Should Campaign Contributions Be Anonymous?

Although it addressed only direct spending by corporations and unions, the Supreme Court’s recent Citizens United ruling has rekindled broader concerns about the power of money in politics. Over at the Washington Post, Marc Geffroy and R.R. Reno argue that our traditional approach to these concerns –in particular the requirement that campaigns disclose their contributors — might be exactly backwards. Instead, they suggest that we should move in the other direction:

There is a way to break the iron grip on access that campaign contributions provide. The United States should establish an anonymous campaign finance system. We need a federally chartered clearinghouse for campaign donations that matches donors to designated, registered candidates and political action committees. Under such a system, politicians would not know who supports their careers, er, causes.

It’s a simple but powerful concept. The identity of the campaign donor would be kept secret, which would break the wink-and-nod link between money and the legislative process

Imagine the confusion on Capitol Hill. Members of Congress wouldn’t know exactly whom to reward with special carve-outs. Union leaders might say they’re big supporters of certain candidates, but who could know for sure?

The proposal raises some obvious practical questions about designing a truly anonymous system (many of which are addressed in Voting with Dollars by Bruce Ackerman and Ian Ayres). But leave those aside for a moment and ponder how this approach might (or might not) address whatever concerns you have about the role of money in politics. Disclosure is a double-edged sword: we can see who is giving how much to whom, but so can the whom.

Marc and R.R. finish their argument with an analogy to the secret ballot:

If you think requiring anonymity for political donations wouldn’t work or is impractical, ask yourself: Does the secret ballot work? Imagine politicians paying you if you promise to vote for them. You can’t — for good reason. The secrecy of the voting booth prevents anyone from knowing whether you are true to your promise. The same would hold for an anonymous campaign finance system.

On this point, I think they identify one benefit of the secret ballot, but overlook at least two others. First, the secret ballot protects voters from politicians that would retaliate against them if they cast the “wrong” vote. That’s the flip side of the paying-for-a-vote argument. Second, the secret ballot protects voters from anyone else punishing them for their vote.

Which leads to what I think may be the most interesting question about their anonymous contribution proposal: How many people out there don’t make campaign contributions because they don’t want relatives / neighbors / friends / employers / activists to know which candidates and causes they are supporting? And would it be a better world if they felt free to make their contributions anonymously?

Update: R.R. Reno suggests a related question: how many people and businesses feel they have to make contributions in order to avoid reprisals from elected leaders? In other words, to what extent are contributions defense rather than offense?

18 thoughts on “Should Campaign Contributions Be Anonymous?”

  1. Donald,

    Their idea is clever and intriguing (and it’s always nice to see “outside the box” thinking in problem-solving), but I do wonder first of all how this anonymity can be achieved in practice. You mention that “The proposal raises some obvious practical questions about designing a truly anonymous system (many of which are addressed in Voting with Dollars by Bruce Ackerman and Ian Ayres).” Do either/both of those sources provide a means to prevent large contributors (bundlers, associations, corporations, whatever) from having their contributions (even to a federal clearinghouse but obviously funding particular candidates) privately, independently audited and reported? Would prohibition of such auditing and reporting be constitutional?

    I have long advocated a mostly publicly-funded campaign finance system, voluntary (so there’s no strong First Amendment challenge) but so attractive in terms of very high matching multiple (and flexible limit in case of opponent who opts out) that there’s no/little advantage to opting out. Some argue that “taxpayers shouldn’t have to pay for campaigns,” but doing so would be the best investment taxpayers have ever made in practical terms – reduction/elimination of unjustifiable special interest subsidies (both as explicit expenditures and tax expenditures), favorable regulations, import quotas, etc. – as well as in bringing us closer to de facto one person, one vote. The 2009 Fair Elections Now Act would move us in the right direction: http://www.publicampaign.org/node/38166

    And we also need more restrictions on the “revolving door” through which members of Congress, key staff and department appointees regularly leave to (after a short hiatus at best) join lobbying firms or industries directly in highly lucrative positions — an ongoing practice that is obviously conducive to a mutual back-scratching dynamic. I do realize that people have the right to earn a living, and that they develop expertise in the legislative process, particularly in policy areas in which they may have focused, but the waiting periods and other restrictions need to be strengthened.

    Re: R.R. Reno suggests a related question: how many people and businesses feel they have to make contributions in order to avoid reprisals from elected leaders? In other words, to what extent are contributions defense rather than offense?

    Although “defense” can be worse than “offense”, from the perspective of both the contributor and the problem of corrupting influence, they are essentially just two sides of the same coin: Only if you contribute will you get some benefit or avoid some harm. Elsewhere I’ve seen the corrupting influence of contributions belittled with the argument that it’s not like a bribe, but more like extortion, but again, it’s the same coin.

  2. This might stop politicians from changing their policy positions but it still doesn’t stop money from influencing politics. Say you just took a bunch of candidates at random from the public and made them race for office. The one who tilts the playing field in favour of agribusiness (farm subsidies), the finance sector (deregulation) or Blackwater Inc. (no bid contracts) (pick the rent seeker you hate most) will get the most donations and will have an undemocratic advantage. It’s sort of like natural selection. Each candidate chooses the policies they think are best not purposefully seeking to aid specific business or industry. But because people who advocate for an even playing field get less money and aren’t elected (die off), and people who advocate policies that aid rent seekers get more money and are elected (survive and reproduce), in the end you get a group of politicians that do the bidding of special interests without even knowing.

  3. Talosaga:

    well argued but the proven game theory of the voting booth contradicts your prediction. rent seekers are only going to spend their money where they get proven results. the lack of contribution verification and the potential for liars to lie to politicians will eventually drive the value of the contribution dollar for “quid pro quoism” purposes to zero. if you doubt this, then you doubt the efficacy of the unsung secret ballot (first introduced to the USA in 1852)……..this is exactly the point. this is the magic of ACFS. i know it seems nuts but i m sure the secret ballot, sliced bread, and indoor plumbing seemed nuts at first. i have all sorts of additional info on the idea if you want it. just email me at Marc@senecapro.com and i ll send it on. thanks. and thanks for caring enough to thougtfully critique the idea. ACFS is all about resurrecting America from the cesspool that is Capitol Hill and saving the Constitution.

    best, Marc

  4. Would a fund raising event like a dinner with the candidate be allowed?

    How about contributions to political parties?

    I don’t like either of these, but I think its unlikely that anyone would pass legislation that gets rid of them.

  5. mike:

    good thoughts all. i dont pretend to have all the answers here. i think the ACFS idea will evolve via just this sort of open, organic dialogue among real voters. From my persepctive, under the ACFS concept:

    a) dinners are fine (its a free country) but participants cant pay to eat. thats pay to play under ACFS rules. attendance and a check cant happen together. sorry.

    b) donate all you want to parties but anonymously. i would restrict donee s to voters eligiable to vote for the election at hand. only voters can donate to parties (but only state voters can donate to state party, county voters to county party, etc.). I dont want get too socialist here but your right to political free speech needs to tie to the election that effects you. i cant vote in virginia so any contributions i give there unfairly effects the va voters.

    those are my thoughts but i m just a real estate developer. we aint too bright. what are yours?

    thanks for the critique. keep it coming.

    best, marc

  6. I really like the idea of a federal clearinghouse for campaign contributions (anonymous or not). Just having that data available and open would add a considerable amount of sunshine to local politics. I also like restricting contributions so that only voters who would have a chance to vote for a candidate can contribute to the candidate. They both seem like ideas that make tons of sense. Likelihood of implementation? Low. (And what can a corporation donate to? They don’t get to vote anyway, but the Supreme Court says they’re guaranteed free speech.)

    I think there are still loopholes in the “pay to play” type fundraiser events. Suppose I’m just a public figure (perhaps rumored to be considering a run for office) that organizes a fancy dinner for all my friends who can afford a $1,100 per plate dinner. I get 25 people to show up. Its a social event. I charge $100 for the food, drinks and venue, and take a $100 speakers fee. I give a quick speech, and then mingle with the attendees. Do this 10 times, let a week or two pass, then announce I’m going to be running for mayor, and will be self-funding my campaign. I have a war chest of $250,000.

    At what point am are you no longer allowed to generate income to fund your campaign?

    As for political parties, anonymous donations are good. But it has to be extended to any entity that makes contributions to candidates, and those donations to the candidates have to be anonymous too.

    1. mike

      good thoughst all. a few comments:

      a) i am happy to send you more info on the idea (my email is marc@senecaprop.com). many other & probably smarter folks have had and worked on it. i understand that it may actually be used in certain judicial campaigns in WV now. any WVer out there that can verify?

      b) i agree with you that only an eligable voter should be able to contribute.

      c) the recent supremes decision in “citizens”, i thought, was about corp entities advertising their positions at election time v. actually donating to a campaign.

      d) the “speaker fee” what if is an interesting one. a few comments: 1) those fees would be subject to taxation so not a full net. 2) the speaker would obviously be donating his net speaking income to his campaign. that s tough to prevent given the my reading of the constitution. 3) one thought that i would have is that any sort of political fundraiser would have to be open to the public and the donations gathered there would also have to be anonymous. in this way, the anonymity would remove the verification premium still keep the pol guessing. so, i guess, one would have to have some sort of regulatory entity that monitored when a pol or potential pol ‘s public speaking was non campaign or campaign oriented. this sort of example does get into a free speech grey area but it feels like it is managable.

      e) my vision of the contribution clearing house is that it bundles the contributions and pays out the money to the candidate in batches. this would confound any timing or amount signaling on the part of donors. obviously, the only receipt a donor would get is for the amount and the donor on the receipt could be designated by a number. in this way, the recipient and donor identiy would remain anonymous. again, the voting booth it the analogy. make sense?

      best, marc geffroy

    1. mike,

      Interesting arbitrage opportunity. Speaker fees would have to be paid to a corporation, and corporate income taxes would be due because this could not be set up as a non-profit corporation.

      So the donors get (1 – marginal tax rate) x donation delivered to the candidate’s coffers. that’s a big haircut to cut for the benefit of linking the donation to the candidate.

      Clearinghouse would allow 100% of money to flow to campaign.

      The problem comes when you authenticate the donation. Will the clearinghouse issue a receipt that donation was made to a particular candidate’s account? Otherwise, there’s no audit trail. It’s possible donations could be routed to the opposition. With receipts, you have the situation where politicians could demand to see receipts.

  7. Our major issue in this country is our two political parties. Our forefathers knew that a two party system would be our downfall and took steps to try to stop this type of politics, and thus anyone who seriously thinks that politics isn’t corrupt or slaves to Corporate America hasn’t not been paying attention. George Jr. will go down in History as one of the worst administrations in history and I could go on for hours showing why, but my point is that the Obama administration has offered nothing different (besides health reform, granted) and has in fact continued nearly every single Bush program. Obama has almost the same political donors and thus has the same pressures as Bush did. Health reform will turn out to be the most expensive and destructive waste of tax payer money ever. I just wish I could offer a better alternative for other frustrated people, but I can’t and those that think that the tea partiers are the future, remember that Sarah Palin is an important figure to them.

  8. dear mr/ ms health insurance:

    per my/ prof reno s 3/20/10 washington post essay, ACFS, i think, solves your complaint. why? b/c, if it works (and i know that some of this blog’s responders are skeptics), it blocks the efficacy of the bribes masquerading as free speech amplification campaign contributions. once that happens, we would get, i theorize, a very different sort of person running (and winning) elected office. I would expect that this type of person would be motivated less by the perks and ego income of office and more out of patriotism. this type of person would probably not be a careerists either.

    the whole point of ACFS project is to remove the influence peddling/ buying from politics while preserving the first amendment. i am happy to send any who want various other papers & a great dilbert cartoon on the subject. just send me your email. mine is marc@senecaprop.com. my cell is 301 651 6385.

    acfs efficacy proof: the “logic” proof of acfs is the woefully unsung adoption of the australian secret ballot in america starting in @ 1852 (?). that worked and effectively ended vote selling (except where/ when the sanctity of the voting booth is violated—-which is why relaxing absentee voting rules would be deadly to our republic but that s a whole nother essay/ topic). since that “proof” is now 160 years solid (like sliced bread and indoor plumbing), the only doubt one can have re the effectiveness of acfs is to argue that its analogy to the secret ballot is false. i m happy to debate that anytime. bring it on.

    i am also looking for some tech savy volunteers to help me construct and maintain a website on acfs. any thoughts?

    asides: re public funding of campaigns: my opinion of this idea is that it is unnecessary if acfs is instituted. i find the idea offensive and socialist regardless. but that s just me and i abhor socialism…………..re “what type of entity should be allowed to contribute to campaigns”: i m not a Constitutional lawyer, but i dont see why anyone other than a voter in the specific election should be allowed to contribute to a particular campaign in that election. that said, unions and companies and special interest groups etc. should be able to say/ print/ advertise whatever and whenever they want. their various members, shareholders, constituents can discipline their leaders as they wish…………neither of these asides are directly germaine to ACFS, however.

    thanks all for your interest in the idea. the general response has been heartening. I do believe that it will take hold and radically improve the american republican system of government and eventually other democracies in other parts of the world. the issue is really only how fast. so the quicker we get this powerful idea into the hands of a true american political leader, the quicker our grandkids get the beneift. make sense?

    fight the good fight always; best, marc geffroy

  9. If you’re interested in eating more organic foods, one of the things that you may have trouble getting past is the price tag. After all, organics tend to be a lot more expensive than chemically treated products. The best solution to that, especially if you have the space, is to grow your own organic vegetable garden.

  10. In the US elections, I see the overwhelming power of anonymous political “donations” to trick people into voting against their own interests. I suggest Americans give up the sham of being a democracy. Instead, they should hold a public auction where various cartels can buy politicians. The money from the slave auction would go to general revenue to reduce everyone’s taxes. There could also be a sort of stock market for daily buying and selling of politicians’ individual votes. The big advantage is who bought whom would at least be known, unlike now. It would also allow citizens’ groups and environmental groups to legally buy politicians too. At least the public then would know which corporations were funding the most evil and boycott them.

  11. dear mr green:

    thanks for your comment. i assume it has some satire to it, no? i share your frustration with the current state of campaign financing in America. that is why i co-authored this op-ed in the Post and have been collaborating with others on the ACFS concept since 1997. I am a small business owner and so do not have the time or wealth (esp these days) to devote to the project as it needs. If i did, we d have a web site up and be actively promoting the idea in the public forum.

    but to your specific point, ironically, were ACFS to be the law of the land, i think, via its game theory, the “payback” to the special interests gets severed and so the incentive to buy influence is destroyed. Now of course the recent Supremes ruling establishing corporations as “persons” for campaign advertising is a fly in the ACFS ointment and would have to be legislatively mitigated, i feel, to allow the full power of ACFS to kick in and save us but that battle is for another day. again, ironically, true doner anonymity is the antidote to influence peddling whereas transparency is gasoline to the fire. its just one of those funny facts of game theory. its the same reason that the “secret” ballot allows for democracy (and why mail in balloting is a cancer and must be stopped except for those who are overseas).

    your satircal “let them eat the babies” point is well made. the current system is neither Constitutional nor fair. It destroys true republicanism and the efficacy of the one man, one vote precept of modern democracy.

    But ACFS is, i think, if not the only viable alternative certainly one of them. I would encourage you think thru its game theory aspects. I would be happy to send you more technical info on it. let me know if you d like more info & thanks for caring about democracy and america to chime into the great on going debate.

    best, marc
    marc@senecaprop.com

  12. Donald,

    Thank you for returning the kickoff by Marc Geffroy and R.R. Reno on an Anonymous Campaign Finance System (ACFS).

    I’ve talked up the idea personally and heard concerns about violation of free speech. Any constitutional scholars out there that could weigh in? As pointed out, nobody would be prevented from freely claiming to have made a contribution.

    The system could be self-funding, with a small percentage, probably around 1%, withheld from the amount passed on to candidates. MasterCard and Visa have the infrastructure and business model to bid for it, and a rotating crew from the Big Four accounting firms could independently verify integrity (as a service to their country?). Candidates would no longer need staff to process contributions and report to the Federal Elections Commission, so even if 5% was needed to cover the costs of the ACFS, candidates might be ahead.

    I don’t think taxpayers should pay for political campaigns. But I understand concerns that wealthy candidates might have an advantage under ACFS – I’m not sure if it would be a bigger or smaller than now.

    The new system could enforce campaign limits more effectively than the current one. For example, what happens under the current system if a politician/candidate receives an envelope containing $2,500 in cash from an anonymous donor, with an explanation that another gift will be in the mail if the candidate supports cause X? I don’t think the candidate is required to turn the money over to the FEC or a charity. And I’m not sure if the donor has violated a law if he stays within the contribution limits. (Of course I’m not suggesting that one incident such as this would change a politician’s view but what if a “bundler” started doing it?)

    The new system could deal with this by not advancing the funds to the intended candidate unless the donor is a registered voter.

    Add ACFS to the list of topics for debate at our impending Constitutional Convention (if necessary because of a free speech hurdle) together with term limits. Yes, I’m an optimist. When will the protest movements (Occupy/Tea Party/etc.) realize their potential and get behind the call for a Constitutional Convention? It’s time to stop wringing our hands about the risks of big changes.

    Thanks for keeping this concept alive,

  13. dear pittsburgh:

    re ACFS violates free speech: agreed that it does not. any one can claim anything they want about their donation behavior. they just cant prove it with a receipt.

    Again, the model here is your vote. the secret ballot does 2 things: 1) it prevents you qua voter from being able to “perfectly” sell your vote in that it prevents you from proving via a written receipt whom you voted for……….2) it prevents someone else from extorting your vote in the same manner.

    make sense?

    the cleverness (aka “game theory”) of the concept in either case is that by cutting the verification cord between voter/ doner and vote direction/ donation, it perfectly compels sincerity of intent. In other words, sans a receipt, the voter is trully free to vote her conscience and the doner is truly free to support the candidate whose speech best reflects her own, regardless of material gain or pain avoidance.

    so, if the “australian” secret ballot system works in preventing vote peddling in the USA (nb America started using this system in the late 1880s; South Carolina was the last state to adopt it in 1952 i recall; it is a fascinating and undersung history; i have an essay on it that i am happy to share; just request it of me), ACFS should work similarly. then basically we let greed do the heavy lifting: since verification will be impossible, the value of insincere donations will plummet to zero because its free to claim to have given and the claim validity is unprovable. very quickly, only those doners who trully care to amplify their speech (versus those seeking favors), will actually contribute. let me know if you want more info on the game theory of the concept. much scholarly work exists on the subject & i am happy to send it to you. my understanding is that a version of this idea is actually used currently for certain judicial elections in kentucky. i did not just cook the idea up in my “whack job” libertarian basement. I did come to it myself but then i researched it and found it already had many and much smarter fathers.

    That said, ACFS is, at the begining, a hard concept to grasp. i believe that it is somewhat so because it is so simple. it is also terrifying to the political class and MSM because it will significantly disempower them. but once you get ACFS, its kind of like sliced bread, indoor plumbing, bactine on wounds, and the secret ballot in that is just “common sense”. maybe common sense takes a while to set in.

    aside: the above argument is precisely why “non emergency” mail in ballots are a grave threat to free elections: sans the voting booth armour, unscroupulous folks can easy buy, sell, and extort votes from less powerful folks with mail in ballots whose completion can now be witnessed. I question the motivation of the many liberal “grass roots” community organizations who so push for this “innovation” given this risk as it makes “walk around” money so much more valuable.

    now, who should be able to contribute to campaigns is another matter entirely. I personally see no reason for any non voter in a election to have a right to contribute to a candidate in that election. if one is not a majority age citizen in the district having the election, one does not have a legitimate interest in who gets elected. Obviously, thus, i disagree with the 2010 “Citizens” supreme crt decision. It is absurd to equate voters with non “natural entities” for the purposes of an election. While a corporation is a collection of individuals and is certainly a “person” for a host of constitutional protections, those natural entities individuals who are also members of a company or union get their voices heard as individuals; they dont need to double dip………….but regardless of this personal opinion (and i am not a scholar or a lawyer——just an small business owner), AFCS should render such contributions moot if the intent is disingenuous.

    finally, my interest in ACFS started with a question that a very smart & effective teacher asked my econ 101 class in college: “why cant you sell your vote? its yours to do with as you please, right? why cant you sell it? its a free market, right?”. the answer (which you may know but i ll hold back for the moment) sent me on the odessy to ACFS.

    apologies for the long commentary but i am passionate (tho underfunded and unstaffed) about this idea and convinced that it is the optimal, constitutional, and simplest solution to the cancerous “threshold” problem of influence peddling that clearly results from our current and unConstitutional campaign finance system. pls email me if you want more info and/ or have further thoughts on how to progress the idea. marc@senecaprop.com. my thanks always to Don for getting the idea exposure.

    best, Marc Geffroy

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