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Politics and Privacy

My earlier post about the site (fundrace.org) on which you can search political contributors by address prompted me to think a little more about politics and privacy. There's a lot that's politically interesting revealed in the general geographic information about contributors, but why do I need all the information about individuals? What public interest is served here? I have neighbors I barely know, about whom I now know a good deal about their political preferences, and probably also something about their finances, whereas if I was able to look up on line what library books they borrowed, it would be considered, and would be, an outrageous invasion of privacy.

And, at the same time, we hold the secret ballot sacred. I know some people who, as a matter of principle, won't say who they voted for, and most people would never ask. It's strange that we put two forms of political expression -- voting and contributing -- at opposite ends of the privacy/publicity spectrum.

Disclosure of political donors has always been the one ground of agreement between campaign reformers and their opponents. The main alternative to the McCain-Feingold reforms in the late 1990s was a bill sponsored by Rep. John Doolittle of California that would have eliminated all limits on campaign giving, but required instant, full disclosure. Some of this is disingenuous, but mostly, the disagreement has always been between those who believe disclosure is sufficient, and those who believe more is required, including limits to reduce corruption, and public financing to allow candidates to be heard.

I've always been in the camp that believes that disclosure is far from sufficient, and increasingly, I wonder what value it has at all. Knowing the name of a donor and his or her employer doesn't provide any information about why the person contributed. The Clinton contributors who became notorious after 1996, like Johnny Chung, were not names that would have attracted anyone's attention until more information came out about why they gave and how they had been recruited, information that was not available from disclosure. And knowing who gave tells nothing about why the person gave, whether it is out of personal economic interest, class-based interest, ideology, friendship, happened to be in Skull and Bones with the candidate, etc. That's why the familiar process of aggregating contributions from employees of a single company or law firm and treating them as if the employees were acting in the interests of the company can lead to absurd results, such as this from a recent report by the Center for Responsive Politics

Nearly half of Kerry's biggest financial supporters contributed more money to Bush than to Kerry himself through Jan. 30 of this year, according to the non-partisan Center for Responsive Politics' study of campaign finance reports filed this month with the Federal Election Commission....

Kerry's third-largest contributor, Citigroup, gave more than $79,000 in individual and PAC contributions to the presumptive Democratic nominee through January. Louis Susman, Citigroup's vice-chairman, is one of Kerry's biggest fund-raisers. But the financial services giant gave more than $187,000 to the Bush campaign during the same period, good enough for 12th on the president's list of top contributors.

Goldman Sachs contributed nearly $65,000 to Kerry through January, earning it the No. 6 ranking among Kerry's top givers. But the company's employees and PAC sent Bush nearly $283,000 -- more than four times the amount it gave to Kerry. Goldman Sachs CEO Henry Paulson and managing director George Walker are Bush Pioneers who have raised at least $100,000 for the campaign.

Citigroup and Goldman Sachs did not contribute a penny to either candidate. Their employees did -- to a limited degree through a PAC, but mostly as individuals. Citigroup has a quarter-million employees; Goldman about 20,000. Many are rich. Some rich people support Bush, some Kerry. And there are also plenty of clerks and computer systems administrators and receptionists at these firms, who probably have political views of their own. And that's all that this report tells you. (Although it is interesting when you see a large firm in which almost all the employees give to a single candidate, which can suggest either that something fishy is going on -- possibly illegal reimbursement of contributions -- or just a confluence of interest, such as would be the case at a firm like Enron -- rich Houston energy traders are probably predictable Bush supporters, whether they get favors or not.)

Disclosure of $2,000 contributors also fails to reveal the all-important question of who actually raised the money. A single $2,000 contributor is unlikely to have an undue influence, even with a member of Congress, which is why that is a reasonable limit. But the person who can put together a few hundred thousand dollars most certainly does. Neither disclosure alone, nor disclosure plus limits, will reveal that fundraiser. Ironically, Bush's designation of "Pioneers," "Rangers," and an unnamed category of half-million dollar fundraisers has provided the best relevant information, although it is not required by law or available through the FEC. (Public Campaign Action Fund, a group affiliated with the reform advocates at Public Campaign, held a contest to give a name to the half-million contributors; the winner by a mile was "Weapons of Mass Corruption," although it is unlikely that the Bush campaign will adopt that fitting nomenclature.)

If disclosure is inadequate, there is a provocative -- though not persuasive -- case for going in the other direction entirely. Yale law professor Ian Ayres made the case in the book he co-authored with Bruce Ackerman for forced anonymity in political contributions. Under this scheme, candidates would actually be forbidden from knowing who their contributors are, thus forcing politicians to treat everyone equally. Although nothing would prevent someone from telling an elected official that he or she was a contributor, it is also the case that nothing would prevent someone who was not a contributor from making the same claim. Thus, in Ayres's scheme, such "strategic lying" would serve as a useful and morally defensible enforcement mechanism. One imagines a group of welfare rights activists showing up on Capitol Hill and demanding to see their congressman on the grounds that they are major donors.

And that's what makes the scheme unworkable. Of course the member of Congress knows generally the kinds of people he's getting money from, whether he knows their names or not. He knows who his political friends are. And he probably knows it's not welfare recipients. And the access that large contributors have is not always part of the official day, but is tied in to the golf outings and dinners that are a part of both the fundraising and lobbying process itself, which would not end under Ayres' scheme.

Ayres draws the analogy to the secret ballot: Because they don't know who voted for them, officials have to respond to all citizens. But that's not true either. Politicians know, to a greater degree than ever, the kinds of people who vote for them, just as they will always know the kinds of people who contribute, and they know the kinds of people who might be persuaded to do either one. And, on the money side, that is the source of corruption we should be concerned about, much more than the individual acts of corruption in favor of a single donor or company. Bush and Cheney knew perfectly well that Texas and Oklahoma energy companies were their big backers, the energy task force favored such companies. The senators from Connecticut know that the insurance industry is a big supporter; they fight for that industry's interests, which they also see as in the interest of their state. The assumption that corruption consists of a single contributor asking for and receiving a single favor is misleading. It's a much more generalized kind of corruption, on behalf of whole industries or classes, that we should be most concerned about, as the Supreme Court seemed to understand when it put this paragraph, which I've quoted before, in its decision upholding McCain-Feingold:

Plaintiffs argue that without concrete evidence of an instance in which a federal officeholder has actually switched a vote (or, presumably, evidence of a specific instance where the public believes a vote was switched), Congress has not shown that there exists real or apparent corruption. But the record is to the contrary. The evidence connects soft money to manipulations of the legislative calendar, leading to Congress. failure to enact, among other things, generic drug legislation, tort reform, and tobacco legislation. Donations from the tobacco industry to Republicans scuttled tobacco legislation, just as contributions from the trial lawyers to Democrats stopped tort reform. To claim that such actions do not change legislative outcomes surely misunderstands the legislative process.

But there is a sense in which Ayres' analogy of the secret contribution to the secret ballot makes sense: The point of the secret ballot is really to prevent intimidation. And there is probably a certain amount of intimidation in current campaign finance practices as well: people feel they have to contribute because their boss does, or because a client invited them to a fundraiser, or because their Washington lobbyist has persuaded them that if they don't give to Tom DeLay, they won't get "a seat at the table" when legislation is written. (See the Westar case for this example.) It would be nice to use "strategic lying" to tell the boss or the client that you gave to their favorite candidate, while actually giving to another, or not at all.

I don't really have a solution here. Even if its value is limited, disclosure is probably better than no disclosure. We want to be able to answer the question, "Where does Congressman Jones's money come from." We don't really need to know the answer to the question, "Who did Mrs. Smith give money to?," certainly not within the realm of limited, hard money contributions. But you can't have the answer to the first question without making the answer to the second available. With current technology, there's nothing that prevents any bit of information from being cross-tabulated all kinds of ways, and this is just the beginning.

Posted by Mark Schmitt on March 22, 2004 | Permalink


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Rick Hasen has a post with a link to a long paper on this topic.

Posted by: ogged | Mar 23, 2004 11:49:12 AM

Public Campaign Action Fund, a group affiliated with the reform advocates at Public Campaign, held a contest to give a name to the half-million contributors;

How about "Ambassador"?

Posted by: Ron | Mar 23, 2004 3:38:23 PM

Ambassador would certainly be the traditional term.

I don't know why full and immediate disclosure with no limits is disingenous. Money will flow into politics whatever legal limits are attempted [see 527s]. It is better that the money is all open and above board.

George Soros can commit millions in secret to 527s. Wouldn't we want to know that?

Wouldn't it be fine if a Soros or a Gates were able to put big money into an unfinanced but otherwise wonderful congressional candidate--to make him or her a player? Sure, as long as we all knew that was what was happening.

In fact, congressmen and state legislators spend an inordinate amount of time hustling small donations that would be better spent being legislators.

Wouldn't most candidates in tight races routinely be forced to disclose their donors voluntarily? Only entrenched incumbents would be immune.

Hiding contributors is a fever dream. A big donor would only need to have the cancelled check framed for the congress critter's inner lobby as an effective form of proof.

By the way, having the address, etc., of campaign donors also insures that foreigners can't try to buy our elections. Elections should be an entirely domestic market.

Posted by: russ e | Mar 23, 2004 4:02:58 PM

There's a certain amount of chicken/egg dilemma in dealing with strategic lying. Sen A is for tort reform. He gets money from HMOs. Sen B is against tort reform. She gets money from trial lawyers. Which came first? Their beliefs or the money.

And as far as keeping it secret, a cancelled check to 'political campaigns' doesn't say much.

Posted by: mecki | Mar 23, 2004 4:29:14 PM

Just to clarify, in response to Russ E -- and this is particularly important because I do work for a foundation funded by George Soros -- I absolutely think large contributions such as Soros's to 527s should be disclosed. I think there's less public value in disclosing every $2,000. However, I also think such contributions should be limited -- they should not go directly to candidates. The question of whether they can go to committees that are not connected to candidates, that operate completely independently, is one that the FEC will take up this month. I may have more to say about it soon.

Posted by: Mark Schmitt | Mar 23, 2004 5:12:56 PM

We have disclosure now and does anyone think that the system is working well? I think the complete nondisclosure idea deserves more airtime in the debate than it is currently getting.

The fear of course is in implementation. If someone could prove to a candidate that he or she gave an outrageous sum to their campaign then the entire system breaks down.

If as Bill Bradley often repeated, money in politics is like ants in the kitchen, it will crawl through any opening to get in, then perhaps we should concentrate on the effects of money rather than the money itself. Nondisclosure, if it can be done successfully, may address that.

Posted by: Stuart | Mar 23, 2004 5:22:36 PM

What if a Repub./Dem. boss sees an employee's name on the contributor list of the opposing party?

Posted by: Yesh | Mar 23, 2004 7:16:19 PM

This is a stupid dichotomy.

How about full public financing?

Posted by: d' Coriolis | Mar 23, 2004 10:04:15 PM

What d' Coriolis said...

The current system is legalized bribery, period. As long as it prevails, contributions should being public is the lesser of the evils.

Posted by: Nell Lancaster | Mar 24, 2004 9:49:23 AM

The issue of "privacy" on donations to a political party or person is very real to me and I will try to describe my experience following the 2000 election.

At the time, I was living in Wisconsin and I had sent donations to the DNC. Even though I travel and have friends in many parts of the US, my travels to Florida were limited to one business trip in the fall of 2000 and a trip to WDW back around 1976. I had no friends, families or anyone that I would have considered to be someone I would associate with living in the Orlando area.

Three days after the Supreme Court ruling regarding the FL election (the equalate of a judiial junta and installation of Bush in the WH) I receive a post card in the mail. It was addressed to me directly, by hand. It was dated the day of the supreme court decision and post marked "Orlando, FL". On the back of the card was a "hand written" note saying, "How do you like your Gore SHITBURGER now?"

Since my contacts in national elections was about as close to "0" as you can get and because I had only donated to the DNC, it was my assumption that the DNC contributor list was "acquired" by operatives of the republican party and that I was one of hundreds, if not thousands, who received such a note.

Given this effort by whomever in the Repubican party that could be so hateful and spiteful and, given that in today's world information (personal, financial, etc) is so easily obtained, I would find that establishing some confidential method of donations comforting.

Posted by: ArkansasJoseph | Mar 24, 2004 1:53:41 PM

I have a similar fear to ArkansasJoseph's. If people feel strongly enough about something to vandalize lawn signs because they are for someone they disagree with and vandalize automobiles because they are SUV's it's not inconceivable that these same people would use a list like this to target homes and families as well. The post card to ArkansasJoseph is deplorable but the tactics aren't limited to supporters of just one party, that's why the voting booth is private.

People need the right to hold their beliefs and support their candidates without fear of intimidation or threat to their person or property. Donors like Soros or the Hollywood crowd, etc. are more than willing to brag about how much they've given to a cause or a candidate. I am not. And unless I'm contributing to something illegal I shouldn't be forced to.

Posted by: Barnabas Sackett | Mar 25, 2004 9:31:37 AM

I came across Fundrace.org the other day and it definitely felt a little creepy when I plugged in my address and found my self staring at the campaign contributions of my neighbors.

Often disclosure grouped by employer can lead to poor conclusions but they can also raise interesting and potential important issues.

Consider that Kerry's largest contributor is the law firm Skadden, Arps, Slate, Meagher & From ($101,800) was paid $18,000 for legal services provided to Americans for Jobs, Healthcare and Progressive Values (The group that ran the Dean/Bin Laden ads) and the group's e-mail contact on their disclosure reports was a Skadden.com address.

Without looking at contributions by employer, such connections would be impossible to draw.

Not that anyone cared.

Certainly there is a lot of white noise in these kinds of employer categorized disclosure reports. But their are stories waiting to be told as well.

Posted by: Marc Brazeau | Mar 26, 2004 2:56:31 AM

Responding to Marc Brazeau: The example you cite is exactly why this employer characterization is misleading. Skadden, Arps has a lot of lawyers, some give to Kerry, plenty to Dean and others. (I happen to know some of the Dean supporters there.) At the same time, Skadden's Washington office has one of the three or four very good election law practices, led by Ken Gross. Anyone who starts a 527 like Americans for blah-blah-blah needs a good election lawyer, and there aren't that many of them. The fact that a particular firm agrees to provide that legal service, for its normal fee, does not have ANYTHING AT ALL to do with the political preferences of anyone else at the firm. I know this is an old, stale story from the forgotten archives of Dean vs. Kerry, but it is nonetheless misleading.

Posted by: Mark Schmitt | Mar 26, 2004 10:39:56 AM

Goldman sent a letter to all VP and above requesting donations to the Goldman PAC. Interestingly, there was no reference to to which candidates or party the PAC would donate to.

GS isn't exactly a hotbed of Republicanism, but the current CEO is personally very supportive of that party. Since $2000/head is nothing for most VP+ level executives it doesn't require much arm twisting to raise those kinds of funds if someone is motivated to do so. Moreover, most people on Wall Street have no problem "hedging" their bets and giving to both parties. The potential payoff can be enormous for everyone involved when it comes time to pass legislation friendly to Wall Street (or at least the old line investment banks) and senior executives are not blind to this so they gladly contribute.

Bottomline, if the next CEO happens to be supportive of the Democrats and organize for them then I would expect GS to lead in donations to the Democrats. Of course this suggests that Wall Street is largely indifferent to which party is in power. Or alternatively take slighly differing views of long term greed versus short term geed.

Posted by: GS Employee | Mar 26, 2004 1:01:27 PM

While it's true that Skadden employees gave $20,054 to Dean and $28,450 to Clarke, I remain suspicous. My point is not that the numbers prove anything. Simply that they may point to something that maybe should be looked into. Raising $100,000 within a law firm for one candidate seems to me that there is some amount of organization at work there.

They weren't just a big donor. They were Kerry's biggest donor. By a lot. And who rose like a phoenix from the ashes of Dean's unravelling? Kerry. I don't want to exagerate the importantance of Americans for Jobs in taking down Dean. I don't mean to really rehash that.

It may be that it is a perfectly natural and innocent set of coincidences. I certainly know of plenty of circumstances when the banality of the world produces conspiracy like results. I do think that the employer compiled disclosures are worth looking at. However, you raise good points about why we shouldn't jump to conclusions about them.

And don't sell yourself short on being one of the best political blogs. You and David Neiwert at Ornicus are two of my favorite. I prefer the longer more considered posts to most other blogs.

Keep on truckin'!

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