Category Archives: campaign finance

Adam Pagnucco, campaign finance

Public Financing Geography, Part Two

By Adam Pagnucco.

As we stated in Part One, we have examined nearly 9,000 records of contributions to thirteen countywide candidates in the public financing system who have qualified for matching funds: County Executive candidates Marc Elrich, Rose Krasnow and George Leventhal and Council At-Large candidates Gabe Albornoz, Bill Conway, Hoan Dang, Evan Glass, Seth Grimes, Will Jawando, Danielle Meitiv, Hans Riemer, Mohammad Siddique and Chris Wilhelm.  Today we begin to answer the question of where individual contributions in the public financing system are coming from.

First, let’s tally the aggregate sums collected by all thirteen candidates.

The largest source of money in the public system is public matching funds, which outnumbers private contributions by more than two to one.  But that understates the magnitude of matching funds because the contribution records do not include public funds requested but not yet disbursed.  We will examine that issue when we begin discussing individual candidates in Part Three.  One note: while candidates may not take corporate contributions, their accounts may accept vendor refunds, deposit returns and bank interest.  That accounts for the tiny amount in the “other” category.

Now let’s look at in-county contributions by local area.

Urban centers that are also Democratic strongholds tend to dominate here, especially Downtown Silver Spring and Bethesda.  We have previously identified an area we call “the Democratic Crescent” including Takoma Park, Downtown Silver Spring, Kensington, Chevy Chase, Bethesda and Cabin John that accounts for 23% of the county’s population, 29% of its registered Democrats and 37% of its Super Democrats (those who voted in each of the last three mid-term primaries).  That area accounts for 53% of in-county contributions in the public financing system.

Below we compare in-county contributions to population by local area.

Relative to their population, Downtown Silver Spring, Bethesda, Takoma Park, Potomac and Chevy Chase are over-represented in terms of in-county contributions.  Gaithersburg, Germantown, Glenmont-Norbeck (zip code 20906) and Silver Spring East County (zip codes 20903, 20904 and 20905) are under-represented.  The Democratic Crescent accounts for 23% of the county’s population but 53% of in-county contributions.  Upcounty, an area we define as including Ashton, Boyds, Brookeville, Clarksburg, Damascus, Dickerson, Gaithersburg, Germantown, Montgomery Village, Olney, Poolesville and Sandy Spring, accounts for 34% of the county’s population but just 13% of in-county contributions.

Here’s another way to look at the same data: in-county contribution dollars per resident.

Seven communities contributed one dollar or more per resident to publicly financed candidates: Takoma Park, Chevy Chase, Dickerson, Downtown Silver Spring, Kensington, Potomac and Bethesda.  Except for Dickerson and Potomac, all of these areas are in the Democratic Crescent.  Seven communities contributed less than 25 cents per resident: Burtonsville, Gaithersburg, Glenmont-Norbeck, Clarksburg, Montgomery Village, Germantown and Damascus.  The average contribution per resident in the Democratic Crescent was $1.26.  In Upcounty, it was 21 cents.

Finally, we compare in-county contributions to the distribution of Super Democrats.

The distribution of in-county contributions is a much closer match for Super Democrats than for the broader population.  But Super Dem-intensive areas are even more influential among contributors.  The Democratic Crescent accounts for 37% of Super Dems and 53% of in-county contributions.  Upcounty accounts for 20% of Super Dems and 13% of in-county contributions.  Downtown Silver Spring and Takoma Park are over-represented here even when factoring in how many Super Dems they have, while Glenmont-Norbeck, Silver Spring East County and Rockville are under-represented.

The bottom line is that public financing is amplifying the influence of heavily Democratic Downcounty areas above and beyond patterns of residency and voting.  That influence comes at the expense of Upcounty areas like Gaithersburg, Germantown, Clarksburg, Damascus and the smaller communities close to the Frederick and Howard County borders.  If corporate money and PAC money are thought to have outsize impacts on the actions of county government in the traditional system, then one wonders if the Downcounty dominance that some Upcounty residents complain about will be even more pronounced due to public financing.

In Part Three, we will begin examining specific candidates.

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Adam Pagnucco, campaign finance

Public Financing Geography, Part One

By Adam Pagnucco.

This year’s election cycle is the first one in which public financing is being used in MoCo’s county-level races.  That is one of many reasons why this election is historic in nature.  So far, we know the following things about public financing: it is heavily used (especially in the Council At-Large race), it is administratively challenging, it requires a long time to raise money, it is less costly than first thought and while it creates opportunities for new candidates, it confers huge benefits on incumbents.  Also, as predicted, the system reduces the influence of corporate interests and PACs.  But who is stepping into that vacuum?

This week, we will explore where contributions to publicly financed candidates come from.  Participation in the system is optional; candidates can stay in the traditional system and many of them have done so.  Candidates in the public system may only accept contributions from individuals up to $150.  They cannot take money from corporate entities or PACs and must limit self-financing to $12,000.  Contributions from in-county residents are matched by the county on a sliding scale.  For Executive candidates, a $150 in-county contribution gets a county match of $600.  For council candidates, a $150 in-county contribution gets a county match of $450.  Candidates must meet thresholds of in-county money raised and numbers of in-county contributors to qualify for matching funds and are subject to caps of public fund receipts.  And if a candidate applies for matching funds and does not meet the thresholds, that person can be ruled ineligible for matching funds.

To examine the origins of contributions in public financing, we accumulated the contribution records of thirteen candidates who have qualified for matching funds: County Executive candidates Marc Elrich, Rose Krasnow and George Leventhal and Council At-Large candidates Gabe Albornoz, Bill Conway, Hoan Dang, Evan Glass, Seth Grimes, Will Jawando, Danielle Meitiv, Hans Riemer, Mohammad Siddique and Chris Wilhelm.  We did not include contributions to district-level candidates like Sidney Katz, Nancy Navarro and Reggie Oldak because their receipts will inevitably be skewed to their districts, thereby introducing a geographic bias into the data.  We also did not include contributions to non-qualifiers because they may not ultimately receive matching funds.  One important consideration with examining these accounts is that not all of them have last filed on the same dates.  While some were current as of the last regular report in January, others have filed as recently as last week.  That’s because once a candidate qualifies for matching funds, they can apply for new distributions at any time through fifteen days after the general election.  One important constraint for late starters: candidates in the system must qualify for matching funds by 45 days before the primary.  Since the date of this year’s primary is June 26, that means the qualifying period ends on May 12.

This analysis involved an examination of nearly 9,000 records.  We asked two sets of questions.  First, where are in-county contributions eligible for matching funds coming from and how do they compare with both the population and regular Democratic voters?  Second, what are the differences in contribution geography between participating candidates?  Those differences contain illuminating clues to the appeal and strategy of the candidates which could ultimately decide the election.

We will begin unveiling our results in Part Two.

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Adam Pagnucco, campaign finance, Council At-Large, County Executive, George Leventhal, Hans Riemer, Hoan Dang, Marc Elrich, Nancy Navarro

Public Financing Update: January 2, 2018

By Adam Pagnucco.

Happy New Year, folks!  After a relatively quiet period in the fall, December saw a number of applications for public matching funds from county candidates participating in public financing.  One of the many positive things about public financing is that when candidates apply for matching funds, they have to file full reports with the State Board of Elections.  That gives data junkies like your author – and Seventh State readers!  – lots of updated data without waiting for the relatively few regular campaign finance reports in the state’s schedule.  The next time all campaign finance reports are due, both from public and traditional accounts, is on January 17.

The candidates below have met the thresholds for matching funds and have applied for those funds from the state.

A few notes.  The column titled “Non-Qualifying Contributions and Loans” refers to loans from candidates and their spouses (up to $12,000 is allowed) and out-of-county contributions, which are allowed but not matched.  The column titled “Adjusted Cash Balance” includes the cash balance in the last report plus the most recent matching funds distribution requested but not yet received.  It is the closest we can approximate the financial position of each campaign at the time they filed their last report.  The column titled “Burn Rate” is the percentage of funds raised that has already been spent.  Generally speaking, candidates should strive to keep their burn rates low early on to save money for mail season.  Mohammad Siddique’s totals are preliminary as there are a few issues in his report that will have to be resolved with the Board of Elections.  And District 4 Council Member Nancy Navarro applied for $35,275 in matching funds but cannot receive them unless she gets an opponent.

Below is the number of days each candidate took to qualify for matching funds.  Let’s remember that the thresholds are different: 500 in-county contributors with $40,000 for Executive candidates, 250 in-county contributors with $20,000 for at-large council candidates and 125 in-county contributors with $10,000 for district council candidates.

So what does it all mean?  Here are a few thoughts.

County Executive Race

Council Members Marc Elrich and George Leventhal, who are using public financing and running for Executive, have been active in county politics for a long time.  Elrich first joined the Takoma Park City Council in 1987 and has been on the county ballot in every election since.  He has been an elected official for thirty years.  Leventhal worked for U.S. Senator Barbara Mikulski and was the Chair of the county Democrats in the 1990s.  He played a key role in defeating a group of Republican Delegates in District 39 in the 1998 election.  Both of these fellows have built up large networks of supporters over many years and they have done well in public financing, raising similar amounts of money from similar numbers of people.

The difference between them is burn rate.  Leventhal is spending much more money than Elrich early, with some of it going to a three-person staff.  He had better hope this early spending is worth it because if this trend keeps up, Elrich could have almost twice as much money as Leventhal available for mailers in May and June.

At-Large Council Race

One of Council Member Hans Riemer’s advantages as the only incumbent in this race is the ability to raise money, and he has put it to good use in public financing.  Riemer leads in number of contributors and total raised.  He has also maintained a low burn rate.  This is Riemer’s fourth straight county campaign and he knows what he’s doing at election time.  His biggest problem is that his name will be buried near the end of a VERY long ballot.

The five non-incumbents who have qualified for matching funds have raised similar amounts of money so far.  As a group, they are not far behind Riemer.  The one who stands out here is Bill Conway.  Hoan Dang, Evan Glass, Chris Wilhelm and Mohammad Siddique all filed in December while Conway last filed in September.  Our bet is that when Conway files next month, he will show four months of additional fundraising that will put him close to Riemer’s total.

That said, the five non-incumbent qualifiers have so far separated themselves from the rest of the field.  Gabe Albornoz and Danielle Meitiv have said they have qualified but have not filed for matching funds with the state.  No other candidates have claimed to qualify.  Raising money in public financing takes a long time and raising a competitive amount (at least $250,000) takes a REALLY long time.  Those at-large candidates who do not qualify soon risk appearing non-viable.

Public Matching Funds Will Be Nowhere Close to $11 Million

The county has so far set aside $11 million to cover the cost of public matching funds.  That appears to be waaaaaay too much with only $1.4 million so far disbursed.  Our guess is that the ultimate total will be less than half what was allocated and will be even lower in the next election cycle with fewer seats open.

Incumbents Have Nothing to Fear From Public Financing

Five council incumbents are using public financing.  All five have qualified for matching funds and have done so fairly easily.  We will see how the challengers stack up, particularly in the at-large race, but so far the only at-large incumbent (Hans Riemer) is leading.  As we predicted last April, public financing is good for incumbents because it allows them to leverage their networks into lots of small individual contributions.  State legislators and other County Councils should take heed.

That’s it for now, folks.  Come back in a couple weeks when all reports, including those from traditional accounts, are due and we’ll put it all together for you!

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Adam Pagnucco, campaign finance

Raising Money in Public Financing Takes a Long Time

By Adam Pagnucco.

Former Council Member Phil Andrews’s public financing system is in use for the first time during this election cycle.  It has already changed MoCo’s political landscape, with 33 county candidates – a majority of those running – so far enrolled.  It’s a bit early to say exactly how it will impact specific races, but two facts about the system are starting to become clear.

It’s cumbersome to use.  And candidates who use it need a long time to raise money.

We have already written about the burdensome administrative aspects of the system, especially in demonstrating residency of contributors.  (The system only provides matching public funds for in-county individual contributions of up to $150 each.)  An additional difficulty is meeting the thresholds for triggering eligibility for matching funds.  In order to collect matching funds, Executive candidates must receive contributions from 500 in-county residents totaling at least $40,000; at-large council candidates must receive contributions from 250 in-county residents totaling at least $20,000; and district council candidates must receive contributions from 125 in-county residents totaling at least $10,000.

So far, just seven of 33 participating candidates have reached the thresholds for public matching funds.  Council District 1 candidate Reggie Oldak was the fastest to qualify, hitting the threshold in 112 days.  But Oldak is a district candidate, meaning that her threshold is the lowest, and her district is the county’s wealthiest with the greatest concentration of political contributors.  At-large council candidate Hoan Dang hit his threshold in 148 days, barely beating out Bill Conway (155 days).  Council Members Marc Elrich and George Leventhal, who are running for Executive, needed more than 200 days each to qualify despite having large donor bases going back many years.

Then there are the other 26 candidates who have not yet qualified.  Six of them have been running for more than 200 days.  (District 4 incumbent Nancy Navarro will only be eligible to receive matching public funds if she gets an opponent.)  Eleven more have been running for at least 100 days.  Many of the non-qualifiers have been working hard for months.  It’s just tough to meet the thresholds.

Why is it taking so long to get matching funds?  One reason is that Andrews, the system’s architect, did not design the system to be easy.  He explicitly intended that public dollars only go to candidates who were viable in the sense that they had actual grass-roots support.  Another reason is the nature of fundraising itself.  Candidates who raise money turn to families and close friends first; past contributors next (if they have run before); then extended networks of professional connections, acquaintances and supporters’ networks; and finally complete strangers.  As each network gets further away from the candidate, the marginal difficulty of raising dollars increases.  In a public financing context, the first fifty contributions are easier than the next fifty, which in turn are easier than the fifty after that.  The last few contributions to reach the threshold are the hardest to get.

At-large candidate Danielle Meitiv has been working to hit the threshold with a video on Facebook.

Similar observations can be made about traditional fundraising with this exception: the private system has no single trigger that activates a stream of cash all at once.  The candidates in public financing will be weeded into two groups: the ones who get matching funds and the ones who don’t.  The latter group will be doomed to failure.

There’s one more lesson here for candidates: don’t get into a race late and expect to raise lots of money quickly through public financing.  Even if you have a history of donors going back more than a decade like Elrich and Leventhal, the public system is not built for speed.  If you are a late starter, chances are you will need either traditional fundraising or self-financing to close the gap and have a chance to win.

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Adam Pagnucco, campaign finance

Candidates, Hug Your Treasurer

By Adam Pagnucco.

Political campaigns have all kinds of characters in them.  There are the campaign managers, the best of whom are data nerds, bartenders, therapists and trouble shooters all at once.  Then there are the hard core supporters, always ready to insist that their candidate is the reincarnation of Mandela and eager to pounce on dissenters online.  There are the cross-eyed pundits, tossing out great gobs of bloggy drivel onto an unsuspecting populace.  And of course there are the candidates, their toothy daytime smiles concealing roiling anxiety in the dead of night.

But no one pays attention to the true MVPs of political races: the Treasurers.  Money is the lifeblood of all campaigns and these are the people who control it.  Without a competent Treasurer, a campaign can’t collect its money, pay its bills, file its reports or do much of anything at all.  And the workload is often far greater than anyone, even the candidates themselves, can ever understand.

I was a Treasurer once.  Senator Rich Madaleno asked me to assume that role for the District 18 slate back in 2008.  It was not the first nor the last dumb thing I have done for a politician I like!  The account records (actually, the disorganized piles of random papers) were delivered to me in shoe boxes.  Shortly afterwards, I began receiving notices from the State Board of Elections that the previous report filings were deficient and needed to be corrected.  But the state didn’t say what the flaws were.  Phone calls to the state offices were laughably useless.  So I had to reconstruct every single transaction in the history of the account(!!!!!) and re-file every single report that had ever been sent in.  This required weeks of agony, but dammit, no account with my name on it was going to get fined.  Even bloggers have standards!

Dear future candidates: don’t ever ask me to be a Treasurer again.  I would rather gargle cockroaches.

This year, the normally substantial challenges of being a Treasurer are compounded for a uniquely unfortunate subset of them: the Treasurers responsible for MoCo’s public campaign financing accounts.  The reason is that the state requires evidence of a contributor’s in-county residency before approving public matching funds for that contribution.  That’s easy to do with online contributions: all a campaign has to do is add a couple fields illustrating residency and collecting a digital signature.  But what happens if a dinosaur (like, say, your author) pays with a written check?  Well folks, that’s when the fun begins!

All contributions eligible for matching funds must be accompanied by proof of residency that is provided to the state.  For physical checks or cash, that means the donor must complete and sign a written form indicating residency in Montgomery County.  Somebody (that might be you, Mr. or Ms. Treasurer!) has to make sure that form is filled out and collected.  If a check or cash shows up in the mail, that means tracking down contact information for the contributor and getting hold of them.  “Thank you for contributing to Politician X, ma’am.  Could you fill out and sign this form showing that you live in MoCo and send it back to us?”  “Well, I’m out of stamps and my scanner is busted.”  “I’m out of the country for two weeks.”  “I’ll think about it and get back to you.”  “I just donated to you.  Why are you bugging me?  I want my money back!”  And these are the G-rated responses.

Campaigns love this like they love tarantulas in the shower.  One campaign surrogate says his campaign “absolutely hates it” when they get paper checks because of the time required to chase down donors.  One candidate with prior electoral experience estimates that the time taken to deal with these administrative issues is 40% greater than it is under the old traditional system.  Another candidate simply says, “Oy.  Vey.”  And again, these are the G-rated responses.

Nothing can be done to remedy these issues in the short term.  And let’s remember: the state is within its rights to demand proof of residency to prevent mistaken distributions of public matching funds.  But candidates in public financing must absolutely do one thing.

Hug your Treasurer.  Do it today!  Tell them you love them.  Or it might be YOU who has to chase down those donors!

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campaign finance

Why Charity and Public Financing Don’t Mix

Adam Pagnucco was very kind in his discussion of problems regarding County Council Candidate Brandy Brooks’s desire to split funds raised for her campaign with disaster relief charities. He ascribed positive motives to the candidate and described her idea as ethical but not legal in contrast to behavior by some that is not ethical but nonetheless legal.

Charitable contributions from campaign funds, however, are heavily circumscribed to charitable events that are closely related to campaigns, such as buying tickets for an event or an ad in a program, for a number of good reasons.

The first is to avoid the public having to fund a candidate’s chosen charities on top of funding their campaign—an idea that Our Revolution Montgomery County Ed Fischman thought was great in his original, later altered, post sharing Brooks’s idea. Beyond the considerable cost, the County did not adopt public financing to fund charities but to encourage behavior that limits the influence of large contributors and reins in spending.

Next, one can imagine candidates throwing fundraisers in the guise of raising money for charity as a means of meeting the threshold to receive matching funds for public financing. This would obviously subvert the intent of the law, which was to force candidates to raise money in relatively small amounts from a wide range of people. As a result, qualifying for matching funds would no longer demonstrate a certain level of grassroots support.

The definition of charity is also quite wide with many organizations engaged in activities much more controversial than disaster relief. One can, for example, set up 501(c)(3)—an organization that can accept tax-free charitable contributions—to educate people about the dangers of abortion or the benefits of abortion remaining a legal option.

On the other hand, how would government assess Brooks’s nice proposal to donate money for disaster relief in Sierra Leone if the charity is not a legally registered American organization and not subject to scrutiny? It’s a very worthy cause but hard for either officials or citizens to assess.

Donors might also start trying to claim a portion of campaign donations as tax write offs. My guess is they would be on shaky ground because there would be little concrete evidence that the money went to a legal charity beyond a candidate’s promise to spend it that way. Nevertheless, as Donald Trump has demonstrated vividly, not everyone fulfills promises to give to charity but many are willing to try to claim dubious tax benefits.

Unscrupulous people have organized charities in which the bulk of the money goes to employees, often relatives, rather to the charity’s avowed focus. Again, clearly not Brooks’s focus here, but a real problem that the State would need to guard against.

Relatedly, mixing charity and campaign finance would further burden government with trying to keep track of what portion of donations are charitable contributions and if they were then donated in a legal fashion. This is a task they are completely ill-equipped to conduct and would require more money and staff.

In short, this is a great example of how a well-intentioned idea can prove very problematic.

Brooks and Our Revolution Responses

Brandy Brooks gave a response on the Seventh State’s Facebook page that shows a candidate dealing with a campaign issue in a calm, measured way designed to reassure voters. Most will commend her commitment to adhere to the law and will (like Adam Pagnucco and myself) not think that she ever intended otherwise.

On the other hand, her plan to spend money on the legally allowed activities, such as buying tickets to events, does not comport with what most think of as disaster relief. A tendency to jump in without thinking through an idea can give voters pause, though her measured response and a willingness to correct problems shows character and limits any damage.

Our Revolution Montgomery County Chair Ed Fischman’s strong accusations against Adam Pagnucco and passionate use of naiveté as a defense on this page earlier today are less helpful. Voters like candidates with passion but also people and organizations, such as Our Revolution, to know what they’re doing.

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Adam Pagnucco, campaign finance, Council At-Large

At-Large Candidate’s Proposal Breaks Campaign Finance Laws

By Adam Pagnucco.

Council At-Large candidate Brandy Brooks, who is participating in MoCo’s public financing system, would like to help natural disaster victims.  That’s a laudable goal.  But she is proposing to spend campaign contributions to do so.  The problem is that’s illegal under state and county campaign finance laws.

On her website and on Facebook, Brooks promotes an initiative that she calls “Power 100,” in which she invites 100 contributors to donate a combined $2,500 to her campaign, half of which would be paid out to a number of charities helping natural disaster victims.  The charities include organizations helping victims of Hurricane Harvey, Hurricane Irma, a mudslide in Sierra Leone and floods in South Asia.

Brooks supporter Ed Fischman went a step further in a posting on the Our Revolution in Montgomery County Facebook page, asserting that public matching funds would be used for disaster relief.  To be fair, it’s unclear whether Fischman speaks for Brooks and Brooks has not yet qualified for public matching funds.

State and county campaign finance laws prohibit these kinds of expenditures.  According to the State Board of Elections’ Summary Guide, there must be a nexus between campaign account expenditures and the promotion of a candidate’s campaign for those expenditures to be legal.  The guide specifically addresses charitable contributions, stating:

Generally, campaign funds may not be used solely for charitable purposes. Maryland law requires campaign funds to be used for the purpose of supporting or opposing a candidate, question, or political committee. Furthermore, it is important to keep in mind that contributors give to campaign committees for one important reason – they want to support the committee’s candidate, question, or political party. When campaign funds are spent for a non-campaign related purpose, it frustrates the intent of the contributor.

However, there are instances when a charitable donation is permissible because it is for a campaign purpose. For example, a candidate may permissibly use campaign funds to attend a charitable event since attending the event increases the candidate’s visibility and allows the candidate to network with potential voters and donors.

ง 13-247 of state election law does allow certain kinds of charitable contributions to be made by accounts that are closing and liquidating their assets, a case that clearly does not apply to Brooks.

Additionally, Montgomery County’s public campaign financing law states, “A participating candidate may only use the eligible contributions and the matching public contribution for a primary or general election for expenses incurred for the election.”  This statement is repeated in the county’s summary of the law.  No one could construe helping disaster relief victims as a primary or general election expense.  It’s noteworthy that the county’s language applies not just to public funds but also to individual contributions made under the public financing program.

Your author really hated to write this blog post but it had to be done.  Generally speaking, when we have examined campaign finance issues in the past, we have sometimes seen behavior that may not be ethical but is legal.  This case is the opposite: what Brooks is doing comes from the best of intentions but does not comply with the law.  Brooks is free to discuss the plight of disaster victims all she wants.  She could also organize a private fundraiser for victims separate from her campaign account.  But if she goes ahead and uses her campaign funds for disaster relief contributions, she will risk sanctions from the state, the county or both.

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Adam Pagnucco, campaign finance

Should You Take Public Campaign Financing? Part Three

By Adam Pagnucco.

In Part Two, we explored some reasons why a candidate may want to enter public financing.  Today we will look at some factors that would argue for staying out.

Reasons to Stay Out

  1. You Already Have Money

In January 2014, then-District 20 Delegate Tom Hucker had a war chest of $146,905.  He had accumulated it by raising money continuously and not having serious challengers since he was first elected in 2006.  Hucker, whose progressive credentials are beyond question and who had sponsored public financing legislation while in Annapolis, would have been crazy to enter public financing for his Council District 5 race had it been available.  He would have had his war chest frozen and would have had to start from zero while facing a strong opponent in Evan Glass.  Even with his starting balance, Hucker won by just 222 votes.

Other state legislators who are thinking of running for council this time are in the same situation as Hucker.  For them, getting into public financing means walking away from significant war chests and participating in a system that is brand new and might have some implementation hiccups.  Self-funding candidates are in a similar place.  It would be understandable for these folks to stay out.

  1. You are Unknown

Complete unknowns rarely win.  Our voters usually expect county-level candidates to have some record in the community before supporting them.  But this is compounded in public financing, which requires participants to hit the in-county thresholds below before distributing public funds.  This will be tough for many unknown candidates.

Even fairly well-known candidates could struggle to qualify for matching funds.  Over the last three cycles, candidates who would not have hit the match thresholds include Mike Subin, Bo Newsome, Hugh Bailey, Sharon Dooley and Bob Dorsey (2006), Nancy Navarro (2008), Duchy Trachtenberg and Royce Hanson (2010) and Duchy Trachtenberg, Vivian Malloy, Ryan Spiegel, Chris Barclay and Terrill North (2014).  Ben Kramer would not have qualified in 2009, but he is primarily a self-funder.  Note that this list includes two incumbents, two school board members, two City Council Members, a state legislator and a Planning Board Chair.  If you are less known than these folks, you could have a hard time in public financing.

  1. You Have Lots of Supporters Outside the County

Most new candidates tap their families, friends and professional associates for start-up funds.  If you’re a MoCo native and have worked in the local area for a while, chances are that you will start with a fair number of in-county contributors.  That’s a good thing for qualifying for matching funds.  But if you come from outside the area and got here recently, that’s a problem.  Your parents and childhood friends in California, your fraternity brothers on the coasts and your former co-workers in New York and Boston can all give you $150 contributions, but none of that will count towards the qualifying thresholds.

  1. You are Running Against an Incumbent

If you are challenging an incumbent in a one-seat race and you enter public financing, you are almost guaranteeing that the incumbent will outraise you.  If the incumbent stays in the traditional system, he or she will clobber you with corporate and PAC money.  If the incumbent also enters public financing and has done even a halfway decent job of constituent service, the incumbent will have more in-county contributors than you and therefore more money.  Either way, you lose.

  1. You Have Connections to the Business Community

If you have a professional background in the business community – especially in development, real estate and/or construction – the progressive left is going to target you.  Individual activists, left-wing groups and maybe even some opponents will label you as “pro-business,” a Democrat in Name Only (DINO) or worst of all, a “tool of the developers.”  It’s debatable whether enrolling in public financing will tamp down such criticism, but it will certainly cut you off from your financial base.  You might be better off sticking with the traditional fundraising system, tolerating attacks from people who won’t vote for you anyway and running a well-financed campaign targeting those voters who don’t care much about the issue.

There you have it, folks.  If you are running for county office, public financing might be a good way to go.  Or maybe not.  It’s all about you and your race.  The decision is yours.

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Adam Pagnucco, campaign finance

Should You Take Public Campaign Financing? Part Two

  1. By Adam Pagnucco.

There are a number of factors that argue either for entering the county’s public financing system or staying out.  Let’s list the things that might cause candidates to get in first.

Reasons to Get In

  1. You Won’t Take Corporate or Developer Money

If you don’t want to take corporate or developer money, public financing can be a great way to replace those funds with taxpayer money.  Your author ran a series of simulations of what county candidates would have raised in the 2006, 2010 and 2014 cycles if public financing had been available.  The huge majority of candidates would have raised less money with public financing than what they actually raised through the traditional system, but there were two big exceptions.  Phil Andrews would have more than doubled his take in his 2006 council race and his 2014 Executive race if he had had access to public funds.  And Marc Elrich’s receipts would have increased by 55% in 2006, 71% in 2010 and 66% in 2014 with public money.  Both Andrews and Elrich refused developer money and Andrews turned away PAC money as well.  It’s not a coincidence that Andrews was the author of the public financing bill.

  1. You Have a Large Pre-Existing Base of Supporters

Under public financing, the key determinant of fundraising is not connections to business or labor or self-financing capacity.  It’s the number of in-county residents you can convince to contribute to your campaign.  That’s it.  For funds received from those folks, the government will pay 75% or more of your campaign receipts, at least until you hit the public match cap.  See the thresholds and caps below.

Most incumbents start with supporter bases and should be able to meet the match thresholds if running for reelection.  Over the last three cycles, only two incumbents – Mike Subin (2006) and Duchy Trachtenberg (2010) – would have failed to meet them.  It is probably not a coincidence that this system was designed and passed by incumbents!  State legislators running for county office have a good shot at qualifying for matches too.

Evan Glass is a good example of a non-incumbent who could qualify.  Glass had 396 in-county individual contributors in his 2014 District 5 race, enough to qualify if he were running at-large.  He raised $159,235 through August 2014, but would have raised $183,382 if public financing were available.  With one election under his belt (a VERY close loss) and continued involvement in the community since then, public financing is a real consideration in his case.

  1. You Can Afford Seed Money

If you don’t start with a large base, you will need a mechanism to raise small contributions.  Otherwise, you will get trapped by not having enough in-county contributions to qualify, which means you won’t have the money to set up a campaign infrastructure, which makes it harder to raise small contributions and so on.  The public financing system allows candidates (including spouses) to self-fund up to $12,000.  You should do that as soon as you can and use the money to set up a website, buy an email list and start running social media ads.  That will help you meet the match thresholds and keep your campaign going.  Or, if you don’t mind having the incumbents hate you, you can get a big email list for free!

  1. You Will Benefit from an IE

During the District 20 Senate appointment process, a group of unions and liberal groups announced that they were joining together “to achieve a progressive sweep” in local elections.  That means there is a real possibility of a labor-backed independent expenditure (IE) campaign to support left-wing candidates.  That could help ease the financial burden on those candidates unlikely to attract significant business support.  But counting on the IE is risky – there’s no guarantee that there will be one, that it will be effective and that it will support you.  After all, there could be lots of progressive candidates for an IE to choose from next year.

  1. You Are a Republican

One would think that Republican candidates would collect tons of business money, but that has not been true recently in Montgomery County.  Most business interests are non-ideological.  They want to pick winners who will support their agenda once elected and they don’t care very much about party labels.  (One of the untold stories in this county is the significant volume of political money contributed by Republican business people to Democratic candidates.)  But public financing gives Republican candidates another option – they can go to their fellow party members.  There are more than 120,000 registered Republicans in MoCo and nearly 60,000 of them voted in the 2014 general election.  Good luck getting elected here during the Trump era, but you can at least be financially competitive in the public system.  Finally, let’s remember that the most successful user of public financing in recent Maryland history was none other than Republican Larry Hogan, who is now Governor.

So are you convinced that you should enter public financing?  Well, not so fast.  In Part Three, we will examine reasons to stay out.

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Adam Pagnucco, campaign finance

Should You Take Public Campaign Financing? Part One

By Adam Pagnucco.

Here’s a question that has come up over and over again with various candidates and potential candidates: should they take public campaign financing if running for county office?  Your author’s typical practice is to demand provision of food and/or liquor in exchange for answering this question.  But in the spirit of recent holidays, we are just going to give away our take right here.  Feel free to send liquor anyway!

First, let’s explore the basic characteristics of the county’s public financing system.  Candidates who wish to participate may opt in, but it is not required.  Candidates in the system must establish new public financing accounts with the State Board of Elections and any money in their old accounts cannot be used for current election expenses.  Contributions may only be accepted from individuals at a maximum of $150 per donor.  Corporate and PAC contributions are forbidden.  Self-financing is limited to $12,000 from the candidate and/or a spouse.  The county will match contributions made by in-county residents on a sliding scale with maximum amounts of $600 per donor for Executive candidates and $450 per donor for council candidates.  But to qualify for matching funds, candidates will have to meet certain thresholds in terms of number of in-county contributors as well as amounts contributed.  These thresholds are shown in the table below.

Now here’s the Big Question: do voters care about who uses public financing?  No one knows because 2018 will be the first cycle in which it will be available.  But while public financing is new, discussion of campaign financing is ancient.  Developer contributions to County Executive and County Council candidates were a huge issue in the 1990s and 2000s.  Citizen groups like Montgomery County Citizens’ PAC for the Future (CITPAC) and Neighbors for a Better Montgomery (NeighborsPAC) tracked and published them.  These groups, which have no successors today, formed a political base for anti-growth candidates who vowed to limit or entirely refuse developer contributions.  The result?  Most of the candidates who won the 1998, 2002 and 2006 elections took developer contributions freely, including Doug Duncan, Ike Leggett, Steve Silverman, Mike Subin, George Leventhal, Nancy Floreen and Mike Knapp.  Phil Andrews and Marc Elrich were the primary exceptions, though Elrich lost four straight times before finally winning in 2006.  If most voters viewed developer money as something that would determine their votes, candidates supported by CITPAC and NeighborsPAC like William O’Neil, Vince Renzi, Ann Somerset, Hugh Bailey, Cary Lamari, Sharon Dooley, Cynthia Rubenstein and Chuck Young would have been elected.  It’s unclear whether the politics around public financing will play out any differently.

And so the appropriate criteria for whether to enter public financing relate to the self-interest of the candidate.  In which system will you be better off?  That depends on your own circumstances and the nature of your race.  We’ll start addressing that in Part Two.

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