Campaign Finance Reform Law
Will Alter Political Landscape

Campaign finance reform is not a new concept. Starting late in the 19th century, people became concerned that the large contributions made by "fat cats" to the political parties were corrupting parties and candidates, not to mention those who already held office. The Tillman Act of 1907 was one of the first attempts to regulate private money in elections. It prohibited corporations and national banks from contributing to candidates for federal office. Subsequent legislation restricted sources of campaign funds, limited spending and provided for disclosure of contributions. But then, as today, loopholes abounded; and enforcement was minimal or nonexistent.

Modern campaign finance reform began in 1971 with passage of the Federal Election Campaign Act (FECA). This law set limits on contributions and required disclosure of spending by candidates for federal office. It also provided public financing for presidential campaigns. Following the Watergate scandal, Congress in 1974 amended FECA to limit contributions by individuals, political parties and PACs and created the Federal Election Commission (FEC) to enforce the acts provisions. The Supreme Court in 1976 in Buckley v. Valeo upheld limits on campaign contributions, but said limits on a campaigns total spending violate free speech guarantees. But the issue around which the new campaign reform law revolves is so-called "soft money" (see box). Soft money is a loophole born of a 1978 FEC decision. Little known at the time, and ignored by Congress when it amended FECA later, this loophole became a major fund-raising mechanism.

In 1992 the U.S. Senate failed to override a veto by President George H.W. Bush of a bill that would have provided partial public financing for congressional candidates who voluntarily abide by fund-raising ceilings, and would have barred soft-money contributions to presidential candidates. Throughout the rest of the 1990s, Congress continued to block similar bills to reform campaign fund-raising practices. Several proposals to close soft-money loopholes and restrict issue-oriented TV advertising expenditures, among other provisions, gathered dust in the halls of Congress.

The Bipartisan Campaign Reform Act of 2002

On March 27, 2002, President George W. Bush signed the Bipartisan Campaign Reform Act (BCRA), which had worked its way through the House of Representatives as the Shays-Meehan bill and through the Senate as McCain-Feingold. The bills primary sponsors were Representatives Christopher Shays (R-CT) and Martin Meehan (D-MA) and Senators John McCain (R-AZ) and Russ Feingold (D-WI). Effective November 6, 2002, this law imposes extensive restrictions on the collection and use of soft money and on political advocacy, among other provisions.

The BCRA bans soft-money contributions to the national political parties (the Democratic National Committee, Republican National Committee, and the senatorial and congressional campaign committees). This provision is a major focus of the law. The national political parties cannot accept soft money after November 5, 2002, and must dispose of all soft money raised before November 6 by December 31, 2002, subject to limitations provided under the new law. If any of this soft money remains on January 1, 2003, it must be "disgorged" to the U.S. Treasury.

BCRA increases limits on individual hard-money contributions. Hard money is the term used for funds raised and disclosed according to federal election laws and regulations. The new law increases the maximum hard-money amounts that individuals may donate:

Political action committee (PAC) contribution limits to candidates and parties remain the same and are not indexed for inflation. These limits are: $5,000 per candidate and the candidates authorized political committees per election; $5,000 to any other political committee per year; and $15,000 per national party committee per year.

BCRA imposes restrictions on electioneering communications. It prohibits corporations, trade associations and labor organizations from using general treasury funds to finance electioneering communications within 60 days of a general election and 30 days of a primary election. An electioneering communication is a broadcast ad that clearly identifies a federal candidate and targets the candidates state or district. However, corporate, trade association or union PACs may still broadcast or finance these ads if they use hard money only and comply with disclosure requirements.

The new law also requires disclosure reports from persons or entities other than unions or corporations that spend more than $10,000 during a calendar year on electioneering communications.

Predicted Effects of the BCRA

Many political analysts expect the law to boost the relative influence of corporations, trade associations and other organizations with large PACs, and to reduce the influence of entities that depend primarily on large soft-money donations. For example, interest groups that served mainly to express the grass-roots will of the people could gain control over the parties through their power to amass and dole out contributions. As a result, PACs may mulitply like rabbits since they not only retain the ability to collect and spend hard money, but limits on contributions to them have doubled.

Local political party "machines," powerful in the days before Watergate, could rise in influence again. For example, the national party chairmen will no longer be raking in the bucks. That role will be assumed by state and county party leaders (heirs to the old machines), to whom the law consequently redirects the flow of "party-building" soft money. Big donors are allowed to give $10,000 contributions to an unlimited number of state and local party committees. So, local "bosses," particularly in the largest and most important cities and suburbs, could become central players in the new system.

Finally, charitable, educational and other membership groups, such as labor unions, the NAACP and the National Rifle Association, and corporate groups could become the hottest political players. The practice of "bundling" will increase the influence of such groups. For example, a company or group could encourage employeesand nonemployeesto contribute to its PAC so that it can contribute to other PACs or to state and local party entities to help protect its corporate or group interests. These groups will continue to collect unlimited amounts from donors whose identities are protected. These groups may spend unlimited amounts of this money on political education efforts, although some restrictions were placed on how they spend the money.

Court Challenges Already Filed

The FEC is developing regulations to implement the BCRA. Meanwhile, several organizations have filed lawsuits over provisions in the act. An AFL-CIO suit challenges the constitutionality of several provisions in the law, stating that the law violates the First Amendment by barring unions from broadcasting ads naming a federal candidate within 60 days of a general election or 30 days of a primary or a convention.

The AFL-CIO also argues that the laws charge to the FEC to redefine what constitutes unlawful "coordination" between a union and a candidate, including an incumbent, would hamper labors efforts to work with legislators to advance working family interests.

Further, the federation says, the laws provisions that compel unions and political committees to make advance public disclosures of possible public communications, broadcast and otherwise, that might refer to candidates or issues will chill speech and impose unjustified burdens and costs.

In addition, the congressional sponsors of BCRA have harshly criticized the FEC for its regulations implementing the new law. The legislators say that the regulations gut many of the provisions and thwart the intent of Congress.

IBEW Policy on
Political Action

This law should not adversely affect the IBEW. To the extent that the IBEW has given any soft money, it has been funds voluntarily contributed by individual members or local unions to an educational fund set aside for that purpose.

As noted previously, the increase in the limits of hard-money contributions will increase the influence of those organizations that can take advantage of this opportunity. How can we best maintain, or increase, our political influence? Only about one-seventh of 1 percent of the U.S. population can afford to give at the $2,000 level; not many union members could work enough overtime to contribute at that level! Those who can afford the increased limit would probably support candidates whose agenda does not favor working families. Thus, IBEW PAC becomes even more important to the future of our members and their families. Individually, we cannot compete on a per-dollar basis with business interests. But we can do our best by pooling members small donations to IBEW PAC and using the funds to support worker-friendly candidates.

Regardless of campaign finance reform, money will still talk. Lets make sure our voices are heard loud and clear!