Report: Florida’s poor disclosure laws hide impact of independent spending

A new report released by the National Institute on Money in State Politics finds that Florida’s campaign finance disclosure laws make it hard to see what effect independent spending has on elections in the state.

According to the report, “researchers discovered that the increasing use of independent spending in Florida allows both large donors and candidates to circumvent the state’s contribution and public financing limits, but poor disclosure laws inhibit analysis of the impact this spending had on the outcome of elections.”

Researchers found that between 2006 and 2010, “$96.8 million of independent spending was reported in Florida, with just under half spent during the 2010 election.” Independent spending reached 25 to 30 percent of the amount contributed directly to candidates and ballot measure campaigns in each of those elections. While that is not considered a significant amount of growth, researchers say that independent spending is still “playing an increasingly important role in Florida’s elections.”

According to the report, Electioneering Communication Organizations (ECOs) — or 527s — provide a loophole for both large donors and candidates to Florida’s “contribution and public financing limits.”

The report explains:

A large donor can only give a candidate $500 per election, yet they are free to spend unlimited sums on electioneering communications, which are advertisements that seek to influence an election but fall short of explicitly endorsing or opposing a particular candidate or ballot measure. Candidates, particularly gubernatorial candidates, used ECOs to augment their fundraising operations and avoid the limits imposed by Florida’s public financing system.

The report also points out that the way groups disclose information presents problems. In Florida, it is difficult to tell who is funding independent expenditures, as well as where the money is going. The groups typically have names that do not really describe what candidate or group they are attached to.

The study also highlights a problem with the limited number of people involved in managing the funds, an issue tackled by The Florida Independent last month.

According to the report, “of the $96.8 million of total independent spending during the study period, $38.8 million, 40 percent of the overall total, was routed through ECOs controlled by just four individuals.”

One of those individuals, the report says, is Nancy Watkins. Watkins is the treasurer for many political action committees — ”of which 24 are independent spending committees, 33 are registered with the Federal Elections Commission (FEC), and dozens more are 527 organizations registered with the Internal Revenue Service (IRS),” the report lists. Millions of dollars are funneled through Watkins’ address, 610 South Blvd. in Tampa, eventually influencing elections all over the country.

One of the more glaring problems the report surfaces, however, has to do with how information is disclosed in the state.

According to the study, effective campaign finance disclosure is comprised of three mutually reinforcing elements:

  • clear statutes,
  • comprehensive data collection,
  • and effective presentation of the data.

While Florida does collect a lot of data and require that groups submit large amounts of campaign finance information, the report explains that “the data itself often lacks key elements and is presented in ways that make it difficult to connect independent spending to specific candidates and their underlying funders”:

For example, nothing on the committee page for the Let’s Get To Work ECO, which spent $17.5 million in 2010, would indicate that it belonged to gubernatorial candidate Rick Scott. To make that connection, a person would have to find the PDF file of Scott’s Statement of Solicitation. In the case of ECOs not affiliated with a candidate, the underlying funder does not have to certify its connection to a particular ECO. Absent a Statement of Solicitation, making connections between ECOs and their funders involves examining each committee’s contribution records.

This can often be a complicated process. A funder will often separate their independent spending into multiple committees. When each independent spending committee is treated as an autonomous entity and not the extension of its funders, a shell game can develop. For example, US Sugar and subsidiaries of Fanjul Corp. spent $4.4 million from 2006 through 2010 through two innocuously named ECOs: Coalition For Justice and Equality and Florida’s Working Families. Although the two companies bankrolled each committee, they are registered to different addresses and have separate lobbyists as their “registered agents.” Without examining their contributions records, it would not be apparent that these committees were spending on behalf of the same corporations.

“Excellent data that cannot be easily accessed or clearly presented stymies the public’s right to know just as effectively as incomplete data,” the report argues.

Lastly, the report raises concerns over the types of connections ECOs are allowed to have with candidates in the state. Because there are no rules against politicians and campaigns working with ECOs, the groups can effectively “function as de facto arms of a candidate’s campaign.” This a glaring difference between rules set in place for independent expenditures.

The report concludes by warning that “Florida is typically one of the largest and most important electoral battlegrounds in the nation, but it lacks a comprehensive campaign finance disclosure system.”

“Absent one,” the report says, “the public’s ability to understand their government will invariably suffer. Its elections will continue to be influenced by a shadowy network of ECOs that obscure the connections between wealthy campaign donors and the public’s elected representatives.”