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The Best Government Money Can Buy

Campaign contributions dno't always have a direct payoff, but money always talks, and politicians always listen.

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You can't vote for or against Mr. Moneybags, but he's still very much in every single race in this election. The race for votes--following the principle of one person, one vote--is ultimately what counts in every contest on the ballot. But the outcome of each is profoundly shaped by the money race--which follows the principle of one dollar, one vote.

Clearly money doesn't always triumph. Peter Fitzgerald's inherited wealth gave the little-known state legislator, whom party leaders saw as too far to the right, a victory over state comptroller Loleta Didrickson in the Republican Senate primary. But attorney John Schmidt spent $5 million in the Democratic State primary--far more than any of his opponents--only to come in third. Yet without that money, Schmidt, a political neophyte, would never even have been in the running, because the minimum required to be a contender has grown so large--candidates now need a great deal of money just to cross what strategists consider the threshold that allows them to be taken seriously. In any case, money confers great advantages. The underfunded Democratic gubernatorial hopeful Glenn Poshard was forced to watch many weeks of negative TV ads by the very well financed George Ryan before he could afford to counter them--a steep hill to climb that had nothing to do with the intrinsic qualities of either candidate.

Even though campaigns are getting ever more expensive, the problem isn't intrinsically the amount of money spent. After all, given the declining voter turnout and the low quality of public debate, good government may require spending even more money to inform and motivate voters. The problem lies in how the money is raised, how it's spent, and what influence it has on government policies. And the unsalutary effects of money are as bad in Illinois as anywhere in the nation.

As of October 4 Ryan's campaign had brought in $11.4 million, a record for an Illinois gubernatorial candidate. Poshard--who, unlike the secretary of state, had to spend much of what he had on the primary--has raised $3.7 million over the course of his campaign. Republicans running for governor usually raise more money than Democrats (Edgar had twice as much as his 1994 opponent), and Ryan is a veteran pol with a reputation for raking in money. Poshard, who as a member of Congress rejected political-action-committee funds, has lagged in part out of principle: he not only prohibited business and PAC contributions to his campaign but also limited individual donations. (In that regard, he's like Wisconsin's Senator Russ Feingold, a leading sponsor of the campaign-finance-reform bill in Congress that died this session; he's locked in a very tight race in part because of self-imposed campaign-finance limitations.) Yet party and union PACs have also spent money on Poshard--mainly on TV ads--without donating directly to his campaign--a total of $879,000 so far; Ryan has benefited to the tune of $369,000 from similarly indirect sources.

Illinois campaign-finance laws prohibit outright bribery but otherwise place few limitations on candidates. Some of Ryan's campaign strategies would be prohibited in other states. A St. Louis Post-Dispatch analysis of fund-raising through the end of June shows that Ryan had raised $868,000--around one-tenth of his fund-raising at that point--from state employees over the past four years, nearly all from workers in his office. They may not have all have given freely. "Having worked in state government," says Larry Hansen, a Joyce Foundation expert on campaign finance, "I have some understanding of that culture. I know it's difficult to resist a superior's suggestion that you buy tickets for a dinner or some affair."

The perils of fund-raising from employees have been highlighted by the scandal in Ryan's secretary of state office that led to federal indictments of employees for selling at least 250 trucker's licenses to unqualified applicants. The Sun-Times quoted authorities saying, "A significant portion of the scheme's $150,000 in proceeds landed in Ryan's campaign coffers." The implication is that pressure on employees may have led some to use bribery to raise funds to contribute to their boss's campaign, which may have led indirectly to more dangerous highways.

Ryan also has raised substantial sums from businesses that are regulated by the state--including by his current office--or that get contracts from the state. According to the Associated Press, auto and other vehicle dealers that are supervised by his office had made more than 1,600 contributions worth $562,000 by last June, and since then the auto-dealer money has continued to flow in. The money also flows back out along predictable lines: according to the State Journal-Register, nearly 70 percent of the money that Ryan spent on legal services in fiscal year 1997 went to law firms that had contributed to his campaign.

None of this is new, and none of it is illegal. Kent Redfield, a University of Illinois at Springfield political scientist and one of the state's leading experts on campaign finance, says that until recently "if you asked, 'How can you violate Illinois campaign-finance law?' I would have been hard-pressed to tell you. When Ryan says, 'I have done nothing wrong,' that's exactly true." And that's part of what's wrong with Illinois politics.

Poshard's insistence that he won't take money from PACs or corporations has hurt his campaign. Spokesman David Stricklin says, "There have been days in the campaign when we've sent back more money than we have raised." Poshard has got less mileage out of his pledge than he might have hoped, because some of the money that Democratic Party committees have spent on his behalf may have come from PACs or corporations. Ryan has made these indirect contributions seem like a betrayal of Poshard's promise.

Still, many state campaign reformers credit Poshard with a well-intentioned, honest effort. "You're trying to break the direct linkage," Redfield says. "I think that's clearly what Poshard has in mind--he thinks that makes him more independent. I have no doubt of his sincerity." But it has raised doubts about the wisdom of unilateral disarmament in the political money war.

People who contribute smaller sums as individuals or through their businesses or organizations tend to do so for personal, party, or ideological reasons. But most big givers expect to be able to influence politicians or at least to get access to present their case. Other big givers may contribute to minimize the prospect of being ignored or slighted by candidates who win.

Take the case of road-building companies in Illinois. Decisions about highway construction and maintenance are among the most important that state government makes, because they affect not only the convenience of commuters but the business prospects and environments of communities. By continually expanding the toll roads around Chicago, for example, the state has encouraged sprawl, which has gobbled up farmland, wetlands, and woodlands and drained jobs and revenues from the central city and older suburbs.

In the first nine months of this year Illinois road builders contributed at least $304,000 to Ryan's campaign. During the same period they gave Poshard about $3,750. (These figures come from Sustain, an environmental group that looked at contributions from members of the Illinois Roadbuilders Association, companies that received no-bid road contracts, and a select list of individuals identified with those companies. Since Illinois law doesn't yet require large individual donors to list their occupation or employer, it's impossible to accurately gauge the extent of industry or interest-group contributions. The figures also don't include contributions from other construction firms that might have a stake in road building.)

Now it's possible that all those road-building contributors are loyal Republicans or greatly admire Ryan personally. They may see him as someone with whom they can do business as usual. There may also be some self-interest at work. Both Ryan and Poshard have pledged to build more new roads than many sprawl opponents would like, but Poshard's position seems to give priority to improving existing roads. And Poshard is a skeptic on the need for a third airport and wants an environmental study done, while Ryan is ready to build an airport in Peotone, which would mean lots more concrete pouring. Both candidates profess support for improved rail-freight facilities and development of a high-speed train network, but Poshard appears much more committed to rail, especially since he believes it would reduce the need for a third airport.

And there's a starker difference. A recent report by the auditor general concluded that Illinois pays more to build roads than the average midwestern state, spending $896 million in 1996, not counting the large budget of the tollway authority. The auditor general found that "a lack of competition" was partly to blame. The 783 competitively bid contracts came in nearly 11 percent below estimates--but the 106 single-bid contracts were nearly 1 percent higher than the estimates. If the single-bid contracts had followed the pattern of the competitive bids, the state would have saved $8.9 million. Ryan has expressed concern and promised to review all state programs, but had no opinion on the single-bid contracts. Poshard has proposed moving "aggressively to reform both procedures and designs to bring our highway costs into line....We should not hesitate to demand [greater accountability] from our highway engineers and contractors." He also promises to look for ways to eliminate single-bid contracts. That attitude might have cost him a few contributions.

Ryan's campaign-finance filings reveal other potential special-interest influences. According to a Crain's Chicago Business analysis, by the end of June Ryan had received $757,000 from groups or individuals with an interest in gambling. In the following months he received another $58,000. Many of those contributions were quite large, including $67,000 from the Duchossois family, $30,000 from the Empress Casino, and $20,000 from the Racing Associations of Illinois. Ryan recently opposed expanding the number of riverboat licenses but supported such changes as permitting boats to operate while docked; in the past he's indicated a willingness to entertain expansion. Poshard, who doesn't seem to have taken any gambling-interests funds directly, has called for a statewide referendum on whether gambling should be expanded. Whatever positions the candidates express, the gaming industry has bet virtually all of its chips on Ryan.

Similarly, Crain's reported that Ryan had received more than $200,000 from nursing homes and related medicaid vendors as of the end of June; in the past three months nursing homes, insurance companies, and hospitals have donated roughly $75,000 more. That doesn't count $100,000 from the Illinois State Medical Society, which has long topped the list of big givers to state Republican causes. These groups all have a stake in issues ranging from medicaid reimbursement rates to a patients' bill of rights for health maintenance organizations, which will be near the top of the agenda for the next governor.

Contributions can have another, more insidious effect: candidates--challengers and incumbents--may shape their positions according to where they believe money is available, much as they may modify their positions to catch the drift of public-opinion polls. There's stiff competition in the U.S. Congress, for example, for seats on the banking and finance committees, because they generate big contributions from the financial-services industry.

Of course, special interests don't always get what they want from their contributions, but those contributions create more than just the appearance of a conflict of interest. What politician wouldn't take seriously the desires of interest groups that can contribute several hundred thousand dollars to his campaign? The Center for Responsive Politics did a series of interviews collected in a report, "Speaking Freely: Former Members of Congress Talk About Money in Politics." A comment by former Democratic congressman Tim Penny of Minnesota is typical: "There's not tit for tat in this business, no check for a vote. But nonetheless, the influence is there. Candidates know where their money is coming from." Even when officials don't do the bidding of their big donors, the report concludes, they often try to make it up to them with some other, less public favor.

It's often difficult to see that a campaign contribution has influenced a specific vote. In 1996 Illinois Senate president James "Pate" Philip, a major recipient of gambling-interest contributions, killed Governor Jim Edgar's well-received proposal to increase taxes on riverboat casinos to pay for education. But Edgar too had received gambling-industry contributions.

Nonetheless, the circumstantial evidence that influence has been bought is often overwhelming. Earlier this year, for example, the U. S. Senate narrowly--51 to 49--defeated a bill to eliminate subsidies for timber companies logging public land. According to the Center for Responsive Politics, senators who'd received $10,000 or less from the timber industry voted 39 to 12 in favor of eliminating the subsidy, but senators who'd received $10,000 to $25,000 voted 18 to 7 in favor of the subsidy--and those who'd received more than $25,000 voted 21 to 3 in favor. Given that the vote was so close, it's hard to believe that industry money didn't tip the scales.

All this makes one wonder, would a Governor Ryan give special consideration to requests by the gaming, nursing-home, health-maintenance, and road-building interests that have heavily financed his campaign?

On lists of big political contributors, some labor unions--the Illinois Education Association, the Chicago Teachers Union, AFSCME--typically rank up with big businesses and industry political action committees such as the Illinois Manufacturers Association, the Illinois Hospital Association, and the Illinois Bankers Association. This gives the illusion that big labor and big business are equals in the special-interest game, duking it out on an only slightly lopsided playing field.

Unions do have special interests, but they're also among the few organizations that mobilize money from working-class individuals and then defend their interests broadly, whether by protecting social security and medicare or by advocating better education and more progressive taxes. And unions don't contribute anywhere near the amount that businesses do. According to U. of I.'s Sunshine Project, during Illinois' 1995-'96 election cycle, businesses contributed $24 million to politicians, while unions contributed $6.1 million.

These figures cover only organizational contributions. In Illinois it isn't yet possible to break down smaller contributions according to likely interests, but stricter federal reporting requirements make it possible to identify the occupation and employer of contributors of more than $200. (Contributions of less than $200 account for about one-fifth of the average budget of victorious federal candidates; larger individual contributions account for 30 to 40 percent of most campaigns.) The Center for Responsive Politics compiled contribution data on individuals, business firms, and political action committees and concluded that so far in the 1997-'98 election cycle, business has contributed $460 million to federal candidates and political parties, and labor has contributed $39 million. That gives business a 12 to one advantage over labor.

At the state level, three times as much business money went to Republicans in the last election as to Democrats; roughly the reverse was true for unions, though here too they gave far less. At the federal level, business distributes its largesse more evenly, though the portion going to Republicans has grown as control of Congress has shifted to the Republicans.

But the issue is only partly about which party gets the money. There have always been business and professional people who've supported Democrats. Back in the 70s, as the cost of campaigning skyrocketed, Democrats began turning to business for support. And with the decline of the labor movement and the rise of conservatism during the 1980s, more and more Democrats abandoned their populist economic appeals and their working-class base of support. Moreover, their fund-raising appeals began to accentuate class biases. As poor and working-class voters found fewer Democrats addressing their economic concerns, they were more likely to drop out--in 1994 this led to a Republican sweep in Congress--or to be won over by conservative appeals on narrow issues such as guns, welfare, taxes, and abortion. With both Republicans and Democrats now appealing to business and the wealthy, class bias has become a major factor in campaigns--rich people from both parties now define what's in the public's best interest. Plutocracy, even if well-intentioned, is not democracy.

Plutocracy helps do such things as keep taxation regressive in Illinois. Last May the legislature approved a tax change that, when fully implemented, will cut business taxes by about $95 million a year. But five big companies will probably reap about $60 million of that--money that could have been used to equalize school funding among districts, reduce the size of classes, or upgrade libraries, computers, and equipment in needy schools around the state. The names aren't official yet, but the biggest beneficiaries are likely to include Caterpillar (which contributed $253,000 to Illinois politicians in the last four years), John Deere ($130,000), and Abbott Laboratories ($69,000). Sixty million dollars a year isn't a bad return on their money.

The current campaign-finance system also has a distinct racial and ethnic bias. A September report from Citizen Action, a statewide public-interest group, examined the last two elections as well as funding for this election through June. White candidates for the Illinois house or senate had on average at least four times as much money as African-American or Latino candidates. Even candidates in contested races received far less, in roughly the same proportion, than white candidates in contested races. Statewide races show a similar pattern, though Jesse White, in his bid for secretary of state, has been able to raise more money than most black candidates.

The majority and minority party leaders in the house and senate--known as the "four tops" for their position in the pyramid of power--amass campaign funds through various political action committees under their control. They then dole out dollars to candidates. Democratic house speaker Michael Madigan leads the pack, but state senator Emil Jones, the only African-American among the four tops, wound up with less than half the average of the other three. The disparity makes it harder for African-American and Latino politicians to emerge as political leaders in the state. (It's probably telling that a survey of big donors to 1996 congressional campaigns showed that 95 percent were white and 80 percent were male, over 45, college educated, with annual incomes over $100,000.)

Nevertheless, minority political candidates can still break through, as Carol Moseley-Braun did six years ago. Yet last spring the race between her and Peter Fitzgerald was shaping up as one of the most expensive in the country, according to the Center for Responsive Politics. Fitzgerald may end up running the second most expensive individual campaign in the country, with only New York's Senator Alfonse D'Amato ahead of him. By September 30, Fitzgerald had accumulated $14,473,293--all but about $2.75 million of which came from his own fortune. By conventional standards, Moseley-Braun hasn't done badly; she'd raised $5,866,930 by the same point.

If Fitzgerald wins he'll be one of the richest members of the Senate, but he won't be lonely. About a third of the members of the Senate are millionaires, though few have funded their own campaigns. And if Fitzgerald wins he probably won't be out much, because businesses and industry political action committees are likely to beat down his door offering to help him repay his "loans" to his campaign. "If he wins, all kinds of PAC and interest groups will have financed his campaign," says U. of I.'s Kent Redfield. "They'll just do it after rather than before. If you don't have money you don't have that luxury. You can say, 'I don't owe anybody,' but if you want that to mean anything you shouldn't take the money after the election either." Fitzgerald, the Joyce Foundation's Larry Hansen argues, "represents a new style. If you have that kind of money you don't have to deal directly with voters and can avoid the press as he has--almost to an art form. While you can say he's not beholden to anyone, political accountability requires that you be beholden to someone." Preferably voters.

Moseley-Braun's biggest problem may be that she's been distracted from work she should have been doing for her constituents by the need to raise money. Yet looking at the list of her top contributors, it's hard to distinguish her from almost any other senator, Republican or Democrat. United Airlines tops the chart, with $32,725, followed by Household International, Bank of America, Andersen Worldwide, Pricewaterhouse Coopers, Merrill Lynch, and Glaxo Wellcome. Moseley-Braun cast the decisive--and only Democratic--vote that preserved a loophole giving Glaxo nearly two additional years on its patent on Zantac, which is worth $3 billion in sales. Moseley-Braun has also been a champion of United, the futures exchanges, the Chicago Tribune, and other businesses--which suggests that she was hoping that the businesses she helped would help her retire her old campaign debt and build a war chest for this year.

Fitzgerald has tried to distinguish himself by saying that he'll be a champion of all businesses, not just those with some special need in Washington, that he'll spread the favors wider and more systematically.

In the two decades since Watergate,

campaign-finance laws have been reformed in most states and at the federal level, but not in Illinois--at least not until this year. Many political observers had long considered Illinois campaign financing the least regulated of any state, except perhaps Idaho. In May the legislature finally placed some restrictions on how politicians could use their campaign funds--for example, contributions may no longer be used to buy a house or car or to add to a retirement fund (until June 30 politicians who had campaign committees were allowed to convert their funds to whatever personal use they chose). Campaigners may no longer solicit or accept contributions on state property, officials and candidates can't hold fund-raisers in the Springfield vicinity during the last three months of a legislative session, and contributions from lobbyists and state contractors are restricted. The new law also requires greater disclosure and faster, clearer reporting of contributions.

"The most important thing is that it happened," says Cynthia Canary, director of the Illinois Campaign for Political Reform. "For the last eight or nine years we've seen all these bills come up, and it's been a shell game where everyone could say, 'I voted for campaign finance reform,' because they knew nothing would pass. It was a miracle that anything passed at all. It drew some lines in the sand. It does start to say there are some types of behavior that are prohibited. You can't get a nose job with campaign funds. You can't stand on the floor of the legislature and accept an envelope with cash anymore."

Yet Hansen says that Illinois is still at the bottom of the reform heap: "Candidates can still raise as much money from any source as they want and spend as much as they want on anything they want--and that's not true in at least 48 other states." Moreover, most legislative campaign money is still concentrated in the hands of the four tops, who will still be able to disburse it to a relatively small number of hotly contested swing elections. Most state-legislature elections are barely contested, and challengers rarely have enough money to even be noticed. The few close and heated elections have become much more expensive as legislative leaders pour in the money trying to preserve their own power. This concentration of political finance means that legislators are still beholden to the legislative leaders--and as a result the leaders still dictate what happens in the legislature.

"Legislative leaders have become parties," Redfield explains. "You don't have the Democratic Party but the Mike Madigan party." This system partly reflects the demise of the old parties--in a state infamous for its strong but corrupt political parties--but with no dramatic change in the political culture. The Madigan (or Pate Philip) party system does provide discipline, but Redfield says that the leaders don't have to answer to any party deliberative process and they have much more personal control than traditional party leaders--largely because they have their hands on the purse strings.

Former senator Paul Simon and former Illinois governor William Stratton, as chairs of the Illinois Campaign Finance Task Force, fired an important volley in the campaign-finance battle in early 1997 with their report "Tainted Money." They suggested further reforms, including limiting individual and group contributions to any political committee to $2,000 per election and to a maximum of $200,000 by any individual or group in each election cycle. They also proposed limiting transfers to any candidate from committees, such as those of the four tops, to $25,000 in each election.

However, these kinds of limits wouldn't fundamentally change the troubling relationship of money and politics in the state. They wouldn't make elections more informative or more competitive, and they wouldn't put the average citizen in the driver's seat. After all, there are contribution limits in federal elections but plenty of money problems.

There is a growing movement around the country to break radically with the old ways by moving to a system of public financing. Maine voters approved such a "clean money" proposal by referendum, and the Vermont legislature enacted a similar measure. Voters in Arizona and Massachusetts will have a chance to decide on such proposals this fall.

The basic idea is to provide adequate levels of public financing to candidates who raise enough in contributions from enough voters to demonstrate that they have a reasonable level of support. Because the Supreme Court ruled (in Buckley v. Valeo) that spending money on politics is a form of protected speech, limits on spending must be made voluntarily. Some clean-money proposals would provide increased funding to any candidate who accepted public financing if his opponent or surrogate groups went over the voluntary limit, which would discourage both excessive spending and private financing.

Public financing of elections is common in Europe, where campaigns typically are shorter and more focused on parties. The most frequent objections to it are that people don't want their tax money spent on campaigns and that it can't succeed. But Gallup polls show that 59 percent of the public thinks full public financing is a good idea (only 29 percent considers it a bad idea). Surveys in 1996 and 1997 for the Center for Responsive Politics, which included Illinois, showed that roughly two-thirds of those questioned supported full public financing after being presented with arguments for and against the idea. Democrats and independents were the most supportive, but 61 percent of Republicans in one series of focus groups supported it. A poll of participants in Illinois Campaign Task Force town-hall meetings (an admittedly activist sample) showed that 71 percent favored public funding for candidates who support voluntary spending limits.

There are big institutional barriers in Illinois to public financing. There's no referendum for direct voter action, and the power of the four tops is deeply rooted in the current system. Even many reformers argue that the culture of Illinois politics is so inhospitable to reform that public financing is a chimerical goal.

Yet there are some tentative signs that a more participatory popular democracy--which could help drive the movement for campaign reform--is possible in this state. The labor movement is beginning to shift its emphasis back toward grassroots mobilization, education on issues, and recruiting ordinary workers or prolabor candidates (though such changes are happening much more slowly in Illinois than in many other states). Groups such as United Power for Action and Justice, a new church-backed metropolitan organizing effort, recently presented demands for action on affordable housing and health care for the uninsured to the two Cook County Board president candidates. In addition, Glenn Poshard, clearly dissatisfied with the existing system, has endorsed the Simon-Stratton proposals for campaign reform. But George Ryan, according to the Illinois Campaign for Political Reform's newsletter, "gave a neutral rating to the current system and found many proposed reforms problematic." He also rejects limits on contributions and prohibition of contributions from regulated industries, such as gambling and utilities. Yet both candidates support faster electronic disclosure of contributions.

The power of money to shape political decisions won't disappear, but clean-money proposals treat campaigns as extensions of the process of governing. Running them in ways that ensure broad access and open competition, while minimizing the influence of class and racial bias and special interests, would be worth a lot if it made government more responsive to citizens. How much would that cost? Funding elections at the current level, according to a Citizen Action analysis, would cost each Illinois household $4.84 a year. That seems a small price to pay to hold Mr. Moneybags at bay.

Art accompanying story in printed newspaper (not available in this archive): illustration by Jim Flynn.

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