Politics is our business, not yours. Keep out.
That’s the message politicians in Congress and state capitols nationwide have for anyone who wants to join the political fray this election season or any other. And that’s the real point of so-called campaign finance laws.
Rep. Michael Capuano recently admitted exactly that when defending a campaign finance bill currently before Congress: “I hope it chills out all — not one side, all sides! I have no problem whatsoever keeping everybody out. If I could keep all outside entities out, I would.”
Further evidence comes from a new Institute for Justice report by University of Missouri economist and campaign finance expert Jeffrey Milyo. Milyo explains the value of political entrepreneurs to the vibrancy of American democracy — and shows how campaign finance laws get in their way.
READ THE REPORT: www.ij.org/keepout
Political entrepreneurs are people who form and grow new political voices and movements. They provide outside competition that keeps the political establishment on its toes, much as economic entrepreneurs drive innovation and change in the marketplace.
“Whether it is the civil rights movement of the 1960s or today’s Tea Party movement, outsiders in American politics have always played a crucial role in challenging the status quo by pushing new ideas to the fore and inspiring newcomers to run for public office,” writes Milyo.
LEARN ABOUT IJ’S CITIZEN SPEECH CAMPAIGN: www.ij.org/CitizenSpeech
Just like established interests in the marketplace, political insiders like Capuano (and countless other incumbents) can respond to outside competition in one of two ways: either adapt or collude with government to regulate competitors out of business. Business insiders use occupational licensing laws and other barriers to entry to keep upstarts out; political insiders use campaign finance laws.
Milyo examines two types of laws that erect barriers for independent political groups — that is, groups that advocate for or against ballot issues or candidates independent of the candidates’ campaigns: contribution limits and regulatory red tape.
In 22 states, it is illegal to give an independent political group that speaks out about candidates more than a government-set limit. Such “contribution limits” make it harder for new groups to form.
As David Keating, a long-time political activist and founder of SpeechNow.org, an independent political group that defeated federal contribution limits in court, explains, “When you have just a handful of people who feel strongly about an issue and the rest of the public hasn’t much thought about it yet, it’s hard to round up many small donations. You need a political venture capitalist willing to put in a large amount of seed money and attract other people to the cause.”
Milyo shows that most new independent political groups that sprung up in the 2004 presidential election such as America Coming Together relied on a few very large individual contributions to get started. These contributions were far larger than federal contribution limits — and than contributions to more established groups with built-in bases of support.
Contribution limits also reduce the resources available for political advocacy. Milyo estimates that if four political groups active in the 2004 election had not been subject to limits, they might have raised between 53 percent and 599 percent more in individual contributions to spend on their speech.
Another barrier to political entrepreneurs is campaign finance red tape. In all 50 states, independent groups that speak about candidates are treated as political action committees, or PACs. So are groups that speak out about ballot issues in the 24 states that permit them. This means citizen groups, in order to speak, must register with the state, open a separate bank account, and complete a host of complicated forms tracking just about everything they do — all under threat of fines and other penalties for mistakes.
This is no small task. In earlier research, Milyo asked 255 people to fill out real-life forms for a small ballot issue committee. No one did so correctly. The average score was a miserable 41 percent correct.
Consider a real-life upstart group. Nathan Worley, Pay Wayman, John Scolaro and Robin Stublen are political enthusiasts in Florida who became outraged about a state constitutional amendment on the ballot. So they hatched a plan to pool some money and speak out. But if they run just 20 radio ads, at a cost of $500, they will have to navigate Florida’s maze of red tape. With jobs and families to attend to, they just don’t have time.
To political pros with armies of attorneys and accountants and built-in support, these laws are barely nuisances. But to would-be political entrepreneurs, they are barriers to the political arena. That is how campaign finance laws lead to fewer new voices and less speech. Indeed, that’s entirely the point.
That’s why IJ, as the first step in a new Citizen Speech Campaign, is challenging Florida’s laws in court — and challenging policymakers nationwide to roll back campaign finance laws that keep political entrepreneurs out. This campaign will restore the right of political entrepreneurs to speak freely and ensure that all Americans have access to the robust political debate that makes our country great.
Lisa Knepper is director of strategic research at the Institute for Justice. IJ’s report, Keep Out: How State Campaign Finance Laws Erect Barriers to Entry for Political Entrepreneurs is available at www.ij.org/keepout