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Minnesota’s campaign-finance system should be more transparent

Legislators are focused on campaign-finance reform this session, and for good reason. In the aftermath of the 2010 Citizens United decision by the U.S. Supreme Court, which struck down the prohibition on corporate and union independent expenditures, the ability of big contributors to avoid disclosure of their political contributions has expanded. Fortunately, Citizens United made it clear that more effective regulation of the disclosure of contributions is constitutional. With the significant increase in large political contributions in the last few years, it is even more important that the identity of the donors be available to the public.

beck portrait
George Beck

In the 2012 Minnesota election, expenditures by state legislative candidates totaled approximately $8.2 million, with an additional $9 million being spent on legislative races by independent expenditure organizations, sometimes referred to as super PACs. Total spending in one state Senate race exceeded $604,000, with almost $412,000 of that amount resulting from independent expenditures. The underlying source of this independent expenditure funding was not always disclosed.

Undisclosed contributions mean that the public will not know who is supporting a candidate or political committee. It also allows the donor to avoid any responsibility for funding its political aims. The proliferation of this so-called “dark money” has the potential to undermine our democracy. Minnesotans are unlikely to want to allow a few anonymous people or groups to control the public agenda in our state.

Bills in House and Senate

Legislation authored in the Minnesota House by Rep. Ryan Winkler, DFL-Golden Valley, and in the Senate by Sen. Ann Rest, DFL-New Hope, will increase the number of individuals and groups required to report and will increase the amount of money regulated and subject to disclosure. The legislation was recommended unanimously by the Campaign Finance and Public Disclosure Board, the state agency responsible for enforcement of Minnesota’s campaign-finance requirements. The legislation will expand disclosure by individuals or associations that engage in communications such as TV or billboard ads, to influence the election of candidates, but which avoid disclosure by avoiding the use of words of “express advocacy” such as “Vote for Jones.”

Instead of using words that explicitly support a candidate, a group can urge voters to “Thank Jones for his voting record” on a particular issue, and thereby avoid having to disclose contributors under existing law. These so-called “sham issue ads,” directed at a clearly identified candidate, take advantage of a loophole in Minnesota’s disclosure system, which is designed to let voters know who is trying to influence their vote. It has been noted that Minnesota’s failure to provide for reporting of expenditures in support of these “electioneering communications” prevents the compilation of complete and accurate data. The legislation, which only applies to larger contributions, adopts a recent decision by the United States Supreme Court.

One of the most striking developments in campaign finance since Citizens United is the increase of funding provided by independent expenditure organizations as opposed to funding provided by registered political committees or funds that must disclose all of their donors. Independent expenditure organizations are prohibited from coordinating their efforts with candidates and their spending cannot be limited. In 2010, expenditures by independent expenditure groups in Minnesota elections exceeded $9 million. Approximately $7 million was spent that year by party units and political committees that fully disclose their donors.

Better disclosure of money sources

The switch to, and increase in, spending by independent expenditure groups is attributed to the possibility of non-disclosure of contributors as well as the unlimited amount of money that can be contributed. Corporations can now use their general treasury money with little underlying source disclosure. The proposed legislation would tighten underlying source disclosure for independent expenditure and ballot question political committees or funds, so that better disclosure of the actual sources of money can be obtained.

These changes will be meaningful only if adequate funding of the Campaign Finance and Public Disclosure Board is provided. Since 2002 the Board’s staff has dropped from 9.5 full-time equivalents (FTE), to 7.6 FTE at present. Its budget has been reduced from a high of $735,000 in 2009 to its current level of $689,000 per fiscal year. At the same time, the number of complaints submitted to the agency has increased, and complaints have become more complex, requiring extensive investigation and analysis. The staff cannot now fully complete all of the responsibilities assigned to it by the legislature, including needed training and education for campaign treasurers and lobbyists.

The board has not been able to improve its website so that campaign-finance information is easily available to citizens. If contribution and spending data cannot be easily retrieved by the public, violations of the law cannot be spotted. Minnesota received a grade of C- from the Campaign Disclosure Project in 2008 for the degree to which disclosure reports are accessible to the public. A 2012 report by the National Institute on Money in Politics criticized Minnesota’s database because it cannot be easily searched and downloaded. The board also has not been able to conduct rulemaking to clarify legal requirements for those regulated. Without an increase in funding, staff levels would need to be decreased even further. And without adequate non-partisan enforcement, there is little incentive to follow the law.

Connecting the dots

Few issues are as important to our democratic form of government as citizen awareness of the impact of money on our elections and on decision-making by public officials. Since the amount of contributions cannot always constitutionally be limited, voters at least need to know who is funding efforts to elect candidates or to pass or defeat ballot initiatives. The goal is to permit voters to connect the dots between big contributions and favorable government action post-election, if it exists.

It’s been said that money talks, but when it doesn’t leave its name, it can warp our democracy. This Legislature will have the opportunity to provide a more transparent campaign-finance system and increase the power of ordinary citizens.

George Beck is a retired administrative law judge and a member of the Minnesota Campaign Finance and Public Disclosure Board. His views do not necessarily reflect those of the full board.

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