Anyone looking for an assessment of the state of America’s campaign finance system need look no further than the recent criminal trial of Democratic fundraiser David Rosen. Rosen’s trial and subsequent acquittal for underreporting in-kind contributions was remarkable in many respects. The trial featured testimony about Hollywood stars, their perks and their habits. It had a roster of characters straight out of central casting. But perhaps most striking was insight it offered into how much confusion exists about exactly how the campaign finance laws work.
During the course of the two-week trial no fewer than eight witnesses and four lawyers offered divergent, contradictory and (in many cases) incoherent views on how in-kind contributions were to be treated and allocated. At issue was whether the inclusion of a large in-kind contribution would have an adverse consequence on the amount of money that would be available to the campaign.
To help clarify the issue, prosecutors produced a letter from the Federal Election Commission providing the agency’s view. Yet, the judge admitted that when he first read the letter he “could not make any sense of it.” He offered this assessment of the jury’s prospects for comprehending the law: “I would be surprised if any single juror could follow that extremely complicated evidence. I think it would be a lot more comprehensible to read the Internal Revenue Code from start to finish than to figure out some of the evidence that was issued on the Federal Election Commission requirements.”
Now remember, this was a case about in-kind contributions (hardly the most daunting topic) prior to the enactment of McCain-Feingold — before politicians had to know what qualified as “soft money”; before the advent of “Levin” accounts; and before fundraisers needed to know the difference between implied and apparent agency. This was when we all thought the law was simple.
The Rosen trial confirmed one of the dirty little secrets of the campaign finance laws — they are so complicated that virtually no one in politics fully understands them. What is worse is that since McCain-Feingold most operatives have given up trying. Those who can afford to hire lawyers and compliance specialists — federal officeholders, top-tier federal candidates and national party committees — rely upon those professionals.
They may attend a legal briefing or read a legal memo, but they have by and large given up trying to understand the logic of why a Senator may attend a state party fundraising event but not one for a mayoral candidate. They have no idea why the law allows them to raise unlimited amounts for some ballot initiative efforts but are told that they can raise very little for others. Increasingly, even these sophisticated actors are finding it easier to avoid doing things that they are permitted to do than to try to figure out the subtle distinctions of the law.
Thus, state parties forgo raising Levin money (funds that can be spent on some get-out-the-vote activities in conjunction with federal campaigns), because it’s simply too complicated to figure out how it can be raised and spent. Officeholders avoid appearing in advertisements for state candidates because of the risk that they will later be considered to be “promoting” their own candidacies.
One might think that we are at the end of this road — that as with the tax laws, there might now be an impulse toward simplification. But that is far from true with the campaign finance system. Self-proclaimed reformers are not done. After the FEC excluded the Internet in the web of regulation, the reformers sued to force the FEC to draft rules governing online political activity. And, afraid that McCain-Feingold is still too lax, they are now focused on 527s.
Winston Churchill said, “If you have ten thousand regulations, you destroy all respect for the law.” For better or worse, we are beyond that point. Passing more laws and revising more rules isn’t the solution because few understand the current rules and few would comprehend new ones. Instead of pushing for more regulation, why not take a step back? Just as tax reform led to simplification in the 1980s, future reform should be aimed at simplifying our campaign finance system, not making it more complex. Perhaps then we can have campaign laws that even a federal judge could understand.
Marc Elias is a partner in the political law group at Perkins Coie LLP.