For months, DC’s Democratic mayoral primary loomed like a political Groundhog Day: If incumbent Vince Gray had won, voters would have faced more dreary reports from US Attorney Ron Machen’s office about dirty contributions to Gray’s 2010 campaign. A Gray loss, on the other hand, would bring an early end to tales of alleged behind-the-scenes meetings with “Uncle Earl”—the alias Gray used for his stealth contributor, city contractor Jeffrey Thompson.
Now Gray is out, but the campaign-finance scandal has never been about Gray or Uncle Earl alone. It’s about the campaign-finance system. Running for office in the District almost presumes deep relationships with developers, lobbyists, and other wealthy types who have an interest in city business. Nor is the story new. As in 29 states, corporations have always been able to contribute directly to political campaigns here. (Don’t blame the Supreme Court’s Citizens United decision, allowing corporations to fund political advertising.)
The typical response to a funding scandal like Gray’s is to identify and close up the legal loophole the scandal exploited. That’s what the DC Council did last December when it passed council member Kenyan McDuffie’s law limiting the use of money orders for campaign contributions (money orders had been used to screen some of Thompson’s financial help) and put a single-contribution limit on related businesses.
If they want to ensure that nothing exactly like “Uncle Earl” occurs again, the council’s legislation is a good start. But McDuffie’s statute doesn’t get to a much simpler problem at the core of the system: Politicians gravitate to funders such as Thompson because they have no other way to run a competitive campaign. Close as many loopholes as you like, but the disparity between rich and poor—the District’s wealth gap is the third-largest among major US cities—guarantees that politics will continue to reinforce the advantages of the very wealthy.
But what if the council instead took the Thompson scandal as an opportunity to rethink the role of political money from the ground up? That’s what other local governments have done in response to scandals very much like DC’s. In 2005, former Connecticut governor John Rowland got a year in prison for soliciting favors from state contractors who were also contributors. Rather than target Rowland’s specific misdeeds, the state’s legislature created public financing for state and legislative offices.
Now any state candidate demonstrating broad public support in contributions of $5 to $100 can qualify for public funding to pay for the rest of his or her campaign. Almost three-quarters of candidates from all parties participate in the voluntary system. As a result, more contests for Connecticut’s General Assembly are competitive, while some bills previously blocked by Hartford’s most powerful lobbyists pass easily.
You may scoff that DC’s byzantine political games make Connecticut’s look like patty-cake. How about New York City? In the late 1980s, a web of scandals left voters guessing which pols were crooks and which were semi-innocent bystanders. Mayor Ed Koch endorsed an approach that encouraged small donors and candidates supported by the most, not the richest, residents. New York’s new funding scheme matched contributions of $500 or less, dollar for dollar, with public funds.
The city has continually tinkered with the system, squeezing the definition of “small contribution” while expanding the match. In last year’s citywide election, a contribution of $175 or less was matched six to one, making $50 worth $350 to the candidate.
To see how this system might play out in DC, where multi-candidate primaries are normally the defining battle, it’s most instructive to look at the primaries in New York’s recent mayoral race. On the Democratic side, Bill de Blasio won with the lowest percentage of private funding; indeed, the top three Democratic candidates finished in reverse order of the private money they had raised. The wealthy, self-financed Republican, John Catsimatidis, went down to defeat. In the city-council races, candidates received an average of 37 percent of their funds from donors who gave $250 or less.
A bill introduced earlier this year by US representative John Sarbanes of Maryland would bring to national politics a version of what New York and Connecticut have done, offering a tax credit for contributions of $300 or less—in effect, a voucher for taxpayers who want to become campaign donors. The Sarbanes bill has 142 cosponsors, including one Republican.
There’s even hope that these new approaches to campaign finance will survive review by the Supreme Court, because they focus less on limiting contributions and more on expanding political fundraising to everyone—and his uncle.
Mark Schmitt (email@example.com) is director of the program on political reform at the New America Foundation.
This article appears in the May 2014 issue of Washingtonian.