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Reform beyond the Beltway: states as laboratories of clean money.

Beltway insiders generally treat public financing of congressional elections as a joke--it's politically unthinkable, they say. Senator Mitch McConnell, the Kentucky Republican, seems to revel in denouncing the idea (along with any other proposition for campaign finance reform), with no visible political damage to himself. Even the half-a-loaf reform measure sponsored by Arizona Republican John McCain and Wisconsin Democrat Russ Feingold studiously avoids any mention of public financing. Yet while reform has foundered in Washington--not a single MI. has been signed into law since the 1970s--many states across the country have moved ahead.

In fact, since 1992, 23 states have enacted campaign finance reform measures. In 1996 alone, voters in Arkansas, California, Colorado, Maine, Massachusetts, Montana, and Nevada voted in favor of ballot initiatives affecting campaign finance, and another wave of initiatives is building for 1998. Many of these state efforts are significant because they correct virtually unregulated campaign finance practices. In California, for instance, voters in 1996 passed Proposition 208, which enacted sweeping reforms, including contribution limits and restrictions on donations from lobbyists and political action committees (PACs). Now, a new wave of reform, more sweeping in its approach, is beginning to take shape symbolized by Maine's endorsement in 1996 of the nation's first system of full public financing for candidates for state office In June 1997, Vermont's legislature put in place a similar, though more limited, public financing system. Attempting to build on the successes in Maine and Vermont, coalitions in Massachusetts, Arizona Missouri, Idaho, and other states are moving forward with similar proposals.

It is unclear whether the results Maine and Vermont are harbingers of things to come or mere anomalies. The two states are hardly bellwethers. "As goes Maine, so goes Vermont," joked one participant at a recent forum on campaign finance. Yet the movement for public financing of state elections directly challenges the conventional wisdom that using taxpayer money to pay for politicians' campaigns won't fly in Washington.

Indeed, part of the rationale for advancing reform in the states is that ultimately the movement will have an impact in Washington. If enough states can implement Maine-style reforms, and if those reforms take effect without the collapse of civilization, gradually the idea will gain favor in Congress, particularly among the delegations from states where voters endorse the idea in ballot initiatives. And there is evidence for this: after the vote in Maine in November 1996, both of that state's Republican senators moved a bit closer to support for campaign finance reform.

Over the past two years, a lot of the state activity in favor of voluntary public financing has been supported by Public Campaign, a Washington-based advocacy group that funds state groups, trains activists, and provides model legislation and ballot initiatives. To make the idea more palatable to voters, and less susceptible to caricature by opponents, Public Campaign and its allies--after conducting polls and focus groups and consulting with spin doctors--poured the old wine of public financing into the new bottle of the "Clean Money Option." Public Campaign has chosen to emphasize the result (getting special-interest money out of the system) rather than the mechanism, and to present its proposal as bold and sweeping. Partly as a result of these tactics, solid coalitions of citizen groups have emerged from the states. In most states, the coalitions include such reform groups as Common Cause, Citizen Action, and the League of Women Voters; many labor unions and state and local AFL-CIO chapters; remnants of Ross Perot's movement, including the Reform Party chapters; and consumer, religious, and environmental organizations. In Maine, the American Association of Retired Persons, the National Association for the Advancement of Colored People, the Maine Women's Lobby, and Peace Action Maine joined the effort.

But serious obstacles confront the movement for public financing of state elections. As important as they are, the victories in Maine and Vermont do not translate well to other battlegrounds, especially larger, industrial mega-states like Michigan and California. As the movement spreads, it can be expected to attract significant opposition from such business groups as the Chamber of Commerce, which proponents of public financing did not face in Maine and Vermont. So far, the Clean Money reform movement has benefited from the element of surprise. Steve Stockmeyer, spokesman for the National Association of Business Political Action Committees, admits as much. "I think business was lulled into a sense of security because almost all of the radical state programs are being tossed out by the courts," he says. "I don't think that business is mounting as concentrated an effort as the reform groups are." As the movement shifts into high gear, reformers can expect millions of dollars to be spent in high-profile campaigns against public financing. And although the proposals for public financing have been crafted to withstand constitutional challenges in the courts, it is not yet clear that the courts will ratify Maine-style reform.


When voters in Maine approved the Clean Election Act by a margin of 56 to 44 on November 5, 1996, they endorsed a system of full, voluntary public financing for elections for governor and the state legislature, scheduled to take effect in 2000 for legislative candidates and in 2002 for gubernatorial candidates.

Under the act, candidates will receive a fixed amount of campaign funds from the state if they agree not to accept or spend private money in their campaigns. To qualify, candidates are allowed to raise a small amount of seed money and must then accumulate a specified number of $5 contributions from registered voters as a sign of public support. A candidate for the Maine House, for instance, would have to collect at least 50 contributions; a candidate for the Maine Senate, 150; and for governor, 2,500. Once that is accomplished, candidates receive public funding equal to three-quarters of the average amount spent in their district during the previous two election cycles. A candidate who faces an opponent who rejects public financing, and is then outspent, is eligible for dollar-for-dollar matching funds to keep pace with the opponent, up to twice the original funding. The act also sets per-contribution limits of $250 for legislative candidates and $500 for gubernatorial candidates, including those candidates declining public funds, coupled with strict accounting and disclosure requirements. Statewide, the act is expected to cost less than $2.4 million a year, with funds coming from a voluntary tax-return checkoff, money from state administrative accounts, registration fees for lobbyists, the $5 qualifying contributions, and any fines imposed.

That victory followed more than a dozen years of coalition building, says George Christie, executive director of the Maine Citizen Leadership Fund. "Initially, there were a lot of tensions around the table , he says. "Common Cause and labor have traditionally been at each other, and labor was reluctant at first. It took a lot of work, one on one." They worked hard to convince Maine's environmentalists that the effort could win, and to hammer out differences among reformers about what approach to take. A pair of key businessmen managed to persuade the governor, who opposed the reform, to remain neutral. The coalition conducted town meetings, issued research reports about campaign contributions, and assembled a team of 1,100 volunteers who collected 65,000 signatures on a single day, election day 1995.

The Maine reform campaign combined traditional grassroots organizing with a frugal but professional array of polls, research, and media. In all, the effort cost $482,000, nearly half of which was spent on television and radio advertising. Ironically, for a campaign aimed at limiting electoral contributions to $250 and $500, 86 percent of the Maine Voters for Clean Elections budget came in the form of donations of more than $1,000, many from out of state, including 13 individual contributions of more than $15,000 accounting for $213,650. And though the campaign was extremely successful in organizing volunteers for its signature-gathering effort, organizers were chagrined to learn that few Maine citizens could be mobilized to support the electoral drive in the weeks leading up to the November vote. According to an analysis by David Donnelly of Northeast Action, "bread-and-butter issues--like health care and jobs--are much more likely to generate lots of volunteers than campaign finance reform."

Nevertheless, the vote in Maine provided momentum for a parallel effort in neighboring Vermont, which half a year later passed a bill providing public funds for qualifying candidates for governor and lieutenant governor. To receive the funds in Vermont, a candidate for governor must gather $35,000 in contributions of no more than $50 from at least 1,500 voters, after which the candidate will receive another $40,000 for the primary and, if successful, $225,000 for the general election, provided that no private money--including the candidate's own-is spent. The Vermont law also limits contributions to a range of $200 to $400, caps campaign expenditures, bans soft money, and regulates political advertising and independent expenditures.


The lesson of the Maine vote, according to organizer Donnelly, "is that the public is ready not just for tinkering but for a complete overhaul of our campaign finance system. It's not just that voters are disgusted, it's a hope for something better, for the kind of democracy that they want their kids to grow up in."

Energized, Public Campaign and its allies have accelerated efforts to replicate the Maine experience in other states where ballot initiatives are allowed. In July 1997, more than 150 activists from state and regional campaign finance reform coalitions in 40 states came together in Raleigh, North Carolina, for a working conference on how to get the job done. In the West, the Western States Center is promoting reform among activists in eight states, and supports the National Institute for Money in State Politics, which is amassing state-by-state data nationwide on campaign contributions from special interests. "We're actively working in 27 states," says Ellen Miller, Public Campaign's executive director. In its first round of grants, Public Campaign doled out $500,000 to state activists. Another $475,000 in grants to 22 state activist groups was provided by the Piper Fund, a new grant-making program sponsored by a number of wealthy funders who are interested in money-in-politics reforms.

Meg Gage, executive director of the Ottinger Foundation and the CarEth Foundation, also oversees the Piper Fund. Under her direction, the Ottinger Foundation last year published the "Funders Handbook on Money in Politics," identifying and describing 84 organizations devoted to campaign finance reform, along with 16 foundations--including the Arca, Ford, Carnegie, Joyce, Schumann, and Soros Foundations, the Rockefeller Family Fund, and the Carnegie Corporation--that, to a greater or lesser degree, fund money-in-politics reform. Gage says that she spends a lot of time educating foundation managers about groups that work for reform. "It's a slow process to make the foundation community come around," says Gage. "They're afraid of anything that has to do with elections." Nevertheless, more and more foundation money is beginning to flow in the direction of state-based reform work. Clearly, says Public Campaign's Miller, "we are trying to use the states as laboratories."

Three states are emerging as likely candidates for ballot initiatives this year.

Massachusetts. In the Bay State, organizers with Massachusetts Voters for Clean Elections have collected more than 100,000 signatures to qualify the Clean Elections Law for the upcoming state ballot in November. "We spent an entire year negotiating a piece of legislation that everybody could agree to," says josh Friedes, executive director of Common Cause. Together with the League of Women Voters, the coalition is reaching out to labor, environmental, and religious groups. While the Maine law forbids all private money once a candidate accepts public funding, the Massachusetts version sets a fixed spending limit and allows candidates to accept $100 contributions in addition to public money. Candidates for governor, for instance, would have to abide by a $3 million spending ceiling, receiving $2.55 million in public financing, while able to raise $450,000 in private funds, The proposal would also ban the transfer of soft money from national parties to state parties. Overall, Friedes estimates that the plan, once put into effect, would cost $14 million a year. Taxpayers would be asked to check off funds on their tax forms and the state legislature would have to appropriate additional money.

So far, no real opposition has emerged in Massachusetts. While Friedes expects that there will be some, he says that many small businessmen are supportive, and that the kind of cynicism that prevails at the national level is more easily overcome among Massachusetts voters because the ballot initiative itself allows voters to bypass a recalcitrant legislature. "Voters know there is a direct mechanism to be used... when a legislature won't act," he says.

Missouri. The Missouri Alliance for Campaign Reform is a coalition of 35 member groups, ranging from the AARP and the League of Women Voters to Church Women United, the Missouri Coalition for the Environment, and the Sierra Club. Labor unions, including the United Auto Workers and the Service Employees International Union, along with the Kansas City AFL-CIO, have joined, and Perot's United We Stand America has come on board. "We've taken Public Campaign's model bill and fit it to our own circumstances," says Ben Senturia, president of MACR.

The coalition came together after an earlier failure. Four years ago, Missouri Proposition A, which would have mandated low contribution limits and established a fair elections study commission to recommend further measures, passed with 74 percent of the vote, but a court decision subsequently overturned that measure's low contribution limits. After that, reform groups put aside their differences and decided to work together.

Senturia expects heavy opposition from big business in Missouri. "They're the ones who benefit from the system," he says, adding that the campaign believes it will need well over $1 million to succeed. As of this writing, the coalition is deciding whether to pursue a legislative strategy or to seek to qualify a ballot initiative for November. In the latter case, its first hurdle would be the collection of 100,000 signatures by July.

Arizona. The quirky conservative state of Arizona, which in 1996 surprised the country by joining California in endorsing initiatives allowing medical use of marijuana, may get to vote in 1998 on Maine-style campaign finance reform, thanks to the efforts of Arizonans for Clean Elections. "Public Campaign has been our financial supporter as well as helping us with the substance of the bill," says Lila Schwartz of ACE. The coalition, which already enjoys the support of the League of Women Voters and United We Stand America, is hoping to win labor and Democratic support, and they would like to settle differences with Common Cause to get them aboard. But Schwartz expects that the GOP will fight the effort. "The Republicans have everything to lose and nothing to gain," she says, since they benefit from private campaign contributions and have a lock on state government. The coalition faces a July 4 deadline for 120,000 valid signatures to place a measure on the ballot.

If history is any guide, there is strong momentum in favor of ballot initiatives that promise [to clean up government. Broadly measured, public opinion registers support for almost anything that promises to throw the bums out, from term limits to all sorts of campaign reforms. According to a study by the Citizens Research Foundation, since 1972 there have been 51 initiatives, referenda, and constitutional and local charter amendments affecting campaign finance on ballots across the country, and 41 have passed. (Seven of those occurred in California alone, with the results contradictory: in 1988, confused voters endorsed Proposition 68, which created a system of public financing, and Proposition 73, which banned it. The courts eventually dismantled both laws.)

How the Clean Money Option will fare in the courts is another question. The Maine vote was immediately challenged by the American Civil Liberties Union and the National Right-to-Life Committee. Two big questions need to be resolved. First, how attractive can incentives be for candidates to accept public financing before becoming voluntary in name only? Second, how far can contribution limits be lowered before they are considered too low and thrown out? Lower courts have tossed out most $100 contribution limits, while the Supreme Court has ratified $1,000 limits. Presumably, some number in between is acceptable but, according to Con Hitchcock, an attorney with the Public Citizen Litigation Group, "You're dealing to some extent with a moving target." What the courts might accept as reasonable in a small, rural state might not be the same as what they would support in a big state like California, where legislative districts are huge and large sums of money are needed. And while the Supreme Court has endorsed the idea of voluntary public financing--the presidential system works basically this way--the courts may look askance at proposals crafted to penalize candidates who refuse public funds.


If Maine and Vermont were the Lexington and Concord of public financing, then Michigan may be its Yorktown--or, to mix martial metaphors, its Waterloo.

Many activists involved in campaign finance reform are skeptical about the meaning of the results in Maine. Said one, asking not to be identified:

I think we have to look at what happened in Maine

with caution. There was no organizational

opposition, literally nobody on the other side, no

one running ads saying that public financing is a

waste of taxpayer money. Plus, Maine is a

good-government state, and they had a lot of

prominent people saying that they were for it. And

with all that, they only got 56 percent.

In addition, the amount of money absorbed by public financing in Maine is so small--just a couple of million dollars--that few would begrudge it. Moreover, the Maine Clean Money effort attracted national attention, support from Washington reform groups, and funding from foundations and other donors.

All of which means that Michigan will be the real litmus test for public financing. Ken Brock, executive director of Michigan Voters for Clean Elections (MVCE), says, "The real test of this movement is, can you win in big, contested states?" In April 1997, a fledgling coalition announced its intention to place a public financing reform measure on the Michigan state ballot in November 1998. But six months later, in October, they pulled back, postponing their campaign until November 2000. Part of the reason was the daunting cost, estimated at between four and five million dollars for a statewide effort. And a big part of the reason for high cost was the emergence of a potent opposition, personified by Bob LaBrant of the Michigan Chamber of Commerce.

LaBrant, senior vice president for political affairs at the chamber, makes no bones about his opposition to Maine-style reform. "In Maine, nobody wanted to fight this," says LaBrant. "But we're going to oppose this all the way along. We'll take on this proposal." LaBrant says that neither the U.S. Chamber of Commerce, nor his counterparts in other state chambers, have geared up to oppose the Clean Money movement yet, though he expects that they eventually will.

Following MVCE's announcement that it was preparing an initiative for November, LaBrant declared that the Chamber of Commerce would spend whatever it would take to defeat it. Working alongside pollster Ed Sarpolus of the firm Epic-MRA, which conducts polls for private clients, LaBrant helped stifle media interest in the Clean Money campaign. Says Sarpolus, "LaBrant and I were on the phone constantly with about 14 key reporters, so you never really had the media support that you had in Maine." Their message was that public financing would not work, that it would cost too much, and that only incumbents would benefit. "To coin a phrase from 1992, we had a quick-response team in place," and were able to catch the MVCE campaign unaware, says Sarpolus. "It went bye-bye."

Sarpolus said that the campaign's proposal exposed itself to easy attack with its reliance on taxpayer money, because this provided devastating material for radio and televisions ads. An experienced media hand, Sarpolus adds with a chuckle, "Crafting the ads to defeat it would not be a problem. That's the fun part."

MVCE, Common Cause, and Citizen Action admit that their campaign was premature. Says Karen Holcomb-Merrill, executive director of Common Cause, "We made a quick decision in May, and in October we realized that we wouldn't be able to do a credible job in 1998." Having stepped back, the coalition is crafting its proposal more slowly, conducting outreach to a wide variety of potential supporters and preparing its fundraising plan. And the Clean Money coalition is cognizant that in trying to create a system of publicly financed elections, it is taking on the heart of political power in Michigan.

"I credit LaBrant," says Brock of MVCE. "He gets it. What we are going for is the business power base, and he knows it." The powerful Michigan labor movement, spearheaded by the United Auto Workers and the Teamsters, is slowly coming around to join the effort, too. Though labor in Michigan tries to play the system using its own PACs and other election spending, labor is outspent ten to one by business in the state.

The reason that the test in Michigan may be so important is that ultimately both sides will marshal enough resources to get their message out to the voters, meaning that voters will have to decide between two diametrically opposed points of view. Each side has polls that support its stand. In May 1997, Public Campaign asked the Democratic polling firm the Mellman Group and Great Lakes Research to gauge public opinion in Michigan, Missouri, Idaho, Massachusetts, and Arizona. They found that, even when arguments against a package of reforms centered on public financing were clearly stated, support for the Clean Money program ranged from a high of 66 percent in Massachusetts and Missouri to a low of 59 percent in Michigan.

"If you ask, Do you want to spend your money on campaigns?--people say no," says Mark Mellman. "But if you explain that it is part of a package, you find very robust support." According to Mellman, the appeal of the Clean Money campaign is its very simplicity, in contrast to the labyrinthine complexities of the McCain-Feingold bill. And, he says, the beauty of the voter initiative process means that even if campaign finance reform is not the voters' number one priority--even if they care more about jobs, health care, and education--when faced with a choice of voting yes or no on reform, they can vote yes.

But in California, in 1996, campaign reform advocates decided not to include public financing in their package of reforms because organizers felt it was not viable. "Based on the polling data at the time, we felt that it would be an easy target for the opponents of campaign finance reform," says Tony Miller, treasurer of the Californians for Political Reform Foundation and a former California secretary of state. "I think public financing will be marketable, but it's going to take a while."

Opponents of Maine-style reform say that when people are informed about the negatives--that it means that taxpayer money will be spent for political campaigns, that extremists and fringe candidates might qualify for public funds, and that the whole idea is just "welfare for politicians"--voter support vanishes. Yet, according to Public Campaign, when the whole concept is laid out before those very same negatives are presented, support drops only a few percentage points. In the end, to make their argument stick, reformers will need to assemble a lot of political muscle and millions of dollars to back up their arguments. That, in turn, will mean that good-government groups and foundations alone will not be able to sustain the effort nationwide; organized labor will have to be the driving force behind it. Even then, this will be trench warfare: state-by-state battles waged over the next four or five election cycles. Reformers expect that the Maine and Vermont systems will add momentum by showing that public financing works, but the Maine system, presuming it survives court challenges, does not even come on line until 2000, meaning that it will not be until 2002 or later that its effects--benevolent or ill--can have an impact on future referenda. Public financing may indeed be a bandwagon, but it will be some time before it shifts out of first gear.
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Title Annotation:financing political campaigns
Author:Dreyfuss, Robert
Publication:The American Prospect
Date:May 1, 1998
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