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Dismantling the Presidential Public Financing System Piece by Piece (Starting With the Farm Bill)

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I kid you not: sandwiched somewhere between provisions of the 2012 farm bill to provide assistance for peanut farmers and loans for moisture feed grain production, U.S. Sen. Tom Coburn (R-Okla.) is proposing an amendment to ban public financing of the presidential party nominating conventions. This is an early salvo in the effort to dismantle the presidential public financing system -- smack dab in the middle of legislation to set the nation's food and agricultural policy for the next five years.

Not only is the Coburn amendment completely out of place in the farm bill, it also is out of touch with the history of corruption that has plagued the party conventions. The party conventions are tarred by all the corporate money that overwhelms these events, not the public funds that are intended to lessen the influence of wealthy interests.

The presidential public financing system was created in 1974 to replace potentially corrupting unregulated corporate money with public funds. This public financing system came in the wake of a convention fundraising scandal under the Nixon administration. In May 1971, the giant International Telephone and Telegraph Corporation (IT&T) pledged up to $400,000 to attract the 1972 Republican National Convention to San Diego. The company was facing several anti-trust lawsuits under the Nixon administration. Just eight days after the selection of San Diego for the Republican convention, Deputy Attorney General Richard Kleindienst agreed to an out-of-court anti-trust settlement with IT&T that the company considered very favorable.

Later testimony in congressional hearings revealed that IT&T executives and Nixon administration officials had met repeatedly in secret in 1970 and 1971 on the anti-trust suits, and while negotiations were in process, IT&T made the offer to underwrite the party's convention. Internal memos within the administration urged the Justice Department to go easy on IT&T. A reluctant Justice Department official was promptly fired by Nixon, and a settlement emerged a short time later.

Despite all the secrecy, the scandal broke publicly with a column by Jack Anderson on February 29, 1972 -- and gave rise to public financing of the conventions and presidential campaigns under the Federal Election Campaign Act (FECA).

For years, the public financing system worked much as intended. FECA's public financing program for the presidential nominating conventions created a system in which the parties, in exchange for accepting reasonable spending ceilings on their conventions, would receive a grant from the federal government to pay for nearly all expenses of the conventions. Originally, the spending ceiling and grant were set at $2 million, to be adjusted for inflation. FECA was soon amended to increase the spending ceiling and grant to $4 million.

In 1976, both parties paid for their conventions almost exclusively from public funds, about $2 million each. In 1980 and 1984, the parties still relied mostly on public funds to pay for their conventions, at slightly more than $4 million in 1980 and somewhat more than $7 million in 1984.

The Federal Election Commission (FEC) -- the agency charged with implementing our campaign finance laws -- began to tinker with the public financing system, eventually poking gaping holes in the system. In a series of advisory opinions, the FEC determined that businesses and cities may establish "host committees" and "municipal funds" to defray expenses associated with the conventions. Since these entities are not officially part of the national parties, they are free to raise and spend corporate money to support convention activities.

The FEC loopholes have resulted today in corporate money becoming the primary source of funding the party conventions. For the 2012 conventions, for example, each major party will receive $18.3 million in public funds, but corporate money and money from wealthy individuals is expected to total around $37 million for the Democratic convention and $50 million for the Republican convention.

With this corporate cash comes all the lobbyist wining and dining, corporations buying access to elected leaders and party bosses, and the late-night soirees hosted by those who have business pending before Congress.

If Coburn really wanted to clean up the conventions and rein in excessive spending, he would introduce legislation to ban all corporate and lobbyist financing of the conventions and strengthen the public financing system. That simple move would cut excessive spending for the conventions by more than two-thirds, check the influence-peddling by corporations trying to buy favors from our presidential candidates and elected officials, and wind down the lavish lobbying soirees.

The Coburn amendment to end public financing of the conventions attacks the solution, not the problem -- an attack that Coburn has decided to wage in the middle of the farm bill.

Click here for more on the financing of the party conventions.

Craig Holman is Public Citizen's government affairs lobbyist.

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