New NC law increases donation limits, curtails some disclosure in 2014

jfrank@newsobserver.comDecember 26, 2013 

A new North Carolina law will allow candidates in the 2014 elections to solicit more money from wealthy donors and limit some disclosure of outside spending.

Starting Jan. 1, state candidates and political action committees can take maximum contributions of $5,000 per election, up from the current $4,000 benchmark. The top donation to judicial candidates will leap to the same level from the current $1,000 plateau.

The limits will increase again in 2015 as part of a provision designed to keep them on pace with inflation, adjusting every odd year.

North Carolina joins at least eight others states pushing for increases in campaign contribution caps this year, according to the National Conference of State Legislatures. Fifteen other states index political donations to inflation.

The main target for the change, experts say, is wealthy donors who currently give the maximum amount.

“Very few people hit contribution limits as a general rule,” said Peter Quist, a research director at the National Institute for Money in State Politics. “What happens then by raising the contribution limits is you allow a handful of people to give a little more.”

The measures are often overlooked in the far-reaching elections law being challenged in numerous lawsuits for limiting early voting and requiring a voter ID at the polls. Taken together with other provisions that shift campaign finance rules, it reflects a retreat from North Carolina’s push under Democrats to limit the influence of money in politics and boost transparency.

The influx of campaign cash is expected to play a prominent role in 2014 with major legislative and judicial races. The federal campaign donation limit of $2,600 per election for the state’s much-watched U.S. Senate race will not change.

At the state level in the 2012 election cycle, candidates, committees and political parties received more than $78 million with roughly $20 million each spent on the governor’s race and House legislative contests, according to the institute.

The total doesn’t include all outside spending. And the new elections law weakens rules about what outside groups, such as nonprofits, issue advocacy organizations and super PACs, must disclose.

More changes under new law

Under the current system, any negative advertising about a candidate within 60 days of the primary or general election must reveal the cost and sources of the money.

The new law will allow such groups to go without reporting for a few more weeks in the November general election, requiring disclosure only for advertisements after Sept. 7. The 60-day rule remains in effect for this year’s May 6 primary.

The provision runs counter to efforts at the national and state level to make campaign money more open to inspection after the U.S. Supreme Court’s Citizens United decision that lifted restrictions on independent political spending by corporations and labor unions.

“Certainly I think in the post-Citizens United world that the more eyes we have on the data the less likely it is that we see situations that moneyed interests are getting undue influence,” said Sarah Bryner, the research director at the Center for Responsive Politics in Washington.

Other campaign finance shifts taking effect in the new year include:

• Allowing political parties to use corporate donations to pay up to three staffers whose primary duties are administrative in nature. Corporate donations are currently limited to building expenses.

• Repealing the state’s pioneering “stand by your ad” law that required candidates to declare in advertisements that they “approved this message.”

• Ending the requirement that outside groups identify their five largest donors on political print advertisements

Moving in the other direction, a candidate’s parents and siblings are no longer eligible to give unlimited contributions to the candidate.

Worries over less disclosure

Republican state Rep. David Lewis, the House Election Committee chairman who helped craft the law, said the increase in donation limits reflects the fact that the “cost of doing everything these days is more than it was 15 years ago.”

“We increased the individual limits because we wanted the candidates to be able to raise the money they needed to raise to get their message out,” he said in a recent interview.

Noting the increased presence of outside spending from groups that can raise unlimited amounts, Lewis said candidates were at a disadvantage. “This is actually a way for candidates and campaigns to be able to compete with all this new money that flows in from outside expenditure groups that truly is outside the regular or traditional realm of campaigning,” he said.

But Bob Hall, the executive director of Democracy North Carolina, an organization that wants to limit money in politics, said the donation cap hikes will allow donors to have greater influence in the policy-making process. He also warned about less disclosure.

“We are losing the window into how much money and where the money comes from,” he said. “We still have part of the window, but part of it is getting shut. They are reducing the voters access to information about outside spending that’s going on – and increasing – in North Carolina.”

Hall particularly pointed to the “stand by your ad” provision” that forced candidates to take responsibility for their ads.

North Carolina was one of the first states in the nation with such a law when it passed in 1999. It served as a model for a similar provision at the federal level that was included in the bipartisan campaign finance legislation known as McCain-Feingold.

But Lewis said the provision and other disclosure rules repealed overlap with other reporting requirements.

Lewis sponsored legislation to increase disclosure with electronic reporting, but the measure, backed by Republicans and Democrats, stalled in the Senate.

The State Elections Board is preparing for the changes, but it’s unclear how campaigns and donors will react. “This is the first increase in contribution limits in many years,” said Kim Westbrook Strach, the board’s executive director. “We’ll see if contributors take advantage of it.”

Frank: 919-829-4698

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