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March 1999 – Wealth Primary Filters Out Low Spenders

March 17, 1999
Contact Bob Hall, 489-1931

Supreme Court Justice, Legislators Say Action Needed

Competition between Democrats and Republicans has become more intense in North Carolina, but party labels still don’t matter as much as money when it comes to winning elections, a new study finds.

An analysis of the 1998 election shows that the top spender in contested races for the General Assembly won more than 8 out of 10 times, regardless of party affiliation. By contrast, legislative candidates who could not raise at least 60 percent as much as their opponent had only a 1-in-24 chance of winning a head-to-head race.

Overall, 9 out of 10 of the state legislators elected in 1998 either outspent their opponent or had no opposition at all.

“We’ve got a wealth primary today that filters out many good candidates, just as the white primary and poll tax excluded good people in the past,” said Pete MacDowell, executive director of Democracy South, the Chapel Hill campaign finance research group that conducted the study.

“The number of dollars, not the number of voters, typically decides who wins,” MacDowell said.

Voter turnout can still matter, however. A strong Republican showing in 1994 helped the GOP gain a majority in the House, with 19 members winning despite being outspent. Money still played a big role: 1994 was the first year the Republicans reached fundraising parity with the Democrats in House races. In 1998, the parties reversed roles as Democrats spent $1 million more on House races than they did in 1996, while the GOP added only $200,000 overall – and lost their majority.

The money factor plays such a dominant role in elections that some legal experts – including a former chief justice of the North Carolina Supreme Court – suggest it amounts to an unconstitutional barrier to political expression.

“I think arguments can be mounted that wealth is playing so large a part in our elections that people of moderate-to-low financial means are simply being drowned out,” James G. Exum, the retired NC Supreme Court chief justice, told a reporter recently. “That raises serious ‘equal protection’ problems under the state constitution.” [Exum is now at Smith Helms Mulliss & Moore in Greensboro.]

The power of money in elections is so great, he said, “it smacks of setting up an additional qualification for office. Either you have a great deal of money, or access to a great deal of money, or you can’t run.”

The study by Democracy South also found:

• The Money Advantage. The success rate for top spenders in contested races dipped to 77 percent in 1994 and 1996, but climbed back to 83 percent in 1998, which is almost where it was in 1992 before Republicans began investing heavily in General Assembly campaigns. Every candidate who spent $150,000 in 1998 won. In head-to-head contests, every candidate who spent at least twice as much as his or her opponent won (with one exception, Rep. Carolyn Russell’s reelection.) Candidates don’t always have to spend big to succeed, but if they can’t compete financially, they are generally doomed. In 1998, those with budgets under 60 percent of their opponents had a 96 percent failure rate.

• Incumbent Success. Special-interest money flocks to incumbents and gives them a substantial advantage over challengers, said MacDowell of Democracy South. In November 1998, incumbents outspent non-incumbents by a record-setting margin of 2 to 1, and 144 of the 154 incumbents who ran were elected. (The only incumbent to lose in the primary – Cindy Watson of Duplin County – was smothered with attack ads by the hog lobby, Farmers for Fairness, whose spending doesn’t show up on any election reports.)

• The Coattails Effect. In a majority of the cases where low-spenders won, they were either incumbents or were helped by the coattails of a high-spending winner from the same party in the same multi-seat district. Newcomers Rep. Junior Teague of Alamance in 1998 and Sen. R. L. Clark of Buncombe in 1994 fit the latter pattern, while incumbents Rep. Alex Warner of Cumberland and Sen. Ham Horton of Forsyth have survived repeated challenges from bigger spenders.

• Bid Up and Out. Highly competitive districts can quickly become uncontested when the price of winning climbs so high no challenger even attempts to outbid the incumbent. Wake County’s Charles Neely and John Carrington and Rep. Danny McComas in New Hanover are examples of high-spending winners in hard-fought 1994 or 1996 races who faced no major-party opposition in 1998.

• Uncontested Seats. The number of legislative candidates without a major party opponent in the 1998 general election jumped to 67, compared to 51 in 1996. Many of them still raised substantial funds, either to build up a war chest that might discourage potential challengers or to help finance the campaigns of their party teammates.

The increasing importance of political money – and the never-ending pressure to get more of it – is aggravating more legislators and fueling the call for serious campaign finance reform.
“The arms race in political fundraising is out of control,” said veteran legislator Rep. Martin Nesbitt (D-Buncombe). “I’ve looked at all the options and there’s really only one route we can take, given the rulings of the U.S. Supreme Court. We’ve got to offer candidates an alternative source of money if they voluntarily discipline their fundraising or abandon the big money chase altogether.”

While the U.S. Supreme Court has ruled that spending unlimited campaign money is a free-speech right, it has upheld programs that offer public funding to candidates who voluntarily accept spending and fundraising limits.

Judge Exum goes further, suggesting that the state may have a constitutional obligation to make sure candidates with genuine voter support aren’t excluded simply because they lack financial resources. “If your voice can’t be heard unless you have money, that’s a problem. We’ve about reached that point, and people know it – they’re closed out and turned off. It’s not unlike the old problem of taxation without representation.”

Like Nesbitt, Exum hopes the legislature will debate and enact a Clean Election program similar to one proposed last year by state Senator Wib Gulley of Durham. Such a program would provide a competitive amount of campaign money to candidates who (1) show strong support among registered voters in their district, by gathering hundreds of small donations and petition signatures; (2) agree to raise no additional private funds; and (3) strictly limit their spending.