Posts Tagged ‘Federal Rulings’

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In 1971 when the FEC Act was originally enacted, the law dictated that Senate candidates file their reports with the Secretary of the Senate who would then forward them to the FEC.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.

 

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?