Leadership shift sparks hope for supporters of campaign finance reform

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Campaign FiNew Mexico’s campaign finance system needs a major retooling.

This is not a new revelation. For years the Secretary of State’s office and supporters of reform have said as much.

Some of the law’s provisions are unconstitutional and therefore unenforceable. Inconsistencies and loopholes in the act make following the trail of money in politics difficult. And the law fails to acknowledge the recent rise of money flowing into campaigns from independent groups.

But following years of attempting to update the campaign finance law, 2017 could be the year for reform, with a new secretary of state and new legislative leaders.

Secretary of State Maggie Toulouse Oliver, incoming House Speaker Brian Egolf and incoming Senate Majority Leader Peter Wirth all have advocated for strengthened laws in the past and are expected to do so again.

And all three ascend to office in part due to the state’s campaign finance laws.

Toulouse Oliver took office after a November election necessitated when former Republican Secretary of State Dianna Duran pleaded guilty to six charges of misusing campaign money to support a gambling habit. Duran served 30 days in jail after resigning from office.

Wirth, a Santa Fe Democrat, takes over after former Senate Majority Leader Michael Sanchez lost his seat following a drubbing he took via ads paid for by Advance New Mexico Now, a Republican super PAC.

Egolf, also a Santa Fe Democrat, ascends to power after union-fueled super PACs helped Democrats regain control over the state House.

Because New Mexico’s current campaign finance law doesn’t require disclosure of spending on specific races, it’s hard to know how much Advance New Mexico Now spent to defeat Sanchez or Democratic super PACs spent to take out GOP incumbent House members.

What is clear is that Toulouse Oliver, Common Cause New Mexico and others will ask lawmakers during the 60-day session to increase disclosure and improve enforcement of campaign laws.

“The brunt of my focus this (legislative) year will be on ethics and campaign finance enforcement related issues,” Toulouse Oliver said after her December swearing-in.

While reform advocates hold out hope in 2017 for their proposals, some lawmakers may muddy the debate by calling for  elimination of contribution limits for candidates that took effect in the 2012 election cycle. They say the limits create an uneven playing field when super PACs that don’t coordinate with candidates or campaigns may raise and spend unlimited amounts of money that can dominate a race they choose to target.

“We’ve created more ways of hiding money than we ever had before,” said Senate Minority Leader Stuart Ingle, R-Portales.

That means the debate over campaign finance reform likely will get sticky during the 60-day legislative session.

“The issue has never been partisan,” Wirth said. “We’ve had bipartisan support and bipartisan opposition.

“There are groups of both sides that have issues with it (campaign finance reform),” Wirth reiterated. “And then, quite frankly, if we can get it up, then there’s a whole other conversation we need to have with the governor.”

Current rules allow little disclosure by big spenders

The year after the New Mexico Legislature passed a 2009 law enacting contribution limits that took effect after the 2010 election, the U.S. Supreme Court struck down limits for political action committees that don’t work with candidates or parties.

That January 2010 ruling by the nation’s top court undercut what New Mexico state lawmakers had attempted to do with the 2009 law, which was rein in the amount of money flowing into politics. Previously, individuals supportive of a New Mexico candidate could give a contribution of $100,000 or $200,000 and the recipient had to report it to the Secretary of State’s office in campaign filings. Sometimes, that generated news stories and public outcry.  

With the court ruling, the money given by wealthy individuals could now flow to super PACs that didn’t coordinate their activities with political campaigns.

The rise of super PACs spending unlimited sums independently combined with contribution limits for candidates, took much of the control over campaigns away from candidates and political parties.

In the 2016 cycle, legislative candidates spent more than $10 million compared to the nearly $17 million PACs spent, mostly on legislative races, but also on other contests.

For instance, when billionaire George Soros wanted to make sure Raul Torrez won last summer’s three-way primary for Bernalillo County district attorney, Soros dropped $107,000 into a new super PAC. New Mexico Safety and Justice did polling and bought ads to support Torrez, who took office in January.

While it was clear who Safety and Justice spent money on, following the money in New Mexico politics isn’t always that easy.

Advance New Mexico Now spent nearly $2.2 million in 2015 and 2016. But it isn’t clear what legislative races it targeted or how much it supported or opposed specific candidates.

Under current rules, there’s no way to capture each and every message or to know how much radio ads or mailers cost groups such as Advance, although New Mexico In Depth tried.

New Mexico In Depth’s Follow the Message project  (ftm.nmindepth.com) tracked many mailers and radio ads sent by Advance and other super PACs. Meanwhile, tracking TV ad spending revealed that Advance spent nearly $386,000 on TV ads, mostly to defeat outgoing Senate Majority Leader Michael Sanchez.

New Mexico’s laws are weak when it comes to tracking the flow of independent money. New Mexico is one of five states that require no disclosure at all for outside spending, which helped  earn the state an “F” grade in 2014 from the National Institute on Money in State Politics.

Many states require identification of the candidate money was spent on, whether the spending opposed or supported a candidate and more.

Montana, for instance, increased disclosure requirements after heavy outside spending in Republican primaries.

“These Republican lawmakers were being targeted by dark money and they couldn’t stand that,” said Denise Roth Barber, managing director of the Montana-based institute. “Their ox had to get gored first.”

Last year, the New Mexico Senate unanimously approved a bill to increase disclosure for such groups. But the measure, sponsored by Wirth, didn’t make it out of the House.

Common Cause Executive Director Viki Harrison said this could be the year such legislation succeeds.

“With so much money that was spent in the election, and that’s just what we know about it… this has to be the year,” she said. “We’re truly not capturing the independent spenders.”

Toulouse Oliver said she will also advocate for increased disclosure “so that we can try to shine some light on the dark money situation in our state.”

The devil in the details

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Maggie Toulouse-Oliver

At the same time, Toulouse Oliver’s office will begin writing rules to enforce the 2009 law that enacted contribution limits and required electronic filing.

Such regulations are now nonexistent.

Duran’s office twice scheduled hearings on proposed rules in 2015, but both hearings were cancelled after her criminal charges, resignation and guilty plea. By the time Albuquerque City Councilman Brad Winter took office in December, it was too late to create regulations for the 2016 election season.

“Ultimately we’ve had a lack of accountability in the system,” Toulouse Oliver  said. “Because the laws themselves are intentionally somewhat vague. You don’t want legislators getting too specific.”

That vagueness has led to an inability to enforce the law. Rules could clarify the law and improve enforcement.

For instance, there’s nothing in the law that prevents former lawmakers from continuing to spend campaign money after they’re no longer in office. NMID has reported on those who kept their accounts open and, while not taking contributions, continued to spend money on meals with “constituents,” computer equipment and more.

Only one of those instances is clearly under investigation, in part as a result of criminal charges in another case.

Former Sen. Phil Griego, who resigned in 2015 over a real estate deal for which he faces trial for bribery and fraud, is also being investigated by the attorney general for misusing his campaign money.

The office is investigating eight campaign finance complaints filed by the public, according to spokesman Mark Pino.

“In addition to conducting investigations of alleged violations of campaign finance reporting guidelines, the Office of the Attorney General actively monitors legislation with a particular focus on these issues,” Pino wrote in an email. “The Attorney General supports reforms that promote greater transparency and accountability for elected officials at all levels.”

None of those complaints were referred from the Secretary of State’s office, which also investigates complaints and may levy fines if it finds violations.

In another instance, since May, outgoing Rep. Andy Nuñez of Hatch has amended virtually all of his campaign finance reports dating back to 2010, some multiple times. That came after at least two complaints were filed with the SOS before the election about misusing campaign money. But the allegations that he paid himself travel costs while also collecting money from the state are complicated, and the complaints weren’t resolved before Election Day. Nuñez lost his seat to Democrat Nathan Small, of Las Cruces.

New regulations could set a deadline for amending reports that would prohibit a public official or candidate from going back years later to change information.

And the Secretary of State’s office only investigates potential violations if a complaint is filed. For instance, no action was taken when a teachers union and others reported doling out campaign contributions to lawmakers during the October special legislative session because no complaints were filed, even though NMID reported on the contributions.

New regulations could remedy such inconsistencies. And they wouldn’t require legislative approval, Toulouse Oliver said.

Harrison, of Common Cause, would like to see candidates required to submit bank statements to the Secretary of State’s office, so they could be compared to campaign filings.

And Toulouse Oliver and Harrison would like to see enforcement taken out of the Secretary of State’s office and replaced with an independent ethics commission. That would take legislative action.

“Ethics commission legislation is extremely high on my agenda,” Toulouse Oliver said.

The reform bill also would seek to rewrite provisions that are now unenforceable due to constitutional issues.

One example came to light in the weeks prior to the June 6 primary when NMID discovered two mailers from a Democratic candidate for the 39th Senate District who didn’t disclose who sponsored the mailing or printed the letters.

New Mexico law was written to require candidates to disclose such information, but a 1997 opinion from the Attorney General makes that law unenforceable, the SOS said. The agency advises candidates and campaigns to follow the disclosure law and most do.

After NMID contacted the candidate, he told NMID he would disclose such information in future mailings.

Scrapping contribution limits for candidates

While there’s a push for new regulations, an ethics commission and enhanced disclosure laws, some expect lawmakers to revive legislation to scrap contribution limits for candidates. The argument is that the playing field is uneven when super PACs can take unlimited donations but candidates can’t.

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Viki Harrison, Common Cause

“We’re going to have a fight on our hand on the flip side with contribution limits,” said Harrison of Common Cause. “We keep hearing both sides of the aisle talking about getting rid of contribution limits. I always say the PACs don’t get elected. The PACs don’t hold official capacity.”

New Mexico’s contribution limits increased with inflation in November to $2,500 per election cycle for a non-statewide candidate and $5,500 per cycle for statewide candidates or traditional PACs from individuals or businesses. PACs may donate $5,500 per cycle to all candidates.

In recent sessions, former Senate Majority Leader Sanchez supported legislation to eliminate those limits. It’s unclear who might sponsor it this year.

Ingle, the Republican Senate Minority Leader, said it would be difficult to roll back contribution limits because they’re popular with the public.

Only six states have no contribution limits whatsoever in terms of how much can be donated or who may give, according to Roth Barber of the National Institute on Money in State Politics. Another five have no monetary limits, but do have restrictions or bans on corporate contributions, she said. New Mexico does allow corporate contributions to candidates and PACs.

But Harrison said lifting contribution limits for candidates won’t stop super PACs from raising large sums of cash.

“When you look at other states that don’t have contribution limits, it’s not like the candidates are getting all the money.”

Still, Harrison has high hopes that this is the year for campaign finance reform, especially requiring more disclosure from independent spenders such as super PACs.

“With so much nasty rhetoric around state and national campaigns this year, transparency and shedding a light on things are going to be the winners in 2017.”

Trip Jennings contributed to this report.

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