Targeting the Fat Cats

illustration by Doug Potter

A metaphor commonly applied to campaign finance reform is that it is like trying to compact a balloon -- when you squeeze it in one place, it bulges in another. Nevertheless, reform initiatives abound across the nation. In seven states and the District of Columbia, voters have approved referenda aimed at severing the link between big-money interests and municipal politics by limiting the size of campaign contributions, even though courts have ruled such limits are unconstitutional. On November 4, Austin will decide whether to join the reform experiment when the public votes on a charter amendment proposal that would cap both individual and PAC contributions at $100, limit non-Austin contributions to any candidate to $15,000, prevent corporations from influencing referenda items, and possibly embroil the city in a legal fight. The rough road this referendum has traveled on its way to the ballot is indicative of the punch it carries. Created by a group of activists known as Austinites for a Little Less Corruption (ALLC), the initiative was sabotaged, either intentionally or unintentionally, by the city clerk's office, which invalidated thousands of signatures on the supporting petition last year. But U.S. District Judge Sam Sparks, calling the clerk's criteria for invalidation "more than a little bizarre," recently ordered the city to place the item on the ballot at the next opportunity. (Two other measures that were batted around as potential propositions were the single-member district question and the Our City, Our Choice amendment. For more on both issues -- neither of which made it on the ballot this time around -- see "Round Two" and "Reverse Race-ism" elsewhere in this section.)

ALLC member Linda Curtis says the proposed charter amendment on the November 4 ballot is Austin's chance to show developers and other special interests that the city is not for sale. "The strongest reason why voters should support it, I think, is that this is the greatest opportunity, maybe their last for a couple of years, to do something fairly dramatic about campaign finance -- the big money in politics," Curtis says. "All of the unnecessary projects that they've been complaining about in Austin are driven by the present situation." Curtis and ALLC co-founder Brent White began their initiative 18 months ago after witnessing the corporate money-slinging tactics used against them when, as members of Priorities First!, they opposed a city-financed baseball stadium. (Interestingly, to fund the anti-stadium campaign, Curtis' group took the seemingly hypocritical step of accepting a huge injection of money from competing baseball interests. She downplays the irony of that move, explaining that her group felt so outgunned by the corporate promotion of the stadium that it was forced to let another corporate interest bankroll its efforts.)

While Curtis and her group promote the amendment as a way to limit big-money influence, others say that supporters should beware of unintended consequences. "These reforms are sponsored by people who consider themselves the liberals, standing up for the little guy, but they can actually end up hurting progressive change," says LBJ professor Bill Black, who says the dangers of limiting campaign funding include larger advantages for wealthy candidates, a reduction in voter interest, and further proliferation of covert corporate influence in elections.

Put the Janitor With the Banker

Yet, on the face of it, campaign finance law -- which weens politicians off large contributors and forces them to rely on a wider pool of small contributions -- looks good for grassroots democracy. Craig McDonald, a national organizer for campaign finance issues and author of Austin's ballot language, says the proposed amendment respects citizens' rights to organize support for a candidate, but prevents wealthy donors from having an advantage. Under the current system, says McDonald, an independent PAC supported by "you, me, and Don Henley," can accept unlimited donations and spend as it pleases. Under the amendment, however, the PAC could accept donations only up to $100, and give just $100 to any one candidate. The provision also allows for small-donor PACs, which can give up to $1,000 to any candidate if the money is raised in increments of no more than $25.

"We are not against people pooling together to vote in a candidate," McDonald says, "That's what democracy is all about... But let's put the janitor on the same level with the CEO of Texas Commerce Bank."

ALLC member Brian Rodgers says that the only way to cut off corporate influence in politics is at its source -- special-interest money. "Now candidates are going to have to quit asking the same developers, the same law firms, for contributions. You're going to have to spread it out," Rodgers says.

Texas law already prohibits corporations from endorsing, opposing, or contributing to political campaigns, but these entities are allowed to foot the administrative costs of PACs, which are often large campaign contributors. Such a law cannot apply to individuals, however, who by the 1976 Supreme Court Buckley decision are permitted to spend their money any way they choose to support a campaign. "If individuals want to affect elections, they have carte blanche to do so under the Constitution," says Sarah Woelk of the Texas Ethics Commission, "so long as they do not do so in coordination with the candidate." Nor are wealthy candidates prohibited from spending their personal fortunes in a campaign.

Which leads critics of the ALLC amendment to argue that contribution limits, in light of the fact that by law there are no spending limits, will allow wealthy candidates to dominate campaigns, increase incumbents' advantage, and encourage more hidden donations. Local politicians and fundraisers say that if they are forced to raise campaign funds $100 at a time, they will not be able to counterbalance the spending power which well-connected candidates can raise through loans and other personal favors. They say candidates are going to keep spending the cash no matter where the money has to come from, and restricting contributions only complicates the disease.

"It's like trying to cure obesity by cutting off the food supply -- you'll do it, but wind up with a world which is nowhere near the ideal," says local political fundraiser Alfred Stanley.

"If nobody has money, then they [contributor limits] are not that big of a deal," says Councilmember Bill Spelman, "but it's not fair if the [Manuel] Zunigas are able to get up on TV but the rest aren't... There's always an opponent willing to spend hundreds of thousands of dollars to get elected." (Zuniga's campaign against Spelman in last season's race for Place 5 was notable for the amount of personal wealth Zuniga was willing to spend.)

In last spring's council run-off elections, not one $75,000 voluntary spending limit contract was kept, even though the reward for compliance, under the 1994 Fair Campaign Ordinance, is campaign money from the city.

Former Councilmember Ronney Reynolds, who bowed out of last spring's mayoral race in the face of a half-million dollar Watson campaign, $50,000 of which was Watson's own money, says it is impossible to prevent candidates from tipping elections with personal funds, especially when fundraising consultants and printers are willing to defer payment for services until long after elections are over. Reynolds also notes that the amendment cannot prevent celebrities (such as Henley) from sponsoring concerts and raising thousands of $100 contributions for a candidate in one fell swoop. Candidates with celebrity or corporate connections will have a greater advantage then ever, Reynolds says.

McDonald replies that it is at least preferable for those thousands of dollars to be given freely by a host of individual donors rather than issuing directly from the pockets of the entertainers themselves. Furthermore, McDonald says, candidates who spend personal wealth or who overtly benefit from wealthy connections will be all the more conspicuous under the proposed system. "When the majority of candidates are under pressure to limit spending, those with big wallets will not be in a politically attractive position," says McDonald.

However, Spelman points out that "people with wealth will not have to spend as much, so total [campaign spending] will go down, but the disparity between haves and have-nots will grow wider." Spelman says he and other councilmembers would be "more comfortable" with contributor limits if they were set at $250 or $500.

Councilmember Gus Garcia, who would have preferred electoral reform to come in the form of a single-member district system rather than the proposed campaign finance charter amendment, says incumbents with name recognition and contact lists will be able to reel in small contributions much faster than challengers, who won't have time to raise enough money to make a strong run. "The principle [of $100 campaign limits] is well-intentioned, but it's just unrealistic," Garcia says.

But research done by ALLC members through the city's contributions and expenditures records shows that nearly 70% of the campaign contributors in the last municipal election gave $100 or less, which they offer as evidence of an already-existing base of small-donor support which will only grow when people believe their contributions will not be negated by big-money spending.

Big Guy Rules

But is it truly possible to take away business' advantage in raising political contributions? Opponents of the ALLC amendment say that corporations will in fact become more central to the fundraising process because their pre-existing networks will allow them to reach smaller donors, such as employees and clients, more quickly. Reynolds says that if he were to campaign under the proposed rules, he would tell the president of a company: "`All right, the last time you gave me $1,000. This time, you need to work your employees $100 at a time.' I could raise the same money."

ALLC members (l-r): Linda Curtis, Brent White, Craig McDonald, and Brian Rodgers say it's time to rein in the big money in city politics. photograph by Jana Birchum

"It used to be," says Spelman, "that you leaned on the big guy. Now it's going to be the big guy leaning on their employees -- cadging from them... That's not fair to employees."

Stanley adds that the reform is not going to help the "progressive" side, because special interests are going to find a way to get their money to a candidate no matter what. At least with the present system, he says, contributions are on record. If you add more rules, the incentive to bring money in "under the radar" increases. Internal company memos recruiting money for campaigns are hidden from public scrutiny, Stanley says, obscuring where a candidate's support is coming from. "I'd rather you be able to see that my client got $1,000 from the Widget Company, and then if he does something that obviously only benefits Widget, I'd expect you to jump on that client," says Stanley.

Candidates would have to rely on business networks, because the cost of fundraising, which Stanley estimates is now five cents on the dollar, could go as high as 50 cents. Candidates will not have time nor money to go door-to-door and make the necessary number of phone calls, he says.

Even if the proposed amendment does manage to control the flood of dollars into campaign chests, the question remains: Will Austin elections become more austere productions, drawing in new ranks of small contributors and voters, or will they merely become smaller and of less interest to the public?

"The thing that we liked about $100 limits is that it's the highest of what Joe Schmo on the street would want to give to a campaign," says Linda Curtis... "If candidates want to be in the voter's face, they should get out on the streets." Rodgers adds that with three public access channels in the city, a cheap medium exists for disseminating campaign messages to voters.

But opponents say that in a city the size of Austin, campaigns simply cannot attract citywide attention without expensive TV ads. Professor Black notes that it would "indicate very poor math skills" to believe door-to-door electioneering can bring candidates' messages to the majority of voters.

"Reform is based on the notion that we don't have to compete in the market," says Stanley, "but Channel 6 ain't going to cut it. People vote when they know there's an election going on, and they know there's an election when they see the campaign commercials on TV." Stanley does not believe that the 80% non-voting public is going to wake up, realize that politicians need their money to run for election, and start contributing. "As you cut the money for campaigns, voter contribution goes down. Period," says Stanley. "I don't think reformers understand how much money is required to run a campaign." Councilmember Jackie Goodman, Stanley's client, spent $180,000 -- $30,000 of which was from personal loans -- to win a seat in the last election.

But ALLC members don't buy it. For one thing, they believe it is unrealistic to think candidates can't recruit plenty of smaller contributors. For another, they do not define TV campaign commercials as "voter education," but rather as image manipulation that turns voters off.

"Nobody wants to volunteer for campaign work any more, and you have to ask yourself if it isn't because of this boring, no-issue campaigning which drives TV ads," says Rodgers.

"The abrupt rise in campaign spending has not helped to enlighten the voters at all -- it's about name recognition," adds McDonald.

Jury's Still Out

Campaign finance reform initiatives are a recent phenonemon which do not yet have a proven track record, but ALLC members say evidence exists that the reform works.

In Oregon, contributor caps raised the percentage of total campaign money given to state legislative candidates by individuals from 15% to 50%, while PAC and corporate donations dropped to 14% of the total. Average expenditures by candidates, meanwhile, declined by more than half. After the District of Columbia imposed $100 limits on its 1994 municipal elections, a study by the Center for New Democracy showed that while contribution limits were cut by 90% (from $1,000 to $100) the total value of contributions dropped by less than a fourth. Furthermore, the report stated, the elections drew more candidates than in previous years.

Contributor limits "have had a positive effect on democracy in the District," said the Center for New Democracy's executive director, Donna F. Edwards. "Critics... mostly politicians, reacted like Chicken Little, claiming that under the limits only wealthy candidates would be able to run for office, only incumbents would get elected, and there would be virtually no money in the system to run campaigns. The facts prove the critics are wrong."

ALLC members also point out that Florida governor Lawton Chiles won back-to-back terms while limiting his campaign donations to $100, beating Jeb Bush, son of the former President, in his re-election bid.

It's important to note that everywhere that campaign finance limits have been approved, they have been struck down by lower courts. That is, until October 3, when a district federal judge in Arkansas bucked the trend and delivered what McDonald calls a "slam dunk" for reform initiatives by upholding contribution limits similar to the ones proposed for Austin. McDonald, who wrote the Arkansas initiative, says the key to the victory was that the reform was structured differently than in the past, allowing $100 contributions for both run off and general elections -- in effect allowing runoff candidates to go back to contributors for a second $100 helping, whereas older measures enforced limits of $100 per election cycle. The Austin referendum includes the newer, revised provision.

Clearly, though, neither the courts nor politicians are comfortable with the $100 limits. No councilmember openly supports the amendment, and Garcia says he'll work to defeat it. Councilmember Daryl Slusher, who along with Goodman and Spelman was instrumental in getting the referendum to the ballot, says he does not feel it is appropriate to take a stand on the issue, but in his view it looks "doubtful" that a candidate could successfully mount a citywide campaign on $100 contributions.

"We were taking contributions as large as they were offered and barely surviving," Slusher says of his last campaign. Despite having the broadest small-donor base of all candidates in the 1996 city races, Slusher says he was in danger of having to forego TV ads until singer Henley gave his coffers a boost. Slusher, like Spelman, says he'd prefer contributor limits to be at least $250.

Stanley estimates that a $500 limit would keep campaign funding roughly constant while still effecting reformers' goal of widening the contributor base. Stanley says he would favor such a system, if it were implemented with a publicly financed matching fund which would double donations of up to $100. That would give small donors a psychological lift, he says, making them feel their donations were important.

Contribution limits would likely be less contentious if Austin changed to a single-member district electoral process, in which candidates need only campaign in small districts where door-to-door and neighborhood fundraising is more practical and effective. Garcia points out, for instance, that school board candidates, who run in geographical districts, can get elected spending $10,000 rather than $200,000. "I can raise $10,000 with a few tamale and taco dinners," says Garcia.

A Leap of Faith

Unfortunately, this time around voters must choose between the campaign finance reform offered them now by the ALLC amendment, and single-member district electoral reform, which did not make it on the upcoming ballot and will have to wait at least another two years if the ALLC amendment passes. If enacted together, the two proposals would almost certainly shrink the campaign finance balloon; taken by itself, the ALLC amendment is a less certain proposition. Furthermore, the city is almost certain to enter into a costly court fight if it imposes the limits, though New York University's Brennan Center for Justice has pledged to cover ALLC's legal costs, which could defray the city's expenses as well.

If the $100 limits are struck down or do not work, the amendment could later be changed to set higher contributor limits, though the task of convincing voters they should widen the campaign finance gates after closing them down would likely be as formidable a task as turning an aircraft carrier around.

For Austinites, the ALLC proposal is a leap-of-faith decision, a test of strength for the village-oriented democracy still considered an ideal in American politics. As a cutting-edge reform measure, the amendment has compiled little evidence to support or disprove its viability. The question is, as LBJ professor of ethics Aditi Gowri puts it to skeptical critics of the ALLC amendment: "Does reform mean only the rich will run for office, or does it mean the character of campaigns will change?"