In January, the Sacramento Press described the 3rd District congressional race beginning between Ami Bera and Dan Lungren and how there’s a clear choice between Lungren, the incumbent, a career politician exemplifying the status quo running against Dr. Bera, a progressive-minded newcomer.  A clear choice, including the way each of the two candidates finances his campaign.

The bottom line: Dr. Bera is raising more campaign money from far more small donors than is Lungren. For the 2009-10 campaign, Bera reports raising $1,257,000 versus Lungren’s $953,000, and he (Bera) has raised nearly all (92%) from individuals, rather than political action committees (PACs). By contrast, Lungren has raised about half (49%) of his funds from PACs and half from individuals (50%).

In the first quarter of 2010 Bera’s campaign demonstrated its grassroots popularity by raising $384,500 from 729 donors – nearly 500 giving less than $200 each – with more than 3 out of every 5 such donors from within District 3, more than 4 of 5 in California. By contrast over this same three month period, Lungren raised $220,000 from 306 donors – about $719 from the average donor – a third higher than Bera’s $527 average.

Lungren’s attitude regarding big corporate contributors seems to be summarized in his now famous 2008 campaign quip: when asked about taking more than $20,000 from “big oil” while voting against a half-dozen House of Representatives bills designed to protect gas consumers, and reduce energy prices and our dependence on foreign oil, he responded with a smirk, “I don’t consider it a contradiction…if I could get more [big oil money], I’d take more.”

Under the 1971 Federal Election Campaign Act and subsequent modifications including the McCain-Feingold Act of 2002, only PACs and individuals may contribute to the campaigns of candidates for federal office. Once an organization processed contributions or outlays over $1,000 it became a PAC. Contributions from corporate or labor unions were illegal, except through PACs which account for just under one-third of total contributions in U.S. Congressional races.

Under the Supreme Court’s January 2010 interpretation of their “First Amendment rights” in Citizens United v Federal Elections Commissions it seems that now corporations and unions may promote (or denigrate, as the case may be) candidates’ campaigns without limit. How this landmark decision will impact elections is as yet unclear. Justice John Stevens in the Court’s dissenting opinion, said that the ruling “…threatens to undermine the integrity of elected institutions across the Nation.” John McCain, co-sponsor of the McCain-Feingold Act, commented that “campaign finance reform is dead.” A February 2010 Washington Post-ABC News poll found that four of every five Americans – crossing all party lines – were opposed to the ruling. Speculation suggests that corporations and unions will only moderately exploit the decision (initially, at least) so as to avoid consumer blowback. Democrats plan legislation to limit foreign companies from political contributions and require disclosure by corporations, unions and non-profit groups who purchase political ads. Finally, Murray Hill, Inc., a PR firm, announced a (satirical) run for a Maryland Congressional seat. Let the games begin.

Besides campaigns, money also drives public policymaking as demonstrated by the recent health care reform debate. Groups opposing the legislation, led by the U.S. Chamber of Commerce and private health insurance companies among others, spent $11 million in the first two weeks of March 2010 – and more by the final vote – targeting Democratic supporters of the bill. At the same time, the bill’s supporters – an unlikely alliance of pharmaceutical companies and labor unions (along with the White House and Democratic leaders) – spent a reported $12 million on TV and Internet ad campaigns urging voters to contact their congressional representatives.

The nexus of public policymaking and campaign finance is illustrated also by the recent pull-back of Wall Street contributions to Democratic party congressional candidates because of President Obama’s push for financial regulatory reform and his criticisms of the “arrogance and greed” of Wall Street firms. The stakes involving consumer financial protection and the regulation of derivatives are huge and any regulatory legislation that constrains or cuts into Wall Street firms’ profits faces steep odds, defined by reduced campaign contributions.

All of which brings us back to the 3rd district race:

While Ami Bera’s financial support is virtually all individual-based and mostly local, he also has broad support, as evidenced by the March 2010 announcement by the Democratic Congressional Campaign Committee that he is among 13 Democrats nationwide running for GOP-held seats in the House that are considered competitive this coming November, thereby becoming eligible for communications, grassroots and strategic support.

By contrast, support of Lungren’s candidacy by the Republican National Committee and its Congressional Campaign arm isn’t clear. The RNC recently recommended a litmus test  of 10 points for Republican candidates to be eligible for party funding, and Lungren’s voting record and campaign pronouncements suggest he easily meets this test. But how this affects his campaign funding depends on what’s available from the RNC this election cycle. In any case, Lungren’s heavy reliance on Republican Leadership and other PACs’ support continues from his 2008 campaign.

Reducing the influence of money and big donors in congressional political campaigns – a reform seriously weakened by the Citizens United decision – would enhance the power of individual voters and improve the democratic (with a small “d”) process. In lieu of that elusive reform, however, it is instructive to review the sources of a campaign’s funding. Here, Dr. Bera clearly has the edge, both in his reliance on more individual, small voters, but also in his avoidance of numerous large, PAC and corporate, donors. Lungren relies substantially more on large corporate donors, Dr. Bera more on small, individual supporters, the more populist, balanced and democratic approach.

Stay tuned for how these candidates differ on the issues. 

Chuck McIntyre 

Sacramento economist, some of whose writing is at http://www.newsreview.com/sacramento/chuck_mcintyre/author.