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Krebs Panel Considers Letting Businesses Donate to Candidates—What About Enforcement?

Secretary of State Shantel Krebs convened her special bipartisan panel on campaign finance reform yesterday and found “solid support” for allowing businesses to contribute directly to South Dakota political candidates.

Allowing businesses and other organizations currently excluded from direct contributions to candidates stirs my anti-business instincts—do we really want corporations buying up even more of the political landscape? The panel’s proposal responds to the desire for transparency that motivated Secretary Krebs to convene the panel. Right now, corporations can funnel beaucoup bucks to candidates through political action committees:

In South Dakota, a candidate for statewide office can’t accept more than $4,000 in one year from an individual. The limit is $1,000 for legislative candidate.

But statewide and legislative candidates aren’t limited on the amount they can accept from a PAC. State law sets a $10,000 limit on the amount that can be contributed to a PAC.

Donations by an individual, a business or some other organization to multiple PACs to support a candidate are already allowed [Bob Mercer, “Panel Ponders Allowing Businesses to Open Checkbooks for Candidates,” Watertown Public Opinion, 2016.09.06].

Allowing businesses to contribute directly to candidates might increase accountability, but only if the panel also proposes limiting their contributions to PACs.

Reforms will be futile if they don’t include some enforcement authority, which Secretary Krebs says right now she has none:

Krebs acknowledged to the group that she and her staff have been frustrated with the number of difficult complaints they received this year about campaign finances.

“We don’t have any statutory authority to do anything,” she said.

She said “the big question moving forward” is the possible creation of an independent review board that would receive complaints judged by her office to be legitimate and backed up by sworn statements [Mercer, 2016.09.06].

Interestingly, Initiated Measure 22, the Anti-Corruption Act, would address both of these issues, creating a statewide ethics commission to enforce all campaign finance laws. Equally interestingly, Justin Smith, a lobbyist member of the Krebs panel and a vehement opponent of IM 22, sounds like he doesn’t want the Legislature creating any enforcement for the panel’s proposals, either:

Smith said the review board could be the most controversial change for the Legislature to consider. Smith said he wasn’t sure how frequently valid complaints surface and, he added, creating the system could invite abuses of candidates by their opponents [Mercer, 2016.09.06].

Come on: if we’re serious about transparency in campaign finance, we have to be serious about enforcement. Either we need to authorize Secretary Krebs to play campaign finance cop or enact a statewide ethics commission, or we’ll see corporations and wealthy individuals continue to play games… and bad actors like Chad Haber go for two years without reporting their campaign finances.


  1. Justin Smith 2016-09-07 09:06

    Just two comments.

    1. I never expressed opposition to an independent commission or board. I made the comments Mercer quoted and said the discussion should keep those issues in mind. The question of a board/commission was held for a future meeting given the breadth of that issue and the limited time during yesterday’s meeting.

    2. There is already a mechanism in place to enforce South Dakota’s campaign finance laws. One may file a complaint with the local State’s Attorney, a mechanism I also brought up during the meeting yesterday. The group will continue to discuss the adequacy of this mechanism and/or adding some type of board/commission during future meetings.

  2. caheidelberger Post author | 2016-09-07 14:28

    Come on, Justin: is it just coincidence that the words Mercer hears at the meeting that suggest resistance to a campaign finance review board come from the same guy who’s shouting at me on Twitter more than anyone else in resistance to the ballot measure designed to hold candidates and donors accountable for their campaign finance practices? When you accentuate the negative, you sound like an opponent.

    Your panel should take a hard look at the adequacy of the existing mechanism of referring campaign finance violations to local state’s attorneys. Where is the nexus of the crime: the location of the donor, the candidate, or Pierre, where the reports are filed? Should local officials be prosecuting campaign finance issues related to access to state government? Wouldn’t some consistency, as well as some independence from partisan influences, be better for statewide campaign finance enforcement?

  3. leslie 2016-09-07 20:41

    surely a state issue, but I told you so perhaps, about Krebs as governorship material yet.

    but what I really want to mention, on the state Congressional races Jay and Paula are pursing, is why and from whom are those $12 million thune election dollars and similar millions of Noem dollars that will be used to pummel our democratic canditates who likely won’t crack a million dollars between them, coming from. Do we get to see who the republican and other donors are, before the election?

  4. grudznick 2016-09-07 20:43

    Ms. Krebs could well be laying in the weeds awaiting the next moment to spring her plans to run for Governor. Won’t Marty be angry like a rhino in a dry pond?

  5. caheidelberger Post author | 2016-09-08 09:22

    Leslie, our Congressional candidates must submit quarterly reports; the Q3 report, covering money donated from July 1 through September 30, is due to the FEC by October 15. A pre-general report covering activity from October 1 through October 19, is due October 24. The next report, covering October 20 through November 28, is due December 8.

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