Campaign finance bill has GOP in a stewBan on corporate money could shift balance of power.
By Laylan Copelin, Austin American-Statesman
Monday, April 25, 2005
As Texas Republicans flirt with a showdown among GOP titans for governor,the party's top brass and some of its activists are fighting about whether next year's primary battle will be waged among contributors who are in full public view or who, at least partly, are taking sides secretly.
The dispute is coming to a head over a bipartisan proposal to ban anonymous attack ads financed by corporations and unions through benignly named front groups in the final days of a campaign. It has escalated into a war of words about the public's right to know who's influencing an election versus the rights of groups to criticize their government.
All this squabbling comes over legislation that purports to reinforce a ban on corporate campaign money that has been on the books for 100 years -- and a legislative remedy that the U.S. Supreme Court has approved.
So why the fuss?
House Bill 1348, an omnibus campaign finance bill, could shift the balance of power away from the handful of lobbyists, elected officials and party leaders who are currently able to tap corporate or union coffers for their own purposes: to pass or defeat legislation, to remain in office, to enforce the party line.
Under the bill, corporate or union money could not be spent in the final 30 days before a primary -- and 60 days before a general election -- on advertising, mailings or other communications that name a specific candidate or ballot measure, regardless of whether the ads explicitly urge voters to support or oppose the candidates. The measure would not affect donations by individuals, who, either by themselves or through political action committees, can now spend unlimited amounts of money as long as they disclose their donations to state election officials.
"Corporate money puts too much power in the hands of too few and eliminates the general public from participating," said Sondra Epstein, a Houston Republican who traces her party activism to the 1960s.
Jim Bopp, a national campaign finance lawyer based in Indiana who represents many nonprofit corporations, including ones that oppose abortion, calls the legislation a draconian attempt to quell criticism of government officials.
"Politicians want to know who is criticizing them," Bopp said, "because they want to punish them."
State law already bars corporate or union money from being spent on campaign activity, including ads specifically advocating the election or defeat of candidates, though it can be used for a political committee's administrative costs. In 2002, however, the state's largest business organization, the Texas Association of Business, U.S. House Majority Leader Tom DeLay's Texans for a Republican Majority and the Republican Party of Texas tested the boundaries of the law by using corporate dollars either for polling, phone banks and consultants or "issue" ads to attack legislative candidates.
Whether current law addresses such ads is in dispute.
All three groups deny wrongdoing. They dismiss ongoing criminal investigations by Travis County District Attorney Ronnie Earle and County Attorney David Escamilla, as well as several civil lawsuits, as partisan attacks by Democrats.
By the time the courts have exhausted the issue in appeals, the 2006 state elections will have come and gone.
So the Legislature has the last chance to resolve the issue for this election cycle.
Ninety-three of the House's 150 members, including 30 Republicans, are co-sponsors of House Bill 1348. All 63 House Democrats are united behind the bill, positioning that party as opposing "secret" campaign donations.
Lt. Gov. David Dewhurst, a Republican, has promised that the Senate will act, although the bill's proponents have criticized him for waiting for the House to go first.
In the House, Speaker Tom Craddick, R-Midland, is under investigation for his role with Texans for a Republican Majority. Craddick lieutenants who either were aided by that political committee or served on its board hold key chairmanships at every choke point for the bill, which is still awaiting its first hearing.
Gov. Rick Perry, who probably faces a party challenge from U.S. Sen. Kay Bailey Hutchison or state Comptroller Carole Keeton Strayhorn, is associated with the controversy through his former chief of staff Mike Toomey and political consultant Dave Carney.
In 2002, as a lobbyist, Toomey helped direct the Texas Association of Business' $2 million mail campaign, mostly against Democrats but in a few GOP primaries as well. TAB has refused to identify its corporate donors.
In 2004, Carney directed corporate-financed attacks that helped keep Rep. Tommy Merritt, R-Longview, out of a runoff for a Senate seat.
Merritt, a maverick Republican, said he suspected his opposition to gambling might have prompted the ads, although the corporate donors have never been identified.
"You never know who you've offended," Merritt said.
The attacks stopped only after Merritt, running for re-election to his House seat, asked Toomey, Perry's chief of staff at the time, to stop them in exchange for his endorsement of Perry's choice for the Senate seat.
Perry, who has championed campaign finance disclosure in the past, has taken no position on the bill.
"There needs to be as much disclosure as possible," said Perry spokesman Robert Black. But he added: "When you start limiting the ability of people to express themselves, you start down the slippery slope of violating the First Amendment."
As members of the party's different factions compete for public office and jockey for position in 2006, corporate money is becoming a bigger factor in GOP primaries, said Epstein, who belongs to Memorial West Republican Women in Houston.
"It's not good for the country; it's not good for Republicans," she said. "It's not a level playing field."
And while many Republicans dismiss the investigations of Texans for a Republican Majority as a Democratic witch hunt, Epstein complained that the publicity could hurt the party.
"This bad publicity is not what we want," she said. "And it will just keep happening if we don't stop it."
Fear of power shift
Reinforcing the ban against corporate money being spent on campaign activity could also shift the balance of power among businesses and the lobbyists who represent them.
State law allows corporations to create political committees that solicit campaign money from stockholders, officers and employees and give it to candidates.
In the past, corporations with smaller work forces in Texas were at a disadvantage in raising campaign contributions. For example, AT&T has fewer Texas employees than SBC, making it harder to raise as much in unregulated contributions from individuals.
In 2002, AT&T found it could better compete by writing corporate checks to the statewide business association or Texans for a Republican Majority.
Corporations might be reluctant to surrender that newfound influence by withdrawing ads.
"If my (corporate) client would write a million-dollar check, my phone calls would get returned, too," quipped a lobbyist, who requested anonymity because of the ongoing criminal investigation.
Likewise, House Bill 1348 limits how political parties can spend corporate or union money.
Ten days ago, state GOP Chairwoman Tina Benkiser had a brochure distributed at a Republican women's convention that said the legislation, sponsored by a Democrat, attacks the U.S. Constitution and Bill of Rights by limiting free speech.
"It restricts some corporations from speaking out," she said last week. "Others who own newspapers have little or no restriction."
"It's manufactured garbage," replied Rep. Todd Smith, R-Euless, whom Benkiser's missive ignored as the Republican co-author.
"No one has come to talk to me in opposition to the bill," he said. "Maybe they think they can kill it some other way."
Fred Lewis leads the Clean Up Texas Politics coalition, which is championing the bill. He said Benkiser is probably more concerned that the bill restricts how political parties can spend corporate money.
Prosecutors are investigating whether the Texas GOP in 2002 circumvented an existing ban on corporate money in the final 60 days by transferring the money to an unregulated federal GOP committee. That committee is estimated to have spent $5 million or $6 million in corporate money on ads and other political activity.
"With the party's huge increase of corporate money in 2002, it has 5 or 6 million reasons to oppose the bill," Lewis said.
GOP officials at the time defended the TV commercials, mostly in federal races, as issue ads because they did not urge voters to act even as the commercials criticized Democrats or promoted Republicans.
Benkiser chafes at Lewis's criticism.
"As a party I have to disclose every penny I spend," Benkiser said. "The Fred Lewises of the world don't have those restrictions."
Indeed, nonprofit groups, whether they support campaign finance reform or oppose abortion, don't have to disclose their donors as long as they are not specifically trying to promote the election or defeat of a candidate.
The hot rhetoric aside, there is a debate at the issue's core beyond whose ox gets gored.
House Bill 1348 borrows a concept included in the federal McCain-Feingold campaign finance reform legislation that the Supreme Court found constitutional in a 5-4 decision.
Both use the 30- to 60-day blackout period, when voters are paying the most attention, to restrict corporate and union spending.
Bopp, the campaign finance lawyer who has testified on behalf of Texans for a Republican Majority, disagrees with the court's majority.
"We have this huge blackout period in which you can't discuss what's happening in government" with corporate or union money, Bopp said. He argues that such restrictions drives people out of the political process and leaves it to the wealthy who can contribute huge sums with impunity.
Trevor Potter, a former Republican chairman of the Federal Election Commission, said the Supreme Court has long acknowledged the government's right to regulate speech in the political arena when a public need protecting elections from corruption, for example is demonstrated.
"People who don't like these laws refuse
to acknowledge that the Supreme Court says it's OK," he said. "It's the law of the land."
Corporate and union money: The do's and don'ts
In some cases, House Bill 1348 seeks to clarify current state law, which limits corporate money to administrative, noncampaign expenses. In other cases, it introduces new restrictions, such as limits on spending by political parties.
What House Bill 1348 would do
"Bar the use of corporate or union money for broadcast, cable or satellite advertising; mail; or phone banks targeting candidate's electorate in final days of campaign.
"Limit political action committees to spending such money on overhead or in-house communications.
"Restrict political parties to spending it on overhead, running primaries, holding conventions and redistricting.
"Bar parties from spending corporate or union money on consultants, electioneering, fund raising, polling or voter identification.
"Declare that political ads express 'advocacy' even if they don't include such 'magic words' as 'support' or 'oppose.'
"Exempt 'bona fide' news media that are owned by corporations.
What it wouldn't do
"Put no restrictions on campaign contributions from individuals or political action committees.
"Put no restrictions on organizations communicating with members.