WILLIAM L. HOOD, JR.: A graduate of Northwestern University School of Law, he was an attorney/investigator for the Better Government Association for six years and recently joined Continental Bank as a governmental relations attorney.

Campaign finance disclosure: Now that the public knows, is there really a choice?

. . . disclosure requirements deter actual corruption and avoid the appearance of corruption by exposing large contributions and expenditures to the light of publicity. ... A public armed with information about a candidate's most generous supporters is better able to detect any post-election special favors that are given in return.'

ON JANUARY 30, 1976, the U.S. Supreme Court upheld the disclosure provisions of the Federal Election Campaign Act. The court merely restated the wisdom of Justice Brandeis' statement of 50 years before: "Sunlight is said to be the best of disinfectants; lectric light the most efficient policemen." Unfortunately, the court's opinion is better history than prediction. Campaign ledgers are open to public scrutiny but, in Illinois at least, the role of money in politics remains unchanged. Special interests and individuals who have received government contracts and jobs continue to inject a steady stream of cash into the campaign coffers of both political parties.

In federal elections, campaign funds disclosure has been required since the first decade of this century (36 Stat. 822, 1910). However, Illinois did not have a disclosure law until September 3, 1974, when the Illinois 78th General Assembly embraced the philosophy that the sources of campaign funds should be revealed (P.A. 79-1183). The linchpin of the new law is the reporting requirement of Article 9. Statements are filed by a candidate or political committee with either the county clerk or the State Board of Elections itemizing contributions received and expenditures made in excess of $150. The reports must be made available for public inspection.

The legislation's underlying assumptions are clear: democracy will be cleansed if the amount and source of campaign contributions are known. Special or corrupt interests will be intimidated by the prospect of public visibility. In any case, informed voters will be able to contrast the financial support of political opponents and cast their ballots accordingly.

Recent reports detailing how campaigns for major public offices in Illinois have been funded challenge these assumptions. Through the maze of electoral politics, one central question has emerged: if our objective is to restore confidence in the political process, is disclosure enough? Because of the new law, we can now paint a fairly accurate portrait of who gives and who gets political money in Illinois. At both the state and local level contributors with a financial stake in government play a prominent role.

In Chicago, of course, old-style party politics dictate the pattern of political money-giving. Since the days of Mayor Anton Cermak the Democratic party's monopoly over patronage, pressure and the election machinery has guaranteed large political war chests. It should come as no surprise that a large portion of Mayor Richard J. Daley's financial support comes from those receiving favors from city hall. Public disclosure of the mayor's campaign receipts merely confirms what cynics, at least, long presumed to be an eternal verity of Chicago politics. Analyzing the mayor's campaign reports, Chicago Tribune reporter Chuck Neubauer found that government contractors, city employees and public officials who rely on the mayor's approval for slatemaking contributed one-half of the mayor's itemized campaign funds during the last mayoral election. Over one-quarter of approximately $600,000 itemized came from contractors and others doing business with the city (Chicago Tribune, March 30, 1975).

Leading the list of contributors are architects, engineers and law firms who receive non-bid contracts for city business. Bankers, many from banks receiving interest-free government deposits, contributed over $4,000 to a Cook County Democratic fundraising dinner in May 1975 (Chicago Tribune, August 28, 1975).

8 / September 1976 / Illinois Issues

At the state level the same basic pattern has emerged. Those with a financial stake in state government are also substantial investors in the political process. The Better Government Association (BGA) has detailed how State Fair contractors were solicited for contributions to the Governor's Illinois Democratic Fund (IDF) in 1974. In a sworn statement, the assistant State Fair manager reported that he had contacted contractors about making $1,000 donations. A Sangamon County grand jury found that the fair management had earlier awarded over $1 million worth of improperly bid contracts (Chicago Sun-Times, March 2, 1975).

Out-of-state contributors
Last August the BGA reported that highway engineering consultants who received $8 million in state contracts each provided IDF with $1,000 contributions. Contractors from as far away as Aurora, Ohio, and Bellevue, Washington, contributed to the governor's campaign fund. These out-of-state contributors received almost $2 million of state business (Chicago Daily News, August 14, 1975). The St. Louis Post-Dispatch and the BGA analyzed a series of large contributions from the St. Louis area reported by IDF in 1975 and found that many of these contributors' firms had contractual ties with the state (St. Louis Post-Dispatch, April 6, 1975). In response to these disclosures, Norton Kay, the governor's press secretary, said, "There is no law against donations from people who do business with the state" (St. Louis Post-Dispatch, August 14, 1975). Commenting earlier on the acceptance of such contributions, Kay said: "The important thing is that the public knows about it. The public has the ability to make a judgment of whether there is anything going on" (Chicago Tribune, March 3, 1975).

Right or wrong, the public does seem to suspect that political contributions may lead to political favors. A nationwide survey by the Twentieth Century Fund found that 35 per cent of those interviewed believed that large political contributions are solely motivated by personal gain. Another 34 per cent thought personal gain was one of several reasons for large political gifts (Twentieth Century Fund Task Force on Financing Congressional Campaigns, Electing Congress, 1970).

If public disclosure has not deterred the use of money from those who do business with government, it might still be claimed that at least now the public is informed. Voters can decide which candidates to support on the basis of how and by whom a campaign has been financed. Unfortunately, the available evidence suggests that disclosure often fails to achieve even this limited objective. The intense coverage of campaign financing during the last presidential election had little impact on voting behavior. Two experts in the field, David Adamany and George Agree, concluded that although 62 per cent of the people surveyed by the Twentieth Century Fund heard or received something about campaign financing, "what was heard, or at least remembered, was so indefinite and unclear that it was unlikely to prompt much attitude change or electoral judgment" (Adamany and Agree, Political Money, Johns Hopkins University Press, 1975, p. 107).

The local front
Disclosure did not fulfill its promise of reform at the national level in a contest literally overrun with issues of political finance. What might be expected then in contests at the local level, where the coverage of campaign financing is likely to be less complete? In its December 1975 number, Illinois Issues reported that 100 reporters, students and other citizens had inspected about 2,000 reports filed pursuant to the new state law. However, the quality and quantity of the information disseminated to the public is less easily determined. The finances surrounding Chicago's recent mayoral election and Gov. Walker's fundraising effort have been analyzed with some care, but financing for lesser office seems to have escaped attention altogether.

Moreover, despite the criticism directed toward Gov. Walker's fundraising practices, both of the present gubernatorial candidates, Republican James R. Thompson and Democrat Michael J. Hewlett, accept contributions from firms receiving government contracts. Donors to the Hewlett campaign include road builders, real estate firms, bankers and attorneys, all of whom receive business from some governmental unit (Chicago Tribune, March 14, 1976). Republican candidate Thompson stated early in his campaign that he too would accept contributions from state contractors, including those doing non-bid business with the state. The Republican candidate hastened to add that, "there will be no question about who owns Jim Thompson. Nobody does and nobody will" (Chicago Sun-Times, August 22, 1975). Yet, despite candidate Thompson's disclaimer, if both candidates' policy of accepting funds from such sources is not an anomaly, an important rationale for the law is undermined. The voter may be faced with the dilemma of choosing between two candidates of whose finances he disapproves.

Few complaints
The efficacy of disclosure is questionable on still other grounds. Effective enforcement of the law is doubtful. The State Board of Elections decided soon after its creation that it would not initiate its own investigations. Instead, the board only reacts to complaints filed by citizens or groups who must themselves monitor campaign practices. Furthermore, the few complaints brought before the board have not elicited strict application of the law. The statute is construed in favor of the respondent, since a criminal penalty might eventually be imposed if a violation is found. Individual state's attorneys and the Illinois attorney general have also failed to bring any complaints before the board.

This experience with state enforcement is consistent with the history of disclosure laws at the federal level. The report of the Watergate Special Prosecution Force criticized the Justice Department for having prosecuted only one case, in 1934, under the federal Corrupt Practices Act. No prosecutions have ever been brought under the more stringent statute prohibiting contributions from government contractors (Watergate Special Prosecution Force Report, October 1975). Prosecution of Watergate-related offenses was vigorous, but recent events cast some doubt on whether this momentum will be maintained. For example, the head of the Justice Department's Criminal Division stated last November that he would decline to prosecute certain cases despite Federal Election Commission policy to the contrary (New York Times, November 7, 1975).

Also, media treatment of campaign financing has been and may continue to be sparse. Ironically, the most widely reported campaign disclosure story

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Disclosure could alter the outcome in a few elections. The problem is that as a remedy, it has been oversold

outlined attempts (albeit rather clumsy ones) to comply with the new law. Newspaper readers may remember that Alan Dixon, state treasurer, bought sheets and pillow cases and that Lt. Gov. Neil Hartigan chose to pay the rent for the swimming pool at his official Springfield residence with political rather than public funds. Both Dixon and Hartigan were acting legally and trying to avoid questionable use of public money. Yet the criticism heaped on them by political commentators and opponents has caused many to wince and doubt the wisdom of truthful disclosure of contributions and expenditures.

Clearly disclosure does have its virtues. For the few who are interested, it will provide more information about the political process. The possibility exists that candidates might effectively make an issue of their opponents' campaign contributions and expenditures. All other things being equal, disclosure could alter the outcome in a few elections. The problem is that as a remedy, disclosure has been oversold.

If disclosure has not been an unmitigated success, what more is needed? Most of the major provisions of the federal Election Campaign Act have been upheld. Nevertheless, serious problems are raised when governmental policies tend to limit campaign spending and the voters' access to information about candidates. Selective prohibitions and limitations on campaign funding have always been problematic. They often restrict political participation without achieving the desired reform. For example, corporate and union contributions are prohibited in federal elections, but the law does not prevent corporate or union officials from forming voluntary associations to solicit and dispense political funds. Of course, all associational contributions could be banned, but this would likely be viewed as an intolerable restriction on the political process.

A major issue in our present system of campaign financing is the threat that large contributions from wealthy donors will distort the political process. Limitations on the amount of contributions are a direct way of dealing with the problem but these limitations can also be evaded. The Supreme Court's recent ruling upheld limits on contributions to an official campaign for elective office. But the court also ruled that individuals cannot be prevented from independently making expenditures (rather than giving contributions), to promote a candidacy. Consequently a supporter can spend unlimited funds promoting a candidate as long as the candidate himself is not consulted on how the money is spent.

A call for reform
These are serious problems that go to the heart of campaign finance reform. Their recognition, though, does not mean that all reform will prove to be ineffective. Ultimately, a system of some type of public financing will probably be required. However, to overcome many of the criticisms of the present federal law, the underlying assumptions of our system of financing presidential elections must be reexamined.

The objective of reform should not be to establish a ceiling on campaign spending. Expenditure limitations favor incumbents and the two existing political parties. Instead, what is needed is a floor on the money available for political activity. Reform ought to ensure that candidates who demonstrate a minimum level of popular support have access to voters without necessarily appealing to powerful organized interests. It now costs approximately $2 million to run for governor of Illinois. In the 1972 race Daniel Walker spent $528,633 and Richard Ogilvie $702,293 on radio and television time alone (Broadcast Spending, 31 Congressional Quarterly Weekly Rep. 1134-37 [1973]). In statewide elections a small subsidy for media outlays might go a long way toward encouraging additional credible candidates to enter the political arena.

Reformers might also profitably focus on the procedures that allow public officials such wide latitude in directing the flow of government business. Unfettered discretion is, after all, one incentive for government vendors to contribute to officials' campaign funds. For example, the mayor of Chicago shifted over $2 million of government business to his son's insurance firm not long ago. In many instances, the power to grant official favors is virtually unchecked. The state's Purchasing Act calls for competitive bidding as a basis for awarding most contracts, but contains major exceptions. For example, professional services are exempted from bidding requirements. Architects, lawyers, insurance brokers and an ever-increasing supply of consultants may be awarded lucrative contracts on a non-bid basis. Even when professional review panels are created to review awards, they are frequently composed of persons with the most to gain from public business.

This unchecked power to confer official benefits increases the possibility of preferential treatment. Examining how public officials exercise their power and determining how that power can be realistically confined lacks the appeal of a crusade to reform our campaign laws. But it might eventually turn out to be one of the most effective ways to remedy the abuses of big money in politics.

The problem of special interest money in political campaigns has been with us a long time. What is startling is not its intransigence, but that we expected so much from the simple mechanism of disclosure. Even when the far more stringent federal requirements failed to solve the problem, reformers persisted in trumpeting the glories that disclosure would bring. Campaign finance disclosure certainly has merit. Indeed, it is an essential component of any attempt to end the abuses of money in politics. In the long run it may increase the demand for reform. But alone it will not produce the results that were claimed in its name.

10 / September 1976 / Illinois Issues