The Millionaires’ Amendment: Making Elections More Fair?

August 30, 2006   •  By Brad Smith   •    •  
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Up in Washington state, first term Democrat Senator Maria Cantwell is being challenged by Republican Michael McGavick.  Both candidates face token opposition in the state primary, which will be held on September 19.  But for all practical purposes, the candidates already know that the general election will be Cantwell vs. McGavick, in one of the year’s marquee races.

Both candidates have had success in business – Cantwell won her seat in 2000 in part by spending millions of her own fortune (much of which was soon lost in the dotcom bust).  McGavick is a wealthy businessman.  McGavick has loaned his primary campaign about $2 million.

Now, it’s well known among political operatives and candidates that under campaign finance fundraising restrictions, it is advantageous to be rich.  The Supreme Court has held it is constitutional to limit one’s right to contribute to another’s candidacy, but not to spend on one’s own.  For incumbents, this is not a big challenge, since they have high name recognition, a full six year term to raise money, and access to fundraising networks.  Raising money in limited contributions, however,  takes a great deal of time and has a high overhead costs and so makes things especially difficult for challengers, who historically have more narrow bases of contributors.  As a result, over the last 20 years, both parties have looked more and more for wealthy, “self-funded” candidates, and Senate is increasingly a body of the very rich.  Once in office, even these rich Senators, such as Ms. Cantwell, hate nothing like a self-funded opponent, since a self-funded opponent can readily match them in fundraising, and do so quickly.  It’s not fair, said the incumbent Senators.

Thus, as part of the McCain-Feingold bill, Congress included a “millionaires’ amendment,” which allows campaign contributions to go up by as much as 600% if one’s opponent spends his or her own millions.  How this squared with the idea that large donations “corrupted” senators – the constitutional basis for the limitations on contributions – was hard to see.  How is it that a candidate running against a well-funded multi-millionaire is not corrupted by a $12,600 donation, but a a candidate running against a poorly funded challenger is corrupted by a contribution over $2100?  But we digress.  The “Millionaire’s Amendment” was intended to make campaigns against multi-millionaires “more fair.”

Now, it’s also a longstanding rule that each election – primary and general – is treated as a separate election for campaign finance purposes.  This means that that in Washington, Mr. McGavick can spend his personal wealth in the primary, pursuing the nomination, while at the same time running ads contrasting his positions with those of Senator Cantwell, building name recognition, building a campaign organization, and the like, without triggering the higher contribution limits of the “millionaires’ amendment” for Senator Cantwell.  By the time the primary is over, there will be fewer than 50 days before the general election.  A good deal for Mr. McGavick.  Meanwhile, Senator Cantwell, whose personal fortune went down with the dotcoms, has to get along on $2100 contributions – like her opponent in 2000, then-incumbent Slade Gorton.

In Advisory Opinion Requset 2006-21, Sen. Cantwell wanted the FEC to rule that the “millionaires’ amendment” should kick in before the primary, arguing that as McGavick’s victory over 5 token opponents was assured, it should count.  The FEC says no.

As a legal matter, it’s not even close.  The FEC’s decision is a straightforward application of the law and the Commission’s regulations, issued in 2002.  There is much poetic justice in this result as well, given that Cantwell helped herself win her seat with her personal spending in 2000, but then voted for the restrictions of McCain-Feingold and for its goofy millionaire’s amendment, designed to protect incumbents such as herself.

As a policy matter, it shows the difficulty (some would say futility) of trying to make elections “fair,” something the Supreme Court has not recognized as a valid grounds for limiting speech, but which supporters of campaign finance regulation often state as a goal of their peculiar brand of reform.

Campaigns rely on many things, of which money is one.  But equal amounts of money is not necessarily fair, and sometimes one candidate having more money will make things more fair (for example, if the other has the advantage of free media because of good press relations).  Nor can one realistically trigger fund-raising rules to assure “fairness.”  Different candidates have different methods and advantages to raising money.  The laws are never “neutral” – they will help some, and harm others.  As such, these laws should always be viewed with the utmost suspicion.

As to fairness, would-be regulators might wish to view the old Monty Python sketch on Robin Hood, in which Robin Hood, unable to make all his robberies and gift givings come out equal, finally concludes, “”This redistribution of wealth is harder than I thought.”

Perhaps the Constitution knows best: “Congress shall make no law…”



Brad Smith

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