Who Killed Political Reform and Ethics?

“My fellow Americans, ask not what your country can do for you, ask what you can do for your country.”
–John J. Kennedy, Inaugural speech, January 20 ,1961

“It’s very possible that I could be the first presidential candidate to run and make money on it.” –Donald Trump, (Fortune, April 3, 2000)


The political reforms of the Watergate era are over. And it was not Trump alone who killed over the reforms.  Obama did his fair share, as well as Democrats and Republicans across Minnesota and the country who have done it over at least a decade if not longer. It is less of a surprise that this has occurred than it is that no one–neither the public nor the media–seems to notice or care.
Watergate political reforms is a shorthand to refer to a collection of laws and policy initiatives at the federal, state, and local levels meant to combat political corruption and open up the  political and governing process to more transparency, fairness, and political accountability.  These reforms includes the Ethics in Government Act that addressed problems such as conflicts of interest.  It also included sunshine, open meeting, and freedom of information laws meant to ensure government decisions and data are open to public inspection.
Additionally, there were a host of campaign finance laws such as the Federal Election Campaign Act, McCain-Feingold, and at the Minnesota level, the 1994 Marty reforms that build on 1970s laws that banned lobbyist gift giving,  provided for public funding for campaigns, and otherwise created a scheme for disclosing the solicitation and expending of money for political purposes.  Collectively these laws, along with other mandatory and voluntary acts by candidates, such as statements of economic disclosure and release of candidate tax returns, went a long way to opening up the political process to more scrutiny.
Certainly there were problems with many of these reforms, but the biggest criticisms were two.  First, they may not have even gone far enough in terms of rooting out the impact that money has on the political process or in terms of extending disclosure and transparency as far as it needed to go.  In effect, the laws felt short of the reforms truly needed to be effective, or even if once effective, they failed to keep pace with efforts to do end-runs around them.
Second, many insiders–especially many  elected officials, the political parties, and lobbyists  simply did not like the reforms.   They saw them as costs of doing business, simply distasteful laws  that limited or restricted the quiet, comfortable relationships they had developed overtime.  They voted for these reforms because they had to, in part because of strong public support for these regulations in light of the Watergate abuses.  In many cases these reforms were internalized by elected officials at the time, but with the passage of time, the lessons for why these reforms were adopted has faded.
Yes the Supreme Court has not helped.  It has struck down many campaign finance reforms as violations of the First Amendment, equating money with speech.  The Court has narrowed the scope of what is considered legitimate forms of corruption regulation, limiting it to only classic forms of quid pro quo bribery in exchange for an official act (money give to buy a vote), while also ignoring the broader ways that money and power create a structural bias in the political system that political scientists repeatedly describe as one that favors the rich.
But even without the Court stepping in , both Republicans and Democrats at all levels of government has demonstrated indifference if not cynicism toward political reform.  Obama talked a great game about money in politics but he was the first major presidential candidate to reject public funding when he ran for president.  He complained about Citizens United but never took executive  actions that he could have that would addressed some aspects of it.  Now he has sold out completely,  giving $400,000 speeches to Wall Street that follow Hillary Clinton’s $500,000 speeches.
Trump flouts ethics in ways too numerous to count.  His conflicts of interest between his government role as president and his private business dealings are too numerous to count.  The same extends to his family and many of his billionaire appointments.  He has broken a presidential traditional of releasing tax returns, and in general, despite “draining the swamp,” he seems to be expanding its scope.
At the state level, Minnesota has not enacted a significant political reform since 1994.  While once a national leader, the Center of Public Integrity assigns Minnesota Ds and Fs for ethics and openness in government.  Bipartisan support eroded some parts of the gift ban law, supported increases in the amount of money that can be contributed to political campaigns, and now, as John Marty has pointed out, the legislature is poised to eliminate public funding for campaigns.   As the recent story about Dai Thao demonstrates, local officials and their surrogates are embolden in pushing the boundaries of acceptable political behavior.
And why all this happens the public seems indifferent.  Democrats dismiss the improprieties  against Obama and Republicans the same with Trump.  Corruption seems accepted, and few now seem upset by the idea that American government is up for sale.
So who  killed political reform and ethics?  Maybe it was the elected officials who walked away from reform as inconvenient, except when used as a cudgel to further partisan gains and fuel polarization.   Or maybe it was the media, much of which no longer saw promoting good government  as an issue.  Or maybe it was public who came to accept the status quo as acceptable and which no longer seemed to expect government officials to act with honesty and integrity.

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.

Fear and Panic, Minnesota Republican Style

    Fear and panic may be the words for now to express how Republicans, conservatives, and business leaders such as Charlie Weaver view the coming 2013 Minnesota legislative session.  The fear and panic is that with the DFL having control of the legislature and all of the constitutional offices, businesses and the affluent will face higher taxes, the economy will go to ruin, and the Chamber of Commerce will not be able to pursue objectives such as restructuring teacher tenure,   public sector pensions, or state government in general.

Have no fear though, it is unlikely that the DFL control will live up to your anxieties for many reasons.

First, this is not the DFL Party of Humphrey, Mondale, Freeman, and Wellstone.  This is a DFL party headed by a pro-business governor and a party firmly rooted in the Twin Cities suburbs such as Edina. These districts are business-orientated and affluent and it is unlikely that DFLers from areas such as Edina will stray far to the left.  Democrats elected in these suburbs are not liberals, they won tight races in swing districts and any serious move to the left will cost them their seats and possibly a House majority in 2014.

Second, were the DFL majority moving to the left it would have made John Marty chair of Health and Human Services.  Marty, who supports a single-payer health insurance program, has the seniority to receive this chair but was passed over for this position.  Don’t look to see the DFL push real progressive positions.

Third, a DFL governor and coalition already demonstrated this year its pro-business attitude when it gave the Vikings and the business community a new stadium.

Fourth, the business community has already overreached and many of its goals are beyond what they should be addressing.  Issues such as teacher tenure are beyond what the business community should worry about, especially if it concerned about the quality of K-12.  If the latter is the issue, then lobby for early-childhood education, fully funding K-12, addressing racial disparities in schools, and providing teachers, parents, and students with the support they need for kids to succeed. 

Finally, live in reality.  Consider the last time the DFL controlled the governor’s office and both houses of the Minnesota legislature.  It was from 1987 to 1990 when Rudy Perpich was governor.  Wanting to make Minnesota the brainpower state, the governor pushed for reforms in K-12 that helped make sure the state’s schools were among the best in the country and students tested at or near the top in national performances.  It was a time when Minnesotans and businesses were among the highest taxed in the country, and also a time when Minnesota had one of the highest median family incomes in the nation, lowest crime and incarceration rates, and a high concentration of Fortune 500 companies.

Additionally, consider the unemployment rate during those four years.  While the national average was 5.7%, in Minnesota it was 4.7%.  Compare that to October, 2012, with a Minnesota unemployment rate of 5.8%.

Unemployment Rates
Year            USA        MN
1987            6.2        5.1
1988             5.5        4.3
1989             5.3        4.4
1990             5.6        4.8
4 yr Avg        5.7        4.7

Oct 2012         7.9        5.8

Perpich opened up the International Trade Center in St Paul, and under him and the DFL control of the legislature, Dayton-Hudson Corporation (now Target) was able to pressure them to hold a special session in 1987 to change Minnesota corporate law to prevent them from being taken over by Dart Corporation.

The point?  Minnesota and its businesses did not do so badly under the last time when the state was under DFL control.  Now, 23 years later, a more moderate and business-friendly DFL is in charge.  The evidence does not support the panic and fear the business community has and, in fact, it may find a supportive party willing to accommodate them in many situations.

One Convention Down, One to Go

The Postmortem on the DFL Convention

With the Minnesota DFL (Democratic) convention done but the nomination far from a done deal, it is time to offer a few thoughts on it.

As suggested in the last blog the convention was a brokered one. It was brokered in the sense that the first vote did not produce a nominee and instead, one had to look to the minor candidates to see where they asked their delegates and supporters to go. Perhaps the critical point in the convention came with John Marty asked his delegates to support Kelliher in exchange for her commitment to push for single payer health care within two years of being elected. His switch, along with Rukavina’s, seemed critical to bringing the endorsement over to the Speaker. What resulted then was that the Convention was an insider’s event that favored established party players such as Kelliher over outsiders such as Rybak. As described last week, the battle between Rybak and Kelliher was a replay of Obama and Clinton, only this time the battleground favored the inside player and not the outsider.

But the convention may be meaningless. Ultimately, the August 10, primary is critical. Here Anderson faces the big money and name recognition of Mark Dayton and Matt Entenza. DFL convention-endorsed candidates have a mixed record of success in primaries, and the same will be true again this year. An early primary when fewer individuals are paying attention, the role of big money, the inability of Kelliher to raise much money compared to Dayton and Entenza, and the remaining days of the legislative session may all make life difficult for Kelliher.

Previewing the MN Republican Convention

Now the Minnesota Republicans take the stage. They have a choice between Tom Emmer and Marty Seifert. Both candidates have pledged to honor the convention endorsement, meaning that by the beginning of May the GOP can unite behind one candidate, raise money, hone a message, and narrative, and wait for the DFL to hold a primary. All of these factors give the Republicans significant advantages over the DFL candidate.

But more importantly, one looks to see what the GOP will do to Kelliher in the remaining weeks of the Minnesota Legislative session. As speaker, Kelliher is both the face of the legislature and of the DFL. In the last couple of years the GOP and Governor Pawlenty have made life difficult for her and she has not done well with negotiations on the budget. Pawlenty’s $2.7 unallotment in 2009 was in part a result of the governor outmaneuvering Kelliher. Look to see little cooperation among the GOP and governor between now and the end of the session. There are many incentives for Pawlenty not to cooperate with the DFL, painting Kelliher into a box that makes her look weak and ineffective. Kelliher wants to run on the theme of leadership. Look to see the GOP try to make her look weak and not like a leader.

The real question now is how hard should the Republicans go after her. The GOP really wants her as the candidate to face in November as it will be easy to blame her, the leader of the legislature, for all types of problems. Should the Republicans go after her now and bring her down by August 10, and thereby face the prospect of a stronger candidate, or hold off until after then, hope she wins the primary, and then go after her? My guess is they will make life hard for her in the remaining weeks of the session but then hope she survives August 10.

One lesson the Republicans should have learned from the attacks on Franken in 2008: Don’t unleash the attacks too soon otherwise by the time of the general election the voters will not care any more. In 2008 Coleman slung the mud early and by October there was nothing left to say. The impact of the early attacks wore off, Franken had time to respond, and then he made an effective counterattack that was fresh.