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interviews

What State Takeover Looks Like

by Senator Scott Wiener
© Frank

interviews

If You're Not at the Table, You're on the Menu

by Michael Malbin
December 7, 2020

This interview with Michael Malbin, professor of political science at the University at Albany, State University of New York and co-founder of the Campaign Finance Institute was conducted and condensed by franknews. 

Michael | My name is Michael Malbin.  I've been writing about and following the issue of campaign finance since I covered the decision of Buckley v. Valeo in the 1970s as a journalist. In 1999, I co-founded the Campaign Finance Institute, which is now part of the National Institute on Money in Politics. Both are strictly non-partisan providers of information, data, and analysis. In recent years, I have focused on the role of small donors and done a number of analyses of small-donor public financing.

frank | Can you walk us through the landscape of public financing initiatives at a state and city level?

Public financing provisions have been adopted by various levels of governments in three different waves. Immediately after Watergate, the federal government adopted a basic flat grant system for presidential general elections, with a one-to-one match in the primaries.

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Basically, if you agreed to limit your spending, and a few other requirements, you could receive public money. The federal system stimulated a number of outsider candidates to participate in the run for the presidency. It was important in the success of Ronald Reagan, George H. W. Bush, and a number of other candidates. Jesse Jackson would not have been the force he was without public financing. In the 2000s most of those systems fell into disuse because candidates began saying that they didn't want to abide by the spending limits.

A second wave came, starting in the 1990s, that didn't merely try to match public money, but instead tried to replace all private money with public. These are called Clean Election systems. Three states use them for state legislative races, but, again, candidates felt fenced in by a spending limit. These systems were also stymied by a Supreme Court decision that said that you cannot give extra money to a candidate when the candidate is faced with opposition independent spending. While the programs are still used in Connecticut and Maine and Arizona, they have come into declining use and new jurisdictions stopped looking at them.

The newest wave of reforms involves trying to stimulate the role of small donors. The goal is not to replace all private money with public money, but to heighten the role of small donors.

Instead of starting from the premise that all private money is bad, the premise is that we need to change the balance in the system.

The New York City system is included in that wave. The New York City system was started in the 1980s, but in 2000 it moved to a multiple-matching system. It started as a 4:1 match, then moved to a 6:1 match in 2017, and is moving to an 8:1 match in the next election cycle.

Can you go into more detail on how a multiple matching system operates and what the different ratios mean and change?

In a multiple matching system, donations are matched by city funding, up to a certain amount. In New York City, for every dollar of the first $175, the city will put in an additional $8. For example, if I were to go to a city-run website to give $25 to a neighbor trying to qualify to run for a city council next year, the site will tell me immediately that my money is now worth $225 to the candidate. 

Typically it is not cost-effective for candidates to go for small donors unless they have the kind of campaign that can take off on Act Blue or WinRed. The most precious thing that a candidate has is time. The campaign will go where the money is, and money is raised most easily from people who give large amounts. The small-donor programs change the incentives for the candidates to reach out to small donors.

That has radically changed the donor pool in city elections. Small donors usually account for around 15% of the money that a state assembly or city council candidate raises. In the last election, candidates running for city council who participated in the matching program raised well over half of their money from small donors or from the public fund matches that those small donors generated. Financially, these were the most important constituents for them as opposed to large donors. Our studies have also shown that not only are there more small donors, but they are more geographically dispersed, more economically diverse, and more racially diverse. Donors come from neighborhoods that looked much more like the city as a whole. It has been a very significant change.

What might future innovations look like? 

I think we can see the start of a fourth wave among the laws that New York State just enacted. The commissioners charged with revising the law started off wanting to imitate the New York City system, but they also looked at what is going on nationally. Candidates are able to raise their money all over the place with internet fundraising tools. In this past election, we saw massive amounts of money going across state lines to Senate races in South Carolina or Kentucky. These commissioners said it's good to have more small money in the system, but is this the kind of national fundraising that public money should be used to enhance? They didn't think so. 

They thought that public money should be used specifically to enhance greater participation by constituents and to enhance a stronger connection between representatives and their constituents.

In New York state, they decided to hyper match donations to local candidates; local donations are matched 12 to 1 for the first $50, 9 to 1 for the next $100, and 8 to 1 for the final $100.

By focusing on within-district donations, it heightened the racial and economic composition of the pool. I think that is a model that other jurisdictions should want to look at. 

It's important to emphasize what is the real driving force here.

The driving force is that those who propose the new systems are coming to realize that there's not much we can do about the fact that rich people are able to spend their money in politics.

There are things we could try to do, but if you want to change the system, you have to expand it. You have to get people to become players — not just voters, but players in a significant way. Therefore the emphasis in these new systems is on expanding the base: building up the bottom to promote pluralism and diversity by bringing people in who haven't participated before. Focusing on building the base is fundamentally different from the idea of let's get all money out of politics.  And the evidence so far is positive, though it is not settled because these new programs have not all had time to undergo a review. 

What is the evidence that points to how people are brought into the fold? Has there been empirical research or anecdotal evidence that points to people's relationship to politics and continued civic engagement beyond donating?

There were no systematic studies yet of the causal relationships between civic participation and donating. We know that people who give are more likely to participate, but what we don't know is to what extent giving produces more participation. There is anecdotal evidence based on the behavior of candidates. If they get a donor to give $5 or $10, the donor’s name and email address is in the candidate's database, and the candidate uses that to recruit the donor for volunteer behavior activities. That is the prime recruiting ground for volunteers who make phone calls or knock on doors. The candidates behave as if the donor is likely to pass an email around, to recruit friends. While there are no systematic social science studies on that relationship, the behavior of candidates tells us that they think this is a two-way street — you are engaging somebody to be part of your team. That was what the whole Obama database was built around, and campaigns since have learned from that.

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There is one theory that suggests that small donors are more extreme and increases the chances of us ending up with more ideologically extreme candidates. Do you think this a credible theory? 

A few scholars have put out studies that are being cited by a large number of other scholars to suggest two things. One, that small-dollar donors are more extreme than people that give more money. And two, that the candidates they support are likely to be more extreme than the candidates supported by large amounts. Those two ideas are widely accepted among many of my colleagues in political science, I should say that. But these claims are without basis.

We have almost no good, serious studies that compare small donors to large individual donors, because, due to federal disclosure laws, we have no information about the donors that give less than $200.

We do have some studies comparing state donors, including one that shows just the opposite — that the small donors tend to be more moderate. But the studies are old, so I'm not going to rest on those. The two federal studies we have that are able to sort out the small and the large donors, both come to the same conclusion; there's no difference in ideology between the people who give smaller amounts and the people who give the larger amounts, and there is no evidence that they support candidates who are more extreme.

In fact, in 2018, more of the small donor money went to more moderate candidates. Why?

Small donors who give across these national platforms are giving to influence majority control of the legislature.

They will give to candidates in moderate swing districts because they want their side to be in the majority. And that's being done by both parties. While the question of extremism is a legitimate and understandable concern and something that any responsible policymaker should consider, there's no basis for it.

Is there any evidence that, more broadly, there’s an ideological difference between people who give money to political campaigns and those who don’t? 

Fewer than 10% of people give. The people who give tend to be activists and people who are activists tend to be more liberal or more conservative than the average voter. There's something to that, but that's true of all donors, not just small donors. 

It is also true that individuals tend to be more ideological than political action committees. If you think it's great that politics is controlled by economic interests and political action committees, go ahead and make that argument. I don't. But, there's no evidence that these small individual donors are more extreme than the individual mega-donors that fuel the system right now. And, no matter what reforms you implement in the public financing realm, those players are going to continue. The Kochs will be there as long as they remain healthy enough to be there. Same with the Adelsons. Same with big Democratic donors. The locally-based multiple match system gives the candidate an incentive to look for a different kind of source by going into people's living rooms or meeting halls and bringing them into the system.

Do you think we should be thinking about campaign finance differently? 

Let me start at the beginning: I favor a system of government that requires legislators to talk to each other and bargain with each other and reach compromises that work for most of the people. That is, I favor Madisonian pluralism.

The problem is that the bargaining around a pluralistic table occurs only among the people who are seated at the table.

There is a quote, “If you're not at the table, you're on the menu.” That is true in this case. You will be eaten alive. I think the big issue relating to equality is not whether rich people play, because they will. Rich people will always find a way to play. I think the big problem is making sure that those who play include a larger and more diverse set of constituents. 

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I see the problem as one of raising the floor and expanding the pool, as opposed to squeezing the ceiling. 

It's valuable to worry about corruption. It's valuable to make sure to get disclosure of dark money. It is valuable to make sure that the party leaders cannot go to million-dollar donors and say, give me money, and we'll make sure bad things don't happen to you. That is all fair enough, but that's only a small part of the bigger problem of democracy. The bigger problem is all of those people who are not participating. In 2020, we had a larger voting turnout than we've had in the century. But, there's still a very large number who do not do anything more than vote. They vote, and then they check out for four years. A fully vibrant democracy requires citizens to stay involved to whatever extent they can. Most people cannot be full-time political interest group actors and earn a living at the same time, but people can be better informed than they are. This is part of a rubric of ideas that has to do with the positive goal of growing participation, as opposed to that part of the reform agenda that is about restrictions and restraints.