The End of Ethics Reform in Minnesota (or how the governor and legislature just weakened campaign finance reform and made it easier for special interests to buy influence)

Minnesota's 2013 legislative session will forever be known as the one that legalized  same-sex marriages.  Yet while many were celebrating this act the governor and the legislature are on the verge of adopting legislation that takes a giant step toward undoing political reform in the state and significantly increasing the chances that special interest money will further damage the Minnesota elections and law making process. The result is more money out of the taxpayer wallet funding special interest projects while legislators get free meals and gifts from lobbyists.

            Stories about campaign finance reform, lobbyist disclosure, and gift ban legislation are not sexy.  They are inside baseball stories that the media generally does not cover anymore, especially at the end of the legislative session where stories about the budget taxes, paying for the Vikings' stadium, or addressing unionization for daycare workers or spending  on education dominate.  But there is a common thread connecting all these stories.  There is a reason why the Vikings got their way, why powerful businesses were able to kill off B2B taxes, why energy companies watered down laws that would have required more power come from renewable sources, and why  day care unionization was pressed so hard.  It is all about money in politics.

            Archibald Cox, former president of Common Cause and the special prosecutor fired by Richard Nixon in the famous 1973 Saturday Night Massacre, described the laws about money in politics as the rules that determine the rules of the game.  Who is allowed to give, how much, and whether the public knows about it, go a long way toward determining the winners and losers in the game of politics.  The rules about money and politics are outcome determinative. 

            Up until the early 1990s Minnesota was a national leader when it came to political ethics.  Its public funding for campaigns was a model for encouraging small donors and mitigating special interests.  The gift ban law was a progressive instrument to break lobbyist-legislator connections.  And state laws mandating economic disclosure for legislators and reporting by lobbyists and the interests they represent were powerful tools of transparency.  But by 1995 it all ended after what has come to be called the Marty reforms (name after DFL Senator John Marty) were adopted in 1994.  Since this many of the old time legislators have remained resentful of the fact that they can no longer accept gifts and goodies from lobbyists and party again like it was 1993.  New legislators do not remember the old days when lobbyist roamed the halls with gifts, and lobbyists themselves are distraught that they cannot schmooze legislators at a party over a glass of beer.  Overall, many forces have come to conspire to thwart new reforms. Minnesota has rested on its laurels and since the 1990s it has done next to nothing, resulting in it now no longer leading the pack but pulling up the rear in terms of ethics in government.  But now thanks to bills sponsored by Ann Rest in the Senate and Ryan Winkler in the House, it will only get worse.

            The House and Senate have passed bills that will dramatically increase contribution limits to candidates.  For example, individual contribution limits to gubernatorial candidates would increase to $6,000 per election cycle, and it would be $4,000 for the other constitutional officers.  For the House and Senate, current law caps contributions to $500 in an election year and $100 in off years, the new law calls for the Senate election cycle limit to be raised to $3,000 and the House to $1,500.  Expenditure limits for the gubernatorial and legislative races would approximately double.

            Governor Dayton along with Rest and Winkler contend that these increases are needed for two reasons.  First, contribution and expenditure limit have not increased in years.  Second, candidates need to raise and spend more money to offset third party spending.  However, there are problems with these arguments.

            First, few of the legislative races exceeded the current expenditure limits and there is no indication that the vast majority of candidates had any difficulty raising the money they needed to run an effective campaign.  Supports of the new limit point to how expensive the Downey-Franzen race was last year, but it was an exception.

            Second, the  new contribution limits dramatically open up candidates to the potential influence of big contributors, undoing one of the long-standing goals of Minnesota's campaign finance system.  Imagine how much more money Zygi Wilf can pump into the Minnesota political process on top of the millions he already spent lobbying.

            Third, there is no evidence from other states that raising contribution and spending limits decreases third party spending or encourages third parties to shift from outside spending to candidate contributions.

            Fourth, the net result of the increased contribution and spending limits will simply be to put more money into the political system.   Special interests already can give unlimited amounts of money to the political parties and party units and to the legislative caucuses, and they can spend unlimited amounts on their own.  The Rest-Winkler legislation simply opens the door to more spending without getting any reforms out of it.

            Were that not bad enough two other proposals in the Rest-Winkler bills are even worse.  One would raise the disclosure level for individual contributions from the current $100 to $200.  This means that no one--not even lobbyists--would have to disclose contributions under $200.  This is a major step back in terms of transparency.  With 1,300 lobbyists paid to influence legislation in Minnesota, think about how they and other special interests will exploit the law and public will never know who is giving legislators money.  Finally, the bills would allow lobbyists to give gifts (meals and drinks for example) to legislators if given to all legislators. Terrific, bribery is ok so long as everyone in the legislature gets their fair share.

            Minnesota does not need more special interest money and gifts but less.  It does not need less transparency but more.  The best accounting of the current sorry state of Minnesota’s political ethics laws comes from the non-partisan and well respected Center for Public Integrity.  In  two  recent reports Minnesota comes off badly compared to other states.  In its 2009 study on legislative financial disclosure laws, Minnesota receives an F grade, coming in 40^th among the 50 states.   In 1999 the same study ranked Minnesota 35^th and in 2006 39^th.  A steady fall.  Minnesota is deficient in the range of disclosure it asks of legislators and also in terms of them updating that information.

            A second 2012 study by the Center measured political accountability and risk of corruption in the state.  Minnesota received a D+ grade, finishing 25^th among states.  Notable in this study, Minnesota receives a D- when it comes to effective conflict of interest laws, a D on political financing, and an F on lobbyist disclosure.  Minnesota simply failed to make the grade when it comes to political ethics before the Rest-Winkler bills, and now it will fall even further back.

            The hidden story of the 2013 legislative session is how the governor and the legislature took a major step back in terms of political reform.  While the media and the public was covering same-sex marriage, the budget, and the Vikings funding package, the story about undoing reform got away. Think about that next year when campaigns get even more expensive and the next time another special interests goes to the legislature and get their way.