How to Get Big Money Out of Political Campaigns

By: Devin Johnston · August 24, 2009 · Filed Under Politics · Add Comment 

Liberal blogger Jeff Jedras (A BCer in Toronto) alerted me to Winnipeg Free Press article about the Conservatives’ latest plan to eliminate public financing of federal political parties. While both the article and Jeff’s reaction to it focus on the strategic implications (which parties will be harmed and which will be helped by removing public financing), I want to talk about whether such a move would make our society more or less democratic.

The rules governing donations, public financing, spending limits, and other facets of a political party’s finances were brought in during the dying days of the Chrétien government and were designed to limit the influence of corporate and union donations (which hurt rival Paul Martin) while also ensuring that personal donations are subject to a cap. It’s no coincidence that it took an outgoing Prime Minister at the end of his career to implement such a change: Liberals and Tories had thrived under the old rules, benefiting from large corporate donations as the barrier to prevent insurgent populist parties from joining their exclusive club. The Liberals, in particular, were so heavily dependent on corporate donations that they have yet to recover from the blow they dealt themselves by introducing the new rules.

Prior to the new regime, the Liberals were financially healthy. In 2003, the Liberals received $10.8-million in business donations, compared to $1.1-million for the Canadian Alliance and $1.0-million for the Progressive Conservatives. Today, the Liberals run about neck and neck with the much smaller New Democratic Party when it comes to fundraising. The Conservatives, on the other hand, have found ways to win by collecting large numbers of smaller personal donations.

On the other side of the Chrétien reforms, a new system of public campaign financing was introduced. Under this system, political parties would receive a small annual sum of money from the federal government based on the number of votes the party received in the previous election. The per-vote amount comes to $1.95, paid in quarterly installments and adjusted for inflation.

Today, Minister of State for Democratic Reform Steven Fletcher wishes to eliminate the publicly-financed portion from the Chrétien reforms. “We believe that political parties should support themselves with people who voluntarily donate to whichever party they wish to support,” he is quoted as saying in the Free Press. The last time the Conservatives attempted to remove public financing, the opposition parties agreed to coalesce to topple the government, triggering a constitutional crisis that bitterly divided Canadians. It is not clear in the article whether the Conservatives would also re-introduce corporate and union donations in their proposed reform.

Rather than focus on which parties would stand to benefit or be harmed by such a change, I want to talk about the impact on Canadians and our institutions of democracy. I have said before and I will say again that I am firmly in support of the public financing system. In fact, I would support a ban on all donations to political parties in favour of a fully public-funded model of party financing.

My reasoning comes down to a simple proposition of democratic equality: is every voter equal or do we believe that some voters should count for more than others? Our balloting laws suggest that our national values favour democratic equality; that’s why we have a one person, one vote electoral system. Yet anyone who understands how a political campaign works will understand that money, as well as votes, can substantially determine the outcome of an election. If one voter is capable of donating a large amount of money to a political party, that voter will have a much bigger effect on the outcome of the election than those who cannot afford to make donations. This is one of the major reasons that a small minority of wealthy individuals exert a greater influence on government policy than the large majority of those who have comparatively little to give.

Fletcher claims that the private donations model is preferable due to the voluntariness of donations. At first blush, it seems odd that taxpayers should be asked to foot the bill for the activities of political parties. Yet a public financing system is every bit as voluntary as private donations: I can direct where my $1.95 will go simply by exercising my right to vote. Political parties compete to earn my financial support just as they do under a private donations system. Moreover, the capacity to financially support a party is normalized among citizens: rich and poor alike have exactly $1.95 each that they can contribute to the party of their choosing. Simple. Fair. Equal. What’s not to like?

The only areas where public financing becomes a little tricky is in the case of independent candidates or new candidates. Not being members of a political party, independents can’t point to an electoral record as the basis for their public financing. The same situation occurs where a new political party has been created as has not yet run in an election. However, these issues can be ironed out. For example, independents and new parties could be allowed to raise money based on a capped donation system and then have the donors reimbursed to the extent of the candidate’s support once the election is over.

The risks of a abandoning a public financing system are very real. The United States has earned its reputation as a haven for lobbyists and special interest groups precisely because of its election financing laws. Corporations, unions, lobby groups, and non-profits all contribute directly to candidates south of the border. Although a public financing option is available for Presidential candidates, no winning candidate has ever taken the public option (which limits the candidate’s ability to raise money through donations). The result is a deeply corrupt environment in which government is handcuffed from setting good public policy. Although the vast majority of Americans support health care reform along the lines of a public option, the single biggest barrier to such reform is the Democratic caucus in the Senate which receives millions of dollars in contributions form insurance and pharmaceutical companies.

In the interests of a healthy, vibrant, and open democracy, I urge all of my readers to support public campaign financing.

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