Public campaign finance reform urged at commission meeting

Danielle E. Gaines, Gazette.Net

A new form of public financing of elections is the best way to restore voters’ flagging faith in the electoral system, advocates said this week in Annapolis.

A state panel is looking at reforms to state campaign finance laws in light of recent court decisions that loosened regulations and an increasingly contentious political environment at the state and federal level.

“All of these problems have been exacerbated by the U.S. Supreme Court’s 2010 ruling in Citizens United, which threw out a century-old ban on corporations and unions making direct expenditures on electioneering,” said James Browning, regional director of state operations for Common Cause, a nonprofit, nonpartisan lobbying group.

Browning told members of the Commission to Study Campaign Finance Law on Tuesday that the decision already is giving rise to massive spending by wealthy donors at the expense of small, grass-roots contributors and that the state should strengthen election spending rules in a number of ways.

However, other experts and commission members at the two-day session worried that toughening campaign finance laws in Maryland might have an unintended, adverse effect.

"Are we going to drive money out of regulated system and into independent expenditure?" asked commission member Larry S. Gibson, a Baltimore-based attorney appointed to the panel by Gov. Martin O'Malley (D).

"Rather than making these [reforms] obsolete, this shows why public financing is ever more important and can be an effective tool for protecting the public interest from outside special interests," said Melissa Price Kromm, director of North Carolina Voters for Clean Elections, who came to support a publicly financed campaign program in Maryland.

The 18-member commission was created in 2011 to study areas where state campaign finance laws can be reformed, such as public financing, slate funding and the enforcement of campaign finance law violations.

Four bills were passed as a result of the commission's interim report before the start of the 2012 General Assembly session.

A final report is due prior to the beginning of the 2013 session.

Public financingCreating a new form of public campaign financing in Maryland could be the long-term solution to restoring public confidence in the election system, said Henry Bogdan, public policy director for Maryland Nonprofits, a group of 1,500 nonprofit organizations.

“Public trust and confidence in governmental institutions, and participation in our political process, is seriously threatened by growing cynicism and disenchantment with elections that seem increasingly dominated by the need to fundraise and spend,” Bogdan said.

He said creating a robust public campaign finance system with state general funds could build public confidence and discourage outside PAC spending.

Maryland has had a public campaign financing law for gubernatorial races since 1974, although it has been used only once, in 1994, according the Department of Legislative Services.

In recent years, the fund has been depleted after the General Assembly redirected almost $3 million from it for other election-related spending and removed the line on the state income tax return through which taxpayers could contribute to the fund.

The fund currently does not have enough money to finance one gubernatorial ticket in 2014.

Each year since 2004, lawmakers have introduced bills that would allow the money to be applied to legislative races. One such bill passed the House in 2008 but failed in the Senate by one vote, according to Browning.

A bill that would have publicly financed judicial elections also failed last session.

Kromm argued that the state might start its public financing program with judges, who in standing for election often must accept funding from business groups and attorneys that could appear in their courtrooms.

Since North Carolina implemented voluntary public financing for judicial campaigns in 2004, 80 percent of the candidates in contested races have enrolled in the program.

The 39 qualifying candidates have included 19 winners and 20 losers, 15 Republicans and 24 Democrats, 15 incumbents and 10 challengers, Kromm said.

The state now is expanding the public financing program to other areas, she said.

Undue influence Under current Maryland law, individuals and limited liability companies are able to donate up to $4,000 to any one campaign and $10,000 to all campaigns during a four-year election cycle.

Critics of the current law argue that one businessman may own dozens of LLCs from which he can make donations, giving that person undue influence in state politics. An LLC is a business structure allowed by state statute that blends elements of partnerships and corporations and whose owners have limited personal liability for the debts and actions of the enterprise.

“This loophole in campaign finance law in Maryland creates an unfair playing field,” Browning said. He pointed to three businessmen vying for slot machine licenses who each donated more than $125,000 to candidates through multiple LLCs from 2003 to 2005.

Business groups oppose the change and say the law was purposefully written to allow such donations.

“Businesses under common ownership could be geographically diverse, each with different interests and business plans,” said Ron Wineholt, vice president of government affairs for the Maryland Chamber of Commerce.

Maryland has more than 170,000 LLCs, according to the State Department of Assessments and Taxation.

Carville B. Collins, a Baltimore-based attorney who has been involved with similar reviews of campaign finance laws in 1985, 1995 and 2010, said much of the so-called loophole problem can be solved by increasing the individual contribution limit.

“If a limit is unrealistic, if it does not reflect the realities of the day, it will be ignored on the regulated side, or the contributions will move to the unregulated side,” he said.

Carville said a higher limit would encourage donors to follow the letter of the law and increase transparency in reporting.

Campaign contribution limits were last raised in 1991, when the law was changed to effectively double the contribution limits from $2,000 and $5,000 that were allowed in the four-year election cycle.

In the 20 years since, the Consumer Price Index has increased more than 68 percent, state income levels have more than doubled and campaign costs have increased significantly, according to the Department of Legislative Services.

Maryland’s $4,000 limit for election cycle donations to statewide offices is double the national median, but significantly lower than the highest limits ($60,800 for gubernatorial races in New York and $23,087 for legislative races in Ohio), according to the National Conference of State Legislatures.

The commission will meet at 4 p.m. Monday in Annapolis to decide how to proceed.