[EL] Small and Large Donors (and Recusal)

Mon Nov 25 09:46:06 PST 2013

Look. Broad participation is a laudable goal. But you have identified the
problem with this whole discussion - it's academic. When the academic
collides with the real world things start to fall apart and all of the
"unintended" consequences start to bight us. Who could have predicted
contribution limits would give birth to independent expenditures and super
PACs. Certainly not any of the reformers or academics who now decry
independent expenditures. The history of independent expenditures in the
wake of contribution limits in California and in Los Angeles is
illustrative. In my 44 years of campaign experience I would say the
overwhelming majority of campaign contributions have gone from donors to
candidates with whom they agree philosophically. No one is being bought.
It's people supporting people who they like, or who they believe will
represent them well. Yes, that includes builders and developers and oil
companies and tobacco companies and the Sierra Club and the Consumer
Attorneys and everyone else who has an interest in the process. 

Larry

From: law-election-bounces at department-lists.uci.edu
[mailto:law-election-bounces at department-lists.uci.edu] On Behalf Of Mark
Schmitt
Sent: Monday, November 25, 2013 9:30 AM
To: law-election at department-lists.uci.edu
Subject: Re: [EL] Small and Large Donors (and Recusal)

This is intriguing, and definitely a reminder that both the academic debate,
and the semi-public debate, fails to notice all kinds of interesting
experiments at the municipal and state level.

I like that this approach puts the responsibility on the public official to
behave ethically. However, if you had a large number of $200 donors in a
community (and you should want to), then legislators might find themselves
in the situation where they would have to recuse themselves quite
frequently. That would mean that the dynamics of who recused would itself
have a huge impact on the outcome of decisions -- changing the composition
of committees or commissions, or shifting a decision from one agency to
another that would handle it differently. (I think this happened in Parks
and Rec.)  It would also give a lot of substantive power to whatever agency
enforced the law.

On the other hand, if you have a large number of $200 donors, and most
elected officials are receiving support from a lot of different people, with
different interests, the recusal process becomes less necessary. If I'm
deciding the zoning case of someone who gave my campaign $250, I'm a lot
more likely to ignore that fact if I have 1,000 other donors at that level.
That's one of many reasons that encouraging small donors, and broad
participation, is so important. 

Mark Schmitt
202/246-2350 <tel:202%2F246-2350> 
gchat or Skype: schmitt.mark
twitter: mschmitt9 

On Sun, Nov 24, 2013 at 10:43 PM, Justin Levitt <levittj at lls.edu> wrote:

FWIW, Prof. John Nagle discussed an idea akin to Rob's "Westminster
Approach" in his 2000 piece on legislative recusal, here
<http://ssrn.com/abstract=969810> .  I suggested that the concept might also
be extended to independent expenditures, in my reaction piece to Citizens
United, here <http://ssrn.com/abstract=1676108> .  

That said, my suggestion was designed for the sort of outsized campaign
support seen in cases like Caperton -- a hefty sum, and many times larger
than any other contribution or expenditure in the race.  That sort of
support would seem most likely to incur an incumbent's gratitude to an
extent not "shared with a substantial segment" of the other donors.  Maybe
$200 is a similar pot of gold in Westminster, but I am skeptical that a $200
contribution would earn special political favors in a city with 100,000
residents.

Justin

-- 
Justin Levitt
Associate Professor of Law
Loyola Law School | Los Angeles
919 Albany St.
Los Angeles, CA  90015
213-736-7417
justin.levitt at lls.edu
ssrn.com/author=698321

On 11/24/2013 6:01 AM, Robert Wechsler wrote:

Thanks, Michael, for posing the issue as you did. The issue of small and
large donors is an important one, which has been studied primarily by only
one side of the ongoing dispute.

Michael Malbin has written most on the issue. See the CFI page on this topic
<http://www.cfinst.org/smallDonors.aspx> , which has links to lots of
reports and articles on the topic.

With respect to New Haven's public financing program, a local newspaper, the
<http://www.newhavenindependent.org/index.php/archives/entry/oct_10_money_ma
ps/> Independent, has published a valuable analysis of the campaign
contributions in this year's election (which I was not involved in).

Besides the wealth of large vs. small donors, at the local level especially
there is another large difference between them. At the local level, small
donors tend to be expressing their political support for candidates. Most of
the large donors are either involved with the political party or faction, or
have a financial interest in the local government's decisions. The latter
group is essentially expressing their recognition that if they do not give,
they may not get to keep their contracts (or get new ones), they may not get
the next permit or grant they request, inspectors might come down hard on
them or, for government employees, they may not get a promotion or may even
lose their jobs. That is why the latter group tends to give primarily to
incumbents and their perceived successors.

In other words, the two kinds of contributions - small and large - tend to
be different both in quantity and in quality, and the donors have different
reasons and incentives for giving.

Speech is not an absolute. There needs to be a serious discussion of the
quality and quantity of these different kinds of speech, and of ways to deal
with them.

For example, an alternative approach to limiting contributions that involve
influence or pay to play is what I call the Westminster Approach
<http://www.cityethics.org/files/lgep1-0%20-%20Robert%20Wechsler.htm#Westmin
ster%20approach> , after the town in Colorado that first employed it. Here
is the language for the City Ethics version of this approach:

An official or employee may not use his or her official position or office,
or take or fail to take any action, or influence others to take or fail to
take any action, in a manner which he or she knows, or has reason to
believe, may result in a personal or financial benefit, not shared with a
substantial segment of the city's population, for ... a person or entity
from whom the official or employee has received an election campaign
contribution of more than $200 in the aggregate during the past election
cycle (this amount includes contributions from a person's immediate family
or business as well as contributions from an entity's owners, directors, or
officers, as well as contributions to the official or employee's party town
committee or non-candidate political committee)

No speech is limited here. Instead, a sizeable contribution creates a
conflict that requires the recipient's withdrawal from matters involving
this sort of donor.

I've been advocating this approach for five years, and although citizens
across the country have taken it up and advocated for it, I have not seen an
academic discussion of it.

Rob

On 11/23/2013 1:01 PM, Michael P McDonald wrote:

Sometimes how people talk past one another illuminates the real issue at
stake.

Rob is talking about a public financing system to increase the speech of
small donors, presumably through a contribution matching system.

Larry is talking about raising campaign contribution restrictions to
increase the speech of large donors.

I would be interested to see if Rob's assertion is true that there is a
tradeoff between small and large donors; that is, when public financing
systems were changed to allow candidates to pursue more large donor
contributions, the number of small donors decreased. If that can be
established, the Supreme Court might take a different position if the
Justices perceived a trade-off between the speech of small and large donors.
The result might also be further experimentation with hybrid public
financing systems with the goal to encourage both large and small donations.

Maybe I am more sympathetic to Rob's position, but I see his comment as
pleading with those who think only in terms of campaign contribution limits
as restricting speech to join in encouraging speech of all citizens, not
just the wealthiest among us. If one really cares about speech, isn't that
the compromise point in this debate?

============
Dr. Michael P. McDonald
Associate Professor
George Mason University
4400 University Drive - 3F4
Fairfax, VA 22030-4444

phone:   703-993-4191 (office)
e-mail:  mmcdon at gmu.edu               
web:     http://elections.gmu.edu
twitter: @ElectProject

From: law-election-bounces at department-lists.uci.edu
[mailto:law-election-bounces at department-lists.uci.edu] On Behalf Of Larry
Levine
Sent: Saturday, November 23, 2013 12:26 PM
To: 'Robert Wechsler'; 'Smith, Brad'
Cc: law-election at uci.edu
Subject: Re: [EL] Civic Courage, Indeed

You sidestep the fact that limiting campaign contributions is limiting
speech. It may be justified legally by a higher purpose of fighting
corruption. But the end result is that it has limited speech and in turn has
restricted the right to redress. And by the way, contribution limits is the
father of independent expenditures, which the reform community seems to
hate. Simple fact: you will never get rid of the perception of corruption;
in the last 40 years we have passed all manner of restrictions and
regulations and the perception is worse than ever. There is an American
institution devoted to promulgating the perception of corruption. It's
comprised of comedians from Will Rogers to Jay Leno and given life by
"reformers" who see corruption everywhere and have made an industry of figh
20;Those who would sacrifice liberty for security deserve neither." The same
can be said of those who would sacrifice speech in quest of the shadow of
corruption.
Larry

From: law-election-bounces at department-lists.uci.edu
[mailto:law-election-bounces at department-lists.uci.edu] On Behalf Of Robert
Wechsler
Sent: Saturday, November 23, 2013 4:22 AM
To: Smith, Brad
Cc: law-election at uci.edu
Subject: Re: [EL] Civic Courage, Indeed

the reform community doesn't bring anything to the table. Each battle they
lose in court seems to be nothing but an excuse to seek other, new ways to
regulate, intimidate, or otherwise silence speakers. Each battle they lose
in the legislatures is merely a temporary setback to their next effort. Even
many of the purest reformers will happily ally themselves with any corrupt
politician who clearly does simply want to suppress his opposition. They
call their opposition "ideologues," but there is one constant in their view
- an ideological commitment that things must be regulated.

Demonizing is not a way to seek compromise and deal effectively with
corruption. As a proud member of the reform communit seek new ways to get
more speakers, and I have succeeded. While Administrator of the New Haven
Democracy Fund, a public campaign financing program, and since I left, both
the number of candidates and the number of contributors grew. People who had
never thought of making a campaign contribution got involved and made their
voices heard.

Public campaign financing isn't even regulation - it's voluntary. And yet
you and your crowd have done what you can to undermine it. We had to change
our program to meet the new restrictions on the speech, both of candidates
and of contributors, that were imposed by the Supreme Court at your behest.
The result was that insider candidates chose not to participate in the
program. The program has still been successful, but your efforts undermined
speech, and enabled a situation where contractors and developers (who don't
give to outsider candidates) gave larger contributions and not only helped
incumbents and their successors to win elections, but lay environment in the
city.

So don't be such a holier-than-thou demonizer. You are part of the problem,
even with respect to what you say you are fighting for. And most of us
reformers support a solution that does not involve regulation, intimidation,
or the silencing of anyone.

It's sad that, to justify what you do and the problems you create, you have
to demonize others. It's sort of like war, isn't it?

Rob Wechsler
City Ethics
On 11/22/2013 11:37 PM, Smith, Brad wrote:
"The CCP crowd sees the spending as pure and spontaneous expressions of
political views." 
&nb >
I would not agree with either of the first two adjectives in that sentence.
I don't think most of us think these views are always pure, and rarely are
they spontaneous.

"Those who worry about corruption"  . include me and my guess is most of us
in the "CCP crowd" (and thank you for the endorsement). The question is the
degree of worry, especially when placed against other values and issues, and
further, the extent to which efforts to end "corruption" are themselves a
source of corruption in the process.<
ize:10.0pt;font-family:"Tahoma","sans-serif"'>

"People give or spend because someone asks them to." Of course they do. I'd
be shocked if there were disagreement here.

"That's [preventing corruption] the justification for for coordination rules
that identify certain individuals who are unlikely to be or be seen as truly
independent, not that certain people's speech is restricted." Of course it
is almost always the stated objective, and o ctive. Nevertheless, and even
in the latter case, it does restrict certain people's speech. 

"if it was all just donors expressing their views, campaigns wouldn't have
to spend 12% of their money and often more than half of their candidate's
time on fundraising." This statement is, I think, factually very wrong.
Charity Navigator, for example, considers fundraising expenses of just
10-15% to be very good for a charitable enterprise. It cost money to raise
money, and to convince people that a cause is worthwhile. 

"But in all but a handful of states, voters and legislators have
democratically decided that contribution limits at some level are
appropriate,." I think many people feel that the constitution correctly
places limits on what democratically elected governments can do.

"and the Court has agreed." And those people are trying to persuade the
Court that it got it wrong. 
&nb >
"Without coordination rules, those limits are meaningless, and it seems
entirely reasonable that prosecutors should enforce those laws."

I think the objection is that the cost of enforcing those laws - even if
they are legitimate - is high, and often not taken into account.
Coordination investigations probably offer the greatest possibility in the
campaign finance world for abuse of prosecutorial power, and as such they
also destroy confidence in government by creating - dare we say it - an
appearance of corruption. Even when investigations are properly motivated,
they have the potential to particularly suppress la er campaign finance
investigations. It is perfectly legitimate to suggest that these are high
costs that ought not be ignored. Moreover, it is perfectly predictable that
almost every high-profile coordination investigation will raise suspicions
of corrupt behavior by prosecutors and complainants. That is why I'm not
hearing people say the coordination laws should not be enforced - rather, I
am hearing them say that either a) they should not exist, because the
benefits are not worth the co!
 sts; or 
b) they should narrowly circumscribed, because otherwise the benefits are
not worth the costs.

Mark essentially argues "it's the law, and it should be enforced." This is
not a convincing argumen hould not be the law, and use examples of
enforcement to illustrate why it should not be the law.

The Constitution plainly circumscribes the extent to which government can
regulate speech. Some may be more absolutist on that than others, but I
don't think anyone on this list would disagree with that basic proposition.
The Court has long held that political speech is at the core of the First
Amendment. I think most people would agree, in theory if not always in deed,
with that statement. It is entirely reasonable, then, that many people will
seek to circumscribe the authority of government to regulate political
speech generally, and given the particularly intrusive nature of
coordination investigations pacity for political and prosecutorial abuse, to
limit the reach of such laws, and to point out possible abuses of the law by
political partisans and zealous prosecutors, politicians, and bureaucrats. 

I have written that the court is incorrect in allowing contribution limits.
But I have also written that the dichotomy between contributions and
expenditures is not non-sensical, and given that one rarely wins complete
and lasting victories in politics, I could live with a compromised world.
Reporters used to like to ask me if it would bother me if Bill Gates gave a
candidate a million dollars. My answer was always, "no, but if that were the
rule this wouldn't have become my life's w
yle='font-size:10.0pt;font-family:"Tahoma","sans-serif"'>

Unfortunately, I have seen little indication that the "reform" community is
prepared to live with me in a world compromised to both of us. As Mark well
knows, because he helped, that community spent hundreds of millions trying
to upset the Buckley status quo. It did not seem to occur to them that
"Buckley's rotten tree" (to use Burt Neuborne's old phrase), when pushed,
might fall in a different direction than they planned. So long as there is a
constant effort to expand the reach of campaign finance regulation, there
will be pushback, and that pushback is not illegitimate simply because it
argues, at times, for changing the law, or because it points out potential
abuses of the law. 

Courts, by their nature, can rarely broker a halfway position (Buckley was a
valiant effort). I think Mark Scarberry reflects the views of a lot of
people on the pro-speech side of the debate when he wrote in this thread:

"I'm not happy that people with money get to have such a disproportionate
impact on elections. . [But] With media of all kinds that have tremendous
power to affec cumbency providing such an advantage (including by way of a
President's ability to use incumbency to speak in an almost unlimited way to
the public and to manipulate information), and with the inevitability that
regulation will be used to protect incumbents and others who already have
power, I have to come down on the anti-regulation/pro-free speech side."

When I read that, I hear a guy who would be prepared to compromise, and I
think he speaks for many. Within the scholarly community, there is room for
compromise. A growing number of pro-reform scholars, for example, agree that
there should be significantly higher disclosure thresholds, higher
contribution limits (oft and greater sensitivity to speech concerns. But the
reform community doesn't bring anything to the table. Each battle they lose
in court seems to be nothing but an excuse to seek other, new ways to
regulate, intimidate, or otherwise silence speakers. Each battle they lose
in the legislatures is merely a temporary setback to their next effort. Even
many of the purest reformers will happily ally themselves with any corrupt
politician who clearly does simply want to suppress his opposition. They
call their opposition "ideologues," but there is one constant in their view
- an ideological commitment that things must be regulated. It seems that
ref!
 ormers t
oday, as they have for 40 years, see themselves as just one FEC
commissioner, one Supreme Court justice, one scandal away from that total
political victory.  That community, however, has lost a lot of ground in the
past decade. I suspect that it will soon lose more, unless it can change and
come more serious ments of its tormenters.

Bradley A. Smith
Josiah H. Blackmore II/Shirley M. Nault
   Professor of Law
Capital University Law School
303 E. Broad St.
Columbus, OH 43215
614.236.6317
http://law.capital.edu/faculty/bios/bsmith.aspx
________________________________________
From: law-election-bounces at department-lists.uci.edu
[law-election-bounces at department-lists.uci.edu] on behalf of Mark Schmitt
[schmitt.mark at gmail.com]
Sent: Friday, November 22, 2013 10:04 PM
To: law-election at uci.edu
Subject: Re: [EL] Civic Courage, Indeed
I've never found "appearance of corruption" to be all that conceptually
useful, although i long history in the legal doctrine. 

But it seems that every time one of these arguments disrupts this otherwise
placid list, we're really dealing with two totally different conceptions of
what happens when people make expenditures and/or contributions intended to
affect the outcome of an election: The CCP crowd sees the spending as pure
and spontaneous expressions of political views. Those who worry about
corruption tend to see transactions: People give or spend because someone
asks them to.  Anyone who supports contribution limits, even at a much
higher level than the current ones, implicitly accepts the basic notion that
if an elected official could ask a donor for $10 million, and get it, the
prospect of corruption is very high. But what if the transaction takes the
form of Bill Burton or Carl Forti making the ask on behalf of Priorities USA
or Restore Our Future? In the donor's eyes that's about as close to an ask
from Obama or Romney himself as you can get. B ons and their histories with
the candidat!
 e provid
e the donor with reassurance that the "independent" message will at least
not be at cross-purposes to the campaign itself. With those two assurances,
for the donor, there's really no difference between that transaction and a
direct contribution to the campaign, other than the amount. 
That's the justification for for coordination rules that identify certain
individuals who are unlikely to be or be seen as truly independent, not that
certain people's speech is restricted. 
Obviously, there's a mix between contributions/spending that is a pure
expression of viewpoint and that which is the result of a transaction with
someone who hopes for access to power, and many transactions have a little
bit of both. But if it was all just donors expressing their views, campaigns
wouldn't have to spend 12% of their money and often andidate's time on
fundraising.

I realize that some on this list would eliminate contribution limits
entirely, which would eliminate much of challenge of figuring it what
independent expenditures are not really independent. But in all but a
handful of states, voters and legislators have democratically decided that
contribution limits at some level are appropriate, and the Court has agreed.
Without coordination rules, those limits are meaningless, and it seems
entirely reasonable that prosecutors should enforce those laws. 

Mark Schmitt
202/246-2350 <tel:202%2F246-2350> 
gchat or Skype: schmitt.mark
twitter: mschmitt9 
Thank you, Robert, for helping to fill in a few of the details on what I'm
sure will be the ever-growing list of Americans who are prohibited from
exercising their First Amendment rights based on appearances, or at least
the appearances preferred (disfavored?) by the 'reform' community. I look
forward to reading about more Americans who need to go on this list. Perhaps
it could be cross-referenced with Santa's naughty/nice list?
Sean Parnell
President
Impact Policy Management, LLC
6411 Caleb Court
Alexandria, VA  22315 class=MsoNormal
style='mso-margin-top-alt:auto;mso-margin-bottom-alt:auto'>571-289-1374 (c)
sean at impactpolicymanagement.com

From: Robert Wechsler [mailto:catbird at pipeline.com] 
Sent: Thursday, November 21, 2013 8:01 AM
To: Scarberry, Mark; sean at impactpolicymanagement.com
Cc: law-election at uci.edu

Subject: Re: [EL] Civic Courage, Indeed

Dear Mark and Sean:

I think it is too often forgotten that campaign finance is part of
government ethics. Therefore, basic government ethics principles can seem
foreign to the conversation.

Both of yo s often don't like each other's politics. In fact, they often
don't like each other, period. But that does not make them any less
conflicted with respect to their candidate/official sibling. And the public,
which does not know the details of any sibling relationship (see all of
literature for the complexities involved), sees the same thing no matter
what the relationship actually is. And they are right to. Equally,
governments are right to create clear conflict rules, rather than basing
them on a vague concept of appearance.

I have never seen a conflict of interest provision that differentiates
between siblings that like or agree with their siblings. This equal
treatment of siblings, and others, is a basic government ethics principle.
It should apply equally in campaign finance.

Mark asks, "Would a family member be disqualified under this standard from
organizing an independ ily member's election?" The family member would still
be conflicted, but would coordination still be a concern? 
Well, it could be a fake supporter of an opponent. There are so many fakes
in recent elections that this kind of fake would not be surprising.
Considering how effective some outside independent groups have been at
shooting those they support in the foot, I would argue that a coordinated
opposing group would be a clever tactic.

The other basic concept that seems to be missing here is power. Both of you
seem to think that family relationships involve political ideas. No, family
relationships tend to involve power. The Cheney sisters' public disagreement
is atypical, as are Carville and Matlin.

With respect to independent groups, the principal issue involving family
members is not ideas. The principal issue is family members being seen as
coordinating to help one member get elected, to get power.

I don't share all the views of the sen , but I know that if I were to form a
supposedly independent group that took sides in his next election, no one
who knew about the relationship would believe there was no coordination. The
First Amendment isn't all that relevant here. No one has a First Amendment
right to insist he is not coordinating with his stepson when the public
reasonably believes that he is coordinating. This is about fraud and making
a mockery of rules that are intended to prevent corruption, not about a
marketplace of ideas.

Rob

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