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OP-ED | Sorting Through The Mud: Understanding the Campaign Finance System

by Jason Paul | Jan 10, 2014 6:19pm
(3) Comments | Commenting has expired
Posted to: Campaign Finance, Election 2014, Opinion

At the end of December, Tom Foley, who is still the Republican frontrunner in the 2014 gubernatorial race, alleged that Democratic Gov. Dannel P. Malloy’s administration was shaking down state contractors in search of campaign cash for the Democratic Party.

Under a new campaign finance law passed earlier this year, the state parties can now spend unlimited amounts on a gubernatorial candidate even if the candidate is participating in the public finance system. Foley alleges that Malloy is helping the party raise money so at some point he can benefit. But he confuses the issue.

State contractors can’t give money to the Democratic Party’s state account under campaign finance laws. State contractors have always been able to contribute to the party’s federal account. Foley used his editorial to confuse the state and federal fundraising laws.

A Malloy surrogate, Middletown Mayor Dan Drew, responded with his own editorial alleging that Foley’s “op-ed is based on the false notion that lobbyist and contractor donation standards were loosened in a law recently passed. It’s simply untrue.”

After reading both editorials, it is easy to feel as if you don’t want to vote for anyone. They cast both candidates in a terrible light. And eyes generally glaze over when campaign finance is mentioned. Still, raising money is a large part of what elected officials do and it does it matter. It is therefore important to get into the weeds and figure out what is actually happening. 

In different ways, both editorials play on a lack of understanding of the law to advance their position. Let’s start with the basics.

Campaign finance law in Connecticut has two parts: what is allowed under state law and what is allowed under federal law. As a result, there are two very different campaign finance schemes, and these schemes interact in different ways.

At the core are federal First Amendment principles. Under the U.S. Constitution, an individual has an absolute right to spend as much as he or she wishes on speech, including political speech. Recently, the U.S. Supreme Court expanded that right by allowing individuals to also give unlimited amounts to organizations known as Super PACs. The only limits are on the amounts that can be given to campaigns run by candidates directly and to organizations that coordinate with or give to campaigns run by candidates. As long as Super PACs don’t give to or coordinate with candidate-run campaigns, they can accept unlimited contributions from individuals.

The legal reason for setting limits on contributions that go directly to campaigns is that such contributions could have a corrupting effect.

Until Connecticut enacted public financing for campaigns, we had a system that was very similar to the federal system, albeit with lower contribution limits. Technically speaking, the old system continues to exist in Connecticut alongside the new system, but very few candidates use it.

Given the amount of energy such fundraising takes, it is likely that a candidate would need to raise twice as much money as the public amount before it would be worth opting out. Since the advent of public financing, no campaign has raised more money privately than it would have under the public financing system. The only people who have opted out of the public financing system and spent more than the public financing amount were self-funders such as Foley, who spent more than $10 million in his 2010 bid for governor.

Essentially, we have two clashing campaign finance systems. Under the federal system, people raise large sums of money and outside groups play a large role. Under Connecticut’s scheme, relatively small sums of money are raised and outside groups play a smaller part. In 2012, this changed slightly. The federal law that allows for Super PACs as outlined in the Citizens United decision does not distinguish between state and federal races.

Federal Super PACs cannot be banned from participating in state elections. During the last election, a Super Pac spent a large sum of money at the last minute against a number of Democratic state senators, although ultimately none of the targets were defeated.

Partially in response to this, and partially in response to the possibility of a large-self funder in the governor’s race, namely Foley, the state passed a law that made it easier for state sources of money to defend against federal sources of outside money.

As a result of the changes our law got more like other states and less like the unique experiment that Connecticut had going. It was not a good law. But it also was not a dramatic change in the law, though it has the potential to change a candidate’s psychology when it comes to fundraising.

This gets us back to the two op-eds. In his, Foley made much more of this state law than was warranted and in the process got a lot of his facts wrong. He claims that changes in the state law allow state contractors and lobbyists to donate to state parties. The truth is the state law has nothing to do with it. State parties are hybrid organizations with both state and federal parts.

A state contractor cannot be barred from giving to the federal part of the organization. Such a ban would be in violation of federal law and no part of the new state law changed this. State contractors have to be allowed to give to state parties’ federal accounts because the U.S. Supreme Court said so. Dan Malloy signed a law to increase the limit on what the state party could take in per donor, regardless of the source. Yet Foley wrongly implies that somehow contractors and lobbyists were once barred from such donations and under the law now can give. The law did not change who was allowed to give at all. The U.S. Supreme Court has already ruled that state lobbyists have to be allowed to give to state campaigns, and state contractors still cannot give to state campaigns.

Foley also provides a completely self-serving description of campaign financing history and purpose. “Over the past decade a lot of progress was made federally and in Connecticut to reduce improper political influence,” he writes. Foley’s correct on the state level, but he’s wrong on the federal level. The federal progress Foley may have been referring to is the McCain-Feingold bill.

That bill, passed more than 10 years ago, and the U.S. Supreme Court’s Citizens United decision left it in tatters. In fact, we’ve gone backward at the federal level, as Foley well knows.

Foley also plays fast-and-loose with his prescription. “Contributions motivated by party affiliation, ideology, or a belief that a candidate is the better representative of the public interest should be encouraged,” he writes. “But contributions made primarily to facilitate a personal or organizational benefit should be restricted or eliminated.” Sounds good, right?

The problem is the line between personal gain and ideological belief is not easily drawn.  Given his background as a Bush fundraiser, Foley surely knows that it was impossible to determine whether a donor gave to Bush’s campaign because Bush promised to lower taxes and the donor believed that was the correct ideological position, or because Bush’s position would reduce the donor’s tax liability. In the end, Foley’s stance is that what he does is good (contributions to Bush from rich donors were all high-minded) and what anyone else does is bad (state lobbyists’ contributions to Malloy are all influence-peddling). That position is neither intellectually honest nor very helpful.

In defending the state position, Mayor Dan Drew wasn’t particularly helpful, either.

First, it would have been better had he done more to explain how campaign financing works rather than trot out Foley’s record on this and other unrelated matters. Drew states correctly that the state law did not change with respect to who could give, but he didn’t explain why Foley’s stated position was false.

Second, Foley, while raising money for his state party, is not quite the hypocrite Drew made him out to be. Foley’s fundraising from permissible federal sources in a heavily federal year is not the same as Malloy raising federal money in big state year — but not federal year — particularly since Foley had little power to set Republican policy in 2012 than Malloy has now.

Yes, Tom Foley was a Bush and Romney money man, but that doesn’t mean he automatically comes into Connecticut politics with hands that are less clean than anyone else when it comes to raising money. Rather than challenging Foley on what he actually wrote, Drew just crammed in all of the negatives about Foley. What’s worse is that Drew issued a challenge that Foley might accept. Foley may just decide to abide by or participate in the citizens election program. Giving your opponent the power to undermine your attacks is never a wise idea.

Foley may not believe what he is saying about campaign finance and might just be using it as a weapon to beat up the governor. Yet, if Democrats are equally cynical in response, something important will be lost and the issue might be a drag on the governor’s re-election bid.

So what should we take from this op-ed duel to encourage all participants in Connecticut to agree to limit outside money in our elections? We might not be able to fix it this cycle, as the rhetoric already may be too hot. But we shouldn’t give up on it, either. We need to work hard so that the values Connecticut wants, not the values that Washington wants, are what comes into play in our state. The less time elected officials spend thinking about raising money, the more time they can devote to enacting laws that are good for all of us.

Jason Paul of West Hartford is a partner in a campaign consulting company called What’s Next. He is also a student at the University of Connecticut Law School.

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(3) Comments

posted by: Noteworthy | January 13, 2014  5:27am

Our eyes glaze and our cynicism grows because all these campaign finance laws are designed to allow politicians to rake in the special interest money while pretending to do the people’s business. Just look at the current laws - NU mandates executives pony up for Malloy - and are told to write checks to the federal account, not the state account, even though the money is meant for a state race, not a federal one. It’s a whore’s shell game and a fundamentally dishonest one.

posted by: StanMuzyk | January 13, 2014  11:10am

Gov. Malloy “wrote the book” on Understanding the Campaign Finance System. He uses it to perfection—“knowing how to get blood out of a rock.” Perhaps an attribute of being a lawyer.

posted by: LongJohn47 | January 14, 2014  9:13pm

Noteworthy—read the NYT series on campaign finance.  What’s going on here is small potatoes

Stan—money follows power.  Always has, always will.  Ask John Rowland.