Oregon Democrats promised to reform the state’s campaign finance laws. But their fix tilts the playing field in their favor, says a Democratic lawmaker.
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In 2020, Oregonians overwhelmingly demanded campaign finance reform. Since then, Democrats have promised to deliver it. But the reforms they are offering contain loopholes, according to a campaign finance expert — and an Oregon Democrat thinks they are designed to give his party an edge.
Currently, Oregon is one of a handful of states without donation limits for campaigns, which has led to very large sums of money going to candidates on both sides of the aisle.
“The lack of contribution limits has made Oregon elections among the most expensive per capita and has enabled outlier megadonors to have exaggerated influence,” said Kate Titus, a money and influence expert at Common Cause.
In 2012, for example, then-Gov. John Kitzhaber (D) called a special legislative session to create a corporate tax break that included Nike, whose co-founder gave Kitzhaber’s campaign a quarter of a million dollars shortly thereafter. Corporate giving to state lawmakers has also stifled efforts in Oregon to put environmental laws in place, a 2019 investigation by The Oregonian showed.
A 2020 ballot measure that passed by a wide margin gave Oregon’s legislature the opportunity to level the playing field for small donors to compete with big money. The measure reversed a 1997 court decision that banned limits.
Democratic lawmakers control both houses of the Legislature and the governorship, and they are “out of excuses” for ignoring the public appetite for campaign finance reform, according to Titus. “The fact that a constitutional amendment passed with 78 percent was really a strong message,” she said.
And the legislative fixes that Democrats have proposed appear at first glance to do this. Gov. Tina Kotek’s House Bill 3455 and House Speaker Dan Rayfield’s House Bill 2003 cap contributions from individuals, corporations, and unions, while creating a small-donor matching fund that would amplify the impact of individual contributions.
But the bills would create a fundraising landscape skewed towards the majority party, according to state Sen. Jeff Golden (D).
The legislation contains a loophole that would allow “membership organizations” to give large sums of money to candidates. Any group with dues-paying members, like a labor union or a business association, could make a practically unlimited donation.
Both parties would race to exploit this loophole experts predict. And Golden says his party would give itself a head start.
Democrats in Oregon already have a robust network of labor union donors, so they’d be in a good position to get around the bills’ limits. Republicans would need time to take advantage of their own member organizations to the same extent that Democrats have.
If Republicans wanted to wholly circumvent contribution limits for their candidates, they’d have to switch over from their main sources of funding — wealthy individuals and corporations — which are both capped by the bill and can’t get around it in the same way.
The bills would let member organizations make donations on behalf of each of their members, whether or not each of them gave money. They could then funnel these inflated contributions to candidates through small-donor political action committees.
Small-donor PACs — supposedly — pool modest donations from individuals together to make them more competitive with wealthy contributors. But unions and other membership organizations would be able to give money to these committees that does not come from everyday people.
“We can take steps to empower small donors to join forces and give collectively, say through membership organizations or small-donor PACs,” said Titus. “But that only works if these entities pool money that actually comes from small contributions.” ”
Neither proposal yet contains a cap on how much these PACs can give.
If Democrats in Oregon make laws with loopholes that benefit them, it would defy voters’ desire for a level playing field that led them to ask for reform in the first place, according to Golden.
That’s why the lawmaker says he won’t support the bills. He fears that passing unfair legislation would look to Oregon voters like another instance of big money holding sway over what laws pass.
“If we pass limits that cynically benefit one side, we’ve blown a precious opportunity to move the needle on public trust,” Golden said.
The proposals make an exception to contribution limits “that the Democratic funding alliance can use but the other side won’t be able to,” Golden said. “I don’t know how anyone can look at that and say, ‘That’s consistent with campaign finance reform.’”
In his mind, the proposals are “violating the spirit of campaign finance reform” because they allow “distractingly large contributions” from entities with an “interest in the outcome of legislation.”
Out of any entity that could exploit the loophole, labor unions would gain the most immediate influence from it, the lawmaker believes.
“Several people have said to me, ‘You’re comparing us with the Koch Brothers.’ And that’s really off-base,” said Golden. “I support labor and these other groups, but if you have a very identifiable interest in how bills come out, you’re a special interest whether I agree with your special interest or not.”
Unions could give “million-dollar contributions to campaigns” if the laws took effect, he said.
If, for example, the individual donation limit were $25, “you could have any group, a union perhaps with 50,000 members, multiply that times $25, and whether or not those members have contributed to campaigns, that’s the size of contribution you can make,” said Golden. The Rayfield proposal caps individual donations at $1,500, while the Kotek bill limits them to $500.
Despite the fundraising advantage Democrats would gain from unions, it wouldn’t take long for the other party to catch up to them and find their own workarounds, according to Titus.
“If we pass limits that cynically benefit one side, we’ve blown a precious opportunity to move the needle on public trust.”
“Maybe for a cycle, while everybody changes their approach, it would advantage the unions, but not for long,” she said. “[Republicans] have organizations too with members that pool money,” she noted.
Unions have gotten behind Rayfield’s and Kotek’s proposals because they don’t realize they won’t be the only ones who will take advantage of it.
“[If a bill with a loophole passes], their opponents can use it, too, so it doesn’t actually give them any advantage. But it’s hard to let go of that feeling that this is easing the way for membership organizations,” Titus said.
There’s legislation on the table in Oregon that doesn’t contain loopholes, but Democrats haven’t pushed for it “because of the politics within the legislature,” according to Titus. She noted that, while Golden has proposed a bill “without big pass-throughs that undermine its effectiveness,” it’s unlikely to see enough support from other lawmakers.
“I think most public officials are working to represent the public interest as best they can,” Titus said when asked why Democrats haven’t put forward tougher limits. “But politics is a team sport. Elected officials are loyal to their teams, including their parties and those they perceive as their primary backers.”
She added that those best positioned to change the system enjoy that power because of fundraising.
Gov. Kotek and Speaker Rayfield could not be reached for comment on whether their proposals contain loopholes that favor Democrats.
Democrats may find that passing a bill that voters perceive as too lax would trigger a public reaction that leads to contribution limits without loopholes.
A “grassroots coalition” is ready to offer a ballot measure to put thorough reform in place if lawmakers don’t deliver it, Titus said. “Even without a lot of money, a campaign like that is likely to succeed given where public opinion is on this issue.”
Passing flawed legislation risks public contempt for Democrats if voters overturn it.
“It really looks bad if the voters say ‘No, that wasn’t good enough,’” said Titus.
To avoid criticism from Oregonians while still creating limits with loopholes, Democrats may refer one of the bills to the public as a competing ballot measure. This would give voters the final choice in the matter.
But if lawmakers take this route, it could delay reform indefinitely.
Titus believes that this would leave all Oregonians disappointed.
“If you look at the average person, there’s not much difference in what Democrats and Republicans believe” about the need for contribution limits, said Titus. “Most people across party lines really are offended by how much money is influencing the political process and want to change that.”