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How States Can Fight Money in Politics

In our current political system, money is a key player. But the idea of corruption in elections and politics is not a new phenomenon—donors, corporations, and corporate lobbyists have bought influence over politicians for a long time. Big donors commonly assume that if they make big contributions, politicians will pay more attention to the issues they care about and their desired outcome; when this rationale is honored by politicians, the wedge between elected officials and voters widens and big money silences the voices of constituents. Rep. Alexandria Ocasio-Cortez explains the issue with corporate funding and lack of transparency in this video.

In Citizens United v. FEC in 2010, the Supreme Court struck down a federal ban on corporate political expenditures that had been on the books for more than a half-century. The Court ruled that corporations have First Amendment rights just like humans, that political expenditures are a form of speech, and that corporate political expenditures made “independently” of candidates don’t pose a threat of corrupting those candidates. The ruling did not have an immediate effect on state laws, but many states had to repeal or rewrite laws that banned or restricted corporate political expenditures that otherwise would have faced legal challenges

Federal and statewide candidates are changing the conversation by refusing corporate PAC funding as a sign of good faith that they might actually commit to meaningful campaign finance reform. House Democrats took a bold stance against money in politics by passing H.R. 1, a federal reform package that would make it easier for people to participate in the democratic process, limit the influence of big money in politics, and ensure that public officials truly work for the public. H.R. 1 further stems the tide of big money in our politics by amplifying small-dollar donations through public financing, encouraging small-dollar donations through tax incentives, and reducing “dark money” by strengthening disclosure requirements for funders of political ads (including online ads). Read more about H.R. 1 in our resource.

Without the Supreme Court to protect us, and with little chance of H.R. 1 becoming law with Trump in the White House, states and local municipalities are the frontline for getting big private money out of politics in the short term.  In the 2018 midterms, voters passed several state-level ballot measures to regulate and enforce finance laws and state legislatures continue to consider campaign finance reforms this session.

This resource will break down the impact of money in politics and what states can do to protect democracy and fair elections:

  • Background of money in politics

  • Find out what your state’s campaign finance laws are

  • What can states do about money in politics?

  • How can you fight for campaign finance reform in your state?

Money in Elections: Who Holds the Influence

Money in politics can tilt the outcome of legislation and elections when big money donors are able to essentially buy access to state officials, and the decision making power those officials hold. A wealthy donor can influence the process of drafting a bill, holding hearings, and the prospect of passage with biased research and pre-selected “experts” in the issue field. There is no room for lawmakers to consider what their constituents want when they are focused on fulfilling a big donor’s requests and securing more funding for re-election.

Privately-funded elections also limit who is able to run for office, disproportionately locking out women and people of color from representation. Big money donors are often wealthy, white individuals or corporations that promote their own interests and exclude under-represented communities. People of color are less likely to run for elected office because of the financial barrier of entry or the reality of being out-fundraised. In a typical election cycle, 90 percent or more of the candidates who raise the most money win their races. When elections are primarily funded by wealthy white men, the policy priorities of the campaign are already biased against marginalized people. As a result, people of color are underrepresented as candidates and elected officials.

But things are starting to change. A surge of candidates and voters are diversifying our elections and demonstrating the representation that people want. More and more citizen-funded candidates that refuse corporate PAC money are winning elections and endorsing campaign finance reform. State advocacy campaigns across the country are working to pass legislation to ban money from lobbyists and corporations, add transparency to campaign funding, and close campaign finance loopholes in state laws.

What Are Your State’s Campaign Finance Laws?

States vary drastically in their campaign finance laws. Find out more about your state’s campaign finance laws through these resources:

How Can States Fight Money in Politics?

Campaign finance laws prevent corruption where monetary contributions are exchanged for influence over elections and legislation. States have a variety of options to combat the influence of big money in politics, including:

  1. Full disclosure of money in elections,  including money raised, received, and spent

    1. Dark money: foreign spending, media and ad spending

  2. Political contribution limits and source prohibitions (e.g., prohibiting corporate contributions to candidates)

  3. Public financing of campaigns

Full Disclosure of Political Contributions

The public deserves to know how their candidates and elected officials get their campaign funding. Transparency in political contributions is vital to maintain integrity in elections. Transparency alone won’t resolve money in politics problems, but we can't achieve reform without providing access. Disclosure laws can cover a broad category when defining which groups are required to report including nonprofits, foreign controlled organizations, unions, and donors who fund nonprofits. There are obvious loopholes if big money donors can hide behind other entities and nonprofits, both trusted ones like the NRA and new nonprofits with names like “Americans for America.”

Out of State Bans and Foreign Influence

“Dark money” influences campaigns, goes undetected, and, therefore, is unaccountable to contribution limits and disclosure laws. “Dark money” is political spending from non-public sources, such as out-of-state contributors or foreign powers. The use of dark money is on the rise and some states have already started to establish legislation that addresses dark money loopholes and regulate foreign funding including:

  1. Restrictions on ad spending. Laws can include disclaimer rules to cover political ads on social media. The difference in platform does not change the intent of a political ad; therefore, voters and the public should know who is paying for an online ad.  

  2. Accessible public databases that include political ad spending. Major media platforms can establish and maintain a public database that includes ad content, donor source, the amount received, and the group of people being targeted. Political ads can cover a broad category and the database should exhaust all ad options that have a purpose of educating or influencing voters.

  3. Restrictions on majority foreign-controlled corporations. State legislation can prohibit spending by foreign-controlled corporations. Corporations with significant foreign ownership should also be considered in bans on foreign political spending.

Political Contributions Limits and Prohibitions

Limiting political contributions can prevent any single donor from wielding too much influence. Campaign contribution limits may ban specific types of donors and/or specify caps on donation amounts. State lawmakers can get creative and combine both types of policy to cover more potential loopholes. Most states already have a limit on cash contributions; $100 is the standard cap but some states have limits as low as $25.

Some states also restrict contributions based on political party. Similar to the other regulations, limits on donations to political parties and from political parties to candidates varies across states. Some states have no limit on the amount given to political parties, some limit based upon the source, and some have overall restrictions regardless of source. In the 2018 midterm, 11 states had no restrictions on individual limits for political contributions.

Public Financing

The use of public financing will help us take back elections and limit the influence of big money in politics. Public financing is a racial justice fight just as much as an economic one, and empowers communities of color by amplifying the strength of small contributions and shifting influence away from big donors. This additional funding would provide critical financial support to those who often feel like they can’t afford to run. Two approaches of public financing are: small donor matching and public finance vouchers or “democracy vouchers”, like what's available to Seattle residents. States are adopting innovative campaign finance policy reforms that challenge how elections are not only funded but who can receive the funds.

Public financing should be made available to all statewide and local officials. A small donor matching public finance system can restore balance to the political process that currently places the influence of wealthy donors over everyday people. Small donor matching programs should include incentives to encourage candidates to solicit and accept small dollar donations.  The public financing program should provide dynamic options of match ratios(which means that the money raised is matched, sometimes in higher ratios) and build in qualifying criteria for candidates to receive public funds.

Countering big money in politics with small dollars frees legislators to represent their constituents without reservation. Prioritizing small-dollar donations over big donors changes the way candidates run their campaigns. Small dollar funded campaigns reduce the incentive for elected officials to fulfill the interests of corporate funders and improves the interactions between candidates and constituents they want to represent. When candidates vie for votes and small dollar funding, candidates are responsive to constituents and not just the wealthy few.

How Can You Fight for Campaign Finance Reform in Your State?

  1. Read Indivisible States. Our Indivisible States Guide outlines how to be an effective advocate in your home state.
  2. Connect with partner organizations. At all levels of advocacy (federal, state, and local), it is critical that you work in collaboration with value-aligned partner organizations to be a respectful part of the movement and maximize your collective power. Here are a few partners that you may be interested in connecting with to advocate for fair redistricting in your state:
  3. Check out our other resources to learn more about how to build local partnerships and how to ensure that those partnerships are inclusive.
  4. Check out our additional resources on protecting democracy.