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Philadelphia Regulation Attempts to Reign in Coordinated Spending

Recently the Philadelphia Board of Ethics passed regulations to try to rein in unlimited outside spending and prevent wholesale abuse of the system.

November 7, 2014

By Leigh Hartman

Due to recent Supreme Court rulings (namely Citizens United), corporations and others are allowed to spend unlimited funds on political campaigns. To comply with contribution limits, outside spenders are theoretically barred from coordinating their message with their favored candidate, but the reality is that the laws preventing such coordination are weak and ineffective. Recently, however, the Philadelphia Board of Ethics passed regulations to try to rein in unlimited outside spending and prevent wholesale abuse of the system.

Citizens United has had a major impact at the state and local level, where money goes further. In a recent report, the Brennan Center details the surge of outside spending over the past four years, and the ways that “[u]nlimited outside spenders are working ‘hand in glove’ with candidates who have every incentive to look after [the contributor’s] interests if elected.”

In Philadelphia, the Board of Ethics recognized that state and local laws to deter coordinated spending were too ambiguous and easily circumvented. For example, while city law had prevented unlimited spending by groups that explicitly collaborated with candidates on campaign strategy, it did not prevent candidates from raising unlimited funds for these groups (with the implicit promise that that money would be spent on the candidates’ campaigns) or from disseminating materials, such as flattering video footage, that outside groups could then distribute for the candidate. These were two easy ways to circumvent Philadelphia’s contribution limits.

In response, the Board of Ethics introduced new regulations to meaningfully prevent coordination between campaigns and outside groups, focused on the two coordination strategies described above. The initial language of the proposed fundraising rule prevented outside spending of “funds solicited for or directed to that [outside group] by the candidate’s campaign.” And the regulation sought to ensure that if an outside group were to reproduce a candidate’s campaign material, expenditures for that reproduction would be counted as a contribution.        

The Brennan Center submitted testimony in support of the proposed regulations and offered suggestions to help strengthen and clarify them. Among other things, our testimony suggested the regulations unambiguously state that if “the candidate’s campaign has solicited funds for or directed funds to the [outside group] making the expenditure,” any subsequent expenditure by that group should be considered coordinated. This prevents  groups from claiming that the money they spend in support of a candidate is different money than the money the candidate raised for the group, a theoretical distinction that threatened to allow circumvention of limits on coordinated spending.  The Brennan Center also suggested new language to clarify the provision allowing media organizations to reproduce campaign material, and a number of other technical changes.

We are pleased that the Board of Ethics adopted most of the Brennan Center’s recommendations and approved the changes to the law. These adjustments make Philadelphia’s regulation one of the most innovative in the country, for which the Board should be applauded. The recent 2014 midterm elections saw around $3.7 billion in spending. States and municipalities should look to Philadelphia as an example of strong, effective campaign finance regulation. We hope that other regulators will follow the Board’s example to prevent campaigns and outside groups from circumventing the law.

(Photo: Flickr/DavidSwift)