THE PARTY'S OVER?
These restrictions on political parties put them at a distinct disadvantage compared to other powerful players in the political system that do not have to play by those same restrictive rules. Almost immediately after the BCRA took soft money away from parties, a group of "shadow parties"—the so-called "527s"—arose as serious political players. These entities can do almost everything parties can do—including the financing of issue advertising and organizing get-out-the-vote campaigns—but with less disclosure and less accountability; and they can take money from corporations, unions, foundations, and similar entities forbidden to candidates and political parties. Thus the effect of the BCRA was to diminish the importance of the political parties in the electoral process and to empower competing organizations that are not subject to the same restrictions on how and from whom they can raise funds. In the 2004 election cycle, for example, a mere twenty-four individuals contributed an astounding total of $142 million to 527s —an amount that was approximately 20 percent of the sum raised by both major political parties—and the spending of these wealthy individuals inevitably affected the outcome of the election. Supreme Court Justice Antonin Scalia noted the irony that a law intended to take the "fat cats" out of politics just herded them to a less visible location and made them relatively more powerful. Under these circumstances, can anyone really question that this outcome is irrational?
Then there are the continuing and pointless restrictions on the ability of our national parties to use hard money to support their candidates, restrictions which make no sense—unless of course we simply admit that the purpose of the campaign finance system is to protect incumbents. At the outset, it is important to recognize that the reason hard money contributions have a maximum size in the first place is that Congress has asserted that a contribution up to this amount will not cause corruption, the appearance of corruption, or undue influence. So why is it, then, leaving aside the protection of incumbents, that a party permitted to raise only hard money cannot use as much of these funds as it wants to aid the campaigns of its candidates? If the party is not deemed by Congress to be unduly influenced or corrupted by the hard money contributions it is permitted to receive, how can these contributions then be said to corrupt or unduly influence the candidates for whom the party uses these funds? Especially, since it is illegal for a party donor to earmark the funds for a particular candidate.
Nevertheless, several years ago, a bare five to four majority of the Supreme Court—disregarding the law's explicit prohibition against earmarking contributions for specific candidates, and Congress' obvious conflict of interest —upheld the current restrictions on a party's support for its candidates. The hypocrisy of Congress' faux concern with limiting contributions is demonstrated in the BCRA's infamous Millionaire Amendment, which provided, in effect, that when candidates face a challenger who has made a personal contribution of $350,000 or more to his or her own campaign, the restrictions on party coordinated expenditures are eliminated and the parties are allowed to assist their candidates (who will, of course, usually be incumbents) until the challenger's financial advantage is overcome. By this measure, Congress communicated that it well understands the power of the political parties to provide campaign funds, but just wants that power limited in cases where it might be used to assist challengers.
Fortunately, the Supreme Court easily saw through this incumbent protection device and invalidated the provision on First Amendment grounds. But the failed attempt at incumbent protection showed both the hypocrisy of Congress and the importance of party support for candidates.
Finally, there is the ultimate absurdity, the fact that although contributions directly to candidates are limited to $2,300, the law also permits the use of "bundlers," who collect the contributions of large numbers of individuals and deliver them directly to candidates. Clearly, this provision destroys the notion that limiting contributions to candidates reduces the appearance of corruption or undue influence. This is not to oppose bundlers; they are simply another demonstration of the central inconsistency of the campaign finance laws we have today, in which the same contribution limits that are supposed to insulate candidates form undue influence require candidates to go hat in hand to the very people who supposedly want to corrupt them.
Even if there were a legitimate concern that removing the limits on a political party's ability to contribute to or coordinate expenditures with its candidates creates the possibility of corruption or circumvention—recall that it is illegal for a donor to earmark funds for a particular candidate—there are simpler ways to address the issue. For example, a great deal of party hard money comes in the form of very small donations, averaging $50 annually, as well as from those who give much more. Parties could be permitted to set up a special fund for all contributions of $2,300 or less and then use only those funds to engage in coordinated expenditures with their candidates. This would enhance the value of smaller contributions, eliminate any realistic concern with corruption/circumvention, and better enable parties and candidates to help their candidates through coordinated election spending.
Unfortunately, while the current campaign finance system is irrational and absurd in many ways, it is wholly rational in one: from the perspective of incumbents, even with all the losses they have suffered at the Supreme Court, the current system works exactly as designed. The major threat they face has always been the ability of the parties to raise the funds for challengers and hence to create a truly competitive electoral system. That's why parties have been restricted to hard money, and why their ability to assist their candidates through coordinated expenditures or direct contributions has been severely limited.
Unfortunately, while the current campaign finance system is irrational and absurd in many ways, it is wholly rational in one: from the perspective of incumbents, even with all the losses they have suffered at the Supreme Court, the current system works exactly as designed.