arrowSection 3.1 - Campaign Finance

arrowSection 3.1.1 - Federal Law

This topic is monitored by Moritz Law Professor Edward B. Foley

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Opinion & Analysis: The Party’s parties

Anyone following the Democratic convention last week knows about the lavishness of the festivities, much of it paid for by corporate sponsors. Is there a reason to be concerned, or are the claims that such spending breeds corruption just the peevishness of watchdog party-poopers?

We know from experience that Democratic administrations, like Republican ones, are not immune from the improper influence of campaign contributions. Recall the renting of the Lincoln bedroom. To be sure, Clinton was seeking reelection at the time, and incumbent candidates may be especially susceptible to financial pressure, since they are in a position to bestow immediate favors on their benefactors. Even so, businesses are often willing to invest in challengers, in the expectation that they will be able to call upon the recipients of their "generosity" if and when these recipients have become incumbents.

If it seems unlikely that a future President Kerry could be corrupted by corporate sponsorship of the Boston convention, consider that undue influence could occur at lower levels of a Kerry administration in subtle, rather than obvious, ways. Businesses need not secure the enactment, or defeat, of a particular piece of legislation in order to reap rewards from their campaign contributions. Instead, a tweak here and there in language, or interpretation, of an administrative regulation might be of significant benefit to a business. And a lower-level administrative official might be willing to provide this tweak, not because of any explicit reminder from the corporation about its funding of the Boston convention, but just because the official attended the convention and subconsciously formed a positive impression of the corporation as a result of the good will generated by the corporate spending there.

Corporate sponsorship of political conventions, like corporate sponsorship of sporting events, is in other words a kind of marketing effort, designed to predispose the target audience favorably to the corporation. Corporations are willing to spend large sums for this kind of marketing because of the economic rewards it brings. It need not work in every instance, and it may work only at the margin. But corporations are well versed in analyzing the probable and marginal returns on their investments. We can be sure that the corporation that undertakes such marketing does so because of its profit motive. Likewise, we know that if a public official does tweak administrative policy as a result of the subtle yet effective influence of this marketing campaign, then this official is making decisions based not on the public interest, but instead on the corporation's special interest.

Maybe the likelihood of the subtle undue influence is rather small. (But then why are corporations willing to invest so much? Over $100 million for both party conventions, according to expert estimates.) Even so, why take this risk at all? The desire of corporations to be able to donate sums to political conventions is not a consideration that merits much weight in First Amendment analysis.

Some campaign finance rules do intrude on the political freedoms of individual citizens. Whenever the law says that individuals, or groups of individuals committed to the same ideological cause, cannot spend their own money to speak their own minds, the law arguably hits at the heart of what the Free Speech Clause is designed to protect. I say "arguably," because many believe – contrary to the prevailing jurisprudence of the U.S. Supreme Court – that the freedom to speak one's mind does not necessarily entail the right to use private wealth to disseminate one's message. But taking the current jurisprudence as a given, protecting the right of individuals to spend their own money on their own messages is a long way from enabling corporations to use shareholder assets to make contributions to pay for a political party's activities. We can preserve the one without succumbing to the other, as the Supreme Court itself has recognized.

Thus, there is no good reason to perpetuate the current loophole that permits corporations to sponsor conventions, even as they are prohibited from funding a political party's other activities. The delegates do not need this corporate sponsorship in order to enjoy their gathering: contributions from individual donors can replace the corporate funding, or the entertainment at the convention could be not quite so luxurious. If John and Elizabeth Edwards celebrate their own wedding anniversary at Wendy's, as he pronounced, then the budget for convention-related meals can resemble Applebee's more than Morton's.

Such downscaling is certainly worth it, in order to remove the cloud of suspicion that inevitably hangs over corporate funding of political campaigns. We know from the evidence accumulated in the litigation over the McCain-Feingold law that the greatest threat of corruption comes from corporate efforts to buy influence over decision-making in Washington. Even if this threat has been reduced, thanks to the enactment of McCain-Feingold itself, there is no point in letting this threat linger in the form of corporate sponsorship of political conventions. Whether Bush or Kerry wins in November, either administration can be tarred with the charge of favoritism if it adopts measures beneficial to corporate sponsors of its political convention – just as the current Bush administration has been tainted with allegations of favoring the energy companies that supported Bush's candidacy in 2000.

The American people deserve a government that is immune from accusations and the cynicism they perpetuate, especially because the accusations cannot be dismissed as baseless as long as both the Democratic and Republican parties rely on business corporations for their financial support.