Campaign Finance Reform Meets Unintended Consequences

Oct. 17, 2008— -- Sen. John McCain says he's a problem-solver. He told the Republican National Convention about how he "battled corruption," that he "fought to get million-dollar checks out of our elections."

He did that by co-authoring McCain-Feingold. That bill, also known as the 2002 Bipartisan Campaign Reform Act, promised to curb the influence of big money on politics.

McCain promised that "the problem with money in elections can be cured to a large degree by the provisions in this bill."

At the time, 98 percent of Congressional incumbents were being reelected. With money playing a lesser role, McCain said, challengers would have a better chance.

People like the idea of campaign finance reform. Yet, campaign finance law, like all of government's laws, is subject to a still more powerful law: the law of unintended consequences.

In the last couple of elections, Ada Fisher, a retired doctor in North Carolina, ran for Congress. She ran on a shoestring budget, campaigning out of her own car, making her own signs and buttons. For staff, she relied exclusively on volunteers.

A recent college graduate volunteered to be her campaign treasurer. It was supposed to be fun and educational. But then they came up against campaign finance laws.

The entire book of rules and regulations published by the Federal Election Commission amounts to more than 500 pages of small print set in double columns.

That's typical of Washington's rules. We wanted to get an idea for how big that really is, so we taped the pages together and spread them out at Giants stadium. The laws spanned the field one and a half times.

Fisher lost both her campaigns -- and navigating that maze of regulations didn't help. Her team had trouble wrestling with all that legalese, and consequently filed some reports late. The result? They received a notice that they were being fined for failure to file. The fines totaled nearly $10,000.

"They then decide that they want to hold a candidate and a treasurer personally liable," said Fisher.

Brad Smith knows all about cases like Fisher's. He was chairman of the Federal Election Commission when it first fined Fisher.

"That's a great way to get volunteers out," Smith said dryly. "Tell them if they fail to file a form on time, they're personally liable for fines and penalties. And it's just a classic example of the way in which the law benefits insiders and those who are already established, who know the rules, who have big-time campaigns, who can afford to hire top-notch legal and accounting talent -- whereas a startup campaign, sort of a newcomer to the system, faces all kinds of obstacles there."