The metaprinciple of implementation is to allow nondonors to ape easily any signal that true donors might try to send. If nondonors can mimic the signals of donors, then donors will have difficulty credibly communicating their contributions. This principle explains the specific regulations regarding donor speech, check cashing, and cooling-off periods. Instead of prohibiting donors from speaking, the regime allows nondonors to use the same words. To undermine the credibility of a donor's canceled check, the regime gives nondonors the option of acquiring an identical canceled check by merely cashing a check with the blind trust. And to undermine the credibility of mailing a check in the presence of a campaign worker, the cooling-off period allows nondonors to publicly donate and then privately cancel.
There are, however, limitations to the mimicry principle. A poor person can not credibly mimic the representations of a rich person - saying that she donated $100,000, for example. But it is unlikely that ability to pay is a close enough proxy for willingness to pay to cause politicians to kowtow to rich people generally. For example, if a law mandated that sellers of Cadillacs could not learn the identity of their customers, sellers would not respond by giving Cadillacs to the universe of rich people. Even if wealth (ability to pay) signals something about whether a donor actually gave, the important point is that the signal would be much weaker than it is now. Similarly, it would not be credible for liberals to represent that they contributed to conservatives (or vice versa). In the shadow of a donation booth, Ralph Nader could not credibly represent that he had donated to the Republican Party. At the end of the day, rich conservatives are the only people who would potentially make large soft money contributions to the Republicans. Therefore, it is reasonable to ask who among this group would be willing to go to the trouble of becoming a faux donor - to noise up the system, for example, by making the ratio of canceled checks to net donations fairly high. My answer is that the current class of Republican contributors who either feel they are being extorted or think they are paying for favors are prime candidates to fake donation. Victims of extortion are likely to have few qualms about lying to avoid the political shakedown, and even those contributors who are trying to corrupt the system by buying political favoritism may prefer to get the same favoritism for a reduced price.
Although this proposal tries to undermine a donor's ability to communicate her contribution credibly, I am under no illusion that this (or any other) system of anonymity would be completely successful in keeping candidates uninformed. Some inventive donors, with the aid of inquiring candidates, will undoubtedly devise methods to credibly signal. For example, donors or candidates may bribe a representative of the blind trust to violate her fiduciary duty and disclose donor identities.34 Undoubtedly, incumbents will have an easier time than nonincumbents discovering the identity of their contributors because a previous history of giving provides a stronger basis for belief; nonincumbents often must start with no track record of fundraising. But simply relying on reputation will not suffice. A history of giving when donations were public does not create a very strong reputation for continuing to give once contributions become anonymous. Candidates will rightfully be concerned that even faithful contributors, once behind the cloak of anonymity, will decide to chisel on their past tradition of giving.
The most predictable and serious evasions of mandated anonymity is likely to be a substitution toward "independent expenditures" or "issue advocacy." The test for what constitutes independence turns on who controls the content of the speech. Independent expenditures - in contradistinction to "coordinated expenditures" - fund political expression that is not controlled by a candidate's campaign. Independent expenditures are made without "prearrangement and coordination." The test for "issue advocacy" turns on the content of the speech itself. Issue advocacy - in contradistinction to "express advocacy" - does not expressly advocate the election of a particular candidate.
Because the Supreme Court has shown greater willingness to protect political speech that it deems either "issue advocacy" or an “independent expenditure,” mandating donor anonymity for large gifts would undoubtedly cause more extensive use of these two end runs. And it is clear that independent expenditures and issue advocacy still pose some danger of corruption. "Candidates often know who spends money on their behalf, and for this reason, an [independent] expenditure may in some contexts give rise to the same reality and appearance of corruption.”35
As shown in Figure 1, these two dichotomous categories create four permutations of control and content. Coordinated express advocacy, like candidate express advocacy, is the most regulated type of political speech. One might initially predict a hydraulic response if donor anonymity were applied to this category: Every dollar of direct contribution that the donation booth deterred might simply reemerge in one of the three other boxes - as an independent expenditure, an issue advocacy campaign, or both. Recent history has already provided ample evidence of substitution toward these three categories.36 What's more, because candidates are not accountable for "independent" ad campaigns, these campaigns are likely to be particularly negative and reckless. It is not surprising, therefore, that the infamous "Willie Horton" ads were independent expenditures.37
If mandated anonymity is likely to produce anything like a dollar-for-dollar hydraulic shift from direct contributions to independent expenditures or issue advocacy, the benefits of mandated anonymity reform would largely be lost. However, (1) mandated anonymity can be extended to reduce the possibility of an end run, and (2) where mandated anonymity is not constitutionally permissible, existing structural factors will ensure that independent or issue advocacy will not be a perfect substitute for corrupt, direct contributions. What would it mean to extend mandated anonymity? To begin, it is straightforward to cover coordinated issue advocacy. As a constitutional matter, coordinated speech can be regulated as much as direct candidate speech.38 And although there is currently a lively debate about whether current law regulates coordinated issue advocacy,39 there is little question that informational regulation (such as mandated disclosure or mandated anonymity) is constitutional.
Independent express advocacy poses a harder problem. This circumvention, however, could also be substantially reduced by requiring that such campaigns be funded solely by contributions from individuals (not corporations or unions) funneled through blind trusts.40 Under such a regime, organizations could establish committees to orchestrate independent express advocacy ad campaigns, but the funding for such campaigns would need to come from individuals' donations to blind trusts. As with the earlier anonymity proposal, individuals would be able to communicate credibly that they had contributed (up to $200) and thus, for example, have their names appear in a newspaper advertisement saying "we support candidate x." But such individuals would not be able to signal the amount of a large contribution.
Requiring that independent express advocacy be funded by individual anonymous donations would substantially reduce the viability of this circumvention. To be sure, some wealthy individuals would still be able to completely fund an independent express advocacy campaign.41 But given the costs of effective advertising, we predict that it would be difficult to raise individual contributions in the shadow of a blind trust. Those donors who are deterred by mandated anonymity from contributing directly to a candidate's campaign are unlikely to give to a blind trust that needs numerous contributions for effective independent express advocacy. And few individuals have the wherewithal to individually fund effective independent ads.
The most unyielding problem concerns substitution toward the upper right-hand box in Figure 1 - that is, substitution toward independent issue advocacy. This combination of content and control has proven constitutionally unregulable. Buckley v. Valeo suggests that mandated disclosure of speaker identity in this quadrant is unconstitutional, and mandated anonymity would fare no better. Still, some progress might be made by expanding the definition of what counts as express advocacy. The Supreme Court might accept a broader definition than the "magic words" test suggested in Buckley. The McCain-Feingold Bill attempts just this broadening by defining as express advocacy any advertisements picturing or naming a candidate within thirty days of a primary election or sixty days of a general election. But instead of capping such expenditures or requiring disclosure of the names of those people who fund such campaigns, mandating contributor anonymity would more effectively balance the government's interest in deterring corruption with the First Amendment interest in allowing unfettered discussion of political issues.
Even under the broadest imaginable constitutional definition of express advocacy, there will still be significant opportunity to use independent issue ads to affect the outcome of an election. But independent issue ads are not perfect substitutes for direct donations - especially donations made as part of quid pro quo corruption. As the Supreme Court has repeatedly emphasized:
Unlike contributions, such independent expenditures may well provide little assistance to the candidate's campaign and indeed may prove counterproductive. The absence of prearrangement and coordination of an expenditure with the candidate or his agent not only undermines the value of the expenditure to the candidate, but also alleviates the danger that expenditures will be given as a quid pro quo for improper commitments from the candidate.42
This quotation nicely underscores the procedural and substantive differences between direct contributions and independent expenditures. Procedurally, the absence of prearrangement and coordination makes it more difficult for candidates and contributors to agree on the terms of quid pro quo corruption. The inability of candidates to solicit these expenditures, in particular, is likely to reduce a candidate's ability to extort (extract rent from) potential donors. Substantively, the absence of prearrangement and coordination makes it more likely that the independent expenditure will be spent differently than the candidate would have spent a direct contribution. The Supreme Court is overly sanguine in suggesting that, "independent expenditures may well provide little assistance to the candidate's campaign and indeed may prove counterproductive." But because candidates would often use the money differently - for example, on express advocacy - candidates will tend to value $1,000,000 of independent issue ads less than $1,000,000 of direct contributions.43
Under a regime of mandated anonymity, candidates might still take positions in order to induce independent issue ads on their behalf (and vice versa), but the prohibition of both coordination and express advocacy acts as a tax on such indirect giving, tending to reduce its value to the candidate. Because mass communication exhibits dramatic economies of scale, it may be much more difficult for individuals who had been giving, say, $10,000 or $20,000 to the Democratic Party (and its candidates) to find an equally effective issue ad substitute. To be sure, independent issue ad organizations will start soliciting contributions, but these organizations are likely to find it more difficult to convince the erstwhile political donor to contribute.
While I concede mandated anonymity would lead to an increase in independent issue ads, I simultaneously predict that a regime of mandated anonymity would nevertheless reduce quid pro quo and monetary influence corruption by reducing the overall level of direct and indirect contributions - i.e., both independent expenditures and issue advocacy. A donation booth is likely to dramatically reduce the number of five and six figure “soft money” contributions. Moreover, mandated anonymity would prohibit the current practice of PAC bundling – whereby PACs gain influence with candidates by bundling together contributions from individual donors.
The predictable, hydraulic shift of contributions toward less accountable issue advocacy -- even if only partial -- is a reasonable grounds for ultimately opposing a mandated anonymity regime. But this hydraulic criticism perversely should also undermines the conviction that mandated disclosure by itself will be effective in deterring corruption. If mandated disclosure could deter corrupt direct giving, the hydraulic critics would have to fear that the same corrupt contributions would reappear as anonymous "issue advocacy" ads.44 Mandated disclosure might not deter corruption but merely shift it to less accountable independent expenditures. Proponents of mandated disclosure must admit either that finance regulation can sometimes deter unwanted direct contributions without creating an unacceptable substitution or that mandated disclosure is simply window dressing which is not really expected to deter unwanted contributions. My intuition is that the hydraulic response is not a concern when it comes to mandated disclosure because we don’t believe that disclosure deters very many direct contributions in the first place.