The Hindu Business Line : US court eases norm for campaign money spending

THE American slide down the greased pole of political morality continues with a three-judge panel of an US federal court overturning key components of a landmark campaign-finance plan enacted by Congress in 2002, thereby clearing the way for special-interest groups to resume `soft money' contributions to political parties as long the money is not used to attack opponents.

The striking down of key parts of the McCain-Feingold campaign finance law comes at a time when a spirited debate is going in many parts of the world about the conflict of interest involved in the award of fat contracts arising out of the reconstruction of Iraq to companies with links to the Bush Administration.

The lower-court judges' opinions run to 1,638 pages — the longest in the history of the US District Court for the District of Columbia — in a case considered the most important one addressing money in politics since Buckley v. Valeo in 1976. That case ended with the court deciding that the First Amendment permits government to restrict campaign contributions, but not campaign spending.

The latest rulings on campaign finance — always a controversial subject in any democracy as it involves the nexus between big business and politicians — state, among other things, that national parties can again raise soft money... but limit the ways that money can be spent.

Such funds can be used for get-out-the-vote efforts and voter registration, but not for activities that support or oppose a particular candidate. It is more restrictive than the McCain-Feingold law on the use of issue ads for or against federal candidates for office.

While the law banned such ads within 30 days of a primary and 60 days of a general election, the latest rulings ban such ads at any time. The doubling of limits on hard-money contributions from $1,000 to $2,000, however, stands.

Legal analysts in the US seem to be of the view that the US Supreme Court, which is not bound by any of the lower court's rulings and also has the option of issuing a stay until it decides the case itself, is likely to wait to hear the appeal, McConnell v. FEC, until its next term which begins in October.

So far, the response of the Democrats and the Republicans to the rulings has been distinctly ambiguous. This may be because they're trying to work their way through a fundamental doubt: Will they have to return the money if they accept hefty donations from corporations, special interest groups, high net worth individuals and so on — and if the US Supreme Court subsequently reinstates the ban?

Corporate contributions to political campaigns were outlawed in the US about a century ago and union contributions banned more than half a century ago. Large individual contributions were barred after the Watergate scandals.

But politicians and interest groups finagled exception for donations made to national political parties and their campaign committees. After its passage last year, the McCain-Feingold law was supposed to end that practice, which accounted for nearly half of the $1.15 billion raised by the national parties in the last campaign.

Now, the federal court panel has upheld the law's central provision by continuing a ban on contributions from corporations, labour unions and wealthy individuals for party committee activities that target or support specific candidates.

But the panel's decision allows a resumption of unlimited and unregulated donations to the parties for get-out-the-vote efforts and party building. And that is precisely the exception that has been exploited by political parties in the last 15 years.

With the first primary of the 2004 presidential campaign eight months away, Democrats reckon that candidates will have to raise about $25 million by fall if they are to be competitive in what has come to be known as the "wealth primary".

But the fundraising efforts of the Democrats are about loose change when compared with the efforts of the US President, Mr George Bush. His campaign is hoping to collect a whopping $200 million.

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US court eases norm for campaign money spending