Politicians’ Message for the Rest of Us:Keep Out!

J. Justin Wilson
J. Justin Wilson · September 29, 2010

Arlington, Va.—“Stay home and leave politics to the professionals.” That is the message politicians in state capitols nationwide have for citizens hoping to make their voices heard this election season or any other, according to a new report released today by the Institute for Justice.

The report, Keep Out: How State Campaign Finance Laws Erect Barriers to Entry for Political Entrepreneurs, by University of Missouri economist and campaign finance expert Jeffrey Milyo explains the value of political entrepreneurs to the vibrancy of American democracy—and shows how campaign finance laws get in their way. IJ is releasing the report as part of its new Citizen Speech Campaign, a multi-state effort of litigation and advocacy to reclaim the right of ordinary Americans to speak out as loudly and effectively as they are able about the political issues that matter to them.

READ THE REPORT: www.ij.org/keepout



For a humorous look at how politicians learn how to enact campaign finance laws that stifle free speech, watch a three minute video.

According to Milyo, political entrepreneurs are people who form and grow new political voices and movements. They provide outside competition that keeps the political establishment on its toes, much as economic entrepreneurs drive innovation and change in the marketplace.

“Whether it is the civil rights movement of the 1960s or today’s Tea Party movement, outsiders in American politics have always played a crucial role in challenging the status quo by pushing new ideas to the fore and inspiring newcomers to run for public office,” writes Milyo.

Yet campaign finance laws in all 50 states erect barriers to entry for political entrepreneurs, just as occupational licensing laws and other regulations keep upstarts from competing with established interests.

Milyo examines two types of laws that erect barriers for independent political groups—that is, groups that advocate for or against ballot issues or candidates independent of the candidates’ campaigns: contribution limits and regulatory red tape.

In 22 states, it is illegal for a person to give more than a government-set amount to an independent group that advocates for or against a candidate. Such contribution limits make it harder for new groups to form and reduce the resources available for political advocacy.

Political entrepreneur and SpeechNow.org founder David Keating, who is profiled in Keep Out, explained, “When you have just a handful of people who feel strongly about an issue and the rest of the public hasn’t much thought about it yet, it’s hard to round up many small donations. You need a political venture capitalist willing to put in a large amount of seed money and attract other people to the cause.”

For example, Milyo shows that most new independent political groups that sprung up in the 2004 presidential election, such as America Coming Together, relied on a few very large individual contributions to get started. It is hard to imagine these groups becoming major players in the election without such seed funding. Yet, these contributions were far larger than federal contribution limits. They were also much larger than contributions to more established groups with built-in bases of support.

Even if the new groups had been able to form, they would have had fewer resources to speak. Milyo estimates that if four political groups active in the 2004 election had not been subject to limits, they might have raised between 53 percent and 599 percent more in individual contributions to spend on their speech.

Another barrier political entrepreneurs face is campaign finance red tape. In all 50 states, independent groups that want to speak about candidates are treated like political action committees, or PACs, as are citizen groups that want to speak about ballot issues in the 24 states that permit them. This means citizen groups, in order to speak, must register with the state, open a separate bank account, and complete a host of complicated forms tracking just about everything they do—all under threat of fines and other penalties for mistakes.

This is no small task. In earlier research, Milyo asked 255 people to fill out real-life forms for a small ballot issue committee. No one did so correctly. The average score was just 41 percent correct.

Keep Out tells the stories of a pioneering blogger and online activist in Colorado who was caught in the maw of campaign finance laws for writing a policy paper about a state constitutional amendment and asking her readers to donate to support her work, as well as a group of political enthusiasts in Florida who simply wanted to run some ads about a state constitutional amendment, but were silenced by all the red tape.

“These regulations raise the costs of citizen engagement and restrict the flow of resources to independent citizen groups,” concludes Milyo. “In fact, these regulations are so burdensome, it is apparent they are intended to deter political entrepreneurship.”

To bring an end to these laws, IJ is filing a federal First Amendment lawsuit today challenging Florida’s regulation of speech about ballot issues. It is also calling on officials in the states that still impose contribution limits and burdensome PAC requirements on independent groups to repeal those laws and bring their campaign finance schemes into compliance with the U.S. Supreme Court’s decision in Citizens United.

“These laws close the door to the political arena to anyone but the pros who already have a broad base of support and the know-how to navigate the complex web of restrictions without risking fines and jail time,” said IJ Senior Attorney Steve Simpson. “But under the First Amendment you shouldn’t have to hire a lawyer or an accountant to speak. In America, the only thing you should need to speak is an opinion.”