February 10, 2016

Door Opens for More Dark Money in Michigan

By Madeline Kirsch

More bad news for state campaign finance law.  In an attempt to make Michigan’s already feeble campaign finance laws even weaker, the state legislature is trying to change Michigan law to formally recognize the kind of uncontrolled and often secret political spending the Supreme Court allowed in Citizens United.

Michigan’s Senate Bill 638 would amend Michigan’s campaign finance law by formally establishing “independent expenditure committees” – essentially state-level super PACs. The legislation would write into Michigan’s legal code that these committees, which in practice are already functioning in Michigan as a result of post-Citizens United court cases, can spend unlimited amounts of money to support or oppose candidates as long as there is no coordination with the candidate.  The bill also would allow them to make unlimited contributions to other independent expenditure committees and ballot committees, and would permit candidates to solicit donations to an independent expenditure committee on their own behalf.

SB 638, enshrining court decisions, would recognize that corporations and unions can donate to independent expenditure committees, provided the committee discloses the contributions.  That disclosure, however, can be illusory.  The ultimate sources of funds may keep themselves secret by routing their contributions through tax-exempt organizations or limited liability companies, resulting in “dead-end disclosure.”

SB 638 has cleared the State Senate by a wide (25-13) margin. With the State House of Representatives also held by Republicans, the bill’s approval there and signature by Republican Governor Rick Snyder seem likely. In 2013, Snyder signed into law legislation which doubled contribution limits for the only state committees with any limits, candidate committees and legislative caucus PACs, and narrowed the definition of “campaign expenditures” so that only those ads that  contain “magic words” like “elect” or “vote for” qualify as express advocacy. More recently, Snyder signed into law a bill which would raise the amount a political action committee can donate to pay for campaign expenses to $136,000.

If SB 638 passes, it could give politicians running for office in Michigan even more grounds to decide that they should focus their fundraising and campaign efforts largely on independent expenditure-only committees and those who have the power to create them. In turn, political players like the Koch brothers, who are focusing their efforts on reducing government regulation by throwing their support (and finances) into local races, may be more likely than ever to act in Michigan, given how lax its state laws on campaign finance already are.

CREW already filed a complaint against one Michigan dark money group, Michigan Advocacy Trust (MAT), that appears to have violated federal law by failing to disclose its donors to either the IRS or the state.  MAT closed up shop once its violations were exposed, but it may well soon be replaced by many more super PACs and dark money groups.

Citizens United is a major factor in increased spending and reduced transparency in elections nationwide. According to a report by Rich Robinson of the Michigan Campaign Finance Network exploring the state’s post-Citizens United elections, “In presidential years, non-party independent spending tripled from 2008 (prior to Citizens United) to 2012.” Campaigns for the attorney general’s office, Michigan House seats and the 20th District Michigan Senate were the most expensive in history. Independent expenditure-only committees have contributed to an increase in the amount spent on state and local elections; recognizing them formally under state law could further this trend.

According to Robinson, “There are no equals to that level of spending in judicial campaigns, or the dark money component, anywhere else in the nation.” Perhaps this is because Michigan’s laws permit and even encourage such massive undisclosed spending. Higher campaign contribution limits are just one part of the problem with Michigan’s campaign finance laws. Other changes to Michigan’s campaign finance laws passed in 2013 increased the amount of food and beverages candidates could accept without reporting the gifts, and shield ‘issue ad’ spending for ads that do not encourage viewers to vote or against a certain candidate. Michigan appears to be going in the wrong direction; across-the-board campaign finance reform is needed to fix the deteriorating situation.

SB 638 is part of a worrying trend of high spending on state-level elections. In an election year in which many candidates and advocates are discussing campaign finance reform, Michigan’s 2016 state races could instead be funded more than ever by undisclosed donations. 

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