We've just seen the future of campaign finance reform, and it's not pretty.
Dec 2, 2002, Vol. 8, No. 12 • By CLINT BOLICK
Early on, the commission took the sensible position that expenses could be reported as they were paid. But late in the primary, the commission's executive director, Colleen Connor, reversed herself and decided they should be reported as they were accrued. She called a widely publicized news conference to announce an investigation of Salmon's campaign for failing to report expenses as they were accrued, even though most other candidates were reporting the same way. Salmon subsequently was mostly cleared of violations, and Connor confessed that she was "very confused" by her own agency's rules. But by then the damage to Salmon's reputation was done.
With empty campaign coffers and negative publicity coming out of the primary, Salmon faced a double-digit deficit against Napolitano. By Election Day, he had whittled the margin to a single point, in part through television spots criticizing Napolitano for bankrolling her campaign with taxpayer money. But ultimately it proved impossible for Salmon to overcome the rules of the game, which assured Napolitano the victory even as Republicans (with some help from redistricting) were capturing both houses of the Arizona legislature and five of seven congressional seats. The Clean Elections Act had achieved the chief goal of its supporters--electing a governor far to the left of the state as a whole.
Inevitably, the program attracted profit seekers and scam artists. One consultant for former secretary of state Betsey Bayless, who lost in the primary for governor, boasts that Clean Elections funds bought his new BMW. It's even easier to game the system for state legislative candidates, who need collect only 200 five-dollar contributions to open the spigot for tens of thousands in public funds. Repeatedly, candidates collect the money, then hire friends or relatives to run their nonexistent campaigns. A trio of Libertarian candidates for state legislature received $86,636 in Clean Elections funds and lived it up on taxpayer-funded meals at chic restaurants such as Opium, Axis/Radius, and the Ra Sushi Bar.
HOW DID A CONSERVATIVE STATE like Arizona embrace such a boondoggle? The framers of the Clean Elections initiative knew that voters would never vote for it if they realized they'd have to pick up the tab. Citizens often like the idea of campaign subsidies, but tend to rank them fairly low among competing budgetary priorities. At the federal level, only about 12 percent of taxpayers check off the box designating $3 for the federal campaign fund, even though it costs them nothing extra. Earlier this year, a Massachusetts state court had to order the recalcitrant Democratic state legislature to appropriate funds for its campaign subsidy system. And 75 percent of that liberal state's electorate voted in a November advisory referendum to abolish the use of taxpayer funds for political campaigns.
So the promoters of Arizona's Clean Elections initiative got clever about funding sources. About one-third of the money comes from a $5 income tax checkoff. But unlike the federal checkoff, which merely shifts $3 from one place to another, the Arizona checkoff sends a $5 refund to the taxpayer and $5 to the Clean Elections fund. Essentially, it bribes taxpayers to check the box, and each checkoff costs the state $10.
Last spring during tax season, the checkoff was promoted by a $600,000 advertising campaign featuring a cartoon character called "Five Dollar Bill" and characterizing the program as the "fastest five bucks in the state." It was a fast one, sure enough: In a state facing a $400 million budget deficit, millions were being drained for political subsidies.
The other two-thirds of the subsidies were earmarked from two involuntary sources. The first was a $100 tax on lobbyists. But not all lobbyists--just those representing for-profit causes, so that the Chamber of Commerce would have to pay but the Sierra Club and teachers' union would not. The second was a 10 percent surcharge on civil and criminal fines, so that Arizonans who park at an expired meter or get a speeding ticket now are also forced to contribute to candidates not of their choosing.
The Institute for Justice, the public interest law firm of which I am vice president, challenged both exactions in court as a violation of the First Amendment's prohibition against compelled political speech. It's one thing if taxpayers generally choose to subsidize political speech. It's quite another, under the Constitution, if discrete groups are singled out to support speech with which they disagree. For instance, the lead plaintiff, former state representative Steve May, received a parking ticket, some of the proceeds of which were used to fund his opponent's campaign.