The Small Donor Fallacy
Will he or won't he? Barack Obama is hedging on an earlier commitment to limit himself to public funding in the post-convention campaign should he become the nominee. Pressed on it in the Cleveland debate with Hillary Clinton, for example, he promised only to "sit down with John McCain and make sure that we have a system that is fair for both sides."
This should come as no surprise. As of January 31 Obama had already raised $134 million for his primary campaign, compared to McCain's $55 million. He naturally wants to opt out of the $85 million public funding for the general elections, because he can do better fundraising on his own.
McCain might be happy with that $85 million, but he has a different public financing dilemma. As part of the terms for his famous last-ditch personal loan before the New Hampshire primary this summer, he declared himself eligible for a different public program that provides matching funds but caps a candidate's spending at $51 million for the primaries.
McCain already spent $47 billion by the end of January. If held to the terms of the loan and locked into this program, he has probably exceeded that cap, leaving him unable to spend any more until after the convention -- an effective gag order. The FEC hasn't yet accepted McCain's request to opt out of the program; it must vote on the question but currently lacks a quorum of commissioners. With Bush appointees to vacant FEC seats stalled in Congress, it is not clear it will get one. Unless and until it does, McCain's opt-out request remains in limbo.
It's a sign of the times that private fundraising so dwarfs the public finance limits that these public financing pledges have come back to haunt both candidates. But whether they eventually opt out of public funds or not, the larger point is that the damage from today's staggering private fundraising has already been done, because Obama, McCain and Clinton are already so deeply indebted to special interest donors.
Consider how little all three major candidates have to say about the economy, especially about the financial sector's role in the current downturn. Individual Wall Street donors represent their single largest source of campaign cash, and the single largest disincentive for them to embrace needed economic reforms those donors oppose.
The Center for Responsive Politics (CRP) reports individuals employed in the "Finance, Insurance and Real Estate" sector contributed over $16 million to Clinton's primary campaign, over $12 million to Obama's, and $6.5 million to McCain's. Actually, the contributions from this sector could be said to be even higher, since "Lawyers and Lobbyists" gave over $14 million to Clinton, almost $10 million to Obama and $3 million to McCain, and some of those lawyers and lobbyists presumably represent the financial sector.
As CRP Executive Director Sheila Krumholz put it, "no matter who becomes our next president, Wall Street will have an indebted friend in the White House." This is a hard fact, all the soft data about Obama's small donors notwithstanding. Since donations of less than $200 need not be itemized or reported to the Federal Election Commission, we rely on the campaigns themselves for data about them, which are easily exaggerated.
For example, Obama said in the Cleveland debate that "we have now raised 90 percent of our donations from small donors, $25, $50...." But the Obama campaign itself released figures showing January 1, 2007 and January 31, 2008, contributions of $200 or less were only 36% of his primary election receipts. Small donors became important only late in Obama's campaign: they comprised 22% his fundraising in the first quarter of 2007, compared to 46% in January 2008.
This underscores how much Obama depended on a relatively small number of large donors in the early days when he was not well known. Those large donors -- chief among them donors in the finance sector -- were there when he needed them most. They already have and will continue to influence him heavily -- all the more so if he and McCain opt out of public financing.
The fact is, small donors are not rescuing candidates from such corrosive influences -- on the contrary. The only way to escape them would be to fund a viable program for opting out of private financing.
Our current public finance system is hardly that. It remains stuck at 1976 funding levels. Until it catches up to political reality, it amounts to little more than a fig leaf for the obscene amount of special interest money that increasingly distorts our politics.
Jay Mandle is the author of Democracy, America, and the Age of Globalization
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Jay, if you're relying on the Center for Responsive Politics website for your figures, they appear to be either way out of date or simply incomplete. For example, a search under my surname on the CRP website produced 32 hits but 60 hits on the FEC website.
It's very easy to ask loaded questions and not really look for the truth. From the FEC:
Obama:
http://www.fec.gov/DisclosureSearch/mapApp.do?drillLevel=US&stateName=&cand_id=P80003338
Clinton:
http://www.fec.gov/DisclosureSearch/mapApp.do?drillLevel=US&stateName=&cand_id=P00003392
McCain:
http://www.fec.gov/DisclosureSearch/mapApp.do?drillLevel=US&stateName=&cand_id=P80002801
Clinton has received more special interest money (that's the PAC category on the right), than any other candidate at $1,050,419 [as of this writing]. McCain comes in second at about half with $575,924. And Obama? Yes, even he has raised special interest money to the tune of $25.00.
Obama has over a million supporters, who have raised over $137 million. To me, this sounds like he truly has the support of the common man and woman.
As PS: Just because something walks like a duck, doesn't make it a duck. Your reasoning is referred to as a "logical fallacy".
Great response. Thanks for the links.
Here's something interesting. I've contributed twice to the Obama campaign within the time frame covered by the FEC (according to the FEC) and I'm not listed. Makes me suspect either the FEC data collection methodology is screwed up, or ???
The ultimate cause of this problem is the Supreme Court.
Back in the '70's the court ruled, in Buckley v. Valeo, that financial contributions were equivalent to speech and therefore, could not be limited.
Without that decision, control of money in campaigns would be possible.
The whole campaign financing thing is simply bribery masquerading as free speech.
One simple rule change should be made.....all political donations must be given anonymously....then there is no chance of a quid pro quo when/if your candidate gets into office.
The Sam Fox/Ambassador to Belgium business is what this is all about....big contributions followed by political appointment...bribery pure and simple.
That's a great idea. But you also have to hide the amounts or they will be used as codes.
I like the idea, but how do you prevent the donor from notifying the campaign that they made a donation? Seems difficult (if not impossible) to enforce.
As one of Senator Obama's small donors I cannot agree with your post. I have checked the FEC filings of all candidates. Senator Obama does take donations from folks with more to give and they do happen to be employed by various industries. Last time I checked, Senator Obama's largest block of donations was coming from classroom teachers. I found this very interesting since Senator Clinton leads in donations from the Teacher's Union. Simply because a donor has more money to give, does not mean that they are personally directing the candidate's message. Please provide facts, rather than innuendo, to back up such claims in the future. Otherwise, you make it virtually impossible for any candidate to raise money without relying on PACS and federally registered lobbyists, by suggesting that the simple fact that people work in a certain industry taints the candidate as much as accepting funds from federal lobbying bundlers and PACs.
As to those small donations for Sen. Obama, doesn't he count purchases of Obama supporter stuff from his website as a donation? Also, while your post is correct, I bet you will get a ton of comments from Sen. Obama's supporters yelling at you for trying to destroy their myth that he doesn't take money from registered lobbyists. Of course, they never even stop to think that what they're parroting is completely irrelevant. Finally, you didn't mention the nuclear energy industry that has supported Sen. Obama big time. That's going to be great for the country, isn't it? Publicly funded financing modeled on the states that have been doing it successfully for many years is the only answer. We, the People, won't really have a voice until the money is taken out of the contest. Until then, we're just kidding ourselves. As Edwards said in his last debate, "...what do you think those big contributors are gonna want from you if you're elected?"
Senator Clinton has received more funds and actually from the federal registered lobbyists of the Execlon Corporation (nuclear energy) than has Senator Obama. While he has received funds from individual donors who work for the Exelon Corporation, he has not received any funds from their federal registered lobbyists. Also check the FEC filings, Senator Obama has received $25 for a PAC and nothing from a federal registered lobbyist.
If you have proof that Senator Obama is taking money from PACS or federal registered lobbyists, please share it. Otherwise, simply saying it is so, doesn't make it so no matter how you might like to create that illusion.
KimberlyKay, keep telling yourself that Sen. Obama isn't just another corporate-owned entity, but it won't change the facts. The candidates that weren't wholly-owned and operated by Wall Street, mulit-nationals, and the Military Industrial/Corporate Media companies were shut out of the race because the corporate-owned media couldn't afford for you to hear their message. And, don't get bogged down in a narrow focus of this particular campaign. The corporate money problem is really much worse with regards our Congress. If you make ALL elections publicly financed, we might actually get some of those things your Representative or Senator has campaigned on and for which you thought you were voting. Oh, and don't go off on Clinton -- she is not my candidate of choice precisely because of the big money she's accepted. At least, though, I can see who owns her. Sen. Obama is trying really hard to divert your attention from who really owns him and that makes me wonder why.
I miss Edwards....
Just raising public funding levels is not enough. Why just pump more public money into the greedy maw of the TV networks, the big newspapers and other recipients? We should overhaul the entire system. Require the broadcast media to provide free air time. Cap print media expenditures. Scrap party delegates and rely only on the popular vote. And most important: Limit the entire presidential campaign process to three or four months. There's no reason for it to be any longer.
he promised only to "sit down with John McCain and make sure that we have a system that is fair for both sides."
This is basically the same thing he promised last year, so I don't see any change.
Compare Obama's 'dependence' on large donors to other candidates. What percentage of Obama's fundraising was solicited by his campaign? How do you make judgments on how much he is "indebted" to various donors? To what extent do people who donate do so to reflect the will of their employer
What is your reasoning to conclude that "They already have and will continue to influence him heavily" ? Do you have any evidence to convince the readers of this claim?
? Do you have any evidence to convince the readers of this claim?
If it walks like a duck.........
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