Past Campaign Finance Reform Initiatives

The information below is a historical reference of the Foundation’s work prior to December 2004. Due to financial constraints, we are no longer engaged in campaign finance reform grantmaking or public policy activities. Read about the Foundation’s strategic and financial changes. Given our focus on other topics, we are no longer keeping the pages below up-to-date. To read about current campaign finance reform activities around the country, go to Public Campaign.

Our Interest in Campaign Finance Reform

From its inception in 1999 and until December 2004, the Foundation was committed to the issue of campaign finance reform, particularly the pursuit of public financing of elections.

In the United States, special interest groups and their financial clout strongly influence and sometimes determine the outcome of important policy debates and votes. This was evident in the U.S. Senate's rejection of the Comprehensive Test Ban Treaty in 1999 and its refusal to increase Corporate Average Fuel Economy standards in 2002. The issue of money in politics is also visible in local and state decision-making. In order to re-establish a democratic, truly representational system in which decisions are made based on the long-term interests of the country and its citizens – and not on money – we believe the current campaign financing system must be overhauled.

Historically, we have been committed to the efforts of Public Campaign, an organization whose ultimate goal is federal campaign finance reform. Its approach is to focus initially on reforms at the state level. We agree with its thinking that, if enough states adopt campaign finance reform initiatives and laws, elected officials at the national level would face enormous political pressure to legislate real reform.

Clean Money Campaign Reform Summary
The following is from Public Campaign:
"Clean Money Campaign Reform provides qualifying candidates who agree to limit their spending and reject contributions from private sources with a set amount of public funds to run for office… While elements of the plan vary according to local circumstances, in general, participating candidates receive Clean Money for the primary and general elections and they qualify by raising a high number of small (e.g., $5) qualifying contributions from voters in their districts or states.

"Clean Money Campaign Reform is not an attempt to patch up the current system, but instead is designed as an alternative to it. By ending politicians’ reliance on special interest money and offering in its place a limited but competitive amount of money from a Clean Money fund, Clean Money Campaign Reform provides an alternative way for candidates to finance their campaigns."

Clean Money Campaign Reform is a package of measures that:

  • Gives candidates the option to reject private contributions if they agree to participate in the CMCR system.
  • Reduces campaign spending.
  • Protects candidates’ integrity and the integrity of the lawmaking process.
  • Bans the use of "soft money" to influence elections.
  • Makes available free or discounted television time for federal candidates and requires candidate debates.
  • Addresses the problem of electioneering efforts that masquerade as non-electoral "issue campaigns."
  • Provides additional funding to Clean Money candidates targeted by independent expenditures.
  • Deepens disclosure and toughens enforcement.

Policy Efforts

California Public Financing Initiative Feasibility Study
Since the Kirsch Foundation's inception in 1999, we have been committed to federal and state efforts to reform and/or adopt campaign finance reform laws and initiatives. We believe our representational system of democracy is at significant risk if political decisions are made based on campaign contributions rather than the long-term interests of the country and its citizens.

Due to that belief, our limited, but ongoing, commitment to fund or provide public policy resources to organizations working to reform the campaign finance system, and at the urging of our Founder and Chairman of the Board, Steve Kirsch, the Foundation launched a 16-week feasibility study in the summer of 2002. Its aim was to evaluate a potential California "public financing of elections" initiative.

In September 2002, the Foundation completed its feasibility study evaluating the potential for a "public financing of elections" initiative in California. Read our Final Report.

California Initiative and Legislative Activities
We supported Proposition 89 on the November 2006 ballot, which failed on a 25.5% (YES) to 74.5% (NO) vote. Prop. 89 would have created a level and fair playing field for California elections and reduced the influence of lobbyists and special interests in the state. The initiative covered all statewide constitutional offices and state legislative offices, and was based on a model in place in Arizona, Maine and elsewhere. To learn more about publicly financed campaigns, visit Public Campaign.

Historical California Efforts
During the 2005-06 legislative session, the Kirsch Foundation supported AB 583, the California Clean Money and Fair Elections Act, authored by Assemblymember Loni Hancock (D-14th District). The legislation – previously known as AB 2949 (see below) – passed through the State Assembly (47-26) but never got out of the Senate. The bill would have provided public funding to candidates who could show a broad base of public support by raising a qualifying number of signatures and $5 contributions and agreed to forgo all other private funds. Clean Money candidates would have received matching funds — for total funding up to as much as six times the base funding amount — to help counter attacks by independent expenditures and excess spending by privately funded candidates. For more on this and prior legislation, go to the California Clean Money Campaign.

In 2004, the Kirsch Foundation supported AB 2949 (Hancock) because it was consistent with the Foundation's goal of pursuing public financing of elections at the federal and statewide level. The bill would have created a ballot initiative to provide Clean Money campaign financing to all statewide and legislative races in California. Candidates would have needed to raise a set number of $5 contributions to qualify for public financing. Additional funds would have been disbursed in the event of independent expenditures or a non-participating opponent raising more money than a participating candidate. Third parties would have been able to qualify for funds, but at a lower rate than major parties. AB 2949 passed the Assembly Elections Committee but died in the Assembly Appropriations Committee.

In 2003, political commentator Arianna Huffington filed papers in California to introduce a public financing of elections, or "Clean Money," initiative. The measure would have provided public funding for campaigns for major-party, minor-party or independent candidates for state offices who could prove a strong base of support. Candidates who opted into the system and qualified for public funds then would have agreed to limit their spending and reject contributions from private sources. Campaigns would have been funded through a severance tax on oil extracted from the ground. Huffington and proponents needed to secure 600,000 valid signatures in order to quality for the California ballot in 2004. The signature gathering was abandoned in favor of a legislative approach through AB 2949.

Historical Grants

In the initial years of the Foundation's existence, we focused on providing grants to organizations working to reform the U.S. campaign financing system. A final grant will be made to Public Campaign early in 2005 in order to enable it to transition smoothly to other funding sources.

State-by-State Progress Through December 2005

Over the past few years, Public Campaign and state coalitions, working closely together, have had significant success in passing state-appropriate versions of Clean Money Campaign Reform. What follows is detailed information about key states where Clean Elections reforms have been attempted, adopted, and implemented:

  • Arizona: In November 1998, Arizona voters passed the Arizona Clean Elections Act, which provides full public funding for statewide and legislative candidates who meet a threshold requirement to raise a certain number of $5 contributions from voters. The public funds come from a variety of sources, including a tax check-off, voluntary contributions and a surcharge on civil and criminal penalties.
  • Connecticut: In December 2005, the Connecticut state legislature passed sweeping campaign finance reform laws, including public financing of all state races, banning contributions from lobbyists and state contractors, and ending campaign advertisement booklets. If signed by the Governor, the changes take effect on December 31, 2006. The bill calls for funding the new system each year with approximately $17 million worth of unclaimed property such as forgotten pay checks and bank accounts that now automatically flow into the state's general fund.
  • Maine: In November 1996, voters in Maine approved a ballot initiative, the Maine Clean Election Act, establishing a system of public financing and voluntary spending limits for all state offices. Candidates who raise a threshold number of small contributions from registered voters in their district and agree not to raise any more private money qualify for a fixed amount of public financing for their campaign.
  • Massachusetts: In November 1998, Massachusetts overwhelmingly (67%) passed a "clean elections" public financing law that provided the option of full public financing for the campaigns of qualified candidates of statewide offices as well as the state Senate and House of Representatives. Ballot initiatives in the state, however, cannot include funding for any program and the legislature refused to fund the system. In 2003 the law was repealed. In its place is a much weaker partial public financing law for six statewide offices that provides matching funds for contributions of up to $250 for qualified candidates who agree to specific limited expenditures for their campaigns.
  • New Mexico: In 2003 New Mexico passed a public financing law for candidates vying for a seat on the Public Regulation Commission, which is responsible for oversight of state public utilities. Similar to the full-public finance laws in Arizona and Maine, candidates who raise a threshold amount of small donations may receive full public funding for their campaigns if they agree not to accept additional private donations. The system is funded by a surcharge on the companies regulated by the commission. Public funding will be made available to candidates for the 2006 elections.
  • North Carolina: In 2002 North Carolina passed a public financing law for judicial candidates went into effect in 2004. The law is designed to provide full public financing for candidates of the State Court of Appeals and Supreme Court, provided they raise "seed money" from at least 350 contributors between $10 and $500 each. The grants provided to qualified candidates are funded by a tax check-off and $50 voluntary contributions from lawyers when they pay their privilege license tax.

More than 15 states provide public financing directly to candidates, but the laws differ as to how funding is provided and to which candidates. In most cases, the goal is the same: to provide individuals with the ability to run for elected office without huge personal or special interest war chests and to eliminate the undue influence of special interest groups on important public policy decisions.

Federal Legislation

In July 2001, the House of Representatives took up a notable bill that was initially shelved when House members could not agree on parameters for the debate. Former House Speaker Dennis Hastert (R-IL) demanded a rule requiring 14 separate votes on amendments to the key bill (Shays-Meehan) that had bipartisan support. Because the bill's sponsors and other House members could not agree to Hastert's proposed rule, the entire matter was sent back to the House Rules Committee.

In January 2002, the proponents of Shays-Meehan gathered support to compel a vote using a discharge petition. A discharge petition – officially a motion to discharge a committee of its responsibilities over a given piece of legislation – is a rare parliamentary maneuver that pulls a bill out of committee (in this case, the Rules Committee) and forces it to the floor of the full House of Representatives. A discharge petition requires the signatures of a majority of House members – 218 out of 435. Supporters of Shays-Meehan garnered 218 signatures, therefore enabling the bill to be heard on the House floor.

On February 14, 2002 after a series of attempts to amend the bill by its opponents, the House passed Shays-Meehan on a 240-189 vote. In the Senate, the McCain-Feingold bill was amended to become identical to Shays-Meehan in order to avoid a House-Senate conference committee that would have likely killed the bill. Opponents of the legislation threatened to block its passage with a filibuster as they had successfully done other times in the bill's seven-year history. Despite these threats, campaign finance reform proponents gathered the 60 votes needed in order to break a possible filibuster. On March 20, the Senate approved McCain-Feingold -- renamed the Bipartisan Campaign Reform Act (BCRA) -- on a 60-40 vote and sent the bill to President Bush who signed it into law on March 27, 2002. In an effort to track the legislation's effectiveness, the public interest organization U.S. PIRG produced a report on the role of hard money verses soft money on the 2002 congressional elections. The report is a comprehensive breakdown of how money was raised and spent and is meant to serve as a resource and a baseline from which to measure the effects of the BCRA.

Since the BCRA became law, proponents of the legislation had to fight a tough legal battle, including a challenge to the ruling by a three-judge panel striking down some provisions of the law in May 2003. Ultimately, the legal wrangling culminated in the U.S. Supreme Court ruling that the law is constitutional in December 2003.

In September 2004, a U.S. District Court Judge struck down 15 of 19 Federal Election Commission (FEC) regulations that had been challenged in the 2002 lawsuit by sponsors of the BCRA. The judge ruled that the FEC regulations designed to limit soft money contributions to campaigns for federal office instead created an "immense loophole," enabling campaigns to "foster corruption" and amass large contributions. The court also rejected the electioneering communications exception for 501(c)(3) organizations. The FEC is anticipated to appeal the judge's ruling. In the meantime, current campaign finance regulations remain in effect.

Typically, contributions/donations are divided into two categories: "hard money" and "soft money".

"Hard money" is a direct contribution to a candidate or money that can only be used for activities to advocate the election or defeat of a candidate. Corporations and union treasuries are prohibited from contributing directly to a candidate.

"Soft money" is unlimited campaign contributions that go to national parties and joint fundraising committees for grassroots activities and party building activities (e.g., voter drives by volunteers in support of a party's Presidential nominees and the production of campaign materials for volunteer distribution). Corporations and union treasuries are allowed to contribute soft money directly to national parties. Another example of soft money is independent expenditures, which usually take the form of communications. For example, issue advocacy ads, which are used to expressly advocate the election or defeat of a clearly identified candidate and made independently from the candidate's campaign, are considered independent expenditures.

Bipartisan Campaign Finance Reform Act Details
The centerpiece of this legislation is a complete ban on soft money fundraising and spending at the national level. In addition, the law prohibits unions, corporations and independent groups from issue ads and independent expenditures that mention candidate names within 60 days of an election or 30 days of a primary. The measure raises the individual hard money contributions for candidates from $1,000 to $2,000 for both House and Senate candidates and includes a mechanism to increase money caps in a race against a self-financed opponent who exceeds certain spending levels. The bill went into effect the day after the November 7, 2002, election. Read a detailed contribution chart that correlates to the law.

Campaign Finance Reform Resources

You may want to visit the following sites if you are interested in becoming more educated about campaign finance reform:

Press Coverage

Read historical press coverage about campaign finance reform.

On July 23, 2002, Steve Kirsch made an appearance on MSNBC's Donahue show to discuss his views on campaign finance reform. Specifically, he explained the virtues public financing of elections and the positive results in the states where it has been implemented.

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