Business Leaders Launch Campaign Finance Reform Effort
Call for Soft-Money Ban, Higher Contribution Limits, and Public Financing

March 18, 1999

Top corporate leaders today unveiled a sweeping campaign finance reform proposal to increase public participation and competition in elections and reduce the influence of large donors and special-interest groups. The proposal by the Committee for Economic Development (CED) would ban soft-money donations, increase individual contribution limits, provide public financing for congressional races, and limit campaign spending.

"We wish to compete in the marketplace, not the political arena," the CED report said. "A vibrant economy and well-functioning business system will not remain viable in an environment of real or perceived corruption."

"The fundraising arms race is taking its toll on everyone," said Edward Kangas, Global Chairman of Deloitte Touche Tohmatsu and co-chair of the CED task force that wrote the report. "Voters are disgusted by bloated special-interest financing and they are dropping out of the system. And businesses feel mounting pressure to give to campaigns because their competitors do."

"Our plan will promote greater citizen participation, improve the quality of candidates, and reduce perceptions of undue influence and corruption," said Columbia University President George Rupp, the other co-chair of the CED subcommittee. "It’s a balanced package that ensures that candidates have the resources they need to run robust campaigns, while reducing the role of big-dollar contributions."

The CED report recommends:

Banning soft-money contributions to national political parties.

Increasing individual contribution limits to $3,000 per candidate, restoring them to 1974 real levels. Maintaining the $25,000 limit on individual contributions to federal candidates, but allowing individuals to make an additional $25,000 in donations to national parties.

Matching individual donations up to $200 with public funds on a two-to-one basis.

Setting spending limits for candidates who accept matching funds.

Reforming issue advocacy by expanding the definition of "express advocacy."

The proposal is the most significant entry into the campaign finance reform debate to date by a business group. The plan and accompanying report – called Investing in the People’s Business: A Business Proposal for Campaign Finance Reform – is the first step in a long-term effort by CED to encourage the business community to push for reform.

Besides outlining specific recommendations and the rationale for them, the CED report provides the most up-to-date data on campaign funding, including figures from the 1998 elections. It documents, for example, the troubling trend towards larger individual donations in congressional campaigns and a drop in smaller-dollar contributions.

Kangas and Rupp emphasized that the soft-money ban is a critical step in ending perceptions of corruption. It would also restore the funding of campaigns to individuals. Raising the contribution limits will ensure that candidates have the resources they need. And the public financing will increase the role of small-dollar contributions, spur greater competition, and reduce the amount of time lawmakers must spend on fundraising.

"Reform is long overdue," said CED President Charles Kolb. "The more CED members looked at the broken system, the more they felt the business community had to weigh in and offer a solution."

Kolb said today’s release is the first step in a national outreach program directed at the business community to educate corporate executives about the need for reform and garner broad support for the CED recommendations.

"No one can claim that the current system is working," said Rupp. "Americans recognize that large contributors and special interest groups have too much say. That threatens the integrity of our elections and government. Elected officials must spend too much time fundraising and prospective candidates shy away from running rather than face the Herculean task of raising a huge campaign war chest. This isn’t working for anyone."

"Corporations and corporate executives have been leading players in financing campaigns," said Kangas. "But now, as concerned citizens and business leaders, we must step in and help explain what’s at stake for our democracy. Our political system will fail if we don’t repair the glaring deficiencies in the system. The nation simply cannot sustain the status quo," he said.

CED is an independent, nonpartisan public policy organization of more than 200 business and academic leaders committed to promoting economic growth and greater opportunity for all Americans. Its campaign finance reform project was directed by Anthony Corrado, a professor of Government at Colby College and a nationally renowned expert on campaign finance. CED’s outreach effort is funded by a grant from The Pew Charitable Trusts.

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Investing in the People’s Business: A Business Proposal for Campaign Finance Reform is available from the Committee for Economic Development, 477 Madison Avenue, New York, NY 10022, telephone - (212) 688-2063 (dial ext. 274 to order), fax - (212) 758-9068. The cost is $18.00 per copy. Please add 15% for postage and handling. Orders under $50 must be prepaid by check or money order (in U.S. dollars).