When Public Financing Almost Swept The Nation

Welcome to Another Way, the podcast produced by Equal Citizens, a nonpartisan pro democracy organization founded by Lawrence Lessig. This is Adam Icken, the organization's campaign manager. Before we begin, please consider supporting us on Patreon. If you become a Patreon supporter, not only will you allow us to keep this podcast going, but you'll also get access to bonus episodes and other cool rewards. We promise. Those are actually coming. To sign up, go to patreon.com/citizens that's P-A-T-R-E-O-N.com/citizens. Now to the episode. Joining me in the studio today is Nick Neihardt. Nick is a longtime democracy activist and a top national expert on small donor driven systems of publicly financed elections. In his role as a leader of Public Campaign and the Every Voice center for two decades in Washington, D.C. he worked with local activists across the country to develop and help win groundbreaking alternatives to the big money financing of political candidates. Central to his organizational work on campaign finance reform were efforts to broaden and diversify its base of support. He began his career as a neighborhood organizer for Massachusetts Fair Share. Nick and I actually met four years ago. And yes, for those of you who have listened to my interviews before, we also got to know each other during Democracy Spring from the march from Philadelphia to D.C. in 2016. Nick actually convinced the actor Sam Waterston to join us for a bit. It was a great time. Welcome to the show, Nick.

Glad to be here.

So today we're going to focus on a period of democracy reform that, you know, seems to be lost to the history books, which is a real shame because it was a period in which the movement for campaign finance reform made tremendous progress. Indeed, it's a fascinating what if moment, for if a few things had gone differently, the struggle for public financing might have been remarkably different. And you know, the idea of public financing has been around for a long time. Teddy Roosevelt, when he was president, while addressing Congress in 1907, spoke about public financing. After Watergate, a system was enacted for public financing for the presidential elections and a couple states followed suit, namely Minnesota and Wisconsin in the late 70s to introduce public financing. And in 1988, New York City adopted a small donor matching system as well. And in the 1990s, the fight for public financing entered another phase. And that's the phase we're going to focus on today. So Nick, talk to me about how you got into the movement for public financing. You got in right when it got good.

So I've been working for about 10 years as an organizer in Connecticut doing grassroots electoral work. We had a coalition of 26 progressive political action committees representing all sorts of different liberal and progressive communities and organized labor as well. As we ran successfully, we recruited and ran candidates for state representative and state senator. But it became clear over that period of time that two things were true. One was that every time we got loads of volunteers into a district to door knock and distribute literature, to do phone banking, the other side would match us with paid mailers or paid phone banking. And in part of my head, I'm thinking, well, all this great grassroots activity is fantastic, but at the same time, the other side just raises more money from lobbyists and keeps pace with us. And the other thing about it was, while we could muster the grassroots strength to win state rep. And state senate races, running all sorts of candidates who are out of their communities, who were strong issue advocates for the environment or for all forms of equity and justice, it was very hard to muster the momentum at that scale for a campaign for governor, for example. And it became harder and harder. If you wanted to run for those offices, all of a sudden you had to meld your grassroots space with more of a money base. And that seemed to be a problem. It also seemed like the problem wasn't going to get better on its own because the deep pockets had so much money. And while I was part of this in Connecticut with a coalition called leap, there were people like me around the country who were seeing some of the same kind of things. And so at some point in the early 1990s, a group of people who've been issue activists in the 70s and 80s on the nuclear freeze on civil rights in the south, community organizing in Chicago, environmental work, had reached the same conclusion, that lots of laws weren't being passed because of the role of money in politics. And. And while the efforts for public financing, which they saw as the solution, had died at the federal level, they thought, well, maybe we can win model legislation at the state level, and that could leave a movement to win federally eventually. And they said to themselves, what would an optimal campaign finance system look like that treated everybody equally? In other words, whether you only had $5 to give to a candidate, or if you had lots more, you'd be treated equally by the candidate. And they came up with a system that they called democratically financed elections, which later became sort of the clean elections model. And they went around the country to people like me saying, there's gotta be a better way to do this. And they certainly had me. I thought, that's absolutely right. And so a friend of mine, Janice Fine, was working with them, introduced me to them, and we began to look at getting some funding. And so Foundation Chicago gave money to activists around the country to do the analysis of the role of money in politics in their states. And what people found from coast to coast and in between was that the amount it cost to win a race for this state legislative seat was going up everywhere. And that most of the money was coming from deep pocket, vested interests, so big lobbying interests at the state capitals. And this was across the board. And so those analyses were made. We didn't have the digitized files in those days. So often that meant going into a secretary of state's office who held the files and renting a copier and then xeroxing all the files and then taking it off site to input manually. But like I said, they showed the same thing. So the next stage was, okay, what would we want to do about this? What would be the policy? And another slew of grants came in to develop policies that would address this. And so the basic policy was a form of this. You'd gather a large number of very small contributions, let's say $5. And once you got hit a threshold number of those contributions, you turn them in and you'd get a grant to run your primary campaign. You'd also have to qualify for the ballot, whatever the local ballot requirements were. But you get this financing and then you could take no more money, right? That was it. If you won your primary and went to the general, you got another grant, enough to win your general. So that was all fine. It was a level playing field. If your opponent was running under the system, they'd have the exact same amount of money. Now there are the what ifs, right? What if you're up against a wealthy candidate or a well connected candidate who doesn't want to opt into the system, because under the interpretation the Supreme Court at that point had given, you couldn't make public financing mandatory. It would have to be voluntary. So you had to have the system be very attractive. So if your opponent was well financed and spent more than you did in their campaign, you'd get an additional grant. So when they reported spending, let's say the grant you got was 100,000, they went over that, you'd get a matching grant. The same with independent expenditures. And back then, independent expenditures were played far less of a role, but we still accounted for them. So if someone spent money against you, the outside money came in, you get matching funds, and in the end you get up to Three times the original amount. So that was a good buffer. So in some places, they called that the rescue money or the insurance money, so a candidate wouldn't fear that they'd be outspent by the other side. And the money was enough to get you up to the point where additional dollars didn't make that much of a difference.

Right, right, right. And so.

So that was the basic model.

Right. And so the first test was Maine. So let's talk about Maine in 1995 and 1996.

Right. So that became the model policy. And people like me around the country at that point, I'd gone to work for a regional organization called Northeast Action that was working with groups on the ground, community organizations, and coalition groups that were doing electoral politics to model these policies specific for their state. And so people would be sitting around a table designing these and then trying to pass them in the legislature or trying to win them on the ballot. And Maine was the first to put it on the ballot. So they qualified for the ballot in 1995. They'd hired a new campaign manager, guy named David Donnelly, who I then worked with for the next 20 years, to run that campaign. They got almost all the qualifying signatures to get on the ballot in one day, on election day in 1995. And it was a huge coalition that made that effort. And then they went ahead, and the campaign won. And that was stunning.

And it won by quite a lot, Nick. I mean, I have the results here. It was 56% to 43%. So it was a blowout.

People said it couldn't be done. And it was a novel. That means, like, all your money, basically, except for your $5 contributions, would come. But we also found in our polling that it was gonna be popular. So it didn't shock us that it was a popular policy if you said, your voice will be heard with this policy and not the lobbyists in Augusta. So that was a key. It elevates your voice. And that was a big deal.

Although there was a story, Nick, about a pollster who refused to take your money because he said, I can't do this ethically because you have no chance to win.

So, yes, people said that they thought the opposition would attack and. And all that. I also know during the campaign, people say, well, has this ever worked any place before? So tell me how it works in some other place. And honestly, it wasn't in place anywhere in America. So they'd say, well, could it work in Europe? But they have a party system, and so they do have public financing, but the money doesn't generally go to candidates, it goes to the party. So there was nothing comparable, but I'd say we hit a home run the first time out. The system worked really well once they put it in place.

Right. And so do you want to tell the story of Deb Simpson? I'm not sure if I've told this story before in the podcast, but this is really your story in some respects.

Yeah. So one of the reasons to pass this was not just to make it so big money had less influence, but also to allow candidates who weren't well connected with lobbyists or people with a lot of money or candidates who had a lot of money of their own to spend, but to say, we'll have a new kind of person running for office. So there was a woman in Maine named Deb Simpson who worked at a restaurant as a waitress. Low wage job. She was a single mom supporting a child and just barely making it, living paycheck to paycheck and on tips. And she was thoughtful politically and would talk with the customers in the restaurant about politics. And people say, geez, Deb, you should think about running for office. And she was, who, me? And then she found out about this public financing system, the clean election system, and decided to run for office and she won. So all of a sudden you had a woman, a single mom, who knew what it was like to go paycheck to paycheck, actually making the laws that would deal with the welfare of people like her. I mean, her, well, being minimum wage laws and things like that, laws that would make life better for single moms and their kids. So all of a sudden she had a policy making voice in the state legislature on issues like that. And that was quite something, right?

No, this story of Deb Simpson is truly amazing. And there's kind of a sad end to the story, which we'll get to later on in the podcast. It takes a relatively dark turn. But, you know, you said you hit a home run with Maine, which you did. You won by a lot on the, on the ballot. And it showed that another system is possible, that we could actually deal with the issue of big money in politics. And again, to our listeners, this is 1996. This is not 2010. This is not post Citizens United States. Money in politics, as listeners know, has long been a problem in our country. And so this was an attempt back in the 90s to fix it. And it worked. It worked well. And so you hit a home run and then all of a sudden you say, what's next?

Right. So what was Next, there had been a group of us around the country moving these forward at the state level, and we were in touch with each other. And so what was next was forming a national organization that would do two things. One was to give technical assistance. In other words, let's learn from each other on the ground. So it was a connecting organization. And the second thing was, eventually we wanted to do this nationally. So we wanted a national bill that would be a model bill. We knew we weren't going to pass it right away, but we wanted something out there as a national model to say, you know, this is the way it would look if we wanted this for Congress in the US Senate. So we formed a group of us formed Public Campaign. And Ellen Miller, who had been head of the center for Responsive Politics in Washington, D.C. had worked with these people all around the country. She went out and raised a substantial amount of money from a couple foundations and said, let's form a national organization. So shortly after the main victory that happened, I went to Washington, D.C. and became their field director and got to work with these folks all around the country who were pursuing the same kind of thing. So this was moving forward in, I don't know, 20 to 25 states where activists on the ground were trying to figure out how to win a similar kind of law that would be carefully fit for their state.

And indeed, that happened in 1997. Vermont was the next state. Let's talk about Vermont.

That's right. Well, they passed a similar law there. There was a very strong contingent of progressive legislators in the Vermont legislature. Maine's right across the way. You gotta go through New Hampshire. But they were following Maine. They said, let's do something similar here. And they incorporated into their bill a low contribution limit and then an overall campaign spending limit. So under the Buckley decision in the 1970s, you could limit contributions to a campaign, but you could not limit campaign spending. And you could not limit what an individual could spend on their own campaign or what an individual could spend to impact somebody else's race as long as that individual didn't coordinate with the candidate. And many of us thought that Buckley decision was flawed in those respects about not allowing us to apply other limits. So in Vermont, they said, we're going to limit the total cost, the total amount you can spend in a campaign. So that was a way of addressing overspenders, Right?

In addition to public finance, right?

Yes, it was both. Let me be clear, it was both. But rather than have the rescue money there, they said, you know what? We're just going to Say you can't spend any more than that. And at that time, you got to remember there was money had been on the rise all over the country. Even back then, people were saying extraordinary amounts are being spent. It's coming from special interest. That's too much. And that maybe Buckley should be reconsidered. And so that was with the court, the way it looked in the early 1990s. And they said this court might take a second look at Buckley and maybe we could have absolute spending limits for campaigns. And the National Voting Rights Institute took that up. It was led at that time by a guy named John Bonifast, who's still active in this field. And that case progressed. Eventually, a much more conservative court actually got to make a decision and said,

no, right, and we'll get to that. We'll get to that. And so one thing to our listeners that will become increasingly clear, but just to really outline it now, is that the models are all of a sudden diverging a bit. There are different models of public financing. So Maine had a full public financing with then a trigger system that more money would come if you. Your opponent spends above a certain amount. Vermont took a different approach, which was a lump sum of money, but then you limit all the extra money that comes into this system. Okay, so that won, Nick. That won in the legislature. So that's important. It wasn't a ballot initiative.

That's correct.

And then 1998 comes, and there are two states that have public financing on the ballot.

Right. So we formed the national organization and we looked at the rest of the country and said we found about a half dozen places where we thought they've got a good ground game here. Build a strong coalition. We can help provide, find money nationally. Is there a sort of proof of concept in Maine? Although people said it's impossible. And then you win it. And they go, well, that's just Maine. Right. We were saying, as goes Maine, so goes the nation. They were saying, well, it's sort of an obscure state off this way. It's really not like the other states.

It's worked for choice voting.

Right. Show us more. So we had a list of groups, we evaluated them, they moved forward. Some just said, we're not quite ready to go forward. In the end, we were looking at two other places to try and win this policy. One was Massachusetts and the other was Arizona.

Let's start with Arizona, because the Massachusetts story is a little complicated.

Right. So Arizona people said, well, you've won Maine. All those liberal people in New England, you're looking at going with Massachusetts. But can you win in a state with sort of some deep conservatism to it? And the folks in Maine said, we think we can. I mean, folks in Arizona said, we think we can win here. And you dig into Arizona politics and there's sort of a wily independent streak among the conservatives there. You think of sort of the John McCain conservatism, not the conservatism we see now in so many states. But this was sort of a wildly independent streak of it. And we were able to move a coalition, put it on the ballot. We had help from the Ross Perot group, united we stand in Arizona and had some republicans supporting it. And we won by the narrowest of margins. Just a little over 50%.

51.2.

Yeah, yeah. So it was tight there, but it won. And people said, geez, you might make it in a conservative state. That would be interesting. And the system did well for a number of years in Arizona.

And Arizona, to be clear, it was a full public financing system with the option for the trigger.

Right. Like in Maine, it was almost identical to Maine, $5 contributions. The league of women voters was heavily involved in passing it. The local chapter of citizen action, a community organizing group, was very much involved and everybody gave it no chance. The opposition in Arizona, and certainly there was a well heeled chamber of commerce type backed opposition. They said we can ignore this, but they saw it getting closer and closer to winning. In the last minute they came out against it, but it wasn't enough and it still won on the ballot.

See, this is part of the history that's so fascinating to me is that we just always think of democracy reform as, oh, well, it's just a bunch of progressives. But here it is in the 90s in 1998, you have it winning in a pretty deep red state. And I get it, there is an independent streak, but it's a Republican state.

So it was interesting that when the other side realized, oh, this is terrible, we got to beat it back. The Democrats in the legislature loved it. The governor was Janet Napolitano who ran using the system, but there were also Republicans. It wouldn't have stayed alive without some republican support in the legislature. And it certainly wouldn't have won on election day without significant Republican support. And in the legislature, when people tried to kill it and legislative leadership on the Republican side wanted to kill it, there were these independent Republicans. And the chamber of commerce we heard at one point came to them and said, you know, if we can make this go away, don't worry. About raising money, we'll make sure you have all you need. And the conservatives, the independent conservatives said, are you crazy? We'd be dependent on you. We'd much rather to be dependent on the people in our district who give us $5 than to be dependent on the chamber of commerce for our race. They said, we might agree with you on policy, but we don't want to be dependent on your money for our elections. And that's what helped keep the law alive.

Okay, now let's move to the liberal Bastion of Massachusetts, 1998. It's on the ballot, so it wins,

basically 2 to 1, huge victory. I mean, Maine was, you could say, a substantial victory by 12 points, but this is 2 to 1, so it's much bigger.

It had over a million votes cast for it. It was 58% to 29%.

And David Donnelly, who had run the campaign in Maine, moved to Massachusetts and ran it here in the Bay State as well. So it was a significant victory, but it was on the ballot, and the legislators were not thrilled, particularly Tom Finneran, who was a very powerful speaker of the house, and he wanted to do everything he could to get rid of the law. So there were people who stepped up to use it. But the ballot measure could not appropriate money. Right. So there was a fund in the legislature available to pay debts people owed. There was a case that went to the Massachusetts supreme Court that said the supreme court came out and said, you know, you can leave this on the books and implement it, or you can overturn it. That's within your power as a citizen initiative. But you can just say, we're taking it off the books by a majority vote in the legislature. And they didn't want to do that because it was so popular. So they just said, let's not fund it. So the supreme court said, no, you got to fund it. Right.

So to be clear, the legislature just did not fund poe.

That's right. That's right.

The voters passed a 2 to 1.

Yeah.

It was law.

Right.

And because of the Massachusetts constitution, the legislature has to appropriate the money. They just didn't do it.

They didn't do it so you could go claim the money. Right. Once it was, you know, because it was there. And they had an. They had a fund in the legislature to pay for that, but that quickly got exhausted. So what happens when there's not any money in the legislature that you can claim to run your campaign? So only a couple candidates are qualified? And when the supreme state supreme court made that ruling, they also said, so if the state won't pay you. We have a process in Massachusetts for claiming money from someone who owes you money. You can hire a sheriff to seize property and put it up for auction, sell it in a public auction, and then you can use that money. So basically, the court said they fashioned a law that said there's a remedy. But of course, that's saying if you want to be a publicly financed candidate, here's what you do. You qualify for the ballot, then you get your qualifications, $5 contributions, you hit your threshold, you get certified, and then you have a sheriff seize public property and put it up for auction. And then whatever those proceeds are, you get that for your campaign until you have enough in proceeds to pay for it.

And Ng David Donnelly did. I mean, it didn't go all the way through, but the campaign did.

Well, at one point, the campaign suggested, I think they wanted the price tag on the desk of the speaker of the House. Right. So anyway, you know, they'd been along through a long fight to keep it. The speaker, by refusing to pay, created this circus where you had to go seize state property and auction it off. And then eventually, because it had become so ridiculous, on a midnight violence voice vote on a hot summer night, they were finally able to get rid of it. They'd been protected by some Republican governors who would say, I'll veto a repeal bill. But Mitt Romney wasn't going to do that. So the bill, eventually the thing put on the ballot was so tremendously popular, was killed in the end. A few years later, he went to jail on some corruption charges that had to do with redistricting. And he's not there anymore. But it was an example of a powerful legislator deciding because as speaker, he could turn on and off the spigots of money to candidates. So if you defied the speaker as a sitting representative, he could threaten you saying, I'm going to shut off all the money to you, find someone to run against you, and I'll turn all the lobbyist faucet for money to you. So having a publicly financed system took that power away from a very powerful speaker. And he fought it tooth and nail.

Right. And we see that trend going into this decade of democracy reforms passing and then the legislature thwarting them or overruling them. But to be clear, just to kind of go with the trend here, what kind of public financing system was it? Was it a full grant with a trigger?

The master system like Arizona was modeled on the main one.

Got it.

The basic model. And that was being looked at throughout the Country.

Okay, now the year 2000, back in your state of. Well, not your state, but an adopted state of Connecticut, the legislature actually passes a clean elections bill, right?

So in Connecticut, the Democrats were in power in the legislature, relatively progressive legislature, but they didn't have the governor's seat. And progressives had not won the governor's seat in, like, forever. And so they said, maybe if we had a system of fair financing. In other words, not just the governor going to the lobbyists and raising money for several years. The governor in Connecticut, John Rowland. The kickoff for his campaigns would be held at the home and sponsored by the most prominent lobbyists in the state. So campaign season began when this lobbyist held a fundraiser in his house for the governor. So it was sort of like they weren't even embarrassed by it. So a similar model passed in Connecticut to the one that passed in Maine, but it was just for the governor's seat and I think statewide office as well. And the governor vetoed it. And people said, well, yeah, you got some free votes there because there are legislators. There were Democrats who voted for this that really didn't like it, but they knew the governor would veto it. So they said, it's a free vote. I can look good again because it was popular. So casting yay vote for reform, they knew would make them look good for the voters, but they also knew the law wasn't gonna come into effect.

Right. So, okay, it failed then. But then fast forward five years.

Yeah. So all of a sudden we have corrupticut, and there are politicians all over the state, several prominent mayors going to jail for various forms of corruption. And then you have the Roland administration being in trouble as well for a whole bunch of things. For one thing, he had a state treasurer who would give out the bond business to firms that sell bonds, and the state bonds would go out to them. But he began to say, yeah, if you want to sell these bonds and get the commission on them, you got to hold a fundraiser for the governor. And so there was a huge scandal. The governor was forced for office.

So the governor that vetoed the original clean elections was forced from office.

Forced from office due to money corruption issues. He also had a lieutenant governor who would take over for him. And she. Jody Rell had been sitting there for 10 years with Rowland in office being the number two. And so she very much wanted to distance herself from the legacy of John Rowland. So all of a sudden you had a governor ready to talk with reformers about what reform could look like. And she said, let's get rid of lobbyist contributions. The reformers in Connecticut said that could be part of a solution, just like public financing. Small donor based public financing could be part of the solution too. And they had this model in mind. And it sort of hit a stalemate where the democrats wanted to publicly fund the governor's office. Rel was saying, I'll consider public financing. And then late in the legislative session, she turned around and said, you know, I'll be all for public financing if we'll do it for all offices in Connecticut and not just the statewide offices. In other words, you come in to publicly finance my race, I'll do that if you'll publicly finance your races too, in the state legislature. So the legislature was sort of like, well, we hadn't been, you know, huh. And within 24 hours they came around and the legislative leaders in the house and the senate, who were democrats, said, we want to work with you, governor, on having a public financing system for everybody who is running for state office. So they went back and forth, but could never, not surprisingly, they all said, yes, I'm for it, but could never agree on anything. And the session ended without taking action. The reporters said, well, once again, a well intentioned reform effort dies. And the reform community basically said, no, this isn't over until we say it's over, right? Until we win.

And.

And they came back. And they came back. There were all sorts of research projects done about where people are getting their money from. I remember a big lobbyist fundraiser where people were getting on a boat to go down a cruise on the connecticut river. And all of a sudden there was a gauntlet of protesters. They had to run to get on the boat, right? There was a pathway to the boat. It was lined with people with signs. They get on the boat, they think, well, no one's noticed. We're safe. We're on the boat going down the river and a flotilla of kayaks comes out with signs and bullhorns talking about the money. And then they go onto the first bridge on the river and there's a drop down banner about it. So, you know, the idea that the protests and the effort was going to go away just because the session was ending and they could refuse this was wrong. And people kept the pressure up. And then eventually they came together, led by the state senate president who said, all right, here's a model I think we can agree on. And it passed. It was a bipartisan vote. Governor rrell whipped some of the republican votes and made sure that there were republicans who supported it. And it passed late late in 2005 and went into effect for the 2008 elections.

And so what kind of model was this one?

It was a modified version of the clean elections. Instead of getting $5 contributions, you could get contributions up to $150. You had to have a certain number of people giving you those contributions. In addition to that, you had to hit a financial threshold. So it wasn't built entirely on $5 contributions, but they didn't permit really big contributions either. And you also had to have a number of people. So as one state senator guy who's now in the state Senate, but ran for this, his first time for office as a state rep, Gary Winfield said, you know, it meant when I went door to door in my district campaigning, I could say to someone, I really need $5 from you because that'll help me qualify. And it was true. He needed her contribution just as much as he might need the $150, because that person counted to the total number of people who had to give. So, you know, he could build it around $5 contributions. And half people understood they played an important role in his campaign by giving as little as $5. Right.

So in little, like less than 10 years, Maine, Vermont, Arizona, Massachusetts almost, but it passed and then was repealed. And Connecticut.

Right.

That's a. A large number of victories in a very short amount of time for this kind of real novel structural reform.

Right.

Now, you've told me this before. Internally, everyone thought this would be a short campaign that once you started getting victories, eventually would spread across the nation. Now, now there were three court cases that really threw a wrench into this process. So the first One was in 2006, Randall V. Soro. Do you want to talk a little bit about that?

I do want to point something out. In addition to that, there were victories like this in acting system in other kinds of venues and for some other offices. So in New Mexico, they passed something for their state regulatory commission, which is elected in Albuquerque, New Mexico. They also passed a public financing system like this in West Virginia, in Wisconsin, in North Carolina, they also passed this kind of model for various kinds of offices.

And I'm sure I'm not fully statewide in the same way that these other programs were significant.

Often legislatures were saying, let's try this, but for somebody's office other than my own. But it was growing. It was growing, continuing.

There was reason for optimism. Absolutely. Okay, so 2006 Supreme Court says, Vermont, your law that you passed, which we flagged earlier, about limiting expenditures and low contribution limits and spending limits, it's not going to go.

They said, yeah. They said, we're not going to let you just say so much you can spend and no more.

And so that was the, I believe, one of the first campaign finance cases that the new Supreme Court, under the George W. Bush appointees, so with appointments, Alito and Roberts, that was one of their first campaign finance cases. And they basically said no.

Right. I think the hopes of reversing Buckley would have done better with a court that was more liberal than the ones that we've seen over the past 15 years.

Right. And so this is important because, again, going back to Vermont, Vermont's motto was not the trigger mechanism. It was, you get a certain amount of public money and you limit all the other spending. That's right. And that's how you compete, that's how you deal with this, is that you limit all the extra money and then you give everyone public money. That's right. And so the Roberts court, by doing so, by getting rid of these expenditure limits and low contribution limits, basically rendered that public financing model no longer really operative.

Right. I think it's said to people, if you want to roll back Buckley, we're not going to touch that. We're not going to do that at all.

And in the years since, the public financing system in Vermont has largely been unused, I believe I saw earlier.

That's basically true. Yes. Right.

That very few candidates are using it. So then in 2010, we have citizens United. Now, Citizens United, contrary to what many people think, did not necessarily increase the rate of spending, but what it did do is it really opened the door for independent expenditures. And what these public financing models do is when you opt in, it limits the amount that you can fundraise and spend and you know the sources of where you raise money. But it doesn't deal with independent expenditures.

Right. I mean, Buckley allowed independent expenditures, but it was a little like driving on city streets with red lights and yellow lights rather than an expressway. And for this outside money. So you could always find a way to get unlimited amounts of money from deep pocket A to campaign B. But you might have had to go through some hurdles or ups and downs. There were certain things you couldn't do, even though the money, in that sense, the amount of money wasn't. It wasn't limited, but some of the pathways you had to take to spend it did place some restrictions. What Citizens United did was basically said, we're going to put you on the expressway for big money.

And it made it completely easy to spend unlimited amounts. And the floors super PACs.

Yeah. The problem for that was these systems of public financing said you can get X amount of money, and then we'll have trigger funds that will get you up to three times that amount of money. But we saw a steadily rising sea of big contributions that would eventually overtake those limits on the public financing system.

Right. And ever since, this has posed a problem to campaign finances or public finance systems to a degree, which is that if you accept, you know, limited money, independent expenditures can come in and spend three times as much and drown you out, and you can't do anything.

And the original theory. Theory was because unlimited expenditures were still there when the system was first created because Buckley would permit those expenditures. The theory was, at some point, the money just didn't buy you anything more. And so if you had a certain threshold amount of money, you could still beat a privately financed opponent who had much more. So getting you up to three times that original amount was part of that theory.

Right. And we'll get to the trigger in a second. But, you know, the. I want to go back to Deb Simpson, because this now closes the loop on Deb Simpson. So what eventually took Deb Simpson out of office?

So, as I recall, it was 2010, right.

It was the same first election under the jurisprudence of Citizens United.

And around the country, there was a move by conservatives to fund an effort to move state legislatures to the right. And Maine was one of the places that was targeted. So they said, we can flip this state Senate from Democratic to Republican control by targeting, I think, five seats. And they needed to flip, I believe, four of them. And so they spent hundreds of thousands of dollars doing targeted attack mail. And under the Maine law, you were supposed to report those expenditures. And that report would trigger the matching funds. So that would keep. Have a candidate, keep pace. So Deb Simpson was one of the targeted people. Her son was biracial. The mailings basically dealt with race attacking her, and they didn't report them. So Deb. Until it was too late. So Deb never got the matching money that she would have gotten to fight back. And so under the system, she should have had that money. And the people who spent that money were eventually fined, but I think it was too late. It was a massive expenditure, and the fine was 35,000. So I believe they said, oh, these states are all so different. We didn't really know what the rules are here. But of course, they had so much money, they easily could have hired lawyers to explain it to them. And my guess is they did know about it and said you know, if we just stay delay the reporting, will pay a small fine, and that's a cost of doing business. Whether they knew that or not, no one can prove. But I just think that they knew that they didn't need to worry about the law too much.

Right. And so just to kind of sum up, I mean, the consequence of Citizens United in relation to public financing is just it made it so much easier to spend on independent expenditures. And that's what happened in Maine. It's what happened across the country, especially with subsequent the federal court ruling in SpeechNow, which created the super Pacific.

Right.

It's just become easier.

Right. So the triggers were essentially needed and they needed enforcement mechanisms.

So some way to then say, if there is a certain amount of independent expenditures, you will get an extra tripling of your money.

Right. Okay.

So that, that takes us where I want to go, which is 2011, the very next year, the Supreme Court then says, what?

So out of Arizona comes a case and there's a coordinated legal strategy around the country because these cases were coming up in different places, but they were successful in Arizona. The basic theory was if I want to spend a lot of money, independent expenditures, attacking somebody, but I know they're going to get money to answer back, I may not spend that money. In other words, if I'm not guaranteed a monetary advantage because they are going to be able to keep up with me, I might not choose to spend the money.

In other words, the Supreme Court said by having the threat of the threat of the trigger be unleashed, that's stifling the speech of the rich donors.

Right. Because I might, I mean, I still have all the agency, I decide whether I spend that money or not. Right. And I can also take the lead. My opponent doesn't know when I'm gonna spend my money, and they're gonna have to wait for their response money. So, you know, the speech argument is, I think, taken to an extreme or an absurd extreme. But. But that case went forward and with contrasting cases from other places that didn't, you know, that disagreed. And so of course, with these disagreeing cases, that's what pops it up to the Supreme Court. And they said, yes, this does chill speech. And beyond all else, we have to protect speech. Right.

So the core principle of in the policy of Maine, in Arizona, which is that you're given a lump sum, and then if your opponents spend above a certain amount or there's a certain amount of independent expenditures, you get a trigger mechanism or you extra money. That is now unconstitutional.

Right. And you know the other thing about it is, obviously there's more speech. If a candidate with public financing has money to spend, they wouldn't have to spend otherwise. There is more speech, and there's speech on both sides. And the person who controls the amounts of speech is the person who decides whether to make that additional expenditure or not. But the Supreme Court said no to triggers, basically. And that took this key element away from this model of public financing because you couldn't accept more money under the laws that were passed. You couldn't accept more money if you were in the public financing program and you were left without these supplemental grants that could help you keep pace with your opponent.

So, okay, so right now, 2011, right, all of a sudden, the Supreme Court says, the Vermont model doesn't work. You can't limit the amount of money that's in the political system. The Supreme Court says, we're going to make it easier for independent expenditures to, you know, go into elections and potentially flood public financing systems. And then the Supreme Court says, and that whole trigger mechanism that allows you to match if there's a big lump sum of independent expenditures, that's also not constitutional. Okay, so all of a sudden, all this momentum, all these victories, it's a little. We're set back, we're set back and. But it's not over. The story's not over there. Now we're into a new phase of public financing in America. If this was kind of the third phase after the early ideas in the, in the turn of the 20th cent century and then the reforms in the 70s and 80s, and we just talked about the 90s, now we're into a new era, the post 2010, post 2011 era, which is really starts in 2015. And you were very much involved in this. And in 2015, Maine decided to try and fix their system, Right?

So in Maine, they said, all right, people need more money. And there wasn't any rule against raising more money or having more money or being publicly financed. But just having your opponent's action trigger that. That's why we call it the triggered funds. So if them triggering more money was the problem, well, then you say, let's not condition the money on them doing something. Let's simply say the way you got that first money by having public financing through $5 contributions. If you need more money, let's just give you that same amount of more money by getting more $5 contributions. And main they said, we like what we have, so maybe we should just say go out and get a chunk more of $5 contributions and you get more money. And they basically said, yes, let's do that. They also increased the fine. So if you were late reporting, like the anti Deb Simpson money, you'd pay a much, much bigger fine. But that passed on the ballot, Right?

So it was on the ballot in 2015. And it passed.

It passed. And so now candidates faced with massive independent expenditures. And if you take it to scale, Maine does have massive independent expenditures. They might be several times what the candidates spend. They now have. Candidates have recourse to get more money, and there's continued participation in the system.

Right. But also on the ballot in 2015 is one of the most exciting public financing models, a new model, one that had never really been part of the conversation. I mean, it had been part of some academic circles, but it never been enacted in law, just like the main clean elections program had never been enacted before 1996. In 2015, you also helped a coalition pass a new model in Seattle.

Right. So by this time, we were being called every voice. And David Donnelly, my longtime colleague, was running the campaign side of that. And folks in Seattle had come very close to winning a matching fund system of public financing, which I know we'll get to later. Like New York's, right? New York City, and people didn't give much of a chance, but without much money and without much big backing, they came really close to winning. So they were saying, let's go for it next time around. Let's put something on the ballot in 2015. After thinking about it, they worked with a local group called the Sightline Institute that did a lot of policy research and said, let's try this voucher system. Which the. The first time I know it had been, the proposal had been developed was by a Yale Law School professor named Bruce Ackerman. Called it, I think, Patriot Dollars, right?

And Larry Lessig was also one of the big early intellectual backers of this and has been a long time advocate of it.

So the basic idea was let's promote participation and promote equity at the same time, get more people involved. So in a matching fund system like in New York, if I get $10 from you, I get a six to one match at that time, so I get another 60. And that's how it works. So this system was a voucher system. They said, let's give every resident of Seattle $100 in four $25 vouchers. Now, these are worthless piece of papers

that can only be used for political spending.

The only way they turn into money, if they are turned in by a Candidate who's qualified by raising a certain number of small donations has qualified for these vouchers. So I can collect them, but unless I am part of the voucher program, I can't turn them in for money. So all of a sudden, you've made everybody, at no cost themselves a potential $100 donor to a candidate. And when I say there's more participation under the system is because if I go to your door and you give me $100 in vouchers, I get that hundred, and it's easy for you to give. But I don't get a six to one match. In fact, in a matching system, I get $100. I get another 600 automatically. Right. The six to one match kicks in, but in the voucher system, I got to go next door, knock on somebody else's door, and get $100 from them. So it requires more people participating, and that was the idea behind it. So make it easier for everybody to give. So a person who is living paycheck to paycheck can still give $100. Someone who's homeless in Seattle can still give you $100. So there were candidates campaigning within the homeless community. Right. The city's leading housing advocate was a candidate in this first election under vouchers and went to the homeless people and said, I want to stand up for you. I've got a track record and got hundreds of dollars in vouchers from homeless families.

That's a really radical transformation of political campaigns. Okay. In 2015, goes to the ballot. It passes.

It passes. Yeah. Dramatically.

First time anywhere in the United States.

Yeah, around that close to that. Two to one margin again.

So in 2015, you win, or public financing advocates win in Maine to fix the system. To fix it under the jurisprudence of the Supreme Court, to fix the whole trigger mechanism. And then also in Seattle, it passes a new, you know, public finance system, a new. A new tool that we've added to our tool belt, our toolkit that we can use expanding forward. And indeed, Nick, you and I have spent a lot of time looking at the numbers from. So it went into effect for the first time in 2017 for two at large races. And then this past election in 2019, it was the first one for district races, so there were about. There were seven, I believe, candidates that were seven races where vouchers were applicable. And the results, Nick, have been really remarkable.

Yeah, yeah. So I took a quick look at the numbers, and so just a little bit of the backstory here. The council in Seattle had run afoul of the desires of some of the biggest corporations in Seattle. In fact some of the biggest. One of the biggest corporations in the world.

So this is 2019? 20.

Well, yes, in 2018, 2018, the lead up to the elections, they're taking on the city council is saying we've got a great homeless and housing crisis here in Seattle. Part of this has been caused by tech corporations which have offices here, attracting lots of people into the housing market, affluent people, we're paying them well and so they're taking up the existing housing, bidding up the cost of housing. And all of a sudden people who've had homes before can't afford them anymore and there's not enough housing. So there are more and more homeless people. And it was becoming quite a crisis affecting large numbers of people. And so the council said we ought to put a tax on the corporations that are hiring lots of workers here that in their view were helping create the problem. So they said yes. Amazon said nuh, because this tax was something they'd pay more on than anybody else.

And Amazon, that's their HQ right there, their headquarters is in.

Right. They have over 50,000 workers in a city that's not that. It's not a big city, it's not New York City or LA or Chicago. It's substantially smaller. So they said no. The council sort of backed off one proposal, cut it in half. Amazon still said no. The council passed the smaller version, nine to nothing. Amazon said, you know, we're going to put something on the ballot and here's our polling. We're going to wipe you out, we're going to turn this over. Wouldn't you rather just reverse it and save yourself the embarrassment of being this wrong? And they also, it was clear they were, I think people thought, and they'll come after us electorally.

In other words, they were going to spend massive amounts of money on independent

patriots to wipe out the council. The council turns around, they go from a 9 nothing vote in favor of a modified version to repealing the modified version they just passed 7 to 2. So almost everybody switches their vote. And then Amazon is pretty clear that they'd like a council that is more malleable and more friendly to them. So indeed, four members of the existing council say, I'm not going to run again. So there are seven district seats up. There are two others that are at large, but those aren't up in 2019. And Amazon and some other corporations, but mostly Amazon spend money like no one has ever seen before in outside expenses.

Right? Amazon pledged 1.5 million as as far part of, I believe, a $4 million campaign to take over seven seats.

So there's seven seats. And this is an unprecedented amount of money. One stat I saw was that in the previous 20 years, when you add up all that independent expenditure Money for those 20 years, it was still less than what was being spent in this one election cycle. And in six of the seven races there was a candidate whose Amazon was backing versus a candidate Amazon was not backing. So you had six races where this money was zooming in and basically you had a setup where you had all the candidates, almost all the candidates were taking vouchers. It wasn't like voucher candidates versus non voucher candidates. They were also gathering lots of smaller contributions. The question was, in an arena where you had lots of people giving money, lots of people getting vouchers, would the decisive blow be struck by Amazon coming in with a huge independent expenditure? And this has been the worry since the Supreme Court really created this expressway for independent expenditures. And on election day the voters voted. They have a mail system. So often the voters, when the votes are mailed in, they aren't recorded for up till a week later. Right.

It takes a little while.

Yeah. So actually the results didn't look terrible for Amazon the first night. But when all the votes were counted, five of those six candidates where there was a choice between an Amazon backed candidate candidate and someone who wasn't backed by Amazon. Five of the six candidates who won were the people who were challenging the Amazon backed candidates.

In other words, Amazon lost in five of the six races.

Five out of the six races. And they were left with two things. One, a council was probably more amenable to those kinds of taxes than the one before. And they, I think, took the fear away. I think the next time around people won't be quite as scared as Amazon's bucks. Because the small contribution based system that included vouchers had such a high participation, so many people were paying attention, so many people were giving small contributions that the Amazon money was seen for what it was. People ignored those ads and Amazon itself became an issue and there was a backlog against it. I think you saw the limits of what, what this super big money could do doesn't mean we don't need antidotes against it. But there's a level at which high participation, high visibility raises with disclosure. It was really important that Amazon's money was made public. Had it not been made public, who knows exactly what might have happened. But the voters knew. Well, Amazon is having to spend so much Money, maybe there's something wrong with this. I don't want anything, anybody to think our council can be bought. So. So it's quite likely there was a huge backlash against that expenditure. And certainly it's disclosure that makes that backlash possible. Right.

And so the key point here is not that the vouchers, since both sides were using vouchers, the point is not voucher versus not voucher. The point is that the vouchers allowed for the anti Amazon candidates to run a viable campaign while engaging the community around them in a way that allowed them to compete and eventually win. In other words, the vouchers served as both, both a mobilizing force as well as a sustainability force in their campaign. And so, you know, it was very successful. Now there are some problems with the system, but not to get into the minutiae about it, at the end, the candidates had to be released from their spending limits because everyone had redeemed as much as they could in vouchers and they showed that there was a certain level of independent expenditures. So there are a couple of fixes potentially to the system that will have to be made. But the key point here is that the vouchers in 2019 and in 2017 mobilized a lot of civic participation. A lot of new donors came into the system and it allowed people to who have never given before, including people who live in low income housing, you mentioned, people who are experiencing homelessness to give for the first time. So it's a really, it's expanding the political community in a way that, you know, other, other public finance systems may not do in this, in the same way. In other words, this is another, another system that we just need more data from.

Right. And I mean, I think in general, what you can say is there was an explosion of big money in that race and there was also an explosion of citizen participation. And in the end, the citizen participation far outweighed the power of that money. And that's a really good thing to know that organized people acting together can beat back some of the deepest pockets in the world, not just in Seattle, but Amazon's pocket for practical purposes are deeper than anybody's.

Right. And I just want to again emphasize this, that the point is not that the vouchers exceeded or somehow matched the Amazon spending, because that wasn't true.

Right.

But what happened is again, the vouchers provided the baseline to run an effective campaign. That is the key to the vouchers.

Yes.

Yeah, yeah, excellent. So, and just a couple more points on the vouchers from the studies from 2017, Nick, are really just quite remarkable in terms of the people who used vouchers are more representative of the electorate than those who were just giving cash. It increased the percentage of funds coming from constituents as opposed to those outside of the city. And honestly, more candidates were able to run right with vouchers. And again, that's the key reason why public financing is so powerful.

That's right. I mean, I think the person who has said it most succinctly is Larry Lessig when he says campaign finance is all about who a candidate depends on financially to win their office. I think the different systems of small donor based public financing system, and you can do it several different ways. The idea is to have the people you depend on for your campaign money look like the people you want to represent. Right. Not like the people who are the richest or the corporations with the best lobbyist fundraisers, but you want the donors to look like the constituents. And that's what these small donor systems, where you combine small contributions with public financing, that's what they do.

Right, right, right. And one of the really interesting things, at least from my perspective, is that in 2017, the voucher users were more representative of the electorate, but not so much on the. On the racial side, in other words, that the voucher users were not really super racially diverse. And so what the program did to try and fix that was issue community grants to increase the, you know, to educate about the program. And we're waiting on the numbers for 2019. But again, some of these programs, it takes time that, you know, requires some real efforts on the part of the government and civic groups to really get us to a place where the donors, even with public financing, are actually representative across all demographic categories.

Right. And so in Seattle, they said, we just don't want vouchers to be used by a lot of people, but we want them to be used across the board in all the different kinds of communities we have here. You know, they printed the voucher materials in, I think, a dozen languages as a way to reach out to all the residents of Seattle. And then they made these community grants, grants to community organizations that service communities that were participating less in the vouchers as a way of acquainting people with them. And it wasn't simply, here's the voucher program, here's how it works, here's your voucher. But it was really a civic education. Here's what the city council decides. If you have a stake in all these different kinds of issues, here's a way to Have a voice when candidates need money. So you. It was really a process of civic education than just something about vouchers. And that's really healthy to make sure people know they have a voice in the system and the ways they can exercise that voice.

Right. And so if there's one thing listeners can take away from this conversation is that the devil is in the details in these programs. And it may sound wonky, it may sound kind of boring, but the way we design these systems, whether it's through community grants or how much reset the thresholds for campaign limits, or the amount of the match and public financing is critical to the success of these programs. Programs, because there are many different metrics here. And so I want to quickly shift the conversation to matching funds, like in New York City, because your organization did a fascinating study, I think, in 2013, about the matching fund, where unlike vouchers, you have to give a small amount of money and that money is then matched at a given rate. You found that basically, if you allow for a matching system to be matched up to above $100, it ceases to be representative of racial minorities.

So what we did was this is in 2013, and there was a question about how to set the level of matching funds. Is it better to have $250 matched at 4 to 1 or $100 matched at 8 to 1 or 1? Whatever, right. So what difference does this make? So we actually downloaded the data from New York City, and then in many, most jurisdictions don't even record small donors, who they are, where they live, because the small donor money isn't that important, so they don't even track it. But in New York City, where it triggers a match, the small donors are important. So they do keep that data. And we matched contributors to their census data for their little small neighborhood data, and then sort of got a measure on race, on income also, and said, at what point does your average donor, $10 donor, a $50 donor, $25, what point do they demographically look like New York as a whole? Right. And so it's sort of complicated methodology, but what we found was that people who give 10 and 15 and $25 donors give that amount, look like New Yorkers at large and are very diverse in terms of income, in terms of ethnic and racial makeup, and you begin to lose that and things skew wider and wealthier, even at you see those effects at $75 and $100, so you get less representative as you encourage contributions. Now, in the big world of Politics, $250 or $500 or $1,000 may sound small. I mean, may sound small compared to what Amazon puts in Seattle. But for ordinary people, giving 250 or 500 or $1,000 just isn't going to happen.

Right, right. So you lose the effect of the diversifying of the donor base when you allow that threshold to increase beyond 100.

The higher it gets, the more you lose. I mean, it's what you might expect, what common sense would tell you. But we looked at it demographically, so I think that's been the argument. And it's in New York, they know this. And so the system first, I think, matched the first thousand dollars one to one. They changed that to a four to one match on $250, and then they went to a six to one match on 175. So each one of these gives more expanded power to the kind of donation that an ordinary citizen representative of New York as a whole might make. And now they've even increased, increased that up to 8 to 1.

They also increased the matchable amount for citywide races.

It went up to 250. Yeah, but they also did some other things. I think on the whole, the reforms they made, I think were quite good ones. And I'm going to be very curious to see how it all works out when the data is crunched. Right.

So I don't know how many of our listeners followed all of that, but basically the takeaway is there's a reason why at Equal Citizen we obsess so much about the specifics of the policy. There's a reason why we get into the weeds, because it really does make a difference in terms of the goals of the program, which is to allow for politicians to be dependent not upon special interests and big money, but upon the people themselves. So I think that that's key. So, Nick, I want to ask you one more question, and then we're going to wrap up, which is you've seen this movement go from before clean elections passed in Maine when there was no hope, and it was just a leap of faith. You saw it passed. You saw it spread across the country. Well, at least across the Northeast and then in Arizona, and then you saw the Supreme Court sucker punch it and say, no, you can't do that. And you've went down to the abyss. And now you're seeing kind of it sprout up again in new models and new places. And you see presidential candidates talking about this. What are your thoughts about the state of the movement for public financing? And just are you hopeful about the Future?

Absolutely. I mean, there are people who all over this country are trying to figure out how to make vouchers or matching funds and other systems work. There are state after state, either at the ballot or in state legislatures, resolutions are being passed for a constitutional amendment that would allow these unlimited expenditures to be limited. Big money. Even as these systems are succeeding, big money is having a larger and larger role. We're seeing a surge in small donations also. That is, I think, a reaction to the power of big money. So I'm optimistic. I don't think the movement for change won't stop unless the problem is dealt with. Right. I'm not worried that even if there's a lull sometimes or there's some setbacks, what drives this forward is people wanting to have their voice heard. I think that's pretty fundamental to being a human being, wanting yourself to count. Right, right. And so it's across all different kinds of democracy issues. And the money in politics field is still pretty rotten in terms of the inequity that's built into the system. So there are always going to be new activists, new organizations, new activists, new

political leaders and new ideas.

Yes. And new policy ideas. And certainly we're seeing an uptick in the elected officials who want to see public financing at the. At the presidential level. We've seen so many of the candidates now not only say they're in favor of public financing, but they would put democracy issues, including campaign finance reform, on their day one list of things they want.

Right. And some are actually giving specifics. I mean, Bernie has supported vouchers, so has Andrew Yang. Kirsten Gillibrand supported vouchers. Elizabeth Warren has been clear about. She supports a matching system of 6 to 1. I mean, the idea that these presidential candidates are not only endorsing the idea, the concept of public financing, but giving us the specific model, I think is a sign of the movement.

And on Capitol Hill with HR1, you have a really forceful, strong public financing bill that Representative John Sarbanes has championed for years and years, but now his whole caucus has voted for it. And in the Senate, Democrats have supported it as well. So I think that that's a huge leap forward as well. Now, obviously, once Democrats are in a position of power, some people are going to find ways to turn around or have disagreements, but it's still a big step forward. And I will remind you, the lesson from Connecticut is you put people on record, and then when an opportunity comes again to move it, they have a hard time turning around saying, well, I used to believe in this, but now I don't.

Right. And the lesson from Massachusetts is just because it has a D next to their name doesn't mean that they're necessarily going to support reform and that we have to keep pushing. And that's why a citizens movement for citizen equality is key.

That's right. It has to be bottom up. I will also say this. I think at the elected official level, this is less of a bipartisan issue. The parties have really been different. That doesn't mean you can't find some Republican champions, but they are harder to find. And it doesn't mean all Democrats, Democrats are going to go to the mat for this or even support it. But I think those differences are important. But I'll say this. At the average citizen level, whether you're a Democrat or Republican or you're mad at both parties, you want your voice heard. And these systems do that. So ultimately, I think this is much less a partisan issue at the level of your everyday citizen. They just want their voices heard. Even in this surge of small donors, there are lots of examples in the Democratic side of people gathering small donors together and having success, but Donald Trump's done that as well. So there are activists on both sides of the issue, but ordinary people who can't give $1,000 or $5,000 or write tens of millions of dollar checks the way some of the billionaires are doing now. This will allow their voices to be heard, and I think that's a popular idea among all citizens.

Well, Nick, thanks so much for joining us. Really appreciate it.

Okay.

All right. This has been another episode of the podcast, another Way. See you next time.