Weekly Briefing

But the System that Fuels It is Ignored

By Rob Schofield

Quick Take:

• After a brief hiatus, developments last week returned the state’s attention to the issue of political corruption.
• Between the release of Meg Scott Phipps, the sentencing of Michael Decker and the news surrounding Kevin Geddings and Jim Black, it appeared that the state was turning a corner in the fight for clean government.
• A new report on political fundraising, however, served as a reminder that the system remains badly flawed.

To the casual political observer, it might’ve seemed that North Carolina was making some real headway last week in the battle to rid its politics of the stain of corruption. On Monday, former Agriculture Commissioner Meg Scott Phipps emerged from a long stretch in federal prison bound for a new career as Christian educator. On Friday, former state Representative Michael Decker received a harsher than expected four-year sentence for his role in the scandal that ensnared former speaker Jim Black – a penalty that seemed to foreshadow less than charitable treatment for Black himself when he confronts the same judge (James Dever) two weeks from now.

Meanwhile, former lottery lobbyist and official Kevin Geddings, who is also slated to go before Dever next week for sentencing on a corruption conviction, appeared to be skating on thin ice after the release of an order from the judge that accused Geddings of perjury during his trial.

When viewed together, last week’s events provided a powerful reminder to those involved in North Carolina’s public policymaking process that overt corruption can be a risky business. Sell your vote or your office or lie under oath about what you know and you can count on severe punishment. In pronouncing sentence on Decker, Dever stated that "One would be hard pressed to identify a more severe potential or actual disruption to the functioning of the House of Representatives." In combination with new lobbying and ethics reforms and the election of an anti-corruption House Speaker, Joe Hackney, it’s clear that there have been some changes in state politics.

But…

For all of the strong messages sent and received last week, the state still has a long way to go. At the same time that Phipps was being fitted with an ankle bracelet and Judge Dever was throwing the book at Decker (and getting ready to throw it at Black and Geddings), powerful moneyed interests were meeting with elected officials, drafting and shaping legislation, and just generally trading on large campaign contributions. Despite all of the tough enforcement actions and new laws, it remains perfectly legal in North Carolina for large special interests and wealthy individuals to funnel large amounts of cash to elected officials (through parties, through other lawmakers, though political action committees) and then to turn around and have frank conversations, either directly or though surrogates, about the policy outcomes that they would like to see.

This hard reality was underscored last week by a new report on campaign contributions from the group NC PIRG. According to the report (Looking for Funds in All the Wrong Places), many North Carolina legislative races are influenced greatly by out-of-district campaign contributions, that is, contributions from individuals who live outside the district to which they are contributing. Many even come from out-of-state.

The authors of the report analyzed contributions to 10 powerful members of the General Assembly during their 2006 campaigns to determine how much funding came from outside the candidates’ districts. Among their findings:

• On average, 74 percent of funding came from outside the district, including 14 percent from outside the state.
• The average in-district contribution was $312, while the average out-of-district contribution was $1,167.

Not surprisingly, the report confirmed the enormous influence of PACs. The authors found that candidates raised more money from PACs based outside of their districts than from individuals inside their districts. Thus while, on average, 62 percent of funds from individual contributions came from citizens within the candidate’s district and only one percent of funds from PAC contributions came from within the district, together, the candidates raised just $750,000 from individuals and $1.1 million from PACs.

While the report authors were careful not to cast their findings as an indictment of the individual legislators that they examined (they noted that the current system practically demands such tactics), they were less generous in assessing the system itself.

“North Carolina’s current campaign finance system encourages candidates to raise money from wealthy individuals and powerful interests, wherever they are located. The result is that a small number of powerful out-of-district interests and wealthy donors heavily influence the outcome of North Carolina’s elections, even if these contributors have little connection to a candidate’s home district. Thus, while the fundraising of the 10 candidates included in this report is not inappropriate, illegal or corrupt, it is symptomatic of a broken system for financing political campaigns.”

In sum, North Carolina’s political system remains terribly flawed because of one giant, overriding problem: the power of big money. Like an addicted smoker who refuses to quit even as he’s receiving treatment for heart problems, North Carolina cannot and will not solve its corruption problem merely by treating the symptoms. Ultimately, the state must sever its addiction to big political contributions if it is to restore the health of its politics.

A Plan for Reform

There are several steps that North Carolina can and should take in order to advance the cause of true political reform. Banning the practice by which large individual and corporate contributions are funneled and laundered through the campaign committees of powerful lawmakers, political parties, PACs and other private groups would help. New efforts to further refine the law on lobbyist contributions also make sense.

Ultimately, however, it is essential that the state move aggressively toward a system of publicly financed elections if it ever hopes to wrest control over the lawmaking process away from the moneyed interests. The NC PIRG report puts it this way:

“Establishing a public financing system for North Carolina’s legislative elections would prevent special interest money from overwhelming the interests of ordinary citizens. Under a public financing system, candidates who collect a requisite number of qualifying small contributions from voters would be eligible for public funding for their campaigns, reducing the role of out-of-district contributions in the state’s elections.”

Even an annual investment of $30 million (the amount raised by legislators from private sources for the 2006 election) would represent only a tiny fraction of the state budget (perhaps 1/6 of one percent) – about the same as what is spent annually on the “JDIG” business “incentives” program. In the context of a modern, multi-billion dollar state budget, such an outlay is a small price to pay for North Carolinians to buy back their democracy.

While certainly far from perfect, (for instance, First Amendment guarantees could still allow very wealthy candidates to bypass a public financing system) there can be little doubt that public financing can, and does, work. Bi-partisan experiments in financing legislative campaigns in Arizona and Maine as well as North Carolina’s own judicial elections offer obvious models on which to build. With respect to the latter, the PIRG report notes that:

“Contributions from business groups, special interests and lawyers—parties who might have a significant interest decided by elected judges—dropped from 73 percent of the funds judicial candidates raised from outside their immediate family in 2002 to just 14 percent in 2004.”

Summing Up

Recent progress in ferreting out and punishing corrupt political behavior deserves to be acknowledged and praised. North Carolina is on the right track. Staying on that track, however, will require more than energetic prosecutors and tough judges. It will require a commitment to real and long lasting structural change that acts as more than a mere deterrent.      

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This entry was posted on Monday, April 30th, 2007 at 12:46 pm and is filed under Weekly Briefing. You can follow any responses to this entry through the RSS 2.0 feed.