Two years after the D.C. Council first took up the task of ethics reform, lawmakers could soon vote on a comprehensive campaign finance reform package — one that addresses several questionable fundraising practices but stops short of establishing the public financing regime advocated by some candidates.
With campaign finance proposals left untouched by the ethics bill passed by the D.C. Council in late 2011, it fell to McDuffie and the Government Operations Committee he chairs to wrangle a bevy of reform proposals — including a package from Mayor Vincent C. Gray and Attorney General Irvin B. Nathan — into a passable bill. Whether or not McDuffie’s bill is in fact passable remains to be seen, but it includes several long-discussed reforms with considerable support.
• Closes the “LLC loophole.” Under current District law, companies with related ownership remain subject to the same campaign contribution limit. For instance, in a race with a $1,000 limit, Company A and Company B may not both give $1,000 if Company A owns Company B. But there is an exception for a particular type of company, the limited liability corporation. An individual LLC is permitted to give the maximum allowable contribution regardless of its relationship to any other corporate donor. The upshot is that particular businesses, primarily but not exclusively real estate development companies, can turbocharge their political giving by aggregating donations from LLCs they control. The McDuffie bill subjects LLCs to the same standards as other types of companies and requires business contributors to disclose whether any related companies also donated to the same campaign.
• Increases “bundling” transparency. The practice of a single fundraiser aggregating checks from his or her own personal or professional network for a candidate’s benefit is common across the country. The McDuffie bill would attempt to make those “bundles” more transparent — explicitly requiring lobbyists to disclose their aggregation and requiring campaigns, and requiring political committees to report donations of $10,000 or more they believe to have been bundled. This stops short of a Gray/Nathan proposal to ban lobbyists from bundling altogether.
• Money order curbs. Currently campaigns can accept any permissible amount as a money order — a financial instrument that can be purchased with cash, thus making the ultimate source of the funds mostly untraceable. Attempts last year to subject money orders to the same $25 limit as cash contributions failed. McDuffie is seeking to set the limit for both cash and money order donations to $100.
• Electronic disclosure requirements. As in the Gray/Nathan proposal, electronic reporting would be mandatory, meaning no more unwieldy and unsearchable paper filings. The Office of Campaign Finance would also be required to make all data quickly accessible in databases that can be easily read by outside parties seeking to analyze and report on it.
• No more contract approvals. The bill contains a major ethics reform that is only tangentially related to campaign finance: It would eliminate the council’s ability to approve and disapprove contracts, which some see as a key element in a “pay to play” culture in city politics. McDuffie would still require the mayor to provide notice of contract awards, but the council would have no ability to disapprove them, only to ask questions and, if necessary, hold hearings. Making this change would require a charter amendment, and the McDuffie bill would authorize a voter referendum to make the change.
The bill also includes some enforcement enhancements, notably giving the D.C. attorney general for the first time the jurisdiction to prosecute misdemeanor campaign finance violations. Currently, all criminal violations are handled by the U.S. attorney. There are several other measures that were proposed but ultimately not included in McDuffie’s bill — including some version of a public financing scheme to help grassroots candidates compete with business-backed heavies, or a blanket corporate contribution ban, such as the one progressive activists pursued via ballot initiative last year.
Also not in the final cut were several aggressive proposals from Gray and Nathan, including barring all campaign contributions from those who have or are seeking city contracts. The bill also stops short of holding candidates personally liable for misdeeds of their campaigns — an issue highlighted by the Office of Campaign Finance’s recent decision to levy a $45,000 fine it will never collect on the defunct 2010 campaign of former Council Chairman Kwame R. Brown.
Expect McDuffie, who was not available for an interview Thursday, to have the support of his colleagues on the Government Operations Committee; he wouldn’t have circulated the bill otherwise. Whether he can secure a majority on the full council is a bigger question, considering the bill would require some significant changes to the long-established norms of local political campaigning in the District — changes that could go into effect in the midst of the 2014 election season.