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Barack Obama Campaign Finance Reforms Fiddled While System Crumbled

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CHARLOTTE, N.C. -- When Barack Obama ran for president in 2008, a central tenet of his campaign was that he would not play the same old Washington game. He would push lobbyists to the side and demand reforms to the way politicians raise money for their campaigns. Once elected, he would "tell the corporate lobbyists that their days of setting the agenda in Washington are over."

Obama had a record to back up his statements. He had worked to pass campaign finance reform while serving in the Illinois Senate. As a U.S. senator, he was a primary co-author of the ethics and lobbying reform law passed in response to the Jack Abramoff scandal and co-sponsored legislation to create a congressional public financing system. He also refused to take contributions from registered lobbyists or political action committees.

This résumé gave hope to supporters of campaign finance reform that the entrenched fundraising and lobbying systems would finally face a sustained attack.

If anything, however, the opposite has happened. The four years of Obama's presidency have featured some of the biggest rollbacks of the campaign finance regulatory regime created in the wake of the Watergate scandal. And Obama's own actions, or lack thereof, are partly to blame.

"The absence of presidential initiative on campaign finance reform issues is the norm," said Democracy 21 President Fred Wertheimer. "What has been disappointing to the reform community is that President Obama while in the Senate was a strong leader on campaign finance reform, and this hasn't carried forward in his presidency."

Even more disappointing to reformers, campaign finance restrictions have crumbled under a string of Supreme Court decisions allowing for corporations, unions and wealthy individuals to spend unlimited amounts on elections, often in secret.

"Some people might say we're in the Wild West," Wertheimer observed. "I think we're on Mars here with this campaign finance system."

Record Fundraising: After securing the 2008 Democratic nomination, Obama announced that he would be the first presidential candidate to refuse to take public funds for the general election. The public financing system, funded by $3 contributions from taxpayers checking a box on their tax returns, provides a set amount of money to a candidate if he or she abides by certain spending limits. Declining those funds freed Obama to raise a record $750 million.

"All the candidates have always made decisions about what was best for their candidacies," said Nick Nyhart, president of the campaign finance reform group Public Campaign. "Each step away, I believe, was a decision predicated on which system will allow [the candidate] to raise the most money."

Obama rationalized his choice, which went back on an earlier promise to stay in the system, first by stating his support for public financing. "The decision not to participate in the public financing system wasn't an easy one, especially because I support a robust system of public financing of elections," he said.

And second, he blamed the opposition. "But the public financing of presidential elections, as it exists today, is broken -- and the Republican Party apparatus has mastered the art of gaming this broken system," Obama said.

Wertheimer stated at the time that he was "very disappointed" and did "not agree with Senator Obama's rationale for opting out of the system." Wertheimer argued that if Obama was elected, "one of the early priorities for his Administration" should be "enacting legislation to repair the presidential public financing system."

Today, that system stands exactly where it did in 2008 and the Obama campaign is currently on pace to raise slightly less than the $750 million he raised in 2008, while Republican presidential nominee Mitt Romney's campaign looks to raise around $500 million.

"He would have been a great, powerful voice for reform on public financing," Nyhart said.

Unlimited Contributions: In January 2010, the Supreme Court overturned decades of precedent in its Citizens United decision allowing corporations and unions to spend freely in federal elections. A lower court extended the ruling's logic to allow individuals to contribute unlimited sums to independent groups that would come to be known as super PACs.

The groups empowered by those decisions -- nonprofits, super PACs and trade associations -- spent $300 million in the 2010 midterm election, just shy of the record amount spent in the 2008 presidential year. The 2012 race has already seen $300 million spent.

Obama was one of the first public opponents of the Citizens United decision. In his State of the Union address just days later, he denounced the ruling, predicting that it would "open the floodgates for special interests." He called for "Democrats and Republicans to pass a bill that helps to right this wrong."

As the Republican presidential primary heated up, each candidate was suddenly supported by a super PAC run by former aides and current associates. These groups accepted unlimited funds to spend for the express purpose of electing their favored candidates. Soon Obama, the opponent of super PACs and the Citizens United decision, had one, too.

Yet that super PAC, named Priorities USA Action and run by former White House aide Bill Burton, struggled to match the fundraising of the Republican super PACs. Democratic mega-donors disliked the Citizens United decision just as Obama had and were not interested in making big contributions to a barely regulated super PAC.

In an effort to get donors aboard, the Obama campaign announced that it supported Priorities USA Action in an email to supporters. The explanation was the same as that accompanying Obama's rejection of public financing in 2008. Campaign manager Jim Messina wrote, "The President opposed the Citizens United decision. ... But this cycle, our campaign has to face the reality of the law as it currently stands."

Not only would the campaign endorse the super PAC, but it would allow senior campaign and administration officials to attend fundraising events for the group.

"This is what he spent 2010 describing as an existential threat to democracy," said John Wonderlich, policy director for the Sunlight Foundation, a pro-transparency nonprofit that has opposed the Citizens United decision. "Shouldn't that threat of unlimited donations apply to his administration, too?"

The president still fights against the Supreme Court's ruling by supporting the proposed Disclose Act in Congress and calling for a constitutional amendment to reverse the decision.

Small Changes: As the engines of campaign finance moved toward more money and more influence, the Obama administration adopted some small changes in the way it did business. Bigger changes were either not pursued vigorously or universally opposed by congressional Republicans.

"Most of the actual progress or meaningful things happened in the first two years," Wonderlich said. "Either with their incremental reforms or by pushing for a response to Citizens United."

These incremental reforms included the barring of former staffers who had become lobbyists from any contact with the administration, creation of a central online hub for ethics data, online disclosure of financial reports filed by top administration officials and the White House visitor logs, and a ban on lobbyists serving in the Obama administration -- a policy that would be undermined by exemptions -- and on federal advisory boards.

The president also required that administration officials' contacts with lobbyists seeking stimulus funds be disclosed online and that agencies writing new financial regulations disclose all contacts, not just those with lobbyists, on their websites.

"We get a significant window into the lobbying that goes into crafting those laws," acknowledged Wonderlich. "That was one thing that they did that was successful and helped to keep influence at bay."

The president also worked to prevent House Republicans from upending the public financing system.

"If you repeal the system, it makes it much harder to repair the current system," Wertheimer explained. "That wasn't progress as much as it was preventing a major setback."

Although the president has had little success in reversing the Citizens United ruling (which requires a constitutional amendment or a Supreme Court decision) or in passing disclosure legislation, campaign finance reformers still see his rhetoric as a key marker for future action.

"If he's reelected and there's an opening on the [Supreme] Court, he could be able to pick a nominee who will not side with the big-money majority on the court," Nyhart said.

Pressure for change is also rising outside the halls of government. In 2008, relatively few people were organized to pursue campaign finance reform. Today, because of the flood of money released by the collapse of the public financing system and the Supreme Court's rulings, more and more people are raising their voices.

"Washington over the next two years is unlikely to provide [campaign finance reform]," Nyhart said. "It's only going to come when more and more citizens are going to demand this."

HuffPost Live will be taking a comprehensive look at the corrupting influence of money on our politics on Sept. 6 from 12-4 p.m. EDT and 6-10 p.m. EDT. Click here to check it out -- and join the conversation.

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