Into the Dark
July 19, 2013
Historically, the U.S. political climate tends to swing back and forth, often influenced by events. An extreme example was the Watergate scandal. The public’s angry reaction to its disclosures of sleazy campaign practices – including briefcases full of secretly donated cash – resulted in the passage of new federal laws requiring filing of campaign finance reports, disclosure of all campaign contributions over $100, and limits on individual contributions. The Federal Election Commission was empowered to enforce these laws.
The states’ reactions were similar to that of the U.S. Congress. In 1976 the Michigan Legislature passed a new Campaign Finance Act designed to limit the influence of large contributors and require disclosure of contributions.
But the wave of public demand waned over time. Court decisions and administrative interpretations weakened some of the reform laws. And a new generation of politicians, special interests and their attorneys dreamed up creative ways around the laws that survived. Major landmarks included the Supreme Court’s 2010 decision in Citizens United v FEC (holding that the First Amendment protects a corporation’s right to spend corporate funds for political speech), the lesser-known D.C. Court of Appeals decision in Speechnow.org v FEC (holding that limits on individual contributions to groups that make independent political expenditures are unconstitutional), the rise of tax-exempt so-called “social welfare” organizations and the explosive growth of “issues” ads which are barely disguised attacks on candidates for public office.
The Center for Public Integrity, a respected non-partisan investigative news organization, recently examined and graded numerous measures of government/political integrity, transparency and accountability in all fifty states.
Michigan ranked 44th, just ahead of South Carolina, and its overall grade was “F”.
The Michigan Campaign Finance Network (MCFN), a non-profit, non-partisan coalition of organizations and individuals concerned about the influence of money in politics, researches both reported and non-reported political expenditures, and issues periodic reports. MCFN is financed primarily by a major grant from the Joyce Foundation, according to MCFN Director Rich Robinson. Robinson, a former Peace Corps volunteer, has been aboard since 2001.
MCFN’s latest report (“Descending into Dark Money”), issued last month, covers the 2012 election cycle. The Network looked at all campaign finance reports filed in compliance with law, but it did not stop there. It dug into the records of TV stations and cable companies to find political expenditures, mainly for “issue” ads promoting or attacking candidates.
The financing of these ads is anonymous.*
MCFN found that “Three-fourths of spending in the 2012 Michigan Supreme Court campaign ($13,850,000 of $18,910,251) was off the books. As in other contexts, that means voters don’t know the identities of the campaigns’ biggest money supporters. ”
MCFN’s research also found that each of the two major political parties spent over $6 million on TV ads on the Supreme Court race, none of it reported.
The 1976 Michigan Campaign Finance Act requires that all political expenditures be reported to the Secretary of State. Section 6(1)(a) of the Act defines a political “expenditure” as any payment for goods or services “for purposes of influencing the nomination or election of a candidate”, which would seem to be pretty inclusive.
However, sub-section (2)(b) creates an exception if the expenditure is “for communication on a subject or issue if the communication does not support or oppose a ballot question or candidate by name or clear inference.”
Since 2004, the Michigan Secretary of State has used the so-called “express advocacy” test to determine whether an issues ad is subject to the statute. This test is simple: if the ad does not expressly say “vote for X” or “don’t vote for X”, it is not a “political expenditure”, and thus is not covered by the statute.
The Secretary of State’s rationale for this interpretation is based on the U.S. Supreme Court’s 1976 decision in in Buckley v. Valeo. In that case, the Court ruled that very similar language in a federal statute was “overbroad and vague” and could only be enforced by using the “express advocacy” test.
In 2006, then-Secretary of State Terry Lynn Land proposed amending the statute to require that the sponsors and financing sources of “issue” ads be reported, and to give the Department of State audit authority and subpoena power. Of course, this proposal went nowhere in the state legislature.
MCFN Director Robinson argues that no amendment is needed, because the courts have reinterpreted “express advocacy” in the years since the Buckley decision. He asserts that the Secretary of State could change her interpretation and bring the “dark money” into the light right now.
At some point in the future, there will be a campaign financing scandal and the pendulum will swing back to the reform side. When it does, the MCFN data, painstakingly collected and cataloged over the years, will be the critical evidence, a treasure finally discovered.
* Once in a great while the source behind an “issues” ad is exposed. For example, a 2008 report on state Supreme Court campaigns by Justiceatstake.org noted that:
“In 2004, a group called “Citizens for Judicial Reform”… attacked incumbent Justice Stephen Markman, saying that with Markman on the high court “no woman is safe.” The same ad said that Markman was an ‘extremist’ who was ‘appointed in secret on orders of the insurance industry and large corporations’. [Citizens for Judicial Reform] was later revealed to be a front group for trial attorney Geoffrey Fieger.”