Democracy in America | Money in politics

Cash rules everything around us

No one knows how to finance elections

By T.N. | LOS ANGELES

AS A foreign journalist covering politics in America, I have learned to interpret the manoeuvrings of politicians in financial as well as political terms. A candidate for governor says something crazy about guns. Why? To shore up his position with voters ahead of a close-run primary, perhaps. But it could also be because he's running out of money and needs to gee up the fat-walleted second-amendment crowd. If you wondered, as I did, why the Democrats seemed to have got a bee in their collective bonnet over Nate Silver's GOP-friendly Senate predictions, you'll find the answer in their fundraising e-mails, which leverage the bad news to squeeze donors for more cash. Money can't buy you elections, but following it can help you understand them.

There are a couple of buried assumptions in much of the reaction to Wednesday's Supreme Court McCutcheon decision that seem questionable to me. The first is that we know what its consequences will be. The second is that the question of how election campaigns should be financed can be readily answered.

Even if only 646 people rubbed up against the aggregate $123,200 cap in the last election cycle, the justices' decision to remove the cap will, it seems safe to say, increase the role of money in American elections. But that doesn't mean we might as well sack the politicians and let Tom Steyer and the Koch brothers duke it out directly. As Nathaniel Persily points out in the New York Times, the ruling could at least shift the balance to politicians and party bosses, who have some degree of accountability, and away from independent groups that have little or none and that often behave accordingly. In a post-Citizens United world, you're going to have lots of money sloshing around politics anyway. Wednesday's decision is expected to send more of that cash directly to politicians, who must disclose the source of their funding; super PACs do not.

Does that mean a supercharged John Boehner will now be able to stare down the Tea Party and get, say, immigration reform through Congress? Probably not. The forces that stop the Speaker from allowing the House of Representatives to consider a bill that probably has the votes to pass are a lot gnarlier than that. But it is a possible consequence of McCutcheon that, over time, establishment politicians will regain some of the power they have lost to independent groups, and that, at the margin, that fact will lead to policymaking priorities a little more in line with those of voters. That's a vague and speculative claim, to be sure, but that's entirely the point: just as with previous campaign-finance rulings, no one knows how this one will shake out.

I'm reminded of a trip I made to Arizona a few weeks ago. The state legislature kept passing crazy laws not, I was repeatedly told, because the electorate demanded it, but because of political rules. Gerrymandering and semi-closed primaries force candidates to pander to extremes, but that happens everywhere. By contrast, until recently Arizona was one of only a few states with a "clean elections" law, under which candidates who had achieved a nominal level of funding would receive funding from the state to match their opponents dollar for dollar. After this well-intentioned law was passed, in 1998, it weakened the links between candidates and civic and business groups that had acted as informal forces of moderation; the politicians didn't need their money, so they could ignore their advice. Had the campaign-finance law not been passed, I was assured, SB 1062 would not have reached the governor's desk; the politicians who backed it might not even have been elected in the first place.

So yay for private funding? Hardly. Force politicians to raise lots of money from private sources and you create some warped incentives, even if your laws are clear. Two Californian state senators are currently under federal indictment after finding themselves on the receiving end of FBI stings; both are accused of soliciting funds for political campaigns, past, present and future, in exchange for various favours, even though both, says the FBI, went to pains to avoid implicating themselves in any direct quid pro quo deals. (Both senators say they intend to plead not guilty.) Darrell Steinberg, leader of California's Senate Democrats, describes the American party-financing system as "awful".

It is a problem that won't go away, and not only in America. Britain, for example, has been agonising over how to modernise its party-finance system since the "cash-for-honours" scandal of 2006-07, where clever donors appear to have found ways to buy themselves into the House of Lords by lending money to the governing Labour Party. Reform talks between the parties broke down, again last summer.

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