You Don’t Know Me: A Radical Idea in Campaign Finance Reform

Earlier on Thursday, I read this article at Technology Review talking about a way to reduce the amount of information leaked in online transactions. Why, for instance, does a website need to know my birth date to know that I am over 18? What if someone who already knew I was 18 (like, say, the DMV, or the Draft Board) could just vouch that I was over the relevant limit, and then we proceed from there?

In a semi-related issue, I was thinking about campaign finance laws. Everyone (it seems) agrees that something has to be done about the use of money for influence in the government. A whole series of campaign finance laws, first enacted in the 1970s, have attempted to do just that by restricting donations and requiring that more and more information about donors be made available. Everything is improved, it is reasoned, by making things more open and transparent. Everyone knows who a candidate is accepting funds from, and candidates know who is supporting them.

Of course, this has really done little or nothing to stem the tide of money-for-influence transactions. Instead, the requirement that every donation be logged and published has presented candidates with a ready-made list of donors so they know who expects to be paid back in the next political pork cycle, while at the same time exposing their campaigns to additional political risk in the form of donations from questionable sources. Politicians are forced to vet, refuse, and occasionally return donations from unpopular individuals and organizations to avoid unwanted associations. This creates headaches and additional lawyers fees for politicians and their campaigns, and hampers the ability of certain organizations and individuals to contribute to the political process.

So what if the problem isn’t that there isn’t enough information in the system about whose money goes where, but too much? The problem with influence peddling is that politicians always know exactly who is paying up- disclosure laws require that these transactions be visible. At the same time, disclosure creates political issues out of donations themselves- unpopular donors, or donors that seem to be at odds with a candidates message, can create problems for a political campaign. So what if we took that information away from everyone- not just ending public disclosure, but requiring that all donations to political campaigns be anonymous?

Why would anonymous donations make the system better instead of worse? The key is that all donations are made anonymous, and that the identities of the donor are never disclosed- not to the candidate, not to the press, and not to the IRS. The removal of all donor information means that politicians literally don’t know where their money is coming from; they have less incentive to trade favors with big donors, because while a donor might report that they gave a certain amount of money to a campaign, the politician has no way of knowing if it is true. While obvious lies will be easily caught, the politician can never find him or herself saying “I can’t offend group X, they’re my biggest donor”. The removal of identities from donations also creates a dis-incentive for corporations and advocacy groups to make gigantic donations; if the candidate never knows where it’s coming from, there’s no real reason to distinguish yourself from other large donors. That means that individual donors become more important. The candidate may have general, historical information on what sorts of people donate more money, but now he or she has to appeal to them as an entire group, not just a particular advocacy group with lots of cash.

What about donations from unpopular organizations- the KKK, Big Tobacco, NAMBLA, etc.? The answer is- let them give. Who cares? If Big Tobacco thinks they have something to gain by giving cash to a candidate, then let them. They’re free to express their opinion with their checkbook, just like everyone else. While these groups can claim that they are giving support to a candidate, they’ll probably want to keep quiet- and pandering to any of these particular groups would bring about the disfavor of plenty of others, who are now responsible for larger portions of the candidate’s war chest.

Is it practical? Sure. The government establishes a legal trust. The administrators of that trust are bonded and under penalty of law not to reveal the identities of donors. Their work is audited independently by another, similarly bound organization. The trust accepts individual donations on behalf of a candidate, and dumps them into a single fund which is then turned over to the candidate’s campaign in aggregate distributions. The trust can issue receipts for the entire amount of money donated to all political campaigns, but no one can ever know if that money was given to a single campaign, or split among multiple. Automation makes it possible that for many donations, not even the trust’s administrators need to know the identity of the donor or the recipient.

Now, just when I was thinking that this was the first New Idea in politics in a century and sure I was going to be getting rich as a pundit soon, I happened to Google the topic and found this book by two Yale professors outlining what was, essentially, the same idea. Their additional twist to the system was to give each registered voter a $50 political speech voucher, to offset the decline in donations that a fully anonymized system would likely entail. There’s even a non-profit org that was created to spread the gospel about anonymous donation, and other, related democratic reforms.

There are certain to be potential problems with the system. But the real issue to me is: 1) is it any worse than the existing system, and 2) does it not substantially reduce the amount of useless paperwork and bureaucracy- filing, vetting, and reporting donations- that exists in the current system? To me, a system that is less work and no better is still a better system- and I think that there are enough substantial gains to be made here to make it worth consideration.


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