Sweeping initiative would bring biggest changes to state’s campaign-finance rules in decades

Publicly funded campaigns. Strict limits on political contributions from lobbyists and state contractors. A cooling-off period before public officials can become lobbyists. New transparency requirements for super PACs. A tax hike for Oregonians shopping in Washington.

All this is on the ballot next month as Washington state voters mull the most sweeping changes to the state’s campaign-finance rules in decades.

It’s wrapped up in Initiative 1464, which supporters see as a step toward cutting the influence of big-money donors in state politics, but opponents see as counterproductive and a potentially costly misuse of limited state resources.

“Big-money interests on both sides are working to manipulate the system and government decisions to benefit their own bottom line,” said Peter McCollum, the campaign manager for Integrity Washington, the group that got I-1464 on the ballot. “We won’t get good representation and good solutions out of Olympia until we can do something to address that.”

Opponents worry that the proposed tax increase to pay for publicly funded campaigns would not be sufficient, leaving the state’s general fund to make up the difference.

“That is taking money from other priorities, like schools,” said Yvette Ollada, spokeswoman for No on Initiative 1464. “Any other priorities that the state might have should be put before funding political campaigns.”

Ollada is a former spokeswoman for Republican gubernatorial candidate Bill Bryant. Bryant opposes I-1464 while Democratic Gov. Jay Inslee has so far declined to take a position.

An August poll showed the initiative leading, but with more than 40 percent of respondents still undecided.

Funded by big money

There is a lot of big money behind this push to reduce the influence of big money in politics.

Integrity Washington has raised more than $2 million and spent nearly $1.9 million, mostly on collecting signatures to get on the ballot.

The group has more than 1,000 individual donors, but most are out of state, and most of the money has come from tech and Wall Street billionaires.

The campaign has received $500,000 from Connie Ballmer, who is married to Los Angeles Clippers owner and former Microsoft CEO Steve Ballmer. It’s gotten $275,000 from Sean Eldridge, the husband of Facebook co-founder Chris Hughes.

The list goes on: $100,000 from William Von Mueffling, who runs a $12 billion New York investment firm; $100,000 from Hollywood producer J.J. Abrams; $99,999.99 from Hadi Partovi, a former Microsoft executive who founded the nonprofit Code.org; $75,000 from Pat Stryker, a philanthropist and heiress to a medical-technology fortune; and $75,000 from Jonathan Soros, an investor and the son of liberal mega-donor George Soros.

The group has also received a combined $675,000 from two national nonprofits, Represent.US and Every Voice, that work to reduce the influence of big money in politics. While both groups disclose more about their donors than is required by law, neither lists a full breakdown of all their donors and amounts donated.

The organizers of Integrity Washington recognize the irony here.

“In order to help make some of these changes it takes a lot of money,” McCollum said. “There are big donors helping to support this campaign to help reduce big money down the road, to sort of fight fire with fire.”

The opposition is not nearly so well-funded.

No on Initiative 1464 has raised just $20,000, all from two groups, the Washington Food Industry Association and the Associated General Contractors of Washington.

Publicly funded campaigns

The most attention-grabbing item in the initiative is a public-funding system that would send every registered voter in the state three $50 vouchers to donate to state legislative candidates of their choosing.

To accept vouchers, a candidate would have to get 75 donations of at least $10, could not accept any donation greater than $500 and could not spend more than $5,000 of his or her own money on the campaign. There is no cap on total spending for candidates who accept vouchers.

The system would initially apply only to legislative races but could be expanded to the governor’s race and others in the future.

State Senate candidates would be eligible to receive up to $250,000 in vouchers, known as “democracy credits,” while House candidates could receive $150,000.

A total $60 million in vouchers would be available for elections in even-numbered years.

Voters would distribute their vouchers online or through the mail, and candidates would receive funds from the state Public Disclosure Commission for each voucher.

It would be funded by repealing the sales-tax exemption currently available to out-of-state visitors whose home states don’t have a sales tax, most notably Oregon.

The state Office of Financial Management estimates the tax change would bring in an additional $173 million in revenue over the next six years, while the “democracy credit” program and the additional campaign-finance enforcement would cost about $171 million.

It is modeled after a similar voucher program passed last year in Seattle, which has not yet been tested in a campaign.

“Why not wait in Seattle and see how it works first?” Ollada asked. “If we don’t know what’s going to happen, is it really responsible to be putting something like this through?”

While “democracy credits” are unprecedented, taxpayer-funded campaigns are not. Theodore Roosevelt proposed publicly funded presidential campaigns in 1907. Publicly funded presidential campaigns began in 1976, part of a spate of post-Watergate reforms, although no nominee has used the system since 2008.

There are also 17 states with some form of public campaign financing, but none uses a voucher system like the one under consideration here.

“This isn’t experimental or new,” McCollum said. “The wait-and-see approach would leave us waiting several more years to address some really big problems in our state.”

Lobbyists and super PACs

Less heralded pieces of I-1464 would also bring big changes.

Lobbyists would be banned from donating more than $100 to any candidate whom they may lobby in the future.

Last month three dozen lobbyists hosted a fundraiser for the Democratic speaker of the House and House majority leader. That would likely be banned under I-1464, which bars lobbyists from soliciting more than $500 in donations for any candidate. Those same limits would also apply to state contractors, who would be restricted from donating to an official who could make a decision about their contract.

It also would bar elected officials and public employees from becoming lobbyists for three years after leaving office.

The initiative also tries to strengthen the legal barriers between candidates and super PACs that support them.

It is currently illegal for candidates, who must abide by strict donation limits, to coordinate with super PACs, which can collect donations in unlimited amounts. But there’s a lot of leeway in what qualifies as “coordination.”

I-1464 would bar a super PAC from spending for a state-level candidate if the candidate had prior knowledge of the spending, if the candidate and super PAC shared office space within the last two years, or if the candidate went to a meeting with the super PAC within the last two years.

It would also increase the transparency requirements for super PACs and their donors.

One week before the August primary, a super PAC called Voters for Washington Children spent more than $165,000 on ads to help five candidates (four Democrats, one Republican).

It had to disclose the five biggest donors on its ads, one of which was a political committee called Stand for Children Washington. That name doesn’t say much about where the money actually came from.

I-1464 would require donor groups, like Stand for Children Washington, to disclose their top five donors — as if they were themselves donors to the advertising — until the top-five list on a political ad is entirely people, businesses or nonprofits.

Had those rules been in effect this summer, Voters for Washington Children’s ads likely would have had to disclose Stand for Children Washington’s biggest donor, Connie Ballmer.