Campaign Finance Reform: Good or Bad for the Jews?

When Bill Clinton won the Democratic presidential nomination in 1996, Monte Friedkin was standing at his side at the Democratic convention.

It was a powerful statement about the Florida businessman’s influence as the former finance chair of the Democratic National Committee who also happened to be the national chairman of the National Jewish Democratic Council.

And in 2000, Mel Sembler, a shopping center developer from Florida who was the honorary chairman of the Republican Jewish Coalition, served as the finance chair of the Republican National Committee and was a major supporter of George W. Bush’s run for the presidency.

Today he serves as the U.S. ambassador to Italy.

As the U.S. Congress appears ready to pass a sweeping campaign finance reform bill, it is too soon to know just how such an overhaul will alter the political influence of the Jewish community.

The impact of large Jewish donors and fund raisers — which both the Democratic and Republican parties have relied upon heavily for tens of millions of dollars– is clearly going to change.

Still most experts think that Jewish interests will fare well because the community is politically well organized and can adapt to change.

The bill moving through the U.S. Senate would prohibit unregulated contributions by groups or individuals to the parties, known as “soft money” donations. It also would limit broadcast ads shortly before elections.

The ban on unlimited donations to national parties is not expected to adversely affect the political influence of the Jewish community, and some even think the new laws will enhance Jewish influence.

The potential effects of the bill are “overblown,” according to Morris Amitay, the founder of Washington PAC, a pro-Israel political action committee.

“This is much ado about nothing,” he said. “This doesn’t change much at all for our community.”

Large donors to the parties would merely have to find new ways to flex their political muscles.

Some of the ways larger contributions can still be made include donating up to $10,000 to state and local parties per year, or financing issue ad campaigns and direct mail efforts.

But the prevailing notion is that hard money–money that goes directly to candidates and their campaigns–has been and will continue to be the backbone of Jewish giving.

“The Jewish community’s strength is not in the $100,000 checks, it’s in the $1,000 checks,” Friedkin said.

In fact, the bill would double — to $2,000 — the amount individuals can contribute directly to a candidate.

Donors could give up to $95,000 to candidates and parties in each two-year election cycle.

The bill would impose the biggest overhaul to the nation’s campaign finance laws since limits were placed on contributions to candidates in 1974.

In 1998 and 1999, the U.S. House of Representatives passed campaign finance reform legislation but the measures died in the Senate.

While its fate in the Senate is still uncertain this time around, the bill appears to be gaining momentum.

In fact, Daschle plans to have a vote on the House version of the bill, instead of on a Senate version, for fear that having to work out a compromise on the two could mean ultimate defeat.

While several Jewish groups have expressed support for some form of reform, the Religious Action Center of Reform Judaism has been beating the drum for campaign finance reform for years. “Soft money and issue ads breed mistrust, cynicism and apathy — sentiments that are as incompatible with a healthy democracy as they are with religious principles,” the center said in a statement.

There are some voices in the community that note Jews, because of their small numbers, cannot rely solely on their power as a voting bloc and therefore whatever influence they can yield through political machines — and giving — is important.

But Ken Goldstein, a professor of political science at the University of Wisconsin, thinks Jews will just step up their giving directly to candidates and campaigns, and therefore the legislative change will not affect the influence that Jews have on politics.

Jack Stein, a former special adviser to the White House during the Reagan administration and past chairman of the Conference of Presidents of Major American Jewish Organizations, agreed.

“We will be a player in both parties,” said Stein, who himself has been a major contributor to the Republican Party and Republican candidates.

Most of the giving will continue to come from individual donors, rather than Jewish political action committees, political activists say.

Amitay and others discounted the notion that political action committees would suddenly re-emerge as the powerful vehicles they were in the 1980s.

In the 1999 to 2000 election cycle, pro-Israel PACS donated a total of $1.9 million to political candidates, according to the Center for Responsive Politics.

There will be a limit of $5,000 in donations to any one PAC, the same limit as before.

No law is perfect and laws have potential for unintended consequences, said Ira Forman, executive director of the National Jewish Democratic Council, but he said this law should not cause great concern.

Total public financing or curtailing out-of-state money for campaigns would have been bad for the Jewish community, Forman said.

The conventional wisdom presents the more modest changes proposed in this legislation as helpful to Jews and securing a good place in a more democratic and pluralistic system.

In fact some believe that the current system in which corporations and unions are allowed to donate unlimited funds to political parties and finance advertising attacks or endorsements of particular candidates is actually detrimental to Jewish interests.

“Soft money had made us less relevant,” said Scott Gale, president of SMG, a Washington-based fund-raising management group.

Gale predicts that the new laws will enhance the Jewish community’s influence on the political system.

But not everyone close to the issue thinks campaign finance reform is positive.

There is concern that the national parties–the easy address for getting money from large Jewish donors–will not be so easily replaced and therefore the power of the Jewish community will be diminished.

Giving unlimited funds to a national party also allowed for Jewish influence to actually be national, as Jews from New York or other areas with high concentrations of Jews could thereby affect out-of-state races, said one leading Republican Jewish activist.

“The voice of the Jewish community will be somewhat muzzled,” said the activist, who asked not to be identified.

Many agree that it will be more work to get the same $250,000 that in the past passed from one donor to a party but under the new system would have to be raised from many individuals and channeled to PACs or individual campaigns.

National political parties will have to work with donors and create a new kind of infrastructure of networking and mobilization, said David Magleby, a campaign finance scholar and dean of social sciences at Brigham Young University.

The Jewish community’s influence could be enhanced, Magleby said, as large donors could set up “pseudo-party” organizations that would do the same kind of work–direct mail and phone banks, for example–that the national parties’ soft money used to go toward.

The Jewish community is “vigilant and smart” and will find legal ways to “make its message heard,” said Betsy Sheerr, head of the Joint Action Committee, which works on pro-Israel and women’s rights issues and has its own political action committee.