The donor class: campaign finance, democracy, and participation.

AuthorOverton, Spencer
PositionSymposium: The Law of Democracy

As a result of disparities in resources, a small, wealthy, and homogenous donor class makes large contributions that fund the bulk of American politics. Even in the aftermath of recent campaign reforms, the donor class effectively determines which candidates possess the resources to run viable campaigns. This reality undermines the democratic value of widespread participation. Instead of preventing "corruption" or equalizing funds between candidates, the primary goal of campaign reform should be to reduce the impact of wealth disparities and empower more citizens to participate in the funding of campaigns. On average, candidates should receive a larger percentage of their funds from a greater number of people in smaller contribution amounts. Reforms such as establishing matching funds and providing tax credits for smaller contributions, combined with emerging technology, would enable more Americans to make contributions and would enhance their voices in our democracy.

INTRODUCTION

Opponents of campaign finance reform embrace a relatively laissez-faire reliance on private markets to fund campaigns for public office. Although they champion the individual rights of those who control resources, antireformers largely overlook the structural impact of vast disparities in wealth on the ability of most citizens to make financial contributions. (1)

This Article uses the Supreme Court's recent opinion in McConnell v. FEC (2) to argue that the law should play a central role in reducing the impact of disparities in wealth on political participation. McConnell upheld large parts of the Bipartisan Campaign Reform Act of 2002 (BCRA) (3)--a regulatory overhaul that banned unlimited soft money contributions and restricted corporate and union spending on political campaigns. In so doing, the Court in McConnell acknowledged the adverse impact that concentrated wealth has on widespread democratic participation and self-government. (4) In the aftermath of the reforms upheld in McConnell, however, disparities in wealth continue to affect participation.

A relatively small and wealthy group of individuals--the "donor class"--gives large hard money (5) contributions that fund the bulk of American politics. (6) Although approximately 51.3% of voting-age Americans cast a ballot in the 2000 general presidential election, (7) less than 2% contributed $200 or more to a presidential or congressional candidate. (8) In the 2003-2004 election cycle, contributions of between $200 and $2000 represented 69% of the money individuals donated to Republican President George W. Bush and 63% of such money donated to Democratic presidential nominee John Kerry. (9)

Access to financial resources rather than mere political interest defines the donor class. (10) While only 13.4% of American households earned at least $100,000 in 2000, (11) these households gave 85.7% of contributions over $200 collected by presidential candidates. (12)

The problem with money in politics is not simply that a handful of individuals made $1 million soft money contributions, but also that relatively few Americans control enough wealth to make contributions of between $200 and $2000 consistently and comfortably. (13) Despite the reluctance of antireformers to grapple with disparities in financial resources among individuals, the law's conception of distribution matters.

Prior to McConnell, a handful of reformers envisioned wealth as one of the principal problems, but their focus on formal equality (14) had shortcomings. Granted, adopting equality as the goal provided a normative baseline, and it allowed the reformers to overcome uninspiring regulatory detail by invoking civil rights analogies. By focusing on formal equality, however, the reformers selected an unattainable ideal. A newspaper editorial endorsing one of the candidates, for example, could throw off precise equality. In addition, by pushing for equal public funding paid directly to candidates, some egalitarian reformers disregarded the central role that citizens should play in democratic debate. (15) The rigid positions embraced by antireformers and egalitarians framed the debate as a stark choice between unrestrained liberty and uniform equality.

The focus on these polar extremes detracts from a pressing problem that persists in the aftermath of BCRA. Massive disparities in the distribution of wealth cause disparities in political participation. The donor class effectively selects which candidates will be viable through large hard money contributions.

Part I of this Article reviews two opposing approaches that have emerged in the law. The class-blind approach minimizes the significance of disparities in wealth and forms the basis of the arguments of many scholars, politicians, and judges who oppose campaign reform. In contrast, the class-sensitive vision highlights disparities in access to resources as a central issue in lawmaking; this approach motivated the Court in McConnell to tolerate restrictions on soft money contributions and corporate spending. Part II examines and reveals the many shortcomings of the antireformers' assertion that the impact of wealth on democratic participation warrants minimal concern. To reduce the impact of disparities in resources and broaden participation beyond the donor class, Part III proposes a goal that candidates, parties, and political action committees (PACs) receive a much larger percentage of their funds from contributors of $100 or less. Part III also predicts that matching funds and tax credits for smaller contributions, combined with innovative use of emerging technology, would move our political process closer to that objective.

  1. CLASS-BLIND AND CLASS-SENSITIVE APPROACHES TO LAW

    Commentators have recognized that legal decisions are influenced by the particular theoretical approach of the decision maker, which is in turn influenced by certain basic assumptions, beliefs, and commitments. (16) This Part focuses on two different approaches to lawmaking: the class-blind approach fails to recognize the significance of disparities in wealth, while the class-sensitive vision is cognizant of such issues.

    1. The Class-Blind Approach: Lawmaking That Ignores Disparities in Wealth

      The class-blind approach to law discourages consideration of relative differences in wealth among individuals. The approach accepts such disparities as an inevitable reality that rarely warrants government intervention. Under this vision, individual citizens are responsible for securing the resources required or meeting the conditions necessary to satisfy their wants and needs.

      Advocates of the class-blind approach do not regard their indifference to wealth disparities as callousness, but rather as objectivity that enhances the quality and credibility of decision making. Conscious accounting of disparities in wealth, the argument goes, will most likely result in class-based factions. Ambitious politicians tend to use the divisive rhetoric of class warfare not to enhance fairness for those with fewer resources, but as an instrument to satisfy their personal hunger for political power. (17) The resentment, discontent, and hostility that arise threaten the stability of economic markets as well as government.

      Advocates of the class-blind approach harbor a strong commitment to private property, to the priority of private interests over public interests, and to bright-line rules and concepts over more nuanced balancing and compromise. (18) The schools of legal and political thought that lean more toward a class-blind vision include classical formalism associated with the Lochner decision, (19) law and economics, public choice theory, and libertarianism. (20)

      In the campaign finance context, class-blind themes abound, especially among those opposed to regulation, Just as less wealthy individuals should not suffer discrimination because they cannot afford to pay a poll tax, wealthier individuals should not face discrimination because they can afford to contribute and spend more. (21) Antireformers do not see contribution and spending restrictions as "content neutral," but as measures designed to suppress the views of wealthier individuals. Bradley Smith, a leading antireformer, illustrates the point with the following question: "[A]re all individuals treated with equal concern and respect when they are not allowed to equally employ the fruits of their labors and talents to political action?" (22)

      One strain of the Supreme Court's campaign finance decisions rejects the argument that individual contributions and expenditures must be restricted to reduce affluent persons' influence and enhance the relative ability of the less wealthy to affect elections. The Court in Buckley v. Valeo reasoned that "the concept that government may restrict the speech of some elements of our society in order to enhance the relative voice of others is wholly foreign to the First Amendment...." (23) Instead of acknowledging disparities in wealth distribution among citizens, the Court justified contribution limits by focusing on the potentially corrupting impact of large contributions on elected officials. (24)

      According to the class-blind assumptions about political participation underlying Buckley and its progeny, the private economic market determines the allocation of entitlements to financial resources for use in the political sphere. (25) The donor class is a natural product of the market and requires no legal acknowledgment or remedy. (26)

    2. The Class-Sensitive Approach: McConnell v. FEC and Lawmaking That Considers Disparities

      In contrast to the class-blind vision of law, the class-sensitive vision recognizes and sometimes seeks to remedy disparities in private property ownership. Those sensitive to class believe that taking economic disparities into account furthers understanding of the consequences of government action or inaction in particular contexts.

      The class-sensitive vision is not socialist--it...

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