A loophole

Our lawmakers have some proposals before them that will try to limit campaign contributions.  We haven’t talked to many of our friends and neighbors who are confident they’ll pass them because there’s no strong political will to kill the political golden goose.  But they’re encouraged that the House leadership wants early debate and are willing to give lawmakers the benefit of the doubt.  For now.  They are concerned, however, about the campaign finance part of the issue.

In our experience, we’ve never seen a bulletproof campaign finance law.  The crafty contributor always finds a loophole somewhere and exploits it and the legislature is usually slow to plug the hole. 

But let’s suppose a bill is passed that puts caps on donations for various offices.  For simplification, let’s assume that the bill passed this year says a person cannot contribute more than $500 to a candidate running for a legislative seat.  For our purposes here we won’t get into dark money, the secretly-donated money that goes through independent committees to hide the identity of donors and the amount they donate.    We’re going to keep this simple. Dark money is a later topic.

Now, suppose you have a basement full of money and you think a $500 donation limit is absurd.  So you find ten people, give them $500 each and have THEM make donations to your chosen candidate.  Here’s how to stop that (we think) end-run around the limit. 

The new campaign finance law would consider any money given by one person to another for the purpose of making a campaign donation as income to the recipient that shall be reported on special employer withholding forms and shall be reported by the surrogate donor on another form as taxable income. The confidentiality provisions of tax return law will be waived so that the Missouri Ethics Commission will have access to that information for purposes of reporting and possible prosecution under tax fraud laws by the Attorney General or an outside counsel hired by the commission. Further, the commission would have subpoena powers and powers to investigate apparent unreported transactions. 

Here’s an example of how this would work: Scrooge McDuck goes down in his basement to bathe in his money pile and decides he wants to donate $5,000 to the Goofy for Governor campaign.  But he can only give $500 under the law.  He decides to drain off an additional $4,500 and give the money to nine other people—Huey, Louie, Dewey, and Donald and Daisy Duck plus to Horace Horsecollar, Ludwig Von Drake, Pluto, Clarabelle Cow, and Humphrey Bear and they each will donate $500 to Goofy.  This law would require Scrooge to file withholding tax forms on each of the other nine.  They would have to file a state version of a 1099 form as outside income.  The ethics commission under this law would have access to those specific forms (but none of the other income tax forms).  The commission could look for something fishy (which for our purposes we will refer to as “a Nemo”)  so it can charge the giver and/or the recipient with tax fraud.  If the Attorney General was the recipient of some of this end-run money, he or she would be disqualified from prosecution because of a conflict of interest and the commission would be able to hire a private lawyer.

Out here, a couple of miles from the capitol, this seems to make sense. 

This plan also has another important benefit.  It avoids any criticism from voters that the legislature has increased the general income tax.  And the proceeds from any fines or penalties could be used to bolster the state’s weak transportation funding.  

Of course, the real boost could come when we create a service fee on dark money funding.  But that’s a loophole for a different day.    

Disclaimer:  We are not saying any candidates for governor are Goofy.    

Notes from a quiet street

(formerly known in our working days as “Notes from the front lines,” compilations of observations that do not merit full bloggitry)

The chairman of the Special Senate Committee to Generate Headlines for a Senator Running for Attorney General, wants the committee to subpoena patient records from Planned Parenthood, a private organization, and to hold some people in contempt for refusing to submit themselves to grilling by the committee.  Planned Parenthood says it will resist any subpoena from the committee as improper meddling in a private business’s affairs and because the records are protected by the federal Health Insurance Portability and Accountability Act, which protects the privacy of personal health information. 

“Phhhhtttttt!” says the leader of the entire senate. He’ll support the SSCGHSRAG’s subpoena, federal law notwithstanding.  

Some folks with whom we have discussed this situation suggest the position of the SSCGHSRAG might be more consistent, although probably still questionable, if the legislature would let the state auditor subpoena records from political campaign committees, including the independent committees that hide contributors from public knowledge, and the activities of legislative staff members who work for political campaigns “in their spare time,” and find those who don’t cooperate in contempt. Some would consider such a step as (pardon the cliché) leveling the playing field.

State law says those who are held in contempt of a legislative committee that they consider taking a contemptible position can be fined and jailed. 

The auditor has no such power and the consensus is that the legislature’s response to the idea that the auditor should have it also would be “Phhhhttttt!”  

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One of our neighbors is a fellow we’ll call Felix, one of those folks who drives around with a school alumni license plate, a school decal in the back window, and little school flags sticking out of the windows on football or basketball game days. He’s 67, about five-foot-eight, and will weigh, probably, 143 pounds after watching an entire football game in a rain storm.  He was concerned for a few days not long ago when he read about two bills filed for the 2016 legislative session. 

One would take away scholarships for football players who refuse to play a game to show their support for fellow students protesting a perceived injustice.  The other would make it legal to carry guns on campus.  

Felix worries about what would happen if he got into an argument with a six-foot-seven, 350 pound offensive lineman who had just lost his scholarship but had a gun.  He was relieved when the scholarship bill was withdrawn by the sponsor because that took away one of the issues to argue about.  Now all he worries about is whether the six-foot-seven, 350-pound lineman with a scholarship would beat the tar out of him or just save his energy and shoot him.  

                                                            —–

A divorced couple in St. Louis County is in court to decide who gets custody of two frozen embryos they enjoyed creating in happier times.  

Someone asked us the other day, “Since the state says life begins at conception, shouldn’t there be another law for frozen embryos to be considered wards of the state, making the state responsible for their maintenance and any support payments in case they do lead to babies without the sperm donor’s consent? “ She continued, “The state is avoiding responsibility for the situation it has caused.” 

Another person at the table opined, “Well, you can’t get an answer if you only write half of the equation.”  

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And a personal note:  We have found in our first year of retirement that our detachment from the intense climate of the capitol during legislative sessions has helped us understand why folks like our neighbors hold those we elect to represent us in lowered esteem.  Perhaps it is because those who serve lose the perspective they had while they lived on quiet streets like this one, before they started hearing all of the capitol voices telling them how important they are. 

We remain convinced, however, that most of those who are beginning their work at the capitol now are good people. Unfortunately they are operating within a badly-flawed system that only they can fix.  And the temptation to leave a system that favors their presence as-is has been too difficult to overcome.  

We have known these people for a long time, them and their predecessors.  And we can tell you that away from the capitol, perhaps around a barbecue pit or sharing a table at a coffee shop, they’re okay.  But the environment in which they will be operating for the next four months is not necessarily he climate that is best for the neighbors they leave at home Monday through Thursday. 

This scribe is no longer the business associate (never a partner) that he once was.  Now he’s the neighbor left behind.  It’s been interesting to feel perspective change.

An ethics blizzard

Nothing like a little sex scandal or two to prompt lawmakers to make sincere noises about ethics reform and to file a blizzard of paper proposals to put their own houses in order.   We’ve seen blizzards at the start of other legislative sessions. One even delayed the start of the session one year.   But legislative sessions last until mid-May and by then there’s not a sign of January’s blizzard.  Whether it’s a snow blizzard or an ethics paper blizzard, things melt away by mid-May.

About a dozen ethics bills have been filed for the legislature to consider in its upcoming session.  Filing of ethics bills is easy. We’ve seen it done dozens of times.  Ethics legislation has been a topic for lawmakers to thump their chests about before sessions for many years.   But all of that blather turns to butter and melts away once the legislative session begins and “ethics” is a forgotten word by the time adjournment rolls around.

Government ethics is a never-ending issue.  Buying influence is hardly new although it always is news. There have been times when personal reputation has become less desirable than political power to those in important positions.

Chairman Mao’s observation that “political power grows out of the barrel of a gun” has been replaced in America by the political power that grows out of the checkbook.  What is the public to think of those it perceives as beneficiaries of the checkbook-as-power philosophy?   A Missouri Governor who served more than a century ago defined that perception.

Joseph Folk was elected governor in 1904 after leading a nationally-recognized fight against corruption in local, state and state capitol politics.  The Lieutenant Governor resigned during that campaign after admitting he was a bag man for people giving legislators bribes and the legislators who took them.  Four Senators were indicted and convicted although an elected state Supreme Court later tossed the convictions.

Folk talked about lawmakers who sell their votes.  And he noted, in terms that seem pretty contemporary more than eleven decades later, there are different ways to be a sell-out:

The legislator who sells his vote traffics in the honor of a sovereign people and prostitutes the trust reposed in him. There can be no offense which, if allowed to go on, is fraught with graver consequences. It is more fatal to civic life than any other crime, for it pollutes the stream of law at its source. It makes the passage of laws mere matters of bargain and sale, thwarts justice, enthrones iniquity, and renders lawful government impossible. If all official acts were for sale, we would have a government not of, for, and by the people, but a government of, for, and by the few with wealth enough to purchase official favor. It is the highest duty of every legislator, of every official, and of every citizen to do all that he can to eradicate this evil, which is the greatest enemy to free government and the greatest danger that confronts this nation today, It is not always by taking money that an official may prostitute his trust. He does it whenever he uses the power given him to be exercised for the public good for any other purpose. An official can embezzle public power as well as public money.

Legislative sessions in election years are great opportunities for both parties to push legislative issues, hold legislative hearings, and pass legislative bills that benefit their base of support. Ethics legislation has a tendency to get in the way of those actions, particularly if the legislation limits the flow through the natural cash pipeline.

The proposals we’ve looked at so far keep the flow going full blast this year. They won’t go into effect until 2017.  And none of them give the state ethics commission some badly-needed big and sharp teeth.

Joe Folk warned more than 110 years ago about the use of power for anything but the broad public good.

Ethics.  Power.  Which will prevail in the 2016 session?

Will we look around in May, recalling the blizzard in January, and see that everything has melted away,

Again?