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John McCain’s signature campaign finance law was a real achievement — for its time

McCain’s work on campaign reform cemented his image as an iconoclast.

Sen. McCain Campaigns In Arizona
Sen. John McCain (R-AZ) speaks at a town hall meeting during a campaign stop at Pima Community College on April 24, 2010, in Tucson, Arizona. He died on Saturday at age 81.
Joshua Lott/Getty Images

From our current vantage point, with politics awash in money of murky billionaire provenance, John McCain’s best-known legislative achievement, the Bipartisan Campaign Reform Act of 2002 (a.k.a. BCRA, or the McCain-Feingold Act), might seem like a dead letter: irrelevant or worse.

But at the time it passed, the bill was correctly treated as a bit of a miracle, cementing McCain’s reputation as an audacious, bipartisan, and persistent reformer. McCain and cosponsor Russ Feingold, a progressive Democrat representing Wisconsin, had little institutional power and were regarded by their colleagues as moralists, rather than the wheeler-dealers who are presumed to get things done in the Senate.

Neither Democratic nor Republican leaders were enthusiastic about it, though Democrats ended up voting for it on principle (even expecting it would hurt them). All but a few Republicans opposed the most significant legislation on money in politics since the 1970s. And, unlike today, there was no significant grassroots movement behind the reform. Among legislative achievements, it can be uniquely explained mostly by the passion and skill of its advocates, rather than structural forces or interest-group incentives.

The bill remains central to the legacy of McCain, who died on August 25 at 81. He was also one of a very few presidential candidates to put campaign reform at the center of his platform, which helped him win the New Hampshire GOP primary in 2000.

Over the arc of his career, the choice to emphasize this reform over other domestic issues had a powerful effect of defining his character as defiant, independent, honorable, and committed to change. That reputation long outlasted the effective life of the legislation itself.

McCain-Feingold, explained

Conventional wisdom holds that the 2002 McCain-Feingold passed in reaction to that year’s Enron scandal, in which a high-flying energy company built on accounting fraud collapsed abruptly, followed by the last wave of high-profile white collar prosecutions.

But while Enron executives did cultivate political allies, it was mostly an accounting scandal, and there wasn’t much about it that would obviously lead to a campaign finance bill. Nor was there anything like the grassroots pressure for reform that has built on the left since the Citizens United decision — it was an elite concern at the time, but also a bipartisan one.

McCain-Feingold was the only bill passed in that first term of George W. Bush without the strong support of the president. McCain and Feingold, and allies in the House, moved the bill effectively through a largely uninterested Congress, to the desk of an ambivalent president.

In this task he had a strong psychological motivation: He hoped to wipe out the stigma of his mostly undeserved inclusion in the Keating Five, a group of senators who had gone overboard in helping a failed savings and loan owned by a major donor, Charles Keating, in the late 1980s.

Substantively, McCain-Feingold is best understood as an effort to fix problems identified in the 1996 and 1998 elections, when first Democrats and then Republicans figured out how to use funds designated for party-building — including money from corporations and unions that even now can’t give directly to campaigns — to win elections.

Parties couldn’t use that unlimited “soft money” for full-out election campaign ads, but the tagline, “Call Congressman Jones and ask him why he loves raising taxes,” had basically the same effect as an ad that said, “Don’t vote for Jones.”

Soft money could pay for those ads. And soft money had swollen to about $200 million by 1998, about one-third as much as the total raised by all candidates from both parties put together in their “hard money” accounts that year.

McCain-Feingold set out to close the soft-money loophole for parties, but supporters knew that it left open the possibility that outside political groups could run similar ads that stayed narrowly on the right side of the line defined by what was called the “magic words” test. (That is, specific phrases like “Vote for,” “elect,” etc. defined an ad as intended to influence the election.)

A pair of senators allied with McCain, Olympia Snowe of Maine and Jim Jeffords of Vermont, crafted a provision defining any ads mentioning a candidate by name within 30 days of a primary or 60 days of a general election as election ads, requiring that they be paid for with hard money, raised in limited amounts from individuals.

That key provision of McCain-Feingold became the nexus for the legal cases that would transform campaign finance law over the next decade. The law mostly survived its first challenge in the 2003 Supreme Court case, McConnell v. FEC, bolstered by an extensive body of evidence that these “issue ads” were indistinguishable from campaign ads.

But over the remainder of the decade, as the Rehnquist Court evolved into the Roberts Court, with its business-friendly interpretation of the First Amendment, this provision was slowly unwound, and ultimately discarded entirely in Citizens United. In that fateful decision, the court held that corporations and unions had the same right as individuals to fund ads supporting or opposing a candidate by name, as long as they operated independently of campaigns or parties.

On its own, Citizens United didn’t wipe out McCain’s campaign finance legacy, but the following year a circuit court cited Citizens United to allow the creation of Super PACs, which allow individuals and corporations to combine their unlimited contributions to influence elections, as long as they don’t coordinate with campaigns or parties.

Along with politicized nonprofit groups, which don’t disclose donors, such outside groups now routinely spend more than the candidates themselves in the highest-profile races, such as recent special elections.

And most of these “dark money” organizations, such as the Congressional Leadership Fund (the biggest spender on behalf of Republicans in recent elections, seeded with $20 million from casino magnate Sheldon Adelson and his wife), operate fully on behalf of one party. Even interest groups such as the NRA, which in the past strategically supported some Democrats who opposed gun regulation, are now effectively an arm of the Republican Party.

As a result of several court decisions, the abdication of enforcement by both the Federal Election Commission and the IRS (which should have cracked down on political activity by non-profit groups), and a shift in political culture as operatives have tested the limits of what they could get away with, the broken campaign finance system McCain and Feingold sought to fix in 2002 has roared back, with several more zeroes at the end of each spending figure, and even more anonymity than 16 years ago. Money from corporations and billionaires like Adelson no longer moves through official party committees, as it did in the “soft money” era, but that’s a meaningless distinction.

McCain held onto his role as the leading — and usually the only —Republican advocate on campaign finance

McCain denounced Citizens United as “one of the worst decisions in the history of the United States Supreme Court,” but never again pushed reform with the intensity of the 2002 effort. Still, he held on aggressively to his role as the leading — and usually the only —Republican advocate on the issue.

Senators often seek to “own” an issue by mastering details, sponsoring the key legislation, or chairing the relevant subcommittee. But for McCain, whose political identity was defined by campaign reform, it was a problem he couldn’t solve — yet he seemed reluctant to yield leadership to others.

Nothing related to campaign reform, lobbying, or related issues could happen without him. To be taken seriously, any reform would need bipartisan support, and McCain, on this issue, had cornered the market on bipartisanship. Even a Democrat who stepped onto McCain’s well-guarded lane would feel his wrath — as a new senator named Barack Obama learned in 2006 when he sought to join an effort for lobbying reform, but with a strategy that differed slightly from McCain’s preference.

A blistering and sarcastic letter from McCain to his future presidential rival concluded, “I have been around long enough to appreciate that in politics the public interest isn’t always a priority for every one of us. Good luck to you, Senator.”

McCain appeared to reenter the fray in 2012 when he sponsored the “Disclose Act,” which would have strengthened transparency requirements that the Supreme Court had explicitly endorsed in Citizens United, and that reform opponents such as McConnell had claimed to support. But McCain soon fell in line with his party leader, declaring the Disclose Act too favorable to labor unions and withdrawing support.

Mostly it was the nature of the issue, and the politics of reform, that changed. McCain’s preferred approach — centered on closing loopholes and tightening limits — had shown its inherent weaknesses, which included the hostility of conservative judges but also the unfeasibility of policing every channel through which money sought to influence elections.

Meanwhile, new approaches that used public financing to encourage candidates to stay within the regulated system and to reach out to small donors offered a promising new approach.

In fact, McCain’s home state of Arizona was among the first two to adopt a “Clean Elections” system, which provides qualified candidates with a fixed amount of public money sufficient to run and be heard. It’s one of a family of systems that encourage small donations, including New York City’s successful program that matches small-donor contributions, and Seattle’s vouchers, which gives every voter, regardless of income, a modest sum to donate to a campaign or party. These efforts have opened up the political system, increased participation, and because they enhance speech rather than trying to limit it, they are safer from judicial challenge.

Aside from a brief gesture of support for Arizona’s “Clean Elections” program, McCain did nothing to encourage these new approaches, and if there had been any other Republicans inclined to support them, the prospect of facing the wrath of McCain on one side, and on the other their party’s Senate leader Mitch McConnell, for whom opposition to all campaign finance regulation is a central pillar of his ideology, was surely a deterrent.

John McCain was not the first conservative Republican to support restrictions on the influence of big money in politics. (Well before the McCain-Feingold bill, there was one called Goldwater-Boren, sponsored in 1985 by the conservative icon who was McCain’s Senate predecessor.) But he may be the last. In our new political world, vast differences in forms of financing between the two parties (though not in total amounts spent) make mutual disarmament difficult to achieve. Republicans are dependent on Super PACs and political nonprofits, while Democrats appear to be building a funding apparatus based heavily on small donors.

No reform will have a balanced effect across the parties, as the soft-money ban did, but changes to the fundamental rules of democracy have traditionally needed cross-partisan assent. Unlike 2002, reform is no longer an elite, insider conversation; there is now an intense grassroots mobilization to moderate the role of money in politics. Unfortunately, that grassroots energy is entirely concentrated on one side of the political spectrum.

John McCain deserves great admiration for his signature legislative achievement, which defined his character and method. But it’s unfortunate that over the long period in which the Arizona senator dominated the cause of campaign reform, he was unable to broaden the range of solutions beyond those designed to solve a problem from 1998.

Mark Schmitt is the director of the Political Reform program at New America.

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