Last updated on 2016-01-07
Sioux Falls lawyer and lobbyist Justin Smith is waging Twitter war on the Anti-Corruption Act proposed by Rick Weiland and Don Frankenfeld. Secretary of State Shantel Krebs has yet to certify the 25,216-signature petition submitted two weeks ago to put the act on the South Dakota ballot next year, but Smith is bombarding his followers with arguments against the bill, which, if certified, would likely be labeled on the ballot as Initiated Measure 22:
Smith has called both the initiative and its sponsors “insidious.” Smith’s primary reason for branding Weiland and Frankenfeld stealthily treacherous and deceitful is the public campaign financing component of IM 22. The Anti-Corruption Act is much more than that plank: its 70 sections also set new limits and disclosure requirements for campaign finance, impose greater limits on revolving-door lobbying, and create a statewide ethics commission to enforce those rules and investigate corruption in general. Smith has arguments against those other planks, but for the moment, he’s ginning up memes against gouging the general fund with welfare for politicians. Thus, let’s focus on IM 22’s public campaign financing.
IM 22 creates a Democracy Credit Fund, from which every registered South Dakota voter would be assigned two fifty-dollar Democracy credits. Voters may assign their Democracy credits to any candidates for Legislature or state office (not Congress or President) who agree to abide by IM 22’s campaign finance restrictions.
Section 68 makes an annual appropriation to the Democracy Credit Fund of $9 for every registered voter. Section 68 indexes that per-voter appropriation annually for inflation. According to the Secretary of State’s November 2, 2015, count of 519,503 registered voters, the first appropriation would equal $4.68 million. Smith laments that this ongoing appropriation would take money away from education and other priorities.
However, IM 22 Section 42 caps the Democracy Credit Fund at $12 million. Section 63 suggests that the ethics commission would adjust that cap for inflation every other year, but the language is not clear. Adjusted or not, that 12-million-dollar cap creates the possibility that, after a couple years, if voters do not take full advantage of their Democracy Credits, the annual appropriation would decrease, as we would top the fund off at $12 million and return the remainder right back to the general fund.
But suppose voters and candidates do make full use of the Democracy Credit Fund. Smith says the Democracy Credit Fund would pad politicians’ pockets with graft. However, under Sections 61 and 62, Democracy Credits can’t line politicians’ pockets. Whereas current state campaign finance law has no prohibition against candidates converting campaign funds to personal use, the Anti-Corruption Act says Democracy Credits must be used for legitimate campaign costs and cannot be used for candidate salary or be kept in a campaign war chest forever:
Section 61. A candidates may only use democracy credit proceeds for campaign costs or debts for the relevant office and election cycle, and may not use such proceeds after a reasonable period, to be set by commission rule, following the election to pay campaign debts. No candidate may use democracy credit proceeds for any cash payments or in violation of any law; to pay the candidate; to pay any entity in which the candidate or an immediate family member holds in aggregate a ten percent or greater ownership interest; to pay any amount over fair market value for any services, goods, facilities or things of value; or to pay any penalty or fine; nor to pay any inaugural costs or post-election officeholder costs.
Section 62. Any candidate who has redeemed a democracy credit, then withdraws, dies, becomes ineligible, loses participating candidate status, is eliminated in a primary election, is eliminated in a special election, or is eliminated in or wins a general election, shall within a reasonable period, as set by commission rule, pay all debts and obligations, account to the commission and restore to the commission and the Program “Unspent Democracy Credit Proceeds.” The commission shall define “Unspent Democracy Credit Proceeds” by rule.
These sections of the Anti-Corruption Act do more to prevent “graft” than anything in current South Dakota campaign finance law.
Besides, for real “graft” to take place, we need a pot of money that politicians themselves can dip into at will. Politicians would not control the Democracy Credit Fund; voters would. IM 22 wouldn’t force anyone to spend the money appropriated for the Democracy Credit Fund. Every voter would get to decide whether $100 of their own tax dollars gets spent or stays put. Considering that $100 represents the state sales tax collected on $2,500 worth of purchases, and considering that probably every voter in this state spends at least $2,500 on food and clothing every year, the Democracy Credit really just gives voters a chance to spend their own money on candidates of their choosing. Voters don’t get that kind of direct, democratic choice on any other general fund expenditure.
Public campaign finance is the trickiest part of the Anti-Corruption Act. Shouting “welfare for politicians” is easy judo for lobbyists and politicians who want to fight an act meant to prevent corruption among lobbyists and politicians. Such is the rhetorical battle we’ll see over the next eleven and a half months.
He’s either lining his pockets with funds from monied interests opposing this effort, or he’s angling for such a paid gig to line his pockets opposing this effort.
Mr. Smith the lobbyist is partner at a law firm that lines its pockets with taxpayer money – and thus his own pockets are lined with taxpayer money. Lots of it.
Flat out, this IM is stupid.
I knew it was only a matter of time before Mr. Heidelberger did a piece on my Twitter campaign against IM 22. To his credit, this one was (on the whole) pretty respectful. I appreciate that and the civil debate we have had. As for Mr. “Rorschach,” I simply have an intense dislike for this measure on principle. Though Mr. Heidelberger disagrees, I feel that I have raised cogent arguments against IM 22 that have nothing to do with my role as a lobbyist (or my law practice). Attacking me personally (and my business) is an ad hominem smear that is antithetical to legitimate debate.
Now, on to addressing Mr. Heidelberger’s arguments.
1. My use of the word “insidious” was intended to mean “operating or proceeding in an inconspicuous or seemingly harmless way but actually with grave effect.” I make no assertion that Messrs. Weiland or Frankenfeld are “treacherous and/or deceitful.” On the “insidious” nature of IM 22, I spoke with numerous signature gatherers and scoured the website of South Dakotans for Ethics Reform. https://sdethics.wordpress.com There was nary a mention of the taxpayer-funded campaigns portion of this measure. Those sources spoke exclusively about the “anti-corruption” components. By the way, the vast majority of the signature gatherers for IM 22 were paid handsomely for their work. This is not some kind of altruistic movement that depends on “spirited citizens enlivened by a dream!” There has already been a significant amount of money invested in IM 22 and you can bet there will be a whole lot more throughout the next year.
2. For the most part, you have recognized that I have never tweeted about the other components of IM 22. My tweets have focused exclusively on the sections dealing with taxpayer-funded campaigns. I do not know where you got the idea that “Smith has arguments against those other planks.” I have not addressed those other sections (e.g. lobbyist restrictions, campaign contribution limits, etc.). My reasons for limiting the scope of my attack? (1) I knew many would cry foul and say that, as a lobbyist, I am somehow ineligible to argue on the anti-lobbyist components. (2) As a taxpayer, my arguments against the taxpayer-funded campaigns have more punch. (3) Despite the clear fiscal impact of all the “anti-corruption” components of IM 22 (e.g. new databases, new reporting requirements, FTEs to process all the data, FTEs to assist with the Commission, etc., etc.), the cost of the taxpayer-funded campaigns is staggering.
3. You keep arguing that “the fund is capped at $12 million.” This bill is a bleeder, no matter how you look at it. I fail to see how any South Dakotan can deny this simple fact. “Democracy credits” will be distributed, removing money from the fund. Every year, IM 22 mandates the fund be replenished with taxpayer money. Whence cometh that money? From the general fund. (See Section 68) The fund is indeed limited to $12 million maximum, but there is no limit on how much can be spent out of the fund for all politicians. If no “democracy credits” are going to be spent, if the fund will sit at $12 million for years with no appropriations, why pass IM 22 in the first place? You are spending taxpayer dollars by giving it to politicians. Period.
4. Taxpayers are going to be supporting, without any choice in the matter, politicians with whom they may have grave moral disagreements. You argue that “not a dollar will be spent unless a voter chooses to assign his/her credits.” First, being a voter does not mean that you are a taxpayer. Fortunately, you may vote in this country without ever paying a dime in taxes. But for those people who do pay taxes, their tax dollars will be up for grabs for anyone (taxpayer or no) to give those dollars to their favorite politician. Second, some of your tax money will clearly go to politicians that you would NOT want to be elected. I will not name names, but there are some South Dakota politicians to whom I would never give money under any circumstances. They hold views and support legal changes that are diametrically opposed to all I hold dear. Yet my tax dollars would be given to that candidate.
5. You are misrepresenting my argument concerning “padding the pockets of politicians.” Most of my tweets have clearly said, “Lining the campaign accounts of politicians.” I acknowledge that the democracy credits must go into a campaign account. On the other hand, IM 22 does not define “campaign costs or debts.” A politician could still hold lavish campaign dinners, hire limousines, pay campaign staff exorbitant salaries, and any number of other politician-like activities. There are also no restrictions on commingling of “democracy credits” with the general campaign funds. If a candidate receives $2,000 in credits and $2,000 in direct contributions, then spends $2,000, why could s/he not say, “I spent the democracy credits first.” More importantly, Section 62 clearly states that the politician should “pay all debts and obligations” before being required to refund a dime. In the end, a politician could still have thousands in his/her campaign account but say, “I don’t have any democracy credits left – those were spent first.” Then, s/he can dump those funds into their personal checking account after the campaign disbands.
6. One of the most stomach-turning elements of IM 22 is that the “democracy credits” can be claimed by politicians who are running UNOPPOSED. The very article you tweeted to me raised this point in my mind. In my mind, this single fact essentially makes IM 22 indefensible. Up to $700,000 of taxpayer money given to a gubernatorial candidate running unopposed. Up to $15,000 of taxpayer money given to a legislative candidate running unopposed. IM 22 is devoid of any language that would prevent this situation. Indeed, Maine’s program (upon which South Dakota’s is based) has been used in uncontested races from the beginning. Here is the quote: “While the initial distributions were still enough for uncontested races . . .” http://www.governing.com/topics/elections/gov-maine-clean-elections-2015-ballot.html
7. In many states where they have enacted similar measures, they have later been repealed or amended with greater taxpayer spending. In Maine, the state that you have lauded for their laws, they had to completely overhaul their program in 2015. Their politicians were not utilizing the program because it did not give them enough taxpayer dollars, so they threw more money at it. In Massachusetts, Portland, and North Carolina, the citizens repealed all or part of their programs (Massachusetts threw out the whole thing).
8. “Graft” is defined as “the acquisition of money, gain, or advantage by dishonest, unfair, or illegal means, especially through the abuse of one’s position or influence in politics, business, etc.” I have already talked about the insidious and well-funded nature of the IM 22 campaign. There are already clear examples of “graft-like” behavior in the signature drive that just ended. Just wait until the proponents’ ad campaign kicks off with hundreds of thousands to be spent on the measure. (By the by, our South Dakota marketing companies are really going to enjoy life if IM 22 passes – they can benefit from taxpayer-subsidized campaigning!)
Getting back to “graft,” recall my tweet in which I pointed out Section 48 of the measure. There, it says that a politician may personally solicit a voter to give his/her democracy credits to the politician. In fact, the politician can actually sit a voter down at a computer and actively assist him/her to send the credits to the politician. If that feels too much like “graft,” IM 22 allows you to instead send a paid representative to run a “how to” seminar at your local nursing home, college campus, or other establishment. By the way, “A valid assignment is irrevocable.” All of that definitely sounds like “acquisition of money through unfair means through the abuse of one’s influence in politics.”
9. You say, “Every voter would get to decide whether $100 of their own tax dollars gets spent or stays put.” We have already talked about the fact that this is wrong. We are not talking about a system like the federal presidential contributions where money only goes in if a taxpayer voluntarily checks a box. Here, mandatory appropriations occur every year from the general fund whether taxpayers like it or not. In addition, non-taxpayers get to participate fully in this whole system, meaning that people are clearly not deciding “what to do with $100 of their own tax dollars.” Your quote above is patently incorrect.
10. I am going to again address your argument against a straw man. I have not made any attacks against the portions of IM 22 that go after lobbyists and campaign contributions. My only target has been the taxpayer-funded welfare for politicians. You cannot dispose of my arguments just by pointing out that I am a lobbyist. That would be tantamount to me saying that your comments on education funding or common core are void because you are a teacher. I am a taxpayer and a South Dakota citizen and, as such, an interested party. You are not entitled to ignore me just because of my vocation.
11. “[C]onsidering that probably every voter in this state spends at least $2,500 on food and clothing every year…” Really? I know lots of voters who do not spend that much on food and clothing every year. I absolutely believe they have (and should have) the right to vote, but they cannot afford even $2,500 for food or basic necessities. We the people got together and decided that these people should benefit from our tax dollars with assistance programs like welfare and food stamps. These people are in need and worthy of our public support. Politicians, on the other hand, are not “in need.” Politicians are able to afford basic necessities. Politicians are not worthy of our public support. I do not want to create a system whereby we are literally giving the same kind of taxpayer-funded support to politicians that we give to those in REAL need. I hope IM 22 makes the rest of South Dakota as nauseous as it makes me. Giving $700,000 of taxpayer money to some politician who wants to be Governor versus feeding a single mother and her three children? The fact that IM 22 would make the two situations similar is appalling.
Is it me?
or is that word salad from Justin G.,
Ben Carson is calling you, please pick up.
I haven’t decided whether I will support this yet. I’m actually inclined not to. What might change my mind is people like Justin Smith (lawyer/lobbyists) protesting too much. The self-interest of a lawyer/lobbyist in trying to kill an initiative that imposes burdens on lawyer/lobbyists is readily evident. Others besides me will see that Mr. Smith is not the best messenger for the opposition. Mr. Smith does not seem to have learned in his time as a lawyer that sometimes it’s better just to say less (or nothing at all) and go sit down.
That said, I agree with Mr. Smith that this is an expensive and complicated proposal. I can picture South Dakotans voting no for any number of reasons.
Whenever you hear a republican/politician/lobbyist say that some tax money could be used for education, you know that it won’t be.
Remember video lottery?
One piece at a time.
“ad hominem smear”? Poppycock. I opened the piece by identifying Justin Smith by his profession and location, which is not an attack but a specification made all the more important by a rather common, Google-indistinct name. Understanding that the critic a lawyer may enhance the authority of Smith’s arguments on legal ramifications of the law. Understanding that the critic is a lobbyist and thus will be directly affected by provisions of this law as relevant as it would be to identify me as a blogger in a report about my opposition to restrictions on journalists’ access to public documents.
Justin sounds like a young zealous man with most likely good capabilities and and drive.
However, Justin, less is more! Four score and seven years…..
Justin, John Tsitrian didn’t feel you were ad-hominemed. He zestfully reads this review and your response and concludes that the public-financing component of the Anti-Corruption Act is a fatal flaw that compels him to vote No on IM 22.
On Justin’s #1:
Hmm… Justin gave us 11, and I’ve got about 200 words just on his #1. This could take a while. Good thing election isn’t for another eleven and a half months. Justin, do you think they’ll let the two of us do the KELO debate on IM 22?
thank u lobbyist justin. my support for rick is now all the more assured. btw, “to his credit, this one” was an ad hominem attack was it not?
On Justin’s #2:
On Justin’s #3:
—(1) it generates interest, which, in excess of $12 million, must revert back to the General Fund, meaning that even if we don’t get the participation/democracy advantage, we get a fiscal advantage;
—(2) we still gain advantages from lobbying reform and the ethics commission, which are each enough reason by themselves to vote for IM 12.
Note: I’m having all sorts of fun thinking through and rebutting Justin’s arguments, but at the point where I have to issue 500-word rebuttals to each of his subpoints, he has me at a disadvantage in front of the majority of voters, who won’t be paying much attention until next fall and who won’t listen much past Justin’s three-word cry, “Welfare for Politicians!” But I’ll keep at it. :-)
On Justin’s #4:
On Justin’s #5:
On Justin’s #6:
It often takes many more words to demonstrate the fallacy in fewer words loaded with fallacies, distortions, and gross omissions.
Democracy Credits, my tight doopa. When the citizens of SD start giving handouts to candidates just because the libbies can’t finance their own campaigns I will eat Newland’s hat. His good one.
Douglas, is truth always harder to sell than fiction?