Campaign Finance Reform

by Dave Kopel

Rocky Mountain News, June 16, 1996

As soon as Governor Romer signed the new law limiting spending on political campaigns, citizen activists announced that they would petition for even further limitations. The Governor and the activists are well-intentioned, but they are unlikely to solve the problem of money in politics. Yet several very effective solutions are already on the books, but are being ignored by the legislature, the governor, and the courts.

Campaign spending limitations are like the amusement arcade game of whack-a-mole. The faster you hammer one mole into the ground, the faster that another pops up from a different hole. Thus, limits on contributions to individual candidates simply divert "soft money" into contributions to political parties. Other reforms spawn unintended consequences; the much-derided Political Action Committees ("PACs") were created by the 1974 federal election reform law, with the intention of reducing political corruption.

To the extent that campaign finance laws are effective, they harm the political process even more. Establishment candidates with hefty rolodexes can amass huge war chests by raising a thousand dollars each from scores of other insiders. Maverick candidates are often unable to compete if they are forbidden to receive large donations from a few wealthy donors who are willing to buck the establishment.

All First Amendment scholars agree that political speech is the core of the freedom of speech and the press. But campaign finance laws directly limit political speech, either by preventing an individual from choosing how much of his own money to give to support political speech he likes, or even by limiting the total amount a candidate may spend to get her message out.

As the whack-a-mole game proceeds, the speech controllers have to restrict more and more political activity, in order to tighten up "loopholes." Thus, proposed legislation in Congress would actually make it illegal for groups like the Sierra Club or the National Rifle Association to inform their members about how elected officials voted on issues of concern to the membership.

In Canada, controls on "independent expenditures" have grown so tight that a person who wishes to print up 200 of her own handbills supporting a candidate cannot do so, for her small expenditure must be reported to the government, and will count against the total amount that the candidate is allowed to have spent on his behalf.

While sincere but misguided reformers pursue efforts to clean up politics by passing statutes or constitutional amendments to limit political speech, there are far more effective solutions, already on the books.

Article XI, section 2, of our Colorado Constitution states: "Neither the state nor any county, city, town, township, or school district shall make any donation or grant to, or in aid of... any person, company, or corporation, public or private in or out of the state."

Thus, our 1876 Constitutional Convention, reacting to the common practice of railroad companies extracting huge subsidies from municipalities, totally outlaws corporate welfare.

Besides upholding the fundamental principle that private interests should not receive public subsidies, the Constitutional provision also protects the political process from corruption. If wealthy private interests aren't allowed to enrich themselves from the public till, then the private interests have much less motivation to give campaign contributions to the legislators who are in charge of the public till.

This 19th-century intuition was recently confirmed by University of Chicago economist John Lott. Comparing state spending levels and political spending rates in all fifty states, Lott found a direct relationship. The greater a state government's per-capita spending rate, the more money that was spent on state legislative elections.

For the first half-century of Colorado statehood, Colorado courts generally enforced the constitutional ban on welfare for private interests. But more recently, the Colorado Supreme Court has invented a "public purpose" exception to Article XI. Corporate welfare is now okay, as long as there is some alleged "public purpose" to it.

Since 1930, the Colorado Supreme Court has never found a single instance of corporate welfare which doesn't have a "public purpose." Thus, the court upheld the 1991 legislative plan to grant a huge subsidy to United Airlines, and the court would likely uphold the proposed gift of $180 million tax dollars to Denver Broncos owner Pat Bowlen.

In addition to the Article XI ban on corporate welfare, our Constitution also outlaws legislative creation of special privileges for corporations or individuals (Art. V, sect. 25); and forbids giving taxpayer money to private persons or organizations (Art. V, sect. 34). These provisions too have been emasculated by specious decisions from the increasingly lawless Colorado Supreme Court.

Grants of public funds to private interests have now become routine. The Denver City Council, for example, just voted to spend millions of tax dollars redeveloping the University Hills shopping center. Legislators and city councilpersons apparently figure that if the courts won't enforce the bans on corporate welfare, elected officials have no independent obligation to uphold the plain language and meaning of our Constitution.

Many advocates of restrictions on spending for political speech have an insoluble dilemma: they want a powerful government which can bestow public funds on various private groups or individuals. At the same time, they want a political process which is untainted by these very same interest groups.

Willie Sutton once explained that he robbed banks because "that's where the money is." If taxpayer funds were no longer a source of private revenue--if Colorado's state and local governments once again obeyed the Constitution-- there would be a substantial reduction of private-interest spending on political campaigns. And no-one's right to participate in the political process would have to be limited.

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