A major overhaul of the state’s campaign finance laws has at last won the approval of the state Senate, after a unpredictable path featuring committee and caucus politics, an hours-long floor debate two weeks ago, and endless legislative tweaks.
The bill, which passed 24-3-3, makes it illegal for corporations and labor unions to donate directly to political candidates, a practice that has been banned for federal candidates since 1907.
Instead of donating directly from the corporate treasury, corporations must now form an affiliated political action committee, or PAC, to which individuals must donate from their own personal funds, explained Sen. Peter Galbraith, D-Windham, who has championed such a ban for years.
“The fact of corporate contributions leads to self-censorship by the candidates,” said Galbraith. “It’s not that the corporations are asking for anything, but a candidate who’s soliciting corporate contributions is going to have in his mind [the company’s agenda].”
Senate President Pro Tem John Campbell, who opposes such a ban, said on the Senate floor that the ban merely decreases electoral transparency, because the PACs which companies will inevitably create need not bear the same name.
This could lead to PACs like the “Vermont for Excellent Government” PAC, he said, and other spurious or mysterious naming tactics, which prevent voters from clearly seeing the flow of funds in politics. Moreover, added Campbell, the ban lays a burden on the state’s small businesses.
“This measure only supports a second layer of anonymity,” Campbell said in a speech explaining his vote in favor of the overall reform legislation.
In an interview, Galbraith described the point about the extra layer of PACs as a “totally specious argument.”
“First, the donations would actually be coming from individuals, they wouldn’t be coming from corporate treasuries. The individuals would be doing it out of their own income, on which they pay taxes, and they would be doing it as individuals,” argued Galbraith.
Finding out the employers and affiliations of individuals is then a simple next step, made easier by a plethora of online tools, said Galbraith.
Galbraith also contended that the state’s small businesses as a whole simply aren’t nearly as involved in the political fundraising scene as major corporate names like AT&T, FairPoint, and Anheuser Busch. That the ban harms small businesses is a “total fallacy,” he said.
Paul Burns, who leads the nonpartisan advocacy VPIRG, predicts that a campaign finance bill could end up on Gov. Peter Shumlin’s desk by May. The House has yet to pass its own version of the legislation.
Previously, donations to statewide candidates were limited to $2,000. The bill increases the limit to $3,000. Candidates vying for the House and Senate will now only be able to accept donations of $750 and $1,500 respectively, per election cycle, down from the present $2,000 cap.
Candidates now must report their campaign finances to the Secretary of State 11 times every two years instead of seven, and must report twice in the off-year, instead of once.
The legislation also requires Secretary of State Jim Condos to build a searchable online database compiling political donations, but fails to fund that mandate.
“Unfortunately the legislature has made a decision not to put any money in it, and I question how serious they are about getting that done. Without money, I can’t do it,” said Condos after the Senate session.
Some other measures Condos had called for since December, however, made it into the final version, elements like increased disclosure by candidates and super PACs. PACs in particular must name donors who donate more than 25 percent of the group’s funds, in advertisements and communications the PAC produces.
Some senators, like Diane Snelling, R-Chittenden, and Campbell, also took offense at the alleged premise of the legislation, which they said was based on the notion that political corruption in Vermont needed to be curtailed. They said political corruption in the state was almost totally non-existent.
The vote ends a weeks-long process in the Senate, where higher donations caps were suggested by parties to counter Super PACs, various disclosure requirements were mulled, and a last-minute political drama threatened to derail the whole effort, which represents Vermont’s first systematic update to its campaign finance laws since 1997.
In more recent weeks, a 21-8 vote approving Galbraith’s amendment led to an order from Campbell for the bill to “lie,” or be put off indefinitely. That provoked questions about how sincere individual senators were in voting for an amendment to a bill they arguably thought was doomed.
The Senate Government Operations failed to include the corporate ban in their latest redraft earlier this week, leading to a last-minute caucus on Thursday afternoon where Senate Democrats and Progressive clashed but eventually decided on a united front in public, as Seven Days’ Paul Heintz reported.