Study Shows Money Still Determines Primary Winners: Reform Group Says Big Money Influence Undiminished by BCRA

WASHINGTON, D.C.—Congressional candidates' fundraising was a key determinant in primary election outcomes, in spite of the reforms enacted by the 2002 Bipartisan Campaign Reform Act (BCRA), according to a report released today by the U.S. Public Interest Research Group.

Just as U.S. PIRG found in the 2002 edition of The Wealth Primary, the 2004 congressional primary candidates who raised the most money won in nine out of 10 races. Moreover, the majority of candidate funds came from a tiny percentage of the voting-age population that is not representative of the American population as a whole.

"Sadly, the candidates who have the greatest access to wealthy donors-not necessarily those who make the best representatives-continue to win primary elections almost every time," said U.S. PIRG Democracy Advocate Dana Mason. "Candidates who can't compete in the race for big money are weeded out by the wealth primary, and Americans are left with fewer genuine representatives to choose from."

Some observers had hoped that the reforms under BCRA would stem the flow of political money, but soft money has continued to flow to 527 organizations, while hard money fundraising by both candidates and parties has skyrocketed. U.S. PIRG's Mason pointed to BCRA's doubling of the individual contribution limits from $1,000 to $2,000 as a key aspect of the problem.

U.S. PIRG's analysis of Federal Election Commission (FEC) data reveals that 63 percent of 2004 candidates' primary contributions came in amounts of at least $1,000, up from 55 percent in the 2002 congressional elections. Very few contributors gave at that level, however-a mere eight-tenths of one percent of eligible voters donated at least $1,000 to a congressional candidate during the primaries.

"A tiny donor elite is responsible for the vast majority of congressional candidates' fundraising-and therefore wields a disproportionate influence over who runs and who wins in U.S. elections," said Mason. "These big contributors are not representative of the American public, and do not necessarily share the views of the rest of the population, particularly on economic and environmental issues."

The report's key findings include:

• Almost two-thirds (65 percent) of the 2004 congressional primary races were uncontested.

• Major party congressional candidates who raised the most money from individuals and political action committees (PACs) won 91 percent of their primary races in 2004. Winning candidates out-fundraised losing candidates by a 4-to-1 margin.

• While only 0.08 percent of voting-age Americans made a contribution to a congressional candidate of $1,000 or more, these large donations accounted for 63 percent of all individual contributions received by 2004 primary candidates. Similarly, only 0.02 percent of voting-age Americans made a $2,000 contribution, the new maximum amount allowed under BCRA, to a congressional primary candidate. Yet more than a fifth (21 percent) of all individual contributions to congressional primary candidates came at the $2,000 level after BCRA went into effect.

• Individual contributions greater than $200 are coming in even larger increments. In 2002, U.S. PIRG looked at the percentage of itemized individual contributions-checks of $200 or more reported individually by the campaigns-coming from $1,000 donors, finding that 73 percent of candidates' itemized contributions came in $1,000 increments. Following BCRA, 89 percent of candidates' itemized contributions came in increments of $1,000 or more.

• Approximately 26 percent of individual contributions to 2004 congressional primary candidates came from out-of-state donors.

The report also illustrates the obstacles that some of the candidates who lose the "wealth primary" encounter. Attorney and local public official David Phelps, who lost his bid for the Republican party nomination in the eighth district in Illinois, testified to the formidable disadvantage he faced in running against a longtime incumbent with the ability to raise large sums from corporate interests. Without the funds to buy TV ads, Mr. Phelps ran his campaign by directly contacting voters. "My wife and I spent 13 months going door to door, holding open-house meetings at local libraries and participating in community parades and events," he said.

U.S. PIRG asserts that the campaign finance system should be reformed to give candidates like Mr. Phelps a better chance to compete with those who are backed by wealthy interests. "Contribution limits should be lowered to levels that average Americans can afford," said Mason. "Low limits would give ordinary citizens greater opportunity for meaningful political participation and allow candidates to compete on a level playing field."

The group also recommends enacting mandatory campaign spending limits. For spending limits to become a viable option, however, the 1976 Supreme Court decision Buckley v. Valeo must be reversed. In Buckley, the Court declared mandatory spending limits unconstitutional. In light of evidence from the city of Albuquerque that spending limits increase citizen participation and confidence in elections, the Court may have an opportunity to review its decision if it agrees to consider the case currently challenging Albuquerque's spending limits law.

The full report is available on the Internet at www.uspirg.org.

U.S. PIRG is the national advocacy office for the State Public Interest Research Groups. State PIRGs are non-profit, non-partisan public interest advocacy organizations. www.uspirg.org.