Archive for the ‘Politics’ Category

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

 

Helping Rhode Island’s Marriage Equality Bill Gain Momentum

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The issue of same-sex marriage is an argument that all of us have heard, and most of us have strong opinions on. As Dr. Martin Luther King Jr. once said, “marriage is a basic human right. You cannot tell people they cannot fall in love.” While he said this in reference to marriage between races, the same can be said about homosexuals.

Public attitudes toward gay marriage are a mirror image of what they were a decade ago: in 2003, 37 percent favored gay nuptials, and 55 percent opposed them.  According to the Washington Post, national support for marriage equality is trending upwards with 58% of Americans being in favor of legalizing same-sex marriage as of March 2013.

CFO Consulting Group is proud to be the public affairs team fighting for marriage equality within Rhode Island.  There are currently nine states, plus the District of Columbia, where same-sex marriage is legal.  In addition to this, 3 states are considering bills to legalize same-sex marriage; Delaware, Illinois, & Rhode Island.  In January, the Rhode Island House of Representatives & House Speaker Gordon Fox overwhelmingly passed legislation to allow gays and lesbians to marry in the only New England state where they can’t.

The Rhode Island Senate will be next to address the issue of gay marriage when they return from their recess this week for the final work of their annual session.  The Senate Judiciary Committee is scheduled to consider legislation allowing gay couples to wed. The session is scheduled for 3 p.m. Tuesday, April 23rd. Also up for consideration is a bill that would place the question of allowing gay marriage on next year’s ballot.

The two bills before the Senate Judiciary Committee take different paths.  One would reaffirm Rhode Island’s constitutional  protection of religious liberty.  The other has a long lists of special exemptions and carve-outs,

The major issue keeping Rhode Island from becoming the tenth state to legalize same-sex marriage, and why there are two bills being considered, is the question of how will those that oppose same-sex marriage on religious grounds, including religious institutions, businesses, and hospitals, be affected if same-sex marriage is approved?  More specifically, questions regarding the legality of a business or religious institution denying service to same-sex couples because of religious beliefs will be up for debate this Tuesday.

CFO is looking forward to seeing the Rhode Island Senate vote in favor of the bill and allow all people in Rhode Island, regardless of their sexual orientation, to possess equal rights.

By Brett Smiley, founding partner of  CFO Consulting Group

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

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.

 

What will it cost to win back the House?

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By Nick Daggers
Follow Nick on Twitter @nickdaggerscfo 

With the 2012 election in our rearview mirror we are all looking down the road to 2014. After a successful cycle the Democrats gained eight seats in the House but are still 18 seats short of the majority. There are plenty of race trackers and analysts that can offer their thoughts on which seats will be in play and why. I would like to offer a quick demonstration of what we can expect to see spent in a race for the majority.

A good case study to establish an estimate for 2014 spending is to look at the six (8, 10, 11, 12, 13, 17) competitive races in Illinois from 2012. According to the Center for Responsive Politics in the five districts won by the Democrats the campaigns and their allies spent a total of $20.5m, or an average of $4.1m per Democratic pickup.

The Illinois’ 11th and 17th Congressional Districts provide a microcosm of districts across the country that Democrats must win in order to take back the House. In both cases the DCCC was able to help recruit strong Democratic challengers (which will be key again in 2014) to take on popular Republican incumbents. In order to take back the house in 2014, Democrats will likely have to defeat at-least 20-25 Republican incumbents.

In the IL11 Bill Foster defeated Judy Biggert. Foster and his allies had to spend $4.88m in order to secure victory. The IL11 covers a diverse swath of the Western Suburbs of Chicago. Meanwhile two hours to the west is the IL17. In this district, Cheri Bustos defeated one-term Congressman Bobby Schilling. Bustos and her allies had to spend just shy of $4.7m to win.

While the races had many similarities they also had one glaring difference, they both fell into two very different media markets. The IL11 is in the Chicago media market, the third largest in the country, and the IL17 covers the Rockford, Quad Cities, and Peoria media markets, of which only the Quad Cities are a top 100 market.  Since both districts cost about the same to win it helps demonstrate that no matter the media market, Democrats can expect to spend about $4.75m per Republican incumbent they can defeat.

The Democrats are looking at needing to spend $120m just to defeat Republican incumbents. That number does not include the 201 seats we will have to defend and the 100 plus seats that are safely in the Republican column, which can probably be estimated at-least another $200m.

Over the next 18 months we will see exactly how these races play out and if the Democrats and their allies can raise to take back the House. While we won’t know that final number for months to come, we can already guess that just like the past three election cycle we should all expect it to be another record year for campaign spending in the battle for the Speaker’s Gavel!

 

Nick Daggers is a Vice President of Development for CFO. He has spent the last five years working as a fundraiser for political campaigns and non-profits.

Helping Rhode Island Crack Down on a National Problem

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For many of us, Payday Loans are an unknown financial instrument. While many have a general understanding of what pawn shops and check cashers are, payday lenders are a different animal.

Rhode Island’s population is barely over a million and yet nearly 200,000 of these loans are taken out yearly. Payday loans are short term, high interest loans. They are capped at $500, due in two weeks and carry an APR of 260%. For many, these loans are the not the solution to a short term financial crises but rather cover ordinary living experiences. In fact, the average borrower takes out 8 loans per year.

CFO Consulting Group is proud to be the public affairs team fighting for the Rhode Island Payday Loan Reform Coalition. A great coalition is fighting back against predatory lending in Rhode Island, but there are similar efforts underway across the country. Additionally, there is an effort to crack down on the enabling role the big banks are playing for the industry.

Recently the New York Times covered how the nation’s biggest banks, including Bank of America and Wells Fargo have proved to be willing partners allowing the payday lenders to continuously debit accounts, racking up big overdraft fees along the way. In response to this coverage JP Morgan pledged to change its practice. CFO is looking forward to seeing that change, and change in Rhode Island.