Clean Campaigns Bill (Council Bill 119701) LISH WHITSON, ANALYST GENDER EQUITY, SAFE COMMUNITIES, NEW AMERICANS, AND EDUCATION COMMITTEE DECEMBER 11, 2019 Agenda 1. Existing Conditions a. Spending in Seattle elections b. Summary of Seattle’s current campaign finance regulations 2. Clean Campaigns Proposal (CB 119701) a. Limits contributions to independent expenditure committees b. Prohibits foreign contributions c. Requires transparency in political advertising CLEAN CAMPAIGNS BILL DECEMBER 11, 2019 1 Spending for or against General Election City Council candidates Year City Council Races Independent Expenditures (IEs) for or against candidates Cash and In-Kind Contributions to Candidates Democracy Voucher Contributions to Candidates % of Spending Total $ Spent for or against For or Against General Total Spending General Election in All Races Election Candidates by Candidates IEs 2011 5 $0 $1,672,288 N/A $1,672,288 0.0% $2,875,209 2013 4 $3,577 $933,866 N/A $937,443 0.4% $3,723,741 2015 9 $669,340 $2,707,044 N/A $3,376,384 19.8% $6,141,227 2017 2 $225,867 $323,416 $964,550 $1,513,833 14.9% $6,992,677 2019 7 $4,047,134 $1,819,300 $1,427,737 $7,294,171 55.5% $13,687,258 Source: Seattle Ethics and Elections Commission, www.seattle.gov/ethics/ Numbers as of December 3, 2019. Expenditures include both primary and general election expenditures for and against the general election candidates. Spending was deemed to be “for” a general election candidate if they were either for the general election candidate, or against their general election opponent at any point during a campaign. Total spending in all races includes spending by IE Committees that was not directed at a particular candidate, including the IE Committee’s staffing and fundraising expenses. Of the money spent by IE committees, one third was spent on overhead. CLEAN CAMPAIGNS BILL DECEMBER 11, 2019 2 Total Contributions to 2019 Independent Expenditure Committees $0 $500,000 $1,000,000 $1,500,000 $2,000,000 $2,500,000 $3,000,000 Civic Alliance for a Sound Economy People for Seattle Unite HERE Local 8 PAC SEIU 775 Quality Care Committee Civic Alliance for a Progressive Economy Seattle Fire Fighters PAC Seattle Hospitality for Progress PAC Moms for Seattle Native Women's PAC District 1 Neighbors for Small Business Neighborhoods for Smart Streets PAC Working People for an Affordable Seattle Alliance for Gun Responsibility Fund People for Affordable Livable Seattle 350 Seattle Action PAC Seattle Neighborhood Council CLEAN CAMPAIGNS BILL DECEMBER 11, 2019 3 Top 15 Contributors to Independent Expenditure Committees in 2019 $Amazon.com SEIU POLITICAL EDUCATION AND ACTION FUND UNITE HERE TIP STATE & LOCAL FUND Vulcan Inc. IAFF Local 27 Washington Association of Realtors Washington Hospitality Association NICK HANUAER SEIU 775 QUALITY CARE COMMITTEE UFCW 21 PAC UNITE HERE LOCAL 8 Expedia International Association of Fire Fighters NAIOP Washington Chapter Hedreen Holdings R.C. Hedreen Co. SEIU WA STATE COUNCIL PAC CLEAN CAMPAIGNS BILL $250,000 $500,000 $750,000 $1,000,000 $1,250,000 $1,500,000 Type of committee receiving the contribution: CAPE – Civic Alliance for a Progressive Economy CASE – Civic Alliance for a Sound Economy Industry PAC – Political Action Committee Labor Union PAC DECEMBER 11, 2019 4 Key Terms “Person”: individual, partnership, joint venture, public or private corporation, association, government, candidate, committee, political committee, continuing political committee, political party, or any other organization or group of persons “Contribution”: transfer of anything of value that is less than full consideration “Political committee”: any person planning to receive contributions or make expenditures in support of or opposition to a candidate or ballot proposition “Independent expenditure”: expenditure on behalf of or opposing a campaign, when: • It is made independent of a campaign • Is made without consent, collusion, or cooperation of a campaign • Is not a contribution CLEAN CAMPAIGNS BILL DECEMBER 11, 2019 5 Seattle’s Campaign Contribution Limits Candidates Collecting Democracy Vouchers Maximum Contribution Candidates Not Collecting Democracy Vouchers Councilmembers $250 City Attorney $250 Mayor $500 All Candidates $500 •No limits on contributions to political committees •Contributions to candidates and political committees must be disclosed •Campaigns may not participate in independent expenditures CLEAN CAMPAIGNS BILL DECEMBER 11, 2019 6 Foreign Contributions • No Seattle regulations regarding foreign contributions. • Federal law prohibits contributions from foreign nationals* and foreign principals** in connection with any election – federal, state or local. • Domestic subsidiaries of foreign corporations are eligible to contribute if the foreign parent doesn’t finance election-related contributions or expenditures. * Green card holders may contribute ** A “foreign principal” is a group organized under the laws of another country or having its principal place of business in a foreign country, including foreign governments, political parties, partnerships, associations, and corporations. CLEAN CAMPAIGNS BILL DECEMBER 11, 2019 7 Political Advertising Commercial advertisers must maintain documents and books of account, including: • Names and addresses of persons placing an advertisement • Nature and extent of the advertising • Cost and method of payment Documents and books of account must be open for public inspection: • During normal business hours • During election and for at least three years after the election Requirements only apply for campaigns, not legislative activity. CLEAN CAMPAIGNS BILL DECEMBER 11, 2019 8 Penalties • Violations of election campaign contribution regulations: up to $5,000 and return of contribution • Illegal contributions: greater of up to two times the contribution amount OR $5,000 and return of the contribution • May be sent for prosecution • Court may void the election if the violation probably affected the election. CLEAN CAMPAIGNS BILL DECEMBER 11, 2019 9 Clean Campaigns: Independent Expenditures Definitions “Independent Expenditure Committee”: political committee that makes (1) an independent expenditure or (2) contributions to other independent expenditure committees, greater than $1,000 or more in an election cycle. “Limited Contribution Committee”: A political committee that: • Has existed for at least 9 months; • Receives contributions of at least 150 persons if spending on district council races; • Receives contributions of at least 400 persons if spending on at-large council and city attorney races; • Receives contributions of at least 600 persons if spending on mayoral races; and • Only accept contributions less than $500 or from other limited contribution committees. CLEAN CAMPAIGNS BILL DECEMBER 11, 2019 10 Clean Campaigns: Independent Expenditures Regulations • Contributions to independent expenditure committees for Seattle campaigns limited to $5,000 per person. • No limit on contributions from limited contributor committees. CLEAN CAMPAIGNS BILL DECEMBER 11, 2019 11 Clean Campaigns: Foreign Contributions Definitions “Foreign Investor”: foreign government; foreign political party; company operating in foreign country or incorporated under foreign laws; or individual that is neither a citizen nor a permanent resident “Foreign Owner”: foreign investor, or corporation where a foreign investor holds “Foreign-Influenced Corporation”: • Single foreign owner controls 1% or more; or • Two or more foreign owners control 5% or more; or • Foreign owner participates directly or indirectly in corporate decision-making regarding political activities CLEAN CAMPAIGNS BILL DECEMBER 11, 2019 12 Clean Campaigns: Foreign Contributions Definitions “Chief Executive Officer”: highest-ranking officer or decision-maker in a corporation “Corporation”: a corporation, company, limited liability company, limited partnership, business trust, business association, other similar entity CLEAN CAMPAIGNS BILL DECEMBER 11, 2019 13 Clean Campaigns: Foreign Contributions Regulations • Foreign-influenced corporations may not (1) make Independent Expenditures or (2) contribute to independent expenditure committees. • Corporations making Independent Expenditures or contributing to independent expenditure committees must certify they are not foreign-influenced. CLEAN CAMPAIGNS BILL DECEMBER 11, 2019 14 Clean Campaigns: Political Advertising • Defines “Qualified Public Communication” (QPC) as a paid advertisement intended to influence political decisions • Requires documents and books of account be kept for QPCs for four years after the QPC occurs. • Requires reporting: • Leaders of corporations placing QPCs • Rates charged for advertisement • Subject of advertisement (names of candidates, election, legislative issue) • Names of candidates, candidate committees, treasurers CLEAN CAMPAIGNS BILL DECEMBER 11, 2019 15 Questions? CLEAN CAMPAIGNS BILL DECEMBER 11, 2019