The D.C. public trough is about to have another mouth to feed: politicians.
The so-called Fair Elections Act of 2017, a measure that would provide a five-to-one tax financing match to small-dollar donations to D.C. candidates, cleared committee this month. The sponsor markets the proposal as “giving more people a bigger voice.”
That’s nonsense. The bill proposes a grand experiment with unpredictable impact. There’s a good chance that it will turbocharge the power of special-interest groups in D.C. campaigns, giving fewer interests a dominant voice. It also could incentivize fraud, which could lead to a collapse of public confidence.
The proposal is biased in favor of a new form of special PAC. The fine print allows for allocations from labor unions to count as contributions from individuals, and thus may be considered small-dollar donations. The provision not-so-subtly prohibits similar contributions from partnerships and small-business owners. The D.C. ACLU noted “labor unions do not have greater First Amendment rights than other kinds of organizations.” But the potential constitutional defect remains.
The tax-funded match initially is more generous than it appears. For example, the first $5,000 raised for a D.C. Council race generates a bonus payout of $40,000. That’s on top of a matching payment of $25,000, or a 13-to-1 match in all, that could provide a big temptation to cheat. This is hardly speculation; in virtually every jurisdiction where tax-financed campaign financing has been tried, candidates have attempted to get campaign funds fraudulently.
In Los Angeles, Councilwoman Nury Martinez has been accused of fraudulently claiming small qualifying donations to receive matching funds (although the FBI investigation is ongoing, three supposed “contributors” have said that they did not contribute to Martinez’s campaign).
In Arizona, Yurikino Centit Downing was indicted on six felony counts in 2004 for misusing more than $100,000 in public funds in his campaign. During his bid for state legislator, Downing spent taxpayer funds on parties at nightclubs, restaurant bills, rental vehicles and expensive office equipment — even though a subsequent investigation found no evidence of a serious bid for public office.
These stories only scratch the surface of the corruption engendered by public financing schemes. And there’s no reason to think the District would be different — indeed, it could be a lot worse. The D.C. Office of Campaign Finance is often viewed as asleep at the switch, with failures to enforce deadlines, competently maintain evidence, responsibly manage public money or even refrain from nepotism. The New York City program has rigorous audits of campaigns, and one national group urged an auditing provision for the D.C. program, but that, too, was ignored. In short, the program will have high risk of fraud.
With this kind of generous match, special-interest groups may well conclude the best way to gain even more influence will be to raise money for favored candidates, knowing that tax funds will make the contributions up to 13 times more valuable to the candidate.
It’s also quite possible incumbents will find the program will ease reelection. They could immediately raise tax-matched donations after getting elected, giving them a huge head start over challengers who emerged later in the election cycle. A more balanced program would limit the program to just the year prior to the election. And there appeared to be no consideration of pushing the primary to later in the year, as in New York. Because winning the primary is usually tantamount to winning the general, the D.C. calendar favors incumbents.
Finally, D.C. residents should prepare themselves to see their dollars eventually used to subsidize abhorrent exercises in speech. New York City recently gave Thomas Lopez Pierre $99,000 to help his anti-Semitic campaign, which vowed to make “greedy Jewish Landlords” pay for their “ethnic cleansing.”
D.C.’s Fair Elections Act is unlikely to give a voice to the voiceless. It’ll probably give more power to the already powerful. There is a real question whether it will produce any value, much less anything approaching its $20 million price tag.