The Alexander Collection
Item Number ¿L?
Donated by Herbed E, Alexander, 2008
Election Essay
The Case FOR Soft Money
Herbert E. Alexander
PACs û Lobbies editor Ed Zuckerioined the chorus of criticism directed at
soft money: money raised outside the restraints of
federal law but spent on activities intended to influence federal election campaign results. ("The
Case Against Soft Money," CEE, Winter L986)
With at least a hint of the moral absolutism typically characteristic of American approaches to
public problems, Zuckerman describes soft money
not only as illegal under the Federal Election Campaign Act, but also as "unethical and immoral." In
particular he calls the collection and disbursement
of soft money by national party committees "an arrogant dereliction of public responsibility."
If Zuckerman, Common Cause and the Center
for Responsive Politics are to be believed, there is
nothing to recommend the soft money practices
conducted by national party committees and every
reason to curb them with near-Draconian regulations. Defenders of national party and presidential
campaign uses of soft money have often been ignored in the current controversy.
An example would be the overlooked comments
on the subject by then-Republican National Com-
lp ...n,\y,
Jl.\man
mittee Chairman Bill Brock following the 1.980
elections. Brock concluded that by making soft
money payments possible for a variety of presidential campaign-related activities, the L979 FECA
Amendments had encouraged the lìepublican national and state party committees to work together
and forced the presidential campaign to work with
the party structure.r In this way the amendments
served their intended purpose of strengthening the
political parties.
Campaign finance expert Michael Malbin holds
that the ability of the national parties and campaign organizations to raise soft money for use by
state and local party committees diminishes the
Dr, Alexander ís Director of the Citizen's Research
Foundatiotz, Professor of Politícal Science at the
IJniuersity of Sotrthern California and a CtE col'
unmist and Editorial Board tnernber.
volume of independent expenditures by PACs in
presidential campaigns. Contributors anxious to
help a favored presidential candidate, Malbin
argues, are more likely to funnel funds through national or state party committees than PACs, which
can only make independent expenditures beyond
the candidate's control.
The 1979 FECA Amendments give presidential
candidates every incentive to raise money for their
parties. "This is one of the best side effects of the
post-Watergate reforms," Malbin declares. "Presidential candidates who want to ignore the party
apparatus, as Richard Nixon did in 1972, will be
throwing away their best chance for spending
more money than the basic flat grant from the
Treasury."2
David E. Price, a former state party chairman
and college professor, maintains that the soft
money practices made possible by the 1979 FECA
Amendments remedy an unfortunate consequence
of the 1974 Amendments. The earlier law, he observes, tended to eliminate state and local parties
and their voter-contact activities from the presidential campaign.
"Assuming that some'loopholes' for party initiatives are desirable, the 7979 provisions seem, on
balance, to be well conceived," writes Price. 'They
open up the possibility of a significant campaign
role for state and local organizations and make the
Presidential campaign a less centrally controlled,
media-dominated affair."3
Critical proposals
Soft money critics have proposed extensive regulatory changes in the governance of federal campaign
finance. Common Cause has urged the Federal
Election Commission to promulgate rules that
would:
o Prohibit national party committees from setting up disclosure-exempt, non-federal accounts,
and permit such committees to collect and spend
only FECA-regulatecl monies, except in the case of
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money raised to fund construction or purchase of
party committee office facilities;
o Require all other political committees, including state and localparty committees, to disclose all
soft money received by their non-federal accounts;
o Include in the FECA definition of "contribution" all donations received directly by any nationalJevel party committee and all money channeled
to state and local committees by national-level
committees or operatives working on their behalf;
o Include in the FECA definition of "expenditure" all payments made by national-level party
committees, all payments made by state and local
party committees for federal-election-year voter
drivcs, and certain other payments made by state
and local party committees for campaign materials
that affect federal elections;
o Require allocation of at least 50 percent of the
cost of volunteer campaign materials featuring federal, state and local campaigns as the "federal
share" of such costs.4
The Center for Responsive Politics has recommended issuance of certain advisory opinions by
the FEC clarifying permissible soft money practices; enactment by Congress of legislation that
would require disclosure of specific transfers of national party funds to state and local party committees, and among state and local committees; standardization of state disclosure laws in a "Uniform
Campaign Disclosure Code"; and establishment of
a central clearinghouse to monitor uses of soft
money.s
Proposals less íntrusiue . . , could stíII
sen)e the publíc's need to know , , .
whíIe generatíng greater support,
Ed Zuckerman would likc to amend the Securities and Exchange Commission Act, the LaborManagement Reporting and Disclost¡re Act and
the provisions of the Internal Revenue Code dealing with tax exemption. The object of all these editions would be to require all publicly held corporations, labor unions and tax-exempt organizations
to fully and publicly disclose any direct and indirect lobbying expenses (among which Zuckerman
includes soft money contributions to national
party committees and campaign organizations
which are then passed on to state and local party
committees. These contributions, he claims are illegal under Section 441b(bl(2) of the United States
Cocle.)
Zuckerman would also require all corporations
and labor unions to disclose any payments made
to tax-exempt and political groups subject to Sections 501, and527 of the Internal'Revenue Code. Finally, he would require that all disclosures generated by the laws he proposes to amend be attached
to all filings required by the Lobby Registration
Act and the Federal Election Campaign Act.
The expansiveness of all three sets of proposals
works against their adoption. AII of them would
require substantial additional paperwork by reporting entities. Those made by Zuckerman and
the CRP would demand the cooperation of a number of separate (and sometimes rivalrous) jurisdictions. Zuckerman's proposals in particular would
appear not to affect the larger soft money donations made by wealthy individuals to national party or campaign organizations. All three sets of proposals discount the party-strengthening benefits of
soft money practices.
A reasonable alternative
Zuckerman has rightly focused much of his fire on
the lack of public disclosure of soft money receipts
and expenditures-"secret fundraising" which, he
says, seeks "to play state disclosure laws off
against each other." Proposals less intrusive than
those cited here could still serve the public's need
to know the sources and amounts of political contributions, while generating greater support.
Under such a proposal, any national, state or
local party committee receiving or spending soft
money would be required by federal law to file a
letter with the FEC stating that a disclosure report
containing soft money information has been filed
under appropriate state law. The letter would contain the name and address of the filing committee,
its identification number, the date of the filing, the
state or local office with which the report was
filed, and its address. The national party committees would be prohibited from establishing their
own non-federal accounts in states or iurisdictions
where election law does not réquire political party
committees to report contributions and expenditures.
These procedures would allow legitimately interested persons to locate information about soft
money, but would not require additional voluminous reports to be filed with the FEC. Moreover,
they would foster intra-party relationships by permitting state and local party committees to continue to participate in party-building activities and
C¡rvp¡tc¡¡s a Eurcr¡oNs July-Augtst 1986 27
in
party-ticket support during federal election
Zuckerman responds:
campaigns.
Critics notwithstanding, soft money demonstrates the inventiveness of political actors in cir-
cumventing the laws-and the intractability of
election campaign finance-more than it demonstrates the deficiencies of the laws themselves. It is
unlikely that the genie can be put back in the
bottle. Barring a major public scandal, soft money
appears to be here to stay.
A
Endnotes
¡See
"GOP Aided by New Campaign Law Provisions,,, polifË
p. Z.
zMichael J. Malbin, "PACs and Campaign Financing,,,
Tfte
Christian Science Monitor, March 2ó, 19g5.
rDavid E. Price, Bringing Back the Parties (Washington,
D.C.: CQ Press, 1984), p, 253.
.Federal Election Commission, Commcnts
of Com¡non Cause
With Respect to Its Petition for Rulcmakin¡¡ Iìegardíng,,Soft
Money," February 4, 7985.
rSoft Money Loo¡thole
for the BOs (Washington, D.C.: Center for Responsive Politics, 'L9BS), pp. ß-?a,
cal Finance/Lobby Reporter, December 1,7, L9BO,
All I suggest is to require those few hundred corporations and labor unions in this country which
contribute to political "soft money" funds-and
"non-political" entities which masquerade as taxexempt organizations-to simply photocopy and
cross-file disclosures which are already required
by federal securities, labor and revenue laws.
Dr. Alexander, on the other hand, would require these same corporations and labor unions to
create an entirely new document, one not now required by any law, which would merely direct researchers to those state capitols around the country where documents disclosing "soft money" contributions and expenditures have been filed.
In the article which drew Dr. Alexander's response, I facetiously mentioned the enemies of disclosure would try to find shelter under the Paperwork Reduction Act. It was the kind of argument I thought might come from the "Private Affairs Council," not from the director of an organization which has a long history of support for
campaign finance disclosure.
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