Outside money is undermining local political control

In an effort to portray herself as the down-home candidate in her contest against Democrat Sarah Gideon, Republican Senator Susan Collins sent out a text message on Oct. 21 saying Gideon has more donors from Portland, OR than Portland, ME. As of mid-October 2020, Gideon’s out-of-state contributions, $41.8 million, represented 92.3% of her total contributions.

Collins neglected to mention that 91.80 % ($11.9 million) of the donations she’s received during 2019-20 have come from outside Maine, according to OpenSecrets.org, the website of the Center for Responsive Politics. That made her one of the top 10 senate recipients of contributions outside of their state during that period.

Think about that. The winner of a critical Maine Senate race that could determine which party controls the Senate may well be determined by people who don’t even live in Maine.

Political races across the country are increasingly being funded by people from other places.

In today’s contentious political campaigns, out-of-state contributions overwhelmingly dominate the higher end of fundraising for Democrats and Republicans. It’s part of the nationalization of all politics in the United States.

In Oregon, the strongest evidence of out-of-state influence on a campaign is in the race between incumbent Democrat Congressman Peter DeFazio and Republican Alek Skarlatos. Out-of-state residents have contributed 41.9% of the money raised by DeFazio; for Skarlatos, the out-of-state share is 68.6%, according to OpenSecrets.org.

DeFazio (L) vs. Skarlatos

Out-of-state money is also playing an increasingly important role in ballot measure battles.

In Oregon, the key backer of Measure 110 on the 2020 ballot is Drug Policy Action, a New York City-based 501(c)(4) nonprofit advocacy group that supports marijuana legalization and more lenient punishments for drug possession, use, and sale.

The group is the advocacy and political arm of the Drug Policy Alliance, a 501(c)(3) educational nonprofit that was also behind Oregon’s 2014 measure legalizing recreational cannabis.

The Drug Policy Alliance has received major funding from billionaire investor George Soros, has long been involved in pushing for an end the legal war on drugs.

The next largest contributor is the Chan Zuckerberg Initiative of Palo Alto, CA, which has contributed $500,000. The Initiative is a charity established by Facebook founder Mark Zuckerberg and his wife Priscilla Chan.

Out-of-state political contributions come from companies with local interests, networks of politically aligned people scattered across the country, and liberal and conservative national groups mobilizing to influence state-level elections.

Oregon tried to limit out-of-district political contributions in 1994 through Ballot Measure 6, which amended the state constitution to allow candidates to ”use or direct only contributions which originate from individuals who at the time of their donation were residents of the electoral district of the public office sought by the candidate.” (Oregon Constitution Art. II, § 22). The measure imposed a 10 percent cap on the total amount of money a candidate could accept from contributors residing outside the district.

When the measure went to the Ninth Circuit Court of Appeals, the state  asserted two interests, preventing the appearance of corruption and ensuring a republican form of government, as justifications for the out-of-district ban. The state could restrict out-of-district residents’ right to vote in the district, the court held, but could not restrict such residents’ right to express themselves about the election, including by contributing money.

In August 1998, the court struck down the Oregon ballot initiative in a 2-1 decision (VanNatta v. Keisling, 151 F.3d 1215 9th Cir.1998).

“Who should really have a say in how each state is run?”, asks Dan Weiner, senior counsel at New York University’s Brennan Center for Justice.  “It used to be that, at least at the state level, the interests of constituents vastly outweighed any interests coming from elsewhere around the country. But that’s no longer true to some extent because of the proliferation of the campaign finance free-for-all.”

Climate change and guns: the long arms of out-of-state billionaires reach into the Oregon Senate

What do Tom Steyer of San Francisco (and Lake Tahoe and Pescadero) and Michael Bloomberg of New York (and Bermuda, London, Colorado and Florida) have to do with Oregon politics? A lot it turns out.

Their money helped the Democrats strengthen their hold on the Oregon Senate and potentially push through controversial environmental and gun control legislation.

Bloomberg is the billionaire co-founder of Bloomberg L.P., a privately held financial software, data and media company based in New York City, and a former mayor of New York City.

Michael Bloomberg

Michael Bloomberg

Steyer is a billionaire who co-founded the $21 billion Farallon Capital Management fund. He spent an estimated $65 million this election through his NextGen Climate political action committee (PAC) to help candidates who support the need to deal with climate change.

Tom Steyer

Tom Steyer

Steyer spent $8.5 million in Colorado to help Democrat Sen. Mark Udall in his losing race against Republican Cory Gardner.

He also spent $11 million in Iowa to help Democrat Bruce Braley in his losing Senate race against Republican Joni Ernst.

His ambitions in Oregon were considerably more modest, but could still have a big impact. Here his NextGen PAC spent $130,000 to help Democrat Chuck Riley in his race against Republican State Senator Bruce Starr and Democrat Sara Gelser in her Senate race against Republican Betsy Close.

Riley defeated Starr in a squeaker by just 221 votes, 17,930 to 17,709; Gelser handily defeated Close by 27,375 to 21,571.

Riley’s campaign finance report doesn’t show any contributions from Streyer’s out-of-state PAC. That’s because the PAC donated the money to the Oregon League of Conservation Voters (OLCV) PAC, which is for all intents and purposes an arm of the Democratic Party. The in-state OLCV PAC then used the funds to support Riley, giving him a total of $191,120.02.

To further bolster the Democrat’s cause, Steyer’s NextGen Climate Action Committee also gave $100,000 to the Democratic Party of Oregon.

Gelser’s campaign finance report doesn’t show any contributions from Streyer’s out-of-state PAC either, but it does show $76,755.36 from the OLCV.
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Meanwhile, Bloomberg’s EveryTown for Gun Safety Action Fund sent $75,000 to Riley’s campaign, as well as $250,000 to Gov. Kitzhaber and $50,000 to the Senate Democratic Leadership Fund.

Everytown for Gun Safety was created earlier this year by combining a Bloomberg-backed group, Mayors Against Illegal Guns, with Moms Demand Action for Gun Sense in America, a movement that grew out of the Newtown shootings in 2012. The two groups have been working together since December.

Did the Steyer and Bloomberg money make a difference?

According to filings with the Oregon Secretary of State, Riley raised a total of $891,153.99 for his campaign and Starr a total of $901,097.63. That means a significant portion of Riley’s campaign money came just from Steyer and Bloomberg.

Add whatever impact Steyer’s $100,000 donation to the Democratic Party of Oregon had on Riley’s race and these two out-of-staters likely played a huge role in Riley’s victory.

According to filings with the Oregon Secretary of State, Gelser raised a total of $843,711.67 for her campaign. Of that, $76,755.36 came from the OLCV. Close raised significantly less, $556,628.14.

The Steyer/OLCV money probably didn’t play as much of a key role in Gelser’s victory, but it surely helped expand her advantage.

Oregon tried to limit the influence of out-of-state campaign contributions in 1994 when it passed Ballot Measure 6 that amended the Oregon Constitution to limit out-of-district contributions to 10 percent of the total. But a federal appeals court ruled in 1998 that the limit violated the First Amendment and was unconstitutional.

So expect more of the same in future Oregon elections, and then some.