A recent study by the Brennan Center for Law and Justice at New York University has found that Michigan’s campaign finance laws are lacking and is urging reform. The 24-page study, titled “Campaign Finance in Michigan,” assesses the state of Michigan’s campaign finance laws and highlights ways in which the laws could be strengthened. The Center argues that by strengthening campaign finance laws, the democratic process in Michigan would itself be strengthened.
According to the study, Michigan’s campaign finance laws suffer from large loopholes that limit their effectiveness. These loopholes include a lack of limits on contributions to PACs and political parties, an inadequate disclosure system that does not require disclosure for independent expenditures on so-called “issue ads” that do not urge people to vote “for” or “against” a particular individual or proposal, and limited use of public financing. The study its analysis into four areas covering disclosure, contribution limits, public financing, and enforcement. Disclosure in Michigan is limited by infrequent reporting and reporting that exempts “electioneering communications” (defined as advertisements in designated media, made within a specified period before an election that refer unambiguously to a candidate and are targeted to the candidate’s constituents) that do not expressly advocate the election or defeat of a candidate, according to the study. The study demonstrates that there are large loopholes in laws setting contribution limits, including laws that allow individuals to make unlimited contributions to PACs and committees despite a $20,000 annual limit on contributions to individual candidates. Similarly, while there are prohibitions on contributions from corporations and labor unions, they can be circumvented easily as there are no prohibitions on contributions to state parties as long as they are not used for “expenditures.”
In the areas of public financing and enforcement, the study argues that further laws are needed as well. The report argues that current public financing laws–described as “relatively ineffective”–set the spending limits too low and therefore lead many candidates to opt-out from public financing. The current public financing limits include a grant of $1.125 million dollars and a spending limit of $2 million, making it near impossible to compete in gubernatorial races that spend tens of millions of dollars. When it comes to enforcement of existing campaign finance laws, the Secretary of State, who is responsible for enforcing the laws, has little power to actually do so. The office cannot issue subpoenas or cease and desist orders and has no power to conduct investigations. Furthermore, the maximum penalty that can be assessed for violating campaign finance laws is $1,000.
The study makes several recommendations in each area, arguing that the improvements would enhance the democratic process in Michigan. In the area of disclosure, the study advocates increasing reporting frequency, enacting laws that regulate “electioneering communications,” requiring the disclosure of independent expenditures within 48 hours, and implementing laws that would require disclosure of donations to political parties for “party-building expenses,” a move that would close a soft money loophole. To improve laws governing contribution limits, the study encourages Michigan to implement limits on contributions to PACs and political parties as well as calling on Michigan’s Senate to extend the prohibition on corporate and union contributions to political parties for expenditures to “electioneering communications.” With regard to public financing, the study asserts that Michigan’s public financing system is “almost obsolete” and encourages the state to increase the amount of funding offered and the spending limits in order to increase participation in the program, which the study argues should be expanded to include all statewide, legislative, and judicial races. Finally, to enhance enforcement, the study calls for the Secretary of the State to be given the power to investigate campaign finance violations, issue subpoenas, and issue cease and desist orders. Penalties should also be made more proportionate to violations.
The study is the fourth in a five-part series authored by the Brennan Center that examines how campaign finance laws have worked and not worked in the Midwest. Previous studies have been published examining campaign finance laws in Wisconsin, Illinois, Ohio, and Minnesota.