OSI Statement on U.S. Campaign Finance Reform and Independent Organizations

Since the Open Society Institute’s U.S. Programs began in 1996, one of the foundation’s central efforts has been to improve the functioning of U.S. democracy and, in particular, to promote an understanding of the influence of money on U.S. politics and to explore solutions that reduce this influence. OSI’s long-term goals have been to reduce the corrupting influence of very large donors to political parties and candidates, to increase public trust and participation, and to open the system so that candidates without access to financial resources can be heard by voters.

The Open Society Institute is a free-standing private foundation whose grantmaking is a matter of public record. George Soros and Soros family philanthropies have provided its funding, and Mr. Soros chairs the board of the foundation, but all decisions about grants are made by a professional staff with significant expertise on these issues. Furthermore, these decisions are reviewed periodically by a board of trustees. There is not and has never been any relationship or coordination between the activities of the foundation and George Soros's personal investment decisions or political activities as a private citizen.

Along with several other foundations, OSI supports organizations that helped develop the case for reform through research, public education, collection of campaign finance data, and testing of reform options at both the state and federal level. These organizations pursued a wide range of reform options, including restrictions on large donations such as those enacted in the Bipartisan Campaign Reform Act of 2002; public financing of campaigns such as the program now in effect in Arizona; free television time for candidates; fuller disclosure of contributions; and improvements to the presidential campaign system to deal with the problems caused by some candidates' refusal to participate.

Among the organizations OSI has funded are Public Campaign, Common Cause Education Fund, Democracy 21, the Campaign Finance Institute, and the Brennan Center for Justice at New York University; a large number of state and regional organizations; and research groups such as the National Institute on Money in State Politics. Grants have also been awarded to academic researchers, constitutional scholarship, bipartisan roundtables, and other efforts.

In the specific case of the Bipartisan Campaign Finance Reform Act, OSI funded factual research to support the legal defense of the act against a constitutional challenge raised by Kentucky Sen. Mitch McConnell (R), the National Rifle Association, and others—a challenge that is currently pending before the Supreme Court.

The chairman of the Republican National Committee has made a specific allegation about OSI, charging that the legislation the foundation helped to defend had the consequence of giving advantage to large contributors, citing George Soros in particular. This is not a claim that the particular kind of contributions Mr. Soros is making are illegal under the campaign finance reform law. Indeed, the argument made by the legal challengers to the law such as Sen. McConnell is that the law restricts the free speech of individuals who wish to make so-called “soft money” contributions. In fact, the law has significantly limited the potential influence of very large contributors, as well as corporations and labor unions. Before the new law, such donors could, and did, contribute millions of dollars to Republican and Democratic committees in support of candidates for federal office. Before the new law, such donors could, and did, contribute to organizations that ran advertisements in the weeks before the election, naming candidates for federal office and criticizing or praising them.

Under the provisions of the Bipartisan Campaign Finance Reform Act, large contributions can no longer be made to these party committees or to fund ads that mention candidates in the heat of the election. Nor can large donors or the groups they fund coordinate in any way with candidates or political parties. This is intended to reduce the influence of large contributors by limiting their role to efforts that focus exclusively on issues or seek to maximize voter participation in the election.

Such efforts are not only constitutionally protected, but because they have no direct connection to candidates for office, reformers and scholars agree that they have less potential for corrupting influence on officeholders. Many also believe that such efforts are beneficial to the functioning of democracy—for example, they are targeted to educating voters and increasing voter turnout among disenfranchised or disaffected groups. Also, under legislation passed a year earlier, such contributions to “527 organizations” are now required to be fully disclosed, and some donors have admirably gone even further by disclosing contributions well before the law requires.

Contributions to organizations that will be mobilizing voters or calling attention to particular issues—whether those contributions come from liberal, conservative, libertarian or other donors—are not incompatible with OSI's unwavering focus on reform of the political process. To the extent that they help more citizens engage in the electoral process, or that they substitute serious discussions of issues for the personal attack ads that can no longer be funded in this way, such contributions may well be beneficial to democracy. And because they are not connected to candidates or parties, there is less potential for corruption.