On January 16, 2016 Common Ground hosted a discussion led by Sara E. Smith, staff attorney for Environment Texas, on the Austin Fair Campaign Chapter (AFCC), its shortcomings, and possible alternatives to it. It became clear within just a few minutes that although the AFCC may have been model legislation in the 1990s, it is now obsolete because City Council members no longer run at-large but now run in single-member districts. Besides being out-of-date, the AFCC is not enforced because the city’s Ethics Review Commission is a volunteer board without the resources to investigate violations fully and promptly.
The current Austin campaign finance system designed to limit corruption includes these features:
- Individual donor contributions are limited to $350 (adjusted annually for inflation).
- Total donations from outside Austin are capped at $36,000 (plus $24,000 for a run-off election).
- Fund raising cannot begin earlier than 6 months before a City Council election (this feature is designed to reduce pay-to-play governance).
- Self-loans are unlimited.
- Independent expenditures, typically from outside interest groups, are unlimited thanks to the Supreme Court Citizen United v. FEC decision. In Austin elections, they do not have to disclose their donors.
The preamble of the Campaign Finance City Code:
The City election process and city government should be protected from potential undue influence by individuals and groups making large contributions to the election campaigns of candidates for mayor and city council. The City election process and city government should be protected from even an appearance of undue influence by individuals or groups contributing to candidates for mayor and city council. The public should have justified confidence in the integrity of its government.
With the goal of protecting city elections and city government from potential or apparent undue influence by individuals or groups making large contributions to campaigns, are there alternatives to the current AFCC? Would they work in Austin? If not, what might?
Sara explored several models with us: Seattle’s Democracy Voucher system; New York City’s small-donor matching system; and Tallahassee’s Anti-corruption Initiative (for a detailed description of each system, see below).
After reviewing these models, what elements did we think were essential in a new Austin campaign finance system?
- A democracy voucher system like Seattle’s was attractive.
- New York City’s system of multiple matching of small contributions was attractive.
- Any system must include a component for voter education:
- To be eligible for funds, a candidate should be required to participate in some given number of public forums.
- An independently produced voters’ guide should be distributed to all households.
- The voters guide should be user-friendly, including only those candidates who will appear on the recipient’s ballot.
- Candidates’ access to media should be equalized [there was some discussion of the equal-time rule and the now defunct Fairness Doctrine, neither of which applies to cable networks or Internet media].
- Any system must include incentives to motivate participation. Alternatives include:
- Candidates participating in the program appear first in the voters’ guide.
- Candidates not participating in the program are omitted from the voters’ guide.
- Any system must include a small qualifying threshold to screen out non-serious candidates.
- Candidates’ use of personal (self-loan) funds for their campaigns should be banned. Candidates need monies available to them early in the campaign calendar.
- Some features of the AFCC should be retained:
- the limit on campaign fundraising to the 6 months preceding an election.
- the cap on total contributions received from outside of Austin to $36,000.
- the current contribution limit per individual to $350.
- All contributions should be disclosed to shed a spotlight on dark money.
- Potential sources of funding for a new system include:
- City of Austin’s general fund
- check-off on utility bill
- diversion of monies contributed to the city’s general fund from our publicly owned utility
- reallocation of monies from property taxes
- lobbying fees
Seattle’s Democracy Voucher campaign finance system (2015):
In Seattle, a nonpartisan, local coalition successfully passed the I-122 ballot initiative, which:
- Reduces the influence of big-money interests in city policymaking by
- limiting campaign contributions from big corporate interests that spend significant funds ($5,000+) lobbying the city and from corporations with large ($250,000+) city contracts.
- making it illegal for city officials and their top aides to take lobbying jobs immediately after leaving office.
- requiring elected officials to fully disclose possible conflicts of interest.
- Motivates candidates to focus less on needs of big money donors and to spend more time listening to voters by
- setting strict contribution limits of $500 in all city races, and limits campaign spending by candidates who receive public financing.
- tightening campaign reporting deadlines, and increases transparency with electronic disclosure requirements.
- increasing penalties on those breaking election rules.
- Provides each voter with four $25 “Democracy Vouchers,” giving ordinary people a stronger voice in local, thereby:
- enabling ordinary people to support candidates of their choice
- enabling more candidates, including women, young people and people of color, to run viable campaigns against big-money candidates.
The program’s cost ($3 million/year) is paid either from the general fund or from a levy, estimated at $0.019 per $1,000 of assessed property value (about $0.65/month for a $400,000 property).
New York City’s small donor matching system (1988):
As reported by the Brennan Center for Justice in “Small Donor Matching Funds: The NYC Election Experience,” the program provides a 6:1 match of the first $175 of each eligible contribution. Participating candidates can accept gifts exceeding $175, but only the “small donor” part of a contribution is matched. Contributions from PACs, unions, nonresidents of NYC, lobbyists, and natural persons doing business with the City are not matched. Contributions from corporations are banned for all candidates.
Data from recent New York City elections demonstrates that
- The program enjoys robust participation by serious, credible candidates.
- Since the enactment of the multiple match, the number of overall contributors and the number of small donors have increased.
- Participants rely on a greater number of smaller donors than do nonparticipants.
- The program encourages candidates to fuse fundraising and voter outreach efforts.
- The system promotes voter choice by enabling a diverse pool of candidates with substantial grassroots support but little access to large donors to run competitive campaigns.
- Especially in open-seat elections, the system has boosted competition by enabling greater spending parity between candidates.
Cities’ Anti-corruption initiatives
The American Anti-corruption Act, crafted in 2011 by former Federal Election Commission chairman Trevor Potter, served as a model for resolutions passed by city councils of Princeton, NJ (2014) and Roanoke, VA (2015) and for a referendum passed by the city council of Tallahassee in 2014.
The Act’s provisions
- Stop political bribery by overhauling lobbying and ethics laws.
- End secret money by dramatically increasing transparency.
- Give every voter a voice by creating citizen-funded elections.
The Tallahassee Anti-corruption Act, approved by voters in 2014, amended their city charter addressing ethics, corruption, and campaign financing. The ballot summary:
Shall the Charter of the City of Tallahassee be amended to establish an ethics and anti-corruption policy; require the enactment of an ethics code, establishment of an independent ethics board with broad powers, creation of an ethics office and officer; limit campaign contributions to City Commissioners to $250 per contributor per election and establish a voluntary citizen campaign finance rebate system for small political contributions.