More Victims of “Reform”

Every issue of CCP’s monthly newsletter for our donors, Speaking Freely, includes a feature titled "Victims of ‘Reform.’" Typically, it tells the tale of citizens harassed, intimidated, or punished by campaign finance regulations for simply trying to exercise their First Amendment political rights of speech, assembly, and petition.

A recent example profiled in Speaking Freely was James Hollowell, who paid for a newspaper advertisement critical of a local school spending referendum but failed to register as a political committee as state law required. The local district attorney investigating the matter told local media that "It’s… a citizen who had strong feelings about the referendum and just had no idea that those campaign finance laws that you hear about now and then even remotely applied to a citizen who just wanted to exercise his constitutional right to free speech.

Hollowell and others who run afoul of campaign finance laws tend to be among the more visible victims of "reform." A few recent stories have brought to light another type of victim, vendors who cannot get paid after a campaign ends.

News reports show Hillary Clinton with more than $22 million in debt at the end of her campaign. While a good chunk of that money is owed to consultants, there are also millions of dollars in debts owed to small businesses, universities, municipalities, and others.

In the state of Pennsylvania, Clinton’s campaign owes about $231,000 to local vendors, according to this news story. Among those still owed is Stephen Bledsoe, owner of Dakota Pizza in Montgomery County.

As the story relates, "His Wynnewood restaurant and catering business fed Clinton, her campaign and the press corps that traveled more than $11,000 worth of grilled shrimp, sandwiches, ‘hand-crafted’ pizza and salads to with her leading up to the April 22 primary. He received a partial payment, but is still owned $5,933."

Several colleges, universities, and towns in Pennsylvania are also owed for the costs associated with events the Clinton campaign held. Among others, the city of York is owed $2,936 and the University of Pennsylvania is owed nearly $24,000.

Under campaign finance laws, of course, Clinton’s campaign is limited to raising funds in increments of only $2,300, making it extremely unlikely that she will be able to raise the needed money to pay these and other vendors the money the campaign owed. Making that task particularly difficult is that by this point, anybody willing to give her campaign any money at all, let alone $2,300, has almost certainly done so by now.

Clinton is fortunate enough to be able to contribute enough money from her own funds to cover her campaign debt, and there is also the possibility that Senator Obama may help raise funds for her (McCain is currently helping retire Rudy Giuliani’s campaign debt, and Reagan helped retire debt for his primary opponents after clinching the 1980 nomination).

Others have not been so fortunate. Perhaps the most vivid example is that of John Glenn, former U.S. Senator from Ohio and failed 1984 presidential candidate. He ended his campaign with nearly $3 million in debt, which took him nearly 20 years to pay off.

This CNN story details many of the problems Glenn faced in attempting to pay off his debts, including a printer who hadn’t been paid for signs who picketed outside the Hart Office Building in Washington DC.

Because he had accepted taxpayer funds during the 1984 primary, he was forbidden to donate more than $50,000 to help retire debt. The FEC eventually made rare exception allowing him to contribute more of his own funds.

Vendors of local candidates also struggle to get paid. This story from Philadelphia tells the tale of Congressman Robert Brady, a candidate for Philadelphia mayor in 2007 with nearly $450,000 in legal bills owed stemming from an effort by another candidate, Tom Knox, to have him thrown off the ballot. Congressman Brady would like to accept contributions greater than the $2,500 limit in order to pay off his debt, but Philadelphia’s limits prevent him from doing so.

2007 was the first year Philadelphia had contribution limits for candidates (for a full description of Philadelphia’s failed experience, go here for the CCP case study by Mike Schrimpf).

Failed candidates with debt are always going to struggle to pay the small businesses and other vendors they rely on during their campaigns to print signs, feed people at events, supply audio/visual services, and the hundreds of other things that campaigns need to do to run effective campaigns. Our current system of contribution limits, however, ensures that it is much, much more difficult to pay off such debts, imposing hardship and greater risk on vendors who do business with candidates.

The Center for Competitive Politics is now the Institute for Free Speech.