November 27, 2012

Missouri lawmakers seek to curb secret money in politics

For decades, reformers tried to dam the rivers of money gushing into Missouri politics. And for decades, those efforts reliably sprung leaks.

For decades, reformers tried to dam the rivers of money gushing into Missouri politics. And for decades, those efforts reliably sprung leaks.

Now a bipartisan group of lawmakers hopes to at least force donors to ditch their anonymity.

“This is not about Democrats or Republicans. It’s about letting voters know where money is coming from when someone is trying to influence an election,” said Rep. Jay Barnes, a Jefferson City Republican.

Lawmakers are considering a push for tougher disclosure laws — and stiffer penalties for those who ignore those laws — after a pair of nonprofit groups spent nearly $600,000 in secret money earlier this summer on unsuccessful attempts to swing a handful of Missouri elections.

And today, House Democrats plan to make their case that while such disclosure requirements are needed, they are only the first step. In a Capitol news conference, they plan to lay out their vision for campaign finance and ethics reform, which is expected to include a pair of longtime priorities for the party: limits on both campaign contributions and lobbyists’ gifts to legislators.

“Unlimited cash donations are just not what the public deserves, and not what they desire,” House Minority Leader Jake Hummel, a St. Louis Democrat, said earlier this month.

Nearly 20 years ago, Missourians voted overwhelmingly to put a cap on how much money someone could give to a candidate’s campaign. The money people of politics quickly found a way around the limits, skirting the law by funneling dollars to multiple political groups but aimed at the same campaign.

By 2008, Republicans finally had enough votes to undo the limits, arguing that the move would lead to greater transparency. It might mean truckloads of money pouring into campaigns, they argued, but at least Missourians would be able to track the license plates.

Despite efforts at reform, big money found another workaround last summer in the form of nonprofit organizations.

In July, a nonprofit calling itself Better Government for Missouri gave $300,000 to a political committee that paid for attack ads aimed at Republican Lt. Gov. Peter Kinder, who was running for re-election and won. Another group, Missourians for Low Energy Costs, gave $275,000 to a political committee that tried to sway three state Senate races.

In both cases, records show, the nonprofits formed and just days later began pumping money into political committees.

Both nonprofits in question are organized as 501(c)(4) “social welfare” groups. Unlike nonprofit charities, contributions to social welfare nonprofits are not tax deductible. The organizations are allowed to engage in political activity, and keep their donor’s identities a secret, as long as politics is not the group’s “primary activity.”

“But if someone is going to form a nonprofit and use it to funnel donations to political action committees within a short period of time, they aren’t really a nonprofit,” Barnes said. “They are a political action committee and should have to disclose donors.”

Rep. Todd Richardson, a Poplar Bluff Republican, said he was drafting legislation that probably would require any organization making a political expenditure to report its financial backers. Barnes said he hoped to be among the first co-sponsors.

Representatives from both nonprofits did not respond to requests for comment.

Democrats argue that even if disclosure laws were strengthened, Missouri still would be the only state that allows lawmakers to accept both unlimited lobbyist gifts and unlimited campaign donations.

That should spur an effort toward broader reform, they say.

“The argument for doing away with contribution limits was that it would improve transparency,” said Rep. John Rizzo, a Kansas City Democrat. “Now we have unlimited money and no transparency at all. We have the worst of both worlds.”

Rizzo said he thinks voters are tired of seeing a handful of wealthy donors hold so much influence over Missouri politics. He pointed specifically to retired investor Rex Sinquefield, who made 10 donations this year to Missouri candidates or committees of more than $100,000 each, and David Humphreys, a Joplin businessman whose family gave Republican Brad Lager nearly $1 million for his failed campaign for lieutenant governor.

Despite his party making the issue a priority for the upcoming legislative session, Rizzo said he doubts any broad campaign or ethics reform stands much of a chance next year.

“I think the system is broken,” he said. “It’s going to take a ballot initiative coming straight from the voters again to change anything.”

Republican legislative leaders — including House Speaker Tim Jones of Eureka — have adamantly opposed reinstituting campaign contribution limits in the past, and currently the GOP holds veto-proof super majorities in both the House and Senate.

Richardson said a good starting point for discussion would be the 2010 law that the Missouri Supreme Court threw out earlier this year over a technicality with how it was originally approved. Among other provisions, the legislation outlawed the laundering of donations through campaign committees and gave the Ethics Commission more authority to investigate.

“I think now it’s time to go back and take a look at that bill,” he said. “There was some good wisdom in the 2010 bill, and some mistakes, and I anticipate that it will be part of the conversation.”

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