Archive for the ‘Campaign Finance’ Category

Benefits and Inequalities of Matching Funds

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In 1977, New Jersey became the first state in the nation to implement public financing for gubernatorial elections.  According to New Jersey’s Election Law Enforcement Commission, the program “allows persons of limited financial means to seek election to the State’s highest office and to conduct campaigns free from improper influence.”   The statement evokes two clear goals of NJ’s matching funds program: 1) greater equality among competitors, and 2) less “improper influence.”

I am sympathetic to these goals, and find these programs difficult to reject on normative grounds. However in my opinion they are practically unworkable, and thus, impossible not to reject on practical grounds.  The key reason being that these programs do not work as intended and if anything, lead to less equality and a greater degree of “improper influence.”  I discuss my reasoning below.

Greater Equality?:

Because “elections aren’t won with prayers,” the reality of the political economic environment necessitates the use of money to translate political ideas into political speech.  Without an option of public funding, federal candidates must rely on wealthy donors, interest groups, and political parties (or themselves) for resources and financial support.  The outcome is that some candidates will inevitably have more resources than others.

Matching funds seeks to bridge the gap. Yet because of a Supreme Court case in 1976 (Buckley v. Valeo) that rendered campaign-spending limits unconstitutional, states may not compel candidates to participate in public programs, which almost always have caps on how much a candidate may spend.[1]  As long as candidates have this de facto “opt-out” alternative, the practical reality is that the only candidates that will use the public funds are the ones that need to.

The best example of this is New Jersey’s gubernatorial race.  There is little reason for Chris Christie to willingly limit his spending in order to participate in the public funds program, when he can raise money so quickly and easily.  On the other hand, his opponent, Barbara Buono, is all but forced to participate in the matching funds program. With a more limited fundraising operation, it is her best shot of maximizing the amount of campaign resources.

Of course, this is only a disadvantage to participants in matching funds programs if they shoulder some kind of significant burden that non-participants do not. Do they?  In a word, yes.  In order to receive the matching funds in New Jersey, the campaign must submit reports to the state every two weeks (accelerating to every week as the election nears).  These reports must include:

  • Donor name
  • Address
  • Employer & Occupation
  • Address of donor’s employer
  • Copy of the original check
  • Copy of the deposit slip (before depositing),
  • Copy of a stamped receipt of the deposit slip (after deposit)

In the case that the contributor was an LLC, then it must also be accompanied by a signed letter stating what individual the contribution should be attributed to.   In the case of credit card contributions, the campaign must obtain an original signature from each contributor, regardless of amount.  In case all this were not enough, all of this information needs to be submitted via proprietary database software that allows for one scan at a time, comes with many bugs, and will reject transactions for including full words such as: “avenue,” “street,” “boulevard,” “road,” “post office box,” “organization,” “committee,” and my favorite, “New Jersey”…plus approximately forty others.

In short, the fact that participants in matching funds programs are held to such high expectations in order to receive funds not only substantially increases their workload, but also engenders intense budget uncertainty, as it seems transactions can get rejected for nearly anything.   In New Jersey, this law that was intended to promote greater equality has led to an outcome whereby quite literally, the two major general election candidates are being held to different standards and expectations, and the underdog is far worse off.

Improper Influence?:

The second noted reason for implementing matching funds programs is to mitigate those seeking to influence politicians. …Influence politicians how exactly?  Pre-eminent scholars of campaign finance cannot agree on how money actually influences politics.  Let’s assume that “influence” means “to affect legislative policy in a way that without such influence, would otherwise have been different.”  This is the conception employed by political scientists Wayman and Hall (1990), who argue that money mobilizes legislators to write more favorable policy.  Taken to its greatest logical extent, this type of relationship between money and politicians can lead to bribery and corruption.

Yet more contemporary scholars observing the same outcomes arrive at far different conclusions.  Esterling (2007) argues the reverse – that PACs contribute to members that he calls the “workhorses” in Congress; those that write more policy, have greater leadership qualities, and value policy substance over style.  This conception of money in politics, as a reward for good work, undermines those that are based on the assumption that money is inherently corrupting.

Let’s assume that the term “influence” does not mean “to affect legislative policy or decisions of legislators.” Rather let’s assume “influence” means “some degree of donor representation.” And again, let’s use the example of New Jersey.  New Jersey’s matching funds program matches qualifying contributions 3:1.  It is not limited to individuals and organizations in New Jersey.  Rather, it includes contributions from any American individual, corporation, PAC, union, etc. from all 50 states.  It is not far-fetched to say that with Chris Christie up for re-election, that this race may attract national interest. For a campaign in a small state like New Jersey to be attracting national attention, it is not unfathomable to imagine a scenario where a substantial portion of contributions comes from out-of-state PACs, individuals, and organizations. This presents a thorny question: how is it that a program that could grant out-of-state interests three times as much “influence” as they would otherwise have, possibly lead to greater representativeness for the citizens of New Jersey?.[2]

MisMatched:

While money may be a necessary component of affecting political outcomes, it is in no way synonymous with, or by itself sufficient to achieve influence. Moreover, there is little evidence that matching funds programs leads to greater equality. This article did not touch on how matching funds programs has the potential to significantly widen the fundraising gender gap I discussed last month.  Nor does it discuss the costs of implementing the programs. Tangential benefits, such as greater voter participation, are also questionable. After implementing the public matching funds program in NYC, most recent mayoral election of 2009 witnessed the lowest voter turnout its had since the 1960’s.   In short, matching funds programs need to be seriously reconsidered. Legislating policy based on untested assumptions and before thinking through the potential outcomes is unwise at best and dangerous at worst.



[1] Note: spending limits are not the same as contribution limits, or how much a candidate can receive.

[2] I discuss this topic in greater detail here.

 

By Erinn Larkin, Compliance Director, PACs and Parties

 

Is it a Problem that the Vast Majority of our Electoral System is Financed by Men?

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A significant amount of journalistic attention is devoted to examining how campaign contributions influence who we elect to the U.S. Congress.  Such concern over the potential for “special interests” to exert inordinate amounts of power on our elected officials is clear; it is  antithetical to the notion of the “common interest” that underlies the foundation of our democracy (previously discussed here).   However, while it is often the case that special interests are presumed to be narrow interests  (i.e. “big oil,” unions, corporations, etc.), there is relatively less attention paid to how our campaign finance system affects groups that are too broad or cross-cutting to be called “special interest,” but may nevertheless be significantly impacted by the current campaign finance system. Specifically, the question I address here is whether it is possible that the campaign finance system is contributing to the gender disparity in Congress.  Is it a problem that the vast majority of our electoral system is financed by men?

Why the Gap?  How does the campaign finance system contribute to the problem?

Those that argue overt discrimination against women is a thing of the past note that women perform just as well as men in general elections. For example, no one was shocked this past April when Robin Kelly was elected in a special election to fill the seat previously held by Jesse Jackson Jr. in Illinois.  However it is also true that women generally have to raise more money to perform as well as men at the polls, while at the same time women perceive fundraising to be more difficult than men.  But why?

I suggest two reasons.  The first is the undisputed gender gap in resources: men make up a larger percentage of the work force and earn a higher income on average.  They therefore have more resources at their disposal to contribute to campaigns than women do.  The second, less obvious reason has to do with a particular FEC regulation governing the rules of “Separate Segregated Funds”  (SSFs), which comprise the vast majority of PACs that contribute to candidates and include corporations, membership organizations, unions, etc.  The regulation specifies that the only members of a company or organization that can be limitlessly asked to donate to the PAC are its executives, stockholders, and notably – their spouses.

While the 2012 Fortune 500 “boasted” a record number female CEOs, the grand total came to 18, just 3.6%.  The reality is that the majority of executives and stockholders are male, that in essence, are able to make contributions on their own accord as well as on behalf of their spouses. Taken to its furthest logical extent, the result is that a greater number of men enjoy de facto doubled contribution limits.

Gender of Contributor and Preferences Toward Male/Female Candidates

Of course for any of this to matter to gender fundraising disparity, it must be the case that women prefer female candidates and men prefer male candidates. To see whether there was any evidence for this, I took a sample that included 2975 individuals who made contributions to a subset of eight pairs of freshman candidates (one male and one female in each pair) within the critical first 100 days of the start of their respective campaigns.[1]

The table below presents the results of a quick analysis. I classified contributors that do not have employers and that list occupations such as “homemaker,” “self-employed,” “mother,” and “volunteer” as “working inside the home.”  Unsurprisingly, males constitute a higher proportion of overall contributors. When I exclude contributors (both male and female) that work inside the home, the average contribution for females declines substantially while the average contribution for males increases just slightly.  It also results in a decrease in the percentage of female contributors to 26%.  It is interesting to note that this percentage roughly corresponds to the percentage of women in Congress. (While this does imply causal relationship, it is nevertheless a fun number…not unlike Romney getting 47% of the popular vote in 2012).   Lastly, it is evident that females seem to prefer female candidates and males seem to prefer male candidates.

Does the Discrepancy Matter?

Arguably, the gender imbalance in Congress is only relevant insofar as it has an independent effect on legislative output that cannot be explained by other factors, such as partisanship.  In other words, if gender has no impact on an elected official’s behavior, then an imbalance, however disproportionate, may be functionally irrelevant.  Yet studies show female legislators devote more time and energy to what are informally referred to as “women’s issues,” including healthcare, children and families, women’s rights, gun control, and others.  Stylistically, women demonstrate more cooperative legislative strategies and collaborative approaches, while men tend to prefer more competitive, hierarchical tactics.  Thus it is reasonable to posit that a change in the proportion of women in Congress would have an impact on the nature and type of legislative output.

Particularly in a political time in which fundraising continues to grow in importance, it is important to be aware of how seemingly non-discriminatory formal institutions, such as the campaign finance system, may nevertheless result in discriminatory outcomes.

Contribution Statistics by Gender

Recipient Candidate

Male

Female

Total

Proportion

Average

Contributor

Male

1165 (58%)

870 (42%)

2035

68%

$899

Female

448(47%)

492 (53%)

490

32%

$920

Excluding Contributors Working Inside  Home

Recipient Candidate

Male

Female

Total

Proportion

Average

Contributor

Male

1150 (57%)

867 (42%)

2017

74%

$911

Female

336 (46%)

382 (54%)

718

26%

$799

Gender and Work Status of Contributor and Gender and Party of Recipient Candidate

Total

Mean

Work Inside

Average

Work Outside

Average

Males

To Male Democrats

801

$869

15

$582

786

$875

To Female Democrats

598

$857

3

$1525

595

$852

To Male Republicans

364

$1091

0

$0

364

$1094

To Female  Republicans

272

$901

0

$0

272

$901

Females

To Male Democrats

316

$1028

70

$1493

246

$874

To Female Democrats

379

$791

82

$972

297

$727

To Male Republicans

132

$1219

42

$1591

90

$942

To Female  Republicans

113

$795

28

$1019

85

$692


[1] The eight pairs, or sixteen total candidates, consist of individuals competing for Congressional office for the first time.  All chosen candidates won their elections in 2008 and subsequently were sworn-in during the 111th Congress.  The pairs were chosen based on the similarity of their ideology, district qualities, and partisan orientation.

 

By Erinn Larkin, Compliance Director, PACs and Parties

What is the Point of Campaign Finance Reform?

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Adam Lioz’s recent article titled “Half a Step Forward and a Full Step Back: Can Connecticut Maintain its Leadership on Money in Politics?” calls attention to the on-going trend of weakening campaign finance regulations across the country.  His argument included a litany of potential policy options aimed at reversing this trend. Some of the suggestions included eliminating spending caps for publicly funded candidates, a greater ratio of matching funds, and tax credits that incentivize more people to contribute.

While the policy alternatives put forth have interesting implications, an expansion of them is beyond the scope of what I seek to achieve today.  Rather, my purpose here is to discuss the critical flaw imbedded within various calls for reform (including this one), which is that there is a conspicuous absence of any specific goals that reformers hope to achieve through policy change.

First, the foundational arguments upon which progressives pursue campaign finance reform continue to be unclear.  For example, the author first speaks of Connecticut’s Citizens’ Election Program as welcomed solution to the “scandal and malfeasance” within Connecticut state politics in the early 2000’s.  He then goes on to proclaim, “the point of the Citizens’ Election Program is to give ordinary citizens and not wealthy donors the power to control who runs for office and who wins elections—so that elected officials will be accountable to their voting constituents, not a separate class of “cash constituents.” The difference between these two purported goals are subtle, yet profound. The former purports strict campaign finance regulations to be a means of mitigating corruption and malfeasance.  The latter professes notions of equality and constituent representation to be the primary goals of regulation.

Context also needs to be addressed. As the author notes, the Connecticut laws arose as a reaction to crisis. Thus it seems reasonable to assume that a decade later, it might be necessary to reevaluate the law to determine whether the changes were effective.

Lastly, the author refers to Senator Chris Murphy and his characterization of campaign fundraising as “soul-crushing.” Many officials have made similar complaints – often in reference to the time and energy they necessarily have to devote to raising money for their campaigns. I would agree with the author that this is problematic. However it remains unclear to me how a system by which officials are forced to spend a greater amount of time and effort in order to attract lower dollar contributions from individuals less likely to want to contribute is an efficient means of solving the problem.

Until there is agreement on specific goals that can be attained through policy change, I feel the general public will be unwilling to listen to their arguments, and will remain unconvinced that reformers are not fundamentally motivated by their own bias. For example, there was little complaint about notions of equality from progressives regarding the vast fundraising discrepancy between presidential candidates John McCain and Barack Obama.

As I noted on this topic in December, my criticism of progressive calls for reform is not to suggest that it is an unworthy cause or that it should be abandoned. Rather, it is a plead for reformers to eliminate fuzzy objectives that could best be described as “better government,” in favor of clear, established goals. Only then will reformers be able to demonstrate precise ways in which their policy proposals solve specific problems.  And only then will they have a chance of garnering public support for their cause.

By Erinn Larkin, Compliance Director, PACs and Parties

Campaign Finance Regulation Needs a Home

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The Federal Election Commission can no longer be considered the sole federal agency tasked with regulating federal campaign activity.  As a recent New York Times article suggests, the Securities and Exchange Commission may soon require publicly traded corporations to disclose the names of individuals who contribute to various so-called Super PACs.  Not surprisingly, the measure is strongly opposed by business organizations such as the Chamber of Commerce, which argue that such measures would infringe on the group’s right to free speech. The Internal Revenue Service has also been highlighted recently for its alleged overreach in targeting tax-exempt 501(c)(4) organizations associated with the conservative Tea Party.

These latest events highlight just how thorny of an issue campaign finance regulation has become.  Agencies that are not normally tasked with any kind of campaign regulation have found themselves forced to overcompensate for a seemingly ineffectual FEC.

In international relations, the term “proxy war” is used to describe a situation in which two opposing parties utilize a substitute, or a third party, as an alternative to fighting each other directly.  What Citizens United seems to have engendered, is a proxy war between liberals and conservatives in which government agencies are being used as reluctant battlegrounds.   As we have witnessed this past week, the results are at best messy, and at worst, damaging to the overall legitimacy of the federal government.

The longer both sides continue to battle one another over procedural matters in multiple agency arenas, the more distant they become from their purported fundamental purpose for being, which is to engage in political advocacy.  Not to mention, of course, the more contributor money they waste in the process. But is there any alternative?

These organizations might benefit from looking back to 2004 and the similar issues brought forth by so-called “527” organizations and their apparent exemption from the recently passed Bipartisan Campaign Reform Act of 2002 (also known as McCain-Feingold).  The crucial similarity between the battles being waged today, and those of the past, boil down to one thing: the definition of a “political committee” as defined in the FEC Act.

The difference between the strategies implemented today versus 2004, is that in the latter, watchdog groups and political parties funneled all their complaints and fought all their battles in one arena – the FEC.  Both sides filed complaints and the FEC came down hard on 527’s, primarily for failing to register as political committees.  As a result, America Coming Together was fined $775,000, the Media Fund was fined $580,000 and the Swift Boat Vets and POWs for Truth were fined $299,500.

A strategy that devotes resources to one specific arena (namely, the FEC) could be particularly beneficial for liberals and other proponents of increased disclosure.  The Supreme Court unambiguously upheld disclosure laws as constitutional.  If disclosure is the bottom line, then liberals and supporters need to bring the fight back to the FEC where they maintain a home turf advantage. Otherwise, they risk undermining their cause by fighting procedural battles in agencies that have little interest in regulating campaign activity and little incentive to become enmeshed in a political battle as contentious as campaign finance.

 By Erinn Larkin, Compliance Director, PACs and Parties

 

What Can We See in Q1 Reports?

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In addition to being tax day, April 15 was the deadline for federal campaign committees to file their first fundraising report of 2014.

The amount of activity contained in these reports helps us speculate about what implications these numbers may have with respect to the 2014 elections.

Power of Incumbency – One of the most obvious signs of these early reports demonstrates is the advantage of being an incumbent. This past January, eighty-one freshman members of the US House were sworn in. Of those eighty-one, twenty-five raised over $250,000 in the first quarter of this year. Many of these incumbents are expected to be somewhat vulnerable heading into the next election.    Challengers simply do not have the resources and apparatus to  raise the kind of money that incumbents can at such an early point in the election cycle; many of them have yet to even declare their candidacy.

Therefore,  incumbents have the benefit of a de facto head-start in the fundraising race. Only a handful of vulnerable members have opponents eighteen months before the next election.   This means that  incumbents often have somewhere between a  $300,000-$500,000 head start before they even have a declared opponent.

A Glimpse of the Future – These numbers may also provide insight into whether an incumbent is considering a run for higher office in 2014.

House members Gary Peters (D-MI) and Tom Cotton (R-AR) are two potential examples of this. Peters proved his fundraising ability by netting $371,000, and in turn, demonstrated that his legitimacy as a possible contender to replace the retiring Senator Carl Levin (D-MI). Cotton is rumored to be considering a challenge to Senator Mark Pryor (D-AR); he raised $526,000 over the past three months, which places him at the front of the pack for Senate challengers.

These reports also show the opposite; that some incumbents are not ready or willing to make a run for higher office. Many in the Tea Party had dreams of Steve King (R-IA) running for the open Senate seat in his state, even though the Republican establishment was rooting for his colleague Tom Latham (R-IA). Latham seems to have won this round by raising $300,000 – more than three times what King raised(amounting to just under $93,000).

Thinking about a Comeback? – We can also look at the reports of members who lost in November to see who is plotting a comeback bid. The quickest way to identify a candidate not considering a bid is to look at who has terminated their campaign committees. Already over 100 campaign committees from 2012 have closed including defeated incumbents on both sides of the aisle.

We can also look at committees that remain open to see who might be thinking of a comeback or considering retirement. The outspoken former Congressman Allen West is likely not considering another bid; his committee transferred $400,000 from his committee to his non-profit foundation. There are also signs from losing candidates that might be considering another bid. Those committees tend to hold onto as much of their cash-on-hand as possible and spend on some limited expenses like polling, fundraising, and paying down debt that could inhibit a future run.

By Nick Daggers, Vice President, Fundraising

Why is the Senate Electronic Filing Bill Deemed Unlikely to be Enacted Despite Near Consensus?

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Few issues or policy realms have the power to bring together alliances like those witnessed in the now infamous Citizens United case, which pinned the ACLU, NRA, AFL-CIO, and Chamber of Commerce against an alliance that included the American Independent Business Alliance, the DNC, and Senator John McCain (among others).  Even fewer have the ability to kindle bipartisanship and consensus in a political landscape characterized by polarization and gridlock. Yet the Senate Campaign Disclosure Parity Act introduced by Senator Jon Tester earlier this year has indeed managed to receive bipartisan support.   The bill would compel Senate candidates to electronically file campaign finance reports along with the other federally registered committees that have been doing so since 2001 (PACs, Parties, and House Members). The bill would save time, tax dollars, and improve disclosure and transparency.

So why do organizations like GovTrack.us, which track the statistical probability of legislation being enacted, give the bill a 10% chance of success?

In 1971 when the FEC Act was originally enacted, the law dictated that Senate candidates file their reports with the Secretary of the Senate who would then forward them to the FEC. All other committees were to report directly to the FEC. In 2001 when the FEC required that almost all committees file their reports electronically, the Senate was exempted from the law and has continued to file on paper ever since.

Why shouldn’t the Senate be allowed to continue filing on paper?  There are several reasons why compelling the Senate to file electronically is a common sense law. First, the current procedure is inefficient. The candidate sends their report to the Secretary of the Senate, who then forwards the report to the FEC. The FEC then sends it to a third party firm that re-types the reports, enters them into a database, and sends the information back the FEC. Only then is the information available to the public.  By contrast, reports thatare uploaded electronically are instantly available to the public.

Second, the current procedure is costly.  The FEC estimates that having the Senate file electronically would save tax-payers just under $500,000 per year. It would undoubtedly save candidates the expense of printing and sending hundreds of pages worth of reports at-least four times a year.  It also unnecessarily wastes the time of government employees.  Because the Senate reports need to be re-typed, every time a campaign finance analyst finds a potential violation, they must then locate the paper image to ensure it corroborates with the re-typed data.  Such a time-consuming, redundant process is obviated by electronically filed reports.

Lastly, it would provide greater transparency.  While the FEC pays for the service of re-typing the data, it is entirely for their own review purposes. The formatted data is never made available to the public. Therefore, individuals interested in reviewing Senate reports must scroll through hundreds of pages of text-unsearchable PDF images.  For all these reasons, the measure to compel the Senate to file electronically has received widespread support and near consensus among all parties involved.

Why might the bill fail regardless of such widespread support? Those interested in the passage of the Senate Campaign Disclosure Parity Act of 2013 should pay attention to the behavior of Senator Mitch McConnell and his role in the failed Senate Campaign Disclosure Parity Act of 2007.  Senator McConnell first placed an anonymous hold on the bill (when pushed, he later revealed his identity).  He then attempted to attach an amendment that would loosen coordinated expenditure laws between parties and candidates.  In short, he sought to negotiate for policy reform when the matter at hand concerned procedural reform, which to many, was simply too unreasonable and unequal of an exchange.  Observing McConnell’s disposition toward the current bill may provide insight into its chances of ever getting past committee and on to the floor for a vote.

 By Erinn Larkin, Compliance Director, PACs and Parties

The latest challenge to McCain-Feingold: McCutcheon v. FEC

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A recent article by in the Huffington Post by Jay Pinho alludes to the thorny spot that progressives have found themselves in vis-a-vis campaign finance rules, ever since the Supreme Court decided the Citizens United case in 2010.  He discusses the recent victory of Robin Kelly the IL-2 special primary election, and the instrumental role that Michael Bloomberg played in Kelly’s electoral success.  Bloomberg flooded the race with money in order to make good on his promise to support gun control advocates.  The point he makes is this: how do Democrats celebrate these progressive victories, while at the same time, work to reverse the rules the allowed them the power to get their message out in the first place?

Pinho also mentions the frustration felt among progressives in knowing that the Supreme Court has the potential to further roll back campaign spending rules when it hears the McCutcheon vs. FEC case in October.  He states, “in conjunction with the Court’s notorious Citizens United v. Federal Election Commission decision from 2010, which lifted the ban on corporate expenditures and led to an explosion of outside spending during last year’s election campaigns, such a ruling in McCutcheon would augur a decisive transformation of American electoral norms — from “one person, one vote” to something approaching ‘one dollar, one vote’.”

The McCutcheon case challenges the constitutionality of individual aggregation limits, which refer to the maximum amount that one individual can contribute to parties, PACs, and candidates during any two year election cycle.  For the 2013-2014 election cycle, this amount is $123,200.  Of this amount, no more than $48,600 can go to candidates; the remainder must go to either PACs or party committees.  This limit should not be confused with the maximum amount that candidates are allowed to receive for their campaigns, which remains unchallenged, and at $2600 per election.  If the Supreme Court sides with McCutcheon, then this limit will be abolished, and individuals will be free to contribute the maximum allowable amount to as many candidates as they choose.   Thus, the case can perhaps be better  understood as an attempt to abolish the limit on the number of candidates individuals can support, rather than the amount of money they can spend per se.

There are several reasons that progressives should take pause before automatically lambasting all individuals, organizations, or proposals to alter extant campaign finance regulation.  First, the practical effects of eliminating individual aggregation amounts is likely to be minimal.  At the current limit, individuals can “max-out,” in other words, contribute the maximum amount of $2600 to both the primary and general elections of a particular candidate, to no more than nine congressional contenders during a two year period.   Of the very small percentage of Americans that contribute to congressional elections at all, an even smaller amount max-out to any one candidate.  The number of individuals who max-out to nine candidates, and exhaust their $48,600 allowance, is minuscule in proportion.

Second, if candidates are to become less reliant on Super PACs and other outside groups, then measures that make it easier to raise money in a transparent way, and in accordance with contribution limits, could be a beneficial thing.  It is impossible for one organization, party, or even Congress, to control the political messages that make it to the airwaves.  What these organizations can control is who is accountable for the messages that are made, and their level of transparency.   Unlike ad hoc organizations like Super PACs, elected officials and candidates are accountable for the statements they make and their legitimacy is dependent upon it.  Therefore measures that empower candidates relative to outside organizations perhaps deserve a second look by progressives that desire an improved campaign finance system.

 

CFO Consulting Group Expands, Adds Public Affairs Practice

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For Immediate Release:
Wednesday, February 13, 2013                                                                                                 

CFO Consulting Group Expands, Adds Public Affairs Practice

Campaign Fundraising and Compliance Experts Announce New Public Affairs Practice, Clients

WASHINGTON, DC – Today, CFO Consulting Group announced a major expansion of services in the form of a new Public Affairs practice. The enhanced offering expands on the development/fundraising and compliance services for which CFO has become well known and regarded within the Democratic campaign, non-profit, and issue advocacy space. CFO Public Affairs also announced its first clients including the Greater Providence Board of Realtors and the City of Providence, Rhode Island. During the 2012 election cycle CFO Consulting Group assisted the successful $25 million affordable housing bond campaign in Rhode Island.

After 5 years of intense focus building our compliance and development practices, we’re excited and ready to expand once again,” said CFO Consulting Group founding partner Brett Smiley. He continued, “CFO remains committed to providing our clients with the attention they deserve and results they need to be successful. We look forward to helping them meet the challenges ahead.”

With deep roots in electoral politics and issue advocacy campaigns, CFO Public Affairs offers clients an array of results driven services needed to exceed even the most challenging objectives. Having held leadership roles in races from California to Chicago to New England, founder Brett Smiley has mastered effective and creative messaging, harnessing the power of coalitions, and developing winning strategies.

The practice is anchored in Southern New England and builds on nearly a decade of work with the region’s biggest Mayors, statewide elected officials, and members of Congress. Its hands-on team of political professionals gives every project the careful consideration and intense focus it deserves.

With its particular expertise in local government, CFO Public Affairs is uniquely suited to assist developers and those working with municipalities. Additionally, as the prevalence of ballot initiatives continues to grow, the practice’s unparalleled electoral experience is an invaluable asset for those seeking to win at the ballot box.

Few can match the experience, innovation, and expertise that CFO Public Affairs leverages on behalf of clients.

Selected CFO Consulting Group Past and Present Clients

Over the years, CFO has assisted dozens of clients with development/fundraising and compliance services, including:

Melissa Bean for Congress (IL), Robin Carnahan for U.S. Senate (MO), David Cicilline for Congress (RI), Matt Dunlap for U.S. Senate (ME), Elaine Marshall for U.S. Senate (NC), Jim Neal for U.S. Senate (NC), Steve Pagliuca for U.S. Senate (MA), Dennis Anderson for Congress (IL), Russ Carnahan for Congress (MO), John Carney for Congress (DE), Leslie Coolidge for Congress (IL), Susan Davis for Congress (CA), Val Demings for Congress (FL), Tammy Duckworth for Congress (IL), Bill Foster for Congress (IL), Eric Griego for Congress (NM), Debbie Halvorson for Congress (IL), Janice Hahn for Congress (CA), Scott Harper for Congress (IL), DK Hirner for Congress (IL), Anne Kuster for Congress (WI), Rob Miller for Congress (SC), Walt Minnick for Congress (ID), Natalie Mosher for Congress (MI), Mark Pocan for Congress (WI), Mike Quigley for Congress (IL), Maureen Reed for Congress (MN), Heath Shuler for Congress (NC), Diane Smith for Congress (MT), Syed Taj for Congress (MI), John Tree for Congress (IL), Frederica Wilson for Congress (FL), Charlie Fogarty for Governor (RI), Phil Angelides for Governor (CA), Peter Kilmartin for Attorney General (RI), Patrick Lynch for Governor (RI), Ralph Mollis for Secretary of State (RI), Angel Taveras for Mayor (RI), Asian Political Leadership Fund, Hartford Humanities Fund, Illinois Democratic County Chairman’s Association, Vanguard Healthcare PAC (IL), Tom O’Donnell for Alderman (IL), Friends of Ric Munoz (IL), Linda Holmes for State Senate (IL), Dave Koehler for State Senate (IL), Mike Noland for State Senate (IL), Celia Gamrath for Cook County Judge (IL), Tim O’Brien for Mayor (New Britain, CT), Pedro Segarra for Mayor (Hartford, CT), Hartford Humanities Fund, Ocean State Tall Ships, Providence Tourism Fund.

About CFO Founding Partner Brett Smiley

Brett Smiley is the founding partner of CFO Consulting Group offering clients results driven services meeting all of their public affairs, development, and compliance needs. After beginning his career as an accountant, Smiley fell into electoral politics in his hometown of Chicago. From 2002 to 2006, he traveled the nation as a professional campaign manager and fundraiser for candidates on the state and national level. In 2007, Smiley founded CFO and over the past five years, his team has helped dozens of candidates, Democratic parties, political action committees, issue advocacy organizations, and charities meet and exceed their fundraising, accounting, and compliance goals. His background in managing everything from a hundred thousand dollar county board campaign to a multimillion-dollar gubernatorial bid provides him with the perspective and expertise needed to assist clients at all levels. Rare for a campaign professional, Smiley holds an M.B.A. and Finance degree from DePaul University in Chicago. He resides in Providence, Rhode Island with his husband James DeRentis and is active with a variety of charitable and political causes including the Victory Fund.

Contact: Karl Frisch

202-681-5275 phone kfrisch@bullfightstrategies.com

 

Hulu, YouTube, and Campaign Finance Laws

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A recent article in the New York Times titled “Technology Leaders Endorse Effort to Overhaul Campaign Finance,” reports that a group technology leaders and venture capitalists have come together to endorse an overhaul of the State of New York’s campaign finance system.   The group is urging Governor Cuomo to pass public financing legislation modeled after the current program in NYC .  The system provides matching funds to candidates that attract small dollar donations.  The authors argue elections are “dominated by a small group of affluent campaign donors, professional influence-peddlers and deep-pocketed vested special interests” and “more often than not, big money gets its way.”

The rhetorical denouncement of “special interests” is popular in both parties, and the reason is clear: it is antithetical to the notion of the “common interest” that underlies the foundation of our democracy.   Walter Lippmann once said that in American politics, the “public interest” can be likened to an all-powerful, “god-like” conception.   In this case, the authors seek to strengthen the public interest by implementing a system they argue will reduce undue influence of big business, enhance participation, and strengthen democracy.

The reality is that the average person will never contribute to a political campaign, even if their funds are matched.  The percent of Americans that do contribute is quite small.  While the intent among reformers is to balance some of the disparities that exist between the wealthy and less wealthy in society, what they will in fact be doing is balancing the disparity within one small part of society: the universe of political contributors.  A matching system would grant “enhanced representation” to a specific group, in this case, politically-motivated yet resource-poor contributors.

The example they note is NYC system, and yet in the most recent mayoral election of 2009, NYC witnessed the lowest voter turnout its had since the 1960’s.  Still, there may be inherent value in decreasing the wealth and power disparity within the universe of contributors by empowering small dollar donors.  What effect will this have?  One key characteristic that distinguishes high dollar donors from low dollar donors (in both parties) is that low dollar contributors are more ideological and partisan.  Thus it is not unreasonable to question whether empowering the universe of small donors could lead to higher levels of polarization.  Polarization of course, is one of the main reasons why public confidence in government among Americans is so low, as the authors note.

All this is not to suggest that reform should be abandoned, or that small dollar contributors should be marginalized; quite the opposite.   It is a call to abandon rhetoric that depicts money in politics as inherently evil, and public financing solutions as inherently good.  Lippmann was on to something when he referred to the public interest as god-like, because like a god, the public interest is not an empirical entity.  It is impossible to know what an unbiased system would look.  The group noted  here, for example, includes venture capitalists and CEOs of companies including Foursquare, Gilt, Etsy, Meetup, Twitter, Tumblr, and others. Ironically if they are successful, they will have provided one more data point to their key complaint, which is that big money tends to get its way.

In order to avoid these inevitable contradictions, reformers should focus their efforts on procedure, and on actual effects that reform will have on how campaigns operate.  They need to clearly link how rule X leads to outcome Y and has Z detrimental implications.  Without concrete examples, no amount of decrying “the evil of money in politics,” even after a substantial change in the dynamics of money in politics like Citizens United, is going to incite public support.

Links:

(1) http://www.brookings.edu/research/books/1999/new-liberalism

(2) http://www.press.uchicago.edu/ucp/books/book/chicago/L/bo6683614.html

 

Timeline: A People’s Pledge

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Incumbent Senator Scott Brown and his Democratic opponent, Elizabeth Warren, have made headlines this election year by agreeing to eliminate third-party involvement in their closely-contested United States Senate race in Massachusetts. For almost 10 months, the two candidates kept their pact alive.

Until now.

With neither candidate gaining a significant lead in the polls, third-party groups have begun to take action.

In five hundred words or less, here is a detailed timeline of the rise and – perhaps imminent – fall of Scott Brown and Elizabeth Warren’s ambitious political pact.

2010: Sen. Brown starts the conversation

In 2010, Scott Brown ran against Martha Coakley in a special election to fill the vacant Senate seat created after Senator Ted Kennedy passed away. At the beginning of his campaign, he urged third-party groups to stay out of the race, saying he and his opponent needed to “do their jobs” and not get “sidetracked by red herring issues.”

November 2011: Elizabeth Warren announces her candidacy for the 2012 election

Shortly after declaring herself as a candidate for the Democratic Senate nomination, Brown once again released a statement asking for independent groups to pull their attack advertisements.

January 2012: The People’s Pledge

Senator Brown challenged Warren to join him in his effort to eliminate third-party spending in their election. After weeks of negotiation, on January 23rd, a final draft of their agreement was presented to both candidates. Scott Brown grabbed a blue pen; Warren, a black one, and with their respective signatures, the People’s Pledge was made official. Both candidates were applauded for their bipartisanship, and average citizens rejoiced.

February 2012: Both sides want credit

Since their successful agreement proved to be popular with the media and voters, Brown and Warren argued back and forth as to who deserves more credit for its success. Brown’s camp reminded the media it was his idea from the beginning, while Warren claimed that the original proposal she received “included loopholes that Karl Rove could drive a tank through.” Despite their arguing, both candidates remained true to their word. Independent groups continued to stay out of the election. Average citizens continued rejoicing.

 

March: The agreement is tested.

In early March, an oil lobbying group produced and aired radio advertisements in Brown’s behalf. One day later, Brown’s campaign delivered a $36,000 check to the Autism Consortium in downtown Boston.

Brown stated he was happy to help a good cause, and both candidates said they were thrilled that nobody had attempted to find loopholes in their agreement.

June-July: Polls are neck and neck

The Senate race in Massachusetts quickly became one of the most closely-contested elections in the nation. In early July, Warren was beating Brown in the polls by two percentage points, 43% to 41%.

In such a close race, people thought the third-party groups would get restless and begin exploring ways around the agreement. Brown and Warren continued publicly supporting their pact, but several influential politicos started predicting the agreement’s “inevitable demise.”

August-September: Warren’s takes a fundraising advantage

Warren’s fundraising team stepped its game up, as she established herself as one of the most effective fundraisers in any Senate race in the nation. Brown supporters were likely frustrated because they had the money but still didn’t think they could use it.

The pact lived on. People were surprised.

Late September-Early October: The week the gloves came off

In the last week of September, Americans for Tax Reform – a conservative political action group – spent $215,617 on direct mail literature that attacked Elizabeth Warren. And with that, the floodgates had opened. In the following days, The League of Conversation Voters (anti-Brown) and Crossroads Grassroots Policy Strategies (anti-Warren) spent over $1 million dollars on direct mail and door-to-door canvassing to support their candidate of choice.

Alas, after months of critics and skeptics being proven wrong, the People’s Pact began to crumble. The third-party groups couldn’t wait any longer. They found the loopholes, and they leaped through them.

Where are we now?

Neither Brown nor Warren has made a statement regarding the apparent breach in their agreement. The independent groups are claiming innocence, saying they didn’t violate anything because the language in the agreement doesn’t specifically prohibit direct mailers. However, the agreement does specifically mention the prevention of loopholes. The last bullet point states, “the Candidates and their campaigns agree to work together to limit the use of third-party advertisements and to close any loopholes that arise in this agreement during the course of the campaign.”

Unless either candidate decides to acknowledge the agreement’s final point – unless they work together to close this loophole – it seems as though the People’s Pledge has lost its appeal in this election year.

We’ll wait and see what happens next, but these two candidates respected their pact for longer than most people thought they could.

It was fun while it lasted.