Reason Magazine - Topics > Campaign Finance

See the Anti-Obama Ad That Was Banned in Washington (Maybe)!

jsullum@reason.com (Jacob Sullum) — Wed, 27 Aug 2008 18:43:00 EDT

Texas billionaire Harold Simmons, who helped fund the Swift Boat Veterans for Truth in 2004, this year is backing the American Issues Project (AIP), whose main effort so far is an ad attacking Barack Obama for his association with former Weatherman Bill Ayers. Obama's supporters are so mad about the ad that they want to punish him for it, and they expect the Justice Department to help.

In an August 21 letter to Deputy Assistant Attorney General John Keeney, Obama campaign attorney Bob Bauer argues that Simmons is breaking federal campaign law by failing to register AIP as a political committee and by giving it too much money (about $3 million so far). He says the ad, which asks, "Do you know enough to elect Barack Obama?," clearly qualifies as "express advocacy." He avers that the group, which says it champions "conservative values" such as "smaller government, a strong and ready national defense, lower taxes, and a government that encourages entrepreneurship and new job creation," has no known activities other than running anti-Obama ads and no purpose other than influencing elections. He sent Keeney a second letter on Monday, supplying additional details about AIP, describing the group as "patently illegal," and accusing Simmons of a "willful violation of law."

Election law expert Rick Hasen analyzes AIP's defense, which hinges on whether it qualifies for an exemption to the political committee rules that the Supreme Court carved out in a 1986 decision. Hasen is skeptical that it does, adding, "The group, and perhaps Simmons, could face fines, but by then the election would be over."

So which is the real outrage: that Simmons will get away with it, at worst paying a fine he can easily afford, or that the offense of which he is accused amounts to exercising his First Amendment rights in a manner that offends people in power?

Back when Simmons was casting aspersions on John Kerry's military career, I noted that Democrats and Republicans are equally happy to use election law as a gag to silence people who annoy them. In December I cheered SpeechNow's efforts to eliminate restrictions on express advocacy by independent groups that eschew donations from labor unions and corporations.

[Thanks to John Kluge for the tip.]

$78 Million for What?

matt.welch@reason.com (Matt Welch) — Tue, 29 Jul 2008 10:22:00 EDT

The New York Times came out today with like its 20^th did-you-know-John-McCain-consorts-with-lobbyists story of this election cycle. Here's how it begins:

As Senator John McCain waited to speak at the annual awards dinner of the International Republican Institute, a democracy-building group he has led for 15 years, lobbyists and business executives dominated the stage at a Washington hotel ballroom.
First up that night in September 2006 was the institute's vice chairman, Peter T. Madigan, a McCain campaign fund-raiser and lobbyist whose clients span the globe, from Dubai to Colombia. He thanked Timothy P. McKone, an AT&T lobbyist and McCain fund-raiser, for helping with the dinner arrangements and then introduced the chairman of AT&T, Edward E. Whitacre Jr., whose company had donated $200,000 for the event.
AT&T at the time was seeking political support for an $80 billion merger with BellSouth − another Madigan client − and Mr. Whitacre lavished praise on Mr. McCain, a senior member of the Senate Commerce Committee. When Mr. McCain finally took the podium, he expressed "profound thanks" to AT&T before presenting the institute's Freedom Award to the president of Liberia, a lobbying client of Charlie Black, an institute donor and McCain campaign adviser. [...]
Operating without the sort of limits placed on campaign fund-raising, the institute under Mr. McCain has solicited millions of dollars for its operations from some 560 defense contractors, lobbying firms, oil companies and other corporations, many with issues before Senate committees Mr. McCain was on.

I suspect this is probably much more shocking to the New York Times and other journalists who once drank the McCain-crusades-against-lobbyists kool-aid, rather than regular voters. (If you are among the former, or just want a refresher course, read reason on McCain's campaign-finance hypocrisy here and here.)

I'm more interested in the IRI, which is a key to McCain's transformation from a Vietnam Syndrome realist type to a full-throated National Greatness neo-conservative, in addition to being one of these skeevy outfits financed by taxpayers (with a $78 million budget and 400 employees) to simultaneously promote democracy abroad and partisan politics at home. For instance, there's this:

When Mr. McCain's Democratic rival for president, Senator Barack Obama, traveled to Miami in May to address Cuban-Americans, Republicans circulated a memorandum to reporters that quoted an anti-Castro group criticizing Mr. Obama's willingness to talk to Cuba's communist leaders. Not mentioned was that the group, the Cuban Democratic Directorate, was financed for years by the International Republican Institute − it got more than $8 million during Mr. McCain's tenure. Though the directorate does not endorse candidates, its leaders are effusive in praising Mr. McCain.

And there's the whole, what-side-is-he-working problem such as this:

Another board member is the McCain campaign's chief foreign policy adviser, Randy Scheunemann. Until March, he was registered as a lobbyist for several foreign governments, and he represented the government of Georgia last January when the institute sent election monitors there. Since joining the institute in 2004, Mr. Scheunemann has spoken with Mr. McCain or his Senate aides at least 42 times on behalf of his foreign lobbying clients, Justice Department records show.

Scheunemann is an interesting and very influential-to-the-campaign neo-con figure, who stands to land a prominent role in a McCain administration if conflict-of-interest scandals don't get him first.

Pity the Poor Incumbent

jsullum@reason.com (Jacob Sullum) — Wed, 09 Jul 2008 13:00:00 EDT

Members of Congress don't like being criticized, especially close to an election. They also don't like facing challengers who can pay for their own campaigns.

In 2002 Congress passed a law that addressed both of these problems. It was called the Bipartisan Campaign Reform Act (BCRA), because "Bipartisan Incumbent Protection Act" would have been too revealing.

Last summer and last month, in decisions almost exactly a year apart, the U.S. Supreme Court ruled that BCRA's restrictions on issue ads and its attempt to erase rich candidates' fund raising advantage violate the First Amendment. These cases highlight the need for true campaign reform: deregulation of election-related speech. Yet both major-party presidential candidates want to move in the opposite direction, imposing new restrictions on Americans' ability to put their money where their mouths are.

Last year's case dealt with BCRA's ban on "electioneering communications," interest group ads that mention candidates for federal office within 30 days of a primary or 60 days of a general election. The Court concluded that the ban, when applied to messages that are neither "express advocacy" (explicitly calling for a candidate's election or defeat) nor its "functional equivalent," infringes upon the constitutional right to freedom of speech.

In last month's case, the Court overturned a BCRA provision that triples the individual contribution limit and eliminates the cap on coordinated party expenditures for candidates opposed by wealthy people financing their own campaigns. "The unprecedented step of imposing different...limits on candidates vying for the same seat is antithetical to the First Amendment," Justice Samuel Alito wrote for the five-member majority.

Alito rejected the government's claim that such an asymmetrical arrangement is necessary to "level electoral opportunities," saying that argument "has ominous implications." He noted that "different candidates have different strengths": Some are wealthy, while others have wealthy supporters; some are celebrities, while others come from famous families. (He might also have noted that some are taller, better-looking, and better-spoken than others.) It's up to voters to weigh these advantages, Alito said, warning that "it is a dangerous business for Congress to use the election laws to influence the voters' choices."

One candidate strength Alito was too tactful to mention is incumbency, which confers name recognition, free publicity, and the power to dispense favors, which in turn attracts campaign contributions. Those advantages seem to make a big difference: Since 1980 the re-election rate for House members has ranged from 88 percent to 98 percent.

Combine the enormous advantages of incumbency with the campaign contribution limits Congress imposed in 1974, and you start to see why rich guys are tempted to run for office. The Supreme Court has said they have a First Amendment right to finance their own campaigns but not to finance other people's campaigns.

Most of the current Court is skeptical of that distinction, but at least four justices seem inclined to eliminate it by allowing restrictions on expenditures as well as contributions. The next Supreme Court appointment could make a crucial difference for the freedom of Americans to engage in political speech, directly or by proxy, without fear of being fined or going to prison.

Unfortunately, John McCain and Barack Obama both seem to think the main problem with campaign finance restrictions is that there aren't enough of them. McCain spearheaded BCRA and made campaign reform the signature issue of his 2000 presidential campaign. Both McCain and Obama worry that money plays too big a role in political campaigns, and both have decried the influence of ads sponsored by the independent groups that have proliferated because of BCRA's restrictions.

Then again, McCain has been criticized for excessive coziness with lobbyists, while Obama's credibility on this issue took a big hit when he decided to decline taxpayer funding for his general election campaign so he could avoid spending limits. I'm not sure who the bigger faker is, but he could turn out to be a smaller menace to freedom of speech.

Another Provision of the Incumbent Protection Act Falls

jsullum@reason.com (Jacob Sullum) — Mon, 30 Jun 2008 11:23:00 EDT

On Thursday, the same day it upheld the Second Amendment right to keep and bear arms, the Supreme Court upheld the First Amendment right to freedom of speech by rejecting one of the most blatantly self-serving provisions of the McCain-Feingold campaign finance law. The same legislators who did not like being criticized on radio and TV close to elections also were dismayed by the prospect that their huge electoral advantages as incumbents might be overcome by wealthy challengers freely spending their own money. Hence Congress decreed that in such races the less wealthy candidate would be allowed to collect three times the standard limit from each contributor, although his opponent would still be bound by the usual rules.

Without speculating about the motivation for such decidedly unevenhanded treatment, the Court ruled that it violates the First Amendment. "We have never upheld the constitutionality of a law that imposes different contribution limits for candidates who are competing against each other," Justice Samuel Alito wrote for the majority. Under "millionaire's amendment" to the Bipartisan Campaign Reform Act, he noted, candidates who want to spend their own money on their own campaigns must "choose between the First Amendment right to engage in unfettered political speech and subjection to discriminatory fund-raising limitations."

This burden, Alito added, "is not justified by any governmental interest in eliminating corruption or the perception of corruption," the rationale the Court has cited in upholding campaign contribution limits. Instead the government argued that "asymmetrical limits are justified because they would 'level electoral opportunities for candidates of different personal wealth.'" Alito found this rationale troubling:

The argument that a candidate's speech may be restricted in order to "level electoral opportunities" has ominous implications because it would permit Congress to arrogate the voters' authority to evaluate the strengths of candidates competing for office....Different candidates have different strengths. Some are wealthy; others have wealthy supporters who are willing to make large contributions. Some are celebrities; some have the benefit of a well-known family name. Leveling electoral opportunities means making and implementing judgments about which strengths should be permitted to contribute to the outcome of an election. The Constitution, however, confers upon voters, not Congress, the power to choose the Members of the House of Representatives.

Same rEVOLution, Different Day

dweigel@reason.com (David Weigel) — Mon, 16 Jun 2008 15:00:00 EDT

On June 12, one year and three months after launching his presidential campaign on an episode of C-SPAN’s Washington Journal, Ron Paul took the stage at a late night Texas rally, outside of the state party’s convention, and called it quits.

It was greeted, by the media, with a paper-and-pixel yawn. The Houston Chronicle reported that Paul “officially unplugged his dormant Republican presidential campaign” and pointed out that he was late to the speech. “Ron Paul ends his campaign—for real this time,” snickered a blogger at The Washington Post.

Paul had an an easy answer to this: Ignore it. "We are miles ahead of anything I ever dreamed of in this movement!" Paul told a cheering crowd. He said, for the umpteenth time, that he'd never even expected this campaign to catch on. He wanted to educate people. "If you’re going to have a revolution," he said, "people need to be educated to understand what we’re doing and why we’re doing it. The rest is all"—he waved his arm as if warding off a malaria-carrying insect—"fluff."

If "the rest" is fluff, it would be a break for Paul. By the traditional measures of a presidential campaign, Paul blew it. He raised $35 million, of which all but $4.7 million was spent by campaign's end. For this he got 1.2 million votes and as few as 35 delegates to the Republican convention. Paul, being honest, had never expected to win. Rarely did he sound as awkward as he did as when George Stephanopolous prodded him to admit that he wouldn't be the nominee. "You'd bet every cent in your pocket?" asked Paul. "Yes," said the ABC anchor. "Oh," said Paul. "OK."

Now that the campaign's over, Paul feels a little more free to tell the truth. "This is actually a racheting up of what were doing before," Paul said in a Thursday phone conversation. "There are more people who believe in the freedom agenda than voted for us in the primaries. I’ve been saying the same thing since 1974, you know, but something... happened this year. I can’t explain what it was, but the young people understand these issues better than anyone thought, and they are not going away."

The "second phase" of the rEVOLution is the Campaign for Liberty, a more explicitly political organization (a 501c3) than many people believed Paul would launch. It is not, as was speculated, a paleolibertarian publishing house. It is not yet, as feared, a donation or employment plan for Paul's friends and family; the only confirmed transfer from Ron Paul 2008 to the Campaign for Liberty is communications director and (as of Sunday) Paul grandson-in-law Jesse Benton. "Together, we will educate our fellow Americans in freedom, sound money, non-interventionism, and free markets," Paul wrote in an inaugural message to supporters. "We will write commentaries and broadcast videos on the news of the day. And I'll work with friends whom I respect to design materials for homeschoolers."

The Campaign, then, is the kind of thing Paul's more strategy-minded die-hards have clamored for since Super Tuesday. That was when it became clear, thanks to the GOP's winner-take-all primary rules and the exits of Mitt Romney and Rudy Giuliani, that Paul could not enough accrue enough delegates to become a convention kingmaker.

"The presidential bid went on a little too long," said Trevor Lyman, the P.R. whiz who pushed and popularized the various moneybombs that netted Paul nearly $12 million. "It gave a lot of people false hope; I'm not talking about me, but about people who honestly thought if Ron stayed in the race he could beat McCain. There was a lot of wasted energy there. Of course, the people in those final primary states got together and got organized, so maybe even that could end up being for the good." The day after we spoke, Lyman joined the Campaign for Liberty blog team.

According to Paul, staying in the race so long was a way to get the base politically activated. "We have something like 22,000 precinct captains now!" Paul said on Thursday. Jesse Benton doubled his exuberance: "If we had 100,000 precinct captains, we could take over the country."

So is it an educational effort? Is a political effort? The tug-of-war between those concepts illustrates the problem Paul's movement encountered all along. His supporters could elucidate the reasons why they loved their candidate better, probably, than any group of supporters in 2008's twisty political history. The education stuck; in some cases, it was hardly needed. It translated only to enough votes to turn Paul into a national figure and rattle Republicans, however briefly, about the fidelity of their libertarian wing. What Paul's supporters proved adept at, in the end, was filling the cobwebbed ballrooms of GOP caucuses and conventions and matching or overwhelming the party regulars to win platform fights and delegates. If the Campaign for Liberty trains people to do that, in between readings of Murray Rothbard, it could terrify Paul's party in the best way.

Or it could fall flat. Occasional reason contributer Jim Henley pointed out in a blog post that, apart from the numbers of supporters and precinct campaigns the Campaign wants to reel in, "all the elements of the 'Mission' of CFL are kept prudently nebulous. That means there never needs to come the awkward time when donors and observers point out that CFL has inarguably failed to meet some goal."

The Campaign is, still, less than Paul's army expected from this campaign when they flooded his coffers. On Thursday, I put the question to the candidate: Were those tens of millions of dollars that went to Ron Paul 2008 put to good use? "I hope so," he said. "They trusted me. We did our very best. And I'd say that in the category of spending, we were the best campaign, as far being the stewards' of peoples' money." Trevor Lyman agreed. "The moneybombs were worth it for the coverage alone," he said. "The Ron Paul Blimp was nearly as good on that count; I've seen serious estimates that it was $2 million in exposure and earned media."

The fundraising numbers and the ambition of the Campaign for Liberty raises another question. In January, Paul took a public relations hit when controversial sections of his old Ron Paul Political Reports were reprinted by The New Republic. Those same passages had dogged Paul in his 1996 congressional comeback. What had Paul learned from the experiences of Ron Paul and Associates that would guide him in his new venture. "I’m only responsible for what I do and what I say," he said. "I've been saying the same thing since 1974, and I've gotten a bit better at it." That was all he'd say on the matter.

The question running through all of this was how intimately Paul would be involved, or wanted to be involved, in the future of his movement. He's striking a difficult balance on this, too. Paul clearly wants to retain the notoriety he's gained as a spokesman for libertarianism. "A lot of those Meet-Up groups have turned into book clubs," he said on Thursday, with a grin I could detect even across two bad cell phone connections. When it comes to raw politics, Paul, rather passively, is hoping his followers don't just cling to his name. He rejected the idea of writing in his name on the November ballot, a concept that's stayed popular with many Paul voters despite the Libertarian Party and Constitution Party's pitches for their votes.

"I don’t think that’s very productive," Paul said of a write-in campaign. "They could do it, of course, but in most of the states it won’t count. If they can change the rules in a primary and not count all the votes, imagine what they could do with write-in votes!"

David Weigel is an associate editor of reason.

Regulate it and They Will Lobby

matt.welch@reason.com (Matt Welch) — Tue, 11 Mar 2008 08:32:00 EDT

Writing in New Hampshire's Union Leader, 20/20 star and friend o' reason John Stossel makes a familiar-to-reason-readers yet always underappreciated point about the influence of lobbyists and perversity of reform. Clip 'n' save for the Naderite (or McCainiac, or Obamaphile) in your family.

The Public Choice school of economics calls this the problem of concentrated benefits and dispersed costs. Individual members of relatively small interest groups stand to gain huge rewards when they lobby for government favors, but each taxpayer will pay only a tiny portion of the cost of any particular program, making opposition pointless. [...]
"Good government" types rightly abhor this influence-peddling, but they propose pointless reforms like bans on lobbyist-sponsored gifts, junkets and rides on corporate jets. They also back a vicious assault on free speech: campaign-finance restrictions designed to reduce the influence of lobbyists in political campaigns. Despite all these "reforms," influence-peddling goes on.
For good reason. None of the reforms gets near root of the problem.
The root is government power. When government is free to meddle in every corner of our lives and regulate the economy through taxes, regulation and subsidies, then "special interests" have every incentive to work on the politicians to preserve their turf or gain an advantage. [...]
The irony is that the "good government" types favor big government, so they undermine their own efforts to eliminate corruption. [...]
There is one way to rid the political system of this sort of corruption: severely restrict government power as the founders intended. Only when we eliminate the state's ability to meddle in business will business will stop meddling in government.

Whole thing here. Stossel in reason here.

Litigating for Liberty

gillespie@reason.com (Nick Gillespie) — Mon, 03 Mar 2008 16:30:00 EST

If you’ve seen a case of state-on-citizen injustice become a mainstream outrage from coast to coast, chances are Chip Mellor had something to do with it. Mellor founded the Institute for Justice, arguably the most effective public interest law firm dedicated to property rights and choice, in 1991.

Since then IJ has “litigated for liberty” on behalf of small entrepreneurs and property owners against rapacious City Halls. In its most famous case, it defended homeowner Susette Kelo at the U.S. Supreme Court against the city of New London, Connecticut, which seized her house using eminent domain to clear the way for a big real estate project that never really got off the ground. Although the Supreme Court ruled against IJ’s client, Kelo v. New London was a tremendous political success, triggering a backlash that has rolled back eminent domain abuse in more than 40 states. Which was exactly the point.

“All of our cases,” the 58-year-old Mellor says, “are viewed and deliberately designed as platforms to educate the general public about the importance of what may seem to be unique or even arcane issues and why those issues affect many, many people beyond the particular case.”

Born in Knoxville, Tennessee, and raised all over the upper Midwest, Mellor was an anti-Nixon, anti-war activist at Ohio State from 1969 to 1973; discovered the works of the economist Milton Friedman, the anti-communist writer Whittaker Chambers, and the novelist Ayn Rand; and earned his law degree from the University of Denver with ambitions to “change the world.” That led him to the Mountain States Legal Foundation, one of the first non-lefty public interest law firms, where the self-described hippie worked for James Watt, the soon-to-be-despised future secretary of the interior, whom Mellor describes as a “fascinating man.”

In the 1980s, Mellor moved on to the Reagan administration, where he was a deputy general counsel in the Department of Energy. After that he served for five years as director of the Pacific Research Institute, where he helped “develop a strategic long-term…libertarian litigation strategy,” one that would come to full fruition with the founding of the Institute for Justice.

IJ has helped everyone from New York jitney drivers to D.C. hair braiders to New Orleans florists defeat unreasonable, frequently ridiculous legal restrictions that prevented them from earning a living in their chosen trade. In recent years the law firm has branched out to defend free speech against campaign finance laws and school vouchers against teachers unions, earning high praise along the way from the likes of Mellor’s hero Milton Friedman. “The Institute for Justice,” Friedman once said, “has become a major pillar of our free society.”

Editor-in-Chief Nick Gillespie spoke with Mellor in IJ’s Arlington, Virginia, offices in September 2007.

reason: Let’s talk about the First Amendment and particularly your political speech cases. IJ has traditionally focused on economic liberty issues—the ridiculous licensing of hair braiders and florists, for example. Wading into speech issues is a relatively new initiative.

Chip Mellor: Yes. We’re challenging the stranglehold campaign finance laws pose for vibrant political free speech. We won a case recently in the Washington state Supreme Court in which the state had passed a 9.5 cent per gallon tax increase and some folks organized an initiative to repeal that. Amongst those supporting the initiative were two talk radio hosts. They opposed it and used time on the air to rail against the injustice and insanity of this kind of tax.

The election commission there slapped them with a cease-and-desist order on the grounds that the time they had spent on the radio advocating against the tax constituted an in-kind contribution to the anti-tax campaign.

reason: And we can guess that had they been talking about how great the tax increase was, they wouldn’t have been fined for political speech.

Mellor: Right. A twist on this is that the law firm doing the enforcement activity had direct ties to the city and would benefit from the gas tax increase because of the work it did.

These campaign finance laws get very complicated and very technical very quickly, so many people don’t understand them very easily. Something like in-kind contributions might not sound that bad. But the practical reality is that here the limit is $5,000 per campaign or per cycle for in-kind contributions. That’s about five minutes on talk radio.

reason: What happened?

Mellor: We won. That part of the law was invalidated. They were able to keep talking up to a point, but there was a period of time when they had to do that at risk. They were brave enough to do it, but other folks might not be, so it has this chilling effect that even when you fight back, you’re in this limbo not knowing what the ultimate outcome is going to be.

reason: What are some of the other problematic campaign finance laws?

Mellor: One perverse aspect of McCain-Feingold and Buckley v. Valeo, the predecessor case, is that both allow legislators wide latitude to pass laws limiting political speech for the purpose of avoiding the appearance of corruption. That standard—the appearance of corruption—is obviously so vague and so much in the eyes of the beholder or the politician that it allows virtually unfettered discretion and potential for abuse. You see that playing out in McCain-Feingold with the restrictions on advertising 30 or 60 days before an election. Unions and corporations are not allowed to express advocacy for or against a candidate 60 days before a general election and 30 days before a primary. What that basically means is you can’t take out paid advertising and make your position known.

reason: It has the explicit intention of limiting the amount of information that would be available to voters.

Mellor: Yes. On the express assumption that this is somehow corrupting the political process and this is somehow beleaguering voters with information that might make them make a bad choice.

reason: If the AFL-CIO or Bechtel can just throw an unlimited amount of money saying that George Bush is a bastard or John Kerry is the greatest thing since sliced bread or whatever, why shouldn’t that be regulated?

Mellor: The whole notion of democracy is the ability to persuade others to adopt the views that you have in voting for the candidate or the issue that you prefer. That’s true of the AFL-CIO or John Doe on the street. Reaching large numbers of people often requires the enlistment of media or of an extensive advertising campaign. It just goes hand in glove with making your views known. In the early days it was pamphlets; today it’s TV.

Two things will always happen. One is that money will always find its way into elections. The problem isn’t too much money in politics; it’s too much power in government. I think that’s absolutely correct. As long as government has the favors to dispense and the power to dispense, people will find ways to get the money to it. It’s a fool’s errand to try to just limit the money.

Second, as long as America is a democracy, you’re always going to have people trying to make their views known. And that’s as it should be. So the attempts to limit this and to impose these increasingly complicated obstacles are doomed to failure and at the same time are going to increasingly create incentives for cynicism, for all sorts of intermediaries. You have to hire lawyers, accountants. You have to do all these sorts of things, and it will serve the interests of the entrenched political establishment because it will be the most able to adapt to them. It will paralyze outsiders and insurgents because it will be harder for them to organize and penetrate these increasingly complicated and arcane rules.

One good example of that is a case we have in Colorado. In Parker North, which is not too far from Denver, a neighborhood found out that it was going to be annexed. Parker North was suddenly going to become part of Parker. That carried with it increased taxes and other obligations that the residents of Parker North were not interested in, so several folks got together and just started talking among themselves in their backyards and said let’s fight this, let’s organize against it. So they began posting yard signs and organizing a bake sale and that sort of thing to increase interest among the residents in their community to vote against the annexation. Partway through the campaign they were served with a cease-and-desist order saying they’d violated the campaign laws of Colorado because they had spent more than $200 simply to influence the outcome of an election and they failed to account for every penny of that, from bake sales, on yard signs.

These are feisty folks. They didn’t give up, but others might, and it’s still in trial.

reason: Will they win?

Mellor: I think we’ll ultimately win, but the fact that we’re in trial, that it’s not a slam-dunk victory for us, should tell you something.

reason: How do you feel about mandatory disclosure laws?

Mellor: Mandatory disclosure laws are often viewed as a painless way of accommodating some degree of regulation of campaign financing such that people at least know who is backing whom. I think that oftentimes people overlook problems created through disclosure, and we ought to consider those problems and determine if those costs are worth bearing. Any time you have to disclose, you’re in essence putting your vote on record. You may feel perfectly comfortable saying, “I back Ron Paul,” but other folks may be in a position where coming out visibly for a candidate or an issue could compromise them in their community, in their workplace, in their church or synagogue, or some place like that, and they may be very reluctant to have their name appear not just in some obscure filing in a city hall file cabinet but on the Internet.

reason: What was the first case that IJ took on?

Mellor: The first case was in 1991 and involved a wonderful entrepreneur here in Washington, D.C., named Taalib-Din Uqdah and his wife, Pamela Farrell. They were entrepreneurs seeking to braid hair but had the misfortune of doing so without a license to practice cosmetology.

Hair braiding is a means of both artistic and cultural expression as well as personal preference for the way that hair is styled, particularly in African-American and Caribbean communities. It is widely practiced and very popular. It’s often practiced in the home and passed on from mother to daughter in sort of an informal apprenticeship, because it is a very elaborate means of styling hair. But Taalib-Din had opened a salon. It was in a home, but one where they’d converted the first floor to a salon. He employed about a dozen people.

He actually received a knock on the door from the D.C. cosmetology police informing him that he was practicing cosmetology without a license, and he had to cease and desist immediately or face a fine—I believe it was $1,000 a day—and possibly even imprisonment for the crime of braiding hair and employing people. And when he went down to get a license, of course, he found that it was much harder than one would expect because it required that you actually attend cosmetology school for a couple of years, that you have thousands of hours of training learning skills that have nothing to do with African hair braiding. Adding insult to injury, it required you to demonstrate your proficiency by showing that you could, on a practical exam, style women’s hair in finger waves and pin curls, which were the hair styles popular with white women in 1938, when the law was passed.

reason: What happened in the case?

Mellor: We lost at the U.S. District Court and were moving it up through the appeal process when we were successful through both media and other efforts in getting it deregulated in the D.C. City Council.

reason: How did the media respond?

Mellor: All of our cases are deliberately designed as platforms to educate the general public about the importance of what may seem to be unique or even arcane issues and why those issues affect many, many people beyond the particular case, both in terms of the situation and also in terms of the constitutional principle involved. Here we had a wonderful media response from everybody. They picked up on several things: 1) the inherent injustice involved; 2) the compelling story that the clients had to tell; and 3) the way in which the law was really rigged against what could otherwise be a totally legitimate and productive activity.

The principle of law there is applicable whether it’s hair braiding or cab driving or casket retailing or flower selling or any number of entry-level occupations that are subject to arbitrary regulations.

reason: Could you talk a little bit about that type of case?

Mellor: In economic liberty cases, the standard of the law today is so abominable that the government virtually gets a free pass to regulate any activity it wants in almost any fashion. The legal standard is literally that any reasonably conceivable set of facts will suffice to justify an economic regulation, even if those facts weren’t present or considered by the legislature when the law was enacted.

For instance, look at the 2003 case we had in Louisiana involving flower retailing. There anyone who arranges flowers—which means, by law, putting two flowers together—and then sells those flowers for any amount of money has to be a licensed florist or work for a licensed florist.

reason: Who does the licensing? Is it a state board?

Mellor: Yes, it is. Of course, it’s comprised of florists. These restrictions were all made out of Public Choice 101 usually.

reason: Meaning that a cartel or a politically savvy group of people get together to limit marketplace entry.

Mellor: Right.

reason: When did the Louisiana law go into place?

Mellor: In the 1940s. There was a proliferation of these licensing laws in the Progressive Era and an explosion of them after the New Deal. They’ve just continued to increase as the number of occupations has grown and enterprising people have created more niches.

In Louisiana, once they set this law in place, it was regulated by the floristry board that was comprised of florists. Surprisingly, or perhaps not so surprisingly, the passage rate on the practical exam—where you arrange flowers and show your proficiency—was about 35 percent a year. It was utterly subjective. They’d just say things like, “It doesn’t have the proper sense of balance. It doesn’t have the proper perspective. It’s not artistic enough.”

There was no appeal from it, no standard of review. You were basically stuck. Many more people passed the bar exam in Louisiana than passed the floristry exam.

The state was arguing that you could create a corsage in such a way that someone could prick their finger on the pin, and that this was a public health and safety rationale sufficient to uphold that law. That’s literally what they were arguing.

In Oklahoma we had a case where individuals were seeking to sell caskets without having to be fully licensed funeral practitioners. Bear in mind that the fully licensed funeral directors have to go to school for two years, have to embalm bodies, have to do all sorts of things that have nothing to do with selling what amounts to a box.

And you can only go to a funeral director for a casket. Markups of 100 to 600 percent are routinely imposed on casket buyers in the funeral home context.

The court said that Oklahoma had a legitimate interest in protecting the funeral home industry from competition. That opinion should chill everyone who believes in free enterprise, because it says dispensing favors is the national pastime of state legislatures. Economic protectionism is a sufficient ground alone to justify this kind of practice.

reason: But in other areas of commercial activity that have long been regulated, things seem to be going in the other direction. You can buy mail-order dentures now. You have 1-800-CONTACTS. Before you would go to an eye doctor, you would get a prescription, and then often you would go to a captive optician to buy your contact lenses, your glasses, etc. That seems much more open now. In certain areas where things were tightly regulated, it seems to be loosening up.

Mellor: Obviously, the Internet has had a profoundly beneficial effect on commerce and on the choices available to consumers. At the same time, though, people who are active in their communities providing goods or services in those communities as entrepreneurs are increasingly subject to licensing and permitting requirements that range from annoying to impenetrable. That’s the real burden, and that’s what we’re trying to stop. These burdens fall most heavily on folks who are really the aspiring entrepreneurs at the entry level, trying to break in for the first time or move up the next notch.

reason: So it’s the flower arranger seeking to go out on her own in New Orleans.

Mellor: Or the cab driver, the jitney driver. Virtually every city in the country has some degree of entry control and monopolization with the cab market. At the same time, cabs have provided a wonderful means of entry-level opportunity for entrepreneurs, often immigrants. They provide flexibility. They provide an opportunity to work as hard as you want and earn as much money as you can or as little as you want.

It’s one thing to say that under the police power of the government they can require safe vehicles and insured vehicles and competent drivers. But they start creating monopolies, limiting the number of cabs that can enter a market, regulating rates. We’ve worked in Denver, Indianapolis, Cincinnati, Minneapolis, and New York to open up transit markets. We’ve had success, but we have a lot yet to do.

reason: Give an example of a success.

Mellor: Maybe you’ve been to Queens or Brooklyn and seen the commuter vans that operate there. These are wonderful community-based transportation options for folks who prefer them over public buses, which are usually woefully inadequate; cabs, which are nonexistent; or private cars, which are either unaffordable or inconvenient. In the mid-’90s, when we took on the case, there were about 60,000 people a day using these otherwise illegal vans to get from point A to point B because the vans ran on a fixed route.

reason: You would show up at a particular place and get in and pay a certain amount of money.

Mellor: One buck. They were called dollar vans. They’ve since changed a little bit, but at the time it was a dollar and you got on and went as far as you wanted with that dollar. They were efficient and safe, yet they were illegal, because the city council had passed a law at the behest of the transit workers unions and the public bus companies that limited the number of vans.

We fought against that with a lawsuit and the media. The Giuliani administration was actually supportive of our efforts, and we got the arbitrary procedures ruled unconstitutional. The vans are allowed to operate and have flourished since.

reason: Talk a little bit about the wine case.

Mellor: It’s a little different in that it was under a different provision of the Constitution, not the 14th Amendment but the Commerce Clause. It involved a woman who unfortunately just passed away, Juanita Swedenburg, and Swedenburg Winery out here in Middleburg, Virginia. She, like so many winemakers around the country, was subjected to a law that made it illegal to ship her wine to individual purchasers in other states. These were protectionist laws that were set up in various states to favor in-state wineries.

reason: Obviously, you could ship your wine to wholesalers.

Mellor: Yes. The wholesalers were really the 800-pound gorillas in this whole thing. They were the middlemen who were profiting—and still are profiting in some states—by the constraints imposed through these protectionist laws. They were very powerful and influential lobbies.

We took Juanita’s case to the Supreme Court and won. That has freed up wine shipment and the ability to get wine around the country. Because of the way states have authority to regulate wine or alcohol under the 21st Amendment, there are still some barriers that can be set up, but this removed a big one.

reason: Eminent domain has been a huge issue for you. How did it present itself as an area that demanded IJ’s attention?

Mellor: It’s a property rights issue. Eminent domain abuse had been of concern to us since our earliest days, but we really didn’t take it on until the mid-’90s, when we came across this situation in Atlantic City, New Jersey. Donald Trump, who owned a casino, had obtained the authority of eminent domain to condemn and tear down the home of an elderly widow right across from his casino in order to build a limousine parking lot to provide what Trump called a proper sense of arrival for his clients. We won that case in court and got tremendous media attention in the process, and that resulted in a deluge of inquiries and approaches to us from folks around the country who were suffering from similar plights.

Frankly, we had not realized just how widespread this phenomenon was until then. It was a terrible under-the-radar-screen tyranny that was sweeping the country. Once we became aware of it, though, we formed a strategic plan to escalate it to national attention and ultimately to the Supreme Court, which we did in the course of the next seven years.

We percolated several cases through the court system, all of which were wonderfully suited to bringing this issue to the U.S. Supreme Court. One of them involved Susette Kelo and several of her neighbors in New London, Connecticut, whose homes were being taken to provide what amounted to amenities for the new Pfizer plant being constructed there. High-end condos or a hotel or an office complex, a variety of things that would purportedly increase the tax revenue for the city and give a more amenable neighborhood for what Pfizer wanted there.

reason: For eminent domain to happen, you have to condemn a property.

Mellor: Yes. As the Supreme Court has done in tragically far too many instances, the words in the Constitution were interpreted or twisted to mean something entirely different from what they were intended to mean. The Constitution says “nor shall private property be taken for public use without just compensation,” and those words “public use” were twisted in a 1954 case to mean public purpose.

reason: That was in the context of urban renewal?

Mellor: That’s right. They razed a slum in Washington, D.C., to put in public housing and other developments. They said clearing the slum was a public purpose, and that was sufficient to do it.

reason: The difference between purpose and use here is that public use had traditionally meant a school, a hospital, possibly a publicly funded hospital, a library.

Mellor: It’s what common sense and historical practice would lead you to believe it was. Something owned and used by the public.

reason: Why wouldn’t a housing project fit into that context?

Mellor: Number one, that was never envisioned by the founding fathers. Number two, it’s not the typical public property ownership where you’ve got it available to the public in an open and even way.

reason: So even though it’s publicly owned and operated, it’s not like you can go into anybody’s apartment.

Mellor: Right.

Once this practice was blessed by the Supreme Court, it ushered in an entirely new practice in urban redevelopment which had a horrible legacy for cities across America and the people who live in them. Entire neighborhoods were razed. People, especially in minority neighborhoods, were displaced, and horrible new public housing projects were created.

The practice went from slums to blighted areas to not-so-blighted areas and ultimately to perfectly fine neighborhoods. A “public purpose” was deemed to be anything that increases a city’s tax base and creates more jobs by tearing down whatever was in one spot and replacing it with something deemed more appropriate—usually at the behest of, or certainly for the benefit of, private developers.

reason: How many of the original affected homeowners in New London sold out at the first opportunity? Originally they were given market value.

Mellor: Some did sell out, many of them under protest. What happens—and this is a very standard operating procedure under eminent domain—is you’re basically approached by an agent for the developer and informed that they’re there to make you an offer, which usually comes as a surprise to most people because they don’t have their houses for sale. They’re told that we’re here to make you an offer, we think it’s a fair offer, in fact we think it’s a generous offer. However, if you don’t agree, we’re going to have to go to the city, and they’re going to condemn your property and, you know, we just can’t guarantee you’ll get this much money. You may get less.

reason: What did Kelo and her co-defendants do?

Mellor: They said no. Susette Kelo said that she was not going to move, that she had bought that home with hard-earned money and had restored it lovingly. She was living there with her husband, and this is where they wanted to stay. It wasn’t a matter of money. This was their home.

We knew we had an uphill fight in the Supreme Court. Sandra Day O’Connor had written one of the worst opinions on the issue back in 1986, and William Rehnquist had joined her, so that made it tough to figure out how we were going to get five votes. Nevertheless, we were there and we were going to make the best case. By this time, we had also developed a national campaign of public awareness in the media, and that was working pretty well.

When we got into court, the good news for us came when O’Connor leaned forward during the argument of the opposing side, the city council side, and said, “Stop a minute, counsel. Let me see if I understand. Do you mean to say that it’s your position that the City of New London could take a Motel 6 and give it to Ritz Carlton?” And he said what he had to say. He said yes, that’s my position, and she had a look of utter disbelief on her face. She sat back, and we knew at that moment we’d reached her.

She wrote a wonderful dissent, but sadly it was a dissent. We lost 5-4, with Kennedy coming in with a very unfortunate concurrence that purported to set some limitations on eminent domain.

reason: There’s a bizarre coda to all of this, right?

Mellor: Yeah. The development’s not going to happen. It’s utterly at the end. It’s not a viable effort at all.

Susette’s house, though, is going to remain standing. They moved it from where it was located to another spot in town. It will stand as a symbol for property rights for the future.

reason: After Kelo you kept litigating this issue.

Mellor: We announced a national campaign to take this to the states, because the one ray of hope in the majority opinion was that the states could do more to protect property rights if they chose. So it was our duty, our opportunity, to go to the states and get greater protection.

reason: Can you talk briefly about how that played out in Ohio?

Mellor: Sure. We had a situation outside of Cincinnati where a neighborhood was being condemned to expand a shopping center. Some wonderful clients there had homes, or in one case a business, that they cherished. We were up against an enormously powerful developer and the city, who were determined to take this property

The law in Ohio was not very good. They’re allowed the condemnation of property if it was declared blighted, and to be declared blighted there was a list of subjective standards that could fit just about any neighborhood, such as diversity of ownership or cul-de-sacs. This neighborhood had, in fact, been declared blighted under those highly subjective standards.

We argued the case in the year after Kelo, and one thing that was evident during the argument was that the court was very, very sensitive to the outrage that was evident around this issue throughout the country. In the days after the Kelo decision, poll after poll after poll was showing astonishing opposition to that decision—70, 80, 90 percent against the government and in favor of property owners.

We won a unanimous decision at the Ohio Supreme Court level. This is the kind of decision lawyers live an entire career for and rarely get. Not only was it unanimous, not only was it in our favor, but this decision quoted Richard Epstein, Bernie Siegan, John Locke, spoke of natural rights—I mean, all of these wonderfully important authors and concepts woven into an unabashed defense of property rights and striking down, among other things, these utterly subjective notions of blight, recognizing them for the sham that they are.

reason: This is an example of where you lose in the U.S. Supreme Court but you generate a huge backlash.

Mellor: Without the Kelo decision, business would have continued as usual. Business as usual meant a complete drift in the direction of greater government authority with eminent domain, less protection for private property rights. Today that’s profoundly different. Forty-two states have enacted laws that change the status quo that was in existence at the time of Kelo in a way that to some degree provides more protection for private property rights. Some of those are modest and minor degrees; some of them are profoundly important degrees; some of them are kind of in the middle. But all of them are better than what existed before.

reason: What are your areas of greatest concern looking into the future?

Mellor: First, I’m worried about the fact that there’s a lot yet to be done on the areas that we’ve carved out. We’ve made measurable, notable, and I think significant progress in those areas since we started, but we’re a long way from the rule of law we need for a free society.

I think those are going to be compounded by the challenges we face in the coming years in the realm of the war on terror and the war on drugs.

reason: How so?

Mellor: There’s no question that we are on a precipice over which we could easily tumble, especially if there’s another major terrorist development whereby the state, at all levels, will gain greater authority. The presumption in favor of state authority will escalate dramatically and that will bleed over into all sorts of activities that we take for granted today, whether it’s financial transactions, whether it’s property ownership and use matters, whether it’s education, whether it’s travel. The liberties that are in the fabric of everyday life could be chilled and then perhaps profoundly restricted.

reason: Do you think we’re more free or less free in that kind of big-picture sense? Are we more free or less free than we were in, say, 1975?

Mellor: I think that we’re more free. The proliferation of new media, the availability of new mechanisms for investment and financial transactions that have dispersed and created wealth for vast numbers of people, property ownership, access to information—all those are wonderfully exciting new developments.

But I think the potential for being less free is far greater, along the lines of what I was talking about with the war on terror and the war on drugs. That whole effort to give government the benefit of the doubt when it comes to its exercise of authority is the real problem that we face. More and more people are willing to do that in more and more areas, and as that happens, as that becomes the prevailing way of thinking, then naturally government will expand into those new initiatives.

What we really face is a Zeitgeist of assumptions. It’s the accumulation of many years of repetition of collectivist thinking, and it allows people to accept as a given things that they would have questioned or been outraged about years ago.

Really Full Disclosure

bdoherty@reason.com (Brian Doherty) — Tue, 26 Feb 2008 12:21:00 EST

New way to bedevil those working in and for Congress, from the website LegiStorm's press release:

LegiStorm, the Web site that first caused controversy in Washington by publishing congressional staffer salaries, has now launched the first database of personal financial disclosures for thousands of the most powerful aides.
By law, members of Congress and their highest paid staff - who tend to be the most powerful on Capitol Hill - are required annually to disclose information about their personal finances, including details about their debts, stock portfolio, outside earned income, spousal employment, major gifts received and even their gambling winnings.
..........

Rules from the House of Representatives state, "The objectives of financial disclosure are to inform the public about the financial interests of government officials in order to increase public confidence in the integrity of government and to deter potential conflicts of interest."
[LegiStorm founder Jock] Friedly expects controversy with the new free database. "I understand that congressional aides want to jealously guard their privacy and I sympathize," he said. "However, these are the behind-the-scenes power players who control a $3.1 trillion federal budget and write all the laws of the land. It's hard to argue that they are not important public figures worthy of a little scrutiny."

Start your private investigation at LegiStorm today!

Maverickology

matt.welch@reason.com (Matt Welch) — Fri, 22 Feb 2008 07:46:00 EST

Because of the New York Times' shoddy execution, and the fact that the real underlying story (not the evidence-lite romantic speculation) is an A27 jobbie at best, the McCain-lobbyist "scandal" 30 hours later has become largely a debate about journalism and even a textbook example of political damage control and base-rallying.

But that doesn't mean there aren't interesting subplots that will be teasing out in the coming days. David Brooks, a longtime intimate of Campaign McCain, provides the most interesting Day Two analysis I've seen, basically laying the blame for the scandal on the longtime rift between McCain campaign manager Rick Davis, and his differently gruntled former Karl Rove figure, John Weaver.

At the core of that article that began on the front page are two anonymous sources. These sources, according to the article, say they confronted McCain in 1999 with their concerns that he was risking his career by interacting with Vicki Iseman. [...] I have no idea who those sources are. But they are bound to come from the inner circle of the McCain universe. The number of people who could credibly claim to have had a meeting like that with McCain in early 1999 is vanishingly small. I count a small handful of associates with that stature, including Davis and Weaver. There is nobody in that tight circle unaffected by the hostilities that emanate from the rift. [...]
Some closer to Weaver theorized that the sources must be former McCain campaign elders from 2000 who worked for rival campaigns in 2008.
I checked that possibility out, and it doesn't hold water. But while calling around to a dozen senior McCain friends and advisers Thursday, what struck me was the enormous tragedy of the rift. [...] [It] is like some primal sore. It affected every conversation I had Thursday, as it has infected McCain efforts again and again over the past many years.

The upshot, for the 99% of healthy humans who don't care about inter-campaign machinations? Team McCain might be getting ready to blame the formerly indispensable John Weaver, and depending on how that goes John Weaver might be poised to dig up more skeletons as the campaign season unfolds.

Oh, and there's this ~~parting~~ zinger from Brooks:

Thursday, McCain went all-in. He didn't just say he didn't remember a meeting about Iseman. He said there was no meeting. If it turns out that there is evidence of an affair and a meeting, then his presidential hopes will be over.

UPDATE: As I've mentioned before, McCain's dealings with Vicki Iseman's client Paxson Communications was a mini-scandal eight years ago first raised by the Boston Globe (McCain effectively managed the crisis, plus a related, ensuing one involving still more alleged favors for Ameritech, by producing a massive document-dump that smothered the stories with context). Anyway, the Globe story has always been hard to find online, until today.

McCain Has His Cake and Eats It, Too

kmw@reason.com (Katherine Mangu-Ward) — Thu, 21 Feb 2008 12:00:00 EST

Here's the Sen. John McCain (R-Ariz.) that everyone in Washington knows and loves (or hates, or loves to hate): red-faced and hollering about his favorite topic, campaign finance.

Last week, Sen. Barack Obama (D-Ill.) showed signs of backing off a semi-pledge to accept public financing for the general election. His original statement was not technically a promise. "If I am the Democratic nominee," said Obama, "I will aggressively pursue an agreement with the Republican nominee to preserve a publicly financed general election." This week, McCain went for the jugular, proclaiming, "I committed to public financing. He committed to public financing. It is not any more complicated than that. I hope he will keep his commitment to the American people."

It's just a coincidence, of course, that McCain is throwing down on this issue right after the Obama campaign raised a massive $35 million during the last month. And when the conventional wisdom says that Obama is positioned to outspend the senator from Arizona.

Candidates who accept public funding for the general election receive a grant of about $85 million from the federal government. In exchange for that pot of gold, candidates essentially forgo all private fundraising, limiting total spending to the government grant. The money comes from citizens who have checked "yes" to contribute $3 to the Presidential Election Campaign Fund on their tax return.

McCain accuses Obama of "Washington doublespeak." But on this particular issue, McCain is a master practitioner. Leaving aside previous legislative ducks and swerves, like his 1995 vote to abolish the public financing system at the presidential level altogether, McCain has had a complex relationship with the public financing of his own campaign in this cycle alone.

There was a midsummer moment last year, now distant in the fruit-fly memories of the political commentariat, when McCain's campaign was "broke and a total joke." To keep afloat, McCain cut staff positions and took out a $3 million loan, using his fundraising lists as collateral. The bank in question, Bethesda Fidelity & Trust, has made campaign loans to many politicians in the past, including Democrat Walter Mondale and Republican Bob Dole, but McCain's particular loan came with a special caveat. He was required to obtain a life insurance policy, lest he fail to survive the campaign, a turn of events that would have drastically hampered his fundraising abilities and thus his ability to repay.

Two weeks before the New Hampshire primary, McCain needed another million, and looked to extend his loan at the same bank. The bank said the previous collateral wasn't going to cut it, and asked for additional backing. "They said, 'You've explained how you can afford to borrow more, and how you can pay us back if things go well. What happens if things go badly?' " said Trevor Potter, a McCain attorney.

At that point, McCain had $5 million coming to him through the Federal Election Commission's (FEC) public financing system for the primaries, which matches a percentage of eligilble private contributions. But McCain didn't want to accept the money, since it would have restricted future spending. So in the loan agreement, the campaign assured the bank that it would drop out of the financing system, but that it could reapply for federal matching funds anytime if things really tanked. The federal money would be waiting for McCain—he'd just have to stay in the campaign long enough to collect and make good on his obligations to the bank.

According to The Washington Post, "Under FEC rules, a candidate who uses a certification for federal funds as collateral for a loan is obligated to remain within the public financing system." McCain's campaign denies that this is what it has done, and technically that's true—he promised to drop out of the system as collateral for the loan.

When public funds are used as a guarantee for a loan being taken explicitly so that the candidate can stay out of the public financing system, surely it is time to throw in the towel. The FEC rules, like most of the byzantine campaign-finance-reform legislation that bears McCain's name, just makes more work for clever lawyers, who can always figure out a workaround (remember 527s?).

And yet there's McCain, up on stage, demagoging campaign finance as usual. The whole thing has a feeling of inevitability. As campaigns get longer and longer and more and more expensive, candidates are reluctant to accept spending caps, which is essentially what public financing amounts to. Even if there is a temporary truce—Obama and McCain might escalate this squabble until both actually do have to accept public funding to save face—there are teams already figuring out the kind of workaround that will get private money into a "publicly financed" election. Public funding has always been a chimera, and, as his campaign's tactics reveal, no one knows that better than John McCain.

Katherine Mangu-Ward is an associate editor for reason.

Campaign Finance Reforms Still Don't Matter

kmw@reason.com (Katherine Mangu-Ward) — Wed, 13 Feb 2008 14:43:00 EST

This week, two more reasons to point and laugh at impotence of campaign finance restrictions:

1) John McCain opts out of matching funds, which would have limited his campaign spending. Though not technically hypocrisy, this does seem to go against the spirit of McCain's well-publicized disdain for the effect of private "special interest" money on politics.

2) The New York Sun's handy expose reveals undisclosed small donations totaling $118 million so far in this cycle, one quarter of the money raised.

Reporting rules are very relaxed for donations under $200. The Sun asks if large sums could be funneled in though this back door (answer: probably) and looks into the largeish number of international donations coming in through this channel.

According to an analysis being released today by a Washington think tank, the Campaign Finance Institute, Senator Obama of Illinois led the pack with such small and secret donations, pulling in about $31 million during 2007. Rep. Ron Paul ran second in small gifts, raking in more than $17 million. At the end of the year, Senator Clinton and John Edwards, who has since dropped out, were essentially tied for third in unitemized, small contributions, with each candidate raising about $11 million.

Once burned, twice shy. Hillary's campaign is incredibly careful about foreign donations:

[While] Mr. Obama's Web site allows donors to choose an address in one of 227 possible countries or territories, including Iran, Iraq, Zimbabwe, and Yemen. Mr. Paul's site is even more embracing, permitting addresses in Syria and the "Occupied Palestinian Territories...The most cautious campaign when it comes to accepting online donations from overseas seems to be that of Mrs. Clinton. Visitors to her Web site who want to list an address abroad are directed to a special page which advises that such donations are only taken by mail and that donors "must include a copy of your U.S. passport or green card."

reason on (and against) McCain-Feingold here.

Warriors vs. the War

bdoherty@reason.com (Brian Doherty) — Tue, 05 Feb 2008 18:04:00 EST

Fresh assessment of which candidates active military service seem to prefer: the candidates on either side who opposed the Iraq war in the beginning, Ron Paul and Barack Obama. Via ABC News's political blog:

In the 4th quarter of 2007, individuals in the Army, Navy and Air Force made those branches of the armed services the No. 13, No. 18 and No. 21, contributing industries, respectively. War opponent Rep. Ron Paul, R-Texas, received the most from donors in the military, collecting at least $212,000 from them. Another war opponent, Sen. Barack Obama, D-Illinois, was second with about $94,000.

The Center for Responsive Politics analysis that ABC relied on.

50-50 Support for the First Amendment at the FEC

jsullum@reason.com (Jacob Sullum) — Fri, 25 Jan 2008 11:45:00 EST

At a Federal Election Commission hearing yesterday, FEC Chairman David Mason sided with SpeechNow.org, an independent 527 organization that wants to run ads advocating the election or defeat of federal candidates based on their positions regarding campaign finance regulation. In a dissenting opinion (PDF), Mason argued that limiting contributions to the group, as FEC lawyers have recommended, would violate the First Amendment rights of its members:

Money given to SpeechNow funds the expression of members' views; it does not facilitate candidates' views. Placing limits on the money given to independent organizations serves only to limit speech—an unjustifiable result in a Republic with a profound commitment to the principle that debate should be "uninhibited, robust, and wide open."...The Supreme Court has recognized government interests in limiting corruption, or its appearance, only when that spending is connected or coordinated with candidates for public office or, in a very limited manner, because of the corporate form....Limiting the [contributions] given to an organization like SpeechNow would impose an intolerable, and constitutionally unjustifiable, burden on the independent spending of [a] citizen organization.

The only other sitting member of the six-member commission, Ellen Weintraub, voted in favor of the draft opinion (PDF) saying SpeechNow has to register as a "political committee" and abide by the contribution limits associated with that status. Without a quorum, the opinion cannot be formally adopted or rejected, but everyone expects the issue ultimately will be settled in court. Steve Simpson of the Institute for Justice, one of the attorneys representing SpeechNow, says the group is "facing the specter of fines and jail time" if it proceeds with its advertising plans, so its "only recourse is the courts."

SpeechNow Holds Its Peace

jsullum@reason.com (Jacob Sullum) — Tue, 22 Jan 2008 16:47:00 EST

It looks like the Federal Election Commission is going to nix SpeechNow.org's attempt to get around restrictions on political speech by organizing as a 527 group, eschewing corporate and union support, and operating independently of parties and campaigns. In a draft advisory opinion issued today, the FEC says SpeechNow.org has to register as a political committee and comply with the donation limits that entails if it wants to run ads explicitly opposing or supporting candidates based on their positions regarding campaign finance regulation. "This opinion would leave practically no room for Americans to exercise our First Amendment rights to join together and speak freely to other Americans about who to elect to office," says David Keating, SpeechNow.org's president. Former FEC Chairman Bradley Smith, chairman of the Center for Competitive Politics (which is representing SpeechNow.org along with the Institute for Justice), sums up the opinion this way:

The FEC is now saying that any time two or more people pool their resources to support or oppose a federal candidate, they become a political committee subject to government regulations and limits. But it should be common sense that if individuals can speak without limit, so too can groups of individuals.

The FEC, which is scheduled to consider the draft opinion on Thursday, can't officially adopt it because the commission does not currently have a quorum. But SpeechNow.org says it does not plan to risk fines or jail time by running its TV spots without a green light.

I wrote a column about SpeechNow.org's gambit in December. More reason on campaign finance regulation here.

Sure Loser Ron Paul Crushes Sure Frontrunner Giuliani--And Not Because Giuliani Gave Up

bdoherty@reason.com (Brian Doherty) — Sat, 05 Jan 2008 01:54:00 EST

Interesting analysis over at LewRockwell.com breaking down Iowa caucus votes per campaign appearances there.

Surprisingly, given the common belief that of course Giuliani did so disastrously in Iowa because he didn't try, he made nearly as many campaign appearances there as McCain did--35 to McCain's 38. And Paul beat Giuliani so thoroughly with far fewer personal apperances--only 27.

In fact, if these judgments were made objectively based on apperance and cash, not just Giuliani partisans' excuses for his dismal showing, it might be Paul, and not Giuliani, who seemed to be barely trying in Iowa. Giuliani, in only the first 9 months of 2007, spent $237,000 in Iowa.

I was unable to get Paul's campaign to respond to a question about how much he spent there in that period, or to find today updated spending numbers for the candidates broken down by state to the caucus day. The official FEC filings for Giuliani and Paul do have categories for "allocations of primary expenditures by state," but both are blank. If any commenters know more on this, have at it. With Giuliani's appearances exceeding Paul's by 30 percent, and Paul doing more than three times as well in the votes, would Paul's spending need to have exceeded Rudy's by more than 300 percent to add believability to the "Rudy did poorly because he didn't try" notion?

One big difference between eccentric loose cannon Paul and highly respectable frontrunner Giuliani is that Paul has oodles of non-campaign workers out there plumping for him, so official campaign cash spent isn't the best measure of real on the ground effort, so I'll give Rudy that.

In votes-per-appearance, Paul pulled 429.5 to Giuliani's 114.6. Only Huckabee beat Paul for votes per appearance.

Here from Media Matters a longer debunking of the "Giuliani didn't try in Iowa" idea.

I think one lesson is that the incredibly extended pre-campaign, with all the requisite predictions and pre-judgements about what is sure to happen, is bad for political analysts' necks, having to snap back so violently from when everyone with any sense knew it would be a Clinton-Giuliani matchup.

The Ron Paul Army in New Hampshire

bdoherty@reason.com (Brian Doherty) — Thu, 27 Dec 2007 18:21:00 EST

Vijay Boyapati quit Google to lead a guerrilla campaign for Ron Paul in New Hampshire, complete with 10 rented base camps and some logistics issues; the Concord Monitor embeds an intrepid reporter.