A “Stern Law” for Alameda?

At the end of the League of Women Voters public forum on campaign finance reform last Thursday, moderator Joe VanWinkle asked the four panelists what kind of law they would recommend for a city like Alameda.  All of them suggested the City consider enacting an ordinance limiting the dollar amount of contributions to mayoral and Council campaigns.

This recommendation was not surprising.  Despite striking down other campaign finance laws, the courts repeatedly have sustained the constitutionality of contribution limits.  Many cities in the Bay Area, including Oakland, Berkeley, Fremont, and Hayward, have passed laws limiting contributions to local campaigns.  Even the ordinance proposed by the Sunshine Task Force for Alameda back in 2011 – and then ignored by Council – contained a $500 contribution limit.

But before we rush to write contribution limits into the Alameda Municipal Code, we need to pause to consider the consequences.

Let’s be clear about what any ordinance regulating campaign finance can and cannot do.  It can limit contributions by individuals, corporations, or unions to a mayoral or Council candidate.  But it cannot restrict spending by a candidate of her own money on her campaign.  Nor can it limit spending by corporate or union political action committees (“PACs”) to support or oppose a candidate.  This is so because the United States Supreme Court and the federal appellate courts have held that the First Amendment entitles self-financed candidates, as well as corporations, unions, and PACs, to spend unlimited sums in an election.

As a practical matter, an ordinance structured to comply with this constitutional stricture would not change the way either self-financed or PAC-supported candidates conduct their campaigns.  The self-financed candidate still can spend as much as she wants to get elected– and a corporate or union PAC still can spend as much as it wants “independently” to support her.  The only limit is the size of the bank account.

Instead, the burden would fall on candidates who are neither wealthy nor well-connected.  Absent public financing, these candidates would have to raise funds for their campaigns in much smaller chunks from a lot more people.  And, unless they agreed to push a corporate or union agenda, they wouldn’t be likely to see any PAC money spent to support them.  Worst off of all would be an impecunious, independent candidate who is running for the first time and needs to spend substantial sums simply to get her name in front of the voters.  An ordinance written to pass constitutional muster thus might end up giving an advantage to the self-financed and/or PAC-supported candidates in a race against an upstart opponent.

To illustrate the impact of mandatory contribution limits on Alameda elections, the Merry Go-Round took the data from the 2012 Council race and assumed that an ordinance limiting contributions to $250 per donor (but not restricting spending by self-financed candidates or PACs) had been in effect at the time.  (We’ll call an ordinance with these features the “Stern Law,” after Robert Stern, the “godfather” of campaign finance reform who spoke at the LWV forum.  We don’t mean to imply that Mr. Stern would prefer such a law to other ideas for campaign finance reform).

Our analysis found that:

  • The Stern Law would have had the least impact on the three candidates – Tony Daysog, Marilyn Ezzy Ashcraft, and Jeff Cambra – who funded the majority of their campaigns from their own pockets.  Mr. Daysog spent very little money on his campaign, and he received just three third-party contributions, only one of which exceeded the $250 limit (and then by only $50).   Ms. Ashcraft was the biggest spender in the race, and Mr. Cambra came in second.  But the Stern Law would have reduced the amount available for Ms. Ashcraft to spend by only 6.62% and for Mr. Cambra by just 7.98%.  Moreover, it would not have prohibited the firefighters’ PAC from spending $15,845 on a mailer in which the two were among the endorsed candidates.
  • For Stewart Chen, D.C., the Stern Law would have had a significant impact on the amount generated by contributions to his campaign – but, thanks to “independent expenditures” by the firefighters’ PAC, it would have had a lesser effect on the total amount spent in support of his candidacy.  Specifically, the Stern Law would have reduced the amount available for Dr. Chen himself to spend by 25.22%.  But Dr. Chen also was one of the candidates endorsed in the mailer sent by the firefighters’ PAC supporting Ms. Ashcraft and Mr. Cambra.  More significantly, he was the sole beneficiary of the $10,000 spent by the firefighters’ PAC the week before the election on mail drop pieces.  The Stern Law would not have prohibited either “independent expenditure” by the firefighters’ PAC.
  • Jane Sullwold would have fared the worst.  The Stern Law would have reduced the amount generated by contributions to her campaign by 39.53% – 22.85% if the $5,000 check received the weekend before the election from her father-in-law is excluded.  (Chester A. Sullwold, an 89-year-old retired newspaperman living in Toledo, Ohio, was the biggest individual donor to any candidate in the 2012 election.  We are informed that he was motivated to contribute to his daughter-in-law because, to his knowledge, she has made only one mistake in the last 31 years).  Unlike Ms. Ashcraft, Mr. Cambra, and Dr. Chen, Ms. Sullwold did not benefit from any PAC spending in support of her candidacy.

For obvious personal reasons, this hypothetical exercise has turned the Merry-Go-Round into a diehard opponent of anything like the Stern Law.  But, seriously, it is worth pondering whether the City would be better off with such an ordinance:

  • Do we really want to discourage candidates who lack personal wealth from entering the race against candidates who are able and willing to spend their own funds on their campaigns?
  • Do we really want to encourage candidates to cater to corporate or union interests in order to get PAC spending to supplement the funds they are able to raise on their own from small contributors?
  • Do we really want to make it more difficult for a candidate who is not already widely known around town to run for office?

Maybe this sounds like so much whining:  Sure, an ordinance like the Stern Law may work against candidates who are not self-financed, PAC-supported, or already well-known.  But all that means is that such candidates will just have to beat the hustings a little harder.  Still, one wonders:  Do we want a system that forces candidates to devote even more time to fund-raising?

Our hypothetical Stern Law thus may carry questionable consequences.  But it is not the only idea for reforming campaign finance in Alameda or elsewhere.  Indeed, well aware of the straitjacket the Supreme Court has put them in, reformers these days tend to gravitate toward proposals that depend upon voluntary assent by candidates.  For example, the City of Oakland allows candidates who agree to limit their campaign spending to accept larger contributions than candidates who don’t.  Similarly, for more than two decades, the City of New York has offered a program in which candidates who agree to cap their campaign expenditures get small donations matched with public funds on a 6:1 basis.

We fear that ideas like these may be too, well, innovative for Alameda.  And the politicians may cringe at the prospect of public financing, even though it would take just about the same amount of public funds to subsidize an entire Council race that the City now spends on one firefighter.

But here’s the ironic thing:  An ordinance like the Stern Law, with all its potential downsides, might have the best chance of getting passed by the current City Council.  One would expect incumbents generally to favor an ordinance that makes it more difficult for an unknown challenger with neither deep pockets nor union ties to run for their seats.  But a majority of our current Council lineup might be especially well-disposed toward an ordinance like the Stern Law because its burdens won’t fall on them.

As self-financed candidates, Vice Mayor Ashcraft and Mr. Daysog would suffer the least from the Stern Law.  The ordinance would have more of an impact on Dr. Chen, but if he is confident that he can remain in the good graces of the firefighters’ union so that the decrease in the amount he can raise from contributions is offset by PAC spending, he may go along with it, too.  (And we can’t see any reason for the firefighters’ union itself to oppose the ordinance as long as it preserves unlimited spending by PACs).  That gets us our three votes.

Then there are Mayor Gilmore and Councilwoman Tam.  Neither, of course, ran in 2012.  But going back to 2010, an ordinance like the Stern Law would have had a far greater impact on the amounts they would have been able to spend on their campaigns than such an ordinance would have had in 2012.  Both the Mayor and the Councilwoman received a plethora of contributions exceeding $250.  Even if their union backers had decided to make “independent expenditures” rather than direct contributions, the ordinance would have curtailed the overall funds available for their campaigns significantly.  Of course, if asked now to vote on the Stern Law or something like it, Ms. Gilmore and Ms. Tam might be willing to support an ordinance that would do unto others what it would have done – but did not do — unto them.

But we need not rest our prediction solely on the self-preservation instincts of the current Council members.  Campaign finance reform is a standard part of the platform for “progressive” politicians.  Our own legislators could portray their support for an Alameda version of the Stern Law as striking a blow against the reactionary Supreme Court and the evil Koch brothers.  They might even claim it would encourage participation by working families in the political process.  (Of course, they could make the same arguments even more compellingly for an ordinance like Oakland’s or New York’s).

We don’t know whether the local chapter of the LWV intends to move forward with any recommendations for campaign finance reform.  But if they do, it will be interesting to watch how the politicians, especially those in the Inner Ring, react.

Sources: 

Campaign disclosure statements, available at http://docs.ci.alameda.ca.us/weblink8/browse.aspx?startid=81737&&dbid=0.

Alameda Election Finance Analysis 2008-2012: Alameda Election Financial Analysis 2008-2012 10-22-2013.jvw

About Robert Sullwold

Partner, Sullwold & Hughes Specializes in investment litigation
This entry was posted in City Council, Firefighters and tagged , , , , , , , . Bookmark the permalink.

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