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Michigan Moves Backward on Campaign Finance Reform

New measures reinforce secrecy and make it harder to enforce existing money in politics protections

December 17, 2018

Cross-posted from the Detroit Free Press.

The Michigan Senate recently passed two bills that would undercut campaign finance law at the voters’ expense. One would prevent the state from requiring “dark money” groups — innocuously named nonprofits like “Build a Better Michigan” or “Better Jobs Stronger Families” —  to say who’s funding them. The other bill would take the job of enforcing campaign finance laws away from the secretary of state and give it to a new commission with an organizational structure known to breed partisan stalemates and inaction.

These bills have been roundly criticized as inappropriate for a lame-duck session. But no matter when they’re proposed or who is proposing them, they are also simply terrible ideas. The Michigan House of Representatives and, if necessary, Gov. Rick Snyder must make sure they don’t become law.

Securing dark money’s future

Let’s start with dark money provision. Senate Bill 1176 would bar state agencies from requiring any entity registered as a nonprofit to disclose its donors unless otherwise required by state campaign finance law. The bill would shield “Build a Better Michigan,” “Better Jobs Stronger Families,” and the other dark money groups that were major players in both the Democratic and Republican gubernatorial primaries earlier this year, and also poured money into last-minute attack ads and negative mailings in state legislative races. Such dark money nonprofits — whose major donors are virtually untraceable — are increasingly active in state politics across the country and have also spent more than $1 billion on federal races.

Michigan law requires disclosure of donors only if a group advocates explicitly for or against a candidate or ballot measure, using words like “voter for,” “support,” or “defeat.” But there is no practical difference between an ad that says “defeat Jane Smith” and one that says “call Jane Smith and tell her to stop hurting Michigan workers.” SB 1176 would ensure that the funders of such ads stay in the shadows, depriving Michigan voters of facts that can help them make informed decisions.

The FEC is no example to follow

The second bill, Senate Bill 1250, would transfer the power to enforce campaign finance laws from the Secretary of State to a new “Fair Political Practices Commission” evenly divided between Democrats and Republicans, modeled on the Federal Election Commission (FEC). But the perennially gridlocked FEC is the last federal regulator to use as a prototype for a new state agency. (Full disclosure: I used to work there.)

The FEC has been mired in a prolonged stalemate between its Democratic and Republican members for more than a decade. Despite momentous changes wrought by Citizens United and other campaign finance cases, commissioners have deadlocked repeatedly along partisan lines over proposed updates to the agency’s rules. Too often that has left candidates, parties and other political actors without clear guidance about their legal obligations.

The FEC’s impasse over disclosure in particular is one of the main reasons dark money is such a problem in federal races. More recently, the commission has also failed to reach consensus on how to respond to Russia’s use of internet ads to meddle in the 2016 presidential race, despite urgent calls for action.

The FEC also routinely sits for years on high-profile enforcement matters, usually ending in partisan standoffs on those, too. One notorious example involved a donor who admitted he had formed an LLC solely to hide a $1 million contribution to a super PAC supporting Mitt Romney’s 2012 presidential campaign. This clear-cut case took four years to resolve. In the end, commissioners deadlocked on whether to move forward. In all of 2016, the agency obtained penalties totaling less than $600,000 — in a $6.8 billion election cycle.

In fact, the FEC’s commissioners are so divided they can’t hire staff. The post of general counsel, the agency’s chief legal officer, has been vacant for five years. It is no wonder that the commission’s own longest-serving member has derided it as “worse than toothless.”

It’s certainly fair to ask whether campaign finance regulation should be in the hands of a partisan officeholder like the Secretary of State (not that this bothered the Legislature when the Secretary of State was a Republican). But copying a profoundly dysfunctional federal body is not the answer.

In short, these purported “good government” measures are anything but. They would reinforce secrecy and make it harder to enforce laws that are already on the books. The state House of Representatives and the governor should reject them.