Citizens United Reform Bills Pair Disclosure Mandate With Higher Contribution Limits

WASHINGTON -- Before the next election cycle heats up, state lawmakers are trying to rein in the independent groups that -- thanks to the Supreme Court's 2010 Citizens United decision -- dominated the last cycle, raising and spending unlimited amounts of money. Bills are being pushed to increase donor disclosure at the state level, close campaign finance loopholes and, in a move questioned by reform groups, raise contribution limits for candidates running for state and local office.

In Maryland, Minnesota and Montana, lawmakers have proposed legislation that would pair increased disclosure by independent groups with higher candidate contribution limits. In Arizona and Florida, bills would merely increase contribution limits.

Thirty-nine states currently have strict contribution limits on the books, according to the National Conference of State Legislatures. Another seven states have nominal limits that allow for large contributions, and four states permit unlimited contributions.

The push for higher contribution limits at the state level is not new, but it is accelerating. In 2008, Missouri scrapped its contribution limits entirely. In 2012, in direct response to the Citizens United ruling, Illinois allowed candidates to accept unlimited contributions if an independent group spent more than $100,000 in their race.

The lawmakers who have introduced the latest bills argue that the increase in contribution limits is necessary if candidates are to compete in a post-Citizens United world of unlimited independent spending. Campaign finance reform groups, while in favor of increasing disclosure, are dismayed that it's being coupled with raising contribution limits.

"Exchanging a contribution limit for disclosure doesn't really fix the system. It just shows us how bad things are," said Blair Bowie, democracy advocate at U.S. PIRG, a public interest reform group with state chapters across the country.

"We're opposed to increasing the limits because it doesn't really address the problem," said Jerry Franck, chairman of Common Cause Minnesota, the state chapter of the national liberal reform group. "The problem is the increase in special interest funding. Putting more money in the system really is not a solution that works in the long run for democracy."

The legislation in Minnesota, spurred by recommendations made by the state's Campaign Finance and Public Disclosure Board, would close major loopholes by requiring both disclosure of donors to "electioneering communications" (issue ads running close to an election) and donor disclosure by nonprofits that give money to political groups and currently don't have to name their donors. This is matched with an increase in contribution limits for candidates running for all offices at the state level.

"Increasing the money flowing directly through candidates from individuals is a better system," Rep. Ryan Winkler (DFL-St. Louis Park), the bill's lead sponsor in the state House, said. "It might not be a perfect world, but we have to live in the world that the Supreme Court created for us and do the best we can."

A Maryland bill that increases disclosure by independent groups (particularly now-nondisclosing nonprofits), enhances penalties for noncompliance, raises contribution limits and closes a number of state-level loopholes passed both chambers of the Legislature with strong bipartisan support on April 3. It's set to be signed by Gov. Martin O'Malley (D) next week.

Maryland's contribution limit will be hiked from $4,000 to $6,000, and the overall amount a donor can give to all candidates in an electoral cycle will rise to $24,000.

State Sen. Bill Ferguson (D-Baltimore City), the lead sponsor of the bill, said about the inclusion of higher contribution limits, "It was a balance to get the more progressive reforms."

Among those reforms, Ferguson specifically mentioned the closing of a loophole that allowed a single donor to give the maximum contribution to a candidate again and again, through limited liability corporations under its control. The low cost of creating an LLC essentially enabled donors to bypass the contribution limits.

In Montana, a bill to increase both disclosure requirements and campaign contribution limits was introduced by state Sen. Jim Peterson (R-Buffalo) with the backing of newly elected Gov. Steve Bullock (D). It has passed the state Senate and awaits consideration in the House.

Montana, which currently boasts one of the lowest contribution limits in the country, has become ground zero for the impact of Citizens United. "Dark money" nonprofits spent big on the state's legislative races last year, targeting Democrats and Republicans alike. A report by PBS Frontline and ProPublica alleged that one nonprofit illegally coordinated with candidates in Montana races and lied to the Internal Revenue Service about its political activities.

The pending bill would close loopholes allowing these groups to try to influence election results without showing the source of their funds and would increase contribution limits from $630 to $2,000 for gubernatorial candidates and from $160 to $500 for state legislative candidates. The overall limit for political action committee (PAC) contributions would be eliminated.

Peterson told the Missoulian in March, "We are raising the contribution limits to make it easier for candidates to raise money, and not feel like they have to go to the sidelines to raise money."

C.B. Pearson, a longtime campaign finance reform advocate affiliated with Common Cause Montana, said that he supports the disclosure provisions in the bill, but is concerned about the changes to contribution limits, especially the elimination of the overall PAC limit.

"Only 3 percent of the contributors max out for state legislative races," Pearson said. "By raising the limits, all that we do is give those who are wealthy the capacity to give more money. It doesn't help."

Another Montana bill, which has already passed the state House, would also raise contribution limits but does nothing to address the lack of disclosure by independent groups spending on elections.

In Arizona, a bill to raise contribution limits passed the Legislature and was signed by Gov. Jan Brewer (R). The legislation, signed Friday, will increase contribution limits from $488 to $5,000 and eliminate the overall cap on how much candidates can accept from PACs.

Steve Wercinski, executive director of the Arizona Advocacy Network, a group opposed to contribution limit increases, said, "We're just going to see more larger contributions gaining greater influence over these policy makers."

Meanwhile in Florida, lawmakers are considering legislation that was originally written to raise contribution limits and eliminate a certain type of fundraising committee linked to scandals in recent years. After the bill passed the House, Gov. Rick Scott (R) announced that he would not sign it in its current form. Scott's statement put the brakes on the bill's movement in the Senate, where a committee recently stripped out the higher contribution limits.

It has not escaped notice that Scott, a wealthy man who spent more than $70 million of his own money on his 2010 campaign, benefits politically from the current system of contribution limits. If they can't similarly self-finance, Scott's opponents in the 2014 gubernatorial election will have far less money to defeat him.

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