Advocates: Malloy plan ‘betrays spirit’ of reforms

National clean-election advocates added their voices Monday to local critics of Gov. Dannel P. Malloy’s proposal to allow publicly financed candidates to accept unlimited dollars from corporate and other private interests if they are outspent.

“It certainly betrays the spirit of the law,” Nick Nyhart, president and chief executive officer of the Washington, D.C.-based Public Campaign, told members of the Government Administration and Elections Committee. “Such a solution could bring us back to the days of Corrupticut.”

Nyhart made his comments at a legislative forum on Citizens United, the 2010 U.S. Supreme Court decision that has made it easier for corporations and other interests to influence elections. Without new laws, Nyhart and others said, special-interest money could dominate state and local races.

Malloy’s controversial proposal to change the state’s 2005 public-financing law is a reaction to an expected influx of big money. He would allow publicly financed candidates, who now agree to spending limits in return for public financing, to raise unlimited supplemental funds if they are outspent by any amount.

On Monday, the administration said its proposal was meant to begin a necessary debate.

“As the governor said last week, the proposal was intended to spur a conversation about how we can maintain a level playing field between publicly financed candidates and self-funders who have the ability to spend tens of millions of dollars,” said Andrew McDonald, the governor’s general counsel. “If the committee has other methods of dealing with this type of problem, I look forward to working with them on their proposal.”

But Donald Simon, former executive vice president of Common Cause, said the governor’s proposal is “contradictory to the whole point of the public financing system,” which is to restrict the influence of well-financed special interests.

Nyhart and Simon were two of the four clean-election experts invited to testify on the ramifications of Citizens United v. Federal Election Commission. In a split decision, the nation’s highest court ruled the First Amendment prohibits restrictions on campaign contributions from corporations and unions.

Six months after Citizens United, a federal appellate court ruled Connecticut could not give supplemental public grants triggered by a privately financed opponent’s spending. The General Assembly responded by doubling the public general election grant for gubernatorial candidates from $3 million to $6 million.

And though the discussion at Monday’s forum went well beyond Malloy’s proposal, Simon and others warned that Citizens United decision already “has ushered in a new level of big-money politics” that could bring elections at all levels “back to pre-Watergate days.”

Simon and others specifically warned against the growth of “Super PACs:” political action committees that, on the surface, are not linked to any particular candidate. Yet these PACs — exempt from strict campaign fundraising limits — amass huge corporate and other special-interest dollars specifically to assist one or — at most — a handful of candidates.

“Super PACs allow donors and candidates to eviscerate campaign contribution limits,” Simon said.

The beneficiaries of the television and radio commercials and mailed fliers funded by these Super PACs also are largely insulated from any negative feedback, since the ads report they are not funded by any candidate.

Yet Simon said each of the four remaining Republican presidential primary candidates is connected with one Super PAC and that four combined have raised $72 million this election cycle.

And the independence of these Super PACs is in name only. GOP frontrunner Mitt Romney attended a fundraiser for his Super PAC while former U.S. Sen. Rick Santorum of Pennsylvania travels with the top fundraiser for his Super PAC, Simon testified.

Further complicating matters, these Super PACs already have found a simple way around the disclosure rules that most campaigns grapple with.

The key rests with federal rules governing different types of charitable organizations.

Charities set up under Section 501(c) 3 of the federal tax code, generally must file reports that disclose their specific contributors. But charities set up under different sections, such as chambers of commerce, or organizations espousing social welfare causes, don’t face those detailed disclosure requirements.

Christopher Heagarty was one of several Republican North Carolina state representatives ousted in 2010 GOP primaries by a slate of candidates financed by Super PACs organized and financed by discount-store-magnate-turned-political-operative Art Pope, chairman of Variety Wholesalers.

Heagarty told Connecticut lawmakers he was the subject of close to a dozen attack fliers mailed by the Super PAC backing his opponent. Those ads reported funding provided by such charitable groups as Citizens for Good Government, Conservatives for Justice and Real Jobs North Carolina.

“We’re still trying to track down where all of the money came from,’ Heagarty said, adding that most of the names behind those charitable groups remained hidden until well after the election.

Ciara Torres Spelliscy, a law professor at Stetson University, told legislators that business shareholders are another casualty of the Super PAC system, since the federal Securities Exchange Commission has no rule requiring that companies disclose details of their political spending.

The Citizens United decision allows candidates with access to corporate support “to reach into a different checkbook, the corporate checkbook,” she said. “Now we’re talking about other people’s money.”

Advocates agreed that the best solution rests with action at the federal level, and state Sen. Edward Meyer, D-Branford, said committee members have considered sending a letter to Congress urging an amendment to the U.S. Constitution allowing limits on corporate and group contributions.

Sen. Gayle Slossberg, D-Milford, co-chairwoman of the committee, said Monday’s testimony “leaves me at a loss for words, shocked.”

The Milford lawmaker added, though, that Connecticut should explore setting new disclosure rules that would “drill down” and at least identify all donors behind charitable organizations used to funnel big dollars into state campaigns.