[EL] What (Then) Non-Millionaire Benefitted from The Millionaire's Amendment in the McCain-Feingold Law?

[Pildes, Rick]

I know this is what everyone is thinking about right now, but for those of you who teach the Davis v. FEC case and this issue, there are some very fun facts I was not aware of in the article Kate Shaw just published in the Election Law Journal on this short-lived provision of BCRA (not sure I can link to the article).  Turns out a major beneficiary of this provision was an Illinois state senator named Barack Obama.  Here is Kate's description:

The 2004 Illinois Senate race

When a one-term Illinois Republican senator named Peter Fitzgerald announced that he would not seek reelection in 2004, the Democrats sensed an opportunity to pick up a Senate seat.26<javascript:popRef('fn26')> A number of candidates entered the field, and two front-runners quickly emerged: Dan Hynes, the Illinois comptroller and scion of a local political family; and businessman Blair Hull, who in 1999 sold his trading business to Goldman Sachs for $531 million.27<javascript:popRef('fn27')> State senator and law professor Barack Obama, who had unsuccessfully run for Congress in 2000,28<javascript:popRef('fn28')> was one of a number of other candidates to enter the race.29<javascript:popRef('fn29')>

Hull made clear from early on that he intended to pour substantial sums of his own money into the race, pledging to spend up to $40 million.30<javascript:popRef('fn30')> In the end he spent $29 million of his own money, "an unprecedented sum for a Senate race in [Illinois],"31<javascript:popRef('fn31')> and at the time one of the top few Senate races ever in terms of personal expenditures.32<javascript:popRef('fn32')>

Recall that the Senate component of the Millionaire's Amendment entitled individuals running against the highest-spending self-funding candidates (and Hull's expenditures of his own money far exceeded the trigger) to accept contributions at six times the otherwise-applicable limits. This meant that in 2004, when the individual contribution limit was $2,000, opponents of self-funders could accept contributions up to $12,000.33<javascript:popRef('fn33')>

And Barack Obama, among others,34<javascript:popRef('fn34')> took full advantage of this provision. During just the primary campaign, Obama raised approximately $4.5 million; from the FEC records, it appears that just over $2 million came from 350 individual donors who gave at the elevated levels the Millionaire's Amendment allowed.35<javascript:popRef('fn35')> Without the increased limits, those donors would have been able to contribute only $700,000 in total-a difference of $1.3 million, or nearly a third of Obama's overall contributions in the primary.36<javascript:popRef('fn36')>

Hull's campaign ended up imploding, in part over domestic violence allegations substantiated by an order of protection his ex-wife had obtained;37<javascript:popRef('fn37')> once all of that came to light, the omnipresent advertisements and massive campaign staff enabled by his expenditures could not stop his slide. And by the time Hull's descent began, Obama was in a position to move into front-runner status. He ended up winning a decisive primary victory of 53%, with Dan Hynes in second at 24%, and Hull a distant third with 11%.38<javascript:popRef('fn38')>

I don't mean to make any sort of strong causal claim about the role of the Amendment in facilitating Obama's eventual victory.39<javascript:popRef('fn39')> But it does seem likely that the Amendment played some part. It was not a foregone conclusion that Obama would be the one to fill the gap left when Hull began to falter; at the time, most local politicos were betting on Hynes, whose name was well known and who had already won a statewide race. By contrast, Obama had never held national or even statewide office, though he'd been a state senator since 1996. But he was extremely well connected in a number of Chicago and some national circles, so he had access to a network of individuals who could give at a high level.40<javascript:popRef('fn40')> And this particular confluence of circumstances seems to have played some role in his eventual Senate victory-which positioned him, four years later, to win the presidency.

Best,
Rick

Richard H. Pildes
Sudler Family Professor of Constitutional Law
NYU School of Law
40 Washington Square South, NY, NY 10012
212 998-6377

-------------- next part --------------
An HTML attachment was scrubbed...
URL: <http://webshare.law.ucla.edu/Listservs/law-election/attachments/20170321/8cbd6a6e/attachment.html>