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Whither Campaign Finance?

Gregory Hladky

November 19, 2009

It could be considered the "perfect storm" for Connecticut's fledgling public campaign finance system, and it may not be survivable.

A ferocious series of political, judicial, fiscal, legislative and economic pressure fronts are coming together in a way that has state and party officials nervous about whether this program will make it through the 2010 state elections.

The system is designed to reduce or eliminate the influence of special interest money on state campaigns. Passed in 2005 after a series of ugly political scandals, the program uses taxpayer money to pay for campaigns by candidates for the state legislature and statewide offices such as governor. (It doesn't apply to federal races.)

Its preliminary test came in the 2008 General Assembly elections. The voluntary program set national records for candidate participation, costing the state about $9 million. The final exam was to be next year's legislative and statewide elections, which experts initially estimated would have a $38 million price tag.

Then came federal rulings that portions of the law, those dealing with how minor party candidates are treated and banning political contributions by lobbyists and state contractors, are unconstitutional.

The state has appealed. No one knows exactly when or what the appellate court will decide. (If you're betting, the smart money would be on the horse named "Unconstitutional.")

The judicial storm cloud is only the beginning.

Consider the financial troubles raining down on the state and its campaign finance fund.

When Connecticut's last fiscal year ended on June 30, the fund had about $42.5 million. It expects to pull in $15.5 million (from unclaimed assets like old bank accounts that have become state property) during the next 12 months, and about $9 million in the following year.

But lawmakers siphoned off $18 million from the fund to help solve the budget crisis. That will leave the fund at about $39.5 million when the election campaign starts to heat up next summer.

"The good news for us is we will get part of the additional funds for the next fiscal year in the middle of the [2010] election cycle," said Beth Rotman, director of Connecticut's campaign finance program. Adding everything, including interest and an inflationary increase, the fund will have $48-50 million for next year's campaigns.

"To be on the safe side, we need to have $48 million," Rotman said. She calls that estimate "incredibly conservative," saying it would cover a host of contingencies and a flood of extra candidates. That flood may be on the way.

There were already six governor-wannabes seeking the Democratic nomination even before Republican Gov. M. Jodi Rell announced last week she won't seek reelection.

With Rell out, state Republican Chairman Chris Healy is expecting at least three contenders for the GOP nomination. State Democratic Chair Nancy DiNardo says there may eventually be as many as eight Democratic gubernatorial candidates.

It's unknown how many of those could raise the $250,000 in small contributions (of $100 or less) needed to qualify for matching public campaign financing grants in the governor's race. It's unknown how many minor party candidates may pop up and qualify for governor, attorney general, treasurer, secretary of the state, treasurer and legislative offices, which have differing, lower qualifying thresholds.

Ned Lamont, the Greenwich millionaire who became a left-wing hero in 2006 by taking the Democratic U.S. Senate nomination away from Joe Lieberman, is exploring a run for governor. George Jepsen, who chaired Lamont's 2006 campaign, says Ned may decide to use his own money rather than accept public financing. In the U.S. Senate race, Lamont spent $15 million of his own dough, only to lose the general election. If he becomes a "high-spending, non-participating" candidate, in Beth Rotman's words, that will put more stress on the public financing fund.

The law says that if a non-participating candidate spends more than a participating candidate gets in public money, the fund will give the participating candidate enough to match what the outside-the-system candidate spends. If Lamont decides to spend $2 million on a primary, his opponents could each get double the usual $1 million primary grant.

"If he were to spend $6 million [on the general election] out of the box, his opponent could get $3 million twice," said Rotman.

Those numbers are not political fantasy. In 1998, Republican incumbent Gov. John G. Rowland (who later ended up in federal prison) won reelection after raising more than $6 million.

All this doesn't faze Rotman, who's convinced they'll have the money to handle everything. What sends shivers down her spine is "The Revision Clause."

This gem was inserted in the campaign finance law by lawmakers scared a court might, at the last minute, rule the new system unconstitutional. (Yes, they had an inkling in 2005 that what they were doing might be fucked up.)

The clause says that, if there's an injunction blocking or overturning the law after April in an election year, and the legislature doesn't take action to correct the problem within seven days, the entire public financing program dies. Connecticut would instantly return to the nasty days of special interest money and candidates on their knees, slobbering for lobbyist cash.

"That is our nightmare scenario," said Rotman.

The state Elections Enforcement Commission is pleading with legislators to repeal that section. "We need to get rid of that clause now," insisted Rotman, who warned it better happen before lawmakers get tangled up in budget horrors next year.

All this is happening when Connecticut is again wallowing in a budget gap already estimated at $500 million.

As icing on this political turd-cake, there's the likelihood that a heated U.S. Senate campaign involving troubled Democratic incumbent Chris Dodd and a pack of GOP challengers will be sucking up whatever recession-ravaged political contributors are willing to hand out next year. It could leave state candidates scraping for leftovers if the public financing system goes bust.

Rotman believes lawmakers will act to save the system from the courts or the budget mess.

"The riskiest thing they can do now is to do nothing," she said. The state GOP chairman, whose party is challenging the program as unconstitutional, has a very different take on the campaign finance system's potential money troubles.

"I hope it bankrupts the state election system," said Healy. "It's an obscenity to have state tax dollars used to support political candidates for any race.