Coordination in Michigan
Take a recent ad in Michigan, where a gubernatorial hopeful speaks directly into the camera as he walks through what appears to be a manufacturing plant.
“I’m Mark Schauer, and there’s a lot we can do to make Michigan’s economy better,” the Democratic candidate says. “Tell Gov. [Rick] Snyder his economic policies work for the wealthy, but not for the rest of Michigan.”
It appears to be a typical campaign ad. But it’s paid for by the Democratic Governors Association (DGA), a Washington, D.C.-based political group that can accept unlimited donations from labor unions, corporations and wealthy individuals.
Like the federal law, Michigan bans corporations and unions from giving directly to candidates. However, the state’s flexible coordination laws allow Schauer to take advantage of the DGA’s deep-pocketed corporate and union donors.
In Michigan, a candidate can coordinate with an independent group as long as the candidate doesn’t control or direct the group, according to Rich Robinson, who runs the Michigan Campaign Finance Network, which tracks outside spending in the state and advocates for better disclosure.
The ad — one of four the DGA has aired in Michigan, including three featuring Schauer speaking directly to the camera — would probably have been illegal if Schauer were a federal candidate because federal law prohibits corporations and labor unions from running ads coordinated with federal candidates.
Even if the funds came from an allowable source, like an individual or party committee, the ad would probably still have been illegal for a federal candidate because it would be seen as an in-kind contribution in excess of the legal limit, according to Matthew Sanderson, a campaign finance attorney with Caplin & Drysdale.
Neither the DGA, nor Schauer’s campaign returned requests for comment.
Schauer is clearly benefiting from the lack of a state coordination ban.
Typically the first ads of a candidate’s campaign serve as an introduction to voters. But Schauer faces a fundraising cap because he is taking advantage of limited public funds for his campaign and is more than happy to see the DGA pick up the tab, Robinson said.
Robinson predicted that most of the ads supporting the Democrat in this race may continue to come from the DGA.
And because the DGA is footing the bill, rather than Schauer, the ads don’t need to be reported to the state.
Unlike candidates, independent political spenders don’t have to report their ads to the Michigan secretary of state unless they specifically ask viewers to “vote for” or “vote against” a candidate. Those words were absent from this and other ads the DGA has produced to support Schauer.
Seeking clarity on state rules
In April, the DGA sued Connecticut claiming its rules for independent spending by political groups were too vague and too broad. The issue was over whether Democratic Gov. Dannel Malloy should be permitted to help the group raise money.
“If [the] DGA were not able to utilize its members to raise funds in support of its nationwide programs and activities, its ability to function effectively would be severely compromised,” the group wrote in a federal court filing.
The court ruled against the DGA’s request to block the 2013 campaign finance law in June, and the DGA dropped the rest of its lawsuit.
Similarly in Minnesota, GOP candidate for governor Jeff Johnson recently asked the state’s Campaign Finance and Public Disclosure Board to clarify whether he could raise money for an independent political spender, according to the Associated Press.
The answer was no.
Minnesota law says spending can be considered independent only if it is made without the consent, authorization or cooperation of a candidate. Fundraising is part of the spending process because no group can spend money if it hasn’t first raised money, the state agency explained in its February opinion.
By comparison, a federal candidate may ask donors to a super PAC, for example, to give no more than the federal contribution limit to a political committee — $5,000 per donor.