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San Diego Ethics Commission Votes To Rein In Independent Committees

Aired 7/11/14 on KPBS News.

Now it's up to the City Council to decide whether to ban independent political committees from using material produced by candidates in ads the deep-pocketed committees pay for.

The San Diego Ethics Commission took a major step Thursday to constrain the activities of deep-pocketed independent political committees.

The commissioners voted 6-0 with one abstention to forward a proposal to the City Council that would effectively ban the independent committees from using material produced by candidates' campaigns in advertisements that the committees pay for.

Committees controlled by candidates and independent committees that support candidates are not allowed to coordinate their activities. But complaints about independent committees cutting and pasting candidates’ material into ads prompted the Ethics Commission to investigate.

The proposal the commission recommended, which the council could take up as soon as September, would have the practical effect of ending the practice of independent committees taking campaign videos published on candidates’ web sites, downloading them and paying television stations to run them as advertisements.

Specifically, the rule would expand the definition of “contribution” to include the republication and dissemination of many candidate campaign-created materials. Independent recipient committees like PACs, as well as independent expenditure committees, are almost always prohibited from making contributions of any kind to candidates for city office. So doing things like replicating candidate videos would constitute an illegal non-monetary contribution to a politican's campaign.

Unlike candidates whose campaigns can accept contributions of no more than $1,000 per election from an individual and $20,000 from a political party, many of these committees can raise unlimited funds from nearly any source: individuals, corporations, labor unions and practically anyone and anything else.

During this year's mayoral race, independent committees raised and spent millions more than the candidates’ own campaigns.

Interactive: Click here for a searchable database and interactive map and visualization of campaign contributions.

After Thursday's meeting, Stacey Fulhorst, the commission's executive director, told inewsource her staff began working on the proposal after receiving complaints that independent committees were downloading materials from candidates’ websites during the mayor’s race and paying for their distribution as ads.

“Essentially, committees that have unlimited contributions were paying bills for candidate advertisements,” Fulhorst said.

During the meeting, Fulhorst urged commissioners not to lose site of the practical issue at hand.

“We have real-life scenarios that we are trying to address where people are literally lifting candidate videos and producing and paying for their ad time on television,” she said.

The commission voted to exempt a handful of campaign-created materials, including text, statements made by candidates at public events and the reproduction of up to three photographs, from the duplication prohibition.

The commissioners adopted the staff's proposal with only minor edits. The draft had undergone extensive alterations since it was presented to commissioners in March.

'That’s Where Most Of The Money Is'

Discussion of the proposal was brief, lasting less than 30 minutes. No members of the public showed up to speak. The measure had been debated at length over the previous four commission meetings.

The only sustained debate over the proposal came from Commissioner Andrew Poat. Poat expressed concern that the commission had not made enough of an effort to solicit input from political consultants and others who would be affected by the proposal. He abstained from the vote.

Fulhorst said that emails had been sent to the agency’s “interested persons” list announcing the details of the proposal and inviting public comment at every commission meeting since March.

Commissioner Clyde Fuller recalled a conversation he’d had about the proposal with an individual “involved in politics” at a recent social function.

“He said, ‘Believe me. We’re all very aware of this motion that you’re making,’” Fuller said.

“The impression I got is they’re very aware of it,” he added.

Tom Shepard, a veteran San Diego campaign consultant, told inewsource that he supported the proposal, noting that when it comes to independent political committees “that’s where most of the money is in politics right now.”

Shepard said he has seen many candidates who will post scores of high-quality photographs, audio and video recordings to their websites with the expectation that independent committees will download the materials and reproduce them in the form of widely distributed mail and television advertisements.

“I know of many campaigns that use their websites primarily as a vehicle for getting those graphic materials to independent expenditure committees,” Shepard said in an interview prior to the Ethics Commission’s meeting.

Consultant Calls Action A Band-Aid Approach

But while Shepard supported the proposal, he believes that the Ethics Commission is applying a Band-Aid to an issue that requires surgery.

The larger problem, Shepard said, is that the limitations imposed on candidates' own campaign committees have encouraged the phenomenal growth in these outside groups, free from hard caps on contributions and prohibitions on corporate and union donations.

“What voters thought was a relatively strict regulatory framework for campaign finance in San Diego has morphed into a system where most of the money that’s being spent in local campaigns is going through what are effectively unregulated committees,” said Shepard, president of Tom Shepard & Associates.

Shepard said a system where candidates can raise unlimited sums of money from any source so long as all contributions are immediately and fully disclosed would be a more transparent system than the current one and far easier to regulate.

Fulhorst disagreed, saying that even if limits on candidate contributions were limited, independent committees would still exist to accept contributions from unpopular special interest groups and to run politically risky attack ads against favored candidates’ opponents.

Unintended Consequences

Brian Adams, a political science professor at San Diego State University, said he understands why the Ethics Commission would undertake such a clarification of the rules, but he believes it’s effect will be limited.

“Any well-funded independent expenditure committee will usually find ways around this,” he said.

Broadly speaking, said Adams, much of the campaign finance reform community has moved on from issues of coordination to other concerns.

Adams said there are other more pressing issues, pointing to the nonexistent disclosure of donors by politically active nonprofits and the recent U.S. Supreme Court decision eliminating aggregate contribution limits.

Like Shepard, Adams believes that what started decades ago as an effort to limit the influence of large donors — by hard-capping contributions to candidates — has led to some unintended consequences.

“What’s happened is that over the past 20 years, 30 years, that an effort to try to limit large donations, to try to limit undue influence from large donors, has created a very complex finance system that isn’t very transparent,” he said.

The duplication measure was the most significant of a number of proposals the Ethics Commission had been considering since March.

In June, the commission unanimously adopted a measure requiring independent political committees primarily formed to support or oppose candidates to pay in full at the time of purchase all advertising and prohibiting such committees from purchasing advertising on credit.

In May, the commission unanimously adopted a measure requiring that so-called “issue ads” that do not expressly advocate for or against a particular candidate but that do identify a candidate by name be accompanied by a disclosure identifying the political committee paying for the advertisement. This would bring the disclosure requirements for issue ads up to the same level of so-called “electioneering ads” that do expressly advocate for or against a particular candidate on which the committee paying for the ad is already required to be disclosed.

This story was edited by Lorie Hearn, editor and executive director of inewsource, a KPBS media partner.

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