Huge War Chest Aids I-1464 ‘Campaign Finance Reform’ Push In Washington State

Huge War Chest Aids I-1464 'Campaign Finance Reform' Push In Washington State
A well-financed coordinated campaign in U.S. states, fueled by national activist groups, aims to undercut the Constitution's First Amendment protections, and limit the free political speech rights of corporations. Photo 401(k).

Washington state election officials say that Initiative 1464 (I-1464) is likely to qualify for the fall ballot. It aims to institute several so-called campaign finance reforms and is part of a broader national strategy to build political pressure for a U.S. Supreme Court reversal of its Citizens United ruling. That 2010 decision upheld the right of labor unions and corporations to engage in political speech, including campaign giving free of unconstitutional limits.

Perhaps ironically, proponents of I-1464 currently enjoy a dramatic advantage in political fundraising. They have gathered $1.7 million so far, from sources including activist groups and a New York hedge fund manager. Opponents have raised $150.

If I-1464 gains passage it would not only move the state in a direction conflicting with guaranteed First Amendment rights to political speech. It would also come at a cost to the economy, because the program would be funded through lifting of a Washington sales tax exemption for some out-of-state residents.

The measure would provide campaign spending vouchers for citizens every two years, limit donations by government contractors and lobbyists, and institute other policies.

Border Communities Would Pay

Implementation would be funded by repealing the Washington state sales tax exemption allowed for residents of six U.S. states, four Canadian provinces and American Samoa. It applies to purchases of tangible personal property, digital goods and digital codes purchased for use outside Washington. Buyers qualify because sales taxes in their jurisdictions – including Oregon, Alaska, Montana and Alberta – are less than three percent.

The Washington Department of Revenue found this year (pp. 20-705) that repealing the tax exemption would cut consumer spending at Washington businesses. The Joint Legislative Audit & Review Committee (JLARC) recommended in 2011 to continue allowing the exemption because of its economic benefits.

“When there is no longer an incentive, (nonresident buyers) won’t come down to buy the product. Washington state will have gained nothing and lost business,” said Bob Battles, government affairs director on legal and employment policy for the Association of Washington Business (AWB).

Benefits Would Be Unevenly Distributed

Approximately $50 million of the estimated $60 million raised every two years would be used to pay for campaign spending vouchers, according to a pro-1464 source. The remaining $10 million would be used for setting up program administration.

However, the $50 million would fall short of covering vouchers for Washington’s current registered voters (4,102,442).

At $150 for three vouchers for each voter, this amount would cover just 333,333 voters. That would leave approximately 92 percent of registered voters without vouchers.

Seattle-Style Policy Initiative Pushed Statewide

Under I-122 approved by local voters in 2015, Seattle became the first city in the U.S. to create a democracy voucher system. Beginning in 2017, the government will mail four $25 vouchers to registered voters to give to Seattle candidates for mayor, city council or city attorney each city election cycle.

Speaking about I-1464, State Rep. Matt Manweller (R-13) said, “Do taxpayers want to be responsible for paying for political campaigns? Taxpayers hate negative ads and now they’re being told they have to pay for them.”

Washington’s initiative would limit contributions from public contractors and lobbyists to $100 individually and $500 from solicited donations. Section four of the initiative exempts employees of contractors and union members from the donation limits.

“[I-1464 is] not giving you a level playing field. It allows people to self-fund well beyond that” and takes away “real jobs,” said Battles.

Campaign Finance Reform Boosters Stuff Their War Chest

Leading support for I-1464 is the political committee Integrity Washington. It has raised $1,776,841.40 as of August 1. Major contributions have come from Connie Ballmer ($500,000), the activist groups Represent.Us ($200,000) and Every Voice ($300,000), and William Von Mueffling ($100,000). He is president and CEO of Cantillon Capital Management, a hedge fund based in New York. Represent.us is based in Massachusetts, Every Voice in Washington, D.C. 

Opposition of I-1464 is led by Sam Jackson, campaign manager of the Coalition to Stop Corruption and Save Jobs, which has received a $150 loan from an unlisted contributor as of August 1. One other anti-1464 committee has formed, but raised no funds so far.

“There is no doubt that money in politics is an issue on many voters’ minds…but if getting money out of politics is your goal, giving millions in tax dollars to politicians is probably not a great place to start,” Jackson told Lens, referring to the democracy vouchers integral to I-1464.

Bottom-Up Effort To Reverse Citizens United Ruling

Both I-1464 and South Dakota’s IM-22 are part of a larger effort to win symbolic campaign finance reforms at the state level in order to eventually influence the U.S Supreme Court to reverse Citizens United.

The game plan was detailed earlier this year in The Atlantic.

“…with a new (U.S. Supreme Court) justice in the offing, the prospect of reversing Citizens United…seems suddenly larger, more plausible…But..even if (the late Justice Anton) Scalia is replaced by a more liberal justice, the Court’s campaign finance rules will not be easily reversed. The precedents extending First Amendment protection to campaign spending date back to 1976, long before Scalia became a judge. The Court generally follows precedent, and overrules past decisions only rarely…”

The magazine further explains that a likely strategy for advocates who wish to try to abrogate the First Amendment rights of labor unions and corporations to unrestricted political speech, is to build pressure on the Supreme Court over time through actions at the state level, similar to I-1464.

Protect ‘Constitutionally Guaranteed Rights’

Derek Muller, associate professor of law at Pepperdine University, argued there isn’t a need for campaign finance reform in America.

“We should be mindful, as citizens of a nation built upon regular and meaningful elections, that these be regulated to do the least damage to our constitutionally guaranteed rights, that is, to the open exchange of political views,” wrote Muller.

Washington Secretary of State officials told Lens I-1464 is expected to qualify for the November ballot due to the number of signatures turned in, which is well above the required 246,000.

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