No matter where you fall on these issues, I think it’s worth watching.

What do you make of arguments which state that disclosure is enough and that caps aren’t needed?

If voters know immediately where candidates are getting their funding they can usually pretty well decide whether or not the politician has the same policy preferences they support.

Comments to alt-tag.com, “Utah Campaign Finance”, 2009-06-29

We have disclosure, yet behavior that I find ethically questionable still exists. There are several possible reasons: voters aren’t aware of it (possible), the majority of voters don’t care (likely), or I’m up in the night (very likely). I noted previously that to my recollection, when these ethical questions are brought up on the campaign trail only intra-party challenges have succeeded. This leads to a fourth possibility: voters prefer ethically questionable members of their own party to unknown members of the “opposition.” (Better the devil you know that the devil you don’t.)

To answer Jeremy’s question a bit more directly, no, I’m not convinced disclosure is enough. Additional ethical standards and restrictions should be defined.

Even the question of whether campaign finance reform should be considered is being debated:

Is “campaign finance reform” about good government? We’ve long argued not—that reformers seem to care very little about governmental outputs, thinking it best to focus on an ideology of inputs. [T]he success of tax funding of campaigns is not measured by whether they lead to better government, but by the number of candidates who participate in the system.* If contributions can’t be shown to be a source of corruption, it is enough if they create “an appearance” of corruption. Make no mistake—this is an ideology, and a relatively blind one at that, for no study dissuades, no amount of experience shatters the belief that more reform is required. But historically, reformers have at least argued that they cared about good government.Brad Smith, “Is Campaign Finance Reform About Good Government?”, 2009-03-21, retrieved 2009-08-24

The argument is wrapped in a straw man (one can rightly care about both inputs and outputs), but does raise the question, “Why debate the issue?” At a high level, my response goes like this: good government is ethical; ethical government is more likely when its members are ethical; ethical behavior is more likely when clear standards are in place and ethics are openly discussed.

If standards should be put in place, how then should it be done? Jeremy continues:

Unlimited contributions allow for well financed new-comers who can pose a viable challenge to incumbents. Contribution limits end up benefiting those politicians already in power because they require that opponents have a much larger contributor base than is often possible.Comments to alt-tag.com, “Utah Campaign Finance”, 2009-06-29

I agree. After brainstorming, here are a few thoughts I’d love to see argued. (If you do post a response on your own blog, please add a link to the comments here—I’m not checking the bloghive as often as I’d like.)

Prohibit corporate donations

Corporations exist for a different purpose than citizens do. The difference in comparative wealth of corporations versus citizens should be enough to sustain this argument, but it’s not the only reason. The primary purpose of corporations is profit; it follows that the corporation’s primary purpose in financing/lobbying government is also profit. This is, I think, not generally in the best interests of citizens. For the same reasons, corporate contributions to political parties, PACs, and other political special interest groups should be restricted. (For example, corporate interference on health care issues.) There are significant restrictions on corporations at the federal level, but there is a fairly important case in front of the U.S. Supreme Court that could drastically alter the landscape. (Also here, here.)

Prohibit campaign contributions from other candidates’ funds

Nothing, I think, makes the U.S. Senate look like an old boys club than the massive campaign support members provide each other. Once one is “in” the club, it would certainly be difficult to turn aside such displays of friendship. Still, I’m not convinced that such behavior serves the public interest.

Require tracking of all contributions

In the age of credit cards and anonymous pre-paid debit cards, it is important, if one values disclosure, to closely track contribution from these sources. The Obama campaign was criticized for accepting contributions from anonymous sources (although nothing was ever done, largely, I suspect because there wasn’t enough information to prove anything), and it was speculated they also accepted multiple contributions below current disclosure levels that in aggregate would have exceeded legal limits. (See e.g., Washington Post, New York Times, and here. See also criticism of McCain’s funding.) This is not the first campaign to face this criticism, and won’t be the last until finance law catches up with the Internet. (See also here.)

Restrict campaign funds to a single election cycle

The uphill financing battle faced by newcomers is significant. A more equitable approach would be to restrict campaign accounts to have a fixed duration (say, three years before the election). The surplus would be required to be donated to charity (or some such). This would require donations to be tagged at donation time for a specific election year as a preventative action against an account-shuffling shell game, but this wouldn’t be a bad thing.

During the last election cycle, a handful of candidate were accused (some, rightfully so, IMNSHO) of being a bit too cozy with certain contributors. In every case, the incumbent was re-elected, often with wide margins. Campaign finance may be broken, but the public doesn’t care.

[Governor's Commission on Strengthening Utah's Democracy] member Bruce Hough contends that campaign contributions are a form of free speech and therefore should not be restricted. The U.S. Supreme Court disagreed in a 2000 decision upholding state limits on contributions. Writing for the majority, Justice John Paul Stevens, said “money is property; it is not speech.”

And Utah candidates are raking in the property, with the big bucks coming in big chunks, primarily from corporations and political action committees. Five-figure donations are common.

It wouldn’t happen in most states. According to the National Conference of State Legislatures, Utah is one of just six states that allow unlimited campaign contributions to candidates for state offices. And it’s one of just 13 states that place no limits on donations to political parties and political action committees. That has to change.

Commissioner Hough, a Republican national committeeman, also says that transparency — the complete and speedy disclosure of campaign contributions and expenditures — will keep lawmakers honest. But according to a 2009 study by The Center for Public Integrity, Utah is also failing in that regard. The state’s campaign disclosure laws garnered a grade of F, ranking 47th in the class.

Salt Lake Tribune, Lawmakers for sale: Campaign contribution caps needed

The Salt Lake Tribune has another editorial out supporting the lawsuit.

[The appeal] is the right thing to do. The lawmakers, state education officials and others who filed the lawsuit want a definitive ruling on whether legislators violated the Utah Constitution when, in the final hours of the legislative session, they packaged together a dozen bills, some that contained must-pass education funding.

…

Each piece of important legislation — and all laws regarding public education are important — is best considered on its own merits, not lumped together with other bills under the vast “education” umbrella. The more so when some of those bills cater mainly to private interests.

“SB2 Ruling: Plaintiffs should pursue appeal,” Salt Lake Tribune, 2008-05-28

If anyone’s looking for it, here is a copy of Judge Dever’s ruling [pdf, 5 MB] dismissing the first two counts of the complaint.

For those wedded to the idea of performance pay and “differentiated compensation” (and not just in public education) may I offer the following nugget from, of all things, an accounting textbook:

Incentive compensation for employees, such as bonuses, can, and probably should, be tied to balanced scorecard performance measures. However, this should be done only after the organization has been successfully managed with the scorecard for some time—perhaps a year or more. Managers must be confident that the performance measures are reliable, sensible, and understood by those who are being evaluated, and not easily manipulated. As Robert Kaplan and David Norton, the originators of the balanced scorecard concept point out, ‘compensation is such a powerful lever that you have to be pretty confident that you have the right measures and have good data for the measures before making the link.’Garrison, R.H., Noreen, E.W., Brewer, P.C. (2008) Managerial Accounting, 12th ed. McGraw-Hill. p 446.
Internal quote references Lori Calabrom “On Balance: A CFO Interview,” CFO Feb 2001, pp 73-78.

Friday in Board meeting, the following proposal was approved:

The “Uniform School Fund Restricted: Growth in Student Population Account” is a $100 M reserve account, originally designed to protect against education unplanned student growth. The legislature set the $100 M aside this last session “just in case.” This proposal would continue to hold $63 M in reserve—a smart decision, I think.

I think it’s important to add that this proposal was reached after significant feedback from school districts.

There have been expressions of concern that further reductions may be requested; the governor’s office has also requested public education at this time the Board has not been asked to provide additional cuts.

Although not technically public education, the Utah Education Network (UEN) provides a significant amount of technology services to public education; 80% of their funding goes to public education. UEN has stated they need to cut 4% ($900,000) from the first round of cuts. They’re hoping to accomplish the savings by eliminating unfilled staff positions, non-essential travel and professional development, and by postponing network improvements to about 70 elementary or charter schools (fewer if districts will help with payment).

Further, (and I hope there is public outrage at least on this point) the Utah Schools for the Deaf and Blind (USDB) has been asked (as it is a state agency) by the legislature to prepare for additional 5% or 10% budget cuts for the next school year. Although they’ve been able to survive a 3% reduction without directly impacting their education programs, further cuts will have a significant impact on students that are underrepresented in the current process.

Even during times of increased revenues, the USDB was not given resources to build a much needed facility. Its students were moved to a handful of ill-suited buildings without ready accommodations for disabilities. (There was a July 13, 2008 Deseret News editorial on the subject. See also Trib, KSL.) Unlike local districts, USDB does not have taxing authority, and thus must rely on the state for the whole of its funding.

I’ve copied my notes (which are effectively copies of the instructor’s slides) below:

Power corrupts
Effects on power holders:

• Self-serving attributions
• Ingroup favoritism
• Outgroup derogation
• Creation of systems, rules, and ideologies that favor the self and the group
• Conviction that self-serving rules are fair and legitimate
• Lack of attention to subordinates and their perspectives
• Lack of awareness of social norms

Responses of the Powerless:

• Lack of participation (internalization)

• Believe that success is impossible (fatalism)
• Withdrawal and apathy (learned helplessness)

Goup energy is depleted

Rebellion (externalization)

• Believe that the system is unfair

Feelings of anger and resentment

Group energy is directed toward changing the system rather than toward the organization’s goals

He was excited to tell us he voted for “Morocco Obama.” (Apparently his name sounded cooler.)