Tag Archives: campaign finance

Public Financing Update: January 2, 2018

By Adam Pagnucco.

Happy New Year, folks!  After a relatively quiet period in the fall, December saw a number of applications for public matching funds from county candidates participating in public financing.  One of the many positive things about public financing is that when candidates apply for matching funds, they have to file full reports with the State Board of Elections.  That gives data junkies like your author – and Seventh State readers!  – lots of updated data without waiting for the relatively few regular campaign finance reports in the state’s schedule.  The next time all campaign finance reports are due, both from public and traditional accounts, is on January 17.

The candidates below have met the thresholds for matching funds and have applied for those funds from the state.

A few notes.  The column titled “Non-Qualifying Contributions and Loans” refers to loans from candidates and their spouses (up to $12,000 is allowed) and out-of-county contributions, which are allowed but not matched.  The column titled “Adjusted Cash Balance” includes the cash balance in the last report plus the most recent matching funds distribution requested but not yet received.  It is the closest we can approximate the financial position of each campaign at the time they filed their last report.  The column titled “Burn Rate” is the percentage of funds raised that has already been spent.  Generally speaking, candidates should strive to keep their burn rates low early on to save money for mail season.  Mohammad Siddique’s totals are preliminary as there are a few issues in his report that will have to be resolved with the Board of Elections.  And District 4 Council Member Nancy Navarro applied for $35,275 in matching funds but cannot receive them unless she gets an opponent.

Below is the number of days each candidate took to qualify for matching funds.  Let’s remember that the thresholds are different: 500 in-county contributors with $40,000 for Executive candidates, 250 in-county contributors with $20,000 for at-large council candidates and 125 in-county contributors with $10,000 for district council candidates.

So what does it all mean?  Here are a few thoughts.

County Executive Race

Council Members Marc Elrich and George Leventhal, who are using public financing and running for Executive, have been active in county politics for a long time.  Elrich first joined the Takoma Park City Council in 1987 and has been on the county ballot in every election since.  He has been an elected official for thirty years.  Leventhal worked for U.S. Senator Barbara Mikulski and was the Chair of the county Democrats in the 1990s.  He played a key role in defeating a group of Republican Delegates in District 39 in the 1998 election.  Both of these fellows have built up large networks of supporters over many years and they have done well in public financing, raising similar amounts of money from similar numbers of people.

The difference between them is burn rate.  Leventhal is spending much more money than Elrich early, with some of it going to a three-person staff.  He had better hope this early spending is worth it because if this trend keeps up, Elrich could have almost twice as much money as Leventhal available for mailers in May and June.

At-Large Council Race

One of Council Member Hans Riemer’s advantages as the only incumbent in this race is the ability to raise money, and he has put it to good use in public financing.  Riemer leads in number of contributors and total raised.  He has also maintained a low burn rate.  This is Riemer’s fourth straight county campaign and he knows what he’s doing at election time.  His biggest problem is that his name will be buried near the end of a VERY long ballot.

The five non-incumbents who have qualified for matching funds have raised similar amounts of money so far.  As a group, they are not far behind Riemer.  The one who stands out here is Bill Conway.  Hoan Dang, Evan Glass, Chris Wilhelm and Mohammad Siddique all filed in December while Conway last filed in September.  Our bet is that when Conway files next month, he will show four months of additional fundraising that will put him close to Riemer’s total.

That said, the five non-incumbent qualifiers have so far separated themselves from the rest of the field.  Gabe Albornoz and Danielle Meitiv have said they have qualified but have not filed for matching funds with the state.  No other candidates have claimed to qualify.  Raising money in public financing takes a long time and raising a competitive amount (at least $250,000) takes a REALLY long time.  Those at-large candidates who do not qualify soon risk appearing non-viable.

Public Matching Funds Will Be Nowhere Close to $11 Million

The county has so far set aside $11 million to cover the cost of public matching funds.  That appears to be waaaaaay too much with only $1.4 million so far disbursed.  Our guess is that the ultimate total will be less than half what was allocated and will be even lower in the next election cycle with fewer seats open.

Incumbents Have Nothing to Fear From Public Financing

Five council incumbents are using public financing.  All five have qualified for matching funds and have done so fairly easily.  We will see how the challengers stack up, particularly in the at-large race, but so far the only at-large incumbent (Hans Riemer) is leading.  As we predicted last April, public financing is good for incumbents because it allows them to leverage their networks into lots of small individual contributions.  State legislators and other County Councils should take heed.

That’s it for now, folks.  Come back in a couple weeks when all reports, including those from traditional accounts, are due and we’ll put it all together for you!

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Raising Money in Public Financing Takes a Long Time

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.

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Candidates, Hug Your Treasurer

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!

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At-Large Candidate’s Proposal Breaks Campaign Finance Laws

By Adam Pagnucco.

Council At-Large candidate Brandy Brooks, who is participating in MoCo’s public financing system, would like to help natural disaster victims.  That’s a laudable goal.  But she is proposing to spend campaign contributions to do so.  The problem is that’s illegal under state and county campaign finance laws.

On her website and on Facebook, Brooks promotes an initiative that she calls “Power 100,” in which she invites 100 contributors to donate a combined $2,500 to her campaign, half of which would be paid out to a number of charities helping natural disaster victims.  The charities include organizations helping victims of Hurricane Harvey, Hurricane Irma, a mudslide in Sierra Leone and floods in South Asia.

Brooks supporter Ed Fischman went a step further in a posting on the Our Revolution in Montgomery County Facebook page, asserting that public matching funds would be used for disaster relief.  To be fair, it’s unclear whether Fischman speaks for Brooks and Brooks has not yet qualified for public matching funds.

State and county campaign finance laws prohibit these kinds of expenditures.  According to the State Board of Elections’ Summary Guide, there must be a nexus between campaign account expenditures and the promotion of a candidate’s campaign for those expenditures to be legal.  The guide specifically addresses charitable contributions, stating:

Generally, campaign funds may not be used solely for charitable purposes. Maryland law requires campaign funds to be used for the purpose of supporting or opposing a candidate, question, or political committee. Furthermore, it is important to keep in mind that contributors give to campaign committees for one important reason – they want to support the committee’s candidate, question, or political party. When campaign funds are spent for a non-campaign related purpose, it frustrates the intent of the contributor.

However, there are instances when a charitable donation is permissible because it is for a campaign purpose. For example, a candidate may permissibly use campaign funds to attend a charitable event since attending the event increases the candidate’s visibility and allows the candidate to network with potential voters and donors.

ง 13-247 of state election law does allow certain kinds of charitable contributions to be made by accounts that are closing and liquidating their assets, a case that clearly does not apply to Brooks.

Additionally, Montgomery County’s public campaign financing law states, “A participating candidate may only use the eligible contributions and the matching public contribution for a primary or general election for expenses incurred for the election.”  This statement is repeated in the county’s summary of the law.  No one could construe helping disaster relief victims as a primary or general election expense.  It’s noteworthy that the county’s language applies not just to public funds but also to individual contributions made under the public financing program.

Your author really hated to write this blog post but it had to be done.  Generally speaking, when we have examined campaign finance issues in the past, we have sometimes seen behavior that may not be ethical but is legal.  This case is the opposite: what Brooks is doing comes from the best of intentions but does not comply with the law.  Brooks is free to discuss the plight of disaster victims all she wants.  She could also organize a private fundraiser for victims separate from her campaign account.  But if she goes ahead and uses her campaign funds for disaster relief contributions, she will risk sanctions from the state, the county or both.

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RoboBomb

The Montgomery County Democratic Central Committee (MCDCC) recently made over 70,000 robocalls asking for volunteers and money. Only 400 people pressed a button to respond positively to new MCDCC Chair Kevin Walling’s plea to support state and local candidates.

So far, multiple sources report that they do not know if a single dollar has actually been raised by follow-up calls to the estimated 0.57% who responded positively to this recorded message. Regardless, it looks like that MCDCC will be lucky if they don’t lose money.

The calls came as a surprise to much of the Central Committee, which did not, at least as a whole, approve or learn about them in advance. I have heard the calls described as misleading because they give the impression that the money donated is directly going to support local and state Democratic candidates.

I imagine that MCDCC leaders would argue that monies raised will support their efforts to aid Democratic candidates. Except that it looks as if any money raised will have to be plowed back into paying for the solicitation. The poor response is why most dialing for dollars occurs with a live voice on the phone.

This fizzling fundraising effort follows on a similarly unsuccessful direct mail campaign. MCDCC included return envelopes in the solicitation, which sounds like a good idea. But it also made the mailing more expensive and did not result in a higher return rate than previous efforts with only small amounts raised.

So far, Kevin’s early efforts to increase fundraising by MCDCC–one of his core promises in seeking the chair–have yet to bear fruit. And expanding the broader donor base has to be even more difficult outside the height of election season.

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Campaign Finance Aggregate Report

Over the next few days, pre primary campaign finance reports will appear on the Maryland Campaign Reporting Information System Websites. Instead of breathlessly hitting refresh, you can simply check out this public, crowd sourced google doc I put together (just like I did in January and April).

https://docs.google.com/spreadsheets/d/1OyeuTrFuRlp_4qtqRPw9JSKcW29e6Z-yVjmRXcyWWyM/edit#gid=0

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Duchy Trachtenberg, Joe Trippi and DFA

Democracy for America (DFA), a PAC founded by Howard Dean to advance progressive causes, has sent out an email attacking Roger Berliner and trying to raise funds for Duchy Trachtenberg. The email is reproduced at the end of this post.

So why did DFA send out the email?

Though DFA endorses at virtually all levels of office, it has not endorsed Duchy Trachtenberg as of May 20th based on my search of their online list of endorsed candidates. Indeed, they have endorsed no one in the State of Maryland.

The answer could be Joe Trippi. Duchy hired Trippi as her consultant according to her January campaign finance report:

DuchyFinance

Duchy January 2014 Campaign Finance Filing

Trippi received national attention for his success as Campaign Manager at catapulting Howard Dean to the front of the Democratic pack for awhile in 2004. That campaign was the first to grasp the importance of social media. DFA started out as Dean for America and pioneered attracting small donors via social media.

The email was funded by DFA as an independent expenditure rather than by Duchy’s campaign. So it would be illegal for Trippi to contact DFA to ask them to spend money on Duchy’s behalf. Since he works for Duchy, coordination between Trippi and DFA would turn this legally from an independent expenditure into a contribution that should appear under Duchy’s own authority line. But if Trippi didn’t contact DFA and get them to do this for Duchy, who did?

Inaccurate, Bizarre Attack

The attack on Roger in the email for promoting development at Ten Mile Creek is particularly strange as Roger helped protect it. Moreover, Duchy has received strong support from the developer who is angry with Roger over his efforts.

Ironically, the email starts to wrap up with “When politicians focus on their own political gains and corporate interests, everyone else suffers.”

Indeed.

 

Democracy for American Email:

We don’t need to tell you: Roger Berliner is bad news. He’s consistently undermined the needs of working families in Montgomery County, despite the fact that he calls himself a Democrat. How’s that for a betrayal?

Berliner has voted to strip bargaining rights from county employees, to remove indexing from any minimum wage bills, and to approve a construction project right by Ten Mile Creek. After hearing Ten Mile Creek — one of the last clean creeks in the area — would be polluted by storm runoff from his construction project, a progressive voice pushed back.

Duchy Trachtenberg won’t stand for this failed leadership and that’s why she’s running for Mongtomery County Council in District 1.

Montgomery County needs a bold progressive leader. Click here to help elect Duchy Trachtenberg to office!

As a former at-large councilmember and a longtime resident of Montgomery County, Duchy understands the needs and priorities of its residents. As a councilmember, she oversaw the creation of the Family Justice Center, which brings coordinated and effective services to domestic violence victims. She passed a landmark civil rights measure extending protection in employment and housing for transgender persons, and worked to protect pay equity for women.

Her background in grassroots organizing for women’s equity, mental health concerns and public health issues shows her ability to put people-powered policies first. Going forward, Duchy will fight for public employees’ job security and collective bargaining rights, affordable housing for families, and fully funded youth service programs.

Sign up to help Duchy Trachtenberg ensure that progressive voices are heard in Rockville!

When politicians focus on their own political gains and corporate interests, everyone else suffers. Let’s make sure that instead, we have forward-looking, compassionate leadership.

Thank you for all that you do,

– Franco

Franco Caliz, Electoral Campaigns Manager
Democracy for America

Paid for by Democracy for America, http://www.democracyforamerica.com/?t=3&akid=4786.2643726.fr7nXK and not authorized by any candidate. Contributions to Democracy for America are not deductible for federal income tax purposes.

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McCutcheon Comes to Maryland

Today, the State Board of Elections lifted the aggregate limits on the total amount that any individual could donate on state races in Maryland. Previously, donors could give only $10,000 total in any four-year election cycle. That is no longer the case.

This change is not due to a shift in Maryland law but to the U.S. Supreme Court decision in McCutcheon v. FEC, which invalidated the federal limits from the Bipartisan Campaign Reform Act of 2002. The $4000 limit on the amount that can be donated to a single state candidate in Maryland remains in place–for now. This limit will increase to $6000 after the 2014 elections.

Lobbyists and wealthy people can expect to be hit up even more as they can no longer plead that they’ve maxed out. It’s also an invitation to extremely wealthy individuals who want to expand their influence in Maryland politics. Common Cause (h/t) outlined their view in a statement:

The State Board of Elections issued guidance today that eliminates the aggregate limits for campaign donations. This guidance was anticipated as the state grapples with the Supreme Court’s decision in McCutcheon, which was released last week.

“Before this guidance came out, donors could only give $10,000 for all their political spending – to candidates, political action committees, and slates,” said Jennifer Bevan-Dangel, executive director of Common Cause Maryland. “Eliminating that limit will have a direct and alarming influence on Maryland’s political landscape starting with this year’s election. The cost to run for office – particularly for down-ballot races, such as Delegate and County Council, will increase exponentially as a result.”

“The last defense we have against big money influencing our elections is the individual limit on donations to candidates,” said Bevan-Dangel. “We are very concerned about how the Board’s guidance will be implemented to ensure that donors do not use slates and political action committees to skirt that last line of defense.”

Individual limits are currently $4,000 but will increase to $6,000 starting in 2015.

“The Supreme Court’s decision in McCutcheon v. FEC was Citizens United round two, further opening the floodgates for the nation’s wealthiest few to drown out the voices of the rest of us,” said Bevan-Dangel. “This decision makes alternative fundraising mechanisms, such as public funding for elections, even more critical. Public funding empowers more diverse candidates to run because it gives an alternative to major donor fundraising. And it empowers everyday citizens to engage in the political process because it leverages their small donations and turns them into major donors.”

“We hope that the McCutcheon case spurs Montgomery County to act quickly on the public funding bill under consideration and encourages other counties and the state to establish alternate funding sources to ensure that the extremely wealthy cannot drown out the voice of everyday citizens in our political process.”

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Don’t Pick Up the Phone

The General Assembly is out of session. There are now around ten weeks between now and the primary. So it’s that dangerous time when the thoughts of legislative candidates turn to their campaign accounts. And how they wish there was more in them.

Whatever you do, don’t pick up the phone unless you want to open your wallet, volunteer to give time, or just feel like having a nice chat with a stranger. No amount is too small. Don’t have $100. How about $50. Or even $25 so we can broaden our contribution base? Even $10 can help.

If you’re really wealthy, you can’t even use the excuse of having maxed out anymore because the Supreme Court did away with the limits on the total amount anyone can donate with the McCutcheon decision, though the limits on the amount you can donate to a single candidate remain in place.

Lobbyists really hate the McCutcheon decision as they know they’ll be dunned more than ever. While the wealthy can at least just say no, it’s harder for lobbyists who know that they may well be knocking on these same people’s door and at least want a hearing.

Of course, the not so big secret of campaign finance is that most candidates hate asking for money even more than other people hate giving it. They didn’t seek office to become fundraisers. Oh sure, some are good at it and thrive on it. But most would rather do just about anything else.

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What McCutcheon v. FEC Means for Maryland

Today’s 5-4 decision by the U.S. Supreme Court in McCutcheon v. FEC has implications for campaign finance law in Maryland as well as the federal level.

McCutcheon voided aggregate limits on contributions. Put another way, the Court voided the bar on any individual donating more than $48,600 to all federal candidates and $74,600 to political parties. At least for now, the Court upheld the limit on donating $2600 to any one candidate but Chief Justice Roberts would clearly like to get rid of it.

The Court’s decision is grounded in precedents that go back to Buckley v. Valeo that view campaign spending as the equivalent of free speech. The five person majority on the Court believes that the aggregate limits violate the First Amendment by limiting speech.

Presumably, Maryland’s limit of any individual or other entity donating more than a total of more than $10,000 to candidates, PACs, or political parties is now also unconstitutional. The $4000 limit on donations to any one candidate, PAC, or political party should remain in place.

The change will allow wealthy individuals or PACs to invest in a much broader array of races. Moreover, wealthy donors have all the more reason to screen their calls. They should now expect to get hit up more aggressively by candidates, as they can no longer say that they’ve hit the limit and cannot donate legally to them.

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