Shays’ Signature Bill

The Shays-Meehan House bill, the equivalent of McCain-Feingold in the Senate, is that single piece of legislation for which former U.S. Congressman Chris Shays is likely to be remembered, just as former Senator Chris Dodd’s congressional legacy will be forever bound up with his massive regulatory scheme, the Dodd-Frank bill. Mr. Shays at the tail end of January announced his candidacy for U.S. Senator Joe Lieberman’s soon to be vacant seat. The consequences of the Dodd-Frank legislation – more importantly, the unintended consequences of the bill – are still in the pipeline. But some of the less anticipated consequences of Shays-Meehan have already been amply displayed.

Initially, Shays-Meehan was designed to ban national parties from raising and spending “soft money.” The soft-money ban, upheld by the U.S. Supreme Court more than a year ago, limits individual contributions to political parties even if the money is to be spent on activities unrelated to federal elections. The bill also prohibited “federal officeholders and candidates from soliciting or raising soft money for political parties at federal, state, and local levels, and from soliciting or raising soft money in connection with Federal elections,” according to a summary of the bill prepared at the time by the offices of Mr. Shays and Mr. Meehan.

The bill additionally prohibited state parties from using soft money to pay for TV ads that “mention federal candidates and get-out-the-vote activities that mention Federal candidates.” Not wishing to hobble political parties altogether, Shays-Meehan permitted state parties and local party committees “to use contributions, up to $10,000 per donor per year, for generic GOTV activities and for GOTV activities for state and local candidates. Each state party or local committee must raise its own contributions and a portion of each expenditure must include hard money.”

Unintended consequences were not long in coming. The soft money ban and other provisions of the bill were to take effect November 6, 2002. Earlier in April of the same year, the Progressive Donor Network gathered in Washington to exploit a loophole in the law. A lengthy article on the convention was published in the Washington Times under the title "Democrats to exploit finance-law loophole".

Exploit they did. The loophole in the law was large enough to accommodate many of the usual suspects who, before the advent of the law, were presumably corrupting political parties with large donations. After the convention, they would similarly corrupt individual politicians, rather than political parties, by raising and spending unlimited sums of money to advocate for or against political candidates.The game was on. The amount of time that normally elapses between the creation of a bill to solve problem A and the subversion of the solution has diminished considerably in the modern age. Money in the political stream dammed up here always seeks a way there.

Later in the fifth inning, the Supreme Court knocked a part of McCain-Feingold-Shays-Meehan into a cocked hat when it ruled in 2007 that a portion of the bill violated First Amendment rights of free speech and assembly, still widely observed in the United States.

The Shays-Meehan bill, which initially sought to remove the deadly hand of corruption from national and state parties by decoupling large corporate and union donations from federal, state and local party organizations, following the Supreme Court decision left much of the financing in the hands of outliers that could raise and spend unlimited amounts of money advocating for individual candidates, nearly all of whom have set themselves up as petite political parties. This arrangement generously benefits incumbent politicians, lobbyists and ideologues but is hostile to party building. And indeed, incumbent politicians who are able to generate campaign funds from other questionable sources in return for favors done do not even see the defects of Shays-Meehan, because the unintended consequences of the bill help them and hobble their political competitors.

Most incumbent politicians begin their campaigns with vast sums of money their opponents cannot hope to match – the spoils of incumbency. And the Shays-Meehan bill does nothing to “even the playing field,” an expression favored by, just to pick one incumbent’s name out of a hat, current U.S. Senator Richard Blumenthal. It is generally supposed that Mr. Blumenthal will be moved from his seat only when he resigns, as had his predecessor, U.S. Senator Chris Dodd, before Mr. Dodd got his feet caught in a series of mini scandals that up-ended him in Hollywood where, pulling in a $2.5 million a year salary as a lobbyist, he will soon be a multi-millionaire, if not quite as wealthy as Mr. Blumenthal, Connecticut’s new senator for life.

And Shays-Meehan, which some critics have called “a congressional incumbent protection act,” will do nothing to hasten Mr. Blumenthal’s departure.