Can Campaign Finance Be Reformed From the Bottom Up?

The New Public Option

Despite hostile courts, can our campaign-finance system be reformed from the bottom up?

October 12, 2015

This article appears in the Fall 2015 issue of The American Prospect magazine. Subscribe here.

On paper, Juan Mendez wouldn’t have jumped out as a prime candidate for public office in Arizona. He was a young Latino guy, a first-generation American who’d grown up in poverty. He’d never been elected to public office before, he didn’t have any money, and he wasn’t well connected within the state’s Democratic Party.

But given Arizona’s public campaign-finance system, the typical connections to party apparatuses and donor circles were not needed for an unknown candidate who wanted to run using public funds. Having long been active in local progressive politics, Mendez, at just 26, decided in 2012 to run for an open state representative seat that included his hometown of Tempe. “We needed to make sure we brought certain views of people who have historically been kept out of the conversation,” Mendez says.

To qualify for a public campaign grant under Arizona’s Citizens Clean Elections system, Mendez had to prove that he had sufficient public support by reaching a threshold of at least 250 $5 donations from citizens in his district. That meant a lot of initial time spent pounding the pavement and knocking on doors—and not incidentally, it meant energizing democracy. “It’s really hard to start the campaign,” he says. “A lot harder than going to a developer, PAC, or union and telling them what they want to hear.”

Mendez qualified for the public grant and ended up running in the Democratic primary. While this was traditionally a progressive district, Mendez says he wouldn’t have even considered running without the option of public funding. He became the youngest legislator in the state, was re-elected in 2014, and was recently named co-chair of the Arizona Legislative Latino Caucus. He’s been at the forefront of the state’s progressive agenda, calling for immigration reform, the expansion of voter rights, paid sick leave, and a “yes means yes” law to combat sexual assault.

“[Public funding] allows a much wider pool, different walks of life, to be involved,” Mendez says.

Campaign-finance reform programs like Arizona’s have proven to be largely successful at increasing the diversity of candidates and voter engagement while minimizing the influence of special-interest lobbyists in the halls of power. But over the past five years, an unprecedented upsurge of money in politics has blunted the effectiveness of public campaign-finance models, leaving those who still utilize the funds vulnerable to powerful outside-spending groups and privately financed candidates.

A string of court decisions seemed to all but prohibit efforts to constrain the influence of big money in elections. These rulings began in the wake of Watergate with Buckley v. Valeo, broadly equating campaign spending with free speech; then Citizens United in 2010 and McCutcheon in 2014. Taken together, these decisions have allowed virtually unlimited private election funding. In a 2011 case, Arizona Free Enterprise Club, the court banned “triggered funding” for clean candidates, under which big influxes of PAC or private candidate spending would trigger additional public matches for candidates choosing the public-financing option. “Arizona’s program gives money to a candidate in direct response to the campaign speech of an opposing candidate or an independent group,” Chief Justice John Roberts wrote in the majority opinion. “This goes too far; Arizona’s matching funds provision substantially burdens the speech of privately financed candidates and independent expenditure groups without serving a compelling state interest.”

Still, the decision was fairly narrow, and left some room for reformers to be creative with public-funding models. Under the Arizona ruling, the current doctrine is that public-financing laws based on the spending of others—like triggered funding—are a violation of free speech, but public-finance systems that utilize grants and small-donor matching are constitutional. Some legal gray areas remain regarding the scope of Arizona Free Enterprise Club. “There haven’t been a lot of cases decided after that to fill in exactly how far that would extend,” says Brent Ferguson, a money-in-politics counsel at the Brennan Center for Justice. 

Chris Maddaloni/CQ Roll Call/AP Images

Bill De Blasio, then New York public advocate and New York City Pension Fund trustee, speaks at a March 2012 press conference with Common Cause President Bob Edgar to announce a campaign targeting companies that use corporate funds to make contributions to super PACs and nonprofits to influence the 2012 election. 

But reformers aren’t waiting for courts. This November, Maine voters will consider a referendum on a comprehensive campaign-finance reform initiative, which includes robust improvements to its public-funding system. In Arizona and Connecticut, advocates are pushing the legislature to improve the existing program. And in Seattle, there’s a ballot initiative in the upcoming election that would enact the country’s first voucher-based public campaign-finance system. Meanwhile, the 2016 election is already looking to be a possible blockbuster for campaign-finance reform. In addition to pledging to overturn Citizens United, all the leading contenders for the Democratic presidential nomination have committed to expanding public funding to all federal races, and there are a number of state-level efforts to get public campaign finance on their respective 2016 ballots.


States of Reform

Grant-based systems have long led the way in state campaign-finance reform. In 1996, Maine became the first state in the country to establish a public-funding system for all candidates. The result has been what some say is one of the most blue-collar legislatures, with representation from everyday working people like farmers, teachers, and even a convenience-store clerk. “For several election cycles, it changed the culture of the state,” says David Donnelly, campaign manager for that ballot initiative.

In much of Maine, voters have come to expect candidates to run using the Clean Elections program. When Cathy Breen decided to run for an open state senate seat in a district outside of Portland in 2014, public funding was her only chance to run a remotely competitive race. Her privately financed Democratic primary opponent outspent her by 6 to 1. Still, Breen managed to win handily, and she thinks that the optics of a clean candidate versus a well-financed private candidate were an important benefit. She went on to beat her Republican challenger (who also ran clean) in a highly contested general election.

“I honestly don’t know if I could’ve been elected without clean elections,” Breen says. “It takes an enormous amount of volunteer time, but that’s the way it should be. Not who has the best ad or radio spot.”

In Maine, lobbyists lost sway and good policy found its way into law with less resistance. “The change in culture was very significant and palpable. Legislation that was able to pass in post-reform would not have been possible prior because of too much influence of lobbyists,” says Ann Luther, a board member for Maine’s League of Women Voters.

(Weirdly, Maine’s clean-elections system has coexisted with a far-right populist governor, Paul LePage, who was narrowly elected in 2010 and 2014 in three-way contests. The past election was the first gubernatorial election that wasn’t included in the Clean Elections program, after the state legislature decided to cut costs in the system. At this writing, LePage may be headed for an impeachment showdown with the legislature.)

According to an upcoming report from the Campaign Finance Institute, 13 states and 17 cities and counties now have some type of public-funding system in place. The majority of the existing programs are either those that match contributions at a ratio of 2 to 1 or less, or public grants that fund all or some of a candidate’s campaign. Some hybrid models combine matching funds with grants.

Arizona’s, Maine’s, and Connecticut’s public grant systems have been the most successful in getting ordinary citizen candidates to participate—and often win. Candidates, who must to prove support through small donations, invariably spend far more time talking with potential voters. In 2014, almost 300 candidates were elected in those three states using the clean-elections system. In Connecticut, which remains the most well-funded, 84 percent of the incoming legislature in 2014 used the public program—as did all six statewide winners, including Democratic Governor Dannel Malloy.

The Connecticut Citizens’ Election program was passed in 2005 in response to a slew of political scandals that had earned the state the unfortunate moniker of “Corrupticut.” The breaking point came when Republican Governor John Rowland was forced to resign the prior year amid a major corruption scandal, giving reform advocates a political atmosphere that allowed them to pass a number of campaign-finance policies.

Connecticut’s voluntary public system requires that candidates meet a threshold of small donations—between $5 and $100—from constituents living in their district. Once they reach that amount, which varies based on the level of office, the candidate receives a lump-sum grant to run their campaigns. From then on, they aren’t allowed to take any more contributions and are strictly limited in the amount of personal money they may use.

Through four election cycles, Connecticut’s system has appeared to be a triumphant success. In the 2014 election, participation remained high as 73 percent of all candidates opted in. Clean candidates won 84 percent of their respective races, according to a report from Public Campaign (now renamed Every Voice), a campaign-finance reform organization.

“When we looked at designing the program, we looked at what it would take to run a competitive race against an incumbent,” says Karen Hobert Flynn of Common Cause, a group that led the push for reform in the state. “The goal was to put money in the hands of challengers so there were competitive races.”

In New Haven, Gary Holder-Winfield was a vocal activist on a broad swath of issues—from incarceration to homelessness. He was also a constant thorn in the side of local politicians. “My activism ran me afoul of the local party machine,” he says. So, in 2008, when Holder-Winfield, who is black, decided he wanted to run for the open state representative seat in his district, he knew that he’d have a hard time currying any favor—let alone raising any money—from the local establishment Democrats.

“There was never really a challenge before. Nobody challenges a longtime incumbent,” he says. “Before the program, you couldn’t challenge entrenched Democrats. There was no race, no excitement, no reason to vote.”

Happily for him, the 2008 election was the first to give candidates access to public campaign funding. In the Democratic primary, Holder-Winfield went up against a New Haven alderman who had the backing of the party. He recalls walking more than 52 hours a week on average, knocking on doors as he worked to collect $5,000 in donations from 150 residents—the requisite level of support to qualify for public funding. He succeeded and was given $25,000 to run his primary campaign. Holder-Winfield ended up winning by 100 votes in the primary, and went on to win unopposed in the general election.

The former engineer has since ascended to the state senate through a special election. Since assuming public office, he’s become a leader in criminal justice reform and is largely credited for forcing political debate on the state’s death penalty and getting legislation successfully passed in 2012 to ban it.

For years, public financing has become embedded in the civic culture of numerous cities and states, producing other tangible improvements to democracy. Small donors’ voices are amplified through matching funds and grant-qualifying requirements. They are more engaged in the process because politicians spend more time face-to-face with everyday voters and not touring the elite donor fundraising circuit, which is an insular echo chamber of wealthy, (mostly) white people who have a vastly different policy agenda than most citizens. According to the Every Voice Center, half of the $74 million in political contributions to ten presidential campaigns this year as of July came from just 1 percent of the ZIP codes in the country.

Those who have long been marginalized in the world of big-money politics find that their power increases with just a $5 contribution. By negating the ever-rising cost of privately financing a campaign, a more diverse array of candidates—women, people of color, ordinary working-class citizens—is able to run for office. And of course, the political influence that industry lobbyists wield is diminished when elected officials aren’t indebted to industry contributions.


Coping with a New World of Money

Despite these successes, public campaign-finance systems face an existential crisis. The reforms of the 1990s and 2000s are increasingly overwhelmed by today’s new financial flows. Recent court decisions have stimulated a torrent of private money. Campaign-finance reformers are now grappling with how to revitalize public-finance models and prove to potential candidates that by opting in, they aren’t condemning themselves to an election loss.

The now 30-year-old Juan Mendez entered the Arizona statehouse just as Arizona’s public grant system was suffering blow after blow. The Supreme Court deemed the state’s “triggered funding” a violation of free speech. Citizens United unleashed a scourge of outside spending. And in 2013, the legislature hiked the campaign contribution limits from $440 to $4,000 and the cap on PAC contributions to candidates was eliminated entirely.

In Arizona, Democrats have lost many seats, and the moderate Republicans have given way to the Tea Party right-wingers. Lobbyists have returned to their powerful perch in the statehouse, and the state’s powerful utilities sector has gained influence over a growing segment of the legislators.

Voter turnout in the state has continued to decline in each election. In presidential years, turnout dropped from 78 percent in 2008 to 74 percent in 2012; in midterm years, turnout fell from 56 percent in 2010 to 47 percent in 2014. Candidate participation in the clean-election option dropped, too. It reached a peak in 2008, with 82 percent of Arizona Democrats and 52 percent of Republicans running on clean funds, according to the Campaign Finance Institute. By 2014, just 43 percent of Democrats and 14 percent of Republicans opted in.

“There are too many people who got elected on clean funds then dropped it to connect with power players,” Mendez says. “We have these giant utility companies that have started throwing dark money everywhere. I have to walk around knowing that they could target me.”

In recent years, reformers like the Arizona Advocacy Network (AAN) have been playing a game of whack-a-mole, trying to beat back legislative attempts to weaken the public system. The Arizona Voter Protection Act states that legislators can’t overturn a voter-mandated provision—like the Clean Elections program—without a supermajority. That hasn’t stopped public--funding foes from trying, says AAN Executive Director Sam Wercinski, who recounts more than 14 attempts to repeal the act since it was first passed back in 1998. Every single one failed—except for the case that led to the Supreme Court ruling that banned trigger funds.

Still, Republican legislators haven’t relented. Every year since 2009, Republicans have tried to pass referendums that would get a repeal initiative on the ballot. Those efforts were successful the first few times, but ultimately deemed unconstitutional. In more recent years, a coalition of reform advocates has been successful in blocking referendum efforts. But the power of the “money versus the many,” in the words of Wercinski, is relentless.


City Limits

For a number of big American cities—New York City, San Francisco, Los Angeles, Miami—public matching-fund systems, which leverage small donations, have proven to be effective in reforming politics. Strategists also say that these types of models are more flexible than one-time grant allotments that no longer have the safety net of triggered funding.

AP Photo/Mike Groll

Supporters for fair elections in New York rally on the Million Dollar Staircase at the Capitol on Tuesday, March 11, 2014, in Albany, New York. 

In New York City, real-estate developer money has long run roughshod over the political process. But in recent years, the city has put campaign-finance reform on the front burner as it enacted strong disclosure requirements, contribution limits, and, at 6 to 1, the strongest small-donor matching-fund system in the country.

“Without public campaign financing, New York City politics would be completely owned by the real-estate industry. Just like oil money controls Texas,” says Bill Lipton, director of the New York Working Families Party. The progressive party, with its strong focus on working-class economics, has seen a stark ascendance in power within both the New York City Council chambers and the mayor’s office, largely in part to the public-funding system.

Candidates that the Working Families Party (WFP) have backed for office, including current Mayor Bill de Blasio, are largely responsible for passing laws mandating paid sick leave and living wages, as well as ending the racially tainted policing practice of “stop and frisk.”

One of those in the WFP cohort that ran in 2009 and assumed office in 2010 was Brad Lander, now deputy leader for policy on the city council and a co-founder of the council’s Progressive Caucus. He has run as a clean candidate both times he was elected. Lander says that he probably wouldn’t have ever considered getting into New York City politics without the public option. A number of other city officials who have utilized the public option, including Council Member Jumaane Williams, Public Advocate Letitia James, and Council Speaker Melissa Mark-Viverito, are indicative of the broadened political access that the system offers.

“It’s a pain in the ass to comply with,” Lander says, “but it’s essential for democracy.” The program withstood a challenging test in the 2013 election when Jobs for New York, a PAC propped up with nearly $7 million in real estate–industry money, supported a number of Democrats with more corporate-centrist leanings who were running against progressives. Clean candidates prevailed in almost every one of those races, Lander says.

An emblematic contest occurred in District 38, a largely Latino district in Brooklyn. Carlos Menchaca challenged longtime incumbent Sara Gonzalez, whom Jobs for New York supported with nearly $300,000 in independent expenditures. The PAC also spent nearly $50,000 in mailings that blasted Menchaca for having just recently moved to Brooklyn from El Paso, Texas, and tried to cast him as a political operative. While he did have some outside spending support from labor, it paled in comparison to the real-estate industry that was trying desperately to keep a friendly politician in the seat. Menchaca beat Gonzalez handily in the primary—58 percent to 42 percent—and at the age of 32 became the first Mexican-American to be elected to office in the city.

A 2010 study by the Campaign Finance Institute and the Brennan Center for Justice found that small-donor diversity greatly increased in New York City when their donations were publicly matched. Compared to state assembly races that don’t offer public matches, small-donor participation in some of the city’s poorest and most diverse areas skyrocketed in city council races. Residents of the predominately black and poor neighborhood of Bedford-Stuyvesant were 24 times more likely to donate in a city council race than a state assembly race; in Chinatown, 23 times more likely; 12 times more likely in the largely Latino areas of Upper Manhattan and the Bronx.


Future Fixes

For now, public campaign-finance systems are acting as a stopgap against—not a solution to—windfall political money. “This is not about small donors magically appearing and big donors suddenly tucking their tails and running away,” says Michael Malbin, executive director of the Campaign Finance Institute. “It’s about shifting a candidate’s behavior through incentive.”

Even with the encouraging successes in places like New York City and Connecticut, other systems are scrambling to ensure that they can remain effective in the face of constant attempts to disarm them legislatively, and unfettered streams of independent expenditures.

While the 2015 elections may be an off year for most, campaign-finance reformers will be keeping a close eye on results in Maine and Seattle. In Maine, the Question 1 ballot measure would bolster the state’s existing system and expand reform. In response to years of budgetary raids of the program and gubernatorial vetoes on new disclosure laws, the measure would increase funding from $2 million to $3 million by eliminating some corporate tax breaks, and would require independent expenditure groups to disclose their biggest donors. It also would give teeth to campaign-finance enforcement by upping compliance penalties.

The Supreme Court’s ban on triggered matching dealt a blow to Maine’s program, which, like Arizona’s, had a trigger mechanism to combat high outside spending or wealthy candidates. That, in tandem with a gold rush of outside spending in the state, has rendered the Clean Elections system far less competitive than it had been.

“Clean Elections candidates become hog-tied, basically,” explains Andrew Bossie, executive director for Maine Citizens for Clean Elections, “because they can’t raise any additional money and all of a sudden you’ve got these outside groups or a privately financed candidate that’s just spending lots more than a clean-elections candidate.”

Question 1 would give candidates the ability to continue raising small donations on top of their grant if they face heavy independent expenditures or a well-financed private candidate.

Seattle is another variant on the story. The city briefly offered partial public funding for elections until a state ballot initiative banned public funding in 1992. The state legislature overturned that initiative in 2008, allowing localities to use public-funding systems so long as they were passed by popular vote and only used local funding.

According to the city’s 2011 election report, campaign spending had reached an all-time high and small contributions had fallen to an all-time low. As the average amount of money spent by a winning candidate exploded by 60 percent and the incumbent re-election rate rose to 84 percent, the number of candidates competing for contested seats decreased.

In 2013, a group of citizen activists ran a ballot initiative to institute a fair elections system. The plan was very narrowly defeated. One study from the Sightline Institute shows how the 2013 candidates were by and large financed by wealthy, white donors who live in Seattle’s luxurious waterfront and view homes. Half of the election’s money came from 0.3 percent of Seattle’s adults. More than 25 percent of the money came from 391 donors who contributed $1,000 or more. Seattle neighborhoods that contributed the most money and represent just 4 percent of the population gave more money than the neighborhoods that contributed the least but are home to 64 percent of the population.

“Every day, I see the rich and powerful … walk around City Hall and talk to the politicians they have funded,” Council Member Kshama Sawant, a socialist, told a local alt-weekly. In June 2014, Seattle City Council President Tim Burgess blocked a motion to put a campaign finance–reform initiative on the ballot. Reformers responded with a new initiative, which has made it onto the 2015 ballot. Burgess, currently facing a pro-reform challenger who has criticized him for reliance on big donors, has since come out as supporting the initiative. The Honest Elections Seattle measure would give voters four $25 vouchers to contribute to the candidates who have opted in to the system, have gathered a certain threshold of $10 donations from local voters, and have agreed to specific spending and contribution limits.

Public candidates who face a disproportionately funded opponent would be able to appeal to the city’s campaign-finance commission for an increase to the spending cap. The goal is to increase voter participation and give more diverse candidates access to the political arena. In addition to the voucher system, the initiative calls for a slowing of the revolving door, restrictions on corporate and lobbyist political spending, and sets contribution limits at $500 for all races.

Ballot success in Maine and Seattle could be a turning point for substantive campaign-finance reform. “I do think it can provide momentum to other states to show something can be done on this,” Maine’s Andrew Bossie says. “Then, hopefully, other states will adopt public campaign-finance laws that will lead to a groundswell of support that works for federal change, where the problem is immensely bigger.”


Can Real Reform Bubble Up to Washington?

Chris Maddaloni/CQ Roll Call/AP Images

Representative John Sarbanes speaks at an anti-Citizens United rally. 

Early in September, Hillary Clinton unveiled an ambitiously robust plan to “return integrity to American elections.” In addition to calling for an overturn of Citizens United and for requiring disclosure from dark-money groups, the proposal included a small-donor matching system for presidential and congressional races.

“It’s as good, if not better, than anything we’ve seen from a presidential candidate,” says Donnelly, who is now president and CEO of Every Voice. “She gets it right.”

With challengers Bernie Sanders and Martin O’Malley having already endorsed public-funding systems on a federal level, the topic of money in politics in the Democratic field has officially gone beyond paying lip service to the damages to democracy doled out by Citizens United, and is now finally offering up solutions. “This signals a greater acceptance by mainstream elites that these policy ideas are the way that we’re going to solve this problem,” Donnelly says. “There’s a very high likelihood that the debate of the solutions goes to the center of the debate in the presidential campaign.”

Representative John Sarbanes of Maryland has become one of the leading campaign finance–reform proponents on Capitol Hill, and recently introduced the Government by the People Act, which would bring a public small-donor matching system to all congressional races. Senator Dick Durbin has a similar bill, the Fair Elections Now Act, in the Senate.

“We’re very encouraged and try to showcase the efforts that are being made at the state and local level,” Sarbanes says. “It’s important to just say to the skeptics out there: ‘This isn’t a pipedream.’”

However, despite broad bipartisan support from the electorate for limiting the influence of money in politics and Sarbanes’s bill garnering a high number of Democratic co-sponsors, the Republican-controlled Congress is unlikely to touch it.

“It’s difficult to imagine a bill now being brought to the floor that would set up a system that we’ve proposed,” Sarbanes admits. But, he says, the task is to build a network of grassroots advocates across the country so that when there is a moment where real reform has a political opening, there’s a solution ready to be pushed through.

“These opportunities can come up suddenly,” Sarbanes adds. “If you’re not ready then, it can pass them by.”

Also, the current members of the Supreme Court will not live forever. At some point, a new Court majority could revisit the doctrine that money is free speech, a doctrine that has plainly impoverished rather than enriched democracy. It’s undeniable that with big money comes big influence. The mobilization of clean-elections strategies at the state and local level is serving as a counterweight to that trend by empowering voters and expanding access to political power. This wave of democratic reform could pave the way for more far-reaching reforms that the courts may well revisit and accept.