The Multinational Monitor

OCTOBER 1996 · VOLUME 17 · NUMBER 10


I N T E R V I E W


Following the Money
An interview with Ellen Miller


Ellen Miller is executive director of the Center for Responsive Politics, a Washington, D.C.-based research and public education organization specializing in the documentation of federal campaign contributions. The Center's most recent publications include: Open Secrets: The Encyclopedia of Congressional Money and Politics, a 1,500-page analysis of individual and political action committee contributions in the 1994 election, The Follow the Money Handbook and The First Primary: Early Fundraising in the 1996 Presidential Election.


Multinational Monitor: How much money does it cost to win a seat in Congress?

Ellen Miller: A House seat on average costs about $520,000. A Senate seat is $4.6 million.

But the cost of elections is only one part of what concerns me about the money and politics issue. More important than what we spend on congressional elections, which will probably be $800 million in this election cycle, is the source of that money -- who supplies it, and, more importantly, who doesn't supply it.


MM: How do candidates raise such sums of money?

Miller: Certainly not from people like you and me. Most of this money comes from big money sources, a combination of large individual wealthy contributors who write $1,000 checks, and from political action committees (PACs). Those wealthy individuals often come from the very same economic interests as are represented by the political action committees.

The vast majority of Americans do not make a campaign contribution at all, much less one at a level of $200 or more. But this big money in politics, along with self-financed candidates, makes up about 80 percent of all money raised in Congressional races.


MM: Is the story the same for the parties?

Miller: Yes, big money dominates the political parties, but they also raise more small money than do candidates.

In 1992, the national parties together raised about $375 million. Of that, about $80 million was soft money [unlimited donations designated for state electoral purposes] -- that's the fat cat money that comes in $100,000 chunks. In this election cycle, the parties have each pledged to double that fat cat money, making it an ever more important slice of what the political parties depend on.


MM: What is the actual process by which the candidates raise the money?

Miller: I am not sure I really know all the various ways that cash is raised. What appears to happen is that there are a lot of telephone calls made to $1,000 contributors; there are a lot of fundraising events in which people who have Golden Roledexes gather with their friends at fundraising house parties -- the kind of parties where everyone can give $1,000. There are corporate reimbursement schemes and various underhanded ways of raising the money.

What we know -- what candidates tell us -- is that they spend far too much time in the living rooms of the rich and interested, and far too little time out on the hustings and in the church basements with ordinary people.


MM: So even though the candidates obviously have a role in driving the system, you think they are also victims?

Miller: No question. The candidates, no matter what their politics, are caught in a corrupt system, a system that demands that they raise this money if they want to be viable. The media, and through them the public, judge candidates' viability on how much money they raise. This is a very poor test for a democracy, when money becomes the first threshold for a candidate's viability, because not everyone has the same amount of money to contribute.


MM: There are some candidates who have run campaigns refusing to take PAC money, or limiting themselves to smaller donations. Is there any hope of reforming the system through these exemplary campaigns?

Miller: The vast majority, if not all, of the candidates who refuse to take political action committee money and claim that they are clean candidates, free of special interests because they only take individual contributor money, are trying to pull off a great hoax. When we analyze the contributions of candidates who don't take PAC money and only take individuals' contributions, what we see are the very same influence patterns.

There is no candidate who has ever won office who has based his or her campaign on contributions of $200 or less. Voluntary limits agreed to by candidates work better for the candidates than they do for the public. Usually voluntary limits are set too high to limit much of anything.

MM: Why do people, corporations and unions give money to electoral campaigns?

Miller: Very few people give big money out of love for democracy; they give it because it gets the access and influence to protect or obtain what they need and want out of Washington.


MM: Is there any direct correlation between the amount people give and what they are able to extract from Washington?

Miller: What we find is those who give big money to candidates have a Washington agenda and seek -- and often get -- some return favor. We can do correlations that show that in the vast majority of cases, those who give, get what they want in return -- stalling a piece of bad legislation, thwarting something they may not want. The money buys gridlock, it buys inaction in some cases, as well as buying specific action in the form of amendments or bills.


MM: How much can you buy? Is it limited to isolated tax breaks, or can you buy big picture policy changes?

Miller: It is pretty hard to generalize. The sugar industry's money can assure, as it has done, that the government maintains a major program that benefits the sugar growers. Smaller corporations get specific tax breaks or loopholes created for their industries and interest groups.

Does it swing public policy? I think it can do that as well. The defense industry is a great example of how not very much money greases the skids for an extraordinarily high defense budget. And if we are spending money on items like defense, then we don't have it for public education.

Those who give "get" in all kinds of ways, and we can't possibly follow them all, because some of them are in the most minute portions of the tax code, provisions that no one figures out for years and years. But what we do know is: money greases the skids in Washington, and the vast majority of Americans are not represented in the money game.


MM: Is there any sense in which campaign contributions should be viewed as a legitimate form of political expression?

Miller: None. The notion that money equals speech is nonsensical. Since money is not evenly distributed, to have money be the determining factor of whose voice gets heard and how loud it gets heard is counter to our very basic democratic principles.

We are not talking about free speech, we are talking about paid speech; and those who have more money get more paid speech. There are other constitutional principles at work here, and the very notion that money should equal speech in the political arena is absolutely contrary to the founding principles of this nation.


MM: When you step back and look at the big picture of campaign results, how do contributions correlate with win-loss records of candidates?

Miller: The candidate who spends the most wins nine out of ten times in congressional elections.

In presidential elections, the candidate who has raised the most money by January 1 of the election year has always won his party's nomination.

Money is the critical factor. A candidate who could be viable on other grounds doesn't get out of the starting blocks unless he raises a lot of money.

Phil Gramm in this election cycle said you have to raise $20 million to be viable, and he set on the road to do that. The media all said, "Yes, you do have to raise that much money." The bad news for Phil Gramm was that he was outraised by Bob Dole.


MM: Is there a cause-and-effect relationship, or is ability to raise money just a sign of a candidate's popularity?

Miller: It is a chicken-and-egg question that I am not sure anyone can sort out, but I'd be willing to experiment. I'd bet on the fact that money is the determining factor. Take out the private money, give all candidates the same, and then see who wins.

When you talk to candidates, particularly challengers, they will tell you the stories: that if they can't raise the money, they can't get their voice out, and their financiers will not give to them because they can't raise the money.

Money does determine who runs for office and who wins. I think to suggest otherwise flies in the face of the statistical evidence that has built up over the years.

It is a bad thing that money determines who wins elections. We have evolved into a system that only the personally wealthy, or those who can raise money from the wealthy interests, have a shot at running for office.

What it means is we have a plutocracy in Congress, either of the wealthy, or of the wealthy's interests.

The current campaign finance system screens who runs for office, and the kind of candidates we get and the kind of policies they espouse.


MM: How is money allocated between the two parties?

Miller: The Republicans usually raise the most money. But the role the parties play in Congressional elections is minimal. There are 535 independent political parties out there. Every candidate is his or her own fundraising machine. And that is what really counts. The political parties are almost irrelevant in terms of electing congressional candidates today.


MM: How do corporations and unions allocate their donations?

Miller: Prior to 1994, the labor PACs would give 94 percent of their money to Democratic candidates, and corporate interests would give about 52 percent of their money to Democrats. In 1994, those patterns began to change slightly, tilting toward Republicans. Now, since we have a Republican Congress, we will see an even greater tilt of corporate PACs toward Republicans. But it has not become a lopsided tilt.


MM: Is the overall campaign finance story the same at the state and local levels?

Miller: The story seems to be very much the same -- that is, there is more money than ever before; it is coming from fewer interests; there is no balance in the interests who give it; and the contributors cash in on their investments.

We do not do the research for the state and local level, though we work very closely with a number of groups that do that research.


MM: What is your proposal for campaign finance reform?

Miller: The Center does not actively lobby on behalf of any particular campaign finance reform proposal. Our job has been to stand back to tell the story of money and politics, so those who want to reform the system will have factual information on which to base their reforms.

What we see though, is a big money problem. It is most definitely not a problem of PACs alone, or out-of-district contributions or even bundled contributions -- that is, all the ways that big money gets its resources to candidates.

When we begin to talk about reforms, what we have proposed is to think about two basic principles: political equality and public accountability.

If we can have a campaign finance system that assures us of those two basic things, then I think we will be along the right track.

For me, personally, I have been most attracted to a system that provides full public financing for primary and general elections, because it enhances competition, encouraging a diversity of voices to get into the system, and eliminates the conflict of interest now inherent in our system.

Such a system would offer voters the opportunity to have access to their representatives; and it would stop the money chase.

This is a proposal which is being advanced in the state of Maine, and will be on the state ballot there for voter decision in November.


MM: How would a full-fledged, publicly financed campaign system work?

Miller: Candidates would qualify by raising a very small number of $5 contributions. Once they qualified and met the other qualifications for public financing, everyone would receive equal amounts of public money for the primary, and then the winners of the primaries would receive equal and full amounts for the general election.

In so doing, the candidates would pledge not to receive any other money, and there would be an effective enforcement agency to make sure that they didn't.

What this kind of full public-financed system will do is provide a level playing field for all candidates and increase the kinds of people we can get into the system. That will result in a change in the political culture that will encourage citizens to get more involved in the process.


MM: How much should be spent on a campaign?

Miller: That varies according to each state. It is hard to pull a number out of the sky.

If we look at campaign expenditures, the average cost of a Congressional race is $520,000. We know that about half of that money is actually spent on fundraising. If we are going to create a system in which candidates do not have to fundraise from private sources, suddenly the average cost of a race is $250,000.

We know that for a House contest, about 25 percent of the money is spent on media. I think in any campaign finance reform, we must have a provision for free media. So that would further reduce the costs of campaigns.


MM: Do you envision the system as voluntary?

Miller: This kind of system can be voluntary and absolutely consistent with the Buckley decision [a U.S. Supreme Court ruling holding that campaign contributions are a form of First Amendment-protected speech].


MM: How does this proposal differ from the current U.S. presidential campaign finance system?

Miller: It differs in a very substantial way. It extends full public financing to the primary election.

Right now, we have a system in which presidential candidates run around the country like players in some Monopoly game, collecting thousand dollar contributions from all manner of economic interests. And then the candidates are rewarded by collecting public money.

A new system of full public financing would not allow the candidates to go out and obligate themselves to big business before they collected public money. They would raise a certain amount of $5 contributions, arguably an amount anyone could give, and then receive public money. From that point on, there would be no private money in the system at all.


MM: How would you deal with the problem of soft money?

Miller: There is a very simple way to stop it; and that is to prohibit that sort of money from going to the political parties. One proposal I have seen would actually reduce the amount that anyone could give to a political party to $100. It would be hard for that to be corrupted.


MM: Doesn't that face constitutional problems?

Miller: As long as the system for candidates is voluntary, it wouldn't.

A second way to shut down the soft money loophole would be to put all of the soft money on the record, and to have it be treated like any other contribution to any candidate who might opt out of the system.


MM: How do you handle independent expenditures (funds spent on an electoral race outside of the control of the candidates)?

Miller: In the legislation in Maine, which has been introduced in about a dozen other states as well, there is a provision to deal with independent expenditures. That provision would kick in additional sums of money to a candidate based on the amount of independent expenditures made against his or her campaign. So there are ways to discourage independent expenditures and personal-wealth spending candidates.

But if some candidates want to spend that way, the other candidates can choose a clean election route. Candidates will have the right to be outside of the publicly financed system. But we need to create a system where candidates are freed from the money chase, freed from the conflict of interest and freed to do the people's business.


MM: If the United States were able to enact the system and it worked as intended -- so the campaign finance arena was purified -- what do you think would be the effect on the political system, electorally and legislatively?

Miller: I don't want to overstate what I think can be done. I think we can create this kind of system to clean up the election system per se. If we can do that, we will energize citizens about their democracy; we will give them hope that a candidate might actually represent their views as opposed to the views of the candidate's cash constituents. We have the hope of moving toward a more representative government.



Contributions from Agriculture Industry PACs
to Federal Candidates, 1995-1996*

PACAmountDemsRepubs
Philip Morris$614,986$195,505$418,481
RJR Nabisco$498,450$130,450$368,000
American Crystal Sugar Corp.$437,825$211,450$226,375
Associated Milk Producers$386,150$173,000$212,650
Mid-America Dairymen$369,350$152,050$217,300
Food Marketing Institute$353,528$57,000$295,528
U.S. Tobacco Co.$330,600$74,150$256,450
American Sugarbeet Growers Assn.$283,479$142,247$141,232
National Cattlemen's Assn.$278,645$36,750$241,895
Brown & Williamson Tobacco$240,675$50,150$190,525

* Compiled by the Center for Responsive Politics from data released electronically by the Federal Election Commission on September 3, 1996. NOTE: Data does not aggregate donations from firms or groups maintaining multiple PACs.



Contributions from Chemical Industry PACs
to Federal Candidates, 1995-1996*

PACAmountDemsRepubs
FMC Corp.$182,350$38,600$143,750
Zeneca Inc.$104,547$19,572$84,975
DuPont Co.$98,950$18,650$80,300
Procter & Gamble$68,325$17,000$51,325
Dial Corp.$65,650$6,800$58,850
Monsanto Co.$54,630$20,505$34,125
Miles Inc.$49,000$8,500$40,500
Eastman Chemical Co.$47,850$9,050$38,800
Nalco Chemical Co.$32,500$3,500$29,000
Dow Chemical$20,250$1,500$18,750




Contributions from Communications Industry PACs
to Federal Candidates, 1995-1996*

PACAmountDemsRepubs
AT&T$1,080,932$370,107$710,825
Ameritech Corp.$540,025$147,207$392,818
BellSouth Telecommunications Inc.$379,347$141,850$236,997
National Cable Television Assn.$346,265$111,125$235,140
Southwestern Bell$315,225$82,500$232,725
National Assn. of Broadcasters$314,661$87,500$227,161
GTE Corp.$314,254$78,227$236,027
BellSouth Corp.$255,125$60,325$194,800
U.S. West Inc.$216,553$48,847$167,706
Time Warner$212,041$96,000$116,041




Contributions from Construction Industry PACs
to Federal Candidates, 1995-1996*

PACAmountDemsRepubs
National Assn. of Home Builders$1,162,399$216,600$945,799
Associated General Contractors$612,350$47,050$564,300
Fluor Corp.$249,280$33,930$215,350
Associated Builders & Contractors$160,600$1,000$159,600
American Portland Cement Alliance$139,528$32,500$107,028
Brown & Root$114,639$6,500$108,139
National Electrical Contractors Assn.$107,300$5,500$101,800
Caterpillar Tractor$107,000$3,000$104,000
CH2M Hill$101,445$30,085$71,360
National Roofing Contractors Assn.$100,800$1,000$99,800




Contributions from Defense Industry PACs
to Federal Candidates, 1995-1996*

PACAmountDemsRepubs
Lockheed Martin$708,975$218,850$490,125
Northrop Grumman Corp.$568,975$157,700$411,275
Tenneco Inc.$444,007$125,050$318,957
Loral Corp.$307,025$155,925$151,100
McDonnell Douglas$287,820$99,900$187,920
General Dynamics$263,512$91,950$171,562
Textron Inc.$246,800$92,100$154,700
Rockwell International$234,400$60,850$173,550
Raytheon Co.$232,200$66,975$165,225
Hughes Aircraft$225,150$78,000$147,150




Contributions from Energy & Natural Resources PACs
to Federal Candidates, 1995-1996*

PACAmountDemsRepubs
ACRE (Action Cmte for Rural Elec.)$441,116$220,266$220,850
WMX Technologies$289,625$86,150$203,475
Petroleum Marketers Assn.$230,592$30,650$199,442
Exxon Corp.$220,235$9,035$211,200
Southern California Edison$200,584$83,725$116,859
Chevron Corp.$183,174$23,050$160,124
Cyprus Amax Minerals Co.$170,120$20,600$149,520
General Atomics$168,900$41,050$127,350
Texaco$159,635$12,500$147,135
National Coal Assn.$153,946$12,500$141,446




Contributions from Finance, Insurance, and Real Estate PACs to Federal Candidates by Selected PACs, 1995-1996*

PACAmountDemsRepubs
American Institute of CPA's$1,082,980$379,255$698,725
National Assn. of Realtors$983,863$306,108$677,255
American Bankers Assn.$804,800$215,450$589,350
National Assn. of Life Underwriters$667,925$200,100$467,825
Ernst & Young$570,440$275,065$295,375
Credit Union National Assn.$454,692$179,681$274,011
Indep. Insurance Agents of America$428,382$125,263$303,119
Arthur Andersen & Co.$365,903$168,435$197,468
JP Morgan & Co.$360,150$137,650$222,500
Deloitte & Touche$358,337$128,558$229,779




Contributions from Transportation Industry PACs
to Federal Candidates by Selected PACs, 1995-1996*

PACAmountDemsRepubs
National Auto Dealers Assn.$1,439,555$247,800$1,189,755
United Parcel Service$1,248,179$450,605$797,574
Federal Express Corp.$561,700$182,600$378,100
Union Pacific Corp.$531,588$78,949$452,639
General Electric$476,945$169,315$306,130
Americans for Free International Trade$365,800$56,200$309,600
American Trucking Assns.$310,144$75,550$234,594
Boeing Co.$286,825$75,750$210,575
Aircraft Owners & Pilots Assn.$279,000$83,000$196,000
American Airlines$266,522$108,379$158,143


Companies with No Loyalty: $100,000 Contributors to Both Party Conventions

Taking advantage of a new loophole in Federal Election Commission (FEC) rules, some of the largest U.S. corporations gave hundreds of thousands of dollars in goods and services directly to the Democratic and Republican Party conventions. The FEC does not view the goods and services as contributions -- a good thing, since federal election law prohibits direct corporate giving to the publicly financed presidential nominating conventions.

Old rules allowed only local and retail businesses to give the convention committees discounts. But rules adopted in 1994 permit any commercial vendor to trade goods and services for "promotional considerations."

Following is a list, compiled by the Center for Responsive Politics, of the 10 companies that gave at least $100,000 to each of the major parties' conventions, and a brief summary of their Washington agenda.

ABBOT LABORATORIES. Abbott lobbied on a bill that will make it easier for U.S. pharmaceutical companies to export drugs and medical devices that the Food and Drug Administration has not approved for sale in the United States. The new law was folded into the mammoth funding bill that Congress passed in March 1996.

ANHEUSER-BUSCH. Anheuser-Busch puts much of its lobbying attention on opposing beer excise taxes and following labeling issues. The company also watches over environmental issues such as hazardous waste and endangered species, as well as tort reform and the farm bill.

AT&T. Of primary concern for the telephone company is the Federal Communications Commission's implementation of the new telecommunications law. Among the company's other lobbying interests are Superfund reform, preferred trading status for China, and worker safety regulations. AT&T also hired a former congressperson, Fred B. Rooney, D-Pennsylvania, to help lobby on its contract to provide phone services for the federal government. In late 1995, AT&T won a competition with Sprint for an increased share of the multimillion dollar federal government contract, which will be up for renegotiation during the next administration.

BANKAMERICA CORPORATION. BankAmerica's main concern in Congress is banking reform proposals -- now bogged down because of fights between banking and insurance companies. The bank is poised, however, to cash in on a Federal Reserve Board proposal to ease regulations on banks like BankAmerica, which offer securities services through subsidiaries.

BAXTER INTERNATIONAL. The biotechnology company lobbies on all issues relating to drugs and medical devices, including tort reform, patents, export laws, funding for the National Institutes of Health and blood safety. (The firm specializes in drugs and devices relating to blood, such as blood substitutes). With many products in the approval pipeline at the Food and Drug Administration (FDA), the company has an interest in several legislative proposals which would change the drug and medical device approval process.

BROWNING-FERRIS INDUSTRIES. Browning-Ferris deals in garbage: collecting, processing and disposing it. The firm's lobbyists track the many environmental laws that can affect this type of business, including Superfund, the Clean Water Act and solid waste transportation rules. The company is closely watching congressional proposals on "flow control," arrangements local governments make with specific facilities to receive only their waste.

CHRYSLER CORPORATION/UNITED AUTO WORKERS CHRYSLER NATIONAL TRAINING CENTER. Chrysler and the United Auto Workers founded the National Training Center in the 1980s as part of contract negotiations. The center provides training, job counseling, and other types of educational services for Chrysler employees.

LOCKHEED MARTIN. This defense powerhouse was formed by the merger of Lockheed and Martin Marietta Corp. in March 1995. The company wants compensation from the government for the restructuring costs of its merger, but some in Congress want to repeal this Defense Department policy. The House included a measure that would prohibit federal funds from being used to pay for the merger costs of defense contractors in its version of this year's defense spending bill. The company still has a chance to weigh in on the legislation, however; the House and Senate must reconcile their different versions.

TENNECO. In June, the shipbuilding firm and a fleet of five other companies managed to save shipbuilding subsidies by pushing for amendments to a bill intended to promote free trade. The House recently authorized $701 million to Newport News Shipbuilding, a subsidiary, to develop the SSN-23 nuclear submarine.

UNITED AIRLINES. Flying the friendly skies would have become even friendlier for those at United if they had won the battle they were fighting with six other airlines to change the airline ticket tax to a passenger user fee. United is still pushing for bills that would repeal a tax on aviation fuel and require government personnel to travel on strictly U.S.-owned aircraft.

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