City Hall

Potential Unintended Consequences of O'Brien's Campaign Finance Law

By Erica C. Barnett April 26, 2012


As we mentioned yesterday, Seattle City Council member Mike O'Brien has proposed legislation that would prohibit candidates for Seattle offices from raising or soliciting contributions until after January 1 of their election year, and limit "rollover" contributions from previous campaigns to $5,000.

The proposals are aimed, according to a letter O'Brien wrote to the Seattle Ethics and Elections Commission, at reducing the influence of money on campaigns; minimizing the influence campaign contributions have on elected officials; and reducing the potential for corruption of off-year campaign contributions. Additionally, the proposal is aimed at reducing the "war chest" effect---that is, the fact that incumbents' large campaign funds often intimidate potential challengers out of entering the election fray.

The rollover cap is tied to the January starting date for contributions because if it wasn't, incumbents could simply send over-limit contributions back to donors with the request that they write a new check in the same amount to the new campaign. Limiting contributions to the 18 months between the January before the election and the April after the election is supposed to discourage this kind of request.

Noble goals though those may be, the proposal could have some unintended consequences---potentially giving incumbents a leg up over challengers, forcing candidates to relinquish money they've already amassed, and making candidates more likely to spend every penny they raise.

For example:

• Current incumbents up for reelection in 2013 who roll over more than $5,000 from their previous campaign funds might have to relinquish their surplus campaign funds, either by donating them to the city's general fund or by giving them to charity, but they would be able to keep any funds raised for their 2013 campaigns. It's unclear what would happen to candidates who aren't running until 2015; candidates can't declare they're running that year until May 1, although it's possible they will be subject to the rollover limits, which would then apply to their entire preexisting campaign war chest. That's one of the things the ethics commission will discuss when it meets next week.

• As a result of the $5,000 rollover limit, candidates could decide not to raise as much money (because there would no longer be an incentive to stockpile funds for the next campaign)---or they could raise as much as ever, but spend it all before the campaign ends. The former is obviously among the aims of the legislation; the latter could be an unintended consequence.

• Shortening the window for fundraising could create a mad dash for contributions on January 1. This would have the impact of benefiting incumbents, who have more ability to raise a large number of $700 maximum contributions than challengers, who tend to have a smaller average contribution. Traditionally, grassroots candidates have started raising money very early, to counteract the fact that they'll be relying on $35, $50, and $100 contributions while the incumbents they're opposing can easily bring in $700 from deep-pocketed contributors and firms with business before the city.

• In addition to handicapping potential McGinn opponents from the city council, the proposal would have a disproportionate impact on another potential mayoral contender, state Sen. Ed Murray (D-43). While all other candidates would be able to start raising money on January 1, Murray would, the state Public Disclosure Commission confirms, be subject to a state prohibition on raising funds for state and city campaigns while the legislature is in session---starting at the beginning of January. The one-two punch of the two restrictions would put Murray several months behind other candidates in the fundraising race.

Murray, who has not said whether he plans to run, says he isn't worried---"I've never had problems raising funds, particularly in a short amount of time"---but it's worth noting that he would be the only challenger with an additional handicap.

Moving the campaign-finance starting line to January 1 may not have much real impact. Since 2001, city records show, the vast majority of fundraising in election years has come after January 1---in most years, between 83 and 93 percent, with the exception of 2001, when that number dropped to 69 percent. That suggests that people aren't raising money until January of election year already.

The ethics commission meets at City Hall on Wednesday, May 2, at 4:30 pm.
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