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Tuesday, June 26, 2007

Anonymous Campaign Finance

Money and politics:

Money Politics, the Court, and the Demise of Democracy, by Robert Reich: The Supreme Court has struck down part of the McCain-Feingold campaign finance law governing so-called "issue ads" that are thinly-disguised endorsements or criticisms of candidates, funded mostly by corporations.

Let's be clear. Money is polluting American politics as never before. But the central problem isn't the issue ads. They're small potatoes relative to the mammoth sums donated directly the the candidates, mostly by big contributors. ...

The ... 2008 presidential election is already turning out to be the most expensive in history. And although the campaigns trumpet how many small donors they’ve rounded up, the leading candidates in both parties are relying mostly on big donors...

What to do? This Supreme Court will continue to use the battling ram of the first amendment to protect the rights of the rich and the corporations in order to mute the voices of the rest of us. So the real question is how to avoid the Supreme Court's wrath while at the same time putting real limits on the power of money in elections. The best idea I've heard is from Bruce Ackerman of Yale Law School. Essentially, he wants to require that all contributions be put in blind trusts for each candidate, so candidates can use the money but cannot know who contributed what. ...

This way, the fat cats can support whomever they want and their first amendment free speech rights are protected. But no one gets a seat at the winner's table because the winners won't know who they're beholden to.

Is it possible to retain anonymity, or would corporations be able to credibly signal their donations anyway? Ackerman (and Ayres) have, of course, thought of this:

Donors might try to circumvent the process by, for example, producing cancelled checks to the blind trust. Furthermore, extremely wealthy donors might write very large checks and tell a candidate to watch for a significant increase in his/her campaign account on a given day. To handle the first problem, the authors suggest a five-day window within which a person could ask for his/her money back from the trust. Politicians would never know whether a person claiming to have contributed – and even showing a cancelled check – would really have done so. To handle the second loophole, the authors would employ a “secrecy algorithm” that would parcel large contributions to candidates in much smaller chunks and over a period of days or weeks. Thus, no one contribution could produce a large jump in a candidate’s account.

Still, I wonder. But I don't have a better answer.

    Posted by on Tuesday, June 26, 2007 at 05:49 PM in Economics, Politics, Regulation | Permalink  TrackBack (0)  Comments (17)


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