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Stealth Campaigns – Part Three

Is Campaign Finance Reform “Completely Corrupted”?

So, with the 2008 presidential campaign headed for a record level of spending not only by the major party candidates but also independent groups that raise millions without disclosing their donors, how effective has the Bipartisan Campaign Finance Reform Act of 2002 been?

It’s been “completely corrupted,” the Republican operative Mary Matalin said in an interview with the Center for Public Integrity. And with the obvious exception of media consultants, who are making more money thanks to the new flood of political money into independent groups that promote both sides, many political professionals agree.

Although some independent organizations existed long before 2002, they did not flourish until the new reform law sent big money donors looking for a new way to influence the process. Once they settled on the independent groups, the Federal Election Commission’s regulation has been so loose and so slow that the flow of large contributions never abated, and neither did the influence of the contributors. But the newly powerful groups have not only attracted corruption charges, they have eclipsed the major parties in fundraising for advertising and soured the campaigns with negativity.

As reformers see it, the independent groups are corrupt to the point of breaking the law on two fronts: first by subverting the purpose of non-profit, tax-exempt organizations, which are not supposed to be engaged directly in electoral politics, and second by broadcasting advertising messages that favored particular candidates under the guise of being so-called “issue ads.” Fred Wertheimer, president of Democracy 21, a reform group, argued that any organization that accepts the unrestricted donations politicians call soft money and tries to influence the outcome of an election is violating the law, no matter how the election commission might rule. “What they were doing was illegal from day one,” Wertheimer declared.

Paul S. Ryan, an attorney at the Campaign Legal Center, noted that it was becoming common for independent advocacy groups “to have what tax lawyers call complex structured organizations. And that means that there will be, affiliated or related, a 501(c)(3), a 501(c)(4), a 527,” he said, using names taken from the sections of the federal tax code that govern them. “And there are different rules for each of these essentially separate bank accounts . . . the money from which can be used for different types of activities in some respects.”

The work of the Foundation for a Secure and Prosperous America, a 501(c)(4), provided a good example of how these groups can support political candidates while claiming they are only asserting their First Amendment right to speak out on important issues. Before the presidential primary in South Carolina in early 2008, the foundation placed local ads on the Fox News Channel that technically advocated passage of a law improving health care benefits for veterans, but effectively backed the campaign of Senator John McCain, Republican from Arizona, by noting that he had championed the popular measure. The group was founded by Rick Reed, a former McCain campaign consultant who also had been involved in the Swift Boat Veterans’ attack on Senator John Kerry, the 2004 Democratic nominee. McCain’s campaign officially disowned the work of Reed, who claimed his group was not primarily trying to help the senator. McCain, of course, has long been an opponent of unlimited, anonymous political contributions and was a principal sponsor, along with Senator Russ Feingold, Democrat from Wisconsin, of the 2002 reform bill.

McCain may have benefited from the ad, despite his disclaimer. But GOP media strategist Mike Murphy, a former McCain adviser, observed that the ads produced by such groups often obscure the candidate’s own message. “You lose control of your own campaign,” Murphy said, speaking from the point of view of the candidate, “because you are spending $5 million, and some group you don’t control, which might be run by knuckleheads, is spending $10 million. So they have a bigger megaphone. Every mistake they have made, your guy is held accountable for. And you don’t control them.”

Tad Devine, a Democratic consultant who worked on the 2004 Kerry campaign, is understandably bitter about the role that independent advertising played in 2004. Not only were the Swift Boat attacks on Kerry “fundamentally unfair,” he said, but even the independent advertising intended to help Kerry was counterproductive because it robbed the campaign of its ability to control the message and slowly build it to a crescendo. He noted: “Some [ads] talked about Bush’s record in the National Guard and the draft. Some people talked about issues like prescription drug coverage or the lack thereof or the failure of the plan on the Republican side. Other people talked about other things. And it was a cacophony. Instead, what we wanted was a solo. We needed our song to be sung to people and for people to get a sense of who Kerry was, to start to move the thing to issues, ultimately to move it to a comprehensive plan to move the country ahead. And then maybe at the end there would be some pushing back and forth. But that was the campaign we wanted.”

The Kerry campaign was faulted for failing to respond effectively to the Swift Boat ads, and Devine explains why: “We were left with the most difficult choice you can make in politics, which is ‘do we spend money now to deal with this paid media attack in the paid media?’ Well, we had a very effective response. But if we do so, are we risking the paid media that we’ll need at the end of October, early November? … There was a tradeoff there. If we were going to spend money in August, we were not going to have that money to spend in October.”