Hard Facts About Soft Money
Jerome Kohlberg was a founding partner of the investment firm, Kohlberg Kravis Roberts & Company. He founded Campaign for America and the Campaign Reform Project in 1995.
Since the post-Watergate campaign-finance reforms were enacted back in the 1970s, the country has witnessed a succession of influence-peddling scandals. Major corporate and private donors, aided by members of Congress, have found loopholes that have effectively overridden and nullified the campaign-finance laws passed at that time. Each new scandal serves to reinforce the public's perception that big money is able to buy the legislation it wants. This in turn only deepens the public's mistrust and cynicism toward government.
The various high-profile funding abuses we are enduring should have set off alarms, but so far they have gone unheeded. We never seem to muster the courage it takes to implement meaningful change. I'm an optimist, however. And I'm convinced that this can be changed.
The biggest fundraising scandal going isn't even labeled a scandal. I'm referring to the so-called "soft" money loophole, which allows the party machines to rake in unlimited contributions from wealthy special interests.
Soft money has become business-as-usual in the political fund-raising game. Just consider the staggering rise in soft money contributions over the past two decades. In 1980, the parties hauled in a mere $19 million in soft money; in 1992, they collected $80 million. By 1996, the two major parties took in a whopping $262 million. And the year 2000 elections will probably see unregulated soft money contributions of $500 million or more. Washington is inundated in soft money, and the political parties have become addicted to it.
This growth in soft-money dependency was a major factor in my decision to stop feeding the habit. Over the years, I had been a substantial contributor to several candidates, and to the Democratic Party, but I grew increasingly uneasy with the entire process. I was being besieged by nonstop demands for ever-larger contributions. I could see that politicians were having to give favors to get that money. I could see that business was expecting favors for the bigger dollars.
I became disenchanted by the unseemliness, and the potential for corruption, and decided to alert the business community to the danger of the political fund-raising game. The reaction was similar to when I started in the buyout business - you're crazy!
 CBS |
| Jerome Kohlberg |
In the early 1990s, I started talking with people, both in business and in politics, about the need for reform. I was surprised that nearly everyone with whom I spoke agreed that the system was out of control and needed to be fixed. And so I decided to do what I could to change the system, instead of fueling it with more contributions.
In 1995, in an effort to reach out to the business community, I established the Campaign Reform Project (CRP) to help educate voters about the issue of campaign-finance reform. Dozens of business leaders - including Berkshire Hathaway Chairman Warren Buffett, Sara Lee Chairman John Bryan and former Merck Chairman Roy Vagelos - have joined the Project's Business Advisory Council. Former Federal Reserve Chairman Paul Volcker has joined, as well.
Fortunately, we're not alone. A growing number of business and finance leaders have begun to speak out on behalf of campaign-finance reform. Time Warner Chairman Gerald Levin recently announced that his company would stop making soft-money donations. Other large companies have recently made a similar commitment, including Monsanto, Allied Signal, General Motors and Hasbro.
In addition, the Committee for Economic Development (CED), a group of over 200 business and education leaders, issued a report in 1999 calling for meaningful campaign-finance reform.
The time to change our political campaign-finance system is now. Each of the major presidential candidates has called for change; each has acknowledged the public's eroding trust in government. Polls show that American voters want reform. Time after time, political leaders, business leaders and influential newspapers have said it's just a matter of time until another major scandal jumps into the headlines.
With the convening of the 2nd session of the 106th Congress just days away, I hope my business colleagues will join with CRP and CED in calling for reform early in this session. It is imperative that the business community urges Congress to join together in one voice, regardless of political affiliation, and enact significant legislation that will take a step towards rebuilding public trust in government now.