Michigan Campaign Finance Network Campaign Finance Talk The Voice of the Michigan Campaign Finance Network February 2002

Gubernatorial campaign finance reports: Shays-Meehan What you see, and what you don’t debate Feb. 12

he first gubernatorial campaign “issue ads” in the 2000 Supreme Court peaker Dennis Hastert has finance reports of the 2002 campaigns. announced that the Shays- election cycle summarize S T • “Independent expenditure” campaigns Meehan campaign finance fundraising through December spending hundreds of thousands of dol- reform bill will be debated in the 31, 2001, and were filed on January lars and financed by few wealthy indi- U.S. House of Representatives on 31st. Summaries are shown in the fol- viduals have marked recent elections February 12 with the vote scheduled lowing table: (see “Personal PACs” on pages 4-5 in for later in the week. A majority of Contributions & Receipts Expenditures Balance the members of the House signed a Dick Posthumus $ 1,006,671 $ 207,803 $ 798,869 discharge petition to bring the John Schwarz 115,025 39,759 75,266 House counterpart to the McCain- Jim Blanchard 1,028,030 388,804 639,226 Feingold bill to the House floor. David Bonior 864,670 183,755 680,915 Jennifer Granholm 2,843,510 794,818 2,048,692 It is hard to say what the outcome Alma Wheeler Smith 129,797 100,859 28,938 of the vote will be. There will surely be attempts to introduce poison pill As of February 4th, only David Bonior this newsletter). amendments to the bill, and the has filed for public match funding (in weak alternative Ney-Wynn bill • The Posthumus Leadership Fund probably will be introduced as a the amount of $473,000), although all (renamed The Leadership Fund in diversionary tactic. Nonetheless, the other candidates except Jennifer September 2001) had raised $870,000 Enron debacle has raised the nation- Granholm have suggested that they will by October of 2001, but unlike other al consciousness about the insidious apply for public funds. Granholm has years and other leadership PACs, it was influence of money in politics and not indicated her plans. Those candi- not spending money on contributions to this gives Congress a chance to take dates who accept public funding are lim- other candidates’ committees. The ited to spending $2 million from their Leadership Fund had spent $560,500, a stand of conscience. The bill candidate committee in each election. including $91,000 for payroll and would kill the parties’ soft money $357,000 on campaign consultants slush funds and ban bogus issue Candidates Bonior, Posthumus, advertising by unions and corpora- Schwarz and Wheeler Smith filed their Linder and Associates, Dickerson and Govan and the Sterling Group. tions who are otherwise prohibited reports electronically. Candidates from using treasury money for elec- Blanchard and Granholm did not, mak- What is the bottom line? These cam- tion activity. ing analysis of their reports consider- paign finance reports show only a frac- ably more difficult. tion of the money that will be raised and This bill is not a complete solution spent in this year’s gubernatorial pri- to the campaign finance morass, but Those who would handicap the race there are times in politics when it is based on fundraising should be advised mary and general elections. There will be public match funds, parallel “inde- wise to take half a loaf. Call or to keep in mind that considerable spend- pendent expenditure” campaigns and email your member of Congress and ing in contemporary campaigns is not unreported issue ad campaigns. More let him or her know how you feel part of the candidate committees and importantly, these figures provide no about the bill. Phone numbers and can be entirely off the books. Consider insight on the candidates’ positions on addresses can be found on these facts: issues in a year when the state faces www.house.gov. • Millions were spent on unreported pivotal tax, fiscal and service decisions. Campaign Finance Talk • 1 Campaign Finance Talk with... Joe Schwarz State Sen. Schwarz discusses his run to be governor & campaign finance reform

his is the third in the series of nomic cycle in January 2003. The FY And some of the most financially sound interviews with Michigan’s 2003 state budget that goes into effect in Medicaid providers are saying they just T 2002 gubernatorial candidates. October 2002 is going to be the most can’t continue because this is such a los- difficult to put together that we have ing proposition. One of the biggest tasks Q. Why are you running to be seen in many years. The Senate Fiscal for the new governor will be restructur- governor? Agency indicates that if we just roll ing Medicaid. I think it is structurally A. There needs to be a moderate voice things over from the current fiscal year, flawed. We have to take a look at the in the Republican Party. The interests the general fund would be in deficit by Medicaid pharmaceutical coverage and that control the apparatus of the $880 million and the school aid fund physicians’ costs and hospital costs. The Medicaid mental health program is in Republican Party, in more ways than would be in deficit nearly $500 million. trouble. I could go on and list problem one, are single-issue interests. I don’t So there are some big problems out after problem with Medicaid. think you can win statewide with that there. There are going to have to be sig- kind of structure. All the polling data nificant cuts across the board. There will I’ve seen say you can’t. The most recent be cuts in areas where we haven’t had to polls show 47% of voters leaning make cuts, at least not in the last decade. Democrat to independent. The I’m talking about K-12 education, the Republican numbers are down to about community colleges and the universities. 38% leaning Republican to independent. The new governor is going to have a That is a 180-degree change from the very difficult job, because he or she isn’t way things were four or six or eight going to be able to give everybody years ago. That tells you something everything they want. The governor is about the Republican Party as an organi- going to have to make hard decisions to zation. It also tells you something I defend the well being of the people of learned with the McCain primary effort the state of Michigan and defend the in early 2000: the biggest political party basic services provided by the state. in Michigan is independent. The number Q. As a physician and a legislator, of voters on the left who are attached at what about the health area? Can we Q. With all this budgetary pressure, the hip to the Democratic Party, and the afford to cut any more from Medicaid declining revenues and cuts in educa- number of voters on the right who are reimbursements? tion and health care, is it prudent fis- attached at the hip to the Republican cal management to continue with the Party is relatively small. The largest A. If you just roll things over from 2002 tax rollbacks? number can be labeled independent tick- to 2003, we’ll need an additional $100 million because our Medicaid match et splitters. I am running to give those A. One of the first things I would do as independents a voice. requirement is going up by that much. This is an area where the states are com- governor, if it hasn’t been done already, Q. We’re in a difficult budget situation ing together to tell the Congress that we would be to put as much pressure as in Michigan. How will you bring bal- are in pretty dire fiscal circumstances possible on the Legislature to stop the ance to the state’s budget as governor? and we just can’t afford an increase of rollbacks of one tenth of one percent in that magnitude. I believe, in spite of personal income tax and the Single A. It’s been said by some of the self- well-intentioned efforts, we have chroni- Business Tax for two years. That would appointed pundits around the state that cally under-funded Medicaid. With state help by about $250 million dollars per anyone who wants to be governor of revenues declining and the general eco- year. It doesn’t solve the whole prob- Michigan starting in January 2003 has to nomic slow-down, we’re going to see lem, obviously, but it certainly helps to be nuts. The economy is still going to be Medicaid rolls increasing with no way to solve the problem. This has to be done. in difficult shape. Even if there is a handle them. The hospitals and health I know the hard-core supply-siders bounce in the economy in the second providers across the board are screaming always feel that there should be more and third quarters of calendar year 2002, because they are losing money on every tax cuts to provide economic stimulus the Research Seminar on Quantitative Medicaid patient they see. You have and they won’t buy it. But you get to a Economics in Ann Arbor indicates we some of the Medicaid managed care point — and we are there — where you will still be in a low point in the eco- organizations in huge financial trouble. endanger people and you endanger serv- 2 • Campaign Finance Talk ices that the state is required by law to the most money. candidates judged by their peers to be provide, if you don’t have the revenues. qualified. That would be my first choice. We can’t patch this hole from the budg- Election cycles last too long, they require too much money, and I believe My second choice would be to provide et stabilization fund, because it has been public funding for the campaigns. The drawn down to balance the FY 2001 we are going to have to go to a system of some form of quasi-public funding for all Supreme Court elections of 2000 were and FY 2002 budgets and it won’t fill horribly ugly. And nobody had a corner the hole. We’re also draining the Merit statewide campaigns, not just the guber- natorial. And I say that after thinking on the market for ugliness. It was ugly to Scholarship Trust that’s funded by the about this for a lot of years. To suggest the point of being unseemly, and I don’t tobacco settlement funds. That that money doesn’t buy anything in poli- want to see that in judicial elections. recharges every year, but it’s like rob- tics, especially big dollars given at an Q. The major campaign finance bill of bing Peter to pay Paul. We want to get opportune time in an election cycle, is the this session in the Legislature limited that trust set up so it will be funded in perpetuity, but there are escape clauses in the master settlement based on tobac- “To suggest that money doesn’t buy anything co sales falling below some threshold in politics ... is the purest form of patent nonsense level, so that really isn’t guaranteed. I’ve ever heard in my life” Q. The readers of this newsletter are concerned about the impact of money in state politics. The concern being purest form of patent nonsense I’ve ever the amount that can be bundled for a that public policy should serve the heard in my life. statewide candidate to $34,000, the public interest, not the private inter- same amount a political action com- Q. At the federal level, the McCain- ests of campaign contributors. Do you mittee can contribute directly to a can- Feingold bill is saying, if a political see problems with the influence of didate. The rationale that was offered advertisement includes the name or money in state politics? was that this would limit out-of-state image of a candidate within the win- influence in state elections, and it A. There is no way a Republican, dow of an election, regardless of would put all interest groups on an Democrat or independent can run for whether it uses words like “vote for” or even playing field. But the federal statewide office without raising a signifi- “defeat,” it is an election expenditure. Republican and Democratic party cant amount of money. You just can’t do And such expenditures have to be gov- organizations transferred $24 million it. In politics at this level, money equates erned according to the rules thereof. If of soft money to the state parties in the to legitimacy. Now, if every dollar that we treated “issue ads” as election last election cycle, and this bill doesn’t was raised and spent in an election cycle expenditures at the state level, would address that. It doesn’t address hun- was raised and spent by a registered can- you see that as part of the solution? dreds of thousands of dollars worth of didate committee, and the source of unreported issue ads that were paid those funds was disclosed in full at the A. Yes, I would. You have to be tired of for by the U.S. Chamber of Commerce time the contribution was made, you’d seeing ads with a disclaimer that says in our Supreme Court elections, and weed out most of the problems that we the Committee for Ethereal Purposes. that’s outside money. And as far as the have. The way things are now, there are Come on. Who are these people, and even playing field, I can name a PAC ways to get money to a candidate’s cam- where did they get their money? that received $650,000 from one indi- vidual and turned around and spent paign or a cause that are nothing more Q. You mentioned that there should be more than $300,000 on three Supreme than money-laundering operations. That some form of public funding for all is something that needs to be cleaned up. Court candidates last fall. My point is, statewide offices. This summer, the this bill didn’t begin to address the And it’s going to be hard to do. One of American Bar Association’s Standing the reasons John McCain and I are such issue of how much money can come Committee on Judicial Independence into a campaign from an interest good friends is that we both believe this recommended voluntary full public is something that has to be done, but we group or an individual, and if it gen- funding for Supreme Court campaigns uinely was intended to limit out-of- belong to a party that doesn’t. To cover in states that elect their high court. Do the de facto money laundering opera- state money in Michigan elections, it you see the Supreme Court campaigns left a gaping hole. Wouldn’t the stated tions in political contributions with the as a special case that should be given same patina of First Amendment rights objectives of this bill be better served particular consideration for a public by establishing limits on contributions as a contribution to a candidate is a real funding system? stretch. Soft money is a way to get large to PACs and the parties, as we have on sums of money, a great deal of it corpo- A. Yes, if you continue to elect the federal PACs and the federal parties’ rate or union money, into a campaign Supreme Court, which I suspect we will political accounts? with no accountability as to its source. do. But I think it would be better to A. I don’t disagree with what you are That is wrong. But the system is awash appoint justices under a merit appoint- saying. with money. And since money equates ment system. You could have the bar Q. Should we have limits on contribu- with legitimacy you have this tremen- association and a panel of citizens recom- tions to parties and PACs? dous drive to raise money. It doesn’t mend a list of qualified candidates from seem to make any difference where the which the governor could select. The A. Yes, I think we should. You’re getting money comes from, as long as you get important thing would be to have the Schwarz continued on page 4 Campaign Finance Talk • 3 Schwarz continued from page 3 Enron and the into the arcane areas of campaign finance when you talk about the things regulatory black hole you mentioned. This is what McCain talks about, and this is what I mean he unraveling Enron story deflated even faster because earnings when I say the system is awash in appears to be the ‘money in had been grossly misrepresented. money. Money is there for only one pur- politics’ scandal of a decade. It T The real policy story of Enron is the pose. The money is there to buy some- is widely noted that Enron and thing, whatever the issue du jour is for its employees have con- catastrophic failure of a radical libertari- the organization that is funneling the tributed more than $2 mil- an attempt to remove all money in. I think the influence can be lion dollars of hard and public oversight from seen clearly over a period of years if you soft money to George W. futures markets for energy, look at a candidate who has received a Bush’s campaigns to be to create a ‘regulatory certain amount of money from some governor of Texas and black hole.’ The trading of source. There isn’t any free lunch. president of the United energy derivatives was States. U.S. Attorney Enron’s core business and This system is like a lot of things that Enron rode this market you see in this country if you follow General John Ashcroft, Texas Attorney General from obscurity to a posi- them closely over a period of years. It’s tion as the seventh biggest going to crumble of its own weight. John Cornyn, the Houston office of the Justice corporation in America. There will be some major scandal or There is a ‘money in poli- series of scandals in the next decade that Department and three federal judges have recused themselves from the tics’ story here that hasn’t received the will lead to major election reform at coverage it deserves. both the federal and state level. The way investigation due to personal connec- we fund campaigns for state offices and tions and campaign contributions from Deregulating contracts and the market the United States Congress is going to Enron. There seem to be new story change. I’m offended by the way the lines emerging every day. Dr. Wendy Gramm, chairperson of the money is handled, and by who puts the Commodity Futures Trading Commission The initial focus of the Bush adminis- (CFTC) throughout the presidency of money in, in many cases. The shameless tration is the collapse of Enron’s stock President George H. W. Bush, took a quest for money by a lot of my col- value and the devastating impact on hands-off approach to regulation of ener- leagues who are seeking office makes former Enron employees who have lost gy futures contracts throughout her tenure you want to say, “Don’t you know their retirement savings. The adminis- with the 41st president, a posture that you’re selling your soul, pal?” If you sit tration is advocating new rules for suited Enron’s business plan. During the down with somebody and ask them for a employer stock in 401(k)s. This may be lame-duck period after Bill Clinton’s big check, do you really believe in your good politics, because tens of millions election in 1992, with the specter of regu- heart of hearts there’s no quid pro quo? of Americans hold such plans and there lation ahead, Dr. Gramm introduced a Some people actually believe there isn’t, is broad empathy for this tragedy. rule to institutionalize an exemption from and those are the ones I want to intro- However, much of that lost equity was regulation for energy futures contracts, duce to my friend the tooth fairy. the product of irrational exuberance and succeeded in passing that rule one Note: Sen. Schwarz gave this interview that matched the run-up of any ‘dot week before Clinton’s inauguration. in December before many of the details com’ stock, and the lost billions were Former Congressman Glen English of of the Enron scandal had come to light. never based on any real price to earn- ings ratio. Prices inflated wildly, then Enron continued on next page

Voluntary Electronic Project update: Brown, Sandy Caul, Gene DeRosset, including Senators Loren Bennett, Bob Stephen Ehardt, Pan Godchaux, John Emerson, Bill Schuette, Dale Shugars E-filing up 65% Hansen, Artina Tinsley Hardman, Gilda and Ken Sikkema. Jacobs, Jerry Kooiman, Mike Kowall, Thanks to all of you who contacted he annual campaign finance reports Charles LaSata, Alexander Lipsey, David your legislators and asked them to file T for 2001 were due on January 31, Mead, Tom Meyer, Mickey Mortimer, electronically. Electronic filing makes a and there was a significant Michael Murphy, Andy Neumann, dramatic difference in the transparency improvement in the number of electronic William O’Neil, John Pappageorge, of campaign finance reports. When all filers among current legislators. There Steve Pestka, Randy Richardville, Joseph candidates for state office are known at were 33 electronic filers among House Rivet, Doug Spade, Tony Stamas, the filing deadline in May, MCFN will members, compared to 19 last election Barbara Vander Veen, Steve Vear and again encourage all candidates to file cycle. E-filers included Speaker Rick David Woodward. electronically. It is very important for Johnson and Representatives Jason candidates from your district to hear Allen, Ray Basham, Patricia Birkholz, In the Senate, there were five e-filers, from you at that time. Elected officials Ken Bradstreet, Cameron Brown, Rich compared to four last election cycle, do care what their constituents think.

4 • Campaign Finance Talk Enron continued holding of electricity supply followed. In Cayman Islands and other off-shore tax Kansas, then-chairman of an Agriculture six months, there were 38 Stage 3 energy havens and there is no telling how much sub-committee with jurisdiction over the emergencies marked by rolling black- money may have been siphoned away CFTC and now president of the National outs, while there had been only one such from the reach of Enron’s creditors, Rural Electric Cooperative, described occurrence in the six months prior to the investors and damaged taxpayers. deregulation of the market for energy Gramm’s action as “the most irresponsi- Notably, Enron’s pet cause has emerged ble” he had seen in 18 years in Congress. derivatives. Revenues in Enron’s “Wholesale Services” division quadru- in the administration’s national energy Gramm resigned from the CFTC on policy. That cause is the deregulation of January 20, 1993, and five weeks later pled in the first quarter of 2001, com- pared to the first quarter of 2000, to transmission lines, so the market free-for- she was on Enron’s board of directors all can become a national phenomenon. and audit committee, a position that $48.4 billion. Until a bipartisan coalition of eight western governors demanded One can’t help wondering whether the enriched her personally by more than fact that Enron Chairman Ken Lay was $900,000 over the next decade. Not inci- that the Federal Energy Regulatory Commission (FERC) re-regulate the the only executive to have a private meet- dentally, Dr. Gramm’s husband, Texas ing with Vice President Cheney during Senator Phil Gramm, has been a favorite market and impose cost-based prices for electricity, the Bush administration stood the administration’s Energy Task Force recipient of Enron campaign contribu- hearings had something to do with this. tions, totaling more than $97,000. on the sideline and allowed the miracle of the marketplace to unfold. The incumbent chairman of FERC, Pat The story became much hotter in 2000. Wood III of Texas, was recommended for Senator Gramm, Chairman of the Senate When cost-based pricing was re-estab- the position by Mr. Lay after former Banking Committee, sought to pass a bill lished in California, the rolling blackouts chairman Curt Hebert Jr. could not be per- that would go beyond deregulating ener- ended. However, there was considerable suaded to see eye to eye with Mr. Lay on gy futures contracts, and would deregu- damage. State and federal regulators cal- matters of deregulation of transmission late the markets themselves. Markets culate that California taxpayers had been lines. such as the New York Mercantile overcharged by $9 billion for wholesale Exchange are subject to CFTC oversight electricity. Utility giant, Pacific Gas and What does it all mean to us in and report trading prices and volumes. Electric, had declared bankruptcy. And Michigan? It should make clear that Senator Gramm’s bill sought to end that Enron collapsed like a house of cards. deregulation and dismantling public over- oversight for energy futures. A federal sight is not the answer to every problem. interagency working group with standing The collapse of Enron had uneven Deregulation of energy derivatives may committee members including Alan impact on its employees. Infamously, have served Enron’s interests but it did Greenspan, Chairman of the Federal many top executives bailed-out of their not serve the public interest. Lax regula- Reserve, Arthur Levitt, Chairman of the stock holdings in time to make tens of tion in corporate financial reporting puts Securities and Exchange Commission, millions. Top executives received seven- all investors at risk. Lawrence Summers, Secretary of the figure bonuses weeks before Enron resigned itself to bankruptcy. Thousands Enron, along with PG&E, DTE, Treasury, and William Rainer, Chairman MichCon and Consumers Energy, was of the CFTC, unanimously opposed the of others just lost their jobs and their retirement savings. writing checks to Michigan legislators’ bill. A House version of the bill passed, campaign committees in the spring of but it went nowhere in the Senate. Then, Policy implications 2000, helping to shape Michigan’s dereg- three days after the U.S. Supreme Court ulated energy market. And if you were finally decided the 2000 presidential elec- The implications go far beyond the sitting at your kitchen table back then, tion, with attention largely diverted, failure of the deregulated electricity wishing that you could buy electricity Senator Gramm and now-retired Rep. market in California. Former SEC from someone other than the same old Thomas Ewing helped reintroduce the Chairman Arthur Levitt said, “What has utility monopoly, your wish has finally legislation, this time with a new bill num- failed is nothing less than the system of come true. ber. The bill was attached to the appropri- overseeing our capital markets.” A ations bill and passed without a hearing. newly released analysis by the Enron On the other hand, this story may raise When combined with California’s elec- Board notes that many of the nearly the question of whether our state and tricity deregulation law, this act allowed 3,000 Enron partnerships and sub- federal lawmakers are making public Enron to operate an electricity auction sidiaries had no legitimate business pur- policy that truly serves the public inter- closed to public oversight, EnronOnLine. pose, and the “independent” auditing est. Or whether special interests are firm Arthur Anderson was complicit in having their way at our expense. If the Market distortions in California structuring them. Furthermore, the Enron story reinforces your belief that The impact of the new deregulation Enron Board study acknowledges its we need campaign finance reform to was immediate and dramatic. California own failure in oversight. Enron had have public policy in the public interest, was thrown into an unparalleled energy more than 800 of its bogus partnerships you have plenty of company. And watch crisis. Enron didn’t own a single power and subsidiaries established in the out for those free-market utility bills. plant in California, but it controlled the market in which futures were sold and For an excellent analysis of the Enron story, see the Public Citizen report, Blind it came to exercise extraordinary con- Faith: How Deregulation and Enron’s Influence Over Government Looted trol over California’s energy supply. Billions from Americans, http://www.citizen.org/documents/Blind_Faith.pdf Unprecedented and unexplainable with- Campaign Finance Talk • 5 The rise of Personal PACs

new breed of independent caucus leadership, or other elected Governor Engler Leadership Fund political action committee officials. In certain cases, leadership a The Governor Engler Leadership (PAC) came to prominence in PACs are the vehicles that become Michigan’s 2000 election cycle. These personal PACs. Examples best illus- Fund was established in April 1999. PACs are characterized by a very large trate the phenomenon. While its funding base is more broadly bankroll, mainly given by an individual distributed than the Ann Arbor PAC, or a small group of contributors. Early Ann Arbor PAC it, too, has unique qualities of a per- sonal PAC. The PAC raised $494,000, campaign finance reports for the 2002 The Ann Arbor PAC was organized in cycle show that more of these personal and the biggest source of its support August 1999 and started with $40,000 was a $175,000 loan from Ann Arbor PACs are positioned to assert their in seed money contributed by former influence this year. real estate developer Ron Weiser. On pizza magnate and president of the Ave the day Weiser made that contribution, Independent PACs have a privileged Maria Foundation, Tom Monaghan. In the Engler PAC made contributions of position among Michigan political the 2000 election cycle, Monaghan gave $34,000 each to its three favored committees. Independent PACs can the PAC $650,000 of its total of Supreme Court candidates. contribute ten times as much to state candidates as individuals or PACs that Michigan Campaign Contribution Limits are merely political committees. To House Senate Statewide qualify to be an independent commit- Candidate Candidate Candidate tee, the PAC must file as such at least six months before the election in Individual/Political Committee $500 $1,000 $3,400 which it wants to participate. It must Independent Committee $5,000 $10,000 $34,000 have contributions from at least 25 persons and it must make contribu- tions to at least three campaigns with- in the lower political committee limits $740,000 (88%). The Ann Arbor PAC The Engler PAC has atrophied in the before it can give larger contributions. made direct contributions to numerous 2002 cycle, having raised only The last two criteria must be met in a candidates for the House and made $10,000 through October 2001. The single calendar year. independent expenditures of more than governor is a lame duck and Mr. $10,000 in several legislative contests. Weiser, whose personal and corporate, There are hundreds of PACs and However, its major activity was in the state and federal contributions in the independent committees registered to Supreme Court elections. It gave 2000 cycle totaled nearly $1 million, participate in Michigan state elections. $34,000 to each of its three favored is now the ambassador to Slovakia. The vast majority of these PACs have Supreme Court candidates and it made a broad and relatively even base of $208,000 of independent expenditures Burton Leland Leadership Fund contributors and represent communities in support of the same candidates. Senator Leland’s leadership PAC was of shared interest, such as business Including Mr. and Mrs. Monaghan’s a small fund in the 2000 election cycle. associations, professional associations, $3,400 maximum individual contribu- It raised only $17,000. But in 2001 it employees of corporations or unions. tions, the Monaghans pumped $330,000 became an impact PAC. Through the In addition, there are political PACs into the Supreme Court effort. Through October 2001 campaign finance report, that are designed to serve partisan the October 2001 campaign finance it has raised more than $216,000. That interests. These include one campaign report, the Ann Arbor PAC has raised is more than either Ford, Daimler committee for each of the House and $138,000 in the 2002 cycle. Monaghan Chrysler, General Motors or the Detroit Senate caucuses, and leadership PACs has contributed more than 90% of that organized by legislators who aspire to total. PACs continued on next page 2 • Campaign Finance Talk Regional Chamber of Commerce raised in the entire 2000 cycle. The Leland Bundling bill leadership PAC was the vehicle for a campaign of independent expenditures in support of Detroit mayoral candidate misses the mark Gil Hill that included phone banking, direct mail, broadcast advertising and staff. More than 90% of the money in the PAC came from just four of Hill’s iting the need to keep outside expenditures” on behalf of candidate supporters: Greektown entrepreneurs money away from Michigan Gil Hill and just four individuals con- Jim Papas and Ted Gatzaros, attorney C elections and to level the play- tributed more than 90 per cent of the Alan Ackerman and attorney and for- ing field among interest groups, the 91st money. In the 2000 Supreme Court mer gubernatorial candidate Geoffrey Legislature has given us a new cam- election, the Ann Arbor PAC spent Feiger. paign finance law. Limits have been more than $300,000 on three candidates imposed on the practice of bundling, the Likely, there will be more to report and one man, Tom Monaghan, gave that act of collecting contribution checks for the Leland PAC in the 2002 cycle. PAC more than 87 per cent of its funds. from multiple individuals with shared The October report, which was filed interests and forwarding them together There are obvious ways to level the seven weeks late and five weeks after to a candidate for public office. Under playing field. There should be limits on the mayoral election, only reports the new law, bundling by an organiza- contributions to the state parties’ politi- activity through October 20, 2001. tion is limited to $34,000, the same cal accounts and state PACs, just as When the PAC reports again in April, limit that applies to a direct contribution there are limits on contributions to the there may be additional contributions from a political action committee to a federal parties’ political accounts and and expenditures from the last two candidate’s campaign. federal PACs. Bogus issue ads that are weeks before the election. the main vehicle for anonymous nega- The new law doesn’t begin to address tive campaigning should be treated as Great Lakes Education Project the flow of outside money into election expenditures, and they should Michigan elections. In the 2000 election be subject to all the rules thereof. Like the Ann Arbor PAC, the Great cycle, the federal parties transferred Lakes Education Project is unconnect- more than $24 million in soft money to Public policy should be developed in ed to an elected official. It was organ- the Michigan Republican and the public interest, not in the private ized in February 2001 and it is driven Democratic Parties’ state political interest of campaign contributors. by former Republican State accounts. That is 20 per cent more than Campaign finance reform is a keystone Committee chair Betsy DeVos. all the candidates for state office com- issue that affects all areas of public pol- Through its October 2001 campaign bined had in their campaign accounts. icy. The bundling bill misses the core of finance report, it has raised $225,000. The new law does nothing to address the campaign finance problem. Of that amount, Ms. DeVos and her that outside money. husband, Alticorp executive Dick Devos, contributed $100,000. While The U.S. Chamber of Commerce spent this is an impressive sum already, more than $5 million on judicial issue recent history suggests that this is a ad campaigns in five states, including Campaign Finance Talk is a PAC to watch in the coming year. Last Michigan, in 2000. None of those free, bi-monthly publication of year, the DeVoses and their parents expenditures were reported on any cam- the Michigan Campaign Finance were multi-million-dollar contributors paign finance report. And the new law Network. to the “Kids First! Yes!” ballot initia- does not address that outside money. tive. Copyright 2002. Articles from There are numerous examples of inter- this newsletter may be reproduced These PACs are striking examples of est groups and individuals spending with attribution. how individuals of exceptional finan- without limits on campaigns that make cial means are able to wield extraordi- a mockery of the idea of an even play- All articles by Richard Robinson, nary financial influence in elections. ing field. Political action committees Executive Director. Design by Personal PACs provide a vehicle for were conceived as a way to give small Cathy Turley. unlimited campaign spending, and contributors with shared interests a Your comments are welcome. individual contribution limits become means to counterbalance big-money Please contact us at: Michigan meaningless. interests. In contemporary elections, Campaign Finance Network. PACs can be used as fronts to allow big 1310 Turner Street, Lansing, MI There is a simple solution to this contributors to spend on campaigns 48906. (517) 482-7198, Email: anomaly. There should be limits on without limits. In the recent Detroit [email protected]. contributions to Michigan PACs, just mayoral election, the Burton Leland as there are limits on contributions to Leadership Fund spent hundreds of federal PACs. thousands of dollars in “independent Campaign Finance Talk • 7 FIRST CLASS Campaign Finance PRESORT Talk U.S. POSTAGE PAID The voice of the Lansing, MI Permit #485

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Inside this issue Welcome to new subscribers Gubernatorial campaign finance reports: This edition of Campaign Finance Talk is reaching many What you see, and what you don’t ...... p. 1 first time recipients. We are adding the names of petition- ers who participated in the Michigan Election Reform Shays-Meehan debated on Feb. 12 ...... p. 1 Coalition’s lobbying day for campaign finance reform in Campaign Finance Talk with . . . October and those who signed up at the Midland meetings. state Senator Joe Schwarz ...... p. 2 The newsletter is free to all who receive it. Voluntary Electronic Filing update: E-filing up by 65%...... p. 4 Help us stay current Enron and the regulatory black hole ...... p. 4 If we have incorrectly entered your name or address, please phone, write or email your corrected contact infor- Rise of personal PACs...... p. 6 mation. Also, if you are moving, please tell us your new Bundling bill misses the mark ...... p. 7 address and information before you go. Welcome to new subscribers ...... p. 8 Contact us at: Michigan Campaign Finance Network Help us stay current...... p. 8 1310 Turner Street, Lansing, MI 48906. (517) 482-7198, Fax: (517) 482-6132, Email: [email protected]. Support research on money in politics...... p. 8

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8 • Campaign Finance Talk