Can Connecticut’s campaign finance reforms be saved? [CT Mirror]

January 20, 2015

CT Mirror

Reform it. Leave it alone. Blow it up.

Needless to say, prescriptions for fixing Connecticut’s system of publicly financing campaigns vary wildly. Its tight limits on contributions and spending turned porous in 2014, tarnishing what had been a shiny instrument of campaign finance reform.

State contractors spent freely to support the re-election of Democratic Gov. Dannel P. Malloy, a publicly financed candidate, despite a prohibition enacted in 2005 in response to the bid-rigging scandal that toppled Republican Gov. John G. Rowland.

The state’s laws on disclosure fell short as Republican Tom Foley, also a publicly financed candidate for governor, benefitted from a $1.17 million contribution from an out-of-state Super PAC, whose financial backers remain unknown.

And Ted Kennedy Jr., a publicly financed candidate who won a state Senate race with an extra $205,000 from the Democratic Party, vividly demonstrated how Senate Democrats in 2013 weakened the spending limits originally imposed on legislative candidates participating in the voluntary public financing program.

“There are so many different pieces of the campaign finance puzzle,” said Michael Brandi, the general counsel and executive director of the State Elections Enforcement Commission, which is seeking a wide range of legislative changes in 2015 based on lessons learned in 2014.

One basic challenge is how the Citizens’ Election Program, as the publicly financing system is formally known, can remain relevant in an era of unlimited independent expenditures. Another is how it can survive some of the changes made in 2013 in response to the fear of outside money.

In all, outside groups spent about $18 million in independent expenditures to influence the race for governor, overwhelming the $13 million in public grants awarded to Malloy and Foley, whose campaigns each were granted $6.5 million for the general election.

There was no similar outpouring on legislative races.

“The program was tremendously successful this year. We gave 287 grants. The only individual races where we saw any large amount of independent expenditures was in the governor’s race,” Brandi said. “We think there are ways we can tweak the program to allow for some more protections, to allow for more disclosure, to allow for an ability to react [to outside spending] without impacting the true purpose of the program.”

It is unclear who will be the commission’s champion.

The Malloy administration, which has stripped the commission and other watchdog agencies of staff and other resources, says only that it will watch with interest. And legislators, who are their own special interest group when it comes to election laws, tend to view campaign-finance rules through the narrow prism of self-interest.

The top leaders of the General Assembly, Senate President Pro Tem Martin Looney, D-New Haven, and House Speaker J. Brendan Sharkey, D-Hamden, already disagree on whether the legislature should impose a new cap on the expenditures a state party can make in support of a publicly financed legislative candidate.

Sharkey said the Kennedy campaign proved that a cap is necessary if the spending and contribution limits on publicly financed candidates are to have any meaning.

Looney said legislators, as they examine the lessons of the 2014 race, should not forget the lessons of 2012. A Super PAC called Voters for Good Government surprised Democrats that year with a late attack, spending $500,000 on ads and mailers. Publicly financed Democrats had no resources to respond.

The effort was unsuccessful, but it prompted Democrats to strengthen the ability of the state parties to be a financial counter-weight to outside spending. The 2013 revisions to elections laws doubled the limit on contributions to the state parties from $5,000 to $10,000 and removed a $10,000 cap on the expenditures it could make on a legislative race.

“It seems to us to do anything other than what we did would be unilateral disarmament. That’s a problem for us,” Looney said.

The 2013 changes were felt in one race in 2014: Kennedy’s.

Kennedy and his supporters contributed generously to the state party, which then spent $205,000 on Kennedy’s campaign for state Senate — more than double the maximum public financing grant of $93,690 for a state Senate race. Kennedy, his wife, brother, stepmother and a business partner each gave $10,000 to the party.

Looney said Democrats expected that Kennedy, as a member of an iconic liberal Democratic family, would draw attacks from national right-wing Super PACS. The attacks never came, but the Democratic Party continued to spend money on Kennedy.

Sharkey said, at a minimum, the legislature must act in 2015 to impose a new cap on what the state parties can spend in support of a publicly financed candidate. Kennedy could not be reached for comment, but Sharkey says Kennedy is aware of his concerns.

“Ted and I have talked about the issue,” Sharkey said. “He fully supports the public financing system, and he indicated he’ll abide by whatever rules we establish for those races.”

But Senate Minority Leader Len Fasano, R-North Haven, said the unlimited spending by the parties is only one of at least three major holes in the public financing system, and all must be addressed for the system to have integrity.

“Fixing one leaves two big holes. Fixing two leaves one big hole,” Fasano said. “If you don’t have the guts to fix them all, then junk the whole system.”

Two of the holes identified by Fasano were those created in 2013: Doubling to $10,000 the limit on what contributors can give to the state parties, and allowing the parties to make unlimited expenditures in coordination with legislative campaigns.

The third was the extent to which Malloy exploited differences in state and federal campaign rules. The Connecticut law passed in 2005 bans state contractors from donating to state campaigns, while federal law has no such ban.

State parties maintain state and federal accounts, and contractors gave freely to the Democrats’ federal account. While the federal funds always covered get-out-the-vote efforts to the benefit of state and federal candidates, the Democrats went further in 2014, using the federal account for a mailer that focused on Malloy.

A GOP complaint about the use of the federal funds is pending before the State Elections Enforcement Commission.

Looney, Malloy and other Democrats blame the U.S. Supreme Court decision in the Citizens United case for the steps they have taken to circumvent spending limits set by the Citizens’ Election Program

The Jan. 21, 2010, ruling by the U.S. Supreme Court let stand state and federal limits on direct contributions to campaigns, conceding that contributions of a certain level could be corrupting. But the court also concluded that “independent expenditures, including those made by corporations, do not give rise to corruption or the appearance of corruption.”

“We believe deeply that Citizens United was a step backwards for elections across the country, and look forward to seeing how the legislature moves forward,” said Devon Puglia, a spokesman for Malloy.

Fasano and House Minority Leader Themis Klarides, R-Derby, said the Democrats either have to live within the public-financing program, including its limits on how much money they can raise and spend, or abandon it.

“This is neither here nor there,” Klarides said. “We’re in the middle.”