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  • 1. EXECUTIVE SUMMARY The Task Force on Municipal Campaign Finance was appointed by Mayor Donald L. Plusquellic on July 31,1998. In its quest for information upon which to make an informed decision, the Task Force has reviewed hundreds of pages of reports from local and national groups, met with a representative of Dollars and Democracy, received a presentation from State and Federal Communications on trends in other jurisdictions, conducted two public hearings and consulted several experts in the field. We found, as we expected, that this is a complicated area in which there is no "magic pill" to solve the perceived ills of the electoral process. Every proposal has the potential for good and for harm through unintended consequences. We have tried to look directly at the dilemmas and to make informed choices, acknowledging when policy "trade-offs" were being made. Our Report expresses our concerns as well as our hopes. In attempting to develop what the Mayor has termed "community standards for Akron, Ohio" we have given our best ideas, our best analysis, and our best efforts to be honest with the community. The Task Force submits the following recommendations: 1. We recommend that all contributions of $100 or more require disclosure of the employer of the donor. 2. We recommend that city officials work with members of the legislature, the Summit County Board of Elections, and the Secretary of State of Ohio in crafting a bill that would meet the needs of the entire state and, simultaneously, bring the benefits of electronic disclosure to the Akron community. If it appears that the State will not adopt electronic disclosure that includes the City of Akron before January 1, 2001, then we recommend that the City of Akron hire a consultant to work on implementation of such a program locally by January 1, 2002. 3. The Task Force recommends the following "Friday Report" provision: Friday Report: All candidates for Mayor or City Council shall submit a Campaign Finance Report to the Board of Elections (or, if the Board of Elections cannot accept the filing, the Clerk of City Council) by noon Friday prior to any election. This report shall identify all campaign contributions between the filing of the pre-election report and that Friday. The report shall be available for public inspection before the close of business that same day. 4. We recommend that campaign contributions limits be adopted in the following amounts per election: (a) Ward Council $750 (b) Council-at-Large $1,000 (c) Mayor $1,500 5. The Task Force recommends that the campaign contribution limits apply to all contributions from whatever source. 6. We recommend that the term "contribution" be defined to include gifts, loans, and in-kind contributions. 7. The Task Force recommends that the City of Akron prohibit cash contributions and cash loans over $100. 8. The Task Force recommends that candidates who accept cash contribution or cash loans under $101 be required to keep a duplicate receipt book, dispensing a receipt to each cash contributor or cash lender and filing another with the Board of Elections. 9. The Task Force recommends that citizen groups, individual citizens, the media, and governmental officials investigate and monitor the efforts of other government entities in partial public funding with an eye towards determining whether a full inquiry into a study of partial public funding would be desirable at some time in the future. 1
  • 2. 10. The Task Force recommends that in addition to all existing state regulations and penalties applicable to campaign finances that the following penalties for the City of Akron's additional requirements be adopted: (1) for any campaign finance form on which good-faith errors exist, the candidate shall be given a reasonable time, after notice of the problem to rile correct information; for contributions or loans above the contribution limit, the candidate will be required to pay to the City of Akron general fund three dollars for every dollar in excess of the limit; that for intentional or persistent violations the candidate shall be fined $500 or rive times of the excess, which ever shall be greater; and (4) that for any filing not made, the candidate shall be fined $100 per day until the form is filed, but with respect to the Friday before election filing the fine shall be $500 per day. 11. The Task Force recommends that representatives of the City work with the Ohio Legislature to secure the passage of H.B. No. 495 or some similar legislation that would authorize the City of Akron to contract with the Summit County Board of elections and the Ohio Election Commission for the enforcement of these provisions consistent with the recommendations set forth above. If it is impossible to contract for enforcement with the Summit County Board of Elections, then the Task Force recommends that some municipal enforcement agency be created that could be effective and yet not create a new office that required substantial resources to operate. 12. The Task Force recommends that the City Council review the IMLA Model Ordinance on Ethics to determine whether its provisions might be suitable for adoption in Akron. 13. The Task Force recommends that these recommendations take effect on January 1, 1999 or January 1, 2000, whichever is the earliest practical implementation date. 14. The Task Force recommends that every five years an independent Task Force be created to review the Akron Municipal Campaign Finance Regulations and submit additional recommendations or modifications to the City. 2
  • 3. I. INTRODUCTION The Task Force on Municipal Campaign Finance was created by Akron Mayor Donald L. Plusquellic on July 31,1998. The Task Force began meeting on August 10, 1998. The initial month was spent in the collection of information Among the information that the Task Force reviewed was: Four publications of the Congressional Research Service of the Library of Congress Three reports and several other documents from the "Dollars and Democracy" group Materials from the International Municipal Lawyers Association Three publications from New York University's Brennan Center A publication of the Center for Responsive Politics in Washington D.C. A publication of the Rockefeller Institute of Government of the State University of New York Municipal election data from past elections from the Summit County Board of Elections An Akron Law Department summary of 35 relevant court cases Several legal memoranda from the Akron Law Department in response to specific questions raised by the Task Force The regulations on municipal campaign finances from twelve different cities from across the United States In addition, the Task Force sought to gain information, ideas, and experiences in a variety of ways including the following: A meeting with Akron Mayor Donald L. Plusquellic Two representatives of the Task Force had private, individual meetings with a representative of the Dollars and Democracy group Dollars and Democracy was asked to select a delegation to meet with the entire Task Force; the meeting with Dollars and Democracy's representative took place on September 8, 1998 The Task Force met with a campaign finances consulting group, State and Federal Communications on September 15,1998 All members of the community were invited to send letters or e-mail to the Task Force providing information, ideas, suggestions, and opinions on Municipal Campaign Finance A public hearing was held at Dowed Hall in Annunciation Church on September 23,1998 A public hearing was held at Temple Israel on September 24,1998 Personal invitations to submit written comments, appear at public hearings, and/or for private meetings with members of the Task Force were sent to all current City Councilpeople A sub-committee of the Task Force also met with former City Councilman John Frank Many of the issues before the Task Force involved legal questions. We drew upon the resources of our own study of the case law and the expertise of people who served upon the Task Force. We also received advice and counsel from the City of Akron's Law Department on specific questions the Task Force posed to it.1 We do NOT mean to imply that any of these individuals or groups have endorsed the specific plan ------------------------- 1 Our efforts to understand the legal views underlying the Dollars and Democracy proposals were frustrated. At our September 8, 1998 meeting with Dollars and Democracy leader Tom Allio, Mr. Allio declined to talk about the legal ramifications of the Dollars and Democracy proposals because of the possibility that the City would appeal the decision of the Common Pleas Court to place their proposals on the ballot. Mr. Allio apparently believed that a discussion of these issues might in some way prejudice Dollars and Democracy's legal position even though no member of the city government was in the room. Mr. Allio did indicate that Dollars and Democracy had received legal advice from the Brennan Center for Justice at New York University School of Law. On September 10, 1998, a 3
  • 4. we put forth. We do mean to state that we searched far and wide for information, ideas, and advice from as many sources as possible. But the proposal presented here is our own and not that of any individual or group outlined above. BACKGROUND The history of the regulation of campaign finances in the United States is set in the context of paradox. From the earliest of times, Americans have had conflicting visions of the way in which elections should be conducted. The first campaign finance regulations took the form of laws prohibiting candidates from paying voters to vote for them and laws against bribery. In the mid- 19th century it was not uncommon for candidates to hold barbecues for potential voters. Critics of the practice argued that wealthy candidates were attempting to "buy" the votes of the electors. Candidates who engaged in the practice argued that food and drink was simply the drawing card to produce a crowd to listen to the speeches in which the candidate sought to convince the electors to vote for him/her. Those divisions echo today. According to a study published by the Rockefeller Institute, the two extremes are: "On the one side, money is seen as the root of all evil - the means by which politics is corrupted and democracy stolen from the control of the voters. For people on this side of the argument, an ideal political world would be one in which there would be no private money in elections at all. Elections would be seen as a public good, to be financed, solely, or primarily, through public funds. "At the other pole are those who see any restriction on political money as a fundamental threat to their liberty. One of the key purposes of an election, these people say, is to let voters decide whether to throw out their representatives. Since any serious challenge to an incumbent requires communication, and [since] communication - whoever pays for it - costs money, the people on this side considers it dangerous to let public officials, through their control over money, limit how, or how much, they themselves can be criticized. Hence, for the people who take this position, the ideal campaign finance regime would be one in which there would be almost no regulation at all. Let there be complete disclosure, and then let the voters decide." 2 The Center for Responsive Politics indicates that the first effort to regulate campaign finance in the modern sense began in 1907 with the Tillman Act. According to the Center almost every effort since that ---------------- member of the Task Force who had asked the Brennan Center to review the Dollars and Democracy proposal, received a memorandum from the Brennan Center that was highly critical of the Dollars and Democracy proposal. See attachment "A." The Chair of the Task Force contacted Mr. Allio for a response and was told that Mr. Greg Coleridge and Attorney Chris Bainter of the National Civic League were the ones who worked on the legal issues. Though Mr. Bainter originally agreed to write a reply to the Brennan Center memorandum, he later sent a fax indicating that he had changed his mind and would not provide any written information on how his views might differ from those of the Brennan Center. Later Rabbi Horowitz of the Task Force contacted Mr. Coleridge for a response to the Brennan Center. Mr. Coleridge indicated the Task Force should contact Chris Bainter who had already refused to provide information. 2 MICHAEL J. MALBIN & THOMAS L. GAIS, THE DAY AFTER REFORM, SOBERING CAMPAIGN FINANCE LESSONS FROM THE AMERICAN STATES 1-2 (Albany: Rockefeller Institute Press 1998). 4
  • 5. time has been a "failure." 3 The reason why "reforms" often fail to meet the hopes of their proponents is that this is such a complex area. The process of making proposals on campaign finance is complicated by three factors. First, there is the ingenuity of people. No set of rules and regulations can anticipate all the situations that can arise. Even people of good will can apply their creativity to "get around" what appears to be a "fail-safe" set of campaign finance regulations. One source has analogized this situation to a balloon partially filled with air: if you squeeze one end, the air simply moves into another part of the balloon. Second, we have to be alert for unintended consequences. Campaign finance laws have been likened to a complex mathematical formula: changing one variable can change the entire equation. Often times proposals try to change one part of campaign finance law without intending changes that occur in the operations of candidates or parties. The fact that these consequences are unintended does not make them any less real or important. Third, the Supreme Court's decision in Buckley v. Valeo, 424 U.S. 1 (1976) builds a paradox into all campaign finance reform, proposals. While Buck-ley allows many controls on campaign finances, including the placing of reasonable limits on contributions, Buck-ley prohibits spending limits and any limitation on the amount of money a candidate can contribute to his/her own campaign. Many campaign "reform" proposals could result in limiting campaign donations and, at least in theory, help to make elected officials more responsive to people of modest financial means. Yet such programs make candidates of modest means vulnerable to wealthy candidates. Similarly, the Supreme Court's decision in Colo. Republican Fed. Campaign Comm. v. Fed. Election Comm'n., 518 U.S. 604 (1996) holds that just as one cannot limit the spending of a candidate's own money, one cannot limit the amount of money a political party spends in support of a candidate's campaign as long as that spending is not "coordinated" with the candidate. Again, limits on the money candidates can raise may make the candidates of an ill-funded party vulnerable to the candidates of a well-funded party. It is this conflict - between limits on campaign contributions with the knowledge that there can be no limit on wealthy candidates or wealthy parties - that creates the dilemma for almost all campaign finance proposals. In the words of a Dollars and Democracy spokesperson, it is "like playing baseball with a large oaktree in the middle of center field." The Supreme Court rulings and the large number of groups and individuals involved in funding campaigns produces a very complex system that is very difficult to regulate effectively. III. PROBLEMS WITH CAMPAIGN FINANCE IN AKRON, OHIO We have concluded that the most serious problem regarding campaign finance in the City of Akron is one of perception. Significant numbers of citizens believe that campaign finance is a source of corruption, imbalance of community interests in policy making, and a lack of competition in local elections. These perceptions arise in part from a recent alleged bribery involving a public official, claims that campaign contributions influenced the awarding of city contracts, and tensions arising from disputes among local office-holders. Controversies over campaign finance at the national and state level also contribute to 3 MONEY IN POLITICS, REFORM PRINCIPLES, PROBLEMS, AND PROPOSALS (Washington, D.C.: 1996) at p. 20. 5
  • 6. these negative perceptions. Finally, the negativity of election campaigns and scandals involving national political figures intensify these perceptions. While campaign finance in the City of Akron is far from perfect, its imperfections fall short of these negative perceptions. Bribery is already prohibited under current law. There is no credible evidence that campaign contributions systematically influenced the awarding of city contracts, the overwhelming majority of which went to the low bidder, as required by law. And claims of uncompetitive elections are not borne out by the facts. Indeed, the political struggles that have prompted such accusations are evidence of a vigorous and highly competitive political process. Many of the serious problems with campaign finance at the national and state levels are not evident in the City of Akron, and broader complaints about the negativity of campaigns and alleged unethical behavior are in no way peculiar to politics in this city. Although not supported by evidence, the negative perceptions of local campaign finance are a serious problem. Such perceptions undermine public trust in government and poison the political process. The reforms proposed in this Report are directed at addressing the problem of negative perceptions of local campaign finance, while at the same time not interfering with the legitimate functioning of the electorial process. Because of the factors outlined above - complexity, creativity in the face of regulation, the knowledge of unintended consequences, the changes in squeezing the air in the balloon, and the constraints imposed by the First Amendment right to free speech - we have proceeded cautiously. We are also mindful of a study of the effects of past reforms in which the Rockefeller Institute study concluded that ". . . many of the problems the country has been experiencing with campaign finance law stem from a lack of clarity about the purpose, a lack of honesty about trade-offs, excessive ambitiousness on the part of reformers, persistent mismatches between means and ends, and an almost naive unwillingness to design laws with an eye toward how they will be received and used by political professionals. Successes are not usually given due credit because they fail to achieve unrealistic goals; the goals themselves, when unrealistic, breed their own failures." 4 We acknowledge that in almost every recommendation there may be both a good and the potential for a negative. We have not pretended the negative did not exist. Instead, we have tried to weigh the public good against the negative consequences and to recommend the proposals that we believe are best for Akron. We have tried, within the constraints outlined above, to craft a collection of proposals that reflect "community standards for Akron Ohio" in campaign finances. We found no "magic pill" that would cure all the perceived ills of the current political process. What we found were solutions that involved tradeoffs. We have tried to confront the policy choices openly, expressing the reasons for our decisions - our concerns as well as our hopes. IV. ANALYSIS Based upon an inventory of campaign finance proposals generated by the Center for Responsive Politics 5 and information we received from other publications, public testimony, and our own deliberations, the --------------------------------- 4 Malbin & Gais, supra note 2 at 3. 5 MONEY IN POLITICS, REFORM PRINCIPLES, PROBLEMS, AND PROPOSALS (Washington, D.C.: Center for Responsive Politics, 1996). 6
  • 7. Task Force determined that we could divide all proposals for changes in campaign finance into seventeen different categories: (1) electronic filing; (2) employer disclosure; (3) contribution limits; (4) time limits on fundraising (5) candidate spending limits; (6) candidate loan limits; (7) regulation of PAC contributions; (8) regulation of bundling; (9) regulation of war chests; (10) regulation of out-of-district contributions; (11) regulations of 'soft' money; (12) free or reduce rate broadcasting; (13) tax credits or deductions; (14) contribution vouchers; (15) partial public funding; (16) full public funding; and (17) regulations of cash contributions. As an aid to our own deliberations, we used these categories to structure our discussions. While we gave consideration to each of those seventeen issues in our deliberations, in this Report we address only those topics that led to a recommendation for adoption or those that were proposed by Dollars and Democracy and that the Task Force rejected. With respect to each issue, we outline what our recommendations are and why. When we make an affirmative recommendation, we try to point out the potential negative aspects of that recommendation as well as its benefits. A. CAMPAIGN SPENDING LIMITS: SHOULD BUCKLEY BE CHALLENGED? One could imagine a number of ways to limit campaign spending: limitations could be based upon past levels of expenditures, some ratio could be created between spending limits and the salary of the position for which the candidate was running, and/or a limitation could be calculated based upon the number of voters in the district. But, as set forth above in Section II ("Background"), while the Supreme Court's decision in Buckley allows many regulations of campaign finance, it prohibits campaign spending limits. There have been suggestions that Buckley could be challenged because there are new members on the Court, experience with the decision has raised problems the original court did not contemplate, or that a factual record could be created that would produce a different result than Buckley. The City of Cincinnati has recently taken that approach. In attempting to create a factual basis that would separate its situation from Buckley, Cincinnati commissioned a study by the Center for Responsive Politics. It conducted an opinion poll of Cincinnati citizens, including focus groups and telephone surveys. Cincinnati also provided numerous affidavits from current and former city council persons and statements from groups such as Common Cause and the League of Women Voters. It also utilized articles from newspapers such as the Washington Post and The Boston Globe. This information provided the basis for Cincinnati's enactment of laws providing for campaign spending limits. Those laws were struck down by the U.S. District Court in Cincinnati. The City appealed that decision to the U.S. Court of Appeals for the Sixth Circuit. A panel of that Court rejected the arguments of the City of Cincinnati and friend of the court briefs filed in Cincinnati's support by thirty-three states and the territory of Guam on April 27, 1998.6 In response to petitions requesting a re-hearing before all of the Judges of the Sixth Circuit, not one of the judges of that Court voted to grant the re-hearing. The City of Cincinnati is currently seeking review of that decision by the United States Supreme Court. Because the Supreme Court agrees to review only about eighty cases a year from the thousands filed with the Court, it is difficult to predict whether the Court will hear Cincinnati's case or not. Even if the Court would choose to hear the case, it is difficult to predict the outcome. New York University Law Professor Burt Neuborne's analysis suggests that four justices would vote to strike down campaign contribution ---------------------------------------- 6 Kruse v. City of Cincinnati, 142 F. 3d 907 6th Cir. 1998)(petition for writ of certiorari to the U.S. Supreme Court pending). 7
  • 8. limitations; two Justices would vote to uphold campaign spending limitations as well as contribution limits; and the views of three Justices are unknown. Because Akron, like Cincinnati, is in the Sixth Circuit, the Cincinnati decision is binding upon Akron unless there is review by the U.S. Supreme Court. Ile Task Force concluded, despite the appeal campaign spending limits have to many people from whom we heard in public and private settings, that this is not the time for the City of Akron to invest its scarce resources in re-litigating the case Cincinnati just lost. The resources question may not be important to some because it will be paid out of taxpayer monies. But we think the conservation of taxpayer monies is one of the roles of stewardship by government officials. We note that the City of Cincinnati reported that it had spent approximately $64,000 in legal fees in seeking to defend its ordinance challenging Buckley in the U.S. District and Sixth Circuit Court of Appeals.7 This is so even though it appears that at the Circuit level the City received free legal services from the National Voting Rights Institute whose attorney, John C. Bonifas worked on the brief and argued the case before the Circuit Court. 8 Further, because campaign regulations like these can be challenged under a federal statute that allows a court to make the defending city pay the attorneys fees of the challengers if the challengers prevail, ultimately Cincinnati may be required to pay thousands of dollars for the plaintiffs attorneys fees. These are significant costs that should hot be lightly undertaken. Consequently, we did not consider the merits of campaign spending limits and choose to conform our recommendations to the requirements of Buckley. B. FULLER DISCLOSURE Currently candidates are required to file with the Board of Election forms disclosure for each contribution received the following: 1. Name of the contributor; 2. Amount of the contribution; 3. Form of the contribution (cash, check, etc.); and 4. The address of the contributor. In many jurisdictions the candidate is also required to disclose the employer of the contributor. The theory behind disclosure is the idea that if the people know who the contributors are, then they can make judgments about the candidate in the elections. Giving money is a form of "endorsement" and we often judge a candidate by his/her endorsements as much as we do by the stands they take upon issues. Further, employers can promote a certain candidacy by "expecting" employees to contribute to campaigns. Diversity in the contributions of employees may indicate individual choice. Patterns where all employee contributions favor one candidate may indicate a corporate policy that should be known to the voters. One drawback to this additional disclosure was presented at the public hearings conducted by the Task Force. The fear was expressed that employer disclosure would facilitate employers checking upon the political activities of employees and even open employees up for potential retaliation if those views differed from those of the employer. We think those risks are minimal for two reasons. First the number of individuals making any contribution to campaigns is very small. Nationwide contributions are ------------------------------- 7 Associated Press, "Cincinnati City Council challenges spending law," Beacon Journal, Wednesday, July 8, 1998 D3. 8 142 F. 3d at 908. 8
  • 9. estimated at 4-6% of the voters.9 Thus, the opportunity for retaliation is small. Further, we heard no testimony to suggest that anyone in Akron has actually been the victim of retaliation. Nevertheless, in balancing the benefits of disclosure against the risks, the Task Force concluded that the appropriate "trade-off' is to follow the pattern set by state and federal disclosure laws: we recommend that all contributions of $100 or more require disclosure of the employer of the donor. We believe that employers are unlikely to marshal significant campaign funds in sums of less than $100 and that the exemption from employer reporting at this level will protect most employees from the risk of retaliation. Similarly, we believe that once the contribution reaches the $100 level, the benefits of disclosure outweigh the risks of retaliation. C. DISCLOSURE: ELECTRONIC FILING A second part of disclosure has to do with electronic filing. As early as 1995 the city of San Francisco required candidates to file all of their campaign finance data on a disk that could be loaded into a computer. The data was then placed on the World Wide Web where it could be accessed by the public, the media, other candidates, and all interested people. A similar system currently exists in New York City on a voluntary basis. According to the Center for Responsive Politics, by 1997 four states (Connecticut, Florida, Hawaii, and Oklahoma) had some form of mandatory electronic disclosure; five states (Arizona, Colorado, Massachusetts, New Mexico, and Texas) had voluntary electronic disclosure; and seventeen states indicated that they were in various stages of working on electronic disclosure programs. 10 Electronic disclosure can allow instantaneous access to the information. If the software is of high quality, it allows a user to sort the data according to his/her own criteria. According to the Washington, D.C. based Center for Responsive Politics the advantages to electronic filing are "enormous." "Allowing (or requiring) candidates to electronically transmit their campaign disclosure reports eliminates an abundance of paper and the cost of keypunching each candidate's campaign data into an office mainframe. Computerized filings can easily be converted into an electronic format that the public can access via computer terminals in local libraries or other public buildings, as well as in their homes. Moreover, the public can obtain electronic disclosure reports at little or no cost and without the hassle of setting aside time on a weekday, between the hours of 9 a.m. and 5 p.m., to travel to the state elections office. And electronic filing lets voters analyze political fund-raising before the election is over." 11 Currently Ohio requires only paper filings. Legislation is currently being drafted that would require some form of electronic disclosure. 12 The Task Force feels that electronic disclosure would be valuable. Yet we are concerned about the expense to the City of Akron if the City attempted to follow the lead of San ----------------------------------- 9 MONEY IN POLITICS, REFORM, PRINCIPLES, PROBLEMS, AND PROPOSALS (Washington D.C.: Center for Responsive Politics, 1996) at 5. 10 Alaska, Illinois, Iowa, Kentucky, Louisiana, Maine, Maryland, Michigan, Minnesota, Missouri, North Carolina, Oregon, Pennsylvania, Tennessee, Utah, Virginia, Washington, and West Virginia. This summary is based upon data from MARIAN CURRINDER, DIGITAL DEMOCRACY, A 50-STATE REPORT ON THE STATUS OF COMPUTERIZING CAMPAIGN FINANCE (Washington, D.C.: Center for Responsive Politics, 1997). 11 Id. at 2. 12 Though this proposal does not yet have a bill number, the Legislative Services Commission number is 122 1918-1. 9
  • 10. Francisco and implement its own electronic filing system. We are also concerned about the possibility that Akron could invest in an electronic filing system that could be made superfluous by a statewide system. We recommend that city officials work with members of the legislature, the Summit County Board of Elections, and the Secretary of State of Ohio in crafting a bill that would meet the needs of the entire state and, simultaneously, bring the benefits of electronic disclosure to the Akron community. If it appears that the State will not adopt electronic disclosure that includes the City of Akron before January 1, 2001, then we recommend that the City of Akron hire a consultant to work on implementation of such a program locally by January 1, 2002. D. DISCLOSURE: FRIDAY BEFORE ELECTION REPORTS One proposal from Dollars and Democracy reads as follows: "Friday Report: All candidates for Mayor or City Council shall submit a Campaign Finance Report to the Clerk of City Council by noon on Friday prior to the Primary Election and General Election. This report shall identify all campaign contributions and expenditures made as of said Friday and this report shall be available for public viewing by the Clerk of City Council at the Akron Municipal Building within an hour after the filing deadline." (emphasis added). During the course of the research conducted by the Task Force, we received anecdotal information suggesting that sometimes significant campaign contributions are received in the closing days of a campaign, but not publicly disclosed until after the election takes place. If the public has an interest in knowing the amount and identity of campaign contributions and their contributors, then it also has an interest in receiving that information prior to the election. Consequently, The Task Force recommends the adoption of the Friday Reporting proposals except for the portion that we have underlined. State law currently requires the filing of a pre-election report. That report contains the normal disclosures concerning campaign contributions. The need is for a report of campaign contributions received after the pre-election report but before the Friday noon deadline. Yet the Dollars and Democracy proposal requires the Friday Report to contain ''all'' contributions whether they were previously disclosed or not. The Friday before elections is a very difficult time for candidates. They are often making last minute efforts to reach the voters with their message about why they should be elected to office. We believe it would be a mistake to require the redundant disclosure of old and new contributions as required by the Dollars and Democracy proposal. Because the problem to be solved is the disclosure of contributions between the filing of the preelection report and the Friday Report, we recommend that only those new contributions should be disclosed in the Friday Report. Further, we recommend that the disclosures be required for all elections, including primary, general, run-off, and special elections. The Task Force also recommends that if the City can contract with the Board of Elections, that the "Friday Report" be filed with the Board of Elections in accordance with our recommendation III, C. If it is impossible to contract with the Board of Elections, then the Task Force recommends that the "Friday Report" be filed with the Clerk of City Council. Based upon our discussion with a representative of the Board of Elections and their experience with the public disclosure of campaign finance documents, we have concluded that requiring the Clerk of City Council or the Board of Elections to provide meaningful public disclosure "one hour after the filing deadline" is to require the impossible. The Task Force recommends that the Friday Reports be made available to the public before the close of business on the date they are filed. 10
  • 11. E. CAMPAIGN CONTRIBUTION LIMITS While Buckley prohibits campaign spending limits, it authorizes campaign contribution limits. Campaign contribution limits are now common. They exist at the state and federal levels, as well as in many municipalities across the nation. Campaign contribution limits do not come without a cost. The results of fundraising can usually be configured as a pyramid, with a large number of small contributions at the base, a few large contributions at the top, and moderate contributions in the middle. Contribution limits typically cut the "top" off the fundraising pyramid. The "good" effect this has is to make the contributions a candidate receives more balanced. With a "cap" on the size of donations, the candidates will receive many donations at the cap; the difference between the size of the donation at the limit and the smaller donations at the base of the pyramid will be smaller; and any perception of favor for a few large donors will disappear because the few large donors will disappear. But there are some disadvantages to having contribution limits as well. It is more difficult to raise the same amount of money with smaller contributions. Thus, in an indirect way contribution limits can lead to spending limits for candidates who rely upon fundraising to fund their campaigns. Supporters of spending limits may welcome this opportunity to do indirectly what the Court in Buckley said cannot be done directly. But there are two hazards that exist for a candidate of modest means. First, Buckley makes it clear that a candidate can spend as much of his/her own money as he/she wants to spend. Thus, contribution limits that indirectly limit spending can make a candidate of modest means vulnerable to wealthy candidates. Second, the Supreme Court's decision in Colorado Republican Federal Campaign Committee v. FEC, 518 U.S. 604 (1996) makes it clear that a party can spend unlimited amounts of money to influence a campaign, as long as that spending is not "coordinated" with the candidate. Thus, contribution limits can make a candidate of modest means vulnerable to a wealthy party. Further, if a candidate wants to continue raising money at the pre-limitation levels, then he/she will have to devote more time to fundraising. This will necessarily take away time from direct campaigning by challengers and from the day-to-day duties of incumbents. Thus, campaign contribution limits may have the unintended consequence of forcing all candidates to spend even more time in fundraising activities. Looking squarely at these dilemmas, we believe that the benefits of contribution limits outweigh the hazards and that some form of campaign contribution limits should be adopted. Though there is litigation over the amount by which contributions can be limited, the general concept of campaign contribution Limitations appears to have been upheld by every court considering them. 'Me tension between the good that can come from campaign contribution limits and the harm that can come from them can best be balanced by setting the amount by which contributions are to be limited. In trying to select an amount that would be appropriate for Akron, Ohio, we looked at these factors: (1) the percentage of the past contributors that would be affected; (2) the percentage of the total contributions that would be eliminated; (3) whether the limitations would have a "dramatic adverse effect" upon the total amount of funds a candidate could raise; and (4) whether the candidates would still have a reasonable likelihood of "amassing the resources necessary for effective advocacy" of their candidacy. 11
  • 12. Buckley itself gives us a key to determine how "limited" campaign limits can be. The Court upheld the $1,000 spending limits because it saw "no indication ... that the contribution limitations imposed by the Act would have any dramatic adverse effect on the funding of campaigns and political associations." 424 U.S. at 21 (emphasis added). In applying this test - whether there were "dramatic adverse effects" in the limitations - the Court noted that the limitation would have prohibited only 5. 1% of the contributions to Congressional campaigns. 424 U.S. at 21, n. 23. Similarly, in noting the effect of the law upon the parties challenging it, the Court noted that the $ 1,000 limitation only effected 10 out of 4,000 contributions for one party; one out of 9,500 contributions for another party; no contributions for a third party; and only five contributions for a fourth party. 424 U.S. at 34, n. 40. Further, Buckley suggested that the contribution limitation could not be so low as to prevent "candidates from amassing the resources necessary for effective advocacy" of their own election. 424 U.S. at 2 1. In applying these principles to local conditions, one court struck down a $ 100 limit to political committees on the grounds that it would prohibit one-third of the past contributions. Day v. Hayes, 863 F. Supp. 940, 953 (D. Minn. 1994). This case was affirmed by the U.S. Court of Appeals for the -Eighth Circuit in an opinion that held "that the $ 100 limit is so low as to infringe upon the citizens' First Amendment right to political association and political expression." 34 F.3d 1356, 1365 (8th Cir. 1994) Another Court stuck down $ 100 limits when it saw that "a large percentage of contributors used to give amounts in excess of the limits now imposed." Nat I Black Police Ass'n. v. Dist. of Columbia Bd. Of Elections and Ethics, 924 F. Supp. 270, 275 (D.D.C. 1996). In looking at the effect upon specific races, the Court found the contribution limits cut out between 17% and 54% of the contributions to Mayoral candidates and between 12% and 85% of the contributions to council races. 924 F. Supp. at 275. 13 The general principle to be gleaned from this analysis is that one can cut the "top" off the fundraising pyramid, but one can not cut through the middle of the pyramid. In addition to looking to the effect of new limits upon past contributions to determine whether they would have "dramatic adverse effects", other lower courts have looked to the effect of the limits upon the ability of the candidate to effectively campaign in the district. Such facts include looking at "the size of the district, the cost of media, printing, staff support, [and] news media coverage..." California Prolife Council PAC v. Scully, 989 F. Supp. 1282, 1298 (E.D. Cal. 1998). This we have done. We have considered the size of the wards. We have examined estimates of the cost of the media, supplies, and staffing one might need in such a campaign. We have also examined the actual expenditures in all council and mayoral races between 1992 and 1997. Taking all of these factors into account, the Task Force recommends that campaign contributions to ward-council candidates be limited to $750 per election. This would eliminate approximately 17.63% of the money received through contributions and affect approximately 1.65% of the contributors. For the election times in question, these limits would have affected fifty-one contributions ranging from $753 to $11,848.25. Taking a similar approach with Council-at-large election, the Task Force recommends that campaign contributions to candidates for council-at-large be limited to $1,000 per election. The election data for 1992-1997 suggests that this would eliminate 10.7% of the total money raised, and affect .72% of the donors. While this is not as deep of percentage cut as we recommend for ward councilpersons, we note that the wards are still small enough that a candidate who chooses to can make a difference with door-to-door campaigning. We believe that an At-large Council person is required to make media purchases in ----------------------------- 13 There was no decision by the Circuit Court because the District Court decision was vacated when the caps were changed from $100 to $2,000 for mayoral candidates, $1,000 for at large council candidates, and $500 for ward councilmen. 12
  • 13. order to mount a successful campaign. For the election times in question, this limit would have affected thirteen contributions ranging from $1,050 to $6,481. When this same approach is applied to the office of Mayor, the Task Force recommends that mayoral campaign contributions be limited to $1,500. This would reduce the total campaign funds available by 5.48% and the contributions affected by 1.96%. While the office of the Mayor would have the smallest reduction in the percentage of campaign funds, the limitation would effect the highest percentage of contributors. We believe that the visibility and importance of the office of Mayor, when combined with the media costs associated with running for that office, supports the conclusion that $1,500 is an appropriate contribution for that office. For the election times in question, this limit would have affected forty-three contributions ranging from $1,550 to $10,000. All of these limits would have one desirable effect: they would cut the "top" off the pyramid, creating so many contributions at the limit that there could be little chance of a realistic perception that a few large donors were inappropriately affecting city policy. At the same time, they would allow candidates a realistic opportunity to raise the money necessary to mount a successful campaign. Further, there is a great likelihood that these limits would withstand constitutional challenge. By way of comparison, we note that at the national level limits range between $ 1,000 and $5,000, depending upon whether the donor is an individual, partnership, PAC, or political party. In Ohio, the limit for individual contributions to a statewide candidate is $2,500. See R.C. 3517.102(B)(1)(a). Most cities - including the Ohio cities of Columbus, Dayton, and Toledo - have no campaign contribution limitations. In Cleveland individual contributions are limited to $1,000, but PACs of certain sizes can contribute up to $8,000. We have chosen not to make distinctions between individuals, PACs, parties, partnerships, and other potential contributors, allowing sources to make up to $5,000 contributions as is done at the national level or $8,000 as is done in Cleveland. Instead, the Task Force recommends that these campaign contribution limits apply to all contributions from whatever source. We believe that this simplified approach justifies slightly higher limits than we might propose if we used the sliding scale approach adopted by other government entities. We realize, of course, that Dollars and Democracy has proposed a contribution limit of $100. But, there is nothing to indicate that Dollars and Democracy considered the admonitions of the courts, the history of campaign expenses, the costs of media, or any of the other factors that the Task Force reviewed. Their plan would eliminate 48.75% of the contributions and affect 20% of the contributors in Ward Council races. Their plan would eliminate 22.09% of the contributions and effect 4.24% of the contributors in Council-at Large races. Their plan would eliminate 36% of the contributions and affect over 22.62% of the contributors in the mayoral races. These limitations go far beyond the "top" of the pyramid and cut deeply into its heart. It is then, no wonder that outside observers raise questions about limitations that low. In speaking of state contribution limits in the range of $100 to $500 New York University Law Professor Burt Neuborne indicates that "lower courts have been striking down low contribution limits on the ground that small contributions are not corrupting." 14 Similarly, when The Brennan Center reviewed the Dollars and Democracy proposals for a member of our Task Force, Senior Attorney Deborah Goldberg concluded: -------------------------------- 14 Burt Newbome, "A Survey of Existing Efforts to Reform the Campaign Finance System," (New York City: Brennan Center for Justice 1997) at 7. 13
  • 14. " ... the monetary levels set may raise constitutional questions. We know of no court that has upheld a $100 limit, and the Eight Circuit (U.S. Court of Appeals] has twice invalidated $300 limits (albeit for much larger jurisdictions than the City of Akron)." 15 Attorney Goldberg also identified two cases that seem applicable to Akron's situation, in which a $ 100 limitation was struck down. In one case from California a $100 limit was struck down for local offices in which the population represented was under 100,000.16 In another case, a $100 limitation was stuck down for district-wide offices. 17 Our own research identified a third case in which a $ 100 limit on contributions to non-party political organizations was struck down by a federal court as being in violation of the First Amendment. 18 The discussion of limitations on campaign contributions requires a definition of contributions and raises questions of whether. it applies to loans and in-kind contribution. With respect to loans, the Task Force was concerned about "loans" that eventually became contributions. These could be loans that were "forgiven" or for which there was no effort to collect the amount due. Functionally these are the same as contributions. Similarly, the Center for Responsive Politics points out that loans can have the effect of disguising one's campaign donors: during the election the public knows only that a loan has been made; after the campaign contributors can give the candidate money to pay off the loan. While the Task Force has searched for a way to distinguish between these types of loans and 'true' loans, ultimately we were unable to find a reasonable way to do so. Consequently, we recommend that the term "contribution" be defined to include both gifts and loans. We also looked at the question of "in-kind contributions." We emphasize that we believe the City cannot regulate the donation of one's own time. If volunteers want to give of their own time to walk door-to-door, if a lawyer wants to volunteer his or her advice on legal matters, if an accountant wants to volunteer his or her time to keep the books of a campaign, then all of those actions are and should be beyond the regulations of the City. But a different circumstance exists when someone donates tangible items of value (envelopes, postage, signs, etc.) or pays wages to someone else to make telephone calls, go door-to-door, or engage in similar activities. The latter are the type of "in-kind contributions" that the City must regulate in order to try to keep the electoral process fair. We recommend that the term contribution be defined to include monetary gifts, loans, and in-kind contributions. F. LIMITATIONS ON CASH CONTRIBUTIONS AND RECEIPTS The Task Force spent some time considering the Dollars and Democracy proposal to limit cash contributions to a maximum of $25. Given public allegations that an alleged cash bribe was paid to a City Councilman, the public atmosphere would seem to support such a limitation. But the Task Force notes that there are laws against bribery. This incident is currently in the courts for the very purpose of determining whether or not those laws were broken. Bribes can be paid by check as well ---------------------------- 15 Deborah Goldberg to Tina Merletti September 10, 1998. Attorney Goldberg cited Russell v. Burriss, 146 F. 3d 563, 571 (8th Cir. 1998) (petition for writ of certiorari pending, 67 L.W. 319 1) and Carver v. Nixon, 72 F. 3rd 633 (8thCir. L995) cert. den. 518 U.S. 1033 0996). 16 California ProLife Council Political Action Comm. V. Scully, 989 F. Supp. 1282, 1297 (E.D. Cal. 1998). 17 National Black Police Ass'n. v. District of Columbia Bd. Of Elections and Ethics, 924 F. Supp. 270, 281 (D.DC. 1996) vacated as moot, 108 F. 3d 346 (D.C. Cir. 1997). 18 Day v. Hayes, 863 F. Supp. 740 (D. Minn. 1994) aff'd 34 F.3d 1356 (8th Cir. 1994). 14
  • 15. as by cash and large donations in the form of a check could just as well be a bribe as a contribution in cash. As the Brennan Center Attorney Goldberg wrote in her analysis of the Dollars and Democracy proposal: "It is difficult to see what purpose this provision serves, other than to make fundraising more difficult..." Further, the Task Force was concerned about how such limitations would affect ward candidates, especially those who hold spaghetti and chicken dinner community fundraisers. Concern was expressed that children would become donors if they attended these events with their families. Further concern was expressed that families would be discouraged from attending these time-honored community events if extra disclosures and extra red tape were added. Ultimately, we determined to strike the balance between the benefits of recordkeeping and convenience. The Task Force recommends that the City of Akron prohibit cash contributions and cash loans over $100. We further recommend that candidates who accept cash contributions or cash loans under $101 be required to keep a duplicate receipt book, dispensing a receipt to each cash contributor or cash lender and filing another with the Board of Elections. G. "SURPLUS" CAMPAIGN FUNDS Dollars and Democracy suggests that at the end of a campaign a candidate should be required to dispose of any leftover campaign money. This proposal is apparently aimed at reducing the ability of incumbent candidates to secure re-election. While there is an appeal for this type of proposal as means of "leveling the playing field" between incumbent and non-incumbent candidates, there are several disadvantages. The Task Force heard credible testimony at the public hearings that this rule would simply result in the candidates spending all of their money in their campaigns. One unintended consequences of this provision would be to increase campaign spending. This proposal would also increase the dependency of candidates on donors. With no reserves, each new election would require the candidate to go back to donors again to raise money. Because it is easier to raise money from large contributors than from small contributors, this proposal would have the effect of increasing - not decreasing -dependency on larger donors. Further, this proposal would have the unintended consequence of requiring candidates to spend more time on fundraising. Moreover, given the need to articulate a strong government interest in regulating campaign spending, it is unlikely that this proposal could pass constitutional muster. According to Brennan Center Senior Attorney Deborah Goldberg: "Courts have found 'spend down' provisions unconstitutional, because they are unsupported by any anti-corruption rationale." 19 As discussed below, we think there are significant ways in which the "playing field can be leveled", but this is not one of them. ----------------------------- 19 Goldberg, supra note __ at 2 citing Shrink Missouri Gov't PAC v. Maupin, 71 F. 2a 1422, 1428 (8th Cir. 1995); and Service Employees Int'l Union v. Fair Political Practices Comm'n, 721 F. Supp. 1172 (E.D. Cal. 1990) aff'd 955 F. 3d 1312 (9th Cir. 1992). 15
  • 16. H. FUNDRAISING SEASON Dollars and Democracy proposes to limit the "fundraising season." It would appear that the goal of this provision is to link it with the "surplus" campaign funds provision and remove an advantage that an incumbent might have in accumulating campaign funds. But such a provision would also have several negative effects. One of these would be to force the candidate to have an even greater dependency on donors. Having expended all of one's funds in one year, the candidate would be obligated to return to the same donors and ask for yet another campaign contribution. If, as Dollars and Democracy seems to suggest, it is not healthy for candidates to be dependent on campaign contributors, then this provision has the unintended consequence of increasing that dependency. Further, there are grave risks that this provision will not survive constitutional challenge. The Brennan Center's Senior Attorney Deborah Goldberg's analysis of this portion of the Dollars for Democracy proposal reads: 'This restriction will almost certainly be found unconstitutional under the First Amendment and Equal Projection Clause of the Fourteenth Amendment. With one exception [where the issue was not properly before the court] every court that has decided a constitutional challenge to time limits on fundraising has invalidated them outright." 20 For all these reasons - reasons of policy as well as of law - we reject the idea that there should be a contracted "fundraising season." I. LIMITS ON NONRESIDENT CONTRIBUTIONS A Dollars and Democracy proposal would limit contributions for Mayor and At-Large Council persons from "natural persons who reside outside of the City of Akron" to 25% of the total amount of money the candidates raises. There are numerous difficulties with this proposal. There is no explanation why this provision applies to mayoral and council-at-large candidates, but not to ward candidates. Similarly, there is no explanation why the percentage limitations on out-of-district contributions applies to people, but not to parties, PACs, or other similar entities. This provision is very difficult to administer. Candidates will not know whether they are at or above the 25% limit until the end of the campaign. A similar provision was adopted by the voters of Oregon, using a 10% limitation. 21 The U.S. District Court for Oregon struck the provision down. 22 In words that would seem to apply to the Dollars and Democracy proposal, the Court noted that the Oregon provision ----------------------------- 20 Goldberg, supra note 16 at 1-2. Attorney Goldberg cited the following cases: North Carolina Right to Life v. Bartlett, 3 F. Supp. 2d 675, 681 (E.D.N.C. 1998), Shrink Missouri Gov't PAC v. Maupin, 922 F. Supp. 1413 (E.D. Mo. 1996); Arkansas Right to Life State Political Action Comm. V. Butler, 983 F. Supp. 1209, 1233 (W.D. Ark. 1997); Zeller v. Florida Bar, 909 F. Supp. 1518,1528 (N.D. Fla. 1995); and State v. Dodd, 561 So. 2d 263, 264 (Fla. 1990). The exception, in which there was no incumbent challenging the law, was Emison v. Cataloano, 951 F. Supp. 714, 723 (E.D. Tenn. 1996). 21 There is some confusion as to whether this was a total ban or a ban of out of district contributions over 10%. At page 7 of the LEXIS version of the Circuit Court's opinion it refers to a ban on "all out-of-district donations " But the District Court indicated that the ban only applied to contributions in excess of 10%. 899 F. Supp. at 497. Further, 16
  • 17. "...burdens a contributor's political speech and right to associate by liming the amount of donated funds that may be used by the candidate." 899 F. Supp. at 496. Similarly, the District Court noted that the Oregon provision, like that proposed for Akron, "prohibits non-corrupt, out-of-district contributors from associating with candidates running for state offices." 899 F. Supp. at 497. The Court also noted that those elected in the district had the ability to impact the lives of those outside the district. On August 11, 1998 this decision was affirmed by the U.S. Court of Appeals for the Ninth Circuit, concluding that the measure was "not closely drawn to advance the goal of preventing corruption and fails to pass muster under the First Amendment." Vannatta v. Keisling, 1998 U.S. App. LEXIS 18377 (9th Cir. 1998). In so holding, the 9th Circuit concluded that Oregon was "unable to point to any evidence which demonstrates that all out-of-district contributions lead to the sort of corruption discussed in Buckley." 23 While it is always difficult to know whether our own U.S. Court of Appeals for the Sixth Circuit would reach the same conclusion, we do note that in none of the materials Dollars and Democracy provided to the Task Force is there any evidence of "corruption" alleged to be caused by out-of-district contributions. Further, Akron is the metropolitan center for the Summit County and of the surrounding area. Many people work in Akron, but live outside of the city. It was suggested that over 60% of the teachers in the Akron public school system reside outside of the municipal limits of Akron. Similarly, the Task Force heard testimony at its public hearings indicating that approximately two thirds of the people paying income tax to Akron reside outside of the City. Many people own businesses and live outside of the City. 'Me City provides water to adjacent areas. The City government has a real and significant impact on many individuals living outside of its boundaries. By the same token the health and vitality of the economic well being of the City is directly linked to the efforts of many people who live outside of its boundaries. It is one matter for these people to realize that they cannot vote in Akron elections. It is quite another to argue that these individuals - with such a real and significant connection to the city - cannot make contributions in order to present their views to the electorate. The Supreme Court's decision in Buckley equates money with free speech. The Dollars and Democracy group presented a document to the Task Force claiming that "Money does not equal free speech." 24 It is this premise that puts Dollars and Democracy on a collision course with the Supreme Court and results in so many of its proposals being constitutionally defective. This proposition might be tested against an analogy. The City could not prohibit out-of-city newspapers from exercising their free speech right to endorse city candidates. It seems equally plausible that the courts would hold that out-of-district people have a free speech right to contribute money to those same candidates. Further, both in the deliberations of the Task Force and at the public hearings, great concern was expressed that the limitations on out-of-city contributions would have a negative impact upon minority candidates. Many* examples were given where nationally recognized African-Americans had been successful with the help of out-of-district contributions. Indeed, a representative of the Akron branch of ------------------------------------ page 5 of the LEXIS version of the Circuit Court's majority opinion (authored by its dissenter on other grounds) also refers to a 10% limit. 22 Vannatta v. Keisling, 899 F. Supp. 488 (D. Org. 1995). 23 The dissenting judge in that case would have upheld the regulation as properly furthering the republican form of government of the state. It may be that such a view is ultimately adopted by the Supreme Court. But as of this date the Supreme Court has never recognized such an interest as overriding first amendment interest in making campaign donations. 24 "Dollars & Democracy Project, Moral and Religious Principles on Money and Politics." 17
  • 18. the NAACP testified in opposition to this proposal because of the negative impact it would have upon minority candidates. Finally, we want to suggest that as a practical matter the enactment of such a provision would make little difference. Out of city contributors could simply make contributions to the major political parties that, in turn, could make independent expenditures on behalf of the candidates. J. ISSUES FOR THE FUTURE: PUBLIC CAMPAIGN FINANCING The ultimate goal in campaign finance regulation is to "level the playing field" - to give all candidates an equal chance to prevail upon the merits of their ideas and the quality of their leadership, while simultaneously trying to insure that government is equally responsive to all of its constituents. Prior sections of this report outline reasons why it is not so easy to devise a way in which to pursue that lofty goal. To those legal reasons we may add practical ones: the person with a "celebrity" name will generally have an advantage over a less we 11 known candidate, even if the latter might be more competent; the person whose appearance or voice is consistent with the voter's "image" of a leader will have an advantage over someone whose appearance or voice is not consistent with that image. People's equal desire to hold an office may not be matched with equal competence. But in considering various ideas and programs from across the country the Task Force was interested in the idea of some version of public funding of municipal election campaigns. In one form or another such public funding occurs not only at the federal level, but also in at least twenty-two different states. 25 A typical program might combine the following elements: (a) candidates would be required to raise a minimal amount of money through small donations by a date certain; (b) if the candidate raised the minimum amount of money and IF the candidate agreed to abide by campaign spending limits, then the candidate would be entitled to receive pubic funds to fund the remainder of his/her campaign; and (c) if the candidate was opposed by a wealthy candidate who chose to spend his/her own money and, in order to avoid spending limits, would not accept public funding, then the first candidate could receive public funds without spending limits. Such a program costs taxpayer money. It shifts the expense of campaigns from the private donor to the public taxpayer. But it also offers the promise of meeting many of the goals that community leaders often articulate: it reduces any perceived dependence by elected officials upon large donors and it helps promote equal responsiveness to the voters. Further, while it does not take away the "natural" advantages discussed above, it would appear to in many ways "level the playing field." Virtually every person with whom the Task Force discussed public funding proposals felt that the public would not support the added expenditures required. Though many claim that the public is discontent with the private financing of campaigns, no strong sentiment emerged for the public funding of those campaigns. Given the conclusion of the Task Force that any recommendation involving the public funding of municipal campaigns would be premature, we did not fully investigate the on-going ------------------------------ 25 Malbin & Gais, supra note 2 at 23. 18
  • 19. experiments with public funding across the country and are not prepared to make a recommendation for or against public funding. The Task Force recommends that citizens groups, individual citizens, the media, and governmental officials investigate and monitor the efforts of other government entities in partial public funding with an eye towards determining whether a full inquiry into a study of partial public financing would be desirable at some time in the future. K. ENFORCEMENT Campaign finance laws are enacted with the expectation that candidates and donors will comply with those laws. While voluntary compliance is the best method of compliance, to hope to be universally effective there must be some enforcement mechanism. While matters of fraud and bribery in elections are typically enforced with criminal penalties, violations of campaign finance regulations are typically enforced with civil penalties. The Dollars and Democracy initiative provides two forms of enforcement. Section 6 indicates that all contributions over their proposed $50 threshold that do not include the name of the employer must be returned to the donor. Senior Attorney Goldberg of the Brennan Center writes the following in her analysis of this provision: "...the requirements are quite onerous. In addition to reporting every single contribution, returning contributions over $50, if employment information is unavailable, is very burdensome. Federal law requires best efforts to comply with reporting requirements, not perfect compliance. See 2 U.S.C. Section 432(I)." In Section 7, the Dollars and Democracy proposal requires "any violation" of the proposal a criminal offense "to be reported to the Akron Police Department" and punishable "as a misdemeanor of the first degree..." The Brennan Center analysis of this provision is: "This provision violates Due Process [as guaranteed by the Fourteenth Amendment to the U.S. Constitution]. Criminal penalties cannot be invoked for 'any' violation of the campaign finance requirements, including inadvertent violations. The fact that there are criminal penalties also increases the likelihood that the [Charter] Amendment will be found unconstitutionally vague." A look at the legislation passed by a sampling of other municipalities suggests the same result. Initially, it should be noted that most of the cities in Ohio do not have any separate, municipally enforced campaign finance regulations. Toledo and Dayton, the two Ohio cities closest to Akron's size in population, do not have any municipal campaign finance regulations. Cincinnati, Cleveland, and Piqua all use civil penalties rather than criminal penalties to enforce their campaign finance regulations. Only Upper Arlington, whose population is 34,128, has a provision similar to that proposed by Dollars and Democracy. We find the same pattern in our own sampling of other cities. As far as we can determine, there are no criminal penalties in Seattle, Houston, Los Angeles, or Albuquerque. Three cities in our sample did use criminal penalties, but not for "any" violation. Rather, they followed the traditional rules of criminal law 19
  • 20. and required some form of "intentional" violation: Denver ("knowing violation'); San Luis Obispo ("knowingly and willingly'' violating the ordinance); and Tucson ("knowingly and intentionally" violating the regulations). The only provision in our sample like that proposed by Dollars and Democracy was from Fremont, California. The use of criminal penalties for "any" violation could produce absurd results. Matters on which candidates currently are given the right to make corrections for unintended omissions would become crimes. It is difficult to believe that the courts would uphold such a penalty, without the usual "intent" requirement. Further, the Dollars & Democracy proposals overlook some of the practicalities of their enforcement proposal. First, the Akron Police Department has special expertise and training in a number of important areas. We can all celebrate their many accomplishments and still respectfully note that they have no expertise or training in enforcing campaign finance regulations. Second, the criminal justice system generally leavens statutes with common sense by allowing police officers and prosecutors to exercise discretion in determining whether a given violation should be investigated or prosecuted. It is not desirable to throw "political controversies" of this kind into the hands of police officers. If they make the normal type of discretionary decisions to investigate or not to investigate, the opponent of the opposite political party will claim their action is politically motivated, even when it is not. The effectiveness of the police depends upon their ability to be a non-political enforcement agency. Asking them to enforce campaign finance regulations will erode the perception of political neutrality. Moreover, in the event of an allegation of a violation during a contest for Mayor, it should be noted that Section 67 of the City Charter provides that the police "shall be under the immediate supervision of the Mayor...." This could create a potential or real conflict of interest. Further, one may note that the ultimate decision about prosecution would rest with the Law Director, who is also a mayoral appointee. The ability of City Council to superintend matters pertaining to the Police Department allows for real or perceived conflicts of interest that could easily arise in the context of contested conduct in a councilperson's race as well. These policy considerations, the patterns seen in other cities, and the constitutional considerations, cause us to reject new criminal penalties. We point out that current criminal penalties exist for submitting false documents, including false campaign reports. See R.C. 3599.36 (Election Falsification). Criminal penalties also exist for bribery, elections fraud, and a variety of other matters.26 We believe that the better policy is to use a remedial approach, allowing times for amended disclosures and fines for violations. We also believe that the expertise of existing enforcement agencies, the Summit County Board of Elections and the Ohio Election Commission, should be used if possible. The Task Force recommends that in addition to all existing state regulations and penalties applicable to campaign finances that the following penalties for the City of Akron's additional requirements be adopted: (1) for any campaign finance form on which good-faith errors exist, the candidate shall be given a reasonable time, after notice of the problem, to file correct information. (2) for contributions or loans above the contribution limit, the candidate will be required to pay to the City of Akron general fund three dollars for every dollar in excess of the limit; ----------------------------- 26 R.C. 2921.02 and 35999.01 (Bribery), 2921.43 (soliciting or receiving improper compensation), 3599.02 (sale of votes), and R.C. 2921.13(A)(3) (falsification). 20
  • 21. (3) that for intentional or persistent violations the candidate shall be fined $500 or live times the excess, whichever shall be greater; and (4) that for any filing not made, the candidate shall be fined $100 per day until the form is riled, but with respect to the Friday before election filing the fine shall be $500 per day. The Task Force recommends that representatives of the City work with the Ohio Legislature to secure the passage of H.B. No. 495 or some similar legislation that would authorize the City of Akron to contract with the Summit County Board of Elections and the Ohio Election Commission for the enforcement of these provisions consistent with the recommendations set forth above. 27 If it is impossible to contract for enforcement with the Summit County Board of Elections, then the Task Force recommends that some municipal enforcement agency be created that could be effective and yet not require substantial resources to operate. Given the importance of having an independent agency that would be perceived to be fair to all candidates, this is not an easy task. One example of how that might be done is to appoint a three-member Campaign Finance Commission to carry out these duties with the power to enforce these recommendations including: (a) power to subpoena documents; (b) power to initiate judicial process to enforce its decisions; and (c) power to level fines. Such a Commission could be appointed in the following way: (a) one resident of the City of Akron, not an officer in any political party, by the Chair of the Summit County Democratic Party; (b) one resident of the City of Akron, not an officer in any political party, by the Chair of the Summit County Republican Party; and (c) one resident of the City of Akron, not an officer in any political party, appointed by the Mayor of the City of Akron but mutually acceptable to the two Commissioners appointed by the two political parties. (d) Such Commissioners would not be full-time employees of the city and would serve on a part-time, as needed basis. (e) Commissioners could be appointed on staggered, four year terms; (f) Commissioners could be initially compensated at some hourly rate equal to that which the city uses for outside professional consultants (g) Such Commissioners could be removed by a 3/4th vote of City Council, but only for misconduct ("good cause"). (h) Someone would have to be assigned to represent the Commission in the court and it would need appropriate staff, though these might be "loaned" staff from other city offices. Our purpose in setting forth this example is not to propose the perfect enforcement process, but rather to illustrate the fact that if the Board of Elections and Ohio Elections Commission cannot enforce the municipal regulations, then other options are available. ------------------------------- 27 Section 3501.111(A) is the portion of the bill that would apply to this recommendation. 21
  • 22. L. ADMINISTRATIVE RECOMMENDATIONS We recognize that there have been many changes over the past decades. To reaffirm the values of good government and to hold high aspirations up to individuals who may be elected to public office in the future, the Task Force recommends that the City Council review the International Municipal Lawyer's Association Model Ordinance on Ethics to determine whether its provisions might be suitable for adoption in Akron. We also believe that the implementation of new election rules and regulations should come at a time when they can affect the entire election cycle. Consequently, the Task Force recommends that these recommendations take effect on January 1, 1999 or January 1, 2000, whichever is the earliest practical implementation date. Finally, we do not suggest that these recommendations constitute the "perfect" approach to campaign finance regulation or the approach for all time. We do believe that taken as a package, these recommendations constitute a good first step. But we also view them as a tentative step that must be monitored and updated. The Task Force recommends that every rive years an independent Task Force be created to review the Akron Municipal Campaign Finance Regulations and submit additional recommendations or modifications to the City. V. RECOMMENDATIONS In summary, the Task Force presents the following of recommendations: 1. We recommend that all contributions of $100 or more require disclosure of the employer of the donor, 2. We recommend that city officials work with members of the legislature, the Summit County Board of Elections, and the Secretary of State of Ohio in crafting a bill that would meet the needs of the entire state and, simultaneously, bring the benefits of electronic disclosure to the Akron community. If it appears that the State will not adopt electronic disclosure that includes the City of Akron before January 1, 2001, then we recommend that the City of Akron hire a consultant to work on implementation of such a program locally by January 1, 2002. 3. The Task Force recommends the following "Friday Report" provision: Friday Report: All candidates for Mayor or City Council shall submit a Campaign Finance Report to the Board of Elections (or, if the Board of Elections cannot accept the filing, the Clerk of City Council) by noon Friday prior to any election. This report shall identify all campaign contributions between the filing of the pre-election report and that Friday. The report shall be available for public inspection before the close of business that same day. 4. We recommend that campaign contributions limits be adopted in the following amounts per election: a) Ward Council $750 b) Council-at-Large $1,000 22
  • 23. c) Mayor $1,500 5. The Task Force recommends that the campaign contribution limits apply to all contributions from whatever source. 6. We recommend that the term "contribution" be defined to include gifts, loans, and in-kind contributions. 7. The Task Force recommends that the City of Akron prohibit cash contributions and cash loans over $100. 8. The Task Force recommends that candidates who accept cash contribution or cash loans under $101 be required to keep a duplicate receipt book, dispensing a receipt to each cash contributor or cash lender and filing another with the Board of Elections. 9. The Task Force recommends that citizen groups, individual citizens, the media, and governmental officials investigate and monitor the efforts of other government entities in partial public funding with an eye towards determining whether a full inquiry into a study of partial public funding would be desirable at some time in the future. I 10. The Task Force recommends that in addition to all existing state regulations and penalties applicable to campaign finances that the following penalties for the City of Akron's additional requirements be adopted: (1) for any campaign finance form on which good-faith errors exist, the candidate shall be given a reasonable time, after notice of the problem to file correct information; (2) for contributions or loans above the contribution limit, the candidate will be required to pay to the City of Akron general fund three dollars for every dollar in excess of the limit; (3) that for intentional or persistent violations the candidate shall be fined $500 or five times of the excess, which ever shall be greater; and (4) that for any filing not made, the candidate shall be fined $100 per day until the form is filed, but with respect to the Friday before election filing the fine shall be $500 per day. 11. The Task Force recommends that representatives of the City work with the Ohio Legislature to secure the passage of H.B. No. 495 or some similar legislation that would authorize the City of Akron to contract with the Summit County Board of elections and the Ohio Election Commission for the enforcement of these provisions consistent with the recommendations set forth above. If it is impossible to contract for enforcement with the Summit County Board of Elections, then the Task Force recommends that some municipal enforcement agency be created that could be effective and yet not create a new office that required substantial resources to operate. 12. The Task Force recommends that the City Council review the IMLA Model Ordinance on Ethics to determine whether its provisions might be suitable for adoption in Akron. 13. The Task Force recommends that these recommendations take effect on January 1, 1999 or January 1, 2000, whichever is the earliest practical implementation date. 23
  • 24. 14. The Task Force recommends that every five years an independent Task Force be created to review the Akron Municipal Campaign Finance Regulations and submit additional recommendations or modifications to the City. Respectfully submitted, ___________________ Richard L. Aynes Jacqueline Silas Butler Debby Eisinger Rev. Ronald Fowler Dr. John C. Green Rabbi David Horowitz Jean Jordan Lee McCutchan Tina Merlitti Cazzell Smith Larry Vuillemin Tom Wagner 24