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282 I CHAPTER 11

country back to its citizens and take it back from the big money and spe

cial interests.”

The bill was repeatedly introduced in Congress but

killed in 1997 and again in 1998 and 1999.

Finally, his perseverence

was rewarded on March 27, 2002, after the consequences of “checkbook

democracy” were exposed by the Enron scandal. Congress had to bow to

public pressure and pass the McCain-Feingold bill, formally known as

the Bipartisan Campaign Reform Act of 2002, and President Bush signed

it. The law went into effect on November 6, 2002.

The laws main provisions are as follows:

• Soft money. Bars unlimited donations to national party commit

tees by individuals, companies, and labor unions. Donations to state

and local party committees are permitted but are limited to $10,000

per year and money cannot be spent on federal elections. (State par

ties’ donations are capped at $10,000 if used to impact federal elec

tions.)

• Hard money (PACs). Doubles cap on regulated donations, allow-

ing individuals to give up to $2,000 per primary and general election

for both House and Senate candidates. Individual contributions to

state party committees are limited to $10,000 a year and those to na-

tional party committees to $25,000. The maximum aggregate

amounts that an individual donor may give per 2-year election cycle

are $37,500 to candidates; $57,500 for all other contributions, of

which not more than $37,500 may be to committees other than na-

tional party committees (i.e., federal PACs and federal accounts of

state party committees). The limit to federal candidates and national

parties over the 2-year election cycle is $95,000.

PACs may give up to $5,000 per candidate per election. A multi-

candidate PAC may contribute up to $5,000 to a candidate, per elec-

tion; $5,000 to another PAC, per calendar year; and $15,000 to a

national party committee, per calendar year. No annual aggregate

limit applies.

• Advocacy advertising and other public communications. Bars cor

porations and labor unions from financing radio or TV ads for a fed

eral candidate within 60 days of a general, special, or runoff election

or within 30 days of a primary, unless ads are entirely paid for with

hard money (i.e., PACs). Any person who spends $10,000 for such

electioneering communication must file a disclosure statement with

the FEC within 24 hours and again for each subsequent $10,000 of

expenditures.

A public communication that supports or opposes a clearly identi

fied federal candidate must be paid entirely (100%) out of hard

money, regardless of whether it contains express advocacy. State can

didates and officeholders may not spend soft money on public com

munications that promote or attack a clearly identified candidate for

federal office.

ELECTORAL ACTIVITIES I 283

• Disclosure and penalties. Toughens reporting requirements for

those who pay for political advertising, requires faster public notices

by the FEC, and extends the statute of limitations for criminal viola

tions to 2 years for violations less than $25,000 and 5 years for viola

tions involving $25,000 or more.

Senator Mitch McConnell (R-Ky.) strenuously objected to the McCain-

Feingold bill and filed a lawsuit that questioned its constitutionality on

the basis that political fund raising and spending are protected by the

free-speech clauses of the First Amendment. However, in December

2003, the Supreme Court, in a close 5–4 decision, rejected this claim,

thereby leaving intact the restrictions on soft money. In a jointly

authored opinion, Justices Stevens and O’Connor stated that previous

rulings “have made clear that the prevention of corruption or its ap

pearance constitutes a sufficiently important interest to justify political

contribution limits.”

(See chap. 14 for further information.)

Have Campaign Finance Reforms Worked? Views vary widely

about the success of the reform bill. Newsday called the law a “qualified

success,” noting that the candidates were forced to “swear off unregu-

lated soft money.”

Taking an opposite view, Larry Sabato, director of

the Center for Politics at the University of Virginia, called the law “an ut-

ter failure.” He blames 527s for undermining the reform legislation and

laments that “Those who wrote (the law) promised that the system will

be more open and there will be less money spent on elections. Of course,

we have never seen an election with so much money.”

The McCain-Feingold bill was intended to reduce the excesses of soft

money, which was largely used by national parties for issue advocacy ad-

vertising, and the undue influence of big contributions by corporations,

unions, and wealthy individuals. The soft money goal was not achieved

in that soft money contributions were simply diverted from national par-

ties to 527 groups. Wealthy individuals accounted for a large share of

these 527 contributions. The amount of soft money contributions, how

ever, was lower than previous donations to national party committees.

The use of issue advocacy advertising was thus largely kept intact. What

the reform bill bans is the financing of radio or television advertising by

corporations and labor unions within 60 days of a general election or 30

days of a primary. The reform bill confirms what cynics have said: “Plug

one loophole, and a dozen others will open up.”

ISSUE ADVOCACY ADVERTISING

Attacks on soft money and 527s have largely centered on the use of

funds for issue advocacy advertising. Its use in political campaigns rep

resents an increasingly prominent source of communication in the U.S.

political system.

It refers to ad campaigns paid for by “money raised

by nonprofit groups that claim no connection to candidates or political

parties, and use their funds to run ‘issue’ ads.”

These ads are supposed

to deal with matters that arise during a campaign; for example, plans

for a Medicare prescription benefit, changing environmental regula

tions, the trading status of China, and various tax reforms. However,

the millions spent by interest groups on single-issue ad campaigns have

actually often been “thinly veiled plugs for candidates.”

No wonder

New York University’s Brennan Center for Justice and researchers at

Brigham Young University have concluded that these issue ads are in re

ality campaign ads and perceived as such by their audiences.

Cam

paign ads that urge citizens to vote for him or her and against the rival

candidate are legal when candidates pay for their own ads, usually with

PAC money.

The largest chunk of political advertising goes to television, but

newspapers are vying for a larger share. During the 2000 presidential

campaign, $807 million went to TV, whereas newspapers got about $30

million. The Newspaper Association of America points to a survey, con

ducted in the summer of 2003 by the Cromer Group, that found that

voters surveyed said they trusted political ads in newspapers more than

political ads on television or radio, and ranked newspapers second be-

hind TV for providing the information most helpful when trying to

make up their minds about how to vote in state and local elections.

Newspapers also say that it’s increasingly difficult for TV to gets its

message out.

Ads Financing by 527s and Other Nonprofit Groups

Several nonprofits, besides 527 groups, have been major sponsors of is-

sue advertising. The Sierra Club exploited the 527 group loophole in

1996 when it began running its environmental issue advocacy ads. An-

other group, Citizens for Better Medicare, a drug industry group, used

this device to fight White House efforts to create a Medicare prescription

drug benefit.

More than $2 million was spent on television advertising

in just 3 weeks before the House vote. Since its inception in July 2001,

Citizens for Better Medicare has spent more than $30 million on televi

sion advertising alone and unknown amounts on radio, print, and

Internet advertising, according to an analysis conducted by Demo

crats.

These examples demonstrate the overlap between campaign is

sue advertising and advocacy advertising discussed in chapter 8.

Other types of groups, such as 501(c) groups, may also engage in is

sue advocacy advertising and in varying amounts of political activity,

depending on the specific type of group. For example, 502(c)(4) groups,

commonly called social welfare organizations, may engage in political

activities as long as these activities do not become their primary pur

pose.

A notable example are ads run in 20 congressional districts by

the United Seniors Association, a conservative group that acknowledges

284 I CHAPTER 11

it receives some financing from the drug industry’s major trade group,

the Pharmaceutical Research and Manufacturers of America. (It was

previously known as the Pharmaceutical Manufacturers Association

but the new name, which adds the word “research,” improves its im

age.) The ad praises lawmakers for supporting legislation to provide

prescription drug benefits to the elderly. Charles W. Jarvis, chairman of

the group, says the ad is simply trying to spur “a civil debate in the pub

lic square” on an important issue, asserting it has no campaign consid

erations in mind, given its 501(c)(4) tax status. The Wisconsin

Advertising Project at the University of Wisconsin said a conservative

estimate of the ads’ cost was $9 million at the time.

On the state level, advertisements by Citizens for a Strong Senate, one

of only a few 527 committees that focused on Congressional races in

2004, raised almost $11 million and unleashed more than 7,000 com

mercials to help Democrats in six states, including Colorado, where Peter

Coors, chairman of the beer company that bears his family’s name, was

defeated. Three quarters of the money came from Herbert and Marion

Sandler, large Democratic donors who run a California financial services

company. Another group, Americans for Job Security, a business trade

association, formed a 501(c) group that ran more than 5,000 television

ads in at least five states before the election, all without having to disclose

thesourceofitsmoney.

Secrecy. One advantage of 501(c) groups is secrecy. Whereas begin-

ning late in the 2000 cycle, 527s were required to file detailed financial re-

ports with the Internal Revenue Service, 501(c) groups were not required

to disclose their contributions or expenditures. For example, when at the

behest of Representative J. C. Watt (R-Okla.), a nonprofit group was cre-

ated that planned to raise and spend as much as $1.5 million to help Re-

publicans keep control of Congress, neither the expenditures nor the

donors were disclosed.

This feature is troublesome. Karl Sandstrom, a

member of the FEC, explained, “When office holders can maintain secret

accounts, the opportunity for corruption is immense.”

Anothercriticof

the practice, Fred Wertheimer of proreform group Democracy 21, asserts,

“The most dangerous money in American politics is the unlimited, secret

contribution.… That’s the door opened here.”

Occasionally, however, givers of issue advertising money do appear on

“media radar screens.” For example, the media revealed that Vance

Opperman, whose company, West Publishing, was involved in a high-

stakes merger and had sensitive dealings with the Justice Department,

gave $100,000 to Democracy 21. Opperman and his family also gave

$300,000 to Democratic state parties. The merger subsequently went

through. Furthermore, West Publishing won a $14-million contract with

the Justice Department for online legal research. Because of such media

revelations, some groups, such as Citizens for Reform and Citizens for the

Republic Education Fund, have switched their tax status away from “so

cial welfare” to a tax status that clearly allows political participation.

ELECTORAL ACTIVITIES I 285

In a study of ads appearing in the 2000 election cycle, nonprofit ad

vocacy organizations accounted for 85% of the ads. The other ads were

sponsored by Democrats (9%) and Republicans (6%). Ad sponsors in

clude Citizens for Better Medicare, the AFL-CIO, Planned Parenthood,

the Chamber of Commerce, the Business Roundtable, the League of Con

servation Voters, Americans for Job Security, Emily’s List, and the Co

alition to Protect America’s Healthcare.

Prior to 2000, conservative

Republicans benefitted most from tax-exempt social welfare organiza

tion support.

Environmental groups, for example, have sometimes decided to

channel their political spending away from traditional PAC contribu

tions into attack ads of their own devising, a shift they consider more

cost-effective. Accordingly, the League of Conservation Voters reduced

its PAC contributions to congressional candidates from $1.1 million in

1994 to about $150,000 in 1996. The League then launched a $1.5-mil

lion “Dirty Dozen” campaign in July 1996 to fund radio and television

ads aimed at ousting 12 House members. President Deb Callahan rea-

soned, “Giving PAC contributions to a candidate wasn’t really saving

our environmental heroes from defeat.” Now, she says, “we’re making a

fundamental shift in the kind of political power we’re exerting.”

The clever way in which these ads avoid the restriction of not advo-

cating that viewers vote or not vote for a particular candidate is demon-

strated in the ad by the Christian Action Network on “Clinton’s Vision

for a Better America.” Innuendos, subtle associations, and various vi-

sual and auditory techniques are used, some bordering on subliminal

perception techniques. Box 11.3 describes the campaign and the

techniques used.

The number of issue ads typically grows with the approach of an

election day. A week before the end of Campaign 2000, the Annenberg

Center logged 861 such ads compared to only 104 earlier ads. The num

ber of groups and party committees paying for them had similarly

jumped—from 27 to 150.

Most of the ads were sponsored by organi

zations other than the two major parties. In a study of ads appearing in

the 2000 election cycle, advocacy organizations—nonprofit organiza

tions, some of which are tax-exempt—accounted for 85% of the ads,

whereas Democrats sponsored only 9% and Republicans only 6%. Aside

from the two political parties, the ad sponsors include such nonprofits

as Citizens for Better Medicare, the AFL-CIO, Planned Parenthood, the

Chamber of Commerce, the Business Roundtable, the League of Conser

vation Voters, Americans for Job Security, Emily’s List, and the Coali

tion to Protect America’s Healthcare.

Following the example of the Christian Coalition, which pioneered is

sue ads, a small number of tax-exempt groups (supported by several

conservative multibillionaires) poured hundreds of thousands of dollars

into last-minute advertising blitzes to offset labor union advertising

campaigns at the end of the 1996 campaign.

Corporations and busi

ness associations also engaged in last-minute preelection advertising.

286 I CHAPTER 11

For example, the pharmaceutical industry poured at least $16 million

into an advertising blitz in 2002 in an effort to tip the balance of power

in Congress toward Republicans who back the drug makers’ legislative

interests.

Also wishing to tilt the election outcome, the U.S. Chamber

of Commerce financed a $13-million ad campaign and spent additional

sums under the name Americans Working for Real Change.

The re

ELECTORAL ACTIVITIES I 287

Box 11.3 Christian Action Network’s Television Commercials

In 1992, the Christian Action Network (CAN) aired the television com

mercial “Clinton’s Vision for a Better America” 250 times in 24 major

cities, along with newspaper advertisements, columns, and direct

mail. None of CAN’s $2 million in expenditures that year was publicly

disclosed because the group called the activity public education rather

than electioneering. The distinction was justified because the com-

mercials did not urge the electorate to vote for or against specific per-

sons. The Supreme Court’s decision in Buckley v. Valeo in 1976 said

that groups are considered to be engaged in electioneering only if

they run ads or produce material including words like “Vote for (or

against) Representative Jones.” But as West points out, there are

many ways to urge voting for or against a candidate by making use of

nonverbal communication and techniques of video production, such

as audio voice-overs, music, visual text, visual images, color, editing,

and code words.

The ads used the following techniques:

1. Visual degrading of Clinton’s picture into a poor-quality, grayish

negative so that he looks bad.

2. Use of unfavorable colors (contrast between a bright color image of

the American flag and a grayish, unflattering image of Clinton).

3. Ominous music; for example, halfway through the commercial, the

pitch drops down into a deep bass, suggesting something bad will

happen if Clinton is elected president.

4. Abrupt sequencing of images; for example, a color image of

Clinton accompanied by an American flag quickly shifts “to a pa

rade sequence of yelling, disagreeable-looking gay men clothed in

chains, leather, and rope,” thus creating a feeling that these individ

uals are threatening traditional American heterosexual values.

5. Use of “quota” and “vision” as code words unfavorable to Clinton;

for example, one spot refers to “Job quotas for homosexuals” and

asks, “Is this your vision for a better America?” (Quotas are viewed

unfavorably by most Americans and the “vision thing” was much

related to President Bush.)

6. Visual disappearance of Clinton in the presence of the flag at the

end of the ad, strongly suggesting to voters to defeat him.

form bill’s restrictions on advertising 30 or 60 days prior to an election

are intended to limit such last-minute advertising.

Effectiveness of Campaign Ads

Like corporate advocacy advertising discussed in chapter 6, the ef

fectiveness of political issue ads and other campaign ads cannot be

assumed. According to Joshua Green, a senior editor of The Atlantic,

campaign commercials are “Dumb and Dumber.” Most people, he

says, would agree that “televised political ads, almost without ex

ception, are remorselessly bad.”

They lag in quality and imagina

tion. They still mainly follow the formats originated in the 1950s,

such as the biographical ad, the negative attack, and the practice of

using an opponent’s words against him. Green not surprisingly

concludes that political advertising is becoming less effective. View-

ers need about 20 exposures before they can remember an ad—in

contrast to around five or six viewings for consumer ads, which in

contrast, prize originality.

People tend to avoid ads with which they disagree, but because politi-

cal ads fill the airwaves, it’s almost impossible to shut them out com-

pletely, says Lynda Lee Kaid of the University of Florida.

In 2002,

1,497,386 spots aired in the nation’s top 100 markets, according to the

Campaign Media Analysis Group, a private firm that tracks televised

political ads. Besides the number of ads, more information is crowded

into them. For example, William Benoit found that from 1952 to 1996

the average number of issues covered in Republican ads rose by 115%,

and in Democratic ads by 519%.

Citizens who are unaffiliated with political parties—nonpartisans—

are most likely to be influenced by campaign ads. Other factors count,

too. Ads sponsored by a candidate serve to bolster the viewers’ percep

tion of the candidate’s character. There is also broad agreement that

negative ads are more persuasive than positive ones, despite widespread

public distaste for them. Their incidence grew from around 11% to 43%

between the 1960 and 1996 elections.

They are more likely to be no

ticed and actively processed; they contribute to more learning and pro

vide superior recall; and they produce a larger effect on opinion

formation than positive ads. There is also some evidence that they sup

press voter turnout. Whether negative or positive, however, issue ads

are inferior to candidate-sponsored ads in producing awareness or

knowledge.

As with advocacy ads in general, quality and creativity count. Green

is optimistic that as the Internet becomes the hot new medium for po

litical ads, more imagination will be fostered. For example, when the

liberal organization MoveOn.org held a contest to design the best

anti-Bush ad, more than 1,000 submissions were made and the best

ones aired on television.

288 I CHAPTER 11

HOW EFFECTIVE ARE POLITICAL CONTRIBUTIONS?

When asked why they make political contributions, corporate

spokespersons typically reply that they like a particular candidate and

party and want to support the democratic process. However, the com

panies and industries that have been the most generous in their giving

are those that expect to benefit the most from government subsidies, tax

benefits, and regulatory relief. The effectiveness of political contribu

tions, therefore, is measured by two results: (a) getting favored candi

dates elected, and (b) obtaining favorable legislation and favorable

treatment from the executive branch of government.

Helping a Candidate Win

Campaigns matter a great deal in the outcome of congressional elec

tions, and how well a campaign is financed is expected to influence

whether one’s favored candidate wins. Joseph J. Fanelli, president of the

Business-Industry PAC, wants candidates with his views to win. His aim

in making contributions is to make races more competitive by “improv-

ing the philosophical balance of Congress—through the support of

‘pro-private enterprise’ challengers with reasonable chances to win and

in assisting similarly-oriented incumbents who are in danger of losing

their seats.”

100

Money Advantage of Incumbents. The ability to outspend one’s ri-

val gives a candidate an important advantage. This advantage accrues

mainly to incumbents because contributions mainly flow to them. In

particular, federally registered lobbyists inordinately contribute to in-

cumbents because they want to reach influential decision makers. In

cumbents from both parties in congressional elections also enjoy

disproportionate contributions from corporate PACs. Corporations are

more interested in buttressing their lobbying clout in support of vital

company interests than in the outside chance a challenger favorable to

them might win an election.

The money advantage of incumbency was shown in the 2002 elec

tions. A House incumbent raised, on average, nearly $900,000 to keep a

seat (up from $650,000 in 1998); the typical House challenger raised

only $197,000. As races grow more costly, the money gap between in

cumbents and challengers is expected to widen.

101

In the 2004 elections,

incumbent senators raised a total of $223.6 million compared to $70.7

million by challengers; house incumbents raised $427.6 million versus

$100.8 by challengers.

102

The biggest spender in the 2000 Senate races was Jon S. Corzine, the

Wall Street multimillionaire. He spent $63 million on his campaign,

with $35 million in the primary election alone, most of it ($23.5 mil

lion) on advertising.

103

As Jeff Pilletts of the Bergen Record stated,

ELECTORAL ACTIVITIES I 289

“Money supplies everything in politics—access, friends, even credibil

ity.… He not only purchased commercials, he purchased the party ma

chinery and the people who run it.”

104

Corzine could make a virtue of his

self-financed effort. “I won’t owe anything to anyone but you,” he de

clared to voters. In his primary campaign he bombarded the airwaves

with 12 weeks of unrelenting audiovisual persuasion and financed at

least 5,000 workers in an unprecedented get-out-the-vote (GOTV) op

eration. He spent $15 million on television time aired over a 2-month

period leading up to the general election.

In roughly 9 out of 10 House races and three quarters of all Senate

races in which incumbents seek reelection, the incumbent wins.

105

In the

2002 elections, 98% of House incumbents were reelected, as were 85% of

incumbent senators.

106

Challengers have a fighting chance mainly when

the incumbent is implicated in a scandal, has roll call votes that are out

of sync with voters, or possesses other liabilities.

Money alone, however, does not buy elections for incumbents and

certainly not for challengers, against whom the odds are so heavily

stacked. An attractive candidate who has a coherent message and comes

from a district whose voters are ideologically not too far from the candi-

date is needed. Among the losers have been some candidates who spent

their own money in the 1998 election. Mark Warner, a Virginia Demo-

crat, lost after spending more than $10 million; Guy Millner, a Georgia

Republican, lost after spending $6.4 million.

107

In California’s June

1998 primary, Republican candidate Al Checchi spent at least $37 mil-

lion of his own money, and candidate Harmon spent $11.6 million. Both

lost to Democratic candidate Lieutenant Governor Gray Davis.

108

In the

1998 election, the top Senate spender, Senator Alfonse M. D’Amato

(R-N.Y.) lost to the Democratic challenger, Representative Charles E.

Schumer (D-N.Y.).

More detailed analyses of election results demonstrate money is

chiefly important in open-seat races. The amount of money a candidate

spends on campaign communications significantly affects the outcome.

The impact of spending is especially important because elections for

open seats are usually won by far smaller margins than incum

bent–challenger races.

109

A strong challenger, however, may be able to

win if he or she can obtain campaign financing and assemble an effective

campaign organization. Certain additional factors help: a contested pri

mary, media support, campaigning on position issues, and group-based

targeting.

110

Party support is also important.

Supporting Lobbying Efforts

Lobbyists want to reach the most influential decision makers. This con

tention is supported by a study by the Center for Public Integrity of the

personal campaign contributions of more than 1,000 federally regis

tered lobbyists from 1999 through September 2004. The study shows

that they gave $2.9 million to Senate incumbents and their challengers

290 I CHAPTER 11

in 2004 and a mere 5.4%, or $257,000 to challengers. Senate Minority

Leader Thomas A. Daschle (D-S.D.) received the largest amount.

111

Business people and lobbyists don’t like to admit publicly that their

reason for making political contributions is to obtain favors. Roger

Tamraz, an oil executive, was an exception. When testifying at the 1996

Senate hearings on campaign finance abuses and asked why he gave

$300,000 to the Democratic party, he bluntly replied: to win access to

the White House and the Clinton administration.

112

A BusinessWeek/

Harris survey of 400 top executives of major companies found a similar

reason behind political contributions: 50% said, “My company and I

hope to gain access to politicians so we can gain fair consideration on is

sues affecting our business.”

113

The top reason, however, was, “I have

strong political views and want to support a political party and candi

dates who share my convictions” (65%), and the second was “Making

political contributions is my way of supporting the democratic process”

(59%).

Robert J. Wager, president of the American Bakers Association, de-

scribes more graphically the aim of political contributions supporting

lobbying efforts. He says, “The key to success for any PAC is to take a

pragmatic approach which emphasizes effective action on behalf of the

economic interests of the association.”

114

He further explains that his

BreadPAC makes bipartisan contributions on the basis of “merit.” Rein-

forcing his belief that PAC funds should reinforce lobbying efforts, he

says, “Whenever possible, the check, or a copy of it, should be person-

ally delivered by the treasurer, or an association member, to the candi-

date. This is even more effective if the PAC treasurer is the association’s

chief lobbyist.”

115

After George W. Bush’s election victory in 2000, businesses that in-

vested in his campaign made no secret about expecting favors, as sug-

gested in the Wall Street Journal headline, “Influence Market: Industries

That Backed Bush Are Now Seeking Return on Investment.”

116

Some of

the expectations were as follows:

• MBNA, which gave $1.25 million to Bush, the Republican party,

and the Inaugural Fund during the 1999–2000 election cycle—the

second highest corporate donor after Enron—was pleased to hear

that the president would sign a tough bankruptcy bill.

• Drug companies gave $14 million to Republican campaigns over

the past 2 years and spent an additional $60 million to fund their

own independent political advertising campaign. They are lobby

ing for an overhaul of the Medicare program that would include a

prescription drug benefit for senior citizens, provided such a bene

fit doesn’t lead to drug price controls.

• Some businesses are looking forward to repeal of the ergonomic

regulations imposed by the Clinton administration, much to the

annoyance of organized labor, which had fought for their enact

ment for 10 years.

ELECTORAL ACTIVITIES I 291