Posts Tagged ‘FEC’

Choosing the Right Lt Gov can be a Game Changer

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Over the next 17 months, there will be 37 governors who will either be elected or reelected. In many of these states the candidates running for governor will have to choose a Lieutenant Governor candidate. One of the key factors to consider is the fundraising support they can add to the ticket.

Here is my analysis of what kind of candidates might exist out there for a gubernatorial candidate to help maximize his or hers’ fundraising potential heading into a general election.

  • The Millionaire – any candidate who has the ability to self-fund can instantly change the fundraising ability of a gubernatorial candidate and his ticket. This would likely be the best match for a candidate who needs cash fast in order to level the playing field. Any Lt Gov who can quickly infuse a few hundred thousand into a close race could be a game changer.
  • The War Chest – some politicians have been around for years stockpiling huge sums of cash. Anyone that has done this would be a great person to add to the ticket as instantly bring cold, hard cash ready to be used. Only a few potential candidates have significant war chests that could make them a good candidate.
  • The Instigator – in recent years we have seen many politicians become very successful fundraisers by always being at the center of controversy. “Wingnuts” as many of them are referred to as; usually make great fundraisers but terrible candidates. Think Michelle Bachman, Alan Grayson, or even Sarah Palin.

While there are many, many ways for a good Lieutenant Governor candidate to add to their tickets fundraising successes these are just a few categories that they might want to consider before deciding on who to slate with them for next election.

By Nick Daggers, Vice President, Fundraising

 

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

 

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.

 

Federal court ruling could create stricter FEC enforcement

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In the wake of the Citizens United case, the common narrative that has transpired among public interest reformers and media outlets, is one that suggests that the FEC’s ability to enforce campaign finance law has been “systematically gutted” over the past decade.  Yet in a recent article titled “No More Easy Outs at the FEC,” former FEC Chairman David Mason posits quite the reverse.  Events that do not quite make it to the level of the Supreme Court, or that otherwise prove insufficiently flashy enough to attract the sort of media attention that Citizens United did, nevertheless have important implications for the direction of campaign finance.  In particular, Mason refers to a court ruling that he believes will engender a heightened sense of scrutiny and stricter FEC enforcement measures and notes, “..it may not be enough to comply with the law—you need to document your compliance decisions and procedures.”  Though relatively minor in its solitary impact, this one example sheds light on an overall national political trend that appears to get lost in the complexity of our system.   Trends such as the rising costs of campaigns and an increased need for professional campaign services have implications that pale in comparison to Citizens United.

Of course, procedural improvements implemented at the FEC are made with the intent to increase accountability within the “regulated community” (PACs, candidates, parties).  Stronger accountability is a nonpartisan issue that few would argue has any negative direct effects.  Yet what tends to get overlooked are the indirect effects, including the pricetag of these procedural changes and where the financial burden of it may fall.

The rising costs of running a campaign, whether as a function of strengthened regulations or the reality of increasingly expensive media markets, has been primarily shouldered by political candidates.  Over the past century, campaigns have moved away from a party-centered model toward a primarily candidate-centered one.  Faced with dwindling party support, candidates had to look elsewhere for the financial support necessary to pay for services such as voter identification, registration, and distribution of campaign literature. Services that have historically been functions of the party machine are now being outsourced to political professionals. (See this article by Jill Lepore for a more extensive background of the professionalization of politics and how it became a business.)

This candidate-centered trend has created the perception that the more money a campaign raises, the more legitimate and credible its candidate is regarded by the media and the public.  The way in which this phenomenon developed can be likened to an arms race.  Candidates stock their war chests with campaign dollars, primarily as a defensive strategy.  Yet understanding the potential for those funds to be used offensively, opponent parties and challengers respond by developing war chests of their own.  In this environment, it is therefore easy to see how a candidate’s legitimacy is a function of how much money they are able to raise.  Money determines the extent to which an incumbent candidate can defend itself from potential challengers, or a potential challenger can run a professional offensive campaign a seated incumbent.

If Mr. Mason is correct, then along with the campaign managers and field directors, compliance services will soon be added to the budget as an indispensable component of the campaign.   Interestingly, what is perhaps become more valuable than precluding incidental FEC fines for minor reporting violations, are the ways in which the competitive political environment may enhance the political role that compliance plays.  Stricter enforcement measures increase the potential for minor compliance errors to become political problems.  And what candidate wouldn’t love to link their opponent to a “campaign finance scandal?”  Compliance specialists are in a position to save the campaign untold amounts in political capital by mitigating potential infractions before they occur (and appear permanently on the public record).

Beyond the professional implications are the unanswered concerns:  should the ability to fundraise be such a vital prerequisite of our elected officials?  Undoubtedly a certain number of otherwise highly qualified individuals that are simply not magnets for money are filtered out in the current system.  What do goliath-sized incumbent war chests, which function to raise de facto “entry fees,” do to the competitive landscape in American politics?  From a compliance standpoint alone, challengers are at a significant disadvantage as they are much more likely to incur administrative fines, while having the least amount resources at their disposal.  Of all administrative fines that were exacted to candidate committees by the FEC in the election year 2010, 94% of them were to challengers and only 6% were to incumbents.  Lastly, what prospects are there for a legislative solution when all members of congress have, by definition, been beneficiaries of the status quo?

Obama for America goes mobile

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Even in election years marked by multimillion dollar donations to a new brand of political action committees–better known as Super PACs – President Obama continuously shows that he understands the value of small-money donors. The Obama campaign took grassroots fundraising to a historical level in 2008, raising 45% of their overall funds in small contributions. Now, four years later, grassroots fundraising has been given a new weapon. They’re going mobile.

Three months after the FEC unanimously approved a rule allowing text message contributions, Obama’s team is days away from wrapping up agreements with Verizon, Spring and T-Mobile to begin fundraising via text by the end of this week.

How will it work?

Text to donate campaigns have typically been used in large-scale charity movements. They made their first big splash during the aftermath of the earthquake that tragically devastated Haiti. In just two weeks, Americans contributed $30 million through text message donations.

In order to comply with FEC regulations and protect the interests of the mobile carriers, the approval of text message contributions came with strict rules and conditions.

  • Donations will be capped at $10 per text, $50 per month, and $200 per cycle.
  • The FEC has stated that campaigns are “solely responsible” for ensuring their donations comply with all FEC laws, including laws that prohibit donations from corporations and minors.
  • Wireless service providers may decide to accept donations for certain political committees and not others.
  • Contributions will be assessed a fee. Carriers and other payment processors will likely receive between 30 and 50 percent of the total contribution.

This is how text message fundraising will work. 1) Campaigns will distribute a phone number to a mobile payment processor for their supporters to text in order to donate. 2) Donors text that number, attest that they are legally permitted to contribute, and pledge their contributions. 3) The mobile payment processor and wireless carrier take their respective fees from the contributions. 4) The rest is given to the campaign by the wireless carrier. 5) The donation is added to the donor’s bill at the end of the month. 6) The donor pays the wireless carrier.

How large of an impact will it have?

Donors already have the incredibly easy-to-use option of contributing with credit cards online, so why is text messaging going to matter so much?

Well, simply put, because it’s easier. Almost 80 percent of Americans send or receive at least one text per day. Young college students – a group the Obama campaign has connected with on an unprecedented level – never leave home without a phone in their pockets. To many people, texting a five-digit number doesn’t feel like spending money, so the hope is that they’ll just hit send and not think twice about it.

Imagine being one of the tens of thousands of people who will be at the Democratic National Convention when President Obama accepts his presidential nomination. You’re in the moment, listening to the President of the United States of America deliver an inspired speech to his supporters. Cameras are flashing, flags are waving, and iPhones are recording. People are standing, clapping, screaming, and whistling as Obama thanks his crowd, promises change, and says God Bless America. He exits the stage, and as he’s walking off, a JumboTron flashes a message: Text GIVE to 62262.

Still caught in the moment, close to 70,000 people – the estimated attendance in Denver four years ago – around you pull out their phones and press the buttons to donate ten dollars.

It’d be hard not to do the same, and that’s why it’s going to be important.

Super PACs overshadow armies of small donors

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According to FEC data, over 2.5 million people have made political contributions to the presidential campaign of their choice of $200 or less. That sounds like a large number. That is a large number.

It just doesn’t mean as much as it used to.

Four years ago, President Obama’s campaign made history with their innovative techniques of encouraging small-dollar donors’ involvement. 45 percent of his funds came from individuals who contributed $200 or less. In this election year so far, that percentage has drastically shrunk.

Through June, the 2.5 million people who have made small donations to either presidential campaign represent only 18 percent of the two parties’ total funds. According to Politico, during this election, the top .07 percent of donors is more valuable than the bottom 86 percent. In an election where virtually all we hear from either candidate is the necessity to strengthen our middle class, the fundraising statistics are awfully top-heavy.

Of course, like most things, there are varying opinions on the matter. Some voters think money is money. If both sides are using these Super PACs, there is still a level playing field. Campaign finance directors have no choice but to fall on this side of the argument. In the last election, Obama urged wealthy Democrats not to spend money on third party groups supporting his campaign. Four years later, that message has been forced to change.

But a large amount of voters disagree. They don’t think it’s fair that the fundraising for a general election is being virtually dominated by the super wealthy.

It’s very possible that President Obama won four years ago because he convinced the small-dollar donors – the Average Joe’s, the middle class, the “regular” people – that he would represent their best interest. He developed a relationship with the people, and they showed their appreciation by contributing financially. Yes, the checks were small – five, ten, fifty dollars – but giving money seemed to provide his supporters with an invaluable sense of involvement with the campaign. That connection between candidates and voters may suffer if Super PACs continue financially overshadowing armies of small donors.

The small donor revolution that President Obama’s campaign pioneered four years ago seems to be coming to a sudden halt. Was this inevitable? Will it impact the upcoming election?

Those questions could be answered in the next few months.