Part 1: Executive Summary
From 1974 through 1996, all forms of public financing of elections came in the form of "matching funds" for certain qualifying donations. (In New York City, the matching funds are now limited to the first $175 of any donation from a constituent, but are matched at a 6:1 ratio; New York State has no public campaign finance system.) In exchange for obtaining these matching funds, candidates must adhere to spending limits in their campaign and some other requirements.
The purposes of public campaign financing are to: a) limit the cost of elections; b) put constraints on the favors owed large donors and fundraisers; and c) lower the barrier to entry for potential candidates without access to large amounts of money. Unfortunately, none of these purposes has been fulfilled. Campaigns are more expensive than ever, large donors and fundraisers have more access to elected officials than ever, and potential candidates must still spend more time and effort fundraising than ever.
The "Clean Money, Clean Elections" (CMCE) plan offers a new alternative. This alternative was first enacted in Maine in 1996. Arizona became the second state to enact a CMCE system in 2000. In 2008, Connecticut's new CMCE bill may get over 80% participation in its first cycle. Under CMCE, fundraising is all but eliminated. Candidates who opt in to the plan (it must be optional to avoid free speech issues) may raise a small amount of "seed money," which will be used to qualify for public funding of their campaigns. Qualifying consists of getting enough constituents -- and only constituents - - to sign some paperwork and write a check for $5-100.
Once enough signatures and checks have been gathered, the candidate qualifies for a preset amount of money, the amount depending on the office for which the candidate is running. That money is directly deposited into the candidate's bank account, and that is all the money that the candidate is allowed to spend, with one exception -- when a candidate's opponent, or a third party, spends more than the "limit." Under the plan, candidates who opt out must report all expenditures early and often, and the money is deemed to be spent when the candidate commits to spending it. For instance, if a candidate places a printing order or a newspaper ad, the money is deemed spent on that day, even if the actual check isn't written until much later.
Once a non-participating candidate exceeds the limit, all other candidates who have opted into the CMCE system receive direct deposits into their accounts, up to a stop limit of three times the original amount. In other words, if the original limit is $100,000, candidates may receive up to an additional $300,000. Any money deposited via CMCE may be spent. Any CMCE candidate who exceeds the spending limit will not only have his or her opponents get extra funds, but will also be personally fined.
What are the results in Maine and Arizona? First, there is an ever-increasing percentage of candidates opting in to the CMCE system with each election cycle. Second, there are more candidates, especially women and minorities, people who generally have less access to the kind of money usually necessary to mount a political campaign. Third, more people became contributors (those $5 checks), and the average donation went down significantly. Fourth, the current governor of Arizona, the Democratic nominee and one of six candidates who opted in, defeated the Republican nominee, and the only candidate to opt out, by a landslide, 59%-36%.
Finally, lobbyists find their power reduced significantly. Both Maine and Arizona now have prescription drug plans that save residents money, over the objections of the drug lobby. Arizona's annual land sales to developers now bring in three times the revenue since the advent of CMCE, as developers must now pay fair market value.
CMCE leads to more candidates, more diversity among candidates, less overall campaign spending, almost no fundraising, and no need to "repay" large donors and fundraisers after the election with special favors.Next Section | Return to Main Menu