Trends in Campaign Finance and Its Effect on Outcomes of Elections

¶ … Campaign Finance and its effect on Outcomes of Elections

In this paper, we are examining the underlying trends in campaign finance. To do this we will look at four different gubernatorial campaigns. Once this takes place, is when we will be able to see what patterns are developing in how campaigns are financed.

Over the last several decades, the issue of campaign finance and its outcome on elections has been increasingly brought to the forefront. Part of the reason for this, is because the relationship between politics and special interests will come together during an election. As political candidates, are forced to run for office through spending massive amounts of money. While having to accept funds; from a number of special interest groups that have active memberships throughout the country. This has led to a host of scandals with names such as Watergate, illustrating how this relationship between political and special interests is having an impact on the outcome of the election. (Richey, 2010)

Since that time, there have been a host of different laws enacted to include: the Federal Election Campaign Act of 1971 and the Bipartisan Campaign Reform Act of 2002. The Federal Election Campaign Finance Act established the Federal Election Commission as it banned any kind of outside influence through the establishment of 527 groups. While at the same time, it was limiting the contributions to political allies and supporters. The Bipartisan Campaign Reform Act was supposed to limit these transactions through soft money.

However, this act was overturned by the U.S. Supreme Court as unconstitutional. This is because there was a 5 to 4 decision among the justices about the impact of this legislation on corporations. As they felt that the law was a violation of freedom of speech by telling corporations what political candidates they are choosing to support. This is significant, because it is showing how the new regulations are having an impact on elections. (Rickey, 2010)

As a result, the underlying amounts of campaign contributions have been increasing exponentially. Evidence of this can be seen by looking in the below table which is highlighting these numbers from 2000 to 2011.

Total Campaign Contributions from 2000 to 2011 for Republicans and Democrats

Year

Total

Democrats

Republicans

Third Parties

2000

$1.4 billion

$765 million

$695 million

$25 million

2001

$189 million

$110 million

$77 million

$1.1 million

2002

$2.6 billion

$1.3 billion

$1.1 billion

$125 million

2003

$385 million

$156 million

$130 million

$2.1 million

2004

$2.1 billion

$787 million

$787 million

$29.1 million

2005

$756 million

$149 million

$129 million

$2.9 million

2006

$3.4 billion

$1.3 billion

$1.3 billion

$56.3 million

2007

$458 million

$208 million

$176 million

$17.4 million

2008

$2.6 billion

$986 million

$857 million

$32.6 million

2009

$406 million

$163 million

$108 million

$2.7 million

2010

$3.5 billion

$1.14 billion

$1.6 billion

$67.7 million

2011

$97.4 million

$47.7 million

41.3 million

$1.0 million

("The FEC," 2011) ("Industry Influence," 2011)

When you look at the leap years, it is clear that the total amounts of campaign contributions have increased from $1.4 billion (in 2000) to $3.5 billion (in 2010). This is a 66% increase in these figures over ten years. These elements are important, because they are illustrating how the campaign contributions from special interests and other organizations have increased exponentially. To fully understand how this is taking place requires comparing key contributions that are made to several key Governors' races from 1998 to 2010. Once this occurs, is when we will be able to see how changes in campaign finance laws have impacted elections.

The Governor's Races from 1998 to 2010

To effectively determine how the shifts in campaign finance laws are impacting the general public requires: monitoring the total amounts of spending and if it is a reflection of a shift in political campaigns. To determine the overall amounts of funds that are being raised during the process requires comparing four different campaigns with each other. This will be accomplished by monitoring for changes in the underlying trends and the impact that it is having on the nation. To do this we will look at these campaigns through different time periods. As we are concentrating on: the total amounts raised, spent, personal contributions and the amounts of funding by various industries.

The four different political campaigns that we are focusing on include: the election of Jesse Ventura (as the Governor of Minnesota), Rick Perry (the Governor of Texas), Ed Rendell (the Governor of Pennsylvania) and the election of John Kasich (as the Governor of Ohio). These different elements are important, because the combination of them will offer the greatest insights as to how the campaign contributions have been increasing. Once this occurs, is when there will be a transformation in the role that fundraising is playing in campaign finance.

1998: Jesse Venture is elected the Governor of Minnesota

In 1998, Jesse Ventura entered the race for the Governor of Minnesota with the Reform Party. He defeated Republican challengers Norm Coleman and the Democrat Hubert H. Humphrey III. During the campaign Ventura spent $300 thousand of his own personal funds. This was used in conjunction with a grass roots effort. As, the total amounts of spending are: accounting for approximately $500 thousand. While, the total amounts raised from in state donors accounted for $38 thousand and there were no funds that were raised from a trade groups. Instead, Ventura would wait for televised debates to illustrate his libertarian views in comparison with his challenges. This allowed him to be able to score points in front of larger audiences (which helped him to increase his overall amounts of popularity). ("Election Results," 1998)

Evidence of this can be seen looking at the below table (which is illustrating) the total amounts of financing actives for his campaign.

Jessie Ventura's financing Activities in 1998 Gubernatorial Race

Contributor

Year

Total

Jesse Venture Gov. Committee

1998

$38,500

Jesse Ventura

1998

$308,840

("Contributors Results," 2011)

These different figures are important, because they are showing how Jesse Ventura financed his activities based on his own money that he was using during the campaign. This means that he had no corporate donors or any kind of political action committees providing him with sources of funding.

As a result, Ventura was able to defeat Coleman and Humphrey in a three way race. Evidence of this can be seen by looking at the below table which is highlighting the results of the 1998 Minnesota Governor's race.

Results for the 1998 Minnesota Governor's Race

Candidate

Party

Votes

Percentage

Ventura

Reform

773, 713

36.99%

Coleman

Republican

717,350

34.29%

Humphrey

Democrat

587,528

28.09%

("Election Results," 1998)

These different figures are significant, because they are showing how the grass roots approach that was taken by Ventura increased his overall amounts of popularity. Where, he was seen as someone who was able to speak directly to everyone, in format that was different from his rivals. This was accomplished by not taking any kind of funds from industry or professional groups. Instead, Ventura's campaign was focused on effectively reaching out to voters who were tired of politics as usual. Once this occurred, it allowed him to stand out from the other two candidates in the race. As there was no particular group of contributors that had an impact on his fundraising other than individual donors. ("Election Results," 1998)

2002 Rick Perry is Elected the Governor of Texas

In the case of Rick Perry, he was first sworn in as the Governor of Texas in 2000. This is because, his predecessor George W. Bush was elected President of the United States and was forced to resign to serve in his new position. Originally, Perry was first elected to the position of Lieutenant Governor in 1998.

In 2002, Perry was running for reelection and was facing a tough challenge from Tony Sanchez. He was self-made oil man from Laredo and he had the ability to be able to raise tremendous amounts of funds. As a result, Perry started to focus his reelection efforts on key donors. The below table is illustrating the firms and political action groups that contributed to his campaign.

Rick Perry's Key Donors for the 2002 Texas Gubernatorial Race

Donor

Amount

Archbold Medical Center

2002

$50

Transatlantic

2002

$50

Mobile Perry

2002

$200

Texans for Rick Perry

2000

$5,077

Texans for Rick Perry

2000

$50,000

("Contributor Results," 2011)

These different figures are important because they are showing how Perry was able to receive large amounts of funds from a political action committee called Texans for Perry. This allowed him to keep his corporate donations down. While at the same time, he was able to increase the amount of funds he was raising by having larger amounts given to his campaign from his political action committee. As far as the total amount raised and spent Perry, he was able to see a total of $3 million in contributions and he spent $4.25 million during the campaign. There were some personal contributions that were made by Perry (which accounts for $147 thousand of his own money).

In the case of other states, Perry was able to raise funds throughout the country, as this accounted for one quarter of the total contributions he received. There were small amounts that were raised through the oil industry of $200.00. However, the larger donations were sheltered inside the contributions that he was receiving for his political action committee. These different elements are important, because the focus of financing his campaign with these contributions allowed him to easily be able to use the media to spread his message to the general public.

The results are that this is having a profound impact on the outcome of the election with Perry easily beating Sanchez in the 2002 gubernatorial election. Evidence of this can be seen by looking no further than the below table which is highlighting the final outcome. ("Elections of Texas Governors," 2011)

Results for the 2002 Texas Gubernatorial Race

Candidate

Party

Votes

Percentage

Perry

Republican

2,632,591

57.81%

Sanchez

Democrat

1,819,798

39.96%

Dailell

Libertarian

66,720

1.47%

Maharajn

Green

32,187

.71%

("Elections of Texas Governors," 2011)

These different figures are important, because they are showing how the contributions from Perry's political action committee helped him to be able to raise tremendous amounts of money. Once this occurred, it meant that he had a major advantage over opponents in the elections. This is because he was receiving small donations from large corporations (which helped him to appear as if he is not being influenced by these organizations). Instead, the majority of the contributions were sent to his political action committees. This allowed Perry to be able to conceal the sources of his campaign fundraising. It is at this point that he was able to have the money he needed to conduct an effective campaign. While at the same time, he is limiting the potential criticisms he is receiving based on the number of large donors to his reelection campaign. ("Elections of Texas Governors," 2011)

2002 Ed Rendell is Elected the Governor of Pennsylvania

In 2002, Ed Rendell ran for the Governor of Pennsylvania. During the campaign he focused on showing how he can take the same tactics that he used as the Mayor of Philadelphia to improve the fiscal condition of the state. The total amount of money that was raised $1.4 million during the 2002 campaign during these events they spent $3 million. The contributions were mainly focused from the Rendell's election campaign and a political action committee. Evidence of this can be seen by looking no further than, the below table (which is showing the largest contributions that were received). ("Contributor Results," 2011)

2002 Sources of Fundraising for Ed Rendell's Gubernatorial Campaign

Contributor

Year

Amount

Rendell 95

2001

$500

Rendell 95

2000

$126,050

Rendell for Governor

2002

$1,195,933

Ed Rendell

2002

$8,025

Rendell 95 Committee

1997

$50,025

("Contributor Results," 2011)

These different figures are important, because they are showing the majority of the contributions to Rendell's 2002 campaign were associated with political action committees. In many cases, this is coming from previous funds that he had collected when he was running for the Mayor of Philadelphia. The personal contributions that were made by Rendell were a total of $112 thousand. The majority of the funds that he received were mainly from out of state sources in areas such as: California, Connecticut, Vermont, Colorado and New York. The amounts that were raised by private industry were limited to mainly small contributions of a few hundred to several thousand dollars. These different elements are important, because they are showing how Rendell is hiding the actual sources of the funding through his previous political action committees that he established. ("Contributor Results," 2011)

The results of these financing activities are that this provided everyone with increased amounts of resources in being able to reach out to the voters. Evidence of this can be seen by looking at the below table (which is showing the results for the 2002 general election).

2002 Results for the Pennsylvania Gubernatorial Race

Candidate

Party

Votes

Percentage

Rendell

Democrat

1,913,235

53.4%

Fisher

Republican

1,589,408

44.4%

Krawchuck

Libertarian

40,923

1.14%

Morril

Green

38,423

1.07%

("2002 General Election," 2002)

These figures are important, because they are showing how campaign financing activities gave Rendell the ability to have the resources he needed to win the race. This was accomplished by having the majority of funds received from various political action committees that he established. Once this occurred, it meant that he had access to resources that gave him an advantage over that of the competition. ("2002 General Election," 2002)

2010 John Kasich Runs for the Governor of Ohio

In 2010, John Kasich decided to run for the Governor of Ohio. The reason why is because, the economy facing severe challenges from: the high number of foreclosures, loss of manufacturing jobs and the high budget deficits that the state was running. These elements are important, because they allowed Kasich to run as an outsider who was thought of as a fiscal conservative. ("Contribution Results," 2011)

To fund his campaign, Kasich used a number of different sources. The below table is illustrating how he financed his run for the Governor's office.

Source of Funding for John Kasich's 2010 Gubernatorial Campaign

Contributor

Year

Total

Kasich of Ohio

2010

$200

Lehman Brothers

2002

$200

New Century Project

2002

$30,000

Pioneer Pac

1998

$16,000

New Century Project

2003

$30,000

("Contribution Results," 2011)

These different figures are important, because they are showing how the majority of Kasich's financing activities were related directly to him receiving large donations from political action committees. At the same time, he is receiving small contributions from corporations and private individuals. The total amount of funds that were raised for the campaign is $5 million. Out of these figures a total of $4.35 million was spent. The majority of the funds were raised from out of state donors to include: California, New Hampshire, Vermont, Colorado, Massachusetts, Florida and North Carolina. There were very little industries or professional organizations that provided him with direct funds. In cases, where corporations were donors the total amounts were limited to just a few hundred dollars. This is designed to provide everyone with some kind of protection by having the majority of funds funneled through his political action committees. ("Contribution Results," 2011)

The results of the increased amounts of spending mean that Kasich was able to narrowly beat the incumbent. This is because he was able to use the different sources of funding to provide him with the tools that he needs to reach out to the voters. Evidence of this can be seen by looking at the below table (which is highlighting the returns from the 2010 election)

2010 Ohio Gubernatorial Race

Candidate

Party

Votes

Percentage

Kasich

Republican

1,889,180

49.90%

Strickland

Democrat

1,812,047

47.04%

Mateasz

Libertarian

92,116

2.39%

Spisiak

Green

58,475

1.52%

("Candidate Election Results," 2011)

These different figures are important, because they are showing how Kasich's financing of his campaign helped to give him an edge in winning against a sitting Governor. This is what allowed him narrowly beat Strickland in a tense election battle.

A Comparison of the Data

When you compare the data with one another, it is clear that the majority of political campaigns are financed through political action committees. The reason why, is because this is a good way to hide the sources for large amounts of financing that the campaign is receiving. During the middle of an election this makes them appear as if they are not working with the special interests.

Yet, in reality they are receiving large portions of funding from these kinds of sources. Once this occurs, it means that many individuals will have loyalties towards particular groups based on what is happening. This is when there is the possibility that politicians will be ineffective in dealing with these issues. The reason why, is because they have loyalties to the largest donors who helped elect them to public office.

Over the course of time, these kinds of issues can often lead to a political impasse in many different situations. A good example of this happened, earlier this year in Ohio when Governor Kasich pushed for the state to reduce the amount of collective bargaining power unions are entitled to. This created heated protests about the loss of benefits and the changes in the law. While Kasich claimed that these actions were necessary to ensure that the state was able to deal with the lingering physical crisis they were facing. ("Kyle Farmer Speaks for Governor Kasich," 2011)