Politics & Government

Financing, transparency proposed as remedy for ‘dark place’ of money in NC politics

Here’s what happened and the key players involved in the NCGOP chairman bribery and corruption charges

Chairman Robin Hayes and major campaign donor Greg Lindberg are at the center for this case. it all started when Mike Causey reported to officials issues with campaign contributions.
Up Next
Chairman Robin Hayes and major campaign donor Greg Lindberg are at the center for this case. it all started when Mike Causey reported to officials issues with campaign contributions.

Calls for campaign finance reform are growing in North Carolina, following federal criminal charges against one of the state’s biggest political donors and the chairman of the state Republican Party.

Mega-donor Greg Lindberg, GOP Chairman Robin Hayes and two of Lindberg’s business associates were accused of trying to route hundreds of thousands of dollars from Lindberg through the state Republican Party and into the campaign account of Insurance Commissioner Mike Causey. Causey is a Republican whom Lindberg was allegedly trying to bribe to help his businesses.

The charges have sparked a discussion about what — if anything — North Carolina’s leaders need to do to change the rules for money in campaigns, to try to stop similar cases from happening in the future.

“This just unfortunately creates more of the jaded cynicism that people across all spectrums have toward democracy and politicians,” said Bob Phillips, executive director of the advocacy group Common Cause North Carolina.

Phillips suggested going back to a system in which the candidates in some elections were eligible for taxpayer-funded grants to their campaigns — if they promised not to take above a certain amount of money from other sources. North Carolina had such a process for a short time in the 2000s.

“For us that would be the gold standard, the ultimate, to find some alternative to the big money contributions,” Phillips said.

Last Tuesday — the same day the charges against Lindberg, Hayes and the others became public — Democrats in the N.C. Senate filed a bill that included election, redistricting and campaign finance reforms. One of the proposals was to bring back a public financing system, which the bill calls the “Fair Election Program.”

Past scandals

Sen. Jeff Jackson of Charlotte said the timing of their proposal, Senate Bill 641, and the criminal charges was a coincidence, but one that ought to add urgency.

“This news is bad, but nobody considers themselves entirely shocked that money in politics is leading to alleged criminal behavior,” Jackson said at a press conference.

Before Republicans held power in the state, Democratic politicians also had public corruption scandals. Former N.C. House Speaker Jim Black was sentenced to more than five years in prison and a $50,000 fine in 2007 for accepting bribes from chiropractors to support legislation they wanted to pass.

And former Agriculture Commissioner Meg Scott Phipps, the daughter of Gov. Bob Scott and granddaughter of Gov. Kerr Scott, spent more than three years in prison due to the extortion of money from State Fair vendors and other related crimes.

A public financing system, advocates say, would help lower the possibility for corruption in the future.

There are multiple types of public financing in use around the country. Some programs apply only to down-ballot races thought to be more susceptible to bribery. That could include somewhat obscure state offices, like North Carolina’s elected insurance commissioner, whom Lindberg is accused of trying to bribe.

Jackson’s proposal, however, would not apply just to those less-visible races but to all legislative and executive branch races.

“If we are agreed — if there is a consensus that we’ve reached a very dark place with money in politics — this is the most practical path forward,” Jackson said.

The amount of taxpayer money candidates could receive under the Democrats’ bill would range from $14,000 for smaller races to up to $10 million for the race for governor. For comparison, in the 2016 governor’s race, Democrat Roy Cooper’s campaign spent $24.3 million and Republican Pat McCrory’s campaign spent $16.8 million.

Can public financing move ahead?

But Republicans did away with North Carolina’s previous public financing program not long after taking control of the legislature in 2011. Andy Jackson, a political scientist and elections expert at the conservative Civitas Institute, said he doesn’t think the Republican-led legislature will bring back public financing — nor should it.

“Clearly it’s not going to pass,” he said. “This is essentially the same legislature, in terms of party control, that got rid of public financing the last time around. But is it a good idea? I think not, particularly on the moral angle. I don’t think it’s a good idea to have taxpayers funding campaigns they might not agree with.”

Longtime Republican consultant Paul Shumaker, who has worked on low-profile campaigns like for judges as well as high-profile campaigns like for U.S. Senators Richard Burr and Thom Tillis, also opposes public financing.

Public financing, Shumaker said, won’t stop people from wanting to donate. All it would do, he said, is drive donors toward groups like super PACs, which have significantly fewer transparency requirements than candidates do.

“It’s like a water balloon,” Shumaker said. “If you squeeze in one area, it’s going to bulge out in another area.”

According to the National Conference of State Legislatures, most states don’t use any sort of public financing, since candidates can’t be required to participate and there is typically more money to be gained by not participating.

public financing.PNG
This map from the National Conference of State Legislatures shows the states that do have a public financing program, and what type of model they use. Most states do not have public financing for any elections. National Conference of State Legislatures

“Candidates who opt not to use public funds can solicit contributions from individuals, PACs, unions, parties, and corporations, without having to abide by state expenditure limits,” according to the group’s website.

A key 1976 Supreme Court decision, Buckley v. Valeo, ruled that the government is allowed to limit how much money individual candidates can take from a single donor, but can’t limit how much money outside groups like PACs can take. A series of other legal changes in 2010 allowed for the creation of super PACs, which can keep donors’ identities secret.

Also in 2010, in Citizens United v. FEC, the Supreme Court ruled that super PACs and other political groups could accept unlimited amounts of money not just from people, but also from corporations and labor unions.

Read Next

Phillips said that “this morass of super PACs that have been blown up in the wake of the Citizens United decision” is exactly why public financing is needed.

But Shumaker came to the opposite conclusion. He said a better idea for campaign finance reform is to put candidates on equal footing with PACs, by allowing them to accept unlimited donations as well.

Improving transparency

He said in his decades of campaign experience, candidates much prefer having direct control of the spending in their races. So if they could solicit unlimited donations, they would pressure donors to give to them instead of to outside groups. He also supports other transparency reforms, like requiring candidates to report their spending and fundraising every month instead of just four times a year.

“Instead of limiting free speech, let’s talk about increasing transparency in the system,” Shumaker said.

Scott Jordan, a Charlotte entrepreneur and the former policy director for the North Carolina Young Republicans — who has since left the party entirely, in part because of his disgust over money in politics — also wants to allow people to give unlimited amounts directly to candidates, since those donations come with greater transparency than donations to outside groups.

“They’re doing it anyway through the outside groups,” he said. “Force them to do it in a way that everyone can see it.”

Jordan wrote an article on the website Medium after Lindberg and Hayes were arrested, calling the Republican Party corrupt. In an interview, he said that in his time as a Republican activist he saw the access that donors bought, and how money flowed suspiciously among the party, candidates, PACs and other outside groups.

“It’s one of the things everyone knows, like ‘OK this is how it works,’” said Jordan, referring to “PACs and super PACs and 527s and all these outside, shadowy groups, where people don’t always know who the donors are.”

But Phillips said that especially in down-ballot races, which don’t make big headlines or grab most voters’ attention, “The only people who would give money, outside of family and friends, are people who want to influence it.”

That’s why he supports public financing.

“Money is not necessarily, in itself, evil,” he said. “And candidates need money to wage a campaign. But where it’s coming from is a problem.”

But Jackson, the elections expert from Civitas, disagrees. He said most people who donate to candidates don’t do so because they’re trying to buy influence, but because they simply believe in what the candidate stands for.

“Better-funded candidates generally win, but that is not a bug in the system,” he said. “Money generally flows to better candidates.”

Staff writer Ely Portillo contributed to this report.

Related stories from Charlotte Observer

Will Doran reports on North Carolina politics, with a focus on state employees and agencies. In 2016 he started The News & Observer’s fact-checking partnership, PolitiFact NC, and before that he reported on local governments around the Triangle. Contact him at wdoran@newsobserver.com or (919) 836-2858.


  Comments