Demos Reports Examine Money in Politics at the Supreme Court

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This year won’t just mark the most expensive and big money-dominated election in U.S. history – it is also the 40th anniversary of the Supreme Court case that set the basic structure of campaign finance law.

In the report titled “Buckley at 40,” Demos counsel and senior adviser Adam Lioz examines how 1976’s Buckley v. Valeo launched a vicious cycle of political, economic, and racial inequality that endures today.

Demos is a group that is “working to reduce both political and economic inequality, deploying original research, advocacy, litigation, and strategic communications to create the America the people deserve.”

In advance of the January 30, 2016 anniversary of the decision, Lioz lays out the basics of the case, examines Buckley’s legacy after four decades, and explains why it is actually more important than Citizens United – all in an accessible question-and-answer format.

“Overturning Citizens United is a great first step, but it would return us to the glory days of 2009, when the donor class still set the agenda in Washington,” said Lioz. “Buckley is the root cause of our money in politics problems – the reason billionaires can spend without limit and drown out the rest of our voices.”

In a companion piece, Lioz makes the case for why transforming the Supreme Court’s approach to money in politics is critical to achieve a fair democracy, revive basic economic opportunity, and move forward our nation’s struggle for racial equity.

“Breaking the Vicious Cycle” details the Supreme Court’s role in gutting basic protections against wealthy interests translating economic might into political power.

In it, Lioz argues that democracy must write the rules for capitalism, not the other way around. The piece also points to a path forward hinged on new constitutional arguments and impending turnover at the High Court.

“Americans want to live in a country where the strength of our voices doesn’t depend upon the size of our wallets, and we all have an equal chance to get ahead,” said Lioz. “To get there, we’ll have to rescue our Constitution from a runaway Supreme Court. We need to clarify that We the People have the power to protect our democracy from big money dominance.  This will be the defining legal battle of this generation.”

Corporate Political Spending Disclosure Rule Can Proceed, Despite Omnibus Rider

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The U.S. Securities and Exchange Commission can work on a rule requiring corporate disclosure of political spending despite a policy rider contained in the omnibus budget approved last week, the Corporate Reform Coalition and congressional leaders have said.

Twenty-eight senators and 66 House members sent a letter to the SEC accompanied by a legal opinion explaining that the agency is free to work on a rule to require disclosure of corporate political spending – despite a provision in the omnibus spending package prohibiting the SEC from using fiscal year 2016 funds to finalize the rule.

The provision does not prohibit the SEC from discussing, planning, revising, investigating or developing plans or draft proposals for such a rule, the letter and legal opinion state.

Leading signers included Sens. Charles Schumer (D-NY), Robert Menendez (D-NJ), Jeff Merkley (D-OR) and Elizabeth Warren (D-MA), and Reps. Michael Capuano (D-MA) and Chris Van Hollen (D-MD). The legal opinion, written at the request of the Corporate Reform Coalition, was authored by John C. Coates IV, professor of law and economics at Harvard Law School.

“Had the Act been intended to restrict the SEC from using funds made available by the Act to engage in rule proposals or steps preliminary to rule proposals, it would not have used the phrase ‘finalize, issue or implement,’ but would have used the phrase ‘plan, propose, finalize, issue or implement’ or similarly broad language,” the opinion reads.

“We believe that disclosure of corporate political spending has immense value for investors and should be a top priority for the Commission,” the letter from lawmakers reads. “The ability of corporate executives to spend company resources for political purposes without shareholders’ knowledge raises significant investor protection and corporate governance concerns. Without transparency or disclosure, executives are free to spend funds invested by shareholders without accountability or monitoring.

The lawmakers concluded with the expectation that the agency will respect the urgency and need for the rulemaking and use its resources within the parameters of Section 707 to prepare for a final rule after fiscal year 2016. Lawmakers said they will ask for periodic updates from the agency to that end.

The Corporate Reform Coalition maintains that the SEC must protect investors and heed this request for action. Common Cause is a Corporate Reform Coalition member.

“For the sake of a functioning and accountable democracy, SEC Chair Mary Jo White should acknowledge the strong demand for a rule requiring disclosure of corporate political spending, and her agency should continue to work on the issue as allowed by the omnibus budget deal,” said Lisa Gilbert, director of Public Citizen’s Congress Watch division and co-chair of the Corporate Reform Coalition.

“While Congress – unwisely – has ruled out final SEC action on a disclosure rule in 2016, nothing in the omnibus spending bill prohibits continued work on the rule-making process that stops short of final issuance. The agency may continue to evaluate, plan and propose a rule that will help educate corporate leaders and stockholders on the importance of disclosure and encourage voluntary disclosure in the upcoming election,” said Common Cause President Miles Rapoport. “Members of Congress may be educated as well, and be persuaded to support continuing and completing the rule-making process after the 2016 election.”

The SEC has received more than 1.2 million public comments in favor of political spending disclosure, including from leading academics in securities law, investment managers and advisers, 70 major endowed foundations, Vanguard founder Jack Bogle and a number of state treasurers. Additionally, a group of former SEC commissioners, including former SEC Chairs Arthur Levitt (a Democrat) and Donaldson (a Republican), and former SEC Commissioner Bevis Longstreth (a Democrat), have commented in support.

OpenSecrets: 24 Major 501(C)(4) Nonprofits Spend More Than 50% of Budgets on Political Spending

A new report from the Center for Responsive Politics has published a new report showing that 24 major, politically active nonprofits have spent more than 50 percent of their budgets to influence elections in at least one year between 2008 and 2012.

The problem? It’s against federal regulations.

The report, published recently on OpenSecrets.org, explains:

Most of the groups are 501(c)(4) organizations –– like public charities but organized under a section of the tax code that classifies them as “social welfare” nonprofits. That designation allows them to shield the identities of their donors from public view and to accept funds in any amount from almost any source. They can also spend unlimited amounts. Treasury Department and Internal Revenue Service regulations require that (c)(4) groups be “primarily operated” to promote social welfare, which, according to the IRS, means that their political activity must make up less than 50 percent of what they do.

And the effects of this spending? The report states:

“To disclosure advocates like John Pudner, executive director of the conservative group Take Back Our Republic, that means money is hidden when it shouldn’t be. ‘Certainly it seems like everyone’s ignoring the 50 percent…it certainly seems like some of these [groups’] primary goal is electioneering,’ Pudner said.

The effect, Pudner says, is discouraging for many citizens. Grassroots activists used to feel they could affect elections as big as the 2004 presidential race, he said. “Now that the perception is just, all this dark money is flying around and they’ve become irrelevant — it really hurts the grassroots.'”

The read the entire report, click here.

For more on “dark money,” click here and here and here.

 

New Poll: Broad Support for Small-Donor Driven Solutions to Money in Politics

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Seventy-two percent of Americans – a broad, bipartisan majority – support small-donor solutions to overhaul America’s campaign-finance system, according to new polling released recently by Greenberg Quinlan Rosner for Democracy Corps and Every Voice.

“Voters from across the political spectrum agree that America has a money-in-politics problem and small-donor driven reforms are the answer,” said David Donnelly, Every Voice president and chief executive officer. “Americans — and particularly millennials — understand that when our presidential elections are funded by a small set of unrepresentative, elite donors, the voices of everyday people are not heard. Small-donor reform is good policy and good politics, and candidates should rally Americans to this cause.”

Here are some key findings from the poll: 

  • There is broad, bipartisan support for small-donor solutions. Seventy-two percent of Americans (including majorities of Democrats, Republicans and Independents) favor a plan to address the role of money in politics with a small-donor public financing system combined with disclosure for all political spending by outside groups and strictly enforced election laws.
  • Voters are concerned about the out-sized influence of a small, unrepresentative donor class. When asked to select their top concerns about money in politics from a list, voters were most concerned that big donors aren’t like regular people. Thirty-nine percent of respondents were concerned that donors are “overwhelmingly white, rich, older and male, and have made their money in finance, oil and coal in a nation that is increasingly younger, more diverse, and where women are a majority.”
  • Voters are concerned about Super PACS. Poll respondents also expressed concern over the fact that many presidential super PACs are raising more than their campaign counterparts and that just 158 families contributed nearly half of all the money raised for presidential candidates so far this cycle. 

Greenberg Quinlan Rosner conducted a national survey of 900 likely 2016 voters in December. Every Voice noted on its website that unless otherwise noted, the margin of error for the full sample is +/-3.26 percent at 95 percent confidence.

Department of State wins 2015 Pennsylvania Excellence in Technology Award for Online Voter Registration

Gov. Tom Wolf

Gov. Tom Wolf announced the launch of the voter registration system in August.

Pennsylvania’s Department of State has been awarded the 2015 Pennsylvania Excellence in Technology Award for its Online Voter Registration application.

The award, presented earlier this month as part of the Pennsylvania Digital Government Summit 2015 held in Harrisburg, recognizes projects that significantly advance the use of technology to deliver government service.

Gov. Tom Wolf and Secretary of State Pedro A. Cortés announced the launch of the Online Voter Registration site in August. Since then, more than 51,000 eligible citizens have used it to register to vote or to make changes to their existing voter registration.

“The goal of the online site was to increase participation in our electoral process by making voter registration more convenient, accessible and secure,” Cortés said. “This honor affirms what voters have already made clear – that online registration is a welcome addition to traditional registration methods.”

The Pennsylvania Excellence in Technology Award recognizes “stellar achievements and innovative initiatives in the public sector throughout the Commonwealth of Pennsylvania,” according to its website.

The OVR project was accomplished in cooperation with the Governor’s Office, the Department of Transportation, the Office of Administration’s Office of Information Technology, the Center for Civic Design, and Acclaim Systems.

“There were many people who worked diligently on the development of OVR. We were well aware of the significance of our work, and were proud to be part of this historic project,” Schneider said.

For more information about voting in Pennsylvania, visit www.votesPA.com.

New Report: Obama’s Campaign Finance Legacy

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(Official White House Photo by Pete Souza)

A new report published online by the grassroots organization Demand Progress explores what President Obama’s legacy will be in the realm of campaign finance reform.

The 34-page report, titled, “A Legacy of Inaction: President Obama and Secret Money in Politics” begins:

At first glance, President Obama appears to be among the strongest critics of the Citizens United decision and its effects. He famously broke decorum to criticize the Court’s decision while six justices sat before him at the first State of the Union address following Citizens United.
Repeatedly, he has drawn from the rhetorical well of decrying the harm he says the decision has done to our political system, stating “ordinary Americans are shut out of the process” in a system with “millionaires and billionaires bankrolling whoever they want, however they want, in some cases undisclosed.”
Yet, President Obama’s record has not lived up to his rhetoric. As this report will detail, the president has numerous avenues to take executive action to fight the impact of secret money in politics, without needing the approval of Congress. With little more than one year left in his term, he has taken none of them.

The report cites several instances where the president could have done more for campaign finance reform, including:

  • when he backed away from signing an executive order requiring federal contractors to disclose political spending
  • how he has failed to appoint members of the Federal Election Commission as their terms expired. So far, he has only appointed two of seven commissioners
  • when he signed into law “a six-fold increase in the contribution limits governing how much money donors can contribute to political parties in the 2014 CRomnibus bill and legislation repealing public financing for political party conventions”

The report listed several things it claims the president must do before the end of his term to fulfill what it refers to as his former campaign promises.

The actions include:

  • issuing an executive order regarding the political spending of federal contractors, requiring all spending to be reported within 24 hours
  • appointing members to fill all five open commissioner seats on the FEC

The paper concludes:

“The president alone will choose the legacy he leaves. He has shown a willingness to take strong executive action to deliver for the American people and bolster his legacy on issues like climate change, criminal justice, and preserving the open internet.
After years of telling Americans he agrees that ordinary people should not be drowned out by big money in politics, President Obama still holds a final chance to live up to those words. If, on the other hand, he does not take action and remove this stain from his legacy, he will only further empower the cynics who say participating in politics is a fool’s errand and politicians are never deserving of our trust.”

What You Need to Know about Citizen Funding for Elections

The Campaign Finance Institute recently released a report titled, “Citizen Funding for Elections: What do we know? What are the effects? What are the options?” – and we wanted to make sure you saw it.

Here’s a sneak peak of the executive summary:

Political campaigns have always been financed disproportionately by people with above average incomes…. But the balance has tilted almost beyond recognition since the Supreme Court’s 2010 decision in Citizens United v. Federal Election Commission…. As a result, a number of jurisdictions have been looking recently to re-balance the incentives through new (or updated) citizen funding programs or tax credits to enhance the role of small donors.

When looking at these new programs and proposals, it is striking how common impulses have led to a wide variety of policy ideas, and an even wider set of justifications and expectations about what the new programs are meant to accomplish. Some want to drive money out of politics; some to increase competition; some to bring a different type of politician into office; and some to enhance participation. In light of this policy ferment, this report seeks to lay out for policy makers what is known and not yet known about whether citizen funding and other incentive programs have accomplished or are likely to accomplish their stated goals.

Here were some of the report’s conclusions:

  • Citizen-funding programs do not and cannot squeeze private money out of politics.
  • A properly designed program can increase the proportional importance of small donors to candidates and increase participation by an economically and demographically more representative cadre of campaign supporters. Candidates may choose to depend on large donors if they wish, but a well-structured program can make it possible for a candidate to choose otherwise. In the most effective programs, substantial percentages of the candidates make this choice and participate.
  • These results probably do not occur because small donors react spontaneously and directly to matching funds or tax credits. Instead, the research suggests (but is not yet conclusive) that incentives work by affecting candidates. The small donors are worth more (both financially and as volunteers), so the candidates and others are willing to spend more time and resources to mobilize them.
  • Whether increasing small donors will favor political polarization will depend on a program’s details, but small donors generally are not more polarized than other individual donors.
  • Citizen funding may also affect other aspects of a candidate’s behavior – from deciding to run and to how they conduct campaigns.
  • Research on the post-election effects in government finds more of an impact on agenda-setting than on end-stage roll-call votes.
  • Finally, the research shows that a program’s fine-grained details can make a huge difference in outcomes. A program that works will be based on the best available evidence – including the best practices for implementation after a bill becomes law.

The report concludes with the following:

Incentive programs do not accomplish everything their supporters have enthusiastically claimed for them. But what they accomplish can be quite significant…. Today’s incentives produce today’s politics. Changing the incentives could change tomorrow’s.

Civic Organizations Sue North Carolina for Failing to Comply with Federal Voting Rights Obligations

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A coalition of civic organizations in North Carolina said that widespread disenfranchisement and a steep decline in voter registration activity has led them and voters to file a lawsuit against the state of North Carolina for violations of an important federal voting rights law.

Attorneys for Action NC, Democracy North Carolina, the North Carolina A. Philip Randolph Institute and three individual North Carolina citizens filed suit against the state officials responsible for elections, public assistance programs and motor vehicle services for failing to provide federally mandated voter registration opportunities, in violation of the National Voter Registration Act of 1993, in the U.S. District Court Middle District of North Carolina.

The NVRA, commonly referred to as the “Motor Voter” law, is aimed at increasing voting opportunities for eligible citizens by making voter registration accessible at the government locations people visit most frequently. The NVRA requires that public assistance agencies—like the agencies that run WIC, TANF, and Medicaid—and motor vehicle offices provide specific voter registration services to individuals whenever they apply for or renew public assistance benefits, driver’s licenses, or state-issued identification cards, as well as when they report a change of address to the relevant state agency.

Earlier this year, the plaintiffs sent letters to the North Carolina State Board of Elections, the North Carolina Department of Health and Human Services and the North Carolina Division of Motor Vehicles notifying them that they were violating the NVRA, and urging them to fix the problems and bring the state into compliance with the law.

According to the plaintiffs, North Carolina failed to remedy its NVRA violations in response to the letters.

“We had hoped that we could work cooperatively with the State to ensure that individuals were being provided the voter registration services federal law requires,” said Bob Hall, executive director of Democracy North Carolina. “Unfortunately, these North Carolina agencies have dragged their feet on fixing the problems we identified in our letters, and it has become clear that federal litigation is necessary to bring North Carolina into compliance with the NVRA.”

State data show a steep decline, beginning in 2012, in the number of voter registration applications originating from public assistance agencies, far exceeding any change in the public assistance caseload.

“North Carolina’s public assistance agencies are routinely failing to provide NVRA-mandated voter registration services,” said Allison Riggs, Senior Attorney at Southern Coalition for Social Justice. “Extensive interviews conducted at public assistance offices in 11 counties found rampant lapses in compliance with the law, lapses that are having a huge impact on North Carolina voters.”

“The recent drop in agency-based voter registration applications cannot be explained by voter apathy or a dearth of competitive elections,” said Pat McCoy, Executive Director of Action NC. “In 2014 there were some highly competitive elections in North Carolina and, because the state has not been meeting its voter registration obligations, organizations like ours have had to pick up the slack and carry on the work that is and should be the state’s responsibility, under the NVRA.”

North Carolina is also failing to place many voters on the rolls when they attempt to register at DMV offices and the state is similarly failing to offer required voter registration services to individuals who renew their driver’s licenses or non-driver identification cards through the mail or on the DMV website, the groups allege.

“A significant number of individuals across North Carolina—including our client Sherry Holverson— were forced to vote provisionally in the most recent election, despite having requested to register or update their registration through the North Carolina DMV,” said Catherine M. Flanagan, senior counsel for Project Vote. “For example, over 150 individuals in Mecklenburg County alone were unable to cast a regular ballot in the 2014 General Election because of apparent DMV errors in processing their voter registrations.”

This is not the first time North Carolina has had to bring its voter registration procedures into compliance with the law. In 2006, voting rights advocates brought compliance problems at public assistance agencies to the attention of the executive director of the State Board of Elections, and cooperatively developed a plan that, until 2011, dramatically improved the state’s compliance with its voter registration obligations at public assistance offices.

The defendants in the lawsuit, all named in their official capacities, are Kim Strach, the executive director of the North Carolina State Board of Elections; Rick Brajer, secretary of the North Carolina Department of Health and Human Services, who oversees the operations of the state’s public assistance agencies; Kelly Thomas, commissioner of the North Carolina Division of Motor Vehicles; and Nick Tennyson, secretary of the North Carolina Department of Transportation, who together oversee the North Carolina Division of Motor Vehicles.

Pittsburgh City Council Calls on Legislators to End Gerrymandering

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Pittsburgh City Council recently passed a resolution urging lawmakers to end the practice of gerrymandering legislative districts.

In the resolution, council urged the passage of SB 484, a bill in the state Legislature that would create an 11-person commission composed of members with no personal stake in the redistricting process.

That group would be tasked with drawing congressional and General Assembly districts based on objective criteria – and prohibited from drawing districts that benefit a particular political candidate or party.

Another requirement is that all the commission’s business must be conducted in public.

Senate Bill 484 was introduced by Sen. Lisa Boscola, who wrote this in her co-sponsorship memo:

This legislation calls for the establishment of a Citizen’s Redistricting Commission to achieve true independence in our redistricting process.  The Commission shall consist of registered Pennsylvania voters that do not presently hold public office or are employed by a public official.  The panel will be comprised of 5 registered Democrats, 5 registered Republicans, and 4 with other party affiliation.

The current system allows lawmakers to have a hand in drawing their own districts, an outright conflict of interest that gives an advantage to an incumbent legislator or political party.  Districts need to be drawn in a responsible manner, not under political or party influence.

The legislation will require the final version of the Commission’s map to be approved by the voters.  This proposal is similar to the redistricting model that is currently used in the state of California.  It aims to produce a redistricting process that is independent from legislative or political influence.