IM22 Voters Wanted Less Big Money in Politics; Legislature Votes for More!

Initiated Measure 22 ran 70 sections, 15,388 words, but achieved all of its main campaign finance reforms (not counting Democracy Credits and the ethics commission) in 30 sections totaling 8,810 words.

Senate Bill 54, the main campaign finance reform bill signed by the Governor, runs 41 sections with 10,057 words and does less to reform campaign finance than IM 22.

One of the main reforms voters approved in IM 22 last November was to lower the limits on campaign contributions for darn near everybody doing politics in South Dakota. The Legislature repealed those limits and, for all their professed zeal to “replace” IM 22, forgot to restore any of those lower limits. Individuals can still donate up to $4,000 to statewide candidates and up to $1,000 to legislative and county candidates each year. PACs, parties, and candidate committees may once again donate unlimited sums to South Dakota campaigns…. meaning if Kristi and Marty had just held their horses, they could have formed their gubernatorial committees, transferred all the money they wanted from their other campaign funds, and declared their candidacies according to their own timetables instead of rushing their declarations last November before IM 22 was briefly enacted.

Rather than putting more limits on big money in their campaigns, the Legislature opened a new door for even more big money: following Secretary of State Shantel Krebs’s recommendation, Senate Bill 54 allows businesses, unions, and other “entities” to contribute directly to candidates. The FEC won’t let businesses do that for Shantel’s campaigns for U.S. House, but the folks who run for Shantel’s job and all other South Dakota offices can now double dip: get their favorite local business people to make personal contributions, then dip into the company cookie jar to double the cash.

Our legislators and the Governor didn’t vote for less money in South Dakota politics; they voted for more. Far from replacing IM 22 and respecting the voters’ will, our legislators and Governor have done the opposite.

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Senate Bill 54 does much more than allow businesses to contribute directly to candidates. Here’s my election-nerd list of SB 54’s notable changes to campaign finance law:

1. SB 54 Section 41 bans converting campaign funds to personal use. Candidates can spend money on their campaigns, on other campaigns, or on charities. Unclear is whether Section 41 allows candidates to pay themselves a salary, as federal candidates may under FEC rules.
2. SB 54 raises the penalty for repeat violations of campaign finance laws to Class 1 misdemeanor—one year in jail, $2,000 fine. First violations Class 2 misdemeanors—30 days, $500.
3. Right now, political ads must identify their bankrollers if they “expressly advocate for or against” a candidate, public office holder, ballot question, or political party. SB 54 expands the disclaimer requirement to include material that “disseminates information concerning” such subjects.
4. Campaign committees still need not give names of donors who give $100 or less each year; however, SB 54 requires candidates to keep records of those small donors and running totals of their donations.
5. SB 54 bans “miscellaneous” as an expense category on campaign finance reports. We still don’t get itemized lists of expenses, but at least candidates have to indicate somewhat clearly what they used their money for.
6. Right now, candidates have to submit pre-primary and pre-general campaign finance reports by the second Friday before the election and report all receipts and spending through the 15th day prior to the election. SB 54 moves those submission deadlines four days earlier, to that 15th day prior, and requires the pre- reports to cover all activity through the 20th day prior to the election.
7. Right now, the Secretary of State can fine committees that fail to file timely reports $50 a day, up to a maximum fine of $3,000. SB 54 raises that penalty to $200 a day, with no maximum. (Under that rule, 2014 delinquent filer extraordinaire Chad Haber would owe the state $175,400.)
8. County parties face a similar increase in their delinquent-filing penalties, up from $10 a day to $50 a day, with no more $600 maximum.
9. Right now, campaign finance rules apply to county races (candidate and ballot question) in counties with population of more than 5,000. SB 54 raises that threshold to 10,000, possibly exempting 18 counties from these campaign finance requirements.
10. Candidates must state the office they are seeking on their statements of organization.
11. Candidates may maintain both one legislative campaign committee and one statewide candidate committee (because nothing says “Vote for me!” like shouting, “I can’t make up my mind!”).
12. SB 54 exempts polling from communications subject to campaign finance rules if the polling question “does not expressly advocate for or against a candidate, public office holder, ballot questions, or political party.”
13. SB 54 adds “certified as a candidate by a political party” as a criterion satisfying definition of “candidate.” I assume this ensures that replacement candidates picked by their party committees are included in the campaign finance reporting requirements from Day One.
14. SB 54 clarifies that donors can’t launder contributions by buying items from political committees for more than fair market price.
15. SB 54 includes “political party” in the definition of “political committee,” thus alleviating wordiness in several statutes (i.e., a rule need not spell out that it applies to both political committees and political parties).
16. SB 54 restores the cosmic balance of wordiness by replacing “in-kind” with “donated good or service.”
17. For all their determination to choke the flow of money to ballot question committees, legislators still struck the Class 1 misdemeanor penalty for ballot question committees accepting contributions from illegal sources, because, with the new “entity” language of SB 54, I’m hard-pressed to think of anyone who can’t contribute to ballot question committees.
18. If we make oopsies, current law gives us three days to fix them by filing amendments to our campaign finance reports. SB 54 gives us seven days.