Campaign finance “reform” and money in Colorado politics

National Review offers an excellent article on the ability of money, wisely spent, to influence the political atmosphere and lead to real, tangible gains at the ballot box. It also touches on the impact that so-called “campaign finance reform” has had at the state level.

Rocky Ride, by former Colorado State Representative Rob Witwer, describes how several wealthy liberal/progressive donors came together with the aim of turning that state from “red” Republican to “blue” Democrat. Although published in the reliably-conservative National Review, there is little in the way of hyperbole or criticism of the efforts of these donors to invest in the political infrastructure necessary to convert Colorado.

A few excerpts:

The day before Barack Obama accepted the Democratic nomination at Invesco Field in Denver, a group of progressive activists gathered nearby to discuss what Democrats call the “Colorado miracle.” …Through a network of wealthy donors called the Colorado Democracy Alliance, Democrats turned Colorado – until recently, a reliably Republican state – a deep shade of blue.

… Democratic success in Colorado is in large part the result of what [Democracy Alliance Founder Rob] Stein calls a “more strategic, more focused, more disciplined, better financed” progressive movement.

In hindsight, what Colorado Democrats did was as simple as it was effective. First, they built a robust network of nonprofit entities to replace the Colorado Democratic party, which had been rendered obsolete by campaign-finance reform. Second, they raised historic amounts of money from large donors to fund these entities…

In a larger sense, this is also a story about the unintended consequences of campaign-finance reform. In 2002, Congress passed McCain-Feingold. That same year, Colorado citizens enacted Amendment 27, a constitutional amendment that capped state-legislative contributions at $400 per donor. By lowering the amounts candidates could raise and spend, these laws effectively took message control out of the hands of candidates and handed it to outsiders.

Campaign spending in large quantities can now be accomplished only through the “independent sector” – a collection of nonprofit organizations that has stepped into the role once occupied by political parties.

Speaking to a group of lawyers in Denver last year, Democratic attorney Mark Grueskin summed up the new reality of political giving: “With the increased imposition of contribution limits, political money finds a way to the political system – always does, always has. . . . And those of you in this room are simply among the blessed, because you get to help people give politically. They’re going to give. And now they do it through nonprofit entities.”

The cost of participation in elections through the independent sector is high, especially at the state level. Political nonprofits are subject to byzantine tax, corporate, and accounting rules, and require constant guidance from lawyers and accountants. That guidance is expensive, which is why there’s no such thing as a “mom and pop” 527. Small and medium donors need not apply.

I highly recommend the whole story, and look forward to the book this story is excerpted from, The Blueprint: How Democrats Won the West (and Why Republicans Should Care), by Rob Witwer and Adam Schrager, to be published by Fulcrum in 2010.

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