Terry J. Allen | 802.229.0303m
w| tallen@igc.org


Vermont v. Buckley
Campaign Finance Reform Hits the Courts

(Shorter version published in American Prospect)

While Vermont's legislation to legalize civil unions for same sex couples was capturing headlines, a sweeping campaign finance reform law that may change electoral politics throughout the country hovered under radar. Act 64 mandates the nation's strictest mandatory limits on both campaign contributions and spending and provides public funding for governor and lieutenant governor's races. All candidates, whether or not they decide to qualify for public funding, have to abide by the strict limits.

The bill was meant to address the growing costs of campaigns and the influence of corporate and special interest monwy in politics. Act 64 passed overwhelmingly in 1997 with the support of many of the state's top politicians who admitted, with confessional zeal that even in relatively clean Vermont, money was corrupting democracy.

In his inaugural address earlier that year, Dean had acknowledged that "Money does buy access, and we're kidding ourselves and Vermonters if we deny it." Dean raised $342,000 in 1996. Two years later, he collected $651,000.

Peter Shumlin, president pro-tem of the senate said that his heavy fundraising on behalf of Democrats in the 1996 election cycle "was one of the most distasteful things that I've had to do in public service."

Shumlin thinks the campaign finance law is "a big step forward. It fundamentally changes the relationship between donor and candidate. But it does not go far enough. It doesn't close the soft money loophole." It is through that loophole that opponents of civil unions may pour funds targeting lawmakers who voted for legalizing same sex unions.

Vermont's radical campaign finance reform is being put to the test this year for the first time in both statewide elections and in Federal Court where the law is being challenged by the Vermont Right to Life Committee, the Republican Party and the American Civil Liberties Union. For the last few week in a Burlington, Vermont courtroom, lawyers for the ideologically diverse plaintiffs have maintained an edgy marriage of convenience, punctuated by occasional spats and protestations of compatibility. What they agree on is that the reform bill violates constitutional guarantees of free speech and assembly.

The attorneys defending Act 64 representing the State of Vermont, the National Voting Rights Institute and the Vermont Public Interest Group sit surrounded by scores of 4 inch thick looseleaf binders and dozens of cardboard boxes overflowing with documents, files and briefs. The lawyers maintain that the pervasive influence of money in politics is corroding democracy and that the reform that the bill mandates are essential to restoring voter confidence and spurring participation.

Judge William Sessions III plans to issue a decision in the case this July, in time to impact the current election cycle and possibly throw it into chaos. No stranger to the machinations of politics, he is a former campaign manager of Sen Patrick Leahy (D-VT). No matter what his verdict, the case will likely be appealed to the 2nd Circuit Court (Manhattan) and eventually up to the US Supreme Court.


Legislative candidates in low_key campaigns that rely on door_to_ door grassroots organizing will see little effect. Those who rely on interest group, out-of-state or corporate contributions may feel a sharp pinch. But even though direct contributions are restricted, issue ads and individual support uncoordinated by the candidate is not.

"Suppose a legislator runs for reelection after voting for civil unions and some church wants to spend $2 million on media in Vermont?" asks Burlington lawyer Richard Cassidy. "That leaves the candidate at a tremendous disadvantage."

The current legislation doesn't solve that problem, says Brenda Wright of the National Voting Rights institute, but it will prevent special interests from pouring ever larger amounts directly into campaign coffers and buying a campaign directly." And that, argues the lead attorney for the defense, is a necessary and important reform, and one that the Supreme Court may entertain.

Opponents of civil unions, including Rep. Nancy Sheltra who led the failed legislative charge against the bill, are exploring election strategies allowable under the new ground rules. "Sure campaign finance puts a kink in our abilities," she says, "but we will organize and go into any of the churches and not just churches...to help defeat candidates who supported the civil unions." Referring to Barbara Postman, the other representative in her district she said "We're putting her out of office. Progressives in this county don't survive."

Sheltra has formed a PAC and contacted the Secretary of State's office to request a written clarification of a section of the law that allows unlimited spending to promote an issue or a group of six or more candidates. Other right-wing groups have also made inquiries that indicate they might be planning to organize around the November elections. Focus on the Family says that several Vermont legislators have called their Colorado headquarters for "information." When the bill was being debated in the legislature, the conservative group did three anti-civil union mailings to its Vermont constituents, made a public service announcement and sponsored a broadcast. Asked about Focus on the Family's plans for the upcoming election cycle, marriage and family analyst Amy Desai said, "It's not that we have given up in Vermont. ... We are weighing options and are in process of determining which resources we are going to use."


Other right-wing groups have been more open about their agenda. "[Jerry] Falwell said on the Larry King Show that they would take us out in the next election," says Shumlin, a strong advocate for the civil union law. "I'm not used to our legislature being the target of the Christian right. And they can spend whatever they want."

"Civil unions is probably the issue this year that will generate money from special interest groups," predicts Postman. "They can buy lots of advertising, smear tactics. I think it is a giant loophole," but adds that she is confident voters will look to her record on health care, liveable wage, and economic development rather than simply her vote for civil unions.

A statewide poll bolsters that expectation with its finding that only 6-8 percent of Vermonters will decide their vote based on a candidate's stand on civil unions. While the effect on statewide races will be negligible, that vocal minority might be enough to sway a few local elections, says Del Ali president of Research 2000 which conducted the poll.

But while Vermont's top politicians admit that contributions buy influence among their ranks, the question of whether soft money can influence Vermonters is less clear. Given the necessity for face-to-face grassroots campaigning, coupled with a traditional resentment to outside meddling, such efforts, which must be reported, may repel as many voters as they attract. At least on the legislative and local level.

THE GOVERNOR'S RACE In the races for governor and lieutenant governor, supporters of campaign finance reform hope that spending and contribution caps, coupled with generous public funding will help level the playing field and keep big money out. The current governor's race— highlighting widely divergent views on education, taxation, the environment and health care, as well as civil unions— will be a showcase for the public financing features of Act 64.

Gov. Howard Dean, who signed both Act 64 and the civil union bill, faces opposition from the right where conservative Republicans Ruth Dwyer and William Meub are gearing up for a September primary fight.


Dean, a centrist democrat, will also have to fend off a challenge on his left. Buoyed by the prospect of spending limits and $265,000 in public funding, the state's two decade_old Progressive Coalition formed an official party last fall and nominated longtime activist Anthony Pollina for governor. Unlike most third parties around the country, the Progressives have a broad based organizational structure and a long history of winning. They have held the mayor's office in Burlington for almost 20 years, elected 5 representatives to the legislature and various local offices. Bernie Sanders (I-VT) the country's only independent U.S. congress member has long been closely associated with Progressives.

Pollina, a key advocate for campaign finance reform while policy director for VPIRG, has already raised more than half the money and contributors necessary to qualify for public funding. Dean and Republican challenger Meub have committed to try. Even though Dwyer has rejected public funds— and thus will be able to gather 25 percent of her funds out-of-state and accept donations up to $400— she will have to conform to the $300,000 spending cap.

THE COURT CASE Although Vermont with its low-stakes budget and grassroots traditions seems an unlikely place to confront the corrupting influence of money in politics, it is perhaps the relatively small scale of both the state and the problem that allowed action. Even before the reform, few legislators raised or spent more than the current caps; most politicians were not so firmly entwined with big money interests that they couldn't extricate themselves. Nor was the public desensitized to scandal and corruption.

As reform advocates pushed for legislation, few politicians dared deny what the public found obvious and, indeed, what many politicians themselves declared increasingly burdensome and odiousa relentless trend toward ever more expensive campaigns and ever increasing out-of-state and corporate contributions. In the decade after a 1975 Supreme Court decision forced Vermont to abandon a previous attempt at contribution limits, costs for statewide office soared 1,000 percent according to VPIRG.

The court challenge to 1997 campaign reform bill was neither unexpected, nor unwelcome by those hoping that the Supreme Court might be ready to revisit the issue. In 1975, in Buckley v. Valeo, the court decided that while some limitation of campaign contributions is constitutional, spending caps are incompatible with First Amendment right of free speech and assembly. This January, however, in Nixon v. Shrink, four justices appeared to open the door for a reappraisal of Buckley. A fifth remained silent.

"Money is property; it is not speech," wrote Justice Stevens a concurring opinion that appeared sympathetic to reform.

The court also deplored the erosion of public confidence and hinted that the problem had grown sufficiently serious to warrant a reinterpretation"Of almost equal concern as the danger of actual quid pro quo arrangements is the impact of the appearance of corruption stemming from public awareness of the opportunities for abuse inherent in a regime of large individual financial contributions."

THE ROLE OF CORRUPTION The crux of the Vermont case, now in recess until the end of the month, lies not only in how the courts interpret the Constitution, but in how they define corruption. According to James Bopp, lead lawyer for the plaintiffs, it is "a quid pro quo exchange" of money or goods for service. Vermont's proposed solution, he argues, is far more dangerous to democracy than the problem. It interferes not only with the right of individuals to free speech, but that of parties to organize and support their candidates.

The defendants interpret corruption more broadly to include buying access and influence. By its very presence, they charge, big money—whether funneled through parties or PACs or handed over in person—warps the democratic process. The appearance of corruption, as well as the fact, has already tainted democracy in Vermont, they say, by encouraging cynicism and discouraging participation.

In Shrink, the Court noted that "the cynical assumption that large donors call the tune could jeopardize the willingness of voters to take part in democratic governance."

Testimony in Burlington by pollster Celinda Lake, confirmed that trend, finding some 70 percent of Vermont voters believe that wealthy individual and large corporations exercise too much influence over politics and government.

Peter Langrock, a cooperating ACLU attorney for the plaintiffs, disagrees. "Voter apathy means that things are not bad and the people are satisfied. When people feel the system is not working, they will organize against it."

Although opposing lawyers dispute the cause of apathy and the effect of money, neither side questions that spending and contributions were being ratcheted up. Many lawmakers receive largess not only from local businesses and individuals seeking influence, but from such national corporations and trade organizations as R.J. Reynolds and Philip Morris, Monsanto, Parke Davis, Anheuser-Busch, the National Association of Chain Drug Stores and American Insurance Association. In the1994 race, Dean received more contributions from pharmaceutical interests alone than the Republican challenger David Kelley collected in total.

This session, when the legislature was considering a bill to regulate pharmaceutical prices to bring them in line with far cheaper prices in Canada, drug companies lobbied hard on both sides of the aisle. Rep. Cheryl Rivers testified that Shumlin told her that the Democratic National Committee had relayed a drug company threat to "shut you off" in the next election cycle."

Shumlin says the DNC played no role. "I heard directly from pharmaceuticals that they would be working actively against Democrats in Vermont. The death of the pharmaceutical bill was great example of effective lobbying by interests absolutely contrary to public interest. There is no question they influenced legislators in two ways. One, though the threat of not having access to generous campaign contributions, and two," he pauses and adds, "There is no two."

"Money can buy influence," says Rivers, "and in some instances can buy votes." Lobbyists, who outnumber Vermont legislators almost 2 to 1, "control the special interests that control funds and access to the leadership that distributes the funds," Rivers continues. When she sponsored a bill requiring labeling of genetically engineered foods, "[Shumlin] told me we already lost drug money and we don't need to lose food money, too." Shumlin said he was joking and opposed the bill on its merits.

Local industries also know how the game is played. For almost a quarter of a century, Act 250, Vermont's strict land use law brooked no exceptions to its environmental protections. Then in 1994, after quarry companies gave gifts to members of a legislative study committee, those who accepted the donations recommended an exemption for the slate industry. It was granted. "I believe personally," stated Rivers in a deposition, "that the campaign contributions that they made to key people in charge in the Vermont senate led to them being successful in getting that exemption."

"It would appear," concurred lawmaker Elizabeth Ready, "that money was a factor."

"People are tempted to bend," said Donald Hooper, testifying in Federal Court, "I would guess that the top six members of Ways and Means [Committee] make deals all the time, quid pro quo for campaign support." The former lawmaker and secretary of state also recounted a 1990 incident in which a lobbyist walked the floor of the State House distributing $40 checks to legislators who supported his industry in a vote on cigarette vending machines.

While tobacco companies such as R.J. Reynolds and pharmaceutical companies such as Parke Davis have been contributing to Vermont politicians for years, others, such as Monsanto pop up briefly when legislation affecting their business is on the table.

In 1994 Monsanto, which manufactures bovine growth hormones (BGH), lobbied heavily against a bill requiring labeling for the genetically engineered chemical that boosts milk production in cows. Just before the election, the company gave gifts to Republicans seven legislators, most in key positions, who had strongly opposed the legislation.

"What that tells me," says former representative Andy Christiansen, "is that if you vote in a way that protects corporate interests, regardless of health effects, there's going to be a reward, and I mean money, around election time."

Vincent Illuzzi, one of the state's most influential senators was on Monsanto's gift list that year. On the day before a key vote, says Christiansen, "we thought he was on board." But that evening, "a corporate representative took him out to dinner at the fanciest restaurant in town and the next day, he decided he didn't like the bill (requiring registration of BGH) after all." Illuzzi's vote broke a razor thin majority and killed the bill, said Christiansen.

CONCLUSION Money does not need to buy votes to be effective and corrupting. It also operates in more subtle and systemic ways to by buy access, which Shumlin readily equates with influence. Contributions may nudge a legislator to change a line here, sponsor or kill an amendment there, introduce a bill or let it die in committee, schedule hearings or testimony, round up supporters and co_ signers, call in favors or simply return calls and keep the office door open.

Christiansen said that Monsanto's role was not unusual. Nor was the fact that Rep. Ruth Towne, who got a gift from Monsanto, did not recuse herself despite having the appearance of a conflict of interest. Towne was employed at the time of the vote by Agrimark, a dairy industry company opposed to regulating BGH."

In a recent study of the role of money in state legislatures, the Center for Public Integrity cited conflict of interest as an endemic problem. Vermont tied for last in the nation for providing public basic information on state legislators' private income, assets, and conflicts of interest. That failure to disclose, the study concludes makes it "all but impossible to determine whether a lawmaker has a hidden agenda." Only 20 of Vermont's 183 lawmakers responded to a Center survey requesting information on their outside economic interests and activities.

If Judge Sessions rules this summer to uphold not only contribution limits, but the far more constitutionally debatable spending limits, it will not eliminate the role of money in Vermont politics. Soft money can still flow, or even hemorrhage into the state to support or defeat a bill such as civil unions or a legilators who took a stand on the issue.

Plaintiffs' lawyers say that nonetheless, the caps on spending and contributions will undermine the right of all citizens and political parties to participate freely. The defendants counter that the legislation will distance money from the candidates, and along with public funding for campaigns, level the playing field and help restore public confidence. Both sides think the case might just make it all the way to the Supreme Court and impact the way American politics are played.

DETAILS OF BILL CONTRIBUTION LIMITS contributions to a candidate from individuals and groups, including parties, cannot exceed
• $400 for statewide offices (governors Lt. Gov, Sec of State, State Treasurer, Auditor and Attorney General)
• $300 for state senate and county office
• $200 for representative or local office
• 75% of funds must be gathered in-state contributions to parties and party committees from individuals and committees cannot exceed
• $2,000 per election cycle

There is no limit to what close family member can contribute to a candidate.

• governors race$300,000/ challengers; $255,000/ incumbent
• Lt. governors race$100,000/ challengers $85,000/ incumbent
• other statewide races $45,000/ challengers; $38,250/ incumbent
• Senator, $4,000/ challengers; $3,600/ incumbent, with additional in multi_seat districts
• Representative, $2,000/ challengers; $1,800/ incumbent, with additional in multi_seat districts

• candidates must collect $35,000 in contributions of $50 or less from 1,500 registered Vermont voters. Qualifying challengers will then receive $265,000 in state funds, incumbents, $220,000 or whatever remains to bring them up to the spending limit.

• Candidates must collect $17,500 in contributions of $50 or less from 750 registered Vermont voters. Qualifying challengers will receive $82,500 from state funds, incumbents, $77,500.

• There are no limits on totally independent expenditures by either in-state or out-of-state individuals or groups. Political committees and parties must report all expenditures. Political ads must include the source of funding.