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Rep. Ellison’s big idea for cleaning up campaign finance

WASHINGTON — The bill would provide matching funds for campaign’s smallest donors, and mean a lot more campaign cash for some candidates.

Rep. Keith Ellison

WASHINGTON — Liberal lawmakers like Rep. Keith Ellison are well aware the ambitious, idealistic bills they’re pitching this year have little to no chance in a Republican-controlled U.S. House.

But that’s not stopping them from pleading their case anyway.

“The energy you gather from just organizing transfers into the next session,” Ellison said Wednesday after rallying with progressive activists and lawmakers over their latest project. “If we get a majority then, then the moment might be right, but if we don’t organize on the front end, it would be one of those great ideas that should have passed but never does because we just didn’t have enough forces to do it.”

The “great idea” Ellison and colleagues were discussing Wednesday is a massive overhaul of the campaign finance system, looking to encourage candidates to move away from big-dollar donors by subsidizing both U.S. House campaigns and those who contribute to them.

The “Government by the People Act” would provide six-to-one matches for all donations worth less than $150, as long as candidates don’t self-fund, refuse most PAC money and, most importantly, decline donations over $1,000. To encourage more small-dollar donors, individuals could receive up to $25 in tax refunds for giving to campaigns, provided they don’t give more than $300 to a candidate in a cycle.

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As the law stands now, there are no matching funds for federal elections (though some states and municipalities have them) and anyone who’s clicked on a campaign’s big, shiny “donate” button has seen some boilerplate disclaimer warning that “contributions are not deductible for federal income tax purposes.” Individuals can contribute up to $2,600 to candidates for both primary and general election campaigns and this bill wouldn’t change that, though campaigns would be very much incentivized to ignore these big donors.

Lawmakers say the goal is to move candidates to small donors and do away with any sense of obligation they may feel to contributors who have money to spread around come election season. Ellison argued campaign finance laws leading to a “political inequality” that favors those with deep enough pockets to prop up candidates.

“The economic inequality actually causes a political inequality because the dollars go to buy political influence in various numbers of ways,” he said. “This has had a corrosive effect on our democracy, which I believe has a corrosive effect on who we are as a people.”

Make no mistake, this bill would be expensive (bill sponsors offered no price point or payment mechanism on Wednesday), expand a government agency (the FEC), and create a new federal subsidy program — so it’s going nowhere in this Congress.

But proponents say such this system would give a leg up to both new candidates and would-be challengers who might not have incumbents’ well-connected fundraising networks. Candidates who already rely on a large grassroots following would benefit, too, and Ellison said it could lead to candidates who run on more niche ideas that might otherwise scare away big donors (though they couldn’t be too far outside the mainstream – matching funds wouldn’t kick in for candidates unless they can raise $50,000 from at least 1,000 in-state donors first).

The legislation hits two of Minority Leader Nancy Pelosi’s four main post-Citizens United reform goals: enhanced contribution disclosures, a constitutional amendment to give Congress more regulatory power, full-scale campaign finance reform and “empowering” citizens to take a more active role in the political process.

It’s highly unlikely lawmakers will take up anything remotely related to that agenda this year, though Ellison said he suspects some Republicans would welcome the chance to cut loose their big-donors — who, themselves, might appreciate “feeling more like a citizen than a piggy bank,” he said.

But what would a bill like this do for candidates if it were in effect right now? Has Ellison crunched the numbers to see what it would do for his re-election efforts?

“I’ve looked at [the bill] as a matter of principle, and I’m all in,” he said. “But I haven’t looked at how it affects me. Maybe I should, but I don’t really care.”

Doing the math

Well, I wanted to know, so I got in touch with Ellison’s campaign staff, who did some calculations and sent me the numbers I needed to find out what this bill would do to Ellison’s fundraising if it was in effect right now.

What follows is a little back-of-the-envelope math to broadly illustrate the effects of a probably-never-going-to-happen bill — so take this all with a grain of salt.

The Ellison campaign has received more than $909,000 in contributions this year, the third most among Minnesota U.S. House members seeking re-election. But in order to receive matching funds under this bill, lawmakers have to forgo self-financing, PAC money and donations worth more than $1,000.

Ellison hasn’t self-funded, so there’s no change there. He’s taken in about $150,000 in PAC money, so we’ll cut that out – now we’re at $759,429.95. And according to his staff, he’s received $101,450.00 from people who have already given him $1,000 (in other words, if you had five $1,100 donors, the size of this pool of money would be $500). Assuming those donors would still give the maximum $1,000 allowed — but not anything more — we’ll take that amount out: Ellison has received $657,979.95 in donations worth less than $1,000. He’s now eligible for matching funds.

According to the Ellison campaign, he’s received $340,459.75 in donations worth $150 or less, each of which is eligible for a six-to-one match under this bill. I don’t have the breakdown for the individual contributions included in this pool, so I just matched the whole amount at six-to-one, which comes to $2,042,818.50.

Add together the matched funds, the principle $150 donations and the remaining $317,520.20, and under the Government by the People Act, Ellison would have brought in more than $2.7 million for his re-election campaign in 2013, thanks to small donors and a public financing system.

There is a $3.25 million cap on the amount of matching funds candidates could take, which would require raising about $541,700 from these under-$150 donors. So if this bill became law, candidates would face a dilemma at the beginning of their campaigns: Do they want to stick with their small donors, knowing they could get a $3.25 million subsidy from the government, or do they go the big donor route and hope to raise even more than that?

It’s unlikely they’ll have to make that choice any time soon, since Congress would first have to pass this bill, which it certainly won’t this year. But Ellison and progressives are going to rally around it anyway, hoping that they’ll get their chance someday.

“It’s in the heartland of the progressive vision for what campaign finance looks like,” Ellison said.

Devin Henry can be reached at dhenry@minnpost.com. Follow him on Twitter: @dhenry