Hagel’s Campaign Finance “Reform” Bill Keeps Nearly 60 Percent of National Party Soft Money in the System

March 21, 2001

Hagel’s Campaign Finance “Reform” Bill Keeps Nearly 60 Percent of National Party Soft Money in the System

Hagel Bill Would Make Corporate and Union Soft Money
a Permanent Part of the System

WASHINGTON, D.C. — Trumpeted by its proponents as a compromise campaign finance reform bill because it “caps” soft money, the legislation sponsored by Sen. Chuck Hagel (R-Neb.) is a sham reform because it would keep nearly 60 percent of soft money in the political system and would do nothing to prevent it from being redirected to state parties.

A new Public Citizen analysis of Federal Election Commission data demonstrates that the Hagel bill’s $60,000 annual soft money limit would have allowed $260 million of the $450 million in soft money raised by the national Democratic and Republican parties to seep back into the system during the 2000 election. Only $190 million in soft money (42 percent) would have been banned (see table and graph below).

Even the 42 percent of funds banned could quickly have found its way back into federal elections because the Hagel bill would do nothing to prevent national party officials from redirecting soft money to state parties for the same activities national parties support (such as producing “issue ads,” boosting voter registration and conducting get-out-the-vote efforts).

“Not only is this bill a sham, but it would for the first time in more than half a century sanction corporate and union soft money and make it a permanent part of our political system,” said Public Citizen President Joan Claybrook. “We urge senators to reject this sham reform.”

The Hagel bill would leave about two-thirds of national party soft money from business untouched while eliminating more than 88 percent of union contributions. As a result, the business advantage over labor in soft money in 2000 would have gone from 8-1 ($232 million to $30 million) to 36-1 ($129 million to $3.5 million), Public Citizen’s analysis shows.

“This bill would make our system more corrupt, not less,” said Frank Clemente, director of Public Citizen’s Congress Watch. “We cannot afford for this measure to pass.”

Impact of Hagel Bill on National Party Soft Money

(2000 Election Cycle)

Type of Giver

Total Contributions

Contributions Allowed Under

Hagel Bill

Percentage of Total Contributions Allowed Under Hagel bill

Business – Corporations

$206,032,564

$113,624,985

55%

Business – Individual Incorporated Entities

$4,316,264

$3,353,164

78%

Business – Trade Associations & Groups

$21,813,880

$12,374,993

57%

Individuals

$173,443,978

$116,691,635

67%

Labor Organizations

$29,935,845

$3,545,395

12%

Other Organizations and Ideological Groups

$5,150,689

$2,726,374

53%

Political Candidate Committees

$2,128,314

$1,654,826

78%

Political Parties & Clubs

$6,734,909

$5,709,799

85%

Total – Itemized

$449,556,443

$259,681,171

58%

Hagel Bill Allows 58% of Soft Money to
National Political Parties

Soft Money Removed
Under Hagel Bill –
$190 Million

Soft Money Allowed
Under Hagel Bill –
$260 Million

Source: Public Citizen analysis of FECInfo (www.tray.com) data obtained from the Federal Election Commission. (Does not include $2.14 million contributed by Politician PACs.)

Methodology: Analysis of impact of Hagel bill assumes total contributions over election cycle are strategically adjusted by donors to come as close as possible to current 2-year election cycle total, taking into account the new annual $60,000 maximum for contributions. For example, a donor who gives $120,000 — $80,000 in one year and $40,000 in another — would aim to achieve the same level by spending $60,000 each year under the Hagel bill limit.