Alan Reynolds

 The ads of 527 groups on the "wrong" (other) side of any issue are undoubtedly annoying to affected politicians. But to "shut down all the ads and activity by 527 groups" would be another blatant assault on free speech. Shut down means shut up. Even if the 527s could be muzzled, people with a strong interest in political issues would soon find other ways to be heard. Resourceful organizations, individuals and foundations can, for example, bankroll biased books, films and studies with transparent political objectives. Is the next "reform" going to censor biased documentaries and ban partisan books?

  Congress has been repeatedly "reforming" campaign finance since 1974. Each reform leaves a "loophole" that supposedly requires another law, which soon reveals yet another method by which people express themselves politically, which requires yet another law, and so on. Restrictions on individuals boosted fund raising by organized political action committees (PACs); restrictions on PACs boosted "soft money" fund raising by political parties; restrictions on political parties boosted fund-raising by tax exempt 527 organizations.

 What "reform" has come to mean is that political opinion should be confined to opinionated journalists, loudmouth entertainers and disingenuous movie producers. Everyone else should just shut up. The 2002 law, for example, actually bans labor unions and corporations from producing TV and radio ads for the last 60 days before an election, although there is no such ban (yet) for PACs or 527 groups.

 My first article on campaign reform (or deform) laws appeared in 1974, in The American Spectator, co-authored by Sam Kazman, now general counsel for the Competitive Enterprise Institute. We argued that protecting incumbents would be the main effect of those initial efforts to limit financing. Incumbents have such huge advantages over challengers -- such as free publicity and the ability to use pork-barrel spending to lure PAC money -- that challengers have to spend millions more to have any chance. Limiting the challengers' access to large individual donors, we predicted, would be a job security program for incumbents. By no coincidence, incumbents were re-elected 98 percent of the time in the past three congressional races.

 Another predictable result of restricting individual contributions was to greatly enhance the relative political clout of organized interest groups, including PACs of the Association of Trial Lawyers, The American Federation of Municipal Employees and The American Federation of Teachers.

 Congress naturally rigged campaign reform against the little guy and in favor of organized interest groups. Under the 2002 law, individuals can contribute only $2,000 to a candidate, but they can give $5,000 to a PAC, which can then give $5,000 to a candidate. Individuals can also give $35,000 to political parties. Those priorities seem cleverly designed to compel candidates to pander to PACs, party bosses, and bundled "individual" gifts from law partners and investment bankers.

 McCain, for example, relied on PACs for 27 percent to 36 percent of his campaign financing in the last two senatorial races. McCain has raised $2.6 million this year; his opponent only $2,715. Don't even think about sending the underdog challenger a big check -- that's a federal crime.

  Informed voting requires information, and information is not free. If attempts to reduce the amount spent on campaigning were ever successful, they would succeed in making voters less informed. As the Supreme Court argued in the 1976 Buckley vs. Valeo case, "A restriction on the amount of money a person or group can spend on political communication during a campaign necessarily reduces the quantity of expression by restricting the number of issues discussed, the depth of their exploration and the size of the audience reached. This is because virtually every means of communicating ideas in today's mass society requires the expenditure of money."

 The 1974-2002 laws that were ostensibly enacted to take money out of politics have had the opposite effect -- tending to exclude everyone but the super-rich from political communication or political office. As the Center for Responsive Politics reports, "The number of wealthy candidates funding their own campaigns has risen dramatically in recent years." The contributions of wealthy candidates to their own campaigns are unlimited, while rivals' sources of finance are handicapped by law. One goal of the 2002 law -- shutting-down many competing sources of issue ads for 60 days before an election -- has ironically shifted power toward the super-rich financiers of 527 groups. Intentional or not, that was something I predicted in two Washington Times op-eds on March 22-23, 2001.

  I argued, "Campaign finance reform has always been about tilting the balance of political power in one direction or another." If the McCain-Feingold bill were enacted, I forecast, then "courting the influence of media and entertainers would become even more dominant forms of political expression." Fantasy filmmaker Michael Moore and his fan Linda Rondstadt have since made me look prescient. I also predicted the new campaign reform law "would tilt the balance of power toward PACs, lobbyists, the media and ?independent' advocacy groups ... producing issue ads." Annoyed by the newly enhanced influence of advocacy groups and their issue ads? Can't say you weren't warned.

 "All versions of campaign finance reform invariably favor some set of organized interests over individual liberty," I wrote. "That is what this game is all about."

 To restore free speech and unregulated political competition would be easy. Start by repealing the singularly outrageous 2002 campaign finance law. Then repeal all the others.


Alan Reynolds

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