New Campaign Finance Law (BCRA) Pushed Parties, Candidates To Raise Dramatically More Money From Individuals In 2004

Washington, DC- Despite widespread claims that campaign finance reform would result in the death of political parties and their ability to fund a national grassroots and media campaign, the opposite was the case in 2004, according to a major new report by the Center for the Study of Elections and Democracy at Brigham Young University. The report, “Dancing Without Partners: How Candidates, Parties, and Interest Groups Interact in the New Campaign Finance Environment,” is the complete summary of the CSED 2004 research project which used scores of academics and hundreds of monitors on the ground to gather information about the presidential race in five presidential battlegrounds and fifteen Senate and House races.

BCRA altered the political finance landscape by forcing parties and candidates to focus more attention on raising money from individuals which resulted in record setting levels of contributions. These funds in turn purchased record amounts of television and radio advertising, phone calls, person-to-person contacts, and direct mail pieces. CSED researchers found that sophisticated marketing techniques helped campaigns identify voters who sometimes received more than a dozen contacts. The study finds that political parties and interest groups devoted more money to the ground war than ever before but that those resources were concentrated in just a few battleground states. David Magleby, distinguished professor of political science at Brigham Young University and a co-author of the study said, “In 2004, being a targeted voter in Ohio was a very intense political experience that forced voters to pick and choose which mail, phone calls and broadcast ads to pay attention to.”

The Battle for the White House

The new research shows that parties defied expectations and targeted a hard money bonanza into ground war activities and independent expenditures. The DNC raised and spent more than the RNC for the first time in decades and saw a dramatic surge in individual contributions in the last six months of the cycle. This surge in individual giving more than replaced old soft money. In interview after interview for this project, Democratic Party staff said they constantly had to revise their budgets as more money poured in. According to Professor Quin Monson, “This spending advantage was counteracted by the efficiency and effectiveness of the ground war waged by the RNC, particularly with the advances the RNC made in 'microtargeting.'"

Democrats made especially effective use of the Internet, both in raising record amounts of money online, and in Internet communications strategies from e-mail to Internet ads all aimed at the central fundraising goals.

The 2004 presidential election was funded at record setting levels by disclosed and limited “hard” money contributions to candidates and party committees. In this cycle, the longstanding gap in individual contributions between the parties was reversed. In 2000 the DNC raised three-fifths of what the RNC did, but in 2004 the DNC for the first time in decades out-raised the RNC. Furthermore, interest groups dramatically expanded their independent expenditures and electioneering communications thorough Section 527 and 501(c) organizations. Most of the early activity by these groups was on the Democratic side, but late-forming Republican-leaning groups were important to the outcome of the election because of the messages they disseminated. Overall, the 2004 election cycle was heavily focused on the presidential race, with some groups allocating unprecedented proportions of their electoral resources to this contest.

The 2004 election saw dramatic growth in individual contributions to candidates and political parties. From 2000 to 2004 the DNC increased its individual contribution revenue by 3.2 times from $111 million to $356 million, the RNC increased by 1.8 times from $186 million to $344 million, presidential candidates raised a combined $234 million in 2000 and $631 million in 2004. While some of the surge in individual contributions to candidates and parties was the result of the higher individual contribution limits enacted under the Bipartisan Campaign Reform Act, the surprise of 2004 is the dramatic growth in the number of individuals contributing and the surge in party and candidate receipts.

Prior to passage of BCRA, the national party committees had depended on the unlimited soft money which often came in large contributions or from sources otherwise prohibited from contributing to parties or candidates like labor union and corporation general funds. In 2000, 40 percent and in 2002 44 percent of funds raised by the DNC, RNC, DSCC, NRSC, DCCC, and NRCC consisted of soft money. The increase in hard money contributions from individual donors shows that the parties and candidates motivated people to give. Overall, the DNC and RNC were able to raise and spend more hard money in 2004 than they had in hard and soft money combined in 2000 or 2002.

The CSED research teams found that Republicans, for the Party or the Bush-Cheney campaign, had a significant advantage over the Democratic Party and Kerry-Edwards campaign. CSED tracked 160 unique mail pieces distributed by the RNC compared to 60 by the DNC. The researchers tracked 22 unique mail pieces sent by the Bush/Cheney campaign compared to 8 by the Kerry/Edwards campaign. They tracked 19 unique, phone calls made by the RNC compared to 12 by the DNC. And they tracked 46 unique, organized phone calls made by the Bush/Cheney campaign compared to 30 by the Kerry/Edwards campaign.

In another major development this cycle, 527 organizations in both presidential and some congressional races conducted unprecedented voter registration, GOTV activities, and broadcast communication. The efforts by Democratic 527 groups narrowed the communication gap between Bush and Kerry that existed early in the campaign and had been an advantage for the incumbent Clinton campaign against challenger Dole in 1996. Among the top three Democratic and Republican 527 groups there was a significant difference in the number of unique direct mail pieces they sent to voters in the battleground states where CSED had researchers. America Coming Together (89 unique mail pieces), Sierra Club- (46), AFL-CIO (37) far outpaced the Republican allied groups National Right to Life (17), National Rifle Association (10), and Swift Boat Veterans for Truth (9).

Democratic-leaning 527 groups were especially visible and active early in the cycle. They mounted an aggressive broadcast campaign and an unprecedented effort to register and mobilize voters. Prominent among these groups were America Coming Together, the Media Fund, the League of Conservation Voters, and MoveOn. By law, these groups could not coordinate with candidates or party committees, a restriction that some on the left felt was “a luxury.” Most of them were also unable to make explicit “Vote Kerry” kind of appeals. This inability to coordinate message and effort with the candidate and party put the overall Democratic ground effort at a disadvantage compared to the Republicans who communicated with the candidate and delivered a “Vote Bush” message because their ground operation was run almost entirely by the RNC.

With Republican Party and campaign coffers full, Republican-leaning 527 and 501(c) interest groups formed much later in the cycle, even as the Democratic groups exerted their fundraising ability and strength on the ground. In aggregate Republican-leaning organizations spent less than the Democratic groups, but the report finds Republican had a more disciplined approach to directing funders to their 527s. They also did not engage in extensive voter registration and mobilization, directing almost all of their money to broadcast ads.

The CSED research found these ads to be highly effective. The Swift Boat Veterans for Truth put the Kerry campaign on the defensive and took it off message for most of two weeks, making them a dominant influence on the campaign. The widely shared view of political professionals on both sides of the election is that the Swift Boat Veterans attack and the Kerry response was a critical moment in the campaign. One Democratic consultant who wished to remain anonymous summarized the Kerry response to the Swift Boat Veterans quite succinctly: “We under-reacted early and overreacted late.” Progress for America advertising also played a significant role in the campaign, especially the “Ashley's Story” ad which depicted Bush in positive terms. The success of these groups will likely encourage 527 groups in the future to mount even more vigorous attacks on some candidates and staunch defenses of others.

Congressional

While the soft money ban did not adversely affect overall spending on the presidential race, there was less spending in dollars per voter in competitive U.S. Senate races in 2004 than in 1998 to 2002. This drop in party resources in 2004 occurred despite the fact that Senate Democrats had recruited strong candidates in such Republican states as Alaska, Oklahoma, Colorado, North Carolina and South Carolina. Senate Republicans had more contentious primaries in 2004 than in 2002, especially in Florida, Colorado, Oklahoma, and Pennsylvania. Candidates in the races we monitored on average spent less per voter in 2004 than other competitive Senate races in 2002. Spending in dollars per voter in Florida ($3.11), Oklahoma ($6.26) and Colorado ($8.05) lagged behind the 2002 Missouri ($11.25) and South Dakota ($37.37) races. The South Dakota 2004 Senate race, however, was the most expensive per capita spending race in U.S. history, with spending reaching $86.59 per South Dakota voter.

Parties also adapted to the new campaign finance regulatory environment. Party committees dramatically increased their independent expenditures in 2004; however, this spending fell well short of what they had expended in soft money in 1998, 2000, and 2002. It is unlikely, given the wide margin of Bush victory in several of these states, that more spending by the DSCC would have changed the party's net loss of four seats.

The report finds that Democratic Senate candidates in competitive races, even in conservative-leaning “red” states were adequately funded. In fact, Democrats out-raised Republicans in all but one of the Senate battles that were examined. Professor Kelly Patterson notes that “In 2004 the parties were more important than 527s at the congressional level in most cases.” The DSCC raised more significantly more hard money, $86.5 million, than the NRSC, $74.9 million.

Competitive U.S. House races were few and far between in 2004, due mostly to the partisan redistricting process that took effect in 2002. The NRCC and to a lesser extent the DCCC spent heavily in several of these races. Some of the competitive races in 2004 were the result of the 2003 partisan gerrymandering in Texas. With the exception of the redistricted Texas contests, incumbents again were reelected in high proportions. There were also pockets of interest group activity spread across the House races. Yet the activity of Section 527 or 501(c) groups was lower in House than Senate races. Overall, very few national observers believed that the House would switch parties. Consequently, groups and parties had an even greater incentive to participate in the presidential race.

Looking Ahead

Among the questions raised in the report are whether Democrats can continue to build on the fundraising surge they saw late in the 2004 cycle. Democrats also face the challenge of attempting to match the “microtargeting” efforts mastered by Republicans in 2004 that allowed them to mobilize likely supporters in Democratic and turn them out to vote. With the rise of 527s in 2004, it is likely that contest-specific 527s will emerge in 2006 and 2008.

About CSED

The Center for the Study of Elections and Democracy (CSED) is a non-partisan academic research center operating under the auspices of the Department of Political Science at Brigham Young University (BYU). Beginning in 1998 CSED has conducted several research projects to examine the impact of noncandidate campaigning in federal elections. For more information, see csed.byu.edu.

About the Authors

David B. Magleby is Dean of the College of Family, Home and Social Sciences and a Distinguished Professor at Brigham Young University and senior research fellow at CSED.

Kelly D. Patterson is Associate Professor of Political Science and Director of CSED at Brigham Young University.

J. Quin Monson is Assistant Professor of Political Science and Assistant Director of CSED at Brigham Young University.