By Adam Pagnucco.

This past primary saw the first use of public campaign financing in local elections in Maryland.  Many people both inside and outside Montgomery County have been watching the system’s performance.  For the benefit of both MoCo policy makers as well as those in other jurisdictions who are considering adoption of this system, here are the things we have learned about public financing.

Public financing was heavily used and helped attract a record number of candidates.

Thirty-three candidates enrolled in public financing.  Four of them ran for Executive, nineteen ran for Council At-Large and ten ran in Council Districts.  Of these candidates, twenty-three qualified for matching funds – all four Executive candidates, twelve Council At-Large candidates and seven District candidates.  That’s a 70% qualification rate.  MoCo has never had as many candidates for county office as it had this year – not even close! – and public financing was partially responsible for that.  Several candidates told your author that they would not have considered running if public financing had not been available.

Candidates in public financing can win.

Of ten county-level seats, six – Council District 3, Council District 4 and all four Council At-Large seats – were won by candidates in public financing.  Three of these winners were incumbents and three were not.  The County Executive seat may also be won by a publicly financed candidate pending absentee and provisional ballot counts.

But did public financing change the outcome?

The three incumbents who used public financing and won did not need the system to win.  Of the three non-incumbents who won while using it, we predicted that two – Council At-Large candidates Evan Glass and Will Jawando – would be strong contenders more than a year ago because they had run credible races before.  The third non-incumbent public financing winner, Council At-Large candidate Gabe Albornoz, would have at least been a viable candidate in the traditional system because of his endorsement by the Washington Post and his networks in the party, the community and among Ike Leggett supporters.  The leading Executive candidate in public financing, Marc Elrich, has long outperformed his fundraising and benefited from significant outside progressive support.  In no instance can we point to public financing as THE reason a candidate who was otherwise not viable became a winner.  In fact, if all candidates had used the traditional system, it’s possible that the exact same group of them would have won.

It was cheaper than expected.

The county set aside $11 million in its public election fund on the assumption that there would be many new candidates and that a lot of them would max out in public matching funds.  Yes, there were a lot of candidates, but only four – Council At-Large candidates Evan Glass and Will Jawando, Council District 1 candidate Reggie Oldak and Council District 3 incumbent Sidney Katz – maxed out.  Two more Council At-Large candidates – incumbent Hans Riemer and Bill Conway – came close and County Executive candidate Marc Elrich was not far off.  As a result, the county spent $4 million in matching funds distributions through the end of June – waaaaaay less than the $11 million in the public election fund.

Incumbents did well in the system.

In his 2014 race, Council At-Large incumbent Hans Riemer raised $271,817.  Four years later in public financing, Riemer raised $326,866 through June – a 20% improvement.  Council District 3 incumbent Sidney Katz raised $135,589 in 2014.  Four years later in public financing, Katz raised $176,265 through June – a 30% improvement.  Council incumbent Marc Elrich, who ran for Executive, raised $851,602 through June, a higher total than he had raised before and enough to let him compete with a multi-million-dollar self-funder.  Fellow council incumbent George Leventhal, who also ran for Executive, had decent fundraising with $628,426 but his campaign was hurt by front-loaded spending and few endorsements.

The system did not produce credible challenges to district incumbents.

Council District incumbents Craig Rice, Nancy Navarro and Tom Hucker blew out little-known challengers.  In the latter case, Hucker’s challenger actually qualified for matching funds and sent out two negative mail pieces but was still wiped out by 45 points in early and election day voting.  In the only competitive district race, District 3 incumbent Sidney Katz used public financing to defeat Ben Shnider, who ran in the traditional system.  The lack of competitiveness in district races is a long-standing trend that public financing has not changed.

Public financing was administratively challenging.

While no users of public financing told your author that they regretted participating in the system, all of them complained about its cumbersome administrative requirements – especially showing proof of residency to obtain matching funds and dealing with filing issues in the state’s software.  The State Board of Elections has every right to verify in-county residency before authorizing release of public funds, but the system’s ease of use should be reviewed by the next County Council.

Raising money in public financing takes a long time.

We wrote about this during the campaign.  Because the system relies on a large volume of small contributions, contacting those MANY small contributors takes a long time to pile up serious cash.  Late entrants into public financing like County Executive candidate Rose Krasnow and Council At-Large candidate Jill Ortman-Fouse were unable to match competitors in fundraising who also used public financing.  The lesson here is if you are going to use this system, start running early.

Self-funders did not overwhelm the system.

In the County Executive race, public financing candidate Marc Elrich fought self-funding David Blair, who gave his campaign at least $2.9 million, to a virtual draw.  In Council District 1, Meredith Wellington – who gave her campaign $78,000 – is on her way to finishing fourth behind public financing candidates Ana Sol Gutierrez and Reggie Oldak.  Self-funding was not a major factor in the Council At-Large race.

Public financing did not stop interest group participation in the election.

Interest groups may not have been able to contribute large individual, corporate and PAC checks to candidates but they still played.  They spent significant amounts on TV and mail in the Executive race and some progressive groups canvassed for their candidates.  Just as importantly, institutional endorsements mattered as much as ever.  Marc Elrich could not have come close in the Executive race without them.  District 1 candidate Ana Sol Gutierrez benefited from them to finish second even though she had lackluster fundraising.  District 3 candidate Ben Shnider had many and came closer to winning than most people initially believed.  And all four winning Council At-Large candidates (incumbent Hans Riemer, Will Jawando, Evan Glass and Gabe Albornoz) had lots of them.  Candidates who lacked interest group support, like Executive candidates Rose Krasnow and George Leventhal and Council At-Large candidates Hoan Dang, Bill Conway and Jill Ortman-Fouse did not come close to winning.  Savvy interest groups can exploit public financing by helping candidates of their choice raise money inside the system while using their own money to finance PAC and independent expenditure activity.  Here’s a prediction: all of the above will happen again.

Most women using public financing did not win.

Much has been said about the next County Council having just one female member.  District 4 incumbent Nancy Navarro used public financing to defeat a no-name challenger.  But no other woman in public financing came that close to winning.  In early and election day voting, Gutierrez trailed traditionally financed candidate Andrew Friedson in District 1 by seven points.  Krasnow finished third in the Executive race by fourteen points.  And the highest-performing woman in the Council At-Large race was Marilyn Balcombe, who used traditional financing to finish fifth.

There are numerous reasons to explain these finishes.  Gutierrez’s primary voter base was in Wheaton, which is outside District 1.  Krasnow and Council At-Large candidate Jill Ortman-Fouse raised money quickly but started too late to raise a lot of it.  Council At-Large candidates Brandy Brooks and Danielle Meitiv were unknown in county political circles before running so they could not tap into preexisting donor networks.  We believe that female candidates can succeed in the system, but we admit that this cycle presents little evidence of that.

Public financing amplified the influence of the Democratic Crescent.

We have written before about the Democratic Crescent, the region of the county stretching along the Beltway from Takoma Park in the east to Cabin John and Bethesda in the West.  This area has a disproportionate number of Democratic activists, voters and political contributors and sent Jamie Raskin to Congress two years ago.  Back in March, we found that the Crescent accounted for a majority of public financing contributions to Executive and Council At-Large candidates and waaaaay out-paced contributions from Upcounty.  If we were to repeat that exercise today, we have little reason to believe that the result would be significantly different.

The impact of Crescent participation was clearly seen in the Council At-Large results.  Riemer, Glass and Albornoz live in the Crescent.  Jawando lives outside it but much of his base in Legislative District 20 is inside it.  All four oppose M-83, the Upcounty highway demanded by many in Clarksburg.

There has only been one At-Large Council Member from Upcounty since the current council structure was created in 1990.  That person – Gaithersburg resident Mike Subin – has an asterisk since he was originally elected in District 2 in 1986 and shifted to an at-large seat when the new structure was put in place four years later.  And so the trend of not electing Upcounty residents to at-large seats was well established prior to this year but we wonder if public financing will lock it in.

We have spent $4 million on public financing so far.  Was it worth it?

We laid out the pluses and minuses above.  Readers, this question is for you to answer!

By Adam Pagnucco.

This year’s election cycle is the first one in which public financing is being used in MoCo’s county-level races.  That is one of many reasons why this election is historic in nature.  So far, we know the following things about public financing: it is heavily used (especially in the Council At-Large race), it is administratively challenging, it requires a long time to raise money, it is less costly than first thought and while it creates opportunities for new candidates, it confers huge benefits on incumbents.  Also, as predicted, the system reduces the influence of corporate interests and PACs.  But who is stepping into that vacuum?

This week, we will explore where contributions to publicly financed candidates come from.  Participation in the system is optional; candidates can stay in the traditional system and many of them have done so.  Candidates in the public system may only accept contributions from individuals up to $150.  They cannot take money from corporate entities or PACs and must limit self-financing to $12,000.  Contributions from in-county residents are matched by the county on a sliding scale.  For Executive candidates, a $150 in-county contribution gets a county match of $600.  For council candidates, a $150 in-county contribution gets a county match of $450.  Candidates must meet thresholds of in-county money raised and numbers of in-county contributors to qualify for matching funds and are subject to caps of public fund receipts.  And if a candidate applies for matching funds and does not meet the thresholds, that person can be ruled ineligible for matching funds.

To examine the origins of contributions in public financing, we accumulated the contribution records of thirteen candidates who have qualified for matching funds: County Executive candidates Marc Elrich, Rose Krasnow and George Leventhal and Council At-Large candidates Gabe Albornoz, Bill Conway, Hoan Dang, Evan Glass, Seth Grimes, Will Jawando, Danielle Meitiv, Hans Riemer, Mohammad Siddique and Chris Wilhelm.  We did not include contributions to district-level candidates like Sidney Katz, Nancy Navarro and Reggie Oldak because their receipts will inevitably be skewed to their districts, thereby introducing a geographic bias into the data.  We also did not include contributions to non-qualifiers because they may not ultimately receive matching funds.  One important consideration with examining these accounts is that not all of them have last filed on the same dates.  While some were current as of the last regular report in January, others have filed as recently as last week.  That’s because once a candidate qualifies for matching funds, they can apply for new distributions at any time through fifteen days after the general election.  One important constraint for late starters: candidates in the system must qualify for matching funds by 45 days before the primary.  Since the date of this year’s primary is June 26, that means the qualifying period ends on May 12.

This analysis involved an examination of nearly 9,000 records.  We asked two sets of questions.  First, where are in-county contributions eligible for matching funds coming from and how do they compare with both the population and regular Democratic voters?  Second, what are the differences in contribution geography between participating candidates?  Those differences contain illuminating clues to the appeal and strategy of the candidates which could ultimately decide the election.

We will begin unveiling our results in Part Two.

By Adam Pagnucco.

Former Council Member Phil Andrews’s public financing system is in use for the first time during this election cycle.  It has already changed MoCo’s political landscape, with 33 county candidates – a majority of those running – so far enrolled.  It’s a bit early to say exactly how it will impact specific races, but two facts about the system are starting to become clear.

It’s cumbersome to use.  And candidates who use it need a long time to raise money.

We have already written about the burdensome administrative aspects of the system, especially in demonstrating residency of contributors.  (The system only provides matching public funds for in-county individual contributions of up to $150 each.)  An additional difficulty is meeting the thresholds for triggering eligibility for matching funds.  In order to collect matching funds, Executive candidates must receive contributions from 500 in-county residents totaling at least $40,000; at-large council candidates must receive contributions from 250 in-county residents totaling at least $20,000; and district council candidates must receive contributions from 125 in-county residents totaling at least $10,000.

So far, just seven of 33 participating candidates have reached the thresholds for public matching funds.  Council District 1 candidate Reggie Oldak was the fastest to qualify, hitting the threshold in 112 days.  But Oldak is a district candidate, meaning that her threshold is the lowest, and her district is the county’s wealthiest with the greatest concentration of political contributors.  At-large council candidate Hoan Dang hit his threshold in 148 days, barely beating out Bill Conway (155 days).  Council Members Marc Elrich and George Leventhal, who are running for Executive, needed more than 200 days each to qualify despite having large donor bases going back many years.

Then there are the other 26 candidates who have not yet qualified.  Six of them have been running for more than 200 days.  (District 4 incumbent Nancy Navarro will only be eligible to receive matching public funds if she gets an opponent.)  Eleven more have been running for at least 100 days.  Many of the non-qualifiers have been working hard for months.  It’s just tough to meet the thresholds.

Why is it taking so long to get matching funds?  One reason is that Andrews, the system’s architect, did not design the system to be easy.  He explicitly intended that public dollars only go to candidates who were viable in the sense that they had actual grass-roots support.  Another reason is the nature of fundraising itself.  Candidates who raise money turn to families and close friends first; past contributors next (if they have run before); then extended networks of professional connections, acquaintances and supporters’ networks; and finally complete strangers.  As each network gets further away from the candidate, the marginal difficulty of raising dollars increases.  In a public financing context, the first fifty contributions are easier than the next fifty, which in turn are easier than the fifty after that.  The last few contributions to reach the threshold are the hardest to get.

At-large candidate Danielle Meitiv has been working to hit the threshold with a video on Facebook.

Similar observations can be made about traditional fundraising with this exception: the private system has no single trigger that activates a stream of cash all at once.  The candidates in public financing will be weeded into two groups: the ones who get matching funds and the ones who don’t.  The latter group will be doomed to failure.

There’s one more lesson here for candidates: don’t get into a race late and expect to raise lots of money quickly through public financing.  Even if you have a history of donors going back more than a decade like Elrich and Leventhal, the public system is not built for speed.  If you are a late starter, chances are you will need either traditional fundraising or self-financing to close the gap and have a chance to win.

By Adam Pagnucco.

Political campaigns have all kinds of characters in them.  There are the campaign managers, the best of whom are data nerds, bartenders, therapists and trouble shooters all at once.  Then there are the hard core supporters, always ready to insist that their candidate is the reincarnation of Mandela and eager to pounce on dissenters online.  There are the cross-eyed pundits, tossing out great gobs of bloggy drivel onto an unsuspecting populace.  And of course there are the candidates, their toothy daytime smiles concealing roiling anxiety in the dead of night.

But no one pays attention to the true MVPs of political races: the Treasurers.  Money is the lifeblood of all campaigns and these are the people who control it.  Without a competent Treasurer, a campaign can’t collect its money, pay its bills, file its reports or do much of anything at all.  And the workload is often far greater than anyone, even the candidates themselves, can ever understand.

I was a Treasurer once.  Senator Rich Madaleno asked me to assume that role for the District 18 slate back in 2008.  It was not the first nor the last dumb thing I have done for a politician I like!  The account records (actually, the disorganized piles of random papers) were delivered to me in shoe boxes.  Shortly afterwards, I began receiving notices from the State Board of Elections that the previous report filings were deficient and needed to be corrected.  But the state didn’t say what the flaws were.  Phone calls to the state offices were laughably useless.  So I had to reconstruct every single transaction in the history of the account(!!!!!) and re-file every single report that had ever been sent in.  This required weeks of agony, but dammit, no account with my name on it was going to get fined.  Even bloggers have standards!

Dear future candidates: don’t ever ask me to be a Treasurer again.  I would rather gargle cockroaches.

This year, the normally substantial challenges of being a Treasurer are compounded for a uniquely unfortunate subset of them: the Treasurers responsible for MoCo’s public campaign financing accounts.  The reason is that the state requires evidence of a contributor’s in-county residency before approving public matching funds for that contribution.  That’s easy to do with online contributions: all a campaign has to do is add a couple fields illustrating residency and collecting a digital signature.  But what happens if a dinosaur (like, say, your author) pays with a written check?  Well folks, that’s when the fun begins!

All contributions eligible for matching funds must be accompanied by proof of residency that is provided to the state.  For physical checks or cash, that means the donor must complete and sign a written form indicating residency in Montgomery County.  Somebody (that might be you, Mr. or Ms. Treasurer!) has to make sure that form is filled out and collected.  If a check or cash shows up in the mail, that means tracking down contact information for the contributor and getting hold of them.  “Thank you for contributing to Politician X, ma’am.  Could you fill out and sign this form showing that you live in MoCo and send it back to us?”  “Well, I’m out of stamps and my scanner is busted.”  “I’m out of the country for two weeks.”  “I’ll think about it and get back to you.”  “I just donated to you.  Why are you bugging me?  I want my money back!”  And these are the G-rated responses.

Campaigns love this like they love tarantulas in the shower.  One campaign surrogate says his campaign “absolutely hates it” when they get paper checks because of the time required to chase down donors.  One candidate with prior electoral experience estimates that the time taken to deal with these administrative issues is 40% greater than it is under the old traditional system.  Another candidate simply says, “Oy.  Vey.”  And again, these are the G-rated responses.

Nothing can be done to remedy these issues in the short term.  And let’s remember: the state is within its rights to demand proof of residency to prevent mistaken distributions of public matching funds.  But candidates in public financing must absolutely do one thing.

Hug your Treasurer.  Do it today!  Tell them you love them.  Or it might be YOU who has to chase down those donors!