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SF considers change to campaign financing

Copyright © 2018 Albuquerque Journal

Santa Fe is taking another crack at leveling the playing field for candidates in municipal elections by proposing changes to the public campaign finance code.

The amendments would allow publicly financed candidates to solicit private contributions, in small amounts, and provide them with matching funds to double the amount raised.

Carol Romero-Wirth

“What this bill does is bring the matching system back and does so in a way that’s constitutionally compliant,” said City Councilor Carol Romero-Wirth, who is sponsoring the proposal to deal with an issue that the city’s Ethics and Campaign Review Board (ECRB) has grappled with for years.

The city initially had a matching system when it developed its public campaign finance system by ordinance in 2009. It allowed publicly financed candidates to receive additional public funding that matched spending by their privately financed opponents.

But the city’s system was invalidated by the U.S. Supreme Court two years later when it handed down a decision in an Arizona case. That ruling held that the matching system effectively discouraged privately funded candidates from spending money.

What’s being proposed under Romero-Wirth’s legislation, which was largely shaped by the ECRB, gets around that by providing matching funds not for what privately financed candidates raise, but for what the publicly financed candidate raise themselves.

“This is basically the best we can do given the constitutional constraints,” said Romero-Wirth, whose husband, state Sen. Peter Wirth, has also worked on campaign finance measures at the state level, only to have them vetoed by the governor the past two years.

The city proposal adds a new term – qualified small contribution – to the city’s campaign code. Qualified small contributions are defined as donations of less than $100 per donor, the theory being that $100 isn’t enough to make a candidate beholden to a contributor.

Publicly financed candidates could collect an unlimited number of such contributions and receive double the amount in matching funds from the city two business days after they submit for the match on the 57th, 40th and 25th days prior to the election.

“It’s an important counter to unregulated (Political Action Committee) money that we’ve seen, especially in mayoral elections and some council elections,” said Romero-Wirth, who won the District 2 position on the City Council earlier this year in a race in which all three candidates ran publicly financed campaigns with $15,000 each from city coffers.

The most prominent case of outside spending came in 2014, when Javier Gonzales defeated two other candidates in the mayor’s race. All three accepted the $60,000 in available public funding for their campaigns and couldn’t take private contributions.

But Gonzales got help from outside groups – public employees unions – who on their own spent more than $64,000 to help him get elected.

Other candidates and some public financing supporters cried foul and said the outside spending to help Gonzales, much of it used on attack ads, violated the spirit of public campaign spending – the theory that public funding would “level the playing field” and keep big money from special interests out of politics.

In a summary of the proposed amendments, the ECRB addresses spending by independent groups that are not allowed to coordinate with the candidates they support.

“ECRB believes that allowing publicly financed candidates to collect small private contributions and matching funds will give those who do not have support from independent groups the opportunity to close the funding gap with those candidates who do,” the summary says. “The plan will be acceptable to the courts because any candidate will be able to use this approach.”

It goes on to say that the purpose of the amendments “is to preserve and strengthen the opportunity for candidates to run viable publicly financed campaigns regardless of whether they or their opponents are supported by independently financed, non-coordinating groups.”

Under the current system, candidates must first qualify for public financing by collecting a certain number of $5 donations from people living within the jurisdiction they intend to represent. City Council candidates need to collect 150 $5 donations from voters in their districts to qualify. Mayoral candidates have to collect 600 $5 donations from throughout the city to qualify to get $60,000 in public money.

The city allocates $150,000 from its budget each year to fund the program to assure there is enough to go round in each election cycle.

Changing campaigns

Santa Fe’s public campaign finance system was adopted after the city’s electorate in 2008 voted to amend the municipal charter to require the City Council to create such a program. The City Council followed through the next year by adopting a system that included matching funds.

“This ordinance began with findings that the existing system of private financing of campaigns for municipal office, among other things, undermined public confidence in the democratic process, created a danger of undue influence by large donors, diminished accountability to constituents and forced officials to spend time fundraising,” the ECRB synopsis says.

While the public campaign finance system aims to take big money out of local elections, it hasn’t worked out that way.

First came Gonzales’ win with outside support from the public employee unions. In this year’s mayoral race, just one of five candidates signed up for public financing (though another, Peter Ives, attempted to, but failed to collect the required 600 $5 donations). Eventual winner Alan Webber raised more than $300,000 – more than the other three privately financed candidates combined and more than five times more than publicly financed candidate Ron Trujillo was given to spend under the current system.

Ron Trujillo

Trujillo, who served on the City Council for 12 years before vacating his seat to run for mayor, remains skeptical that changing the campaign code will make a difference.

“It will never be a level playing field,” said Trujillo, who placed second in the mayoral race. “Not when you have people who can buy TV ads and spend hundreds of thousands of dollars on their campaigns.”

And a lot of money goes to paying the people who run campaigns and/or who do door-to-door canvassing in neighborhoods, says Trujillo, adding that his campaign was strictly made up of volunteers.

Never did he think that the $60,000 he received through public financing would be so overwhelmed by what was raised by Webber.

“I was shocked how much money Mr. Webber raised,” he said. “There will never be a level playing field because whatever people try to do to make it a level playing field, there’s always someone who will find a way around it. We’ve seen that the last two (mayoral) elections.”

Another former city councilor who provided input to the ECRB on the public campaign finance system is Karen Heldmeyer. She’s curious to see if the proposed changes will make a difference if they’re adopted.

“If this passes,” she said of the proposal, “we won’t really know how it will work until the next election, and particularly the next mayoral election, because that’s where the big bucks are.”

She said campaigns in Santa Fe have changed over the years.

“It used to be that local campaigns were more homespun. People that worked on them were volunteers,” she said. “It’s kind of evolved into where there’s a sense that (candidates) think that they need more money, therefore they need professional staff. And as you get more professional campaign staff, you get more professional campaigns, and that costs money.”

Heldmeyer said the city’s program might work better in races for city councilor because less money is spent in those races, but she questioned the $100 limit as a qualified “small” contribution.

“The idea is that a $100 contribution isn’t enough to corrupt anyone. That may be true in the race for mayor, but in a councilor’s race, $100 might be worth something,” she said.

Public hearing

Another criticism of the current program is that it relies on taxpayer dollars to fund the program – money that could be spent to fill pot holes, pull weeds along roadsides, or to hire additional police officers.

Jim Harrington, state director of Common Cause New Mexico, which describes itself as a nonpartisan, nonprofit group committed to honest, open and accountable government, says that citizens also want to see spending controls placed on elections.

“I don’t think there’s any doubt about the support for public financing of elections. People are outraged with all the corporate spending and influence from PACs,” he said, noting that the change to the city charter that led to creating the city’s public campaign finance system was approved by 63 percent of voters.

Harrington, too, has worked with the ECRB over the years to create a system that works. He wrote a memo to the ECRB in July that argues for additional funding for the program.

Harrington observed that the majority of mayoral candidates in this year’s election decided to forgo public financing.

“It is therefore apparent that many candidates will not accept public financing, and it won’t serve its purpose of reducing the influence of large private contributors unless additional funds are offered to help the publicly financed candidates deal with extravagant private spending,” he wrote.

“It won’t guarantee that publicly financed candidates can always match their private opponents – the courts won’t let them do that – but at least it will give them a way to respond to heavy spending when it occurs.”

While the proposed changes would open the door for increased payouts to candidates from the public campaign finance fund, he has worked through different scenarios that indicate that’s unlikely.

“Even if we assume that the new system would double the payouts to candidates compared to the average payouts in the four elections previously conducted with public financing, the fund could still be financed exclusively from the $150K annual appropriations without a need for top-up payments for the indefinite future. And even on the extreme assumption that the payouts to candidates are tripled by the new system, this would increase the average annual cost of the system by only $56,812.50, which still seems a reasonable price to pay for restoring the viability of Santa Fe’s public financing system.”

There is a provision in the proposal that says if the fund is depleted, the amount paid out to candidates would be adjusted accordingly.

It’s not ideal, but, “It’s the best way to thread the needle that the courts have made hard to thread,” Harrington said.

The proposal is now going through the city’s committee process and is scheduled to be heard by the Finance Committee on Oct. 1. It will come before the City Council for a decision on Oct. 10, when citizens will have an opportunity to chime in during a public hearing.

“It will be interesting to see who supports this and who doesn’t and how many people even care,” Heldmeyer said.