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The high finance behind campaign finance reform

Candidates spend millions of dollars to get elected. Now, reform groups are spending their millions to make sure you know where candidates got their money.

By MARY JACOBY

© St. Petersburg Times, published July 5, 2000


WASHINGTON -- With spending on federal elections expected to reach $3-billion in 2000, it is not hard to find a political scientist, watchdog group or even a business organization eager to denounce the increasingly dominant role of money in politics.

But while the voices for reform are many, their sources of funding are not. A small clique of wealthy private foundations provides most of the financial backing for the web of public-interest groups, researchers and academics that makes up the campaign finance reform movement.

The philanthropic donations are a drop in the bucket compared with the billions spent to influence state and federal elections. The six most active foundations in money and politics have made about $60-million in related grants over the past five years, according to records and interviews with foundation officials.

The biggest donors have been the Pew Charitable Trusts, the Chicago-based Joyce Foundation and the Florence and John Schumann Foundation, headed by public broadcast journalist Bill Moyers. Other significant players are the Carnegie Corp., the Ford Foundation and the Open Society Institute, founded by global financier George Soros.

"Our goal is to at least get the issue of campaign finance reform on the agenda," said Michael Delli Carpini, director of the public policy program at the Pew Charitable Trusts, which has given about $12-million since 1996 to organizations working on campaign finance issues.

"Even though there hasn't been meaningful reform at the national level, it is certainly the case that, thanks to the efforts of our grantees and additional reasons, people are thinking and talking about this," he said.

In philanthropy, grants are looked upon as investments. And campaign finance reform is considered a high risk one, like a dot-com stock just as likely to pay off big as go bust.

Unlike health care or the environment, it is a relatively obscure issue that, as the foundations' studies show, does little to animate a jaded and cynical public.

The fact that any movement is funded at all is testament to the personal passions of the foundation officials who have championed the cause. It is an example of how a few private citizens who happen to have their hands on the purse strings of large charitable endowments can have an outsized effect on a major public policy debate.

When the board of the $1-billion Joyce Foundation was considering getting out of funding election and voting issues in the mid-1990s, for example, vice president Larry Hansen persuaded it to continue funding what was then the nascent campaign finance reform movement. Joyce has given $13-million to the effort since then.

"I made a pitch for them to hang in there with campaign finance. I thought it was one area where the foundation could not say with a straight face that any progress had been made," Hansen said. "Little did we know then just how bad things would become."

Leaks in the Watergate-era campaign finance laws have become gushers in recent years as loopholes are increasingly exploited to circumvent restrictions on campaign giving and the requirement that donors' identities be disclosed.

One such loophole was closed last week when President Clinton signed into law a disclosure requirement for so-called 527 groups, named after the section of the Internal Revenue code that authorized them. Often nothing more than a bank account, such groups were raising and spending untold millions of dollars to influence campaigns but not publicly reporting who donated the money or how it was spent.

The disclosure law, the first significant reform since Watergate, was spurred by Sen. John McCain, the former GOP presidential candidate who made campaign finance reform a centerpiece of his campaign. McCain lost the primary battle to Texas Gov. George W. Bush, who was helped in the crucial New York primary by $2.5-million in television ads attacking McCain paid for by a 527 group billing itself as Republicans for Clean Air.

After the ads became controversial, Texas billionaire Sam Wylie, a Bush supporter, fessed up to being the real force behind Republicans for Clean Air.

Foundation heads take some credit for passage of the disclosure bill, saying they have fostered public awareness of the need for campaign finance reform. "Look, John McCain didn't just pluck this idea (of reform) out of the ether," Moyers said. "I think our people have been very successful in forcing the issue on the table despite the opposition of the political class."

Meanwhile, reporters who write about the campaign finance laws need experts to quote. And thanks to the foundations, there is no shortage of them.

In Washington, reporters turn to the Center for Responsive Politics for research on campaign spending. The center compiles databases from Federal Election Commission reports and makes them available free on its Web site. The Center for Public Integrity, meanwhile, produces widely cited reports such as "The Buying of the President"; its executive director is a former broadcast journalist adept at giving sound bites.

Both centers stick to the compilation and dissemination of research. Some foundations like it that way.

Campaign finance is "an important issue that should be discussed," said Marcia Smith, deputy director of the governance and civil society program at Ford. "That's really our posture rather than promoting a particular type of reform."

Other foundations, such as Schumann, are involved with outright advocacy. Schumann has been the largest funder of an organization called Public Campaign, which promotes public financing for elections and has received about $7-million from the foundation over five years.

All told, Schumann has donated about $15-million to campaign finance groups in the past five years.

"We believe people should move beyond simply knowing into acting," said Moyers, who came under fire last year for airing the views of campaign finance experts in PBS documentaries without revealing that he also helps fund their activities through Schumann.

Now, however, Schumann is reassessing whether to continue funding campaign finance causes, Moyers said. He said the reassessment has nothing to do with the controversy over his dual roles as philanthropist and journalist, nor does it mean Schumann grants have not been effective.

With about $90-million in assets, Schumann is small compared with Pew ($4.9-billion), Ford ($11.8-billion) or Carnegie ($2-billion). "There are other larger foundations with deeper pockets that can carry the momentum," Moyers said.

Foundations have funded the Alliance for Better Campaigns, an advocate for free television ad time for candidates. Vice President Al Gore recently praised the group and the former Washington Post reporter who founded it.

And they have kicked in millions for the Brennan Center for Justice at the New York University School of Law, which defends campaign finance reform strategies in the courts. Brennan is also in the midst of a $1.1-million Pew-financed analysis of "issue ads," another loophole that allows donors to political campaigns to remain secret. By avoiding explicit exhortations to "vote for" or "vote against" a candidate, outside groups can argue their TV ads are about the issues, not specific candidates they promote or attack, and thus not subject to disclosure rules.

Through an exhaustive check of every political ad that ran in a major TV media market during the 1998 congressional election season, Brennan identified $31-million in issue-ad spending whose origin the public will never know.

Conservatives grumble that foundation heads are liberals who have unrealistic views of how to fix the campaign finance system. Last year, they thought they found some ammunition for their argument when Pew gave $2-million to the Committee for Economic Development, an economic and social policy research organization directed by business leaders that advocates campaign finance reform.

The money was meant to help the committee publicize and distribute its recommendations that soft money be eliminated and spending limits for congressional campaigns be imposed. Both positions are loathed by GOP leaders, who have exploited the current loose rules to maintain a traditional fundraising advantage over Democrats.

Conservative suspicions that the committee was a mouthpiece for liberal Democrats were further stirred when the group's president, Charles Kolb, told the media that corporations feel hit up for money by politicians. The statement eviscerated the argument of Sen. Mitch McConnell, R-Ky., a prominent reform foe, that corporate executives give to "participate" in the political process.

"I think the suspicion was that the foundations had an agenda and were looking for some outside organization that might provide cover for that agenda," Kolb, a former Reagan and Bush official, said in acknowledging conservative concerns about the Pew grant. "And that is honestly not what happened."

Geri Mannion of the Carnegie Corp., which gave the business organization $250,000, said she was surprised the foundation grants had been controversial. "It was the first time we'd seen the business community energized about this issue, and we thought it was terrific," she said. "To get any reform passed you're going to have to have a wide range of constituencies involved."

Reform advocates got a chuckle out of a New York Times report last year that McConnell, chief party fundraiser for Senate Republicans, had written angry letters to members of the business organization warning them against speaking out about reform. One of the pillars of McConnell's argument against campaign spending limits is the Buckley vs. Valeo Supreme Court ruling that equates political spending with free speech. In an interview, however, McConnell struck a more democratic tone when asked his opinion of the foundation officials who have fueled the reform movement he wants to stamp out.

"All these folks have the freedom to fund whatever causes they choose. Do I like what they're doing? Of course not. Do I want to shut them up? No."

Where the money goes

Foundation grants to organizations prominently involved with campaign finance issues (many grants run two or more years):

  • (current grants

  • Schumann Foundation: $1-million

  • Ford Foundation: $1-million

  • Pew Charitable Trusts: $425,000

  • Carnegie Corp.: $400,000

  • Joyce Foundation: $350,000

  • TOTAL: $3.2-million

  • Center for Public Integrity

  • (current grants)

  • Schumann Foundation: $1-million

  • Pew Charitable Trusts: $700,000*

  • Carnegie Corp.: $450,000

  • Ford Foundation: $200,000

  • Knight Foundation: $200,000

  • TOTAL: $2.6-million

  • Brennan Center for Justice

  • (1999 grants)

  • Pew Charitable Trusts: $1.1-million**

  • Open Society Institute: $600,000

  • Ford Foundation: $500,000

  • Schumann Foundation: $250,000

  • Joyce Foundation: $165,000

  • Carnegie Corp.: $200,000

  • Deer Creek Foundation: $100,000

  • Arca Foundation: $30,000

  • TOTAL: $3-million

    ** Grant awarded through Brigham Young University for "Buying Time" study of issue advertising in the 1998 congressional elections

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