(Maybe Don’t) Show Me the Money: Big Money’s Influence in State and Local Elections

In the current contentious U.S. political climate, concern about the influence of wealthy campaign donors on elections is growing. According to a 2016 poll, Americans believe reducing the influence of money in politics (Hensel 2016) is one of the most important issues facing the country. Despite the vitriolic rhetoric and doomsday-predicting headlines about our division as a nation, a majority of the country is largely in agreement on this topic. Over 80% of respondents agree that the influence of money in politics is worse now than at any other time in their lives. 72% back bipartisan efforts to address money in politics, and 78% favor large-scale reform that reduces the influence of money in politics (Hensel 2016).

This problem doesn’t only exist at the federal level; it is also very much an issue in state and local elections. According to legend, when George Washington ran for the Virginia House of Burgesses in 1757, he spent about S200 (McCue 2019). Any more, running for state or local office is likely going to cost you quite a bit more than the price of a really good dinner party (which is what Georgie Boy spent that $200 on, though bribing voters with delicious food is no longer legal in Virginia). The amount of money raised and spent by candidates for state and local office varies widely. Many local elections really don’t have any campaign spending at all, while some look more like statewide or even congressional elections. Statewide offices can vary dramatically as well, depending on the state, the level of competition, and the perception of that position’s importance in the grander political scheme. There has been a trend toward those overall numbers increasing pretty dramatically, though. Some of these races make the headlines—the Los Angeles Mayoral race cost $33 million in 2013 (Moore 2013). In New York City, Michael Bloomberg spent $109 million to get reelected as mayor (Frazier 2010). And this isn’t limited to the big cities either. In 2017, candidates for city council in Waterloo, Iowa raised almost S48.000 for the 2017 election, which is almost seven times what was raised during the equivalent period during the 2013 election and almost three times the previous record for amount raised (Jamison 2017).

In 2010, the U.S. Supreme Court passed Citizens United v. Federal Election Commission and its sister case, SpeechNOW v. Federal Election Commission. These cases held that the Constitution’s First Amendment right to free speech means that the government cannot limit the political spending of either corporations or individuals. As a result, “Corporations, labor organizations, and political committees may make unlimited independent expenditures from their own funds, and individuals may pool unlimited funds in an independent expenditure-only political committee. It necessarily follows that corporations, labor organizations, and political committees also may make unlimited contributions to organizations such as the Committee that makes only independent expenditures” (Federal Elections Commissions n.d.-a). This ruling brought forth an outpouring of political spending, at the federal level certainly, but also at the state and local levels as some of those places adjusted their own laws to fall in line with the federal regulations.

This isn’t to say that there are no restrictions at all on campaign donations at the federal level or in the states that followed suit. The Federal Election Campaign Act of 1971 (Federal Elections Commission n.d.-b) limited political contributions to candidates for federal elective office to SI,000 and by a political committee to S5,000 to any single candidate per election (the limit has been raised over time). This act was challenged in court, rising up to the U.S. Supreme Court in the case, Buckley v. Valeo (1976). The court found that even though donations were a form of free speech/expression, restrictions on large campaign contributions are justified by the state’s interest in “the prevention of corruption and the appearance of corruption spawned by the real or imagined coercive influence of large financial contributions on candidates’ positions and on their actions if election to office.” The Court further defined “corruption” to mean “large contributions ... given to secure a political quid pro quo from current and potential office holders” (Buckley v. Valeo 1976).

Federal laws deal with the use of money in federal elections, however the states themselves create and enforce campaign finance laws for state- and locallevel elections. This leads to quite a bit of variation in campaign finance laws from state-to-state. Some states, like Iowa, Nebraska, Alabama, and Utah do not have any campaign contribution limits. Donate all the money you want to whomever you choose. However, if you live in Alaska, you can only donate up to $500 per candidate per year (National Conference of State Legislators 2019).

One of the reasons that we are seeing such a spike in spending on state and local elections is the growing realization among political operatives that donating to candidates at this level has an outsized impact on policy. As much as political candidates tout the impact of small donations on their campaigns, it is often the big donors that count the most. Spending large sums on local elections is not only a way of sidestepping gridlock at the federal level, it is a more cost-effective approach to gaining political influence. A donation ofS100,000 or even a million dollars is a drop in the bucket for a presidential candidate or even for most candidates for Congress, however a mayoral candidate or a candidate for a state legislator would be able to considerably increase his or her reach with a sum of this size. As Robert Lenhard, former chairman of the Federal Elections Commission said to the Wall Street Journal, “The ability to step in with a six- or seven-figure ad buy is going to be disproportionately effective on a local race” (Haddon 2015).

Power and control at the state and local levels also carry weight that often trickles upward. Consider things like districting after each Census. The state legislatures handle this. Thus, whichever party is in power after the decentennial person-count has the power and responsibility of redrawing the district lines. As we have seen in the past, this can have a tremendous impact on Congressional races. Further, many local elected officials run for higher office later. A huge chunk of the current Congress consists of people who served on their state legislatures, and many of them served locally prior to that. It makes sense, right? Many people who have the heart and guts for public service would also have the ambition to serve at higher levels. Plus, they get an automatic advantage when it comes to running in those races—many voters will already recognize their names. As a big-money donor, it makes sense to find an ambitious candidate early in their political career and follow them right up the line to higher office.

In 2017, 23 states made changes to their campaign finance laws. Additionally, several cities have made moves recently to change their own campaign finance systems. For example, Denver, Colorado is looking at placing new caps on contributions and creating a matching fund to help boost the power of smaller donors. Baltimore, Maryland is looking at a similar matching funds program, as is Portland, Oregon (National Conference of State Legislators 2018).

In contrast to most of the other states, Oregon doesn’t have any campaign contribution limits either on individuals or corporations. Some people have taken advantage of this in order to use money to position themselves or their candidates for office. An example of this was seen during the 2012 mayoral race in Portland where each of the three leading candidates raised close to $1 million each—more than $2.5 million total—during the primary. Portland’s mayor, Ted Wheeler, received over a million dollars himself in 2015-2016. And, of course, these numbers aren’t even counting money spent on these candidates’ behalf by political action committees.

Voters in Oregon did come close to employing campaign finance limits during their 1994 election. More than 70% of voters supported the measure; however, in 1997, the Oregon Supreme Court struck down the limits, ruling that the measure violated the free speech rights guaranteed by Oregon’s constitution (Templeton 2018).

In 2016, a non-profit called Honest Elections took up the local campaign finance reform mantle, this time trying for a county-wide cap in Multnomah County (the county in which Portland is located). Again, the measure passed, this time with almost 90% of the vote. This was a huge success electorally. Heck, when can we ever get 90% of people to agree on anything? Unfortunately for these voters, the Portland Realtor’s Association led a group of local businesses to challenge the measure and it was once again struck down, this time by a County Circuit Court Judge.

Honest Elections then appealed the Circuit Court decision to the Oregon Supreme Court using the same argument that was used at the federal level— while capping campaign contributions might limit free speech to some extent, the risk of corruption posed by NOT limiting campaign contributions is worse. Further, they hoped a local measure in Portland might present a temporary fix. They proposed an amendment to the city’s charter that placed limits on the amount of funding a candidate can receive from individuals and PACs, as well as banning corporate donations. In yet another twist, Honest Elections was successful, as the Oregon Supreme Court overturned the lower court’s ruling and ruled in April of 2020 that campaign contribution limits are legal in Oregon. A long and winding road indeed.

This move was not unique. In fact, state-level caps exist in 39 states, and many local governments have their own, more restrictive spending rules. This is ok at the state and local level as long as there are no state constitutional provisions that prohibit it. The federal statutes, while useful for purposes like Honest Elections’ are really directed at federal elections.

And it is pretty clear what happens when you look at the effects of these laws. Only 3% of Americans are worth more than a million dollars. Of the largest political donors though, over 45% are millionaires. This “donor class” is also older, more male, and whiter than the U.S. population. This imbalance highlights the potential that policy areas that don’t affect the wealthy elite might not be getting the attention they merit. One might wonder how this jibes with the idea of “one person, one vote.”

Discussion Questions

  • 1. Should there be limits on campaign spending? What are the pros and cons?
  • 2. Do you agree that campaign donations are a form of free speech? Why or why not?
  • 3. Look back at the Buckley v. Valeo ruling. What do you think of the idea that free speech can be overwritten by the potential risks?

Key Concepts

  • • Campaign finance reform
  • • Citizens United v. Federal Election Commission
  • • Buckley v. Valeo
  • • Census

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