Chairwoman Feinstein, Senator Bennett and members of the committee I
thank you for inviting me to testify today on behalf of the U.S. Public
Interest Research Group (U.S. PIRG). U.S. PIRG is the national
advocacy office for the federation of state PIRGs.
Our country
faces many challenges. Fueled by high profile scandals, voters in last
year’s election cited congressional corruption as a top issue of
concern.
Following the election, Congress responded to the
frustration expressed by the electorate with measures like S. 1, which
included among other provisions increased disclosure of campaign
fundraising activities and new limitations on those seeking privileged
access through the purchase of gifts and travel. Similarly, Congress
has stepped up oversight of private contractors in matters ranging from
the Iraq war to ongoing assistance to those who lost homes and
businesses to Hurricane Katrina.
The proposal before the
committee today to eliminate the coordination restrictions as written
in section 441(a)(d) of the Federal Election Campaign Act seems
antithetical to those important steps. U.S. PIRG strongly opposes the
proposed change, as it will permit large numbers of individuals to
effectively circumvent the existing individual contribution limits and
invite large contributions back into the system under the guise of hard
money.
I wish to make four points today. (1) Contribution
limits matter; (2) lifting the coordination rules between political
parties and candidates would open the door to significant increases in
the contributions limits; (3) while national political parties now
collect only hard money contributions, the proposed changes threaten to
undermine the rules that make the distinction between hard and soft
money meaningful; and (4) under the current system political parties
have been able to effectively promote their favored candidates.
Contribution
limits are important to stem both corruption and the appearance of
corruption. During the months leading up to the passage of the
Bipartisan Campaign Reform Act (BCRA), Congress spent significant time
debating whether to raise the individual contribution limits to
candidates. Many Senators and reform groups opposed raising the limits
from $1,000 to $2,000 for fear that it would allow a small group of
wealthy individuals to have even greater influence in our elections.
Lifting the coordination rules between parties and candidates would
effectively raise the individual limits for any one who could afford
such a contribution from $4,600 to $61,600 in a two year election
cycle. At this level, contributions are well above what average
Americans can afford and raise questions about whether very large
donors will receive preferential access to legislators once in office.
Further, a majority of Senators surely would have rejected this
tremendous increase if it had been proposed during the 2002 debate on
BCRA.
National political parties are now only permitted to
collect hard money contributions, a significant step in removing from
parties the ability to collect unlimited contributions. Yet, some have
argued that since these contributions are disclosed and limited, the
coordination rules are less important. But at what point are the rules
defining hard money so relaxed that they begin to lose meaning?
The
coordination rules we are debating today are not made in vacuum. They
are an important part of a larger scheme that has some checks on the
ability of very large donors to dominate our elections and gain unfair
advantage in the political process. Loosening or lifting the
coordination rules opens the door to an unlimited number of very large
contributions that could easily be routed back to a favored candidate
with no meaningful distinction between money sent to the party or to
the candidate directly.
Under the current rules, political
parties are able to spend unlimited sums in support of their candidates
as long as it is not coordinated with the candidates. In Federal
Election Commission v. Colorado Republican Federal Campaign Committee,
the courts upheld the parties’ right to make unlimited independent
expenditures. The Court also recognized the important distinction
between coordinated and uncoordinated spending. The court upheld the
coordination restrictions because it concluded that coordinated
spending was tantamount to a direct contribution to the candidate and
circumvented the contribution limits.
According to a March 7th
statement from the Federal Election Commission, Republican national,
state and local committees raised $602 million and the Democratic
counterparts raised $483 million in the 2006 election cycle Democratic
Party receipts were more than double those in 2002 – the last midterm
election. Republican Party committees raised 42% more than in 2002.
Given
the experience of this last election cycle, it seems a misplaced
concern to worry about the impact and viability of political parties.
By all measures, parties are enjoying a resurgence with an influx of
new members, smaller donors and increasing resources. These are the
signs of a healthy political foundation. Candidates are not
marginalized from their parties. In fact, under the current rules,
parties can coordinate their spending with senate candidates in varying
degrees depending upon the size of the state. The range this year is
$81,800 in smaller states such as Alaska and Wyoming to more than $2.2
million in California.
In closing, I would note that
individuals can give to candidates directly, a candidate’s leadership
PAC, other PACs, national party committees and state and local party
committees. Parties also can give directly to candidates.
Collectively, a single individual could direct virtually unlimited sums
of money to a particular candidate if not for two important
restrictions. The first is the aggregate limit on political
contributions, this year a little more than $108,000 for the election
cycle. The second is the coordination rules for parties and
candidates.
Given the high profile scandals and the growing
concern over money and politics among members of the public, now is not
the time to roll back these rules.
The question before the
committee today is whether to further amplify the voices and potential
access of the few by creating a new, legal loophole to circumvent
campaign contribution limits. These limits have been debated
extensively, approved by Congress and affirmed by the courts as a
legitimate defense against corruption and the appearance of corruption.
With
heightened awareness and concern among the American people regarding
the role of money in politics, this proposed change is both ill-timed
and destructive to the framework around which Congress built campaign
finance rules over the last 30 years.
