The Money Chase Moving from Big Money Dominance in the 2014 Midterms to a Small Donor Democracy adam lioz karen shanton candidate profiles by emma boorboor, michael russo & dan smith About Demos Demos is a public policy organization working for an America where we all have an equal say in our democracy and an equal chance in our economy. Our name means “the people.” It is the root word of democracy, and it reminds us that in America, the true source of our greatness is the diversity of our people. Our nation’s highest challenge is to create a democracy that truly empowers people of all backgrounds, so that we all have a say in setting the policies that shape opportunity and provide for our common future. To help America meet that challenge, Demos is working to reduce both political and economic inequality, deploying original research, advocacy, litigation, and strategic communications to create the America the people deserve. About U.S. PIRG U.S. PIRG, the federation of state Public Interest Research Groups (PIRGs), stands up to powerful special interests on behalf of the American public, working to win concrete results for our health and our well-being. With a strong network of researchers, advocates, organizers and students in state capitals across the country, we take on the special interests on issues such as product safety, public health, political corruption, tax and budget reform and consumer protection, where these interests stand in the way of reform and progress. demos.org Media Contact 220 Fifth Avenue, 2nd Fl. [email protected] New York, NY 10001 212.633.1405 ext. 551 EXECUTIVE SUMMARY ive years after the Supreme Court’s 2010 Citizens United v. FEC decision, what are the roles of large donors and average voters in selecting and supporting candidates for Congress? This report examines the role of money in the 2014 con- Fgressional elections from both quantitative and qualitative perspec- tives, and demonstrates how matching small political contributions with limited public funds can change the campaign landscape for grassroots candidates. key findings • Candidates for the U.S. Senate must raise an average of $3,300 every day for six years to match the contributions collected by median 2014 winner; House candidates must raise $1,800 every day of their two-year cycle. • Relying exclusively on small donors, Senate candidates would have to secure at least 17 contributions every day and House candidates at least nine in order to keep up. • In 25 targeted 2014 congressional races, successful candidates and their closest competitors received more than 86 percent of the funds they raised from individuals in contributions totaling $200 or more. • Only two of 50 candidates in these competitive races raised less than 70 percent of their individual funds from large donors, while seven relied on big donors for more than 95 percent of their individual contributions. • This big money system filters out qualified, credible candidates who lack access to large donors. Four of these candidates are profiled in the pages below. • Kelly Westlund, lost WI-7 general election: “The current system makes sure that from start to finish our political process is dominated by the people with the most money…it’s no wonder that there is no voice for working class people in Congress.” january 15 • 1 • Rev. Michael Walrond, lost NY-13 Democratic primary: “You find out very quickly this is not about who has the best ideas; this is about who has the most money.” • David A. Smith, lost FL-7 Republican primary: “It’s very difficult for a first-time candidate, unless you’re personally prepared to write a big check to break into it.” • Amanda Renteria, lost CA-21 general election: “Given my network, where I come from, where I’m running, I expected that I wasn’t going to have huge donors. You have to ask folks for help that have been in your network and that understand where you’re running and why it’s important. That for me ended up being a small donor base.” • A federal program matching small contributions with limited public funds would have helped the profiled candidates compete more effectively against their big money-backed opponents by substantially narrowing the fundraising gap. One candidate would have raised significantly more money than her opponent if a matching fund program were available. The other three candidates would have narrowed the fundraising gap by an average of more than 40 percentage points. More importantly, they would have had significantly more resources to get their messages out and hit the minimum threshold for running a competitive campaign. And, they would have been able to do so raising two or three small contributions each day as opposed to the nine or more they currently need to keep up. 2 • demos.org INTRODUCTION ive years out from the Supreme Court’s 2010 Citizens United v. FEC decision, this report examines the role of money in the 2014 con- gressional elections. We calculate how much Fmoney it took to run a competitive race and look at where candidates are getting the bulk of these funds—from a broad cross section of average voters or a narrow slice of wealthy donors. And, we profile a set of qualified, credible candidates from both major parties who are not serving in Washington today at least in part because they were sig- nificantly out-fundraised by their opponents in primary or general elections. The stories of candidates who lost primary or general elections illustrate the magnitude of the fundraising challenges candidates face in a system dominated by big money, where depending upon small donors to run a competitive race almost always results in fewer resources and fewer votes. But, it doesn’t have to be this way. As part of our examination of losing yet viable candidates, we model how each of the candidates’ fundraising numbers could have changed under a federal campaign finance system that matches small contributions with limited public funds, using the proposed Government By the People Act for our estimates. january 15 • 3 BIG MONEY IN THE 2014 ELECTIONS Many organizations and news outlets have reported that the 2014 midterm elections were the most expensive in U.S. history,1 with a total cost of approximately $3.7 billion.2 Others have questioned whether the real, per-capita cost of campaigns has been rising as clearly and steadily as it first appears.3 But, regardless of the shape of the long-term cost curve, one thing is clear: running a competitive campaign for Congress now routinely costs millions of dollars. The more interesting question is: Why does this matter? High Cost of Campaigns is a Barrier to Entry First, the high cost of running is a formidable barrier to entry for anyone without an established network of donors. A House of Represen- tatives candidate who started fundraising for 2014 immediately after the 2012 election would have had to raise close to $1,800 a day—every day, including weekends, holidays, birthdays, anniversaries and high school graduations—to equal the total contributions collected by the median House seat winner.4 A Senate candidate would have had to bring in more than $3,300 per day over a full six-year cycle to match the median incoming senator’s haul (see Figure 1).5 At the upper limit, the fundraising challenge gets even more onerous. The House winner reporting the largest contribution total in 2014 raised nearly $8 million in contributions, while the Senate’s leading fundraiser collected more than $18 million. Those numbers average out to nearly $11,000 and more than $8,000 each day for their respective election cycles. Figure 1. $ $ U.S. Senate candidates must raise $3,300 every day for 6 years to keep up with the median winner. $ $ Source: Demos & U.S. PIRG analysis of FEC data 4 • demos.org This system makes fundraising prowess—rather than good policy ideas, a genuine desire for public service, or strong connections with a broad base of potential constituents—the primary qualification for holding elected office. The first question any aspiring candidate for Congress must ask him or herself is, “How much money can I raise?” Some otherwise promising congressional prospects filter themselves out of the process when they realize the answer is “not enough to compete.” And, as Kelly Westlund discovered when she ran against an incumbent representative in Wisconsin’s 7th Con- gressional District, others are actively discouraged from running. Westlund said, “When I went to the Democratic Party and told them I wanted to jump in, their representative asked me if I could raise a quarter of a million dollars in three weeks…When I said [no] his response was, ‘Then, you’re not viable.’” David A. Smith challenged an incumbent for the Republican nomination in Florida’s 7th Congressional District, and concluded that money cements incumbents’ existing advantages, making it difficult for anyone who is not wealthy to mount a successful challenge. “The money that incumbents can bring in is virtually limitless,” Smith said. “It’s very difficult for a first-time candidate, unless you’re personally prepared to write a big check to break into it .” This filtering process disproportionately affects members of groups that are already underrepresented politically.6 Although people of color comprise 37 percent of the population, 90 percent of our elected leaders are white.7 In a recent survey, two-thirds of people of color agreed that lack of access to donor networks is a significant barrier to political representation of communities of color.8 A 2013 study of African American candidates concluded that “the underrepresentation of blacks is driven by constraints on their entry onto the ballot” and that the level of resources in the black community is “an important factor for shaping the size of the black candidate pool.”9 And, a recent analysis of state legislative races found that candidates of color raised 47 percent less than their white counterparts.10 Large Donors Fuel the High Cost of Campaigns Even more important than the total amount of money in politics is the source of the funds.