New limits to campaign financing confuse Missouri’s political candidates | St. Louis Public Radio

New limits to campaign financing confuse Missouri’s political candidates

Oct 24, 2017

Just over a year away from what could be a crucial 2018 election, Missouri candidates are grappling with the new restrictions to campaign donations mandated by the voter-approved measure known as Amendment 2.

Close to 70 percent of Missouri voters approved the constitutional amendment in 2016, putting an end to the state’s 10-year status as one of only a handful of states without donation limits. But flaws in the new system are prompting the General Assembly and political activists to seek more changes.  

The Missouri Ethics Commission, charged with enforcing the new law, has had its hands full. The six-person panel has issued at least 15 different opinions addressing various provisions of Amendment 2. It’s also been caught in the middle of several lawsuits.

Missouri candidates for statewide and legislative offices are having to learn the ropes of Amendment 2, which imposes restrictions on campaign donations.
Credit Jo Mannies | St. Louis Public Radio

Some of the panel’s opinions have chipped away at one of Amendment 2’s core principles: Reducing the amount of money in state-based elections. That’s because there was little in the measure to stop the formation of political action committees, or PACs, that can raise lots of money to help candidates or causes.

The commission’s executive director, James Klahr, agrees that the amendment’s provisions can be confusing.

“Hopefully the commission’s opinions have clarified most of the questions that people have had about Amendment 2 and how it applies to their situations,” he said.

The ins and outs of Amendment 2

Here are the basics:

  • Candidates for statewide or legislative offices can accept donations no larger than $2,600 per election from any individual or political committee.
  • All candidates also can no longer collect direct contributions from unions or businesses; those donors have to form PACs to dole out their money.
  • Political party committees, such as the Missouri Republican Party or Democratic Party, can accept donations of no more than  $25,000 per election.
  • Amendment 2 bars PACs from donating to each other, but that ban is in limbo because of a lawsuit before the federal Eighth Circuit Court of Appeals.  Unless the court rules otherwise, PACs can donate to each other.

There are exceptions to the rules. The donation limits don’t apply to county or municipal candidates, who can still collect contributions of any size.

That’s why St. Louis County Executive Steve Stenger, who is seeking re-election next year, has become the state’s top recipient of large campaign donations.

An explosion of new PACs

Certain types of political committees also don’t have to comply with all the provisions of Amendment 2. That includes PACs set up to help certain candidates.

Some are so-called “leadership PACs,’’ set up by politicians or partisan groups. Others are allegedly independent PACS, although their aim is promote particular candidates or causes — or to attack people or ideas.

James Klahr, executive director of the Missouri Ethics Commission
Credit Marshall Griffin/St. Louis Public Radio

There’s been an explosion in the creation of independent political action committees since Amendment 2 passed. At last count, Klahr said almost 100 new ones have been formed this year.

Such PACs can accept donations of any size, but they are required to detail their donors in regular reports filed with the Missouri Ethics Commission.

They can either donate directly to candidates within the donation limit — or, in most cases, pay for other campaign activities, such as television or radio ads. (That’s what’s happening in the race for the 8th Senatorial District seat in Jackson County, where a PAC bought advertisements for Republican nominee Mike Cierpiot’s campaign.)

(These PACs are different from other types of independent entities often active in campaigns, known as 501(c)(4)s, that do not have to make their donors public.)

Although these outside groups are to be independent of a candidate’s own campaign committee, the commission recently announced that political candidates can, in most instances, encourage donors to give money to these PACs.

That ruling has raised questions about how independent the PACs really will be – and whether they might actually be vehicles used by candidates to skirt Amendment 2’s donation restrictions.

More donation restrictions may be coming

Such questions are prompting Republicans and Democrats to expand Amendment 2’s reach.

“Amendment 2 is well-intentioned, but flawed,”  said Sean Soendker Nicholson. He heads Clean Missouri, a group that’s trying to get a ballot initiative before voters that deals with a variety of ethics issues.

On the campaign-finance front, Clean Missouri’s initiative slightly lowers the individual donation limits for state House ($2,000 per election) and Senate candidates ($2,500 per election). The proposal also seeks to rein in all those new political action committees.

State Rep. Justin Alferman, R-Hermann
Credit Provided | Tim Bommel I House Communications

“The biggest loophole I think about is the ability for a billionaire like Rex Sinquefield to set up 100 PACs and just go around the clear intention of the law,” Nicholson said.

Clean Missouri’s proposal states that if a donor provides more than half of a PAC’s income, any donations from that PAC to an individual candidate will count toward the donor’s per-election limit.

For legal reasons, Clean Missouri’s measure doesn’t deal with the lack of limits on local candidates.  Nicholson said lawyers advised that the initiative might run into trouble if it touched on too many topics.

But state Rep. Justin Alferman, R-Hermann, expects legislative leaders to look into placing donation limits on municipal and county candidates.

Alferman said that lawmakers want a uniform set of  limits to campaign financing for all Missouri candidates.

“Because, if we’re going to have a set of ethics laws, we should hold our local and county candidates to the same standard,” he said.

Legal fights continue

Klahr, the executive director of the Ethics Commission, said the panel is staying out of the debate over what parts of Amendment 2 should be changed. Instead, the commission is focusing on interpreting and enforcing the law as it now stands.

“I’m hopeful that through this educational process that we’ve had through 2017, we won’t get too many complaints in 2018, if everyone understands better than they did, what the rules of the road are,” Klahr said.

But those rules could change soon. As mentioned earlier, a federal appeals court is reviewing some of the amendment’s PAC restrictions. And the Missouri Chamber of Commerce recently filed suit challenging the commission’s ban on corporate donations to the chamber’s PAC.

Those court decisions could reinforce or erode the power of Amendment 2.

Follow Jo on Twitter: @jmannies