- The Washington Times - Sunday, July 15, 2001

As the debate over McCain-Feingold campaign finance legislation heats up, another reform proposal contin-

ues to gain support: requiring candidates to disclose the identity of their contributors and the amounts of the contributions. But a better solution is to make all campaign donations anonymous, by pooling the donations into a blind trust.

If the point of voting in private in a curtained booth anonymously is to discourage corruption, then donating in private should also curtail political corruption. Politicians won't know who gave them how much money.

And contributors couldn't expect direct favors in exchange for donations.

Ballot secrecy was adopted toward the end of the nineteenth century to deter political corruption by disrupting the economics of vote buying. That made it much more difficult for a candidate to know if, at the end of the day, the voters he paid had actually voted for him. In much the same way, we could use an anonymous "donation booth" to restrict campaign finance corruption.

We could legally require donors to funnel campaign contributions through institutions that, when distributing money to the donor-selected candidates, would be prohibited from disclosing the names of the donors. Such a requirement would make it impossible for candidates to know who "paid the price" for access or influence. Knowledge about whether the other side actually performs his or her promise is an important prerequisite for trade.

People including political candidates are less likely to deal if they are uncertain whether the other side performs.

Under one possible system of mandated anonymity, all candidates, political parties and PACs would establish blind trust accounts at private trust companies with substantial, pre-existing assets. All donations would, by law, have to be directed to the recipients through the blind trusts. Then, on a weekly or biweekly basis, the blind trusts would report the total amount that had been donated to the candidates and political groups who, in turn, would use the money to finance campaigns.

In such a system, candidates could still ask potential donors for support. They could still hold fund raisers for rich invitees. But the candidates could not close the deal; they could do no more than distribute postage-free envelopes addressed to the blind trust so that supporters could mail in their contributions. The system, by itself, might be enough to free politicians from the current fund-raising marathon of constantly seeking contributions.

Of course, even with this system of mandated anonymity, candidates would still know a lot about some of the sources of their campaign funds. Ross Perot would know how much he gave to himself. Bill Clinton would know how many New Hampshire cocktail parties a particular supporter threw on his behalf. Donating your time to fund raising might still get you an ambassadorship. But the effect of those efforts would be muted, because the candidate could not know for sure how much money a particular person raised.

What is to stop a donor from telling a candidate on the sly about a large contribution? Absolutely nothing. But talk is cheap. Anyone can claim to have donated to a candidate, just like anyone can claim to have voted for a candidate. But mandated anonymity would make it impossible for a donor to prove that he gave to a campaign. What is more, non-donors could mimic the signals of real donors, making it difficult for unscrupulous candidates to determine to whom they owe favors.

Mandated anonymity would deter political corruption and give potential donors more freedom to participate in campaigns. For instance, it would impede various forms of implicit and explicit quid pro quo corruption because politicians would be unable to determine to whom they owe favors.

Mandated anonymity would also deter officeholders from extorting donations with threats of future policy decisions that would prove harmful to those being threatened.

Under mandated anonymity, contributors would be free to tell candidates anything (or nothing) about their contribution. The only restriction would be that donors could not prove that they donated. Also, mandated anonymity would allow the removal of campaign donation limits without fear of impending corruption. Because a candidate would not know the identities of his donors, people who want improper access or influence would have no incentive to use large campaign contributions as a means to their ends.

Without that incentive, there is little reason to limit the amount of contributions. People who truly support a candidate could thus be free to donate as much of their money as they want to the campaign.

The secret ballot stands against disclosure in elections. We should remind ourselves that we chose to make voting a solitary act in order to diminish corruption. Anyone opposing mandated donor anonymity needs to explain why we should not also jettison mandated voting anonymity.

Ian Ayres is the William K. Townsend Professor of Law at Yale Law School. This commentary was excerpted from an article published in the summer 2001 edition of Regulation, the Cato Review of Business and Government.

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