The (Un)Intended Consequences of Campaign Finance Regs

Paul Jacob
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Posted: Aug 09, 2015 12:01 AM
The (Un)Intended Consequences of Campaign Finance Regs

Nothing surprising happened in Grand Rapids last week.

Simply stated, Michigan’s campaign finance laws are now being enforced against two powerful, well-connected interest groups that failed to report large, late contributions to a 2014 ballot measure campaign until well after the votes had been counted.

But the lesson to be learned is not “the system works.”

Last year, Rina Baker and Bonnie Burke launched a grassroots petition drive collecting the signatures of nearly 10,000 registered voters to place on the ballot a two-term “eight is enough” limit on election to the Grand Rapids City Commission.

The two women worked day after day for six weeks, personally gathering most of the signatures and made significant monetary contributors to the campaign, though neither appears to be a billionaire. Baker is a laboratory specialist at Spectrum Health and has twice before sought a seat on the commission. Burke is an adjunct member of the Kendall College of Art & Design faculty.

Soon arrayed against these two and their term limits measure, however, was the double-whammy of big business and big labor, led by the Chamber of Commerce and the Kent-Ionia Labor Council. A ballot committee was formed, called Protect Your Vote GR, with Dr. Glenn Barkan, professor emeritus of political science at Aquinas College in Grand Rapids, and indisputably a political “expert,” serving as treasurer.

As last November’s vote neared, Professor Barkan’s opposition group clogged answering machines with robo calls and stuffed mailboxes with slick advertisements warning against the “hijacking of our local democratic process,” suggesting that sinister forces were trying to “change our city charter, erode local control and silence your voice,” and ultimately urging Grand Rapids residents, “Don’t let your vote be shredded.”

Shredded votes? What on earth was the anti-limits campaign talking about?

Well, the good professor’s committee had somehow left out two critical words in their communications, which, if uttered, might well obliterate their entire effort.

Those two little words?

Term limits.

In addition to hiding the actual topic of the ballot measure from prospective voters, the Protect Your Vote GR group hid both the amount of money they had on hand and the source of that funding until after the election, too late for voters to consider.

Campaign finance reporting is designed to show sources and amounts of funding prior to an election. If one side ignores the rules and their opponent complies, they can gain quite an unfair advantage in last minute maneuvers.

“It just seemed odd that they could do all the mass mailings with little money,” said term limits sponsor Bonnie Burke. “We knew something was up. We ran a totally above-board campaign and they have these seasoned people and they weren’t sticking to the rules.”

Burke’s pro-term limits committee was also dinged for reporting a large contribution from the head of U.S. Term Limits some 48 hours late, though well prior to the election. In fact, the committee issued a news release announcing the donation on the very day it was received — as Burke put it, “No one can say that we were trying to hide it.”

On the other hand, it’s easy to understand why anti-term limits groups don’t want to disclose their funders. Term limits opponents invariably claim lobbyists and special interests will gain power, yet their argument lacks much punch when those same lobbyists and special interests write big checks to overturn or weaken term limits.

In Grand Rapids, the term limits opposition was funded by the usual laundry list of local politically connected special interests (both left and right), including: Orion Construction, Rockford Construction, the CEO of Irwin Seating Co., Custer Office Furniture (wonder if the city ever buys office furniture?), the Progressive Women’s Alliance, about a dozen attorneys from four prominent Grand Rapids law firms, the mayor’s re-election committee and the Grand Rapids Chamber of Commerce.

Late in the campaign, Amway Corp. gave $10,000 to the Grand Rapids Area Chamber of Commerce Ballot Committee, which turned around that same day to give $9,850 to Protect Our Vote GR. Neither the Chamber, nor the anti-term limits campaign bothered to report this money . . . until after the election.

Without my colleague at Liberty Initiative Fund, Scott Tillman, filing an official complaint, nothing would have been done. In fact, even after the complaint, the city clerk originally took no action, telling reporters she didn’t think the failure was intentional, merely “ignorance of the law,” and calling it “water under the bridge.”

The reaction of the state Bureau of Elections to the complaint was far less phlegmatic: “(Protect Your Vote GR) deprived voters from knowing the source and amount of more than half of the contributions it received during the reporting period before the election.”

The Michigan Secretary of State has now assessed fines and fees of $2,525 against the Chamber ballot committee and $7,455 against the Protect Your Vote GR campaign committee. The Chamber has already agreed to accept and pay the fine, though, it may take a few minutes to decide from which vat of money to pay it. No word yet on whether Prof. Barkan’s group will dispute their fine.

Both committees claim their failure to properly report was “inadvertent.”

“It was a clerical oversight,” Andy Johnston, vice president of government affairs for the chamber, told reporters.

“We made a mistake,” admitted Barkan. “We corrected the filing and that's it. Ultimately, we reported every penny we took in — maybe with the wrong dates, but we reported it all.”

After the election was over, of course . . . but, hey, what more can be expected of someone with a PhD in political science?

“I think [the fine] was kind of steep for that kind of relatively small error, and an error that was non-intentional but actually accidental,” the professor complained. “Frankly, I’m not sure how any non-attorney can understand the complexity of election law.”

“I’m glad Mr. Tillman found [the problem],” Dr. Barkan offered, but in adding, “I’m sorry he has nothing better to do,” I wonder just how glad the professor really is — especially since term limits won (and his cause lost).

For his part, Tillman has called for repealing the entire campaign finance regulatory regime, recognizing that, “Campaign finance laws do not stop connected insiders from gaming the system and hiding donations. Big money can ignore the laws and pay the fines if they get caught.”

More importantly, he told an MLive.com reporter, “Campaign finance laws intimidate and discourage outsiders and grassroots activists from becoming active in politics.”

Tillman has a cogent point. If Michigan’s campaign finance laws cannot be successfully navigated by experts in political science, by groups with access to lawyers and accountants, what does that bode for the average citizen?

To sum up: there was a political campaign, complete with contribution reports; a complaint was filed; a determination was made and fines were even imposed — which have been called “kind of steep.” But what comes shining through is not the hooray-for-us message, “the system works.” Instead, we see the uselessness, the absurdity and even the counterproductive impact of campaign finance regulation regimes.

Under the current system, these finance regulations only further block the non-wealthy from political participation. Well-heeled interests can and do simply pay large fines as a small cost of doing business. Yet, the little guy lacking lawyers and accountants and a bankroll to backstop any complaints or litigation, cannot afford to even play the game.

Serious students of regulation in general recognize the pattern here. Nearly all regulation aids the wealthier at the expense of the less well off — even if it is the latter who are said to be the beneficiaries for whom the regulations were cooked up. This applies to Dodd-Frank and Sarbanes-Oxley as well as to feel-good regulations as pushed by figures like Sen. John McCain . . . or your local political insiders.

Maybe it’s time to stop pretending this is an accident.