Senator Hagel's Campaign Finance "Reform" Bill Leaves 58% of National Party Soft Money Untouched

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 sham reform. A new Public Citizen analysis of Federal Election Commission data demonstrates that the Hagel bill?s $60,000 per year limit is so porous that it would have allowed $260 million of the $450 million in itemized soft money raised by the national Democratic and Republican parties in the 2000 election. Only $190 million in soft money (42%) would have been banned (see table and graph below).

Even the 42 percent of funds banned could have quickly found their way back into federal elections because the Hagel bill does nothing to prevent national party officials from redirecting soft money to state parties for the same activities national parties support ("issue ads," voter registration and get-out-the-vote).

Interestingly, as the table shows, another effect of the Hagel bill would have been to 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).

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%




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.

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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.