Campaign Finance 2008: A first look back

Not all the campaign finance data that will be reported are in. Candidate committees have to file post-election reports, and late independent expenditures by state PACs will not be reported until the end of January. But some major story lines from Campaign 2008 are already clear. Here is a first look back.

Obama

Sen. Barack Obama was the proverbial political game changer. By the middle of October, Obama for America raised $637 million from individuals – more than the entire presidential field raised from beginning to end in 2004, and more than the entire Republican field in 2008.

Most strikingly, Obama raised over $300 million in small contributions of less than $200. Obama raised 50 percent more in small contributions than Sen. John McCain raised from all persons. Obama’s support in small contributions was 50 percent more than the entire presidential field raised from individuals in 2000, when George W. Bush was the first major-party candidate in the post-Watergate era to decline public financing for the primaries and he raised the previously unimaginable total of $94 million.

Obama declined public financing for the general election and he was criticized for it, but after the Democratic convention more than half a million new contributors gave to Obama for America and half the money he raised continued to come in the form of small contributions. The tightly integrated Obama campaign turned many of those contributors into volunteer activists. Giving money became the gateway to civic engagement.

In addition to being the great breakthrough of ‘everywoman-giving,’ this campaign season was the effective end of the presidential public financing system as we’ve known it. Reformers advocate for a modified system with higher spending limits and a four-to-one multiplier for qualifying contributions, but contributions to the public campaign fund through income tax check-offs are not equal to that challenge. It appears that a wired society can and will accomplish democratization of presidential campaign financing without government involvement.

At the same time, this campaign should end any notion that contribution limits are too low or need inflation adjustments. There is plenty of money in the system and it is not healthy for politics when too much comes from too few.

The great challenge ahead is to cultivate the broadly-based giving that emerged in 2008. Was the democratization of giving due to a once-in-a-generation candidate? Or, can we replicate this breadth of participation for all our politics?

Obama’s likely answer: Yes, we can.

Money loves power

Many interest groups are agnostic about political giving. They give to both parties, but as a practical matter, they tend to give more to the side in control. The majority is better able to help with policy issues.

Democratic majorities helped build advantages in caucus funds at every level, and those financial advantages helped to build even larger legislative majorities. The Democratic Congressional Campaign Committee topped the National Republican Congressional Committee in fundraising, $134 million to $104 million, and Democrats picked up 20 seats in the U.S. House. The Democratic Senatorial Campaign Committee raised $122 million compared to the Republicans $74 million, and Democrats gained at least six seats in the U.S. Senate.

Even though nominal fundraising figures were comparable for the Michigan House caucuses, the Michigan House Democratic Fund had $1 million more than the Michigan House Republican Campaign Committee at the end of July - $1.2 million to $187,000 – because the Republicans were paying down debt from 2006. The House Democrats raised an additional $730,000 during the fall campaign and the House Republicans raised $485,000 more. The House Republicans took new bank loans for $500,000 to reduce the Democrats 3:1 money advantage, but the Republicans were overmatched in most target races and lost nine seats.

Democratic-oriented 527 committees also had a broad advantage over Republican-oriented 527s in 2008, $134 million to $49 million. The level of spending by 527 committees reverted to a level of activity similar to what it was prior to the McCain-Feingold reforms, much less than the level of the 2004 campaign.

Money matters…

The Democratic caucus’s financial advantage was critical in both of Michigan’s hot congressional races in 2008.

Joe Knollenberg raised more than $3 million in his campaign fund but the NRCC left him to his own resources. Gary Peters raised more than $2 million for his successful challenge and the DCCC spent over $1.6 million supporting Peters, mainly for broadcast advertising.

Mark Schauer's successful campaign raised more than incumbent Tim Walberg - $2.0 million to $1.7 million – and the DCCC outspent the NRCC - $1.7 million to $1.4 million. Both campaigns were able to achieve saturation television advertising.

Until the very last days of the campaign, Walberg was the number one recipient of the NRCC’s support nationally. In the end, he finished second on the NRCC support list and he was one of only four Republican House candidates in the country who got more than $1 million in help. Thirty-five Democrats, including Schauer and Peters, received over $1 million in support, and 15 of those candidates got $1.9 million or more.

Among winners in Michigan House races, 105 out of 110 had superior financial backing. Candidate committees in targeted races were augmented by caucus in-kind support and PAC independent expenditures. The House Democratic Fund outspent the HRCC in every targeted race where both competed.

The Coalition for Progress, whose funds come mostly from Kalamazoo philanthropist Jon Stryker, spent at least as much as $46,000 in ten races. Seven of the candidates backed by Coalition for Progress were winners and three lost. Coalition for Progress spent its most, $275,000, in the 98th District backing Garnet Lewis. Lewis’s opponent, Jim Stamas, was one of only five House candidates to win against an opponent with greater financial support. Stamas joins his brother, Sen. Tony Stamas, in the 95th Legislature.

In what appears to have been the most expensive Michigan House race in 2008, Democrat Lisa Brown of West Bloomfield defeated Amy Peterman. Brown raised $144,000, received $285,000 in caucus support and benefited from $193,000 in Coalition for Progress independent expenditures. Peterman raised $169,000 and received $21,000 in caucus support.

…Except when it doesn’t

Financial advantage did not lead to victory in two notable areas: key judicial races and the statewide education boards;

Chief Justice Clifford Taylor was defeated in his third run for the highest state court by Judge Diane Marie Hathaway of the Wayne County Circuit Court. Taylor raised $1.9 million, a record for a Michigan Supreme Court candidate and three-times as much as Hathaway. However, the larger aspect of the campaign was off the books. While the candidates raised a combined $2.5 million, the Michigan Chamber of Commerce, the Michigan Democratic Party and the Michigan Republican Party spent over $3.5 million for candidate-focused issue ads that are not reported in any campaign finance reports. These ads mainly attacked the candidates’ records, character and qualifications, but they did not exhort a vote, so they don’t have to be reported under Michigan’s flimsy campaign finance law. The Chamber and Republican Party outspent the Democratic Party on "issues."

The nonpartisan Justice at Stake Campaign, of which MCFN is a state partner, declared this year’s Michigan Supreme Court contest to be the nation’s dirtiest campaign. It capped a decade-long run of campaigns where the majority of financing has been off the books.

The new Michigan Supreme Court will feature four Republican nominees and three Democratic nominees, with Justice Elizabeth Weaver at the center of a court that has moved toward the center.

In another notable judicial contest, attorney Michael Kelly defeated Ingham County Circuit Court Judge Paula Manderfield for a seat on the 4th District Court of Appeals. Manderfield had a financial advantage but Kelly overcame it.

In the party bellwether elections for directors for the state Board of Education and the governing boards for U-M, MSU, and Wayne State, Democrats had a clean sweep, eight wins to none. The Republicans have lost all 16 of these contests in the last two years. This year incumbent Scott Romney lost his seat on the MSU Board, and well-funded challenger Danialle Karmanos lost a run for the WSU Board. Two years ago, two well-funded and prominent Republicans, David Brandon and Eileen Weiser, lost their seats. The defeat of these name-brand Republicans may be the best indicator of how big the last two elections have been for the state Democratic Party. Generally, observers assume these races are the best indicators of voters’ core party identification because voters appear to know almost nothing about the candidates for these positions.

A season of extremes

Extremes of campaign finance were on display in 2008.

The stem cell ballot proposal was the third-most expensive ballot question since 2000, after the racino proposal of 2004 ($27.6 million) and the school voucher proposal of 2000 ($19.6 million). Proposition 2 of 2008 ran over $15 million, with proponents spending over $9 million for their successful campaign and opponents spending over $6 million. Developer Al Taubman gave the proponent committee more than $5 million and the Michigan Catholic Conference gave the opponent committee more than $5 million.

Barack Obama was supported by millions of contributors in the biggest and most broadly based campaign in American history.

Michigan’s state Supreme Court campaign was mainly under the table and we don’t know who put up most of the money.

Off-the-books campaigning is particularly toxic for Supreme Court campaigns because we can’t see whether a prospective party to an appeal is spending big to make sure its case is heard by the judge of its choosing. The U.S. Supreme Court has assured that all parties, including corporations and unions, can spend their money for electioneering communications, but the spending should not be allowed in a way that conceals potential conflicts of interest, and those conflicts of interest should not be ignored. All electioneering spending should be reported and more stringent standards for recusal should be enacted.

In a concession to reality, Michigan should rededicate its public campaign fund to Supreme Court campaigns so candidate committees have a viable alternative to soliciting funds from interest groups and individuals who may be part of an upcoming appeal. Michigan's gubernatorial public financing system is broken in precisely the same way as the presidential system, but the fund could support viable Supreme Court campaigns. Michigan Supreme Court campaigns are among the most infamous in the country, but they can be cleaned up. Policymakers just need to make a stand for integrity over expediency.

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