Campaign spending and contribution limits

The results of Tuesday’s primary elections illustrate that money doesn’t always buy voters’ love. If that’s the case, though—money doesn’t buy elections—why do we still have a very low $2,400 contribution limit at the federal level?

Of the five different states that held primary elections Tuesday, Florida generated the most discussion about money in politics. Two wealthy, outsider candidates shook up the GOP primary for governor and the Democratic primary for U.S. Senator.

The results of those races seem to indicate that money can be effective at a certain level in ensuring voters hear a candidate’s message—but it’s no guarantee voters will be swayed by the politician’s pitch.

In the Democratic Senate contest Rep. Kendrick Meek crushed Jeff Greene 57 to 31 percent. Greene spent more than $25 million on the race—at least four times what Meek spent. In this case, money certainly didn’t buy Jeff Greene a U.S. Senate nomination.

The GOP race for governor played out in favor of the wealthy candidate. Rick Scott, a former health care company CEO, spent more than $50 million on his campaign. McCollum spent less than half as much, but he was aided by $14 million in negative ads financed from a range of groups including the sugar industry. With 97 percent of precincts reporting, Scott won 46 percent of the vote to McCollumn’s 43 percent (A third GOP candidate, Mike McCalister, garnered 10 percent of the vote while spending only $8,000).

During his victory speech, Scott argued that his self-funding insulated him from questions about vote-buying: “It’s sobering news for the special interests,” he said. “They know I don’t owe them anything.” His campaign accused McCollum of cutting a “secret deal” with the sugar industry because of their spending on the race. McCollum’s spokeswoman was less pleased with the result: “That is an unbelievable amount in Florida… Money can apparently buy you love in Florida” (Apparently, she didn’t see the results of the Meek-Greene race).

The Miami Herald published a story analyzing the impact of the wealthy candidates’ free-spending: “Turns out owning a yacht with a reputation for wild parties is more of a liability than massive Medicare fraud.” Actually, that doesn’t really follow. Perhaps there were other reasons for the split result: maybe Republicans were more open to a business leader spending large sums on a political campaign or perhaps Meek was a stronger candidate than McCollum. The Herald concedes that point later: “Scott campaigned harder and smarter. Starting when he dropped $1.2 million on TV ads the first week he declared, he never let up on the TV advertising blitz. In contrast, Greene spent a few million dollars on TV to move his poll numbers and then let up until the final month of the campaign.”

This race also had a campaign finance law angle: a federal appeals court denied McCollum additional state funds for his campaign beyond the $24.9 million spending cap. The court ruled that, like federal courts have found in Arizona and Connecticut, so-called rescue funds violate the First Amendment. The system works by granting dollar-for-dollar subsidies to candidates taking taxpayer funds based on the spending of non-participating candidates and outside groups. There’s some indication that McCollum’s reliance on taxpayer money may have rubbed GOP voters the wrong way. A poll released in early August indicated that 74 percent of the GOP electorate opposes the program. In a race decided by 3 percentage points, one wonders if McCollum’s support for what even Gov. Jeb Bush derided as “welfare for politicians” cost him votes from his natural base.

Alaska featured a contest where an incumbent greatly outspent her challenger yet still seems headed for defeat. With 98 percent of precincts reporting, Tea Party-backed outsider Joe Miller is leading incumbent Sen. Lisa Murkowski 51 to 49 percent (only about a 2,000 vote margin). Thousands of absentee ballots have yet to be counted, so the final result may not be known for up to two weeks.

As in Florida, money was perhaps not the dominant factor in the race: A ballot measure requiring teens to seek parental notification for abortions may have boosted pro-life turnout in the GOP primary, which worked against Murkowski (who is pro-choice).

Nonetheless, Miller faced a huge spending disadvantage. The California-based Tea Party Express spent $561,000 to support Miller’s campaign, but Murkowski outspent him by a 12-to-1 margin, Politico reported (or 10-to-1 according to the Center for Responsive Politics). She raised $3.4 million and spent $2.4 million by the end of July. Miller raised just $283,000, including a $100,000 contribution from himself.

On a certain level, this line from a Slate article attempting to explain the Alaska upset makes almost no sense: “So, what happened? The most important factor, as usual, was probably money.” But, wait, didn’t Murkowski spend more than 10 times as much as Miller? Slate again: “Murkowski had more of it, but the Tea Party Express spent enough to make a difference. The group put $600,000 into ‘Liberal Lisa’ radio and television ads, which helped define Miller’s opponent.”

That seems to make sense. As Brad Smith has noted in a Cato Institute policy analysis, candidates, especially incumbents, face a diminishing rate of returns when spending on campaigns. Challengers need to spend enough to get their message out, but in a state like Alaska—with a cheap media market—that’s easier. Once Miller reached the basic threshold of credibility, the additional spending aided him more than Murkowski. “The incumbent’s added spending is likely to have less effect on vote totals than the challenger’s added spending,” Smith wrote. “Thus, limits on campaign spending would hurt challengers more than incumbents. Accordingly, efforts to limit spending, whether mandatory or through incentive-based “voluntary” caps, should not be viewed as benign. Incumbent lawmakers will always have an incentive to draw campaign regulations to their advantage.”

In Arizona, incumbent Senator John McCain—also the 2008 GOP nominee for president—spent nearly $25 million on his primary against former Rep. J.D. Hayworth. McCain stomped on Hayworth, winning by more than 20 points. Hayworth only raised $2.8 million. Unlike Florida or Alaska, this race was not a surprise—McCain was expected to win by a comfortable margin. It’s worth noting, though, that we should never have to listen to another lecture from McCain about “obscene spending.”

Lessons learned?
So, what do the results of all these races mean? Is it just a wash—money is important but it doesn’t buy results?

It seems that the lesson is that the premise of contribution limits that arbitrarily restrict the ability of campaigns to spread their messages should be challenged. These caps hurt challengers more than incumbents, as incumbents already have established fundraising networks and already benefit from high name ID. Since the Supreme Court’s 1976 decision in Buckley v. Valeo, the government is free to limit the amount a person may contribute directly to a campaign. At the federal level, it’s $2,400. Every state is different—it’s $500 in Florida. The Supreme Court ruled that contributions could be limited because there’s a potential for corruption but expenditures could not be limited.

It makes little sense, though, to mandate that Rick Scott may not give another candidate’s campaign $50 million instead of spending it himself. Ultimately, proponents of restrictive contribution limits do not trust voters to decide for themselves whether or not they view large contributions as corrupting. As the anecdotal results from Tuesday show (as well as a recent study by the National Institute of Money in State Politics showing that only 11 percent of self-funded candidates won their races), money does not buy elections, it’s a tool to spread a candidate’s message.

It’s just as easy to make the argument that raising or eliminate contributions limits would reduce reliance on interest groups [let’s assume that taxpayer funded campaigns, which force citizens to fund the campaigns of politicians they may not agree with, is not an option].

Take Kendrick Meek. Under federal campaign finance limits, he must seek hundreds of contributions from Washington, D.C.-based PACs to achieve fundraising parity for his Senate race. If there were no limits, he could eschew the PAC crowd and raise a few large contributions from a small number of wealthy individuals in Florida (a political consultant has already created an independent fund to raise millions for Meek) and then use that as seed money to develop his campaign, raising money from small dollar donors and others.

Assuming one believes campaign contributions impact votes, which is not supported by most academic studies, under which system would Meek be reliant on fewer interest groups? It would seem that the less regulated system would be preferable. Nonetheless, “reformers” continue to argue for restricting the ability of people to contribute to candidates who share their principles even as courts continue to rule that candidates and independent groups may spend in unlimited amounts on politics.

This system does not produce better government; it simply generates more millionaire candidates.

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