Testimony of the Wisconsin Democracy Campaign on December 2007 Special Session Senate Bill 1, Senate Bill 12, Senate Bill 25 and Senate Bill 463

Senate Committee on Campaign Finance Reform, Rural Issues and Information Technology

February 12,2008

Thank you for holding this public hearing and setting the stage for action on campaign finance reform in the special legislative session. The Wisconsin Democracy Campaign strongly supports all four bills that are the subject of this hearing.

December 2007 Special Session Senate Bill 1

Special Session Senate Bill 1 combines the features of two reform plans that we strongly support – the Ellis-Erpenbach comprehensive campaign reform bill (SB 12) and the Impartial Justice bill (SB 171) – and it incorporates a new approach to disclosure of special interest-sponsored electioneering masquerading as “issue advocacy” that takes into account the U.S. Supreme Court’s ruling on the matter last June. The package provides substantial public financing of all state races and full public financing of state Supreme Court elections. It also bans fundraising during the state budget process as Senate Bill 25 does and eliminates leadership-controlled campaign fundraising committees.

All of these features are much-needed reforms that powerfully address the public’s growing concern about political corruption and growing lack of confidence in the integrity of elected state officials and our courts. According to the most recent polling by the conservative Wisconsin Policy Research Institute, only 2% of state residents trust state government to do the right thing most of the time. When asked whose interests they think their elected officials represent the most, 10% of respondents said they think their elected officials represent the voters’ interests, while 43% think state politicians are working for the special interests and 42% think they are just looking out for their own self-interest.

The Badger Poll by the University of Wisconsin Survey Center released in late December showed public approval of the Wisconsin Legislature’s performance dropped 18 percentage points from the levels of public support indicated by polling done by the center just five months earlier. The latest Wisconsin Survey by St. Norbert College also showed an 18-percentage-point drop in the Legislature’s job approval rating since the previous opinion survey done in the spring of 2007. When asked by St. Norbert’s Survey Center to identify the biggest problem facing Wisconsin, more people than ever said it’s government ethics and politics. The percentage of people identifying government ethics as the state’s biggest problem nearly doubled from the previous poll conducted in the spring, and on the list of biggest concerns it ranked ahead of jobs and the economy, health care, education, gas prices, crime and drugs, the environment and immigration. Only tax and budget concerns worry a higher percentage of Wisconsinites than government ethics and politics.

Wisconsin used to have some of the nation’s strongest campaign finance laws. But huge holes have been blown in these laws, and the state’s once-effective public financing system for state elections is now useless and largely unused.

Critics of public financing are fond of saying it’s wrong to force taxpayers to pay for election campaigns. This is a lame excuse for inaction, not to mention crassly hypocritical. Taxpayers are already forced to pay for election campaigns, and if you tally up the cost of all the public policy favors that are granted to big campaign donors, we are paying a great deal more for election campaigns through the back door than we would if we paid for them directly through a system of publicly financed elections.

The issue before you is not whether taxpayers should pay for elections. We always will, one way or the other. We pay for every slice of budget pork, every tax break, every perk, every favor big donors receive. Taxpayers are paying through the nose for election campaigns the way they are financed today. And we have no choice in the matter. All of us pay for how special interests are rewarded for their campaign donations, whether or not we agree with these policies.

The issue before you is ownership. Special Session SB 1 would replace the special interest-owned elections we have today with voter-owned elections.

Along with creating a system of voter-owned elections, Special Session SB 1 also closes a gaping loophole in Wisconsin’s campaign finance laws that has rendered our state’s disclosure laws and campaign contribution limits effectively meaningless. In 2006, special interests spent an estimated $15 million on secret electioneering in the form of undisclosed “issue ads.”

Full disclosure of special interest-sponsored election advertising and restrictions on the source of funding used to pay for these ads are constitutionally permissible. But it needs to be done in the way it is handled in Special Session SB 1, which takes into account the latest U.S. Supreme Court ruling on the issue ad disclosure provisions of the federal Bipartisan Campaign Reform Act of 2002, commonly known as the McCain-Feingold law.

Finally, a word about a Supreme Court closer to home. Our state Supreme Court is operating under an ethical cloud. The court’s seven justices face the prospect of becoming part-time judges as they must increasingly consider sitting out cases involving campaign contributors. The court finds itself in a no-win position. If justices recuse themselves the court can be paralyzed, unable to decide cases. If justices rule on cases when they have an economic conflict of interest, they risk further undermining the public’s confidence in the fairness and impartiality of our courts. Already, a poll by a leading Republican polling firm, American Viewpoint, finds that only 5% of Wisconsin residents believe that campaign contributions made to judges have no influence at all on decisions judges make in the courtroom, while 78% say they have “a great deal” or at least “some” influence.

Wisconsin’s Supreme Court justices need to be freed from the inevitable conflicts of interests that are the natural byproducts of the badly broken system of selecting high court judges currently in use in our state. The public is demanding that the judges be liberated, as American Viewpoint’s polling last month found that 65% of state residents support publicly financed Supreme Court elections. And after hearing arguments both for and against such reform, support for public financing went up to 75%.

Just as significantly, the justices themselves are demanding reform. All seven members of the state Supreme Court – from the most conservative to the most liberal – signed a letter in December voicing support for publicly financed Supreme Court elections. This is incredibly significant. Our state Supreme Court is not unanimous about much of anything. But they are unanimous about this.

If full public financing of Supreme Court elections cannot be accomplished as part of a broader set of reforms, then it needs to be done as separate legislation. Our high court is in deep trouble and it puts our entire court system at great risk. This crisis calls out for immediate action.

Senate Bill 12

We have long supported the Ellis-Erpenbach bill and continue to believe that, if enacted, it would get Wisconsin to a much better place when it comes to our elections than where we find ourselves today. But we prefer that SB 12 be incorporated into an updated and even more comprehensive package of reforms that Special Session SB 1 represents. The special session bill not only provides an extra measure of protection to our Supreme Court, but its revised approach to disclosure of phony issue ads is in keeping with the latest jurisprudence in this area.

The approach to disclosure currently contained in SB 12 does not take into account the U.S. Supreme Court’s ruling last June in the Wisconsin Right to Life case. If SB 12 is considered as separate legislation, it needs to be amended to incorporate the new approach to issue ad disclosure that is included in Special Session SB 1 and the recently introduced stand-alone issue ad bill, SB 463.

Senate Bill 25

The Democracy Campaign strongly supports banning campaign fundraising during the state budget process, and with the addition of one amendment we support Senate Bill 25.

According to the latest polling by the Wisconsin Policy Research Institute, 82% of Wisconsin residents say lobbying groups determine what’s in the state budget and what state government spends. Only 12% believe the voters do. This survey research finding screams out for reform.

SB 25 is not a significant campaign finance reform. But it is a meaningful state budget reform. It is our preference that a fundraising ban during budget deliberations be accomplished as part of a comprehensive reform of our campaign finance system, but if the committee acts on such a prohibition separately it should not be passed before it is made into a true ban on fundraising during the budget process. Making it a true ban requires the addition of one amendment that applies the prohibition on fundraising to the four partisan legislative campaign committees.

The four legislative campaign committee – the State Senate Democratic Committee, Committee to Elect a Republican Senate, Republican Assembly Campaign Committee and Assembly Democratic Campaign Committee – account for one-third of the campaign fundraising done by legislators during the budget process. Under SB 25 as it stands today, the fundraising ban during the budget process does not apply to these four committees.

Senate Bill 463

Senate Bill 463 is a rewrite of Senate Bill 77, which passed the Senate earlier this session before the U.S. Supreme Court handed down its decision in the Wisconsin Right to Life case. This revised version of SB 77 takes the Court’s June ruling into account as it closes the loophole that has devoured our state’s campaign finance laws. Wisconsin’s campaign finance disclosure laws have become effectively irrelevant because interest groups can so easily circumvent them. And they do. As mentioned previously, some $15 million flew under the radar in 2006, influencing the outcome of numerous state legislative races as well as statewide contests for governor and attorney general. And the best estimates indicate at least another $3 million was spent secretly to decide the 2007 Supreme Court race.

Longstanding limits on campaign contributions also have become easy to skirt by those who wish to pump much larger sums of money into campaigns than they can legally give to a candidate or registered political committee.

This is happening because Wisconsin’s laws relating to electioneering activities are hopelessly out of date. They are many years – and two U.S. Supreme Court rulings – behind the times. It is both possible and constitutionally permissible to restore meaning to our state’s disclosure laws and campaign contribution limits. Senate Bill 463 does just that.

Opponents of campaign finance reforms, especially those reforms featuring public financing of election campaigns, often are heard saying that campaign donors should be allowed to give as much as they please, as long as everything is disclosed. But the disclosure they profess to support is a pathetic joke so long as this massive loophole that has enabled untold millions in special interest money to flow undetected into state election campaigns is allowed to stay open.

No one who opposes the reform embodied in SB 463 and also included in Special Session SB 1 can be taken seriously on the subject of disclosure.

If Wisconsin is to have any hope of reviving its once-proud reputation for clean, open, accountable and honorable politics, the phony issue ad loophole simply must be closed, preferably as part of a comprehensive package of reforms, or as separate legislation if necessary.