Talking Politics : Missouri Campaign Finance Reform Raises Concerns

Nov 7, 2016

Missouri is one of only 12 states that does not have limits on campaign finance.

On Nov. 8, citizens will be voting on five amendments to the Missouri Constitution. Amendment 2 will establish limits on campaign contributions to candidates seeking office. If put in place, individual donors in Missouri will no longer be able to donate millions to campaigns. Currently, donors can give any amount they see fit as long as they follow the rules established by the Missouri Ethics Commission.

James Klahr, who is the executive director of the Missouri Ethics Commission, said that donors can exert a large amount of influence on the election process.

“Individual donors can give, in some cases, hundreds of thousands of dollars or more to individual candidates or individual committees,” Klahr said.

For example, Republican gubernatorial candidate Catherine Hanaway’s 2016 campaign was heavily funded by Rex Sinquefield, a donor who is known for his large investment in politics. In this case, Sinquefield invested over $2.3 million between himself and the political action committee Grow Missouri, according to votesmart.org. The same site states that Hanaway’s final funding was about $6.5 million. Although Hanaway ultimately lost the race, the contribution allowed her to have a broader reach in the election.

Those in support of the amendment, like Missouri Sen. Rob Schaaf (R-St. Joseph), hope that it will encourage candidates to seek several small donors instead of a few large ones. However, there are many concerns surrounding the amendment’s overall effectiveness.

Sinquefield’s spokesperson, Travis Brown, says that if this amendment were to pass, donors could use social welfare organizations to bypass the funding limit. Social welfare organizations, like the National Rifle Association, are classified as not-for-profit under Internal Revenue Code 501(c)(4) and thus have no restrictions on their donations to campaigns.

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Wealthy donors could place their money in not-for-profit organizations that do not need to disclose who donates to them, instead of placing their money in committees that are carefully monitored by the Missouri Ethics Commission, which is the current situation. The organizations that these donors could funnel money through include both 501(c)(4)s and 501(c)(6)s. This dark money can then be used to fund elections at the discretion of the not-for-profit organization. According to Brown, this harms transparency.

“Large donors will still be giving large amounts of support exceeding $5,000,” Brown said. “They would just be doing it in a manner that won’t be seen by the Missouri Ethics Commission.”

Sometimes it doesn’t even take dark money for donors to make large contributions to campaigns. In many states, there are ways around limits that are written into regulations aimed at curbing campaign contributions themselves.

Just last month in Illinois, there was a case in which Illinois Incumbent Comptroller Leslie Munger broke free of her contribution limits by taking advantage of a specific piece of text in the statute. There is a threshold set in Illinois that says if an individual or their family member donates more than $250,000 of their own money, then the fundraising limit is lifted. Munger’s husband donated $260,000, effectively removing the limit for the rest of her race, according to NBC.

Klahr says that in Missouri there is also a section of the amendment that donors can use to make large contributions, without resorting to dark money.  In Missouri, there are no limits to the amount of committees that a donor can open as long as each committee has a treasurer. If a donor were to open 50 committees, then their funding limit would effectively be raised 50 times.

While creating numerous committees is monitored by the Missouri Ethics Commission, it is inconvenient at best. Each committee has to turn in regular reports about their funding. If a donor were to open multiple committees, then their elected treasurers would have to file each report, or be subjected to late fees.

For now, donors are able to give as much as they want. However, this could all change on Nov. 8 if voters decide that money can’t be as large of a determinant in politics as it is now.