On the Public Financing System

Good morning. Later today, we'll examine some of the kerfuffle around campaign finance reform and Barack Obama's recent and unprecedented decision to opt out of the public financing system.

But first: In re the plight of local Morning Call reporters, my father the doctor pointed me to a couple of cases this spring in which a similar move was aimed at peer-reviewed medical journals.

Medical journals, like most academic journals, publish their scholarly articles based on a process of "peer review," where other academics look at the articles submitted and then determine which ones are the most important to publish. Those meetings are closed, and all of the discussions about what to publish are confidential. As you might imagine, drug companies fund a lot of studies, many of them set up to showcase the virtues of their products, or occasionally just outright rigged. The peer review process is what ensures that the studies doctors see in the big journals are well-done and significant in their findings.

Perhaps not stunningly, Pfizer is currently embroiled in some litigation for saying some things about a certain type of painkiller that weren't so much true as designed to boost sales. It's a drug company; who can be stunned at a little bit of truth-hedging? What was more surprising was that they grabbed a page out of the gangster playbook, and just subpeonaed everything from the internal meeting of the Journal of the American Medical Association and the Annals of Internal Medicine. Pfizer wasn't looking for anything specific, they just asked the journals to turn over everything in case there was something there Pfizer could use to humiliate, intimidate, or discredit AIM and JAMA or doctors involved.

In March, the district courts in Chicago and elsewhere said no, Pfizer, you can't just destroy a working system because you're unhappy someone caught you lying. But one would be surprised if this is the last we hear of this. There is no federal law on this, just state law, and peer-reviewed journals are one step removed from the freedom of the press the First Amendment addresses. Certainly, a strict constructionist like Scalia would say that there is no Constitutional protection as it stands (though Alito might be more receptive). Drug companies are not renowned for their sense of civic spirit, and they are major donors to lots of politicians, especially Republicans. Peer review is a long-held practice in all academic journals, and while it has its flaws, it is a good one that usually results in the best research getting published. And whatever it doesn't do perfectly can not be remedied by letting the drug companies sit in on every meeting. If academics aren't free to make their own decisions, how can we know those decisions are in our best interests? If the last eight years have taught us anything, it's that when companies regulate their own industries, we get disaster.

Okay, on to campaign finance.

As you may have heard, Barack Obama announced last week that he will be the first general election candidate to opt out of the public financing system since it was . This system gives the candidate matching funds for every dollar raised, but the ways he can spend the money are limited. It's quite complex, and the system is funded largely by tax money directed from about 8 percent of Americans who check that box on our taxes that sends three bucks to the system. Since it ends up being in the $80 million range, every candidate so far has decided it's worth the limitations, especially since you can get other people to spend money that doesn't count toward your limit. Of course, given that Barack Obama can raise hundreds of millions with his broad donor base, that number doesn't seem so big to him.

The big dustup is that he signed a paper early in his candidacy. I am quoting now from 2008 Central's excellent dissection of the issue:

In September 2007, [Obama] responded “yes” to a survey question from Midwest Democracy Network that asked: “If you are nominated for President in 2008 and your major opponents agree to forgo private funding in the general election campaign, will you participate in the presidential public financing system?.”

Obama also wrote a longer, more detailed response:

In February 2007, I proposed a novel way to preserve the strength of the public financing system in the 2008 election. My plan requires both major party candidates to agree on a fundraising truce, return excess money from donors, and stay within the public financing system for the general election. My proposal followed announcements by some presidential candidates that they would forgo public financing so they could raise unlimited funds in the general election. The Federal Election Commission ruled the proposal legal, and Senator John McCain (R-AZ) has already pledged to accept this fundraising pledge. If I am the Democratic nominee, I will aggressively pursue an agreement with the Republican nominee to preserve a publicly financed general election.

I am getting a little tired of the endless talking-head mantra of how Obama "broke his pledge," "went back on his word" and "flip-flopped." A read of that statement pretty clearly shows that he never exactly promised to just opt into the system, no matter what. In a field where the major actors break words, change minds, and flip-flop all the time, we should be diligent about what it actually means when someone says they will do something. In this case, he agreed to use public financing if he could reach an agreement with the Republican.

Now, he is open to several other criticisms. This is certainly a legalistic reading (perhaps to be expected from a law professor), and is definitely some Clintonesque linguistic wriggling. Additionally, as 2008 Central points out, Obama's video message spoke of the public financing system as "broken," and it hasn't changed since he signed this pledge, where he seems to think it's not bad. And, even if he is sincere in his comments, Obama is clearly guilty of taking a stance that benefits him. All of those things are fair to say about Obama. But what McCain and the pundits keep saying is that he somehow went back on a promise that he never exactly made.

There are, to me, some other things that might be going on here, as I re-watch Obama's video message. One is about politics, and that is that, when you can out-raise your opponent for the first time in your party's recent history, you take that advantage if you want to win. So this was a no-brainer. More money is better, even if the pundits don't like it for the moment. But, then, does that make Obama the same type of politician as everyone else? All I can say is that I'm happy he opted out.

First, it's a little strange that being the first to do something could result in someone being criticized for being like everyone else. Put it this way: If George W. Bush, who was renowned for his fundraising and creative use of soft money, used the same system twice, how groundbreakingly anti-Washington could it really be? And, in the one meeting between Obama and McCain camps on fundraising, I am sure that the agreement Obama alluded to last September was not in the works; how could McCain eschew 527 groups, when they are his primary change to win? He's not going to reign in the swift-boaters, he's going to use them as best he can. No one runs for president without wanting to win, and McCain has proven this time that winning is more important than any personal stance he might have. Obama has no agreement, only a guy who wants to beat him at all costs. So why adhere to a system that only hurts him? Also, whether or not this is the reason he wants to do it, Obama's system is more honest than the public one. As someone who has worked around the money that these laws supposedly control, I can firmly say that they do nothing to control how much of it raised, spent, or shuffled around. When Obama speaks about his broad base of donors as an effective public financing system, he's kind of right. Of course, he still has large donors to whom he will be indebted, but none of them will be as important as any one guy at the head of a 527 would be under the public system. This way, his name can be on every ad he wants to run. And, unlike the public system, everyone who sends money to Obama is choosing to.

So, Obama is guilty of wanting to win, and of changing his mind on the virtues of public financing (as I did), and of making decisions that help him. In exchange, even if you assume the worst intentions, the system he will use in the end is the most honest one we will have seen in a long time. Also, we may see the end of our current attempts at campaign finance reform, which are somewhere between unconstitutional and completely ineffectual. And the worst thing you can even claim he did is not adhere - in spirit, not letter - to a pledge he signed with no one a year ago? Perhaps I am guilty of seeing this as not that bad because I agree with the decision he came to (whereas I find McCain's switches, to pro-torture, pro-Bush tax cuts, and anti-immigration reform, all poor policy), but it just doesn't seem that bad to me.