Did Obama Outspend McCain Two To One? Is Campaign Finance Reform Dead?

The $639 Million Loophole: Obama's Riches, and the Humiliation of Campaign Reformers, Opinion, Wall Street Journal, November 17, 2008.

We're fresh off the most expensive election cycle in history, in which the winning candidate raised record amounts of money while opting out of the campaign finance limits. With victory in hand, Barack Obama's allies now want to return to the alleged virtues of public money. If there was ever a demonstration of the folly and hypocrisy of campaign finance reform, this would be it.

The GOP is using this demonstration to make another constitutional challenge to McCain-Feingold, and we're glad to see it. That's the upshot of two lawsuits filed Thursday by the Republican National Committee in Washington, D.C. and Louisiana, challenging campaign finance restrictions including the 2002 McCain-Feingold law. The rules were intended to limit the influence of money in politics, but we now have the proof of three election cycles showing they haven't. Instead they have made election money less transparent, restricted political speech, and helped create a cottage industry of election lawyers and shadowy political groups.

In Washington, the RNC is challenging McCain-Feingold's ban on national parties raising and spending money for state races -- the so-called soft money that is not subject to federal contribution limits. The Louisiana suit will also challenge rules that limit groups from coordinating their message with candidates. Lifting the restrictions would mean national parties could lend a hand raising state money in important statewide races, like next year's elections for Governor in Virginia and New Jersey.

According to the RNC complaint, banning the use of soft money in state-level races is unconstitutional because it doesn't meet the standard of being "unambiguously related" to the election of a federal candidate, the standard that the Supreme Court first set out in Buckley v. Valeo. All voters have a First Amendment right to contribute to candidates, whether they do so as individuals or through organized groups -- and they will always find ways to do that.

President-elect Obama should now be counted among those who understand the principle. To his credit, he managed to raise $639 million, roughly as much as President Bush and John Kerry spent combined in 2004 -- from big bundlers as well as small donations. Mr. McCain also broke records for fundraising with over $350 million, according to the Center for Responsive Politics.

But in a moment of poetic justice, the Republican felt yoked to the public financing system he championed, capping his general-election spending at $84 million, a piddling amount next to Mr. Obama's pile of cash. Mr. McCain's campaign manager recently said the Republican was outspent by some $100 million in the final week; this is a main reason Mr. Obama was able to make more states competitive than either Mr. Kerry or Al Gore could.

As they usually do when Democrats run through the loopholes, campaign reformers were uncharacteristically quiet while Mr. Obama raked in the dough. But with the election over, they've suddenly got their mojo back. Within days of November 4, seven "reform" outfits were demanding more disclosure requirements for bundlers and raising the amount of taxpayer funding that would have been available to Mr. Obama if, ahem, he hadn't chosen not to accept taxpayer funds.

Like writers at the Nation magazine who claim that socialism hasn't failed because it hasn't really been tried, the thinkers who gave us the post-Watergate campaign reforms and then McCain-Feingold continue to insist that "The way Washington works is not going to change until we fundamentally change the nation's campaign finance laws."

How Mr. Obama and his Justice Department weigh in will be worth watching. Is he going to delegitimize his own election by lending his Administration's voice to the idea that money is evil and public financing the only true path to salvation? The President-elect has ceremonially banned lobbyists from his transition team, but there's apparently no such hex on the fat cats who helped stuff his campaign war chest. His campaign bundlers have already reached the inner sanctum. Bloomberg reports that of the 12 members of Mr. Obama's transition advisory board, five raised at least $50,000 for the campaign coffers.

If the election showed anything, it's that the answer isn't layering more regulations and limits on top of the ones that have already failed. The better road is starting to strip some of them away -- a task that will ultimately fall to the Supreme Court. The Roberts Court blinked last year when offered a chance to overturn McConnell v. FEC and restore the First Amendment right to free political speech. Let's hope it gets another opportunity.

Text Source: Wall Street Journal, November 17, 2008.