Anti-Corruption Act Imposes New Campaign Finance Limits

I hear a lot more griping about Initiated Measure 22, the voter-approved Anti-Corruption Act that took effect last week, from Republicans than from Democrats. Hmmm… I’m thinking if the beneficiaries of one-party rule in Pierre are unhappy, we voters must have done something right.

One aspect of the Anti-Corruption Act that hasn’t received much attention are the new campaign finance limits. The new law lowers the cap on individual contributions to many candidates and caps contributions from PACs and parties, which previously could give unlimited sums to their favored candidates. These new limits forced Kristi Noem to announce last week her intention to ignore her job and run for Governor, so she could transfer her huge pot of out-of-state money before the new Anti-Corruption Act campaign finance caps kicked in.

Here’s the rundown on the limits on contributions that candidates and committees may accept from each donor, with section numbers from IM 22 after the new limits. Note that IM 22 now classifies candidate committees, political action committees, and ballot question committees all as “political committees” but still excludes ballot question committees from contributing to candidates, PACs, or parties.

Office/Cmte Previous Limits Anti-Corruption Act Limits
Governor Individual: $4,000 Individual/candidate/PAC: $4,000
Party: $40,000 (Sec. 5)
Lt. Governor and Attorney General Indiv: $4,000 Indiv/cand/PAC: $2,000
Party: $20,000 (Sec. 5)
Other statewide Indiv: $4,000 Indiv/cand/PAC: $1,000
Party: $10,000 (Sec. 5)
Legislative, county Indiv: $1,000 Indiv/cand/PAC: $750
Party: $5,000 (Sec. 6)
PAC Indiv/candidate/PAC/ party: $10,000 Indiv/cand/PAC/party/org: $2,000
(Sec. 7)
Party Indiv/candidate/PAC/ party: $10,000 Indiv/cand/PAC: $5,000 (Section 8)

Candidates can still make unlimited contributions to their own campaigns. However, the exemption for family members is gone. IM 22 strikes the exemption of immediate family members from the rules on independent expenditures (Section 3) and the caps on contributions to statewide (Section 5) or legislative or county (Section 6) offices. Plus, candidates can’t use Democracy Credits (the public campaign finance mechanism of IM 22) to pay themselves or any entity in which they or a family member has at least a 10% ownership interest (Section 61).

My mom and Mark Mickelson’s mom will thus no longer be able to donate unlimited sums to their loving sons’ campaigns. (Maybe that’s really why Mickelson bailed!)

The Anti-Corruption Act cuts off another source of unlimited funds in Section 10:

For the purpose of the contribution limits established by §§ 12-27-7, 12-27-8, 12-27-9, and 12- 27-10, all committees established, financed, maintained or controlled by the same corporation, labor organization, person, or group of persons, including any parent, subsidiary, branch, division, department, or local unit thereof, are affiliated and share a single contribution limit both with respect to contributions made and contributions received.

Last month, I could have set up a dozen shell PACs, asked Tom Steyer and George Soros to each pour $10,000 into each fund, and then had $240,000 to pour into my District 3 Senate race in addition to whatever I raised in my actual Senate campaign committee. Section 10 ends that practice. If I control multiple committees (and right now, I do: my candidate campaign fund, plus two ballot question committees), the Anti-Corruption Act views them all as one entity for accounting purposes. If I get $750 from my mom for my campaign committee next year, she can’t send any money to my ballot question committee to help refer whatever godawfulness the Republican Legislature passes.

Let those soak in. I’ll tackle the new reporting requirements in a separate post. But these new contribution caps alone could explain a lot of the grousing from big-money Republicans… and maybe, once everyone digests the impacts, a few Democratic candidates and donors.

10 Responses to Anti-Corruption Act Imposes New Campaign Finance Limits

  1. barry freed

    What happened to Jack Abramhoff co-conspirator and SuperDelegate in fine standing with the D Party, Tom Daschle’s millilons?

    Republican or Democrat, they come in with nothing and leave as multi-millionaires.

  2. Did it do away with legalized bribery: i.e. elected officials pocketing the remainder of their campaign accounts when they leave office? Governor Janklow got to keep nearly $1 million from his campaign account when he left office. Of course he had to pay income taxes on it, but that’s not the point. The point is that while in office people got to give him significant money beyond his public salary that he got to put in his pocket. That kind of thing should not happen anymore.

  3. No, Ror, there’s no change on converting regular campaign finances to personal use. However, Section 61 appears to prohibit converting Democracy Credits to personal use.

  4. bearcreekbat

    Does it strike others as a bit sleazy for Noem to intentionally skirt a new SD law designed to limit contributions? If SD voters wanted campaign finance reform and passed this law to implement it, shouldn’t Noem’s disobedience of the voters’ expressed will disqualify her from the Governor’s office? And doesn’t this move seriously disadvantage her political opponents in a manner directly contrary to our voters’ expressed intent?

    Rather than use her sizable political war chest to help her own cause by quickly sneaking the money through a loophole in the newly enacted law, wouldn’t someone who respected the will of SD voters have used this war chest in some other manner, such as contributing to Donald Trump’s campaign expenses.

  5. bearcreekbat, following the “letter of the law” is an issue for the courts; following the “spirit of the law” is an issue for the voters.

  6. Bear, you are trying to cram political ethics and SD into the same paragraph. Doesn’t seem to work!

  7. Loren makes me consider this: is Representative Noem’s action a political ethical grey area like Secretary Clinton’s e-mails? Will SD reject Noem for the same reason many rejected Clinton?

  8. No more sleazy, bearcreekbat, than those of us who went out and bought our license plates early in March 2015 before Al Novstrup’s $85 million road tax increase took effect.

    Of course, as stake for the typical car owner was 15 to 20 bucks. For Noem, at stake was $1.9 million. Measure your sleazage accordingly.

  9. bearcreekbat

    When you buy your own license plates early to avoid a rate increase you are not obtaining any advantage over other people, aside from spending less for the plate.

    But when you make a contribution to your own campaign of almost 2 million dollars that is contrary to a recent enactment explicitly limiting contribution amounts to just a few thousand dollars, that defeats the will of the voters and gives you a huge, but very unfair, advantage over candidates who did not try to avoid the impact of the new voter approved limits.

  10. Keen point, BCB! My getting a cheap license plate didn’t make it harder for anyone else getting a license plate. A smart primary challenger will find a way to remind voters of both Noem’s and Jackley’s machinations. The smart Democrat who runs for Governor should be ready for either of them on this score.