[From my recent BNA piece-- footnotes not included here]:
    The "Millionaires' Amendment":  Mortals fear God, but incumbents fear self-funding candidates. As John McCain put it, "Everyone is scared to death of waking up in the morning and reading in the newspaper that some Fortune 500 CEO or some heir or heiress is gonna run against them and spend $15 million of their own money."  Self-funders usually lose- but win often enough. E.g., in 2000, two of the six successful Senate challengers were heavily self-financed. In 1998, of the three incumbents who lost, two were defeated by multi-millionaires.
     But BCRA protects incumbents against even mini-millionaires. When the "Millionaires' Amendment" was on the floor, Sen. Levin said "the playing field will be less level for the challenger. For instance, the challenger, who might want to put $1 million into the campaign ... may mortgage a home to get the $1 million so that he or she is able to compete against the incumbent, where the incumbent has $5 million in a campaign account. We make that situation less level, not more level, because the incumbent is able to then raise money at the higher contribution levels."
     If this provision had been law for the 2000 elections, it would have come into operation in 35 elections (15 primaries, 20 general elections).  To see how the provision works, use a House race as an example rather than bogging down in the "very complicated ... mind-boggling" calculations for Senate races.   If a House incumbent has a warchest of $500,000 (and as of 6/30/03, exactly 106 of the 435 Members already had that much) and the challenger mortgages her home -her only significant asset--for $1,000,000 and puts that sum into her campaign, then the incumbent (or other opponent) can get contributions of up to $6,000 instead of $2,000. In Senate races in 22 small States, donors to incumbents with warchests who face such mini-millionaires may be able to make contributions of up to $12,000. (Another benefit for opponents of self-funders: they're freed from the ordinary limits on "coordinated spending" by their parties.)
     The inconsistency between BCRA's premises--and sales pitch--and the "Millionaires' Amendment", is captured well in one brief for the Supreme Court:: "The Government has shown remarkable intellectual flexibility in defending strict contribution limits and limits on coordinated party expenditures as essential bulwarks against corruption, only to abandon those restrictions in the interest of aiding ... candidates facing wealthy opponents."
    And hiding behind the complex part of the Millionaires' Amendment is a simple provision even more damaging to challengers: No more than $250,000 in candidate self-lending can be repaid after the election. No surprise, this. In House races, self-funding loans total 0.53% of incumbents' total funds but 24% of challengers' total funds; that's for 2002, but the highest figure in years for incumbents was 1.36% in 1992, contrasting with challengers' lowest figure of 18% in 1996.
     Don't overlook the main role (of what obviously should be called the anti-Millionaires' Amendment): helping incumbents by discouraging self-funders (even mini-millionaires and people willing to take on debt) from running at all.

     For real reform, how about steps to reduce the unique, well-known hurdles facing women and minority candidates, and the incumbent-challenger gap?  E.g., how about adapting the Millionairesâ Amendment leeway, so as to allow non-incumbent women and minority candidates to raise up to $X from >$2,000 contributions, at least for early money?

--
Roy A. Schotland
Professor
Georgetown U. Law Ctr.
600 New Jersey Ave. N.W.
Washington, D.C. 20001
phone 202/662-9098
fax        662-9680 or -9444