Campaign money back in spotlight

Reformers weren't surprised last week when Barack Obama became the first presidential nominee since the Watergate era to opt out of the public campaign-finance system. But they were disappointed, leading to assertions that the Democrats' soon-to-be nominee is a flip-flopper and just another politician addicted to campaign cash.

His defenders argue that the presumptive Democratic nominee has proved himself a reform champion already by attracting hundreds of thousands of small donations, the sort of broad participation a healthy democracy needs.

Either way, his decision made clear the ailing state of the public finance system, which grew weaker last week after Obama declared his decision in an Internet video.

“If Obama goes on to outspend (John) McCain and win the White House without public financing,” said Craig Holman, Public Citizen's elections expert, “it sends a very clear signal to Congress that public finance isn't necessary.”

Holman predicted “dire consequences” for a public finance system in need of repair, which won't happen at least until next year. The immediate effect of Obama's decision will be a furious money-chase by candidates, political parties and bands of attackers that crop up on the political fringes.

Reformers who began mobilizing after the era of Watergate corruption expected public financing to be operating smoothly by now. But that's far from true, observed Anthony Corrado, a fundraising expert and a professor at Colby College in Maine.

“An antiquated system based on spending limits established before the 1976 election no longer reflects the realities of modern campaigns,” Corrado said. “As a result, candidates are finding it a disadvantage to take part.”

This year's limit – $84.1 million – sounds like a lot of money for a two-month general election campaign that will last from early September until Nov. 4. But Sen. John Kerry claims that with a slightly smaller amount four years ago, he couldn't keep pace with George W. Bush and uncontrolled “527” independent groups backing the president's re-election bid.

For the primary season, public financing clearly is outmoded in limiting spending to less than $50 million, making it next to impossible to run lengthy campaigns across the country. With such restrictions, only candidates desperate for money subscribe – a fix Republican John McCain found himself in the run-up to the primaries.

No congressional remedies are in sight any time soon, a failure compounded by the near-collapse of the Federal Election Commission in a dispute between the White House and Congress over commission appointments.

At present, the supposedly six-member FEC couldn't hand out money if it wanted to because it has just two commissioners. McCain, who has said he would accept public financing this fall, can only hope the Senate doesn't fail in its mission to confirm new commissioners.

Then there's the question of how many people care. Fewer than 11 percent of taxpayers at last count checked the box on their 1040s to deduct $3 from their return to financing campaigns. And polls regularly show campaign-finance low on the list of voter priorities.

Meanwhile, clean-campaign advocates are pushing for vows from Obama and McCain to repair the public financing system next year. One proposal takes special aim at the primary-season problems, offering to give candidates $4 in public funds for every $1 raised privately in small donations rather than the $1-for-$1 system now.

Congressional sponsors say the change would reward candidates for soliciting small contributions over the Internet – a practice Obama has revolutionized, attracting a record-shattering 1.5 million donors thus far.

Reform groups say Obama's claims are deceptive. The Campaign Finance Institute reported in April that 34 percent of Obama's fundraising take had arrived in increments of $1,000 or more, often assembled by bundlers. By comparison, 63 percent of McCain's contributions were in $1,000 increments or bigger.

In subscribing to the federal matching system this fall, McCain will have to endure one limitation that will especially hit home: His wealthy wife, Cindy, will be able to contribute no more than $50,000 of her family's Arizona beer-distributorship fortune to his campaign.