The Longest Campaign — Part Four
The Federal Election Campaign Act becomes more loophole than law
BY Jules Witcover | March 27, 2008
A dollar is a dollar—except in politics, where some dollars are “hard” and some are “soft.” This hard-versus-soft distinction was invented by election lawyers and other political operatives looking for a way around the sweeping campaign-finance reforms ushered in by the Watergate scandal. It didn’t take them long.
Once again, repeating a pattern that recurs throughout the nation’s political history, the ink was barely dry on a reform measure before those it sought to regulate began to drill loopholes in it. Their end runs around the Watergate reforms, in fact, paved the way for, among other things, two of the most controversial but potent political advertising campaigns of the past two decades: the Willie Horton ad used against Michael Dukakis, the 1988 Democratic nominee for president, and the Swift Boat Veterans for Truth ads used against John Kerry, the 2004 Democratic nominee for president.
In revising the campaign-finance laws in 1976, Congress set limits on contributions to and from political action committees that were significantly higher than what individuals could give directly to a candidate. The limits, to the consternation of Common Cause and other reform groups, encouraged the rapid growth of political action committees. Corporations and labor unions, barred from giving directly to federal-level candidates and their official committees, quickly went the PAC route. By 1986 there were 4,157 such PACs registered with the FEC, compared with just 1,146 in 1974.
Beginning with a 1978 ruling, the Federal Election Commission interpreted the Federal Election Campaign Act in a way that allowed for money to be raised for grass-roots organizing, voter registration, and get-out-the-vote efforts, without regard to the FECA’s provisions regulating contributions. Then in 1979, Congress amended the law, strengthening the two major political parties by exempting the same activities from the FECA’s spending limits. These contributions almost immediately became known as “soft money,” as opposed to FEC-regulated “hard money.”
National Secrurity PAC ad, 1988Both parties found ways to exploit the soft-money loophole. The Democratic Party got a slow start in 1980, collecting an estimated $4 million in soft money, compared with the Republicans’ $15 million. But in 1988, the Dukakis campaign raised more than $20 million for the Democratic National Committee, which then spent it on Dukakis’s behalf, and the Democrats remained competitive in the soft-money race thereafter.
“Independent expenditures” became another early loophole, and committees sprang up that specialized in making them. Individuals or organizations could make expenditures as long as they were independent of a candidate or official campaign committee. Organizations that specialized in exploiting this loophole—chief among them the National Rifle Association—did not need any such communication or consultation to fill obvious needs, such as radio and television ads that were not being run by the campaign, or at least in the quantity desired, for lack of money.
The existence of such committees proved to be a mixed blessing. When one of them took on a campaign task that was unambiguously constructive, and in tune with the candidate’s or campaign’s objectives and manner of operation, that was all to the good. But some independent-expenditure committees that went off on politically destructive trails in conflict with the campaign saw their activities backfire. Then again, such groups could launch attacks on the opposition that would benefit a candidate while leaving him or her with “deniability,” plausible or otherwise.