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David Grosso

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We Can Fix Our Campaign Finance Laws and Use Full Disclosure to Stop Corruption in D.C.

Posted: 02/15/2012 4:16 pm

As I have written here before, corruption in D.C. damages our chances for full voting rights and cheats District residents out of city services paid for by their own tax dollars. Because half of the District's elected officials are under investigation, recent federal prosecutions, along with a cascade of regular and special elections, may help clean out the D.C. Council. But we need more: we must modernize our laws to keep up with increasing efforts to evade existing campaign-finance limits. Just as we need ethics laws with real teeth, we must demand an update to our campaign-finance laws to give them some bite.

Before I offer my solution, I want to be clear about the scope of the problem.

Let's look at the most recent and egregious example: legalized Internet gambling. The D.C. Council just repealed Internet gambling legislation, also called iGaming, after a limited but damning investigation, combined with (as I noted here) public outrage over the secretive way iGaming was forced through the Council. Councilmember Michael A. Brown, who pushed iGaming legalization, quietly tacked it onto an important budget bill, rather than abiding by the usual practice of making it a stand-alone bill that would see a full public hearing. He did so while his law firm represented much of the gambling industry and while he made money, as a lobbyist, from that firm's profits. According to the Washington Times, Brown also failed to disclose $200,000 of income from that firm. We still do not know to what extent the clients of Brown's firm were invested in legalized gambling. Yet, as the Washington Post noted, at the time, Councilmember Brown did not even disclose this blatant conflict of interest. And it gets worse.

According to news reports, Brown received donations from four top officials of the company that was awarded the iGaming contract worth $38 million. And each donation was the maximum the law permits from a single individual or company. These donations were collected by the same councilmember who, in the late 1990s, pleaded guilty to criminal campaign finance violations, in which he admitted to distributing money to several different people, who then donated the money to a campaign in their own names, in an admitted attempt to launder the money and subvert the legal limits. This time, Brown returned the checks -- but only after the questionable contributions were discovered by a reporter. Would Brown have returned the gambling money if he hadn't been caught? We must demand more from our elected officials.

So how can we stop this vicious cycle of corruption and back-room deals that subvert our elections?

Convincing the Council to revisit the ethics law it recently passed -- which still permits councilmembers to use "constituent services" slush funds to buy season tickets to sporting events -- will require a change in leadership. But we can still update our campaign-finance laws to keep up with the scheming and inventiveness of those politicians intent on hiding the source of contributions and busting the legal limits in order to game the system and subvert our elections. For instance, there is a grassroots effort just beginning that would add an initiative to the November ballot to allow voters, rather than the public officials themselves, to ban corporations from contributing to candidates for public office. If this effort is successful, it will be a major step forward. However, I believe we need to start cleaning up our city right now.

Beginning today, we can hold our politicians accountable, and as candidates we can hold ourselves to a higher standard, by requiring full disclosure for all campaign donations. The problem is this: As the law now stands, individuals like Brown are accepting contributions from individuals as well as from multiple companies owned by those individuals -- yet another attempt to conceal the source of donations from the public and to undermine our laws that limit the amounts of campaign donations. At the same time, large checks are often bundled together and delivered to the candidate by a single person hoping to use this leverage to influence the candidate's future votes. These schemes, as the Washington Post discovered, can easily allow a single individual who owns four LLCs to donate five times the legal limit. Yet, unless a reporter happens to dig up enough information to follow the money, the public may never learn about such influence-peddling, because the law does not require that the candidate disclose this information.

This must end. Until we can ban these donations, or change the law so that the Office of Campaign Finance requires full transparency, the public will not be able to hold its elected representatives accountable. For now, as both challengers and incumbents, we must hold ourselves accountable.

I propose a new standard, which I challenge every D.C. Council candidate to follow, and which I will begin to follow immediately.

  • Every donation from a corporation must include a disclosure of the directors and major shareholders of the company, and every donation from an LLC must include disclosure of its managers and members -- and those of every parent company, all the way up the chain, including the address of each company, so the public will know what companies support which candidates and with how much money.
  • If a single person bundles contributions from more than one individual or company for delivery to a candidate, the bundler's name, the amount bundled, and from whom, all must be disclosed.
  • These disclosures, along with the existing disclosures, should be prominently displayed on each candidate's website.

Because updating ethics laws takes time and, as we have seen, can be subverted by the very officials to which the stricter laws would apply, beginning in the next reporting period, I will voluntarily hold myself to this standard. I will also join with the public to demand that all other D.C. Council candidates agree to this transparency challenge and hold themselves to a higher standard. I hope they will join me in creating a cleaner electoral process and a more ethical city. We certainly need it.

 

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