Philadelphia Ethics Board plans crackdown on independent expenditures

We just saw a presidential race in which federal campaign contribution limits officially became a joke. Supreme Court decisions allowed super PACs to accept unlimited contributions for campaign ads and the cash came streaming in, sometimes by the millions.

But the Philadelphia Board of Ethics is making plans to keep that from happening in city elections, and it may show a lot more teeth than the Federal Election Commission has.

Pennsylvania is one of a handful of states that has no limits on political contributions, and in past mayoral races, leading candidates would get six-figure contributions from special interests.

That changed with the 2007 mayor’s race, when Philadelphia finally had limits on contributions in city elections. Michael Nutter, the one candidate who got it and committed early to building a broad fundraising base won the prize.

But while there are dollar limits on what anyone can give to a candidate’s campaign in Philadelphia, there’s one very big loophole that was apparent when the city’s campaign finance law was enacted in 2003. While it said candidates can have only one committee and must accept contributions within specific limits, no such restriction applies to independent political committees.

“You can pretty much do anything,” Ethics Board Executive Director Shane Creamer said of the prospects for independent committees. “You can spend unlimited amounts of money to promote a candidate, as long as you’re doing it independently of that candidate’s campaign.”

Which means that in Philadelphia, anybody can function like a Super PAC. Because contribution limits apply only to candidate’s committees, anybody else – a powerful union, a committee representing a commercial interest, or just some rich guy – can spend whatever they want to promote someone’s candidacy, as long as they aren’t coordinating their activity with the candidate they’re sweet on.

This was amply demonstrated in the 2011 City Council elections when a political committee associated with powerful electricians’ union leader John Dougherty put tens of thousands of dollars into media attacking candidate David Oh. It was perfectly legal as long as the effort wasn’t coordinated with any candidate, and I never even heard a rumor that it was. Oh won narrowly despite the attacks.

Gotta Keep ’em Separated

But you have to figure that as candidates make plans for the 2015 mayor’s race, some will be tempted to assign supporters to set up an “independent” committee that can accept unlimited donations to help them, or to court the favor of existing power players for assistance on a grand scale.

So some questions arise: How do you define coordination among political groups, and if somebody’s engaging in it, who’ll do anything about it?

The Philadelphia Ethics Board is attempting to answer both questions. The board has drafted some regulations defining coordination, and Creamer says when they’re in place if a candidate believes his opponent is breaking the rules, the board will act.

“We could open up an investigation and try to substantiate whether there’s any truth to the allegations,” Creamer said.

Okay, I said, but do you have the authority to get critical information you’d need, like emails, to establish a connection between two political groups? No problem, he said.

“We have subpoena power,” Creamer said. “We can compel people to give statements under oath and we can also compel people to produce documents.”

I’ve seen this happen. When anonymous fliers appeared sliming mayoral candidate Nutter in the waning days of the 2007 primary, the Ethics Board initiated an investigation that took more than a year but brought the responsible parties to account. The political committee for Local 98 of the International Brotherhood of Electrical Workers paid $10,000 for the fliers and other campaign finance violations.

Does this happen in Washington?

If the Ethics board were to effectively crack down on coordinated spending, it struck me that it would be doing something I’ve never heard of the Federal Election Commission doing.

To check I turned to John Dunbar, who knows federal election law and regulatory practice better than anybody I can think of. Dunbar is managing editor of politics for Center for Public Integrity in Washington, and I wasn’t surprised when he answered his office phone on the day before Christmas.

As it happens, Dunbar told me, the Center did a study of the issue this year, because the question of coordination is so important in the era of super PACs.

“We went back to 1999 and we only found three investigations for coordination,” Dunbar told. “Two of those resulted in fines.”

That’s three cases over a period in which hundreds, if not thousands of Congressional, Senate and presidential candidates were raising and spending money subject to federal election law. It’s worth reading the center’s report on this here.

The Ethics board will hear public comment on its proposed regulations January 23rd. They could be in place by March, in time for this year’s Democratic primary races.