The grassroots case for increased campaign finance limits

Tomorrow the Public Ethics Commission takes up campaign-finance rules (PDF). Campaign donation and spending limits are justified by a vague but widely-accepted notion that money is not great for politics, and limited money levels the playing field, encouraging grassroots candidates and competitive elections. As someone who served on the campaign committee of a grassroots challenger (Sean Sullivan in 2008) to an Oakland City Councilmember, I have seen how finance limits affect campaigns. Unfortunately, strict campaign-finance rules make it harder, not easier, for grassroots candidates to wage competitive elections. The evidence? Our remarkably entrenched City Council.

Oakland is one of the few California cities where Councilmembers can run for reelection indefinitely. Of the ten largest cities in California, only Oakland and Sacramento are without term limits for the City Council. In the other eight cities, incumbency is not an issue. But in Oakland, the advantages of incumbency are overwhelming: the last time a full-term Councilmember was defeated for reelection was in 1996, and half of our City Council has been elected to serve sixteen years or more. Oakland’s notable lack of term limits and the built-in advantages of incumbency aren’t the only factors producing stagnant leadership. Strict campaign-finance regulations also favor incumbents because incumbents have more access to loopholes than challengers, while challengers have passionate supporters who are more likely to give the maximum contribution.

The most significant loophole enjoyed by incumbents under Oakland’s campaign-finance rules is the ability to roll over debt from one campaign to the next without triggering self-financing penalties, which is very unfair. Incumbents also tend to do better securing matching funds than their challengers, and it is a rare day when a City Council challenger has access to ballot measure committees or other funds that are allowed to sidestep City regulation. But there is another key reason why incumbents benefit more from campaign donation limits than challengers: passion.

It takes a lot of passion to challenge a sitting City Councilmember. As much as people are dissatisfied with the City Council and City leadership in general, it is an uphill climb to unseat an incumbent. Councilmembers can punish their political enemies with unfavorable legislation, and though Councilmembers are not supposed to decide the character of individual development projects, the recipients of public contracts, where parking meters are located, or which parks get renovated, the fact is that they usually do decide these matters. Any community member with interests before the City is taking a huge risk when challenging an incumbent, and recent history bears this out. Nancy Nadel’s tight reelection campaign in 2008 featured a mailer attacking her opponents as real-estate speculators, yet property developers gave her more money than they gave her challengers, because most of them couldn’t risk her wrath. Those who are willing to jeopardize their interests to help Oakland achieve better leadership must be very passionate, and are therefore more likely to contribute the maximum amount of resources allowed.

The report prepared by Ethics Commission staff is flawed (PDF) but contains the information necessary to prove this point. Dan Purnell, Executive Director of the Ethics Commission, was quietly criticized on Monday for making errors of omission on an ethics matter that appear to favor Councilmember Jean Quan. For the Commission’s discussion of campaign-finance changes (which are opposed by Ms. Quan), Mr. Purnell, in his reports of past campaign donations and spending, wrongly includes City-provided matching funds in donation totals without noting so, making it appear that maximum-contribution donations are a much lower percentage of overall contributions than in reality. However, one can still see that Sean Sullivan received a higher percentage of his overall contributions in maximum increments than did Ms. Nadel. With incumbents enjoying a stranglehold over their seats, it makes sense to give challengers more of an opportunity to make their voices heard, and since raising donation limits benefits challengers more than incumbents, this aids the democratic process.

But that’s only one side of the equation. Low donation limits disproportionately benefit incumbents because their supporters tend to be less passionate, and because they have loopholes they can exploit that challengers cannot. But Oakland also has spending limits, and there are good reasons to think that IRV will increase campaign budgets. If those budgets are unduly constrained, rather than limiting the money in politics, money will just go around the candidates, weakening democracy and leaving candidates more beholden to special interests.

City Attorney John Russo makes a good case that Instant Runoff Voting should trigger an increase to campaign limits. Consolidating two elections into one necessarily lengthens the election season, increasing campaign expenses. More importantly, holding elections in November instead of June means that there are many more voters to capture (higher turnout is of course the main selling point of IRV). Ms. Quan said publicly that “you don’t need twice as many mailers” in a November election, but you have to send mailers to twice as many people. Failing to increase expenditure limits when campaign costs go up doesn’t take money out of politics, it takes control away from candidates.

Because, of course, money won’t leave politics. California cities are constrained in their ability to impose taxes, so there is less money in local campaigns because there is less at stake, compared to other states where many millions of dollars are spent on middling mayoral elections. But since there are still dollars at stake in election results, from businesses seeking permits to nonprofits seeking public funding, interests will spend money on campaigns regardless of what the Public Ethics Commission declares. If candidates cannot collect and spend these dollars, they will go to unregulated independent efforts. Thus spending limits don’t decrease money in politics, and can reduce candidates’ control over campaigns, encouraging negative campaigning.

Whatever high-minded goals avowed by campaign reform advocates are undermined by unseemly politicking over these decisions, with mayoral candidate Jean Quan exhorting her supporters to oppose raising campaign limits with the explicit goal of helping her campaign vis-a-vis Don Perata. But Mr. Perata controls an unregulated campaign account, and if there is money on his side, it will find a way into the election through independent expenditures. Mayoral campaign aside, Oakland desperately needs to level the playing field for challengers to our unusually entrenched City Council. Because of loopholes more available to incumbents, because of the real need for more spending due to higher turnout, and because of the passion of challengers’ supporters, loosening campaign-finance limits will aid grassroots democracy more than strict limits.