New Report: Amplifying Small-Dollar Donors in the Citizens United Era

Common Cause today released Amplifying Small-Dollar Donors in the Citizens United Era. The report examines Connecticut’s citizen-funded election program and shows how in its first decade the program shifted power to ordinary citizens from wealthy special interest donors and helped diverse candidates run and win. Unbeholden to industry lobbyists and wealthy special interests, the elected officials then passed policies that favor everyday people, including the nation’s first sweeping paid sick leave reform bill covering workers across the state.

According to report author Beth Rotman, runaway campaign spending is one of the biggest obstacles faced by women, people of color and working people who want to run for office and pass policies which favor large swaths of everyday Americans. Politicians are too often beholden to the industry lobbyists and wealthy special interests who fund their campaigns.

In contrast, the Citizens’ Election Program (CEP) opened the door for a new generation of elected officials to fund their campaigns with donations as small as $5 from the people who live in their districts. In its first 10 years, the small dollar donor program more than paid for itself by closing a corporate giveaway, according to the report.

Freed from reliance on large checks from special interest lobbyists, state elected leaders (with a majority having run under the CEP) voted to return $24 million per year in unclaimed bottle deposits back to the public and away from the wealthy special interests which had for years blocked every such effort to return the funds to the public. Many still cite this vote as the singularly most powerful evidence that public financing can lead to better governance. And, after 10 years of program operation, the amount returned to the public totals $240 million so far.

“The small-dollar donor experiment in Connecticut is working and the state has become a national model,” said Rotman, national director of money in politics and ethics for Common Cause. “Ordinary citizens are more empowered to participate in democracy and better represented by those elected to office. The legislature is more representative of the people. This is what a healthy democracy should look like and it is setting a new standard of reform that inspires others to make changes across our nation.”

“Opponents of small-dollar donor laws make them sound like a bad use of taxpayer dollars, when in reality the savings not only pays for the cost of CEP, but frees up tens of millions more that can be used for other priorities, saved, or returned to the people,” said Karen Hobert Flynn, Common Cause president. 

Key findings in the report:

• Candidates participate — From 2008 to 2018, an average of 75 percent of all state legislative candidates joined the CEP. In 2018, a record 85 percent of General Assembly candidates joined.
• Small donors dominate — In 2018, 99 percent of campaign funds used by state legislative candidates came from individuals, the bulk of which came from their in-district residents. This stands in sharp contrast to pre-program practices, when less than half of contributions to political candidates came from individuals.
• Races are more competitive — Before reforms passed, lobbyists and special interests tilted the scales toward incumbents and bought influence with newcomers. In the first election cycle with CEP, the state jumped to the eighth most competitive state and ever since has been consistently ranked as one of the top three states with the most monetarily competitive legislative races in the nation.  In 2018, Connecticut was ranked first in the nation for monetary competitiveness.
• New voices get elected — By reducing the Big Money barrier, more people with different life experiences, women and people of color saw an opportunity. The percentage of women elected to serve increased to 33 percent of the Legislature, while many more people of color and individuals from limited means have been able to compete and win elective office as part of a more representative and reflective democracy.
• Better government policies pass — After candidates ran under the program, the Legislature passed the nation’s first paid sick day policy for service workers, passed the nation’s first Genetically Modified Organisms (GMO) labeling bill, adopted healthier food choices in schools and adopted statewide police reform in solidarity with the social justice movement.

Quotes from the report:

• “I am a candidate of color and I did not come from money. I was not the candidate picked by a political party or machine apparatus. The Citizen’s Election Program made it possible for me to run and serve the public – as one of them.” — Sen. Gary Winfield
• “I ran because there were not a lot of young women in the legislature. I was not connected to wealthy people or lobbyists, so the Citizens’ Election Program made my run possible.” — Sen. Mae Flexer
• “In other states, the push is for lobbyists and large dollar contributions. We don’t have that here. We are in no one’s pocket. We are not influenced by lobbyists and big donors.” — Rep. Anne Hughes
• “When I walk into a room and sit down with a person, not tell them the full truth about how much time they are going to miss from their family and their jobs, but say listen here’s what you have to do to qualify and you’ll get the exact same amounts of money as the democratic candidate. That made it a lot easier to get people to run for public office.” — Former Senator and Republican minority leader John McKinney
• “I couldn’t have predicted this level of extraordinary success, or that the program would be so widely used. It has had a remarkable impact on the quality of the debate. The reforms went beyond transforming elections — they changed the way the state government operates.” — Former Senator Don DeFronzo
  
• “As I travel the country and meet with candidates and lawmakers from around the United States, it is stunning to see the difference between the Connecticut Legislature and other states.” — Karen Hobert Flynn, Common Cause president and Connecticut resident

More on the Citizens’ Election Program:

The CEP was signed into law in 2005, in the wake of a federal investigation into bribery and contract steering in then-Governor John Rowland’s office. Rowland resigned and the state’s new Republican governor, Mary Jodi Rell, worked with Common Cause, the Connecticut Citizen Action Group and Clean Up Connecticut Coalition to pass sweeping reform.

The CEP launched in the 2008 election cycle for legislative offices and 2010 for statewide offices, the first cycle also affected by Citizens United, a Supreme Court decision that permitted corporations to spend unlimited amounts on campaigns without disclosing their donors, as long as they did not coordinate with candidates.

The CEP has helped blunt the impact of wealthy special interests and dark money spending in Connecticut. Key provisions of the law were used in the For the People Act (HR1), a multifaceted bill addressing money-in-politics, voting rights, and government transparency, which was passed by the U.S. House in March 2019 but never got a hearing in the Senate and is a flashpoint in many current congressional races.

Connecticut also provides a model for other states and municipalities — including Oregon, where voters will decide this November whether to amend the constitution to allow for campaign finance regulation, a first step toward passing a small donor program for candidates, and in Baltimore County, where a public financing measure is on the November ballot.

“Money in politics is the problem, but money in politics is also the solution,” said Rotman, who served as the founding director of the small donor program in Connecticut and the deputy general counsel for the small donor program in New York City. “Small-dollar donor programs are the best answer we have to improve our democracy which is out of balance because of special interest greed and dark money. Small donor democracy is really the change that makes all of the other changes possible.”

To qualify for a grant from the CEP, candidates must raise a threshold number and amount of small qualifying donations from individuals. Candidates must cap lobbyist contributions at $100 and decline contributions from political committees and other entities. The CEP grant amounts are generous and provide candidates with the ability to compete meaningfully and get their messages out to voters.

An overview of the CEP in the 2020 election cycle, qualifying numbers and grant amounts is here.

Read the Amplifying Small-Dollar Donors in the Citizens United Era report online here.