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The Business Case for Campaign Finance Reform

With everything else  on your desk right now, why care about campaign finance reform?

Because it’s not just about “campaign finance.”  It’s about the future workability of our democracy.   Special interest money in politics completely distorts not just our system of government – but also our economy and, increasingly, our culture and sense of community. ‘Dark’ money skews the ability of small and mid-sized companies to have their voices heard.

It hits each of us in our pocketbooks, through higher taxes – an estimated $1,300 more per taxpayer per year to pay for government spending that benefits special interests. 

It throws our free-market system out of whack, as companies and industries that “invest” in political spending get special tax breaks and government benefits.  When “competitive advantage” starts being defined according to the effectiveness of a corporate lobbyist, there’s a problem.

And it’s beginning to drive us all away from our televisions (and phones, and mailboxes) every time there’s an election. And, that drives down voter participation, which undermines our democracy. The sheer volume of money being spent on campaigns increases  the acrimony level.

Even my former associates in the campaign business don’t want to listen to the cacophony anymore.  A friend of mine from Atlanta – who, like me, spent decades working in politics – actually left the area rather than listen to the vitriol of campaign commercials during their recent special congressional election. 

When special-interest money pours in – more than $50 million in that race – things get ugly. Dark money groups can say what they want: they’re “independent” of the candidates’ campaigns, so they’re not restrained by any “I’m running for office and I approved this ad” responsibility.

The corrosion of our campaign finance system is beginning to affect everything else in our country.  It affects who our government officials interact with. Is their priority their constituents or their donors?  If affects what they do: act in the best long-term interests of their communities, or, the short-term interests of their donors? And it affects the tone of our conversations with each other: how many people “unfriend” each other on Facebook every day because of politics?

Special-interest money in politics is creating distortion, division and chaos.  And that’s why you should care about “campaign finance reform.”

Now: add untraceable, unquantifiable money to the mix.  This is one of the problems that Take Back Our Republic is focused on right now.

Under current law, candidates’ campaigns can accept online contributions without verifying the donor’s identity.  In 2008, someone borrowed a Missouri woman’s identity to contribute almost $175,000 to a presidential campaign.  This was discovered only because the online donor used the same borrowed identity to make repeated contributions, and that quickly exceeded federal donation limits and attracted attention from the campaign’s compliance folks.  But the only reason that was noticed was because the same name was used over and over again.  And it’s apparently easy to write software that avoids that problem.  One software program that we know of can transfer $1 million an hour to a campaign without triggering review.

Stopping this practice would be simple: just require campaigns to use the same industry-standard fraud prevention standards that online retailers use.  When customers order products online, retailers verify the cardholder’s identity through security code and address checks (CVV and AVS). Shouldn’t political campaigns be required to do the same?

Instead, campaigns are even willing to pay higher credit card processing charges to avoid seeing if their donations are from real people or are being mass-produced - perhaps even from overseas.  It costs more to process charges without the identity checks, because of the risk of fraud.  It all adds up to millions in extra spending, each election cycle, just so campaigns can avoid verifying donors’ identities.

More than $14 million of the money that flooded into the recent Georgia special election came through online contributions from unverified donors.  In past presidential campaigns, there’s evidence that online money came from overseas.  But again, there’s no way to really know – because the campaigns’ contribution systems were set up to avoid verifying donors’ identities.

It’s a specific problem with a simple fix: and we have legislation now pending in Congress that would require candidates to let the bank quickly ensure the contribution is from an American – the same CVV and AHS checks that are already industry standard in retail.

The legislation has attracted a broad spectrum of political support.  The House bill, HR 1341, was sponsored by Rep. Paul Gosar, a member of the House Freedom Caucus – and the Senate bill, SB 1660, is cosponsored by Sen. Dianne Feinstein of California.  So, in a small way, this legislation is already helping bridge the partisan divide.

We hope you’ll help us get this simple, common-sense fix through Congress by contacting your Representative and Senators and asking them to make sure it gets passed this year.

So far, more than $1.7 Billion has come into our country’s campaign system through unverified donations.  And all that money is corroding our sense of community, as special interests use acrimony and division to try to buy themselves government benefits.

We hope you’ll join us, as we work to fix the system. 

John Pudner is a former political consultant who is best known for helping unseat US House Majority Leader Eric Cantor in 2014. Take Back Our Republic is a grassroots organization offering conservative solutions to campaign finance.