Public Financing: A Moment of Real Opportunity for Reform

By Lauren Foster

When Deborah Simpson decided to run for a seat in Maine's House of Representatives in 2000, she was an unlikely candidate for elected office: as a waitress and single mother, she lacked connections to deep-pocketed donors. She had, however, heard about the state's new Clean Elections Act and figured she could campaign by talking about issues instead of asking people to write her checks. That year she won a seat representing the old mill town of Auburn and went on to serve four terms in the legislature. In 2008, she won a seat in the state Senate.

In many ways, Ms. Simpson is a poster child for the public financing of elections. Freed from having to fundraise, she could focus on the issues affecting her constituents.

"Public funding of elections, or clean elections, allows people who otherwise wouldn't have the opportunity to run to participate effectively in the political system, and that's the way it ought to be," says Adonal Foyle, founder and president of Democracy Matters, a nonpartisan student organization that works to get big private money out of politics and people back in.

"If you have a candidate who wants to run for office, the first thing she should be thinking about is ideas to respond to the needs of her constituents. It shouldn't be, 'How much money can I raise?' and 'Who can I go to to raise that money?' Usually, in America today, that's the first question that is asked, and that seems so backward because we have so many issues, and if money becomes the determinant of whether you run, then we have so many people who don't have the opportunity to participate effectively in the political system."

Democracy Matters is one of many organizations fighting to reform the system of financing election campaigns. "Democracy is above all a process of citizen participation—but it is precisely that participation that has been weakened by private financing of campaigns," says its Web site. "Private money in elections undermines a truly democratic political process."

The problem with big money is that it skews politicians' incentives: when political survival hinges on fundraising and keeping donors happy, not on addressing the needs of ordinary citizens, voters lose out.

"I believe there is room for people and companies to address their representatives, but when money becomes the determinant of who gets the ear of the politician, that has made for very bad policies that affect the overall population," says Mr. Foyle.

Advocates of public funding say the system helps ensure that a person's ability to run for public office and conduct a competitive campaign are determined more by ideas than by access to powerful donors or personal wealth. Reducing the impact of big contributions also lessens the risk of corruption and provides politicians more incentive to align their interests with voters, as opposed to special interests. It also frees politicians from the never-ending cycle of fund raising and chicken dinners—time that could be better spent on the people's business—and makes them more accountable to voters.

"Public dollars mean that public officials will consider themselves public representatives and so they won't have to cozy up to the banks, to the energy companies, to agribusiness in order to stay in office, and that means that they can vote their conscience rather than their own political survival," says Laura MacCleery, deputy director of the Democracy Program at the Brennan Center for Justice at New York University School of Law.

Public financing is becoming more popular, but widespread reform is still needed at the state and federal levels.

The time may now be at hand: during his presidential campaign, Barack Obama raised millions of dollars from small donors and ignited debate about the power of small contributors. But he also raised some eyebrows when he declined public financing for the general election.

In a recent editorial, The New York Times said Mr. Obama's decision to reject public financing in the presidential campaign "dealt a serious blow to the cause of reform."

Ms. MacCleery doesn't see it that way. President Obama's decision not to take public financing is "an artifact of an outmoded system," she says.

"Public financing and other systems' reforms are the life support of democratic institutions. You have to come in and tinker and make sure the system's incentives are aligned with the way people are doing modern campaigns. You have to make sure the money is the right amount of money," she explains. "They require maintenance, and Congress didn't do the maintenance on the presidential public financing system, and so by the time President Obama went to look at it there wasn't enough money in the system, and he saw very clearly he could raise a lot more money outside the system than in it, and that means it's the system's fault for not being attractive enough to have participation."

Moreover, she says, there is a "moment of real opportunity" for "major transformative reforms in the way we finance elections." The Rod Blagojevich corruption scandal in Illinois and questions about whether the financial industry bought the votes for deregulation that led to the current economic crisis have put the spotlight on fraud and graft.

"Americans are disappointed with how government has been allowed to be unaccountable, has lacked transparency, and has exercised really unchecked forms of power. All of that plays into a public mood that is really ripe for fundamental reform. And I think we have a good shot at it," Ms. MacCleery says.

While there may be, in her words, "a populist sentiment" driving reform, there is still the not insignificant challenge of changing decades of entrenched behavior.

"Overall, the issue is, How do you incentivize candidates? And that is what public financing speaks to," Ms. MacCleery says.

This is one of three features from the Democracy in Action cover story in the  2008 Annual Review.