Debt Consolidation

National Resource Center for State & Local Campaign Finance Reform

Posted on: June 11, 2008
Written by: UWSA Staff
A Center for Governmental Studies Project
10951 West Pico Blvd., Suite 206 * Los Angeles, CA 90064
Tel: (310) 470-6590

Question: What will be the impact of the California Political Reform Initiative on political party organizations?

Conclusion

The CPR initiative will restructure the financing and organization of political parties in California, substantially reducing their reliance on candidate-centered committees for funding and the formulation of policy agendas. All individuals, candidates and committees will be limited to annual contributions of no more than $5,000 to state and county party central committees combined, and candidate transfers of funds to party committees will be prohibited. Political parties will be reorganized into independent and clearly identifiable entities responsible for their own fundraising, platform development, and distribution of party funds to candidates and causes.

Political parties will be given a special status in the financing of candidate campaigns, in part to encourage candidate discipline to party programs and in part to off-set independent expenditures by special interest groups. Party committees may contribute to any candidate up to 25% of the candidate's spending limit per election, whereas all other individuals and committees are subject to fixed, low limits on contributions to candidates. In the event a candidate's opponent refuses to abide by spending limits, or substantial independent expenditures are made on behalf of the opponent, party committees shall be exempt from contribution limits for that candidate.

Political party clubs and associations at the local level are not defined as components of a political party per se and thus are treated as either small contributor committees or regular political committees. As a small contributor committee, with a membership of at least 100 individuals who contribute $50 or less annually, the local party club or association may contribute to candidates two-times the applicable contribution limit set for other persons; if the group receives contributions in larger amounts, it is a regular political committee. As a regular political committee, the local party club or association can accept contributions from each member of no more than $500 annually and can contribute to candidates no more than the applicable contribution limit set for other persons. Any local party club or association can accept donations in excess of these limits so long as the excess funds are spent on activities not directly related to the election or defeat of a candidate.

Analysis - The California Political Reform Initiative will:

1. Revitalize political parties as independent organizations.

Currently, political parties in California tend to function as appendages--in terms of both finances and policy agendas--of state political leaders. Party organizations themselves are frequently relegated to get-out-the-vote activities or other activities designed to strengthen the position of the political leadership. As such, party organizations today are widely viewed as "candidate-centered" entities, dependent on the resources and direction of such officeholders as the Governor or the Speaker of the Assembly.

The CPR initiative would fundamentally restructure party organization. Individual political leaders and officeholders would be subject to the same contribution limits to party committees as any other person and could not serve as intermediaries to funnel special interest funds for party activities or candidate elections. Political parties would become clearly defined entities comprised of their state and county central committees, which would establish their own fundraising and constituency bases. Instead of relying on the resources and direction of individual candidates or officeholders, parties would become largely independent organizations responsible for their own fundraising, formulating their own policy agendas, and allocating party funds to candidates and causes according to party programs and interests.

2. Reduce dramatically money in party politics.

Absent limits on contributions and expenditures, party politics are currently overwhelmed by the flow of money, primarily special interest money. Defined in their current context as a loose amalgam of officeholder committees, special interest constituency groups, and party convention and get-out-the-vote organizations, political parties are indirectly responsible for this excess of money in politics.

The CPR initiative will dramatically reduce the amount of money in party politics and candidate campaigns by establishing strict contribution and expenditure limitations. A political party could accept contributions of no more than $5,000 per calendar year from any single source. Similarly, special interest groups and candidate committees that currently provide the bulk of party money would be subject to stringent contribution and expenditure limitations, slashing the amount of money in campaigns by more than half of 1994 levels.

3. Establish political parties as the "big player" on the block.

Even though the amount of money in party politics will be dramatically reduced by the CPR initiative, political parties are given special status that place parties in a major role in the financing of campaigns. Party committees can accept contributions from any single source in amounts far greater than any other political committee; and parties can contribute to candidates in amounts far greater than any other individual or committee. In order to strengthen the role of parties in disciplining candidates, mobilizing voters and promoting a political agenda, party committees may contribute to a candidate up to 25% of the candidate's total spending limit, while all other persons are limited to a fixed, low contribution level.

Parties will, in effect, become the "big player" on the new block. They will have greater potential impact on the financing of campaigns than any other individual or committee.

4. Off-set independent expenditures.

Due to the 1976 Buckley v. Valeo decision, independent expenditures either by a wealthy candidate, individual or political committee cannot be restricted outright. This constitutional interpretation poses a serious problem for the financing of campaigns. Even in a system of contribution limits and voluntary spending ceilings, a wealthy candidate or independent committee choosing not to curtail spending cannot legally be required to do so. It is therefore important to provide mechanisms to help level the imbalance caused by independently wealthy players such that all candidates may have an opportunity to be heard.

The CPR initiative approaches the problem of independent expenditures through four mechanisms, the most important of which is to place political parties in a unique role to off-set excessive independent expenditures. These mechanisms include:

(1) candidates who had agreed to spending limits, but whose wealthy opponent has not, benefit from a limit on contributions twice as high from any one source;

(2) candidates who had agreed to spending limits, but whose wealthy opponent has not, will have the spending ceilings lifted;

(3) contributions to independent expenditure committees are limited to $250 per election from any single source; and

(4) most importantly, party contribution limits to candidates challenged by a wealthy candidate not abiding by spending ceilings, or by excessive independent expenditures, are lifted so as to provide political parties with the opportunity to off-set these independent expenditures.

5. Ban "soft" party money.

Under current federal law, state political parties may make unlimited expenditures for voter registration, get-out-the-vote drives and other generic activities in support of federal candidates. Despite the fact that federal law limits contributions from any source to federal candidates, the Federal Election Commission has permitted state parties to spend funds, known as "soft money," that would otherwise be in violation of these contribution limits. As a result, federal candidates and national political parties raise otherwise illegal federal money, channel it to the state parties, and have the state parties in turn spend it on behalf of generic activities that indirectly benefit federal candidates.

To prevent further soft money abuses, the CPR initiative limits contributions to California's state political parties to no more than $5,000 from any single source, including federal candidates and the national parties. Party committees are not permitted to accept more than this amount from an entity for any candidate-related as well as any noncandidate-related activity--thus, effectively shutting down the soft money system in California.

6. Enhance the involvement of local party clubs and associations.

Local party associations and clubs under the CPR initiative are not defined as formal political parties and are thus subject to the limitations imposed on political committees. In most instances, a local party organization would fall under the definition of a small contributor committee--that is, a membership of at least 100 individuals who contribute $50 or less per year to the organization. As a small contributor committee, a local party association or club could make candidate contributions in amounts twice the applicable limit for other persons. In all instances, activities of a local party organization not associated with candidates, such as educational activities, non-candidate speeches, forums, social activities and infrastructural developments are all exempt from the contribution and expenditure limitations of this initiative.