WASHINGTON - February 5 - With the final year-end 2003 committee reports in to the Federal Election Commission (FEC), political parties have collected more in hard money contributions in 2003 than they received in hard and soft money contributions combined in 1999, the last comparable pre-presidential election year. Furthermore, the presidential candidates raised significantly more money in individual contributions than in 1999, with fully one-quarter of those funds collected as a direct result of the contribution limit increases under the Bipartisan Campaign Reform Act (BCRA).
"More than ever before, hard money is the currency of elections," said U.S. PIRG Democracy Advocate Dana Mason. "Not only do candidates have a greater incentive to appeal to wealthy donors who can contribute twice as much under the new campaign finance law, but party fundraising has not decreased. The doubled hard money limits have prevented us from getting any big money out of the system."
U.S. PIRG's analysis shows that candidates raised the bulk of their contributions from large contributors and that big money continues to dominate the electoral system, for example:
* 2004 presidential candidates have raised 26% of individual donations in contributions that would NOT have been permitted before BCRA's doubling of limits. (1)
* 2004 presidential primary contestants have raised 66% of their funds in contributions at or above $1000, up from 60% in the 2000 race.
* Political parties raised $301,807,399 in hard money in 2003, compared to $266,330,006 in both hard and soft money in 1999.
* The average amount raised by the candidates increased from $16,447,006 in 1999 to $23,353,077 in 2003, an increase of 42 percent.
"Donors who can afford to write $2,000 checks continue to decide who will be able to compete in elections, while the voices of ordinary Americans are drowned out in a flood of big money," said Mason.
The new campaign finance law, recently upheld by the Supreme Court, doubled the amount that individuals may contribute directly to candidates for federal office from $1,000 to $2,000. Barely one-tenth of 1% of the voting age population made a maximum contribution of $1,000 to a 2002 congressional candidate, but these large contributions accounted for nearly 56% of the candidates' individual fundraising. U.S. PIRG supports lowering the contribution limits to levels that average Americans can afford, allowing citizens to participate in a more meaningful way in the electoral process.
U.S. PIRG pointed out that the presidential public financing system has been another casualty of the higher limits. As candidates are able to raise more money from fewer donors, it becomes much easier to forego public financing with its accompanying voluntary spending limits. When, as occurred in the 2002 congressional elections, 94% of the candidates who raise the most money win the general elections, candidates can ill afford to fall behind in the fundraising race. In 2003, with a number of the major candidates refusing public funds in the primaries in order to spend freely and remain competitive, advocates for public financing say the system is sorely in need of reform.
"Presidential campaigns should be contests of ideas, not battles for big bucks," said U.S. PIRG Senior Democracy Advocate Adam Lioz. "Successful candidates should have to appeal to a broad spectrum of society, not just to the economic elite. That's why U.S. PIRG is working to improve the presidential public financing system, increase incentives for small donors through a tax credit for small donations, and reduce the limit on political contributions."
(1) Candidates who accept general election public financing are permitted to raise money only for the primary. The contribution limit for the primary was $1,000 until November 6, 2002 when it was doubled to $2,000.