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* I’ve been pushing reform groups to come up with some viable alternatives to the contribution caps law. The legislature will never go for eliminating it because that makes members vulnerable to big-spending individuals and groups. Reform for Illinois came up with some ideas and here’s a sampling…
Unfortunately, the self-funding provision inadvertently created a loophole that was ripe for abuse. As reported by Reform for Illinois and the Better Government Association, it has now become common practice for legislative leaders in both parties to donate or loan $100,001 to their own campaigns, triggering the self-funding provision and opening the floodgates to uncapped megadonor and special interest contributions. As the above table shows, all four legislative leaders have removed limits in their own races this election cycle.
Legislative leaders don’t need the extra funds for themselves—none of them has faced a credible reelection threat in years. Instead, they use the money to further consolidate their power by transferring millions to grateful candidates either directly or using a state party committee as an intermediary. […]
Option 2: Raise—but do not remove—fundraising limits in a race where a candidate self-funds
Currently, when a candidate in a race donates or loans more than $100,000 to their own campaign, all donation limits for all candidates in the race are removed. As an alternative, Illinois could raise contribution limits without removing them entirely to give non-self-funding candidates the opportunity to raise more without flooding the race with vast amounts of money and elevating the role of megadonors.
This model of increased but not unlimited contributions was implemented at the federal level in the congressional Millionaire’s Amendment. (The Millionaire’s Amendment was only ruled unconstitutional because it applied different limits to wealthy and non-wealthy candidates. Symmetrically applied increased limits should be constitutional.) In Colorado, a proposed constitutional amendment to create a self-funding provision (which voters ultimately rejected) would not have removed contribution limits entirely but instead would have quintupled them, increasing the amount candidates could raise but still subjecting contributions to caps.
For example, Illinois could amend the self-funding provision to triple contribution limits, which would increase individual contributions from $5,800 to $17,400 and independent expenditure contributions from $57,800 to $173,400—substantial amounts, but still significantly less than the $864,200 that Mike Madigan received from the Engineers Political Education Committee in December 2019 shortly after he triggered the self-funding provision for his race.
This year, from the start of January through the end of August, the Friends of Michael J. Madigan campaign committee has received more than $4.6 million from 67 individuals, unions, businesses, and PACs. $4 million of its funds have come from 11 PACs that donated in excess of normal contribution limits. If contribution limits were tripled rather than eliminated, the committee would have raised about $2.2 million during that period.
Option 3: Raise the amount a candidate must self-fund to trigger the removal of contribution limits
Currently, contribution limits are lifted once a candidate gives a certain amount to their campaign: $250,001 for statewide races, and $100,001 for all other races. If these thresholds were higher, the self-funding provision would be more difficult to exploit. Candidates wishing to lift contribution limits on themselves would need to be able to donate or loan a significantly higher amount to their campaigns in order to do so.
The proposed self-funding rule considered in Colorado would have kicked in after a candidate contributed $1 million to their own campaign—a much higher trigger than Illinois’. With a higher trigger amount, Illinois could preserve the original purpose of the self-funding provision while making it more difficult—though certainly not impossible—to exploit.
Conversely, however, it could make the provision less effective at providing a safeguard for non-wealthy candidates to compete with self-funders. A candidate could donate $999,999 to their own campaign without triggering the self-funding provision. To match that, a non-self-funding candidate would need to find 173 individuals, 87 businesses, or 18 PACs willing to contribute their legal maximum amount.
A higher triggering amount would have to be carefully calibrated to deter abuse without hobbling non-wealthy candidates. But there is plenty of wiggle room between Illinois’ current thresholds and $1 million.
Option 4: Only remove contribution limits when candidates donate to their campaigns, rather than loan them money
Currently, any contribution to one’s own campaign committee will trigger the removal of contribution limits. That includes a loan. In December of 2019, State Senator Don Harmon loaned his committee $100,001, allowing it to collect as much money from individual donors as they were willing to give. The committee repaid the loan to Senator Harmon in June of this year. Similarly, in October of 2018, Senate Minority Leader Bill Brady loaned his campaign committee $100,001. Three days later, he received $500,000 from Kenneth Griffin. Brady repaid his loan with $1069.45 in interest two months later. (His committee has yet to repay the loan he just made to it this August.)
The barrier to blowing contribution limits is relatively low when candidates only need to loan their campaigns money and are confident that they will be able to repay them once they start raking in large donations. In practice, this means that the self-funding provision rewards wealthy candidates for being able to front a repayable loan of $100,001 to their campaigns. Non-wealthy candidates, meanwhile, would not have the ability to do so. This aspect of the self-funding provision is giving an additional fundraising option to wealthy candidates that they can choose when to trigger, the opposite of the spirit of the law.
Amending the self-funding provision so that it only triggers when candidates donate—rather than loan—money to their campaigns would not fully prevent abuse, but it could reduce its prevalence by increasing the cost of triggering it.* Furthermore, it would promote the spirit of the law, given that a candidate who temporarily loans their campaign money that will be paid back is not actually self-funding. On the other hand, it would give yet another advantage to even wealthier candidates—those who can afford to permanently lose $100,001 rather than just lend it.
Option 5: Limit party contributions to candidate committees
A major problem with Illinois’ self-funding provision is that it allows a candidate to raise unlimited funds and transfer them to a party committee, which can then donate unlimited amounts to its own candidates—even in races where contribution limits are still in place. This is only possible because Illinois does not place limits on the amount a party committee can donate to a candidate committee during the general election. (Contribution limits are in place during the primary but they are very high: $144,800 for Senate candidates and $86,900 for House candidates.) About half of states and the federal government impose some sort of limit on the amount that candidates may accept from political parties. Similarly, Illinois permits candidate committees to transfer unlimited funds to state party committees in general elections, meaning money flows without restriction in both directions.
Imposing limits on transfers between candidates and parties would reduce the incentive for a candidate to take advantage of the self-funding loophole to enrich their parties while leaving the provision available for candidates who need to raise additional funds to match a self-funder. Currently, the self-funding provision is most often used by legislative leaders in each party. Because leaders typically come from safe seats and do not often face competitive elections, they are free to fundraise aggressively and dole out unlimited donations to candidates in other races. Limits on party contributions to candidates—and vice versa—would reduce the effectiveness of this strategy.
Thoughts?
posted by Rich Miller
Wednesday, Oct 21, 20 @ 10:47 am
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The report glosses over a few of the most important points of US Supreme Court precedent: (1) a state cannot cap the amount of money an individual can spend on their own race, and (2) a state cannot cap independent expenditures; (3) a state has to recognize corporations have status similar to individuals.
Unless (1) and (2) are changed, it is nearly impossible to adopt campaign finance reform that reduces the amount of money spent.
Their suggested options 2 and 3 only inject more money into the system. Neither reduce the “influence” of money, which is supposedly their intention.
Option 4 is semantics. Whether it’s a contribution or a loan, the committee can always “repay” the candidate. You cannot prohibit a committee from making that kind of expenditure.
Comment by southsider Wednesday, Oct 21, 20 @ 11:00 am
Option 5 makes it more likely that only wealthy candidates can run. Those who cannot self fund will find it nearly impossible to compete. Option 5 would lead to MORE career politicians, not fewer.
Comment by southsider Wednesday, Oct 21, 20 @ 11:01 am
=== Whether it’s a contribution or a loan, the committee can always “repay” the candidate===
Only if the candidate goes on the payroll. And then it’s taxable income.
Comment by Rich Miller Wednesday, Oct 21, 20 @ 11:04 am
I always thought the donation to break the caps made no sense. If I can afford to give my campaign a 100 large then rich people, businesses and union etc can give me even more.
It should just apply to my competitor who can receive with no caps up to what I put in.
Either way it’s all a big shell game and there will always be ways around any caps. I would like to see more disclosure of the individual expenditure funds. Follow the money.
Comment by Been There Wednesday, Oct 21, 20 @ 11:11 am
== - Rich Miller - Wednesday, Oct 21, 20 @ 11:04 am:
=== Whether it’s a contribution or a loan, the committee can always “repay” the candidate===
Only if the candidate goes on the payroll. And then it’s taxable income. ==
Disagree, Rich. A committee can refund a contribution at any point. A refunded contribution is not subject to taxable income.
Comment by southsider Wednesday, Oct 21, 20 @ 11:15 am
It’s no surprise that the eggheads at BGA and Reform for Illinois came up with these options, ignoring the real problem.
The real problem is millionaires/multi-millionaires/billionaires spending unlimited fortunes to influence elections or stepping into the ring themselves to trounce all opposition with their personal wealth.
Rauner beget Pritzker who beget Griffin.
The BGA and other reform groups won’t admit this because their secret list of mega donors includes millionaires, multi-millionaires and billionaires who like our skewed democracy just the way it is.
The ultimate solution is a Supreme Court that reverses Citizens United.
In the meantime, we should have public financing of elections in Illinois, and the public financing should not wait to kick in until a multi-millionaire drops a check for $100K. Require candidates to disclose their net worth (excluding their primary residence) on their candidate filing, and if it has six or more zeroes, every other filed candidate gets $100K in public financing immediately. When the millionaire spending on their own race exceeds $200K, every candidate gets 50% of whatever the millionaire gives to their own effort.
We require puppet candidates to file statements of economic interest, but not their puppet masters, the one calling the shots.
If Ken Griffin, or other mega-donor wants to spend $100K to elect a guy who pled for leniency for a child abuser like Rep. Morrison, they are free to under Citizens United. But the Illinois State Board of Elections really ought to require mega donors to file more robust statements of economic interest beyond occupation and employer.
Let’s see Griffin’s last five years of tax returns.
Comment by Thomas Paine Wednesday, Oct 21, 20 @ 11:20 am
– The report glosses over a few of the most important points of US Supreme Court precedent –
southsider, if you click through to the article, it actually does directly address those Supreme Court precedents.
Comment by Mike Wednesday, Oct 21, 20 @ 11:25 am
===Only if the candidate goes on the payroll. And then it’s taxable income.===
Could someone donate $101K to their campaign, breaking the cap, and then have the campaign refund the contribution 2 months later?
Been There has a great idea to only lift the cap for the competitor, not the self funder, and only to match the self funder.
Then again, I am also in favor of increasing the number of legislative seats to make them more competitive, more known to their constituents, more diverse and representative of their district, and less subject to high dollar races. That, and moving one of the chambers to sortition are two ways to reduce the influence of campaign finance.
Comment by thechampaignlife Wednesday, Oct 21, 20 @ 11:30 am
===Could someone donate $101K to their campaign,===
lol
Um, no. That’s why there’s a cap.
Comment by Rich Miller Wednesday, Oct 21, 20 @ 11:35 am
===Disagree, Rich.===
And you’re right. I withdraw my assertion.
Comment by Rich Miller Wednesday, Oct 21, 20 @ 11:48 am
===Um, no. That’s why there’s a cap.===
I mean a self funder donating to their own campaign to bust the cap. No limit there, now they have busted the cap and can take in unlimited contributions, and then they refund their contribution.
Comment by thechampaignlife Wednesday, Oct 21, 20 @ 2:44 pm
Unless and until SCOTUS reverse the rulings that declared corporations are people and money is freedom of speech, no set of rules or laws are likely to be successful, especially in Illinois’ political environment. If you raise the cap, only the rich will still be players in major elections, because the citizen legislature can’t even come up with the $100K, let alone $250. Do away with the cap, do away with the “loans” to campaigns, and open up the field of candidates.
Comment by thisjustinagain Wednesday, Oct 21, 20 @ 4:05 pm