Money Isn’t the Problem – Power Is

February 27, 2014

Inside Insight

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money is the problem

CAMPAIGN FINANCE LAWS MISS THE POINT

There’s a line making its way around the internet – a kind of online cliché at this point – that nonetheless captures an important truth about politics. It goes something like this: “Want to get money out of politics? Get politics out of money.”

The idea that we should get money out of politics is, of course, an old one, dating at least as far back as President Theodore Roosevelt’s efforts to prevent the practice of buying elections. In its modern form, the idea is usually termed campaign finance reform. Campaign finance laws cap the amounts electoral candidates may accept for their campaigns; regulate the gifts candidates receive; and regulate what kinds of groups may spend money to influence elections.

The most zealous proponents of campaign finance laws support publicly funded elections. In order to curb the influence of money in political campaigns, the thinking goes, let the campaigns be financed exclusively by public money. There wouldn’t be much of it, and it would all be completely transparent and subject to FOIA laws. Theoretically, at least, a wealthy individual or corporation couldn’t bankroll a campaign for its own narrow purposes.

But campaign finance usually takes a more piecemeal form. The ethics bill currently in the South Carolina Senate, for example, closes a loophole allowing out-of-state organizations to support in-state election campaigns without disclosing their identity. (Many of these groups have supported challengers and run negative ads against incumbents, which is why the provision is popularly known as the “incumbent protection” clause. The provision has been remarkably uncontroversial among the legislature’s incumbents.)

Certainly, campaign finance reforms seek to address a real problem. Politicians have the power to change laws and regulations, and they will tend to do so for reasons of self-preservation (and outright profit) if the public fails to keep an eye on them. Politicians, moreover, will tend to use campaign money for “expenses” that have nothing to do with campaigns, in essence encouraging them to abuse their power by using it for big donors. (Curiously, nothing in the legislature’s ethics bill cracks down on the clearly improper uses to which elected officials may put campaign money.)

But there are problems with campaign finance laws, and they are serious ones: they tend to encroach on Americans’ right to free speech, and they invariably spawn unintended consequences that have to be “fixed” by means of even further encroachments on First Amendment rights.

There’s an even bigger problem with campaign finance laws, though, and it’s this: They don’t actually touch the real problem. Here’s where my new favorite cliché comes in. The reason why wealthy individuals and corporations want to influence election campaigns in the first place is because politicians have the power to do enormous financial favors for them. Remove those powers, and the problem largely takes care of itself.

The fact that state lawmakers dole out hundreds of millions of dollars in corporate income tax credits every year, for example, gives corporations a powerful incentive to court lawmakers with hefty campaign contributions. A single lawmaker can introduce an amendment exempting a certain product from sales tax. Why wouldn’t the manufacturers of that product offer the lawmaker every conceivable financial gift, legal and maybe illegal, too? If a lawmaker will advocate the sale of $120 million in bonds to benefit a single aerospace company, the aerospace company would be foolish not to do everything in its power to ensure that that lawmaker is reelected.

The problem, in short, is not money. The problem is power.

But how do you curtail the use of power? That’s a challenge, clearly – although it’s no more difficult than trying to keep wealthy corporations from influencing elections, which is a bit like trying to keep the squirrels off your bird feeder. (For those who haven’t dealt with squirrels: It can’t be done.)

A first step would be, not to try and outlaw the power to dole out corporate welfare altogether, but to make the transactions visible to the public. Presently, “incentives” – as corporate welfare is euphemistically known – are handed out in secret. The agreements are kept out of the public domain, and their details aren’t even subject to the state’s Freedom of Information law. Making that transaction public, as a bill introduced in the 2011-12 session would have done, would expose the cozy relationship between politicians and corporate interests to the public gaze. It’s secrecy, after all, that allows self-enrichment and influence-peddling to flourish; forcing it into the sunlight would make it far more difficult than it is now.

That’s at least a start to getting politics (governmental power) out of money (corporate interest). For once, a cliché gets it right.