Reform Beyond the Beltway

B
eltway 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
bill 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 in 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.


MAINE AND VERMONT

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.



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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.


A MOVEMENT GROWS

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.

I
f 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.


WATERSHED—OR WATERLOO?

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.

B
ut 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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