HOME / ABOUT THE FEC / COMMISSIONERS / FORMER COMMISSIONERS / COMMISSIONER DAVID M. MASON / SPEECHES AND ARTICLES
IFES INTERNATIONAL CONFERENCE
ON MONEY AND POLITICAL ELECTORAL CONTESTS
David M. Mason
Vice Chairman, Federal Election Commission, USA
THOUGHTS ON ADVANCED CORRUPTION FIGHTING
When the heads of central banks gather in international conferences, the world notices: reporters crowd hallways, investors hesitate, markets pause, agreements constitute major news.
When the heads of national electoral commissions gather, few notice, few appear to care. This difference is understandable - the World has always loved money - but unfortunate. What we do, or fail to do, is more important to the future of our countries and to fulfilling the aspirations of our fellow citizens than monetary policy or market reform. A fair and efficient election system is ultimately more important than even an adequate national defense or criminal justice system.
Functional defense, police and monetary systems are essential, but they fulfill needs of a lower order: survival, food, clothing, shelter. Ultimately humans are meant to be free. To be free, people must govern themselves. And in all but the smallest communities, self-government is exercised through elections. Thus, conducting and regulating elections is the most fundamental and necessary task for the government of a free people. The legitimacy of every other action of the government relies upon free, fair and honest elections. We participate in fulfilling the highest calling of a free people.
We should share some pride among ourselves in playing a special role in that high calling, as unrecognized by others as it may be. Perhaps we can take some comfort when we return home in the appreciation shared by those of us here in the way elections uniquely shape and form national destinies. And, of course we hope to learn some lessons from one another about the different ways in which the challenges of democracy can be met.
Before I offer some detailed thoughts on the financing of free elections, I want to provide an outline of the electoral system in the United States. I would not necessarily recommend the US election system as a complete model for a country with different constitutional and legal structures; there are a variety of legitimate ways to run democracies. But the contrast between our federated system and the more unitary systems prevalent in most other countries may present some useful considerations.
The United States was founded when 13 separate colonies joined together in a revolution. For the first eleven years of our history we operated with almost no national government; we had a legislature, but it had no power to tax, and we had no executive and no national courts. The Constitution of 1787 established the system of dual sovereignty which continues today, but not for nearly 80 years more, and only then through a civil war, was the fundamental issue of whether we were separate nations joined in a compact or one nation with separate parts finally resolved. Even today states manage their own diverse criminal justice systems separate from the national system and subject only to some broad national constitutional rules.
The United States does not have a unitary electoral system, but fifty separate state systems. For state and local elections there are fifty separate election codes. While those systems share many similarities, they also allow significant differences on questions including whether there is a plurality or majority requirement in individual elections, access by minor party and independent candidates to the ballot, and whether voting by party is encouraged or made nearly impossible. (In my home state of Virginia the party identification of candidates for most offices is not printed on the ballot.) Again, subject only to some broad constitutional guarantees, states manage their own systems for registering voters, qualifying parties and candidates, balloting and counting votes.
While the US electoral system is state-centered as a matter of constitutional form, in practice elections are run and administered at the local level, by county and municipal governments. In most states, for instance, voters register with their local government, and state government may not even have ready access to local registration lists. These local lists, however, are used for local, state and national elections. Local officials are responsible for the entire election process in their jurisdictions: for establishing election districts, for securing, staffing and managing polling places, for acquiring voting machines (in all but two states), for designing ballots, for counting votes, adjudicating challenges, and certifying results. Of course, these local officials operate under varying national and state guidelines and requirements, but they generally work for, are paid by, and receive their budgets not from state election directors but from municipal or county councils. Thus, the actual administration of elections can vary significantly even within a state, and state election officials who are formally responsible for the process may have little direct control over it.
As a result of controversies in our most recent election, it is likely that these processes will be subject to greater centralization, at least up to the state level, but the fundamental administrative structure, with local officials managing local, state and national elections in their jurisdictions, is unlikely to change. The advantage of this system in a well-established democracy is that the process of self-government, even at the national level, is managed by citizen-neighbors at the local level, not by experts from the national capital or by a large and impersonal bureaucracy. The system has a natural level of transparency, provides multiple levels of oversight and permits adequate uniformity while allowing for local variations. This system also provides structural protections against fraud or machine and counting errors by limiting consequences to individual localities.
As a matter of constitutional convenience states are also charged with conducting elections for the national legislature, subject, however, to plenary power of Congress to make any specific rules it wishes states to follow for Congressional elections (this power has been exercised quite infrequently). Thus, the same local officials, with their local lists, workers and equipment conduct our national elections along with state and local contests. For selection of the President, states are not even required to conduct elections (though all do by choice), but each state may determine any system its legislature chooses for allocating its share of "electors" who constitute the formal selection body for the presidency. All but two states allocate 100% of their electoral votes to the candidate who wins a plurality of the popular vote in that state. Thus we sometimes characterize our Presidential election as fifty concurrent state contests. It was this system which resulted in the selection of President Bush despite a victory in the popular vote by Mr. Gore.
The narrow margin in the Presidential election and controversies over the result in the state of Florida have, of course, produced much discussion of changes in the Presidential selection process and in voting practices generally. Some additional states, for instance, are considering proportional allocation of presidential electors based on the state popular vote. Most serious consideration of election reforms remains, however, at the state level. The national Congress is considering principally measures to provide financial assistance to states to purchase new voting machines, to provide technical assistance, and perhaps to provide some rules for the registration process.
My own Commission has gone unmentioned thus far because, as you perceive, there is no national agency responsible for the conduct and administration of elections; there is not even a significant body of federal regulation for the conduct of elections. My Commission does establish technical standards for voting equipment, but those standards may or may not be adopted by states on a voluntary basis. Federal regulations may flow from current election reform debates, but Congress remains very tentative about making such regulations mandatory and highly resistant to any ongoing administrative role in elections for the national government. The US Department of Justice does have a division dedicated to investigating and prosecuting vote fraud or illegal denials of the right to vote and there are provisions for federal election observers in extraordinary circumstances, but federal observers are rarely deployed in practice.
If the US Federal Election Commission does not count votes, what does it do? It counts money! We regulate the financing of elections for Congress (the national legislature) and administer the system of public financing for Presidential elections. I call this "advanced" corruption fighting because campaign financing regulations do not deal with fundamental voting rights.
The world has been blessed in the last decade by remarkable and widespread advances in self government and free elections. The fall of communism in Europe allowed many nations to conduct free elections for the first time in half a century or more, some for the first time ever. The fading of the threat of international communist subversion allowed and required many governments in Asia, Africa and Latin America to liberalize their governmental processes and permit genuine political competition. In most countries of the world today the fundamental right to self government is not disputed, and generally the instrumental rights necessary to exercise genuine self-government are respected. Every citizen may vote, but only once, voters and candidates should be free from violence or threats in campaigning and voting, election administration must be transparent and vote counting fair and impartial, votes must not be bought or sold, and government officials must not accept bribes or demand payments in return for favors, protection or special treatment. These principles are widely respected and, in most countries, generally applied.
We all realize, as is the case with any other crime, no country is permanently and universally free from evils such as these. In the United States we have had Congressmen sent to jail for abuse of office only about a decade ago, we have had local election officials imprisoned very recently for accepting illegal payments in connection with the purchase of voting machines, and we periodically have instances of voting fraud. But as these crimes are contained into isolated instances our concern can be extended to the potential for less direct and obvious influences on elections, particularly through election financing. This is the role my Commission plays at the national level in the United States, and a subject of particular interest for this conference.
In considering the US campaign financing system, recall that states retain complete control over all aspects of their own (state and local) elections. Thus, the rules which apply to financing federal campaigns cannot be applied to the financing of state or local campaigns. Each of the fifty states have its own campaign financing rules, as do many of our larger cities for municipal elections. Some states require disclosure of contributions to campaigns and little else. Other states have detailed restrictions on the size and source of campaign contributions (most frequently prohibiting contributions from corporations or labor unions). Several states have various public financing schemes, but the US campaign financing system, except at the Presidential level, is composed overwhelmingly of private financing.
Because US political parties operate at the local, state and national level, with local party committees promoting presidential candidates and national party committees often involved in state elections, we face significant legal and enforcement issues at the point of intersection of state and national election laws and activities. The "soft money" controversy some of you have heard about is essentially a problem of national political parties collecting money under state financing rules, which are generally less restrictive than federal rules, and then using that money in ways which influence federal elections. Congress is considering addressing this problem by extending federal campaign finance rules to cover entirely these "mixed" activities which influence both federal and state elections.
Regulators and legislators also face restrictions because our federal courts have interpreted our constitutional prohibition against the regulation of free speech as prohibiting most regulation of spending by political parties and candidates. In general, states and the federal government may place reasonable limits on the sources and size of contributions to candidates and political parties but may not limit the total amount of spending by candidates and parties or by individuals if they choose to disseminate election messages on their own. One significant exception is that candidates who accept public campaign funding may be required to limit spending in return, but public financing must remain voluntary, permitting candidates to decline to accept public funds and instead collect private contributions without a spending limit.
Within this constitutional structure our Federal law limits contributions from individuals to Federal candidates to $1,000 per election, with separate limits for primary and general elections. No individual may contribute more than $25,000 per year in total to candidates, parties and other political groups. Political parties have higher limits on the size of contributions they may receive and make and are unlimited in direct spending unless it is done with the specific direction or approval of individual candidates. Political associations other than parties (groups of individual members of labor unions, employees of corporations or groups sharing professional or ideological interests) may receive and make contributions of $5,000 per election.
Presidential candidates collect private contributions for primary campaigns, and may receive government funds to match a portion of private contributions if they agree to limit their overall spending. Major party (Democratic and Republican) nominees for President may receive a grant for complete federal funding of general election expenses, again in return for agreeing to limit spending to the size of the grant (about $70 million per candidate for the 2000 election). Minor parties may receive proportional funding if they meet established vote percentage thresholds.
Candidates and parties must report their contributions and spending to my Commission periodically, and those reports are made available to the public rapidly, including posting on the Internet. The Commission can impose fines on candidates and parties who file late or fail to file reports. Beginning this year, all but the smallest parties and candidates must file their reports electronically rather than on paper. My Commission employs staffs of investigators and auditors to review campaign finance reports and to investigate any irregularities which appear on the face or reports or in response to complaints filed with the Commission. A complaint may be filed by anyone. Frequently, complaints are filed by political competitors against one another. Complaints do not need to meet specific formal requirements, other than notarization under oath, and most are filed by non-lawyers.
Candidates and political parties under investigation are afforded significant procedural rights, beginning with the composition of the Commission itself, which has six Members, no more than three of whom may be of the same political party. In practice this has meant that there are three Members from each of our two major political parties, Democratic and Republican. In order for the Commission to take any action a minimum of four votes are required, mandating a significant degree of bi-partisan consensus in the operation of the Commission.
Members are nominated by the President and confirmed (voted on) by the Senate for six year terms, with terms staggered and expiring in pairs every two years. The chairmanship rotates annually among all six Members. Under current law Members may serve one term only. The Commission is technically part of the executive branch of government, but operationally is independent from supervision by the President or other executive officials. Members can be removed during their terms only for malfeasance. While subject to some criticism, this system of bi-partisan, rather than theoretically non-partisan, enforcement and administration of election laws works well in our system of relatively equal competition between two stable political coalitions. While the 3-3 structure occasionally produces deadlock in particular cases, more often it produces compromise solutions involving reduced fines or ambiguous findings when there are partisan disagreements. In contrast to the federal structure, most states vest enforcement of election finance laws in a single administrator or in a commission with an odd number of members.
Candidates and parties subject to complaints are given three formal opportunities to respond: when the complaint is received, when the Commission votes to open an investigation, and at the conclusion of an investigation. Because this process takes from six months to several years, investigations are conducted in confidence, with findings and conclusions released to the public only after the investigation is complete. The Commission releases its findings and rationale in cases in which we conclude the law was not violated just as when we believe a violation has occurred. This potential for clearance of a wrongfully accused political figure is an important part of our process. If the Commission determines the law has been violated, we attempt to reach a voluntary settlement directly with the offender. Most settlements include an admission of a violation, a fine, and often some remedial action. Most cases are settled at this stage. If we are unable to reach a voluntary settlement, the Commission takes the accused party to federal court, subject to our normal civil judicial process.
The Federal Election Commission exercises civil enforcement powers only. We can refer aggravated violations to the Department of Justice for criminal prosecution if we believe that is warranted. The purpose for having an independent civil enforcement authority has to do both with the perceived gravity of the offenses involved (that exceeding a contribution limit or failing to report a contribution is less serious than vote fraud or bribery, for instance), and with protection against actual or perceived political favoritism, since US prosecutors are part of the executive branch of federal or state government, reporting ultimately to an elected or politically-appointed supervisor.
In addition to its disclosure and enforcement functions, the Commission makes significant efforts to educate campaign and party workers about the requirements of the law. These include a series of guidebooks, plain language publications, a toll-free telephone line on which we will respond to anonymous inquiries, and a series of low-cost seminars which we hold in locations around the country to train campaign and party workers about how to comply with the law. We also assign analysts to review reports of the same campaigns and committees across successive reporting periods and encourage persons preparing reports for committees to have regular, informal contacts with their assigned analyst. By making it easy for reporting entities to get answers to their questions, and by knowing who to call when we have questions about a report we have received, we can prevent most reporting problems before they occur. The Commissions exercise of its reporting functions is generally well regarded largely because of this emphasis on personal contact.
Also in an effort to encourage voluntary compliance with the law, our governing statute requires the Commission to issue "Advisory Opinions" construing the statute or our regulations in particular circumstances in advance whenever anyone asks. Such opinions, when issued, protect the recipient from any potential penalty.
In some US states, the administration and enforcement of campaign finance law is conducted by the same agency which administers elections. In most states, however, campaign finance laws are enforced by separate agencies. Looking at the US model, it is clearly not essential that election administration and campaign finance enforcement be vested in the same agency. The politicians who are uniquely subject to campaign finance regulation appear comfortable with the concept of election officials as impartial referees but view campaign finance regulators as investigators or prosecutors.
The theory behind US Federal campaign financing law, and the view I hold, is that campaign financing regulations are an extended form of the corruption fighting purpose of basic election rules. Financing laws are refined tools because they are not generally used to prevent acts which are corrupt per se, but rather regulate actions which might become corrupting or appear corrupting if wholly unregulated. In most countries it is illegal to buy or sell votes, no matter what the price. Campaign contributions are generally not illegal per se, though source, size and handling of them may be regulated in various ways. Financing rules exist to aid citizens in exercising self-government, primarily by limiting opportunities to seek or secure improper post-election favors in return for large campaign contributions.
Connected to the general rule prohibiting spending limits is a strict and generally well-enforced prohibition on political candidates transforming campaign funds for personal use, by themselves or anyone else. No matter how large campaign treasuries become, if spending is reported and reviewed with this prohibition in mind, the utility of campaign contributions as bribes, individually or in the aggregate is severely limited. Thus, in seeking to prevent corruption do not overlook the utility of comprehensive reporting of campaign expenditures coupled to a personal-use prohibition as equal in importance to scrutiny of the sources of campaign funds.
There are some in the United States who hold views, with which I disagree, that campaign financing rules should be used to enhance the position of smaller political parties and of less popular candidates or to seek to equalize political influence among various interests or sectors of society. In my view such aims amount to putting the thumb of government on the election scales and end up frustrating rather than promoting genuine citizen self-government.
Even if you disagree with my philosophical view, an essential first point in considering campaign financing rules is to identify purposes and goals. If your goal is to promote equality by some measure, at the level of individual voters, or among identified sectors, interests or parties, you will design a very different type of law than one intended merely to prevent corruption while providing a free choice to voters. Just as a free economic system allows some companies to grow larger and more influential than others, a free political system allows some parties to grow larger and stronger than others. There is a great difference between a system which allows such power to flow largely from individual choices (whether votes or purchases) and one in which the government manages competition in order to achieve some other perceived good.
Campaign contributions are not wrong per se, just as money is not per se evil. Thus, the task in regulating campaign contributions is not to attempt to limit contributions as much as possible but to balance the legitimate use and purpose of campaign funds with their potential for abuse. Balances must be struck in several respects.
A major consideration in developing campaign financing rules is the question of where lies the source of the most significant threat of corruption. Reviewing history and recent experience, it appears that incumbent governments and politicians hold the most serious potential for corruption of elections. Incumbent governments in various countries, including my own, can and have manipulated the electoral process to perpetuate themselves in power. Such abuses can range from outright election fraud through interference with voting or campaigning to barriers to registration or other participation by political opponents. Certainly, it is incumbent politicians who are subject to bribery and who have the power to extort political tribute. Just as certainly, non-governmental forces can commit corrupt acts but in most cases their power and potential to do so is less.
If we think of campaign finance laws as a species of corruption-prevention rules, it is natural to conclude that we should not focus all attention on stamping out the potential for corruption through private financing of election campaigns while ignoring the potential of corruption from the government itself. While it is true that private entities can corrupt or be corrupted by a government, private financing also holds the potential to be a source of significant opposition to an incumbent government. Overly-strict campaign finance rules can be used effectively by governments to muzzle the opposition, while leaving the government free to make its case through official channels. In this respect the US principle, which limits political contributions from any one source but does not limit total spending by candidates or parties, strikes a good balance.
The consensus of academic research in the United States is that spending limits harm non-incumbents and aid incumbents. This is apparently because incumbent candidates are already well known in their constituencies and enjoy a variety of electoral advantages related to holding office. Non-incumbent candidates need not exceed incumbent spending in order to win, but they must spend enough to become well known in the relevant election district. Once candidates have done so, additional spending by either candidate appears relatively insignificant. Spending limits are simply counterproductive with regard to electoral competition.
Another consideration requiring a balanced judgment of the sources of potential corruption regards disclosure of campaign contributions. The US federal law requires disclosure of the names of individuals contributing $200 or more to any candidate or party. While large, undisclosed contributions pose the threat of back-room corruption, it is also true that a repressive or vindictive government or politician could seek to punish persons or interests who support the opposition. If disclosure is viewed as essential to a campaign finance regime, I would recommend reserving disclosure to the largest contributions.
A third subject for balance is choosing the appropriate limit on the size of campaign contributions. The purpose of contribution limits is to prevent transactions which could amount to or appear to be bribes or extorted payments. What that level may be in any particular political and economic system is a matter for informed local judgment. There is a risk, however, in setting contribution limits too low. At extremely low levels contribution limits can significantly hobble opposition parties and candidates. But even at moderately low levels contribution limits can create their own risk of corruption by encouraging candidates or interested donors to find ways to circumvent the system, either by collecting and spending money through quasi-political but unregistered organizations or by enlisting conduit donors who will accept money from an employer or patron and then pass it on to a campaign. In the United States, our current contribution limits were set in 1974 and have not been adjusted for inflation or population increases, resulting in a significant erosion in the real value of those limits. As a result we have seen an upsurge in conduit contribution schemes and other efforts to avoid contribution limits. I should note that in the United States the majority of campaign funds are collected and spent by individual candidates rather than by or through their political parties, and thus limits on contributions to individual candidates have far more significance than they might in most other countries which have more party-centered election systems.
My final observation about campaign financing restrictions regards the justification that they are needed to limit the influence of wealthy individuals or groups. This is a misperception which arises from an incorrect understanding of campaigns as neutral processes and from a failure to comprehend that influence in politics arises from any number of sources.
As for influence in politics, we all understand that the leader of a large corporation or labor union will be able to secure a meeting with a government official more readily than an average citizen. Outside the voting booth social and political influence is simply not distributed equally. To the extent that campaign contributions are thought to "buy" or wield political influence, they are hardly unique in that regard. Persons whose reputation, prominence or position, locally or nationally, enable them to persuade certain voters have inordinate political influence. One difference is that the influence of money depends largely on its effective use. To the extent that money is used to buy advertising or campaign materials that attempt to persuade voters, money is a more rational source of influence than mere prominence or power.
Seeking to severely limit money as a source of influence in elections also fails to address the many other sources of influence, beginning again with incumbency. In most countries, the communications media is hugely influential in politics. Yet in the United States and many other countries, the tradition and constitutional guarantee of a free press prevents us from even considering limits on media power in elections. Silvio Berlusconi, just elected leader of the Italian government, is that countrys leading media owner. Former President Estrada of the Philippines, former President Reagan and prominent Indian politicians were once movie stars. Numerous successful professional athletes have been elected to the US Congress. Even when such persons do not themselves run for office, their influence by way of endorsements is certainly disproportionate. Why should persons who have strong chins, who can kick a ball further than the rest of us, or even those who own newspapers have more political influence than the rest of us? Whether they should or not, they do. Limiting the source or use of money, which is arguably a more widespread and neutral source of influence that many of these others, does nothing to alter the fact of unequal sources and distribution of influence in political systems.
To conclude, in considering campaign financing we must think carefully why it should be regulated and what ends can realistically be achieved by doing so. Financial corruption in fact, and its appearance in faith, undermines and ultimately can destroy self-government. Its prevention and punishment is as important as anything else the government does. I do not believe we should regulate campaign financing on the theory that money, at least non-government money, is evil per se. I do not believe we should attempt to regulate campaign financing in an effort to achieve a more fair or equal distribution of political influence, fearing the dangers of an incumbent government designing the system and the ineffectual practical results. I do not believe we should attempt to regulate campaign financing in an effort to equalize political competition.
I do believe we can and should regulate campaign gifts to politicians so that they do not approach the threshold of bribery. We can do so by limiting the size of individual campaign contributions and by prohibiting the use of campaign funds for personal expenses. I further believe that limitations on campaign financing ought to be balanced against the legitimate and positive uses of private campaign funds, particularly in aiding non-incumbent candidates against an incumbent government. Even if you disagree with my particular conclusions about what campaign financing regulation can or should achieve, I urge you to consider carefully what goals you wish to achieve in a campaign financing system, rather than merely assuming that campaign finances ought to be controlled as much as possible.