www.DemocraticFundamentalism.org - VOTU - Election 2002 - 7/16/2002

	Globalization - Countries - United States Daily News in Review - Election 2002 Fix the Campaign Rules First By E. J. Dionne Jr. The Washington Post Tuesday, July 16, 2002; Page A17


	The power of money in politics is never so great as during a ferocious economic expansion. Paradoxically, that's exactly when you wish big money's voice was a bit softer. During the boom times, politicians should be sticking up for the tiresome green-eyeshade types asking crabby, nagging questions about whether the bacchanalia is getting out of hand. Yet our campaign money system pushes politicians to shirk their obligations to stand outside the marketplace to make sure it's working. Repairing the campaign rules is thus as urgent to the future of American capitalism as repairing the accounting rules. Of course, campaign contributions do not explain everything that went wrong during high tech's high tide. Politicians embraced the new, painless economics because they thought it was the future. They didn't want to be on the wrong side of history. They were no different from investors who were certain that markets only had upsides. You read a lot now about the efforts of Sens. John McCain of Arizona and Carl Levin of Michigan to have stock options treated more like normal compensation for the purposes of reported corporate expenses. For a decade, Republican McCain, Democrat Levin and such far-seeing financiers as Warren Buffett have been warning that the options boom was misleading investors and had the potential to exacerbate market problems when the flush times ended. It's true that Silicon Valley sent Washington politicians truckloads of campaign contributions -- forgive the old economy metaphor -- to protect their blessed options. But even without the money, politicians in both parties were desperate to avoid being tagged as dinosaurs who, God forbid, just didn't "get" what the Valley geniuses were creating. And so in 1994, when the high tech industry gathered its minions in San Jose for a populist-sounding "Rally in the Valley," there was Kathleen Brown, then the Democratic candidate for governor of California, with the goofiest paraphrasing of John Lennon ever offered a mass audience. "Give stock a chance!" she declared. "Don't stop the engine of economic growth that has absolutely fueled this California economy!" Don't be too hard on Brown. She was simply saying what a lot of people thought then, and what some still do. That's the point: When big campaign money aggravates an already strong tendency in the political culture, all balance is lost. And, boy, did the money roll in. Fred Wertheimer, the veteran campaign finance reformer, recently released figures compiled by the Center for Responsive Politics showing that corporations and business executives gave more than $1 billion in soft-money political contributions in the decade after 1992. Nearly $13 million of that came from just the Funny Money Six -- Adelphia, Arthur Andersen, Enron, Global Crossing, Qwest and WorldCom. That money tilted policy not toward business or capitalism in general but toward very specific legislation that favored corporate management. For example, in 1995, Congress overrode President Clinton's veto of a bill that has made it harder for shareholders to bring securities-fraud actions against corporate executives. In 2000, congressional pressure -- abetted by large contributions from the accounting industry -- halted then-SEC Chairman Arthur Levitt's efforts to regulate accounting along lines similar to measures now contained in Sen. Paul Sarbanes's corporate reform bill. Politicians are scurrying to support Sarbanes's legislation so they can bury their own pasts. Opponents of campaign reform say any attempt to limit money's writ in politics is impractical because money will always discover loopholes. It is an argument suspiciously similar to claims brought against efforts to regulate the stock market and corporate behavior. It's not simply defeatism. It's dishonest because opponents of reform consistently try to (1) create the very loopholes they publicly decry and (2) oppose any efforts to expand campaign reform in ways that would answer their legitimate objections. If Congress worried about loopholes, it would immediately overturn the loophole-ridden regulations recently issued by the Federal Election Commission to undermine the ban on soft money pushed through Congress by McCain and Sen. Russ Feingold. If opponents of reform really care, as they say they do, about making sure candidates can communicate with voters, they'd pass a recently offered reform proposal to provide federal matching funds to help candidates buy broadcast time. And if they want to expand political participation, a goal they often tout, they'd pass another reform providing tax credits for small donations. All these reforms would help ensure vigorous political debate, but in a way that would prevent a chorus heavily inflected by big money from drowning out all the other voices. As we've learned, it's precisely at moments when politicians are inclined to write such lines as "Give Stock a Chance!" that those with alternative lyrics most need to be heard. © 2002 The Washington Post Company