Kirk MacGibbon: The Price Of Office

News that the Labour Party is being investigated for allegedly breaching campaign spending limits by a whopping $400,000 seems almost quaint from a New York perspective. What struck me was just how cheap it is to win office in New Zealand. The Labour party spent $2.8 million to win control of the Treasury for another three years. Helen Clark said the laws were in need of ‘clarification.’

Debate over campaign financing and spending in America is almost perennial, and almost always ends in failure because the Supreme Court has decided that campaign spending limits infringe Americans constitutional right to freedom of speech.

The city and gubernatorial (state governorship) elections last November for example, saw sums of money spent that surprised even hardened political watchers. Michael Bloomberg outspent everyone of course. But then he is a billionaire and, given his incumbency, must have been pleased to have won the New York mayoralty for a mere $70 million. To get a job he was a shoo-in for. His Democratic opponent could only raise a paltry $13 million, which included a public contribution.

Across the ditch in New Jersey, the candidates spent a combined total of $73 million and the result was a record low turnout. The governorship was eventually won by Democrat John Corzine, a US senator and former chairman of investment bank Goldman Sachs, who went toe to toe with Republican Doug Forrester. It was a no-holds-barred fight and a real eye opener as to what can happen when politics gets really dirty. Nothing was off-limits: The Republicans even made an ad featuring a quote from Corzine’s ex-wife, saying he had ‘failed his family and would probably fail New Jersey too.’

The successful candidate in the race for a House seat in good ol’ Texas District 32 spent more than $9 million.

A candidate seeking an electorate seat in New Zealand can spend no more than $20,000. If you aspire to one of our local authorities, you’re limited to a few thousand dollars. Our campaign spending laws might be in need of ‘clarification’ but running for office for New Zealand is largely within reach of just about anybody. As some successful candidates have found it’s possible to become a politician in New Zealand for little more than what a dinner would cost in one of our better restaurants.

The Centre for Responsive Politics (www.crp.org) calculated that spending in the 2004 U.S. Presidential election exceeded US$1.2 billion (and the cost of all elections in 2004 including presidential, Senate, state and municipal at $3.9 billion).

Just to remind readers, Bush raised in excess of $274 million for his campaign (which, when you think about it makes the amount he spent to win power and the amount spent by the Labour Party roughly equal on a per capita basis) and John Kerry in the order of $235 million. Incidentally, both candidates received $74 million in matching public campaign funds. But it was interesting how Bush was able to manipulate this funding. The rules are that if you accept public funding you have to spend that money in the period between when the party confirms its presidential candidate and election day. The Republicans pushed their conference out to within six weeks of election day, so Bush could spend his $74 million in six weeks, while Kerry had to eke his out over three months).

If you elect not to accept public campaign financing, as unsuccessful Democratic candidate Howard Dean did in his party’s primaries (the first candidate to do so) you can spend whatever you like. This is what Bloomberg did too.

Given the amount candidates are spending on their campaigns, it’s tempting to conclude that wealthy candidates are simply buying their offices. This is a subject that Levitt and Dubner looked at in their highly entertaining book, Freakonomics (www.freakonomics.com). Anyone who has ever wanted to know whether sumo wrestling was rigged, or whether real estate agents really do short-change us, or ‘why drug dealers live with their Moms’ should buy themselves a copy.

What Levitt and Dubner found, after analyzing hundreds of election results, was that while it’s true that the candidate who spends the most usually always wins, it was not true that the money they spent was the reason they won. Their somewhat surprising finding was that “the amount of money spent by candidates hardly matters at all.” They claim their analysis shows that a winning candidate could cut his spending in half and lose only one per cent of the vote. Conversely, a losing candidate could double his spending and only expect to shift his vote by that same one per cent. They also point to the fact that there have been some enormously wealthy candidates who have squandered vast sums chasing dreams of higher office. Ross Perot is a recent example. And maybe John Banks could have saved himself a bit of money too.

The Washington Post (www.washingtonpost.com) last year likened decisions about how to ‘fix’ U.S. campaign finance laws to deciding what to do when an old car breaks down. “Before you get out your wallet, you ought to think hard about whether such an investment makes sense, whether you should try a new model or whether you might be able to get around without a car at all.”

Perhaps rather than ‘clarifications,’ New Zealanders need to debate whether such restrictive campaign finance laws are needed at all. The rationale usually put forward in support of spending limits is that they ensure candidates from all walks of life can compete on a reasonably level playing field. But if you agree that this is based on the flawed logic that money can buy election victories, the need becomes less obvious. What is more obvious, and perhaps less in dispute is that, regardless of how you try to ‘clarify’ campaign spending, some fairly dodgy people can still win office.

Kirk MacGibbon is currently in exile in NYC

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