I $ New York

What are campaign finance reformers to make of the fact that Republican billionaire Michael Bloomberg was elected mayor of New York last month? Bloomberg’s success has reignited the issue of money in politics and underscored the power of constitutionally protected, wealthy, self-financed candidates. His personal spending of nearly $70 million and Virginia Governor-elect Mark Warner’s generous self-subsidy of his own campaign followed on the heels of the more than $60 million in personal money New Jersey Senator Jon Corzine spent in 2000 and the elections of millionaires Maria Cantwell and Mark Dayton to Senate seats in Washington State and Minnesota, respectively. Wealthy candidates are becoming more and more common, thanks to personal political ambition and the active recruitment efforts of party leaders. And, as these examples suggest, money rules.

Many people sneer at the folly of campaign finance reform attempts such as abolishing “soft money” and restricting so-called issue-advocacy ads on behalf of candidates. If multimillionaires have an open field to spend, critics of reform say, limits imposed on their rivals give the wealthy candidates an advantage: It’s like immobilizing one hand of a boxer in the ring with Mike Tyson. From this point of view, the best option is the laissez-faire notion of eliminating all restrictions on fundraising and letting the market decide.

The concern about the growing visibility and clout of wealthy candidates is both understandable and real—although the middling success rate of self-financed candidates means that the problem up to now is more like a migraine headache than a virulent cancer on the body politic. But the solution is not to abandon reform or to embrace deregulation of campaign finance laws; it is to adjust reforms so that they offer adequate resources for nonwealthy candidates to get their own messages across.

To be sure, the recent race for mayor in New York City should make reformers pause. The city’s system of partial public financing tied to voluntary spending limits is a model for many reformers. The law’s flexibility, after all, provides substantial leeway for a nonwealthy candidate to fight back against a self-financed opponent—flexibility that losing Democratic candidate Mark Green used fully. The spending limit that Green agreed to in return for public funds was suspended because of Bloomberg’s high spending, allowing Green to raise and spend whatever he could (around $15 million). At the same time, the public match for the funds that Green raised was increased from four-to-one to five-to-one, giving him a $610,000 addition to his public subsidy. And New York law had in place a contribution limit sufficiently high ($4,500, as opposed to the federal limit of $1,000) that Green could raise the additional millions to spread his message.

That was the theory, at least. Nonetheless, Bloomberg’s megaspending allowed him to dominate in the days leading up to the election. No doubt, he needed his money: He was a comparatively unknown candidate who lacked political experience and was working against the overwhelmingly Democratic tilt of the city.

Still, for all the power of Bloomberg’s independent wealth, no objective observer of New York City’s election could argue that money alone gave him the race. Several factors contributed independently to his narrow victory. For instance, the money would likely have been wasted had there been no September 11. The attack on Manhattan transformed incumbent Mayor Rudy Giuliani from a controversial figure to a lionized hero; his endorsement of his fellow Republican alone was worth as much as the millions spent by Bloomberg on last-minute ads touting that endorsement. The post-September 11 environment also erased much television and print news coverage of the mayoral campaign, thereby sharply elevating the importance of paid advertising. At the same time, the divisive Democratic primary and Mark Green’s failure to heal the resulting party wounds or to assure voters of his own leadership qualities contributed mightily to his defeat.

But it is hard to believe that Bloomberg would have been either nominated or elected without his prodigious personal spending. And even if Bloomberg’s money was not enough in and of itself to achieve victory, his election should serve as a wake-up call to traditional reformers. They have to acknowledge that reform laws that focus only on restricting money in politics will give an outsize advantage to the billionaires and a flashing green light encouraging more of them—whatever their credentials—to run for office.

Reform has to be adapted to this set of realities. And that requires a new perspective on the presumed panacea of spending limits, whether they are voluntary or not. It means higher federal limits on contributions—closer to the $4,500 in New York than to the $1,000 in current federal law. It means experimenting (as the McCain-Feingold bill does) with even higher limits for the nonwealthy to counter massive self-funded campaigns by wealthy candidates. It means that abolition of party soft money has to be accompanied by a generous supply of hard money to enable the parties to contribute more to their own candidates and engage in grass-roots voter-identification and mobilization efforts. Finally, it means free TV time and cheaper mailing costs for candidates who can raise substantial amounts on their own in smaller contributions from average citizens: Something billionaires can’t do.

Although the McCain-Feingold and Shays-Meehan bills in Congress have been roundly condemned by ultra-reformers for raising candidate contribution limits to $2,000 and increasing hard-money contributions to parties, the New York City experience suggests that McCain, Feingold, and company are at least on the right track. Better to have incremental reform than none at all.