Richard Painter - Taxation Only With Representation: The Conservative Conscience and Campaign Finance Reform

The Edmond J. Safra Center for Ethics convened for its sixth Lab seminar on October 28th, 2014.  Edmond J. Safra Lab Fellow, Richard Painter, who is the S. Walter Richey Professor of Corporate Law at the University of Minnesota Law School, gave a presentation based on a book he is currently working on titled, "Taxation Only With Representation: The Conservative Conscience and Campaign Finance Reform" which argues that political conservatives need to be concerned about, and embrace a solution to, the current system of campaign finance. Painter examined the campaign finance problem from the perspective of several different categories of political conservatives.

First he discussed faith-based religious conservatives who he argued should support campaign finance reform from the perspective that lawmaking under the current federal campaign finance system cannot hold true to the ideas embodied in the theory of natural law. Painter explained that faith-based conservatives should have a philosophical objection to the federal campaign finance regime because the laws that are made under it—laws made by members of Congress beholden to special interests—are not rooted in fundamental moral truths, nor are they the result of fair moral debate, both of which are the touchstone of value embodied in the theory of natural law. Citing Judge Guido Calabresi’s comparison of the biblical lesson of the “Widow’s mite” to the injustice of federal campaign finance law in an opinion upholding campaign finance laws in New York City prohibiting “pay-to-play” practices, Painter contended that this problem ought to be particularly troubling to faith-based voters, who primarily believe that conscience, rather than wealth, should dictate power and values in our society. Throughout the course of the presentation, he provided several examples of how private interests have begun to crowd out faith-based conservatives on issues that are tenets among these types of conservatives. 

One example touched on the conservative issue of abortion. To many faith-based conservatives Plan-B, which is commonly referred to as the “morning after pill,” constitutes an abortion. Painter then presented members of the Lab with a graph from that showed the amount of money contributed by pharmaceutical and health product companies to congressional campaigns in 2013-14. The graph showed how industry is able to crowd out normal, regular voters on these types of issues, by contributing large sums of money to congressional campaigns on both sides of the political spectrum. Without taking a side on the issue of abortion, Painter argued that from the perspective of natural law, that is if you believe the law should reflect moral truths derived from natural, fair, moral debates, then clearly this distortion by private interests is wrong. Another example that Painter offered as to why faith-based conservatives should be concerned about the current campaign finance regime is the issue of tax credits and vouchers for private religious or non-religious schools. Painter argued that no matter what side of the position you take—whether you’re supportive of only using tax dollars to fund public education, or whether you’re supportive of a tax-funded voucher program—that in the end, it is PAC money that ultimately influences education policy, not the voice of the public.

Painter then spent some time discussing a problem that should be worrisome to conservatives concerned about national security: the disconcerting ability of foreign interests to undermine the autonomy of the U.S. Congress by funneling money through 501 C4 organizations, commonly referred to as “dark pools,” and other organizations to influence federal elections in the U.S. Again, he provided several examples of how this could be done, and probably is already being done, and the likely consequences. Specifically, because social welfare nonprofits, or 501 c4’s, do not fall under the Federal Election Commission’s definition of a political committee, such organizations are able to keep their donors secret making it possible for foreign governments, foreign corporations, or sovereign wealth funds to influence U.S. elections. Painter argued that this is not only morally wrong, but also creates a huge national security risk for the country. Philosophically and practically we can’t isolate ourselves from the world, Painter explained, but should we be selling preferential access to our government when foreigners acquire a financial interest in American companies? What’s more, when we buy a company abroad we do not get that sort of influence, not at least comparable to what foreigners can achieve under our current campaign finance regime. At this point in the presentation, one participant of the Lab raised the concern of U.S. companies possibly influencing foreign countries, but Painter contended that the Foreign Corrupt Practices Act makes this less likely than the ease with which foreign interests can influence the United States government through our system of campaign finance.

Painter next turned to a discussion of how campaign finance often drives both big government spending to benefit campaign contributors and extensive and sometimes unnecessary regulation of business in order to extract campaign contributions from regulated industry. He provided several examples in discussing the Congressional process of earmarking expenditures and the extensive regulation of finance services in the Dodd Frank Act of 2010 which has been followed by extensive lobbying, and campaign contributions, from banks and other financial services companies seeking exemptions from particular provisions of the Act. More generally, Painter discussed how almost all Americans, including even the majority of Americans in the very top income brackets, are disadvantaged and alienated from their government by the current system of campaign finance.

Finally, he concluded the presentation by discussing a public campaign finance solution he will propose in his new book -- a federal tax rebate of $200 for every taxpayer entitled to vote that would be allocated to a political campaign of the taxpayer/voter's choice. This approach he argued would dramatically increase the influence of small dollar donors, and decrease the dependency of office holders and candidates on the very few large donors who currently control the political landscape.