Tracking state-level developments in campaign finance

A screenshot from the State Integrity 2015 report. (Credit: The Center for Public Integrity and Global Integrity)

In 2015, Global Integrity and the Center for Public Integrity published the State Integrity Investigation (SII), a state-by-state analysis of transparency and accountability measures around the United States. By examining government-regulated ethics sectors such as campaign finance, lobbying disclosure, state budgeting and freedom of information, researchers were able to determine how states fare relative to one another.

The big picture wasn’t pretty: Alaska topped the ranking with a C and the other 49 states earned Ds and Fs, grades that no one would be proud to bring home. While some states have voiced interest and support toward getting their ethics-laws in order, many more have remained quiet or have prevented reform from happening.

Now, one year after Global Integrity concluded the research period, we took the opportunity to see how state law has changed over the past twelve months in one crucial aspect of public administration: political financing or “campaign finance.” We wondered if we could identify changes (positive or negative) over the past year and since the publication of the results.

  1. Have states revised or clarified campaign finance limits?
  2. Have they enhanced their campaign finance disclosure regulation?
  3. Have states strengthened their campaign finance oversight mechanisms?

We will present the results of our follow-on investigation in three blog posts over the next few weeks.

A word on methodology

The first step we took in exploring state-level change since mid-2015 was to create categories from State Integrity Investigation questions that would let us evaluate specific aspects of campaign finance law and practice. The State Integrity Investigation evaluates state policy and practice on political financing through the use of 25 indicators which each explore 25 slightly different aspects of campaign finance in the states. We grouped sets of these indicators to produce thematic indices for campaign finance disclosure, campaign finance limits and campaign finance oversight. Taking this shortcut — relative to evaluating every indicator in every state — made updating the index more practically achievable for the purposes of this snapshot update.

Each of these three categories plays an important individual role in keeping state campaign finance transparent and accountable.

  • Campaign finance limits (SII indicators 14-25) not only cap the amount of permissible campaign contributions in order to lessen the risk of political favoritism, but can also limit the type of entities which are permitted to give to state political candidates.
  • Good campaign finance disclosure (SII indicators 31-39) allows the public to see who is funding campaigns to elect state officials and is a major component of political transparency.
  • Finally, campaign finance oversight (SII indicators 26-30) ensures accountability by verifying that  laws on limits and disclosure are respected.

This is a critical time to be staying current on the state of campaign finance regulation. The national field of campaign finance has shifted dramatically over the last decade due to U.S. Supreme Court decisions like Citizens United. With new entities like super PACs and new ways of skirting disclosure requirements, states need strong and updated campaign finance disclosure laws if they want to track the sources of campaign cash.

A first look at the data

Looking at the SII data and tracking progress on these issues over the last year since publication, we find that the evidence displays a mixed picture: According to our research, 13 state governments approved legislation changing contribution limits, 19 states revised disclosure requirements and 28 state governments enacted penalties or passed laws modifying their oversight mechanisms.

  • In terms of limits, just five states instituted legislation that we categorized as positive change, those that reduced or clarified limits. Those states were California, Maryland, New York, South Dakota and Utah.
  • Fourteen states improved disclosure requirements: Arkansas, Colorado, Connecticut, Hawaii, Idaho, Illinois, Maine, Maryland, Missouri, New Hampshire, New Mexico, South Carolina, South Dakota and West Virginia.
  • Oversight was the category with the most activity: 24 states saw positive developments, most of which took the form of fines or penalties levied on candidates who violated the law. Those states were Alabama, Alaska, Arkansas, California, Colorado, Connecticut, Georgia, Illinois, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, New Jersey, New York, North Carolina, Ohio, Oregon, South Carolina, South Dakota, Utah and Washington.

This data does not present a single trend. The states are diverse and most experienced progress in some areas along with stasis or regression in others. This means that advocates, especially those who work at the state level, should be vigilant and push for meaningful reform. Analyzing our findings, here is our take on the good, the bad and the …rest.

The Good

Just two states experienced a trifecta of positive change in all three political finance categories: Maryland and South Dakota. These states ranked 22nd and 47th, respectively, last year. It’s a positive sign that states that were in the middle or bottom of the ranking demonstrated the capacity for change this year, in ways minor or major.

  • Maryland brought transparency to a larger number of political groups, requiring entities that spend money to support or defeat ballot measures adhere to campaign finance law. It also codified that committees must reimburse via check, making the flow of money more traceable. The state also brought a bit more clarity to the complex world of corporate contributions. Law already required that companies with state contracts report their political donations. A new bill now requires that subsidiaries of those companies report this information, even if the subsidiary itself does not do government work. This will make unsavory activity harder to hide.
  • Meanwhile, South Dakota serves as an example of small strides that add up to progress. The state codified that state finance law can apply in county and municipal elections, bringing more regulations to those races. One provision allows the Secretary of State to terminate committees that broke the law, while another bill reduces the number of entities exempt from campaign finance regulations.
  • Connecticut and Hawaii, which came in 8th and 11th places in the 2015 ranking, also deserve special mention for refining already good systems. Connecticut will now require campaigns that have raised or spent $1,000 or more to file disclosure statements with the state; previously that threshold was $250,000. As a result, a whole swath of campaigns for state office will now experience greater scrutiny.

Lawmakers in Hawaii passed a bill rebuking Citizens United, requiring super PACs to be more transparent about the sources of their contributions, especially when that source is another wuper PAC.

The Bad

Just one state experienced regression in all three categories:

  • Arizona. In 2015, the state placed 26th for political financing, receiving criticism for doing little to stem the tide of dark money during the 2014 elections or strengthen the law following a raft of scandals. In 2016, the state did act, but inflicted further harm by passing bills that raised contribution limits and eliminated criminal provisions in the campaign finance statutes.
  • Michigan is an honorable mention in this category. It did not achieve the regression trifecta as Arizona did, but lawmakers did pass bills that undermined limits and disclosure. Last year, the state came in 32nd for Political Financing. Since then, it has only weakened its standing.

The Rest

Overall, our research showed that the most common case in the 50 states was not progress or regress, but stasis over the past year, particularly in the categories of limits and disclosure. And aside from administering penalties, just a handful of states revised laws regarding oversight.

Given that most states received Ds and Fs for their campaign finance rules in last year’s investigation, we already know that the status quo is not acceptable. The tide of money in politics will not turn on its own. To promote a culture of openness and transparency, the states must take an active stance. Lawmakers must act to strengthen the integrity of our political systems by placing adequate controls on the private money going to fund our public campaigns.