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Campaign finance becoming state, local issues

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There’s almost zero chance Congress will seriously consider this year a single bill aimed at reforming the nation’s weakened money-in-politics laws.

Going local is a different story: State lawmakers are engaging in full-throated debate on campaign finance proposals — with some surprising outcomes.

The governor of Montana vetoed an attempt to raise giving limits to candidates, triggering a court battle. New Mexico’s secretary of state may have found a way to enact rules that the governor vetoed months before. And the South Dakota legislature voided a ballot measure citizens passed — and banned it from being considered again.

In these three states and others, ideologically-driven groups are hammering away at laws to loosen restrictions on campaign money, in order, they say, to protect Americans’ freedom of speech.

So far this year, lawmakers in at least 18 states have introduced legislation to change the amount of money people can give politicians, according to a Center for Public Integrity analysis of proposed legislation in the nation’s 50 statehouses.

Half of the bills aim to increase contribution limits in attempts to keep pace with the rising number of outside forces that can spend unlimited amounts of cash. The other half try to decrease the limits to blunt the amount of money in politics.

Two initiatives have passed. Two have been vetoed. Eight bills are in progress, while six have failed.

All the while, lobbying forces from Washington, D.C. — some backed by mega-donors such as the billionaire Koch brothers, others supported by national government-transparency organizations — have swarmed statehouses and city halls, sometimes to the suspicion of locals.

These national coalitions are targeting donor-disclosure laws, pay-to-play and lobbyist rules and the role corporations, unions and certain nonprofits may play in elections, in addition to campaign fundraising limits.

This special-interest influx comes at a time when some statehouses are also struggling to update their statutes to comply with the 2010 U.S. Supreme Court case, Citizens United v. Federal Election Commission.

The ruling, which upended many state laws on the books, said corporations and labor unions could raise and spend unrestricted amounts of money to advocate for or against political candidates — as long as they did not coordinate their spending with candidates.

When it comes to political money, national-level political organizations also see statehouses and city councils as the real battleground for change. Bills here — unlike at the federal level — sometimes move through chambers with relative ease and bipartisan support.

“It’s vitally important that we build momentum, win victories on reform at the municipal level, at the state level, and doing that increases the likelihood of eventual wins at the federal level,” said Paul S. Ryan, vice president of policy and litigation at Common Cause, a national campaign finance reform group.

Only two of the 30 bills introduced in Congress that pertain to money in politics — both sponsored by Republicans — have even been formally debated.

At the local and state levels, by contrast, more sweeping money-in-politics experiments, such as public financing of political campaigns, are succeeding.

New York City, for example, has since 1988 slowly increased the amount candidates could earn in its matching-fund system: For any small donation (under $175), the city will give six times that amount to the campaign. So, for every $50 donation, a politician would receive another $300 from public financing.

Seattle voted in 2015 to give every voter four “democracy vouchers” worth $25 each. Voters can give the vouchers to political candidates who agree to limit their spending. And Portland, Oregon, will in 2019 bring back a matching fund program similar to that of New York City.

Kentucky, a state that hasn’t increased its campaign contribution limits since 1998, saw Gov. Matt Bevin, a Republican, sign a measure in March that increased almost all campaign contribution thresholds. Kentuckians may now give $2,000 to candidates per election (double the $1,000 previously allowed) and $5,000 to political party committees (up from $2,500), among other increases.

The law also establishes an account for party committees to buy or maintain their office buildings — money that cannot be used to influence elections. These funds can accept an unlimited amount from any source, including corporations.

Despite the increases, Kentucky’s limits remain relatively low compared to other U.S. states, said state Sen. Damon Thayer, the Republican floor leader and the sponsor of the bill.

“But at least it’s a step in the right direction to allow campaigns and political parties to raise more money to keep up with the rising costs to run an election and the increased role of super PACs,” he said.

Thayer said he supports Citizens United.

But the decision “diminished the role of campaigns to amplify our message,” he said. “The downside of super PACs is that we can’t coordinate our message with them.”

State house and courthouse

Raising campaign contribution limits, not naming donors, led Montana Gov. Steve Bullock, a Democrat, to veto the campaign finance bill lawmakers sent to his desk earlier this year.

“The increases in contribution limits are far above what Montanans believe to be acceptable,” Bullock wrote in his veto.

Montana’s allowable campaign donations have been fluctuating since 2012.

That year, a U.S. District Court judge ruled the 1994 limits enacted in a ballot measure violated First Amendment protections because the limits were so low. The U.S. Court of Appeals for the 9th Circuit reversed the ruling and sent the case back to District Court in 2015, where the limits were again struck down, yet again, in May 2016. The case, Lair v. Motl, is back on appeal.

As Montanans wait to hear the latest ruling, the state is using pre-1994 campaign finance limits adjusted for inflation, according to Montana’s office of the commissioner of political practices. The vetoed bill would have at least allowed individuals to give $2,640 to gubernatorial candidates (up from $1,990) and $700 to state lawmaker candidates (up from $330 for House and $530 to Senate candidates.).

The courthouse is another avenue for groups to enact campaign finance changes, or comply with Citizens United.

At the time of the ruling, 24 states had bans or restrictions on corporate spending in elections that had to be overturned or rewritten, according to the National Conference of State Legislators.

At least six recent court cases involve a tug-of-war over contribution caps.

The 9th Circuit is also handling an appeal on the constitutionality of Alaska’s limits for state candidates. Alaska’s law includes a cap on out-of-state donations, upheld by a district court last November.

The 9th Circuit is also handling an appeal on the constitutionality of Alaska’s limits for state candidates. Alaska’s law includes a cap on out-of-state donations, upheld by a district court last November.

Illinois, Kentucky, South Dakota and the city of Austin, Texas, have recently faced or are currently facing challenges to their campaign contribution limits.

“There has been a concerted effort … to try to find every vulnerability in existing limits,” said Tara Malloy of the Campaign Legal Center. “And they’ve had success.”

And not all statehouses are done debating political money this year: At least eight states still have campaign finance bills they’re considering.

National interest in statehouse drama

Amid the various statehouse battles over political money, New Mexico is unique in its theatrics.

In April, Gov. Susana Martinez, a Republican, vetoed legislation that doubled contribution limits but tightened donor-disclosure rules.

Just two months later, newly elected Democratic Secretary of State Maggie Toulouse Oliver proposed a campaign-finance rule that included elements of the failed bill, though not the increased contribution limits. This angered opponents of increased disclosure requirements.

“The proposed rule attempts to legislate rather than implement existing law,” Tyler Martinez, an attorney with the conservative Center for Competitive Politics and no relation to New Mexico’s governor, wrote in public testimony to the secretary of state.

Toulouse Oliver disagrees. She said in an interview that she’s not overstepping her authority because she is not creating new law — only clarifying it — in the wake of court decisions, such as Citizens United.

She recently conducted public hearings on the rules and aims to have the final rules go into effect in October. On Wednesday, she vowed to go to court, if necessary, to defend the rules.

New Mexico could serve as a model for other secretaries of state who want to update campaign finance rules when lawmakers are unwilling to do so, some reformers say.

“I mean, nothing is going to happen on the federal level in terms of campaign-finance reform, and you have these secretaries of state that could single-handedly get in there and try to reshape these rules,” said Craig Mauger, executive director of the Michigan Campaign Finance Network.

Michigan’s secretary of state, Ruth Johnson, did just that.

In 2013, she proposed rulemaking that would require reporting of the donors behind “issue ads” — political commercials that don’t specifically support or denounce a candidate. These ads, however, often come within a micrometer of overtly advocating for or against a candidate. Often, the ads cast a politician in a decidedly negative light and urge voters to do something along the lines of, “Call lawmaker X and tell them you don’t support bill Y.”

Michigan lawmakers didn’t respond kindly. Instead of letting Johnson have her way, they passed legislation that in part lets “issue ad” funders keep their identities secret. Gov. Rick Snyder, a Republican, signed the bill.

"Our democracy thrives and our government is at its best when there is openness and accountability, all while our freedoms of speech and association are protected," Snyder said in a statement.

Snyder was referring to a part of the bill that requires groups airing ads or paying for robo-calls to add an “authorized by” disclaimer. They do not, however, need to name their donors, as Johnson attempted to require.

‘What is the point of voting?’

Things didn’t go as expected for South Dakota voters who thought they had scored a victory for limiting the influence of money in politics.

In November, almost 52 percent of South Dakotans voted yes on IM 22, a ballot measure that lowered contribution limits, established an ethics commission and set up public financing in elections, among other measures.

This was a win for Massachusetts-based Represent.Us, which had been pushing the initiative, against Americans for Prosperity, which tried to kill it.

“If supporters of IM 22 had their way, taxpayers would be paying for expensive political ads for politicians, instead of prioritizing funding for necessary budget items like education, public safety, and infrastructure improvements,” Americans for Prosperity said in a statement.

But the majority’s victory was short-lived.

Lobbying group South Dakota Family Heritage Alliance Action and 24 state legislators filed a lawsuit, arguing the measure is unconstitutional and limits free speech. The judge stopped the law from being implemented from taking effect as he considered the case.

Then came the real legislative blow: South Dakota lawmakers repealed the overhaul less than three months after the measure passed and included a clause preventing voters from putting it back on the ballot.

“It’s not responsible to use taxpayer money to fund political campaigns at the cost of education. And I’m certain that voters of this state did not support that," Gov. Dennis Daugaard, a Republican, said of the public financing proposal during a budget address in December, two months before he signed the repeal bill. “They were hoodwinked by scam artists who grossly misrepresented these proposed measures."

A legislative task force is meeting to discuss campaign finance law, and more bills will likely be introduced in 2018. Represent South Dakota is gathering signatures for a constitutional amendment that would further restrict lobbyist gifts and contribution limits.

Sarah Kleiner contributed to this report.

The Center for Public Integrity is a nonprofit investigative news organization based in Washington, D.C.


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