August 01, 1998 Policy

Soft Money Contributions

98A10D

American Bar Association
The Bar Association of the District of Columbia
Robert L. Weinberg, The District of Columbia Bar

Report with Recommendation

Recommendation

RESOLVED, That the American Bar Association opposes the solicitation and use in Presidential and Congressional election campaigns of contributions of "soft money," i.e. contributions to political party committees in unlimited amounts by corporations, labor organizations, and individuals; and supports efforts in Congress, and before the Federal Election Commission, to prohibit such contributions.

Report

Background

So-called "soft money" contributions are contributions unlimited in amount made by corporations, labor organizations, or wealthy individuals to political party committees involved in national elections for President and Congress. "Soft money" contributions are often made in amounts of $100,000 to $250,000 or more. They totaled more than $250,000,000 in the 1996 national elections. They are not subject to the restrictions of the Federal Election Campaign Act (PECA), which prohibits all campaign contributions to candidates by corporations and by labor organizations, and limits individuals' contributions to candidates to $1,000 for the general election and $1,000 for the primary election. It also allows PACs to contribute $5,000 per election to candidates. The contributions which are allowed by FECA are so-called "hard money" (or ''hard dollars"). As explained by the FEC, the distinction between "soft money" and "hard" is as follows:

"Generally, the term 'soft money' refers to funds that are prohibited under the Federal Election Campaign Act, 2 U.S.C. 431 et seq. ['FECA'), either because they come from a prohibited source, see 2 U.S.C. 441b, 441c and 441e, or because the amount exceeds the contribution limits in 2 U.S.C. 441a. Conversely, the term 'hard dollars' refers to funds that are permissible under the FECA because they come from permissible sources and do not exceed applicable contribution limits." 62 Federal Register 33040 (June 18, 1997).

A more pithy definition of "soft money" has been given by a leading nationally syndicated columnist, David Broder: "'soft money' [is] the huge donations to the political parties from corporations, unions and wealthy individuals that figured in most of the 1996 campaign scandals." The Washington Post, May 20, 1998, p. A25.

Recommendation

This recommendation to ban "soft money" contributions in federal election campaigns is the same Resolution that was before the House at the 1998 Midyear Meeting; after debate, and late in the day, the House voted to refer it to the Standing Committee on Election Law for further study.

One result of the referral by the Midyear Meeting has been the ABA's silence during the debates of the last several months of this Congressional session on the principal campaign finance reform issue: banning "soft money." A majority of the Senate has voted in support of proposed legislation to ban "soft money," but this majority was less than the 60 Senators required to end the opponents' successful filibuster which blocked final Senate action on the bill. As of this writing (May 20), the House is about to begin debate on the "soft money" issue after a discharge petition generated the momentum needed to compel the House leadership to allow the issue to reach the F1oor. Final passage of campaign reform legislation prior to the ABA Annual Meeting now seems unlikely, so ABA support for legislation and FEC rulemaking to ban "soft money" would still be timely.

A second result of the referral to the Standing Committee on Election Law has been to give the House the benefit of the Standing Committee's analysis of the law on "soft money." The Standing Committee’s recommendation on the issue is included as one part of its proposed omnibus resolution and accompanying report to the House. (See Report No. l13.) The language in the text of the Standing Committees recommendation appears to support a prohibition on the use of "soft money" for "federal election purposes," and in that regard is similar to the instant Resolution. However, the Standing Committee's accompanying report, to which Members are respectfully referred, may appear to undercut the language of that recommendation, since the Report indicates that the Recommendation is intended to allow the continued use of "soft money" in numerous ways that would further the objectives of the national political parties. While it is only the language of the Recommendation, not the Report, which would be voted on as ABA policy, the Report language could well be invoked by "soft money" supporters to argue that the ABA at least tolerates the use of "soft money" - which by definition includes large contributions from corporations and corporate officers whose business activities are potentially affected by federal governmental actions - for purposes that would affect the outcome of federal elections, such as party "get out the vote" drives in Presidential election years. That approach would plainly leave national political committees with an incentive to continue their practice of soliciting corporations for such "soft money" contributions, as they did so notably in the 1996 election cycle.

The instant Recommendation, unlike that of the Standing Committee on Election Law, would put the ABA on record as opposing the solicitation (as well as the use) of "soft money" contributions from corporations, labor organizations, and wealthy individuals, including individual corporate officers. It is the solicitation even more than the expenditure of such monies which has given rise to the allegations that have caused the greatest public concern in the investigations of the 1996 national campaigns. There is at least the appearance of impropriety in solicitations made from White House premises for "soft money" contributions from corporations potentially affected by governmental actions, or in the sale to such corporations by a party's national political committee of $250,000 "season tickets" for its activities. And there is a sense of national chagrin at the use of the Lincoln bedroom as a perk for generous contributors of "soft money."

The ABA should, therefore, oppose the solicitation as well as the use of "soft money" contributions in federal election campaigns. The House should welcome the recommendation of the Standing Committee on Election Law that "soft money" not be used for federal election purposes, but should adopt the instant Resolution, in preference to the ''soft money" position proposed by the Standing Committee, because

  1. this Resolution would prohibit the solicitation as well as the use of "soft money" contributions by national political party committees, and
  2. this Resolution is not encumbered by Report language that may encourage the political parties to continue seeking "soft money" contributions.

For almost a century, since 1907, our federal election laws have prohibited corporations from contributing to federal election campaigns. We should not permit that long-established principle to be undermined or circumvented by tolerating large "soft money" contributions from corporations, their office or other entities or individuals. The increasing size and concentration of corporate entities makes it especially important to adhere to that principle now.

Nor does the First Amendment, which is fundamental to our democratic political process, preclude a ban on "soft money" contributions. 126 scholars of First Amendment jurisprudence have joined in a statement to Senators McCain and Feingold that, "To prevent corruption, and the appearance of corruption," such a ban would be constitutional. Their statement is attached as an Appendix to this Report.

Respectfully submitted,

Robert L. Weinberg
as a D.C. Bar Delegate and on behalf of the Bar Association of the District of Columbia