The Intimidation Game (5 page)

Thirty years after the Tillman Act, a different Roosevelt was sitting in the White House, and congressional Republicans suspected him of using his ever-growing New Deal program to construct a permanent power base for the Democratic Party. Those suspicions turned to outrage in 1938, following accusations that employees at the Works Progress Administration had influenced congressional elections. Republicans, working with conservative Democrats, in 1939 used the scandal as an excuse to pass the Hatch Act, which limited the political activity of federal employees. In 1940, Republicans expanded the law, putting a dollar limit on federal employee contributions to candidates and extending other political restrictions to certain employees of state agencies that received federal funds.

Three years later, Roosevelt's allies gave Republicans an excuse to shut down the speech of an even bigger prize. FDR had done more to grow the union movement than any other president, and Big Labor returned the favor by throwing vast sums of money at Democratic candidates. But in 1943 the United Mine Workers made the monumental error of going on strike over wages—in the middle of a global war. Republicans played off the resulting public anger and fear to whip through the Smith-Connally Act. In theory, the law was about giving the federal government power to seize and operate wartime industries threatened by strike. But Republicans made sure to throw in a provision prohibiting labor unions from federal campaign contributions for the duration of the war. In 1947 they made that ban permanent, and upped the ante. Up to then, Congress had concentrated its fire on restricting direct contributions to candidates. The 1947 Taft-Hartley Act banned both unions and corporations from spending money on pretty much any federal political activity. No giving dollars to candidates, but also no spending money independently to endorse or disapprove of politicians. In the space of forty short years, Democrats and Republicans had teamed up to make themselves immune from criticism from two of the biggest political constituencies in the country—businesses and workers (both private and public).

Next up were private citizens, and the moment this time was provided by Richard Nixon. Despite the Tillman Act, the Hatch Act, the Smith-Connally Act, and the Taft-Hartley Act, campaign spending just kept going up. Congress wanted a better handle on where all the money was coming from, and in 1971 it passed the Federal Election Campaign Act (FECA), instituting the nation's first formalized disclosure laws. And what that disclosure found was that a lot of individual Americans, including wealthy ones, were giving a lot of money to campaigns. Including to Richard Nixon.

Watergate has come to stand in many Americans' minds as the ultimate reason why the country needs campaign finance laws. Yet Nixon's campaign-finance infractions were almost incidental to his broader crimes. Nixon's real offense was his abuse of power—his decision to use all the levers of the federal government to “screw” his political enemies. His administration ultimately stood accused of bugging the offices of political opponents, of using the CIA, the FBI, and the IRS to harass his adversaries, of hiring thugs to break into the Democratic National Committee headquarters, and of digging up dirt on adversaries.

The wrongdoing flowed from the skewed morals of a corrupt chief executive, and Nixon's resignation—and the subsequent incarceration of forty-eight of his officials—might have ended the story. Yet Congress felt it must do more to reassure the public and get credit for action. And because some of Nixon's activities had been funded via an outside campaign organization, and because some of that money had been donated illegally and secretly, Congress settled on passing yet another campaign finance law.

Washington in 1974 amended the 1971 FECA law to include sweeping new disclosure laws, restrictions on how much money private individuals and independent outfits might contribute to campaigns, and restrictions on how much politicians and parties could spend in elections. It also set up a new body to referee all these disputes—the Federal Election Commission. Campaign finance expert (and onetime FEC commissioner) Brad Smith, in his book
Unfree Speech
, calls FECA “one of the most radical laws ever passed in the United States; for the first time in history, Congress had passed a law requiring citizens to register with the government in order to criticize its office holders.”

The Supreme Court wasn't impressed. FECA required the high court to meditate for the first time on the question of money and speech. Unfortunately, the Court fell for the same political sell-job as most of the nation. In its 1976
Buckley v. Valeo
decision—one of the nation's most far-reaching cases—it did strike down a few important chunks of FECA, including limits on spending. But it would at the same time give its blessing to one of the more radical parts of the law—forced disclosure.

In doing so, the Supreme Court undermined the impressive body of law it had been building protecting political anonymity. The Court of course referenced its recent prior decisions—
NAACP v. Alabama
,
Bates v. Little Rock
. It had to—those decisions were less than twenty years old. Yet it cleverly wrote around them, pretending it wasn't undoing anything. The government, the Court found, had a compelling “interest” in disclosure, on the grounds that it prevented corruption and that this was necessary for the “free functioning of our national institutions.” Yes, yes, said the Court, “compelled disclosure” can seriously infringe “on privacy of association and belief guaranteed by the First Amendment.” And yes, yes, it conceded that there could well be a situation in the future in which that threat is so “serious” that the new disclosure rules “cannot be constitutionally applied.” When might that moment come? Like pornography, the Court would know it when it saw it. Supposed victims need only come back to the judiciary, which would decide the issue on the merits, on a case-by-case basis.

Even critics of disclosure will point out that the Burger Court sanctioned only “limited” disclosure in
Buckley v. Valeo
. But it was a sanctioning nonetheless, and it licensed the political class to think of yet new ways to track and make public the political activity of private citizens. It was a big moment.

Buckley
was huge.
It was overshadowed only by the most modern moment—the one that would create the rules that Bauer would help mold into a new culture of intimidation.

The author of that moment was the son and grandson of four-star admirals. He followed his kin into the U.S. Navy, and in 1967, while on a bombing mission over Hanoi, was shot down and captured by the North Vietnamese. He spent more than five years as a prisoner of war, subjected to brutal torture, yet refused Hanoi's offer to return him home early. He wouldn't step back on U.S. soil until 1973.

John McCain came back to the United States a war hero, a reputation that meant everything to him. When he finally retired from the Navy in 1981, he chose a run for Congress. He spent four years as an Arizona representative in the House, then jumped to the U.S. Senate. And that's when the trouble began.

McCain, starting in his time in the House, had benefited from campaign contributions from a man named Charles Keating Jr., the head of Lincoln Savings and Loan Association. A few months after McCain took his Senate seat, Keating contacted him and four other senators to ask for help in preventing the federal government from seizing his company, which was teetering at the edge of bankruptcy in the savings and loan crisis. McCain met twice with federal regulators to discuss the situation.

The episode blew up into the “Keating Five” scandal, with the accusation that the senators had been bought and had corruptly intervened in federal business on Keating's behalf. The Senate Ethics Committee held embarrassing public hearings and ultimately found that three of the senators had acted improperly. McCain and Senator John Glenn were cleared of wrongdoing but criticized for exercising “poor judgment.”

McCain had not been in the Senate for long when the scandal erupted, and it scarred him. The war hero had never been anything but that—a hero—in the public's eye, and here he was enmeshed in what he'd later describe as one long “public humiliation.” He'd write that those two meetings were “the worst mistake” of his life.

McCain chose to atone by devoting his Senate career to erecting new finance rules that would make it harder for people to engage in politics. He resented that Keating's donations had put him in a questionable position. It never seemed to occur to the Arizona senator that his problem wasn't the money, but his own actions. Later chronicles of the Keating episode would reveal that McCain had been nervous and troubled all along about attending the meetings or intervening on Keating's behalf. He knew that what he was doing was a problem. He did it anyway. It was, as he admitted, his mistake.

But that didn't stop him from blaming money. Within a few years of his humiliation, McCain had teamed up with Wisconsin Democrat Russ Feingold to introduce in the Senate in 1995 the most sweeping change in political money laws since Nixon and the FECA. McCain had the backing of most Democrats. He'd made the centerpiece of his bill regulations to bar the business community from any meaningful interaction in elections whatsoever. Democrats knew that business mostly supported Republicans, so they adored his approach.

McCain meanwhile also had flanking cover from an array of left-wing foundations and “good government” groups—Common Cause, Democracy 21, the Center for Responsive Politics, the Pew Memorial Trusts. And with the mainstream media running daily stories about the virtues of finance law and “clean” government, the population got behind the cause as well. McCain and Feingold pushed their rock up their hill for seven long years, adding provision after provision with each new version of their bill. By the time the Bipartisan Campaign Reform Act came to the floor in 2002, it contained more ornamental restrictions than a government Christmas tree: new rules on donations; on the definition of ads; on the types of ads groups could run; on the time frame in which they could run them; and on the types of organizations that could participate in elections. It moreover contained breathtaking new disclosure rules—expanding the scope of who was required to report to the federal government, and narrowing the time limit in which this needed to happen. You know the annoying phrase that now comes at the end of every political advertisement: “I'm Joe Blow, and I approve this message”? You can thank John McCain for that.

The bill was hardly a sure thing. McCain aside, most Republicans had grown wary of the finance “reform” craze. Democrats had glommed onto it for all the usual reasons—to handicap Republicans and to improve the party's reputation after the Clinton money scandals. The corporate financial scandals of the late 1990s (Tyco, Enron, Global Crossing) had also put the public in a mood for financial reform of any kind. Republicans, however, were re-remembering their roots as the constitutional party and defenders of free speech, and the McCain bill was over the top. They opposed nearly every element.

Save this: disclosure. Political memories are short, and Watergate had helped politicians to forget the way government had abused disclosure during the McCarthy and civil rights eras. They bought into the idea that more information about political involvement would yield cleaner government. (They had yet to be introduced to the Obama presidency.) This public view played a big role in the Burger Court's decision to sanction disclosure in its
Buckley
decision. Disclosure was already so in vogue that even those who brought the lawsuit against FECA didn't really challenge its disclosure provisions.

Republicans also saw political refuge in disclosure. They knew the public wanted more money regulations (which they opposed), and they didn't want to stand for nothing. So they adopted a new cause: transparency. By the mid-1990s, the stated conservative position was as follows: We should get rid of all government rules on money and speech and replace them with a system of full and instantaneous disclosure. That position allowed the GOP to be in favor of more speech, in favor of “clean” government, and in favor of leaving it to the public (rather than the government) to decide what influence money was having on elections. It sounded good. And in fairness, the left hadn't yet zeroed in on disclosure as an intimidation weapon.

This idea was such a craze that at the height of the reform craze, House whip Tom DeLay and California Republican John Doolittle put forward their own alternative to McCain-Feingold. It proposed lifting existing regulations on political money and replacing the whole shebang with a system of immediate and complete disclosure on the Internet. DeLay was at least honest about the political realities of finance reform, and his own motivations. Democrats, and even some Republicans, continued to pretend they were pushing reform in the name of cleaner elections. The Texas Republican leader called them out, noting that McCain-Feingold was all about silencing certain classes of political participants—namely the business community, which tended to support Republicans “I am for full disclosure. I am for instant disclosure,” said DeLay. “But I am not for unilateral disarmament.”

Democrats sensed the public tide on their side and slammed the proposal. The
New Republic
wrote about the DeLay-Doolittle legislation under the headline “Cynics United.” The left nicknamed the bill “do little and delay.” DeLay-Doolittle never did get a vote. And it would come under retrospective ridicule when DeLay a few years later was indicted in a finance probe. But the bill mattered. It staked out for years the conservative position on campaign finance: disclosure, disclosure, disclosure. That position would last right up to the point at which the right's grassroots supporters became IRS quarry.

Not every conservative fell for it, though, even in the early days. In 1996, a little-known faculty member at Capital University Law School in Columbus, Ohio, by the name of Brad Smith published an article in the
Yale Law Journal
under the title “Faulty Assumptions.” Smith laid out a precise and damning critique of campaign finance laws. They were based on incorrect beliefs about the effect of money in politics, and they inspired perverse consequences, he wrote. The article, and his follow-up book,
Unfree Speech
, turned him into a nationally recognized free-speech expert. He became a fixture at congressional hearings; his voluminous writings worked their way into judicial decisions.

Mostly, Smith became a guiding influence on the conservative turn against political-speech laws. Senate Republican leader Mitch McConnell, one of Congress's most ardent free-speech defenders, would ultimately send Smith's name to the Clinton White House as a GOP choice for the FEC. The academic was by then so controversial that the left staged near-riotous objections to the nomination, and the confirmation process dragged on and on. When he finally got a vote, in May 2000, thirty-four Democrats (and John McCain) voted no in protest. The
New York Times
would begrudgingly title him the “intellectual powerhouse” behind the conservative movement's new effort to deregulate finance laws. His opponents—including Democrats and so-called good-government groups—immediately despised him, deriding him as a “flat-earth society poohbah.” One editorial page would liken him to David Duke, the Unabomber, and Slobodan MiloÅ¡evi
ć
—all in the same article.

That's amusing, because Smith is the furthest thing from a Serbian dictator. He's from Michigan, and he has that understated midwestern thing going on. He's a law professor, and he looks the part. He has a wry sense of humor. (Underappreciated fact: Some of the quirkiest people in America are campaign finance lawyers.) Smith's particular gift, however—and what makes Democrats dislike him so—is his ability to use uncomfortable realities in crafting his arguments, and to then make those arguments in ways that average people can understand.

Smith's early criticisms of campaign finance laws are now the standard case against “reform”: The laws protect incumbents; they lock out new entrants to the political scene; they force candidates to spend all hours of the day and night fund-raising (rather than governing); they reduce political accountability; they kill free speech. They are inherently unfair; they give vast rights to the press, but deny them to average Americans. They are ineffectual; money always finds a way, and the laws drive it to darker places. What particularly drove the left doolally about Smith was his ability to blow up their most basic arguments. The “reformers”: Money in politics is corrupting. Smith: How can it be corrupting to spend money to try to convince someone to vote a certain way? Isn't that just democracy?

What was most notable about Smith's work—even his earliest tracts—was his skepticism of disclosure laws. Most Republicans didn't buy into his cautionary note; disclosure was their political cover, and they were sticking with it. Even other conservative scholars didn't agree; disclosure simply sounded too good. His wariness would nonetheless prove justified, and in the wake of the IRS and other targeting, he's only grown in his belief that, as he tells me, “there should be a very heavy burden on anybody who wants to invade your political privacy.”

When Smith talks about disclosure, he likes to reference that
McIntyre
decision of 1995. “You've got to think about this in context, not legal speak,” he says. Here is an average mom just trying to raise the alarm about a school tax. “Which means she is a person whose kids could easily face retaliation from teachers who don't appreciate a parent opposed to more school funding,” he says. Smith is himself the child of two teachers, and grew up understanding how vindictive the profession can be. “Those kids might have trouble getting references for college; they might be punished in band, or chess club, or in their athletics. There's a whole bunch of reasons, in a public school, that you don't want to be known as the kid whose parent is leading the charge against the tax increase.”

And the
McIntyre
case, Smith adds, was about vindictiveness. School officials knew exactly who had distributed the flyer; it is how they were able to file a complaint against McIntyre with the Ohio Elections Commission in the first place. There was no “disclosure” problem. “The complaint was instead filed to send a message to others to not do the same thing,” says Smith. “Is that what we want disclosure laws used for?”

As an FEC commissioner, Smith saw up close and in person the ways that disclosure discouraged political speech. He also saw how the burdens always fell disproportionately on the little guys—folks like Karen Kenney. Corporate America and powerful political groups hire teams of lawyers to walk the right side of the law. But the average American has no such legal adviser, and their hardest area of compliance is disclosure. “Even small, grassroots groups, they generally understand the big rules. There is an easy cheat sheet for them to follow,” says Smith. “But the disclosure forms are insanely complex. Nobody can get them right.”

Conservatives are fortunate to have had a string of distinguished free-speech advocates at the FEC, including one who immediately followed Smith, Hans von Spakovsky. Von Spakovsky worked years in the Justice Department before serving at the FEC as a commissioner in 2006 and 2007. He remembers his own first realization that conservatives had made a mistake in embracing disclosure. The FEC was contacted by a woman who had given a contribution to a political candidate whom animal rights groups detested. Those groups tracked down her name with disclosure forms and started harassing her. “She wanted her name off these public lists, so they'd leave her alone,” he recalls. “We evaluated it, but there was nothing we could do under the law. And that was one of the first times I saw the really bad purposes to which disclosure laws could be put. They sound innocuous, but there are all kinds of things that are innocuous until they are used in a bad way. Say, box cutters.”

The problem is that disclosure and finance laws have become an article of faith for much of America, particularly liberals. Smith remembers getting in an elevator at the 2000 Republican convention and discovering himself in the company of the liberal Al Hunt, then a
Wall Street Journal
columnist. Hunt had written critically of Smith during his nomination to the FEC. Smith recalls that after a few seconds of polite chitchat, Hunt proclaimed that it didn't matter that Smith had recently been confirmed, because the FEC never did anything useful anyway. Smith disagreed; the FEC played an enormous (often terrible) role. He attempted to explain to Hunt that he'd met many average Americans who were “scared to death” of the FEC and of running afoul of its scary laws, and that this discouraged them from taking part in politics. By the end of the elevator ride, Smith remembers, Hunt was screaming at him—and the conservative law professor had learned something about the depths of liberal love for finance regulation.