RUNNING FOR THE MONEY IN OHIO

I. Executive Summary 

A fundamental problem with the American system of campaign financing is that wealthy donors and big money special interests distort the election process by influencing who runs for office and who wins elections.   This study looks at the Ohio 2000 congressional primaries as well as the 1997-98 election cycles.  Key findings include: 

·        The candidate who raises the most money wins the majority of congressional races.  In 1998, 100% of Ohio candidates for federal office who raised the most money won the general election.

·        A small number of Ohioans contribute the vast majority of all campaign funds.  In the first half of 1999, only one out of every 10,000 Ohioans (0.01%) gave a contribution of more than $200 to a 2000 congressional candidate. 

·        Contributions of $1000, the maximum allowable amount, make up a significant proportion of individual campaign contributions.  Of all disclosed donations (greater than $200) to Ohio congressional candidates in the first half of 1999, two out of every five was from a $1000 donor.   Maximum contributions made up 46% of the money received from individual donors during the same period. 

·        Out-of-state donors aid campaign fundraising.  In the first half of 1999, out-of-state contributions to Ohio congressional candidates made up 19% of all funds received from individual donors giving more than$200. 

·        Large contributions early in the race can help candidates discourage potential challengers.  Of the top ten congressional candidates in Ohio who raised the most money in the first half of 1999, only one, Deborah Pryce (15^th District), has a primary challenger. 

II. Preface 

The first round of primary elections in the new year tell a familiar tale of big money centered elections.  The American “wealth primary,” where candidates frantically compete for large contributions, continues to dominate and erode electoral politics at every level, creating a very real danger that the interests and concerns of large campaign donors will overpower the interests and concerns of ordinary citizens.  Unfortunately, the political corruption inherent in big money campaigns is often downplayed or absent in most campaign finance reform analyses.  Rather, focus is put on sensational incidents of quid pro quo corruption where a donor literally “buys” a politicians vote: million dollar corporate “bribes,” sleepovers in the Lincoln Bedroom, etc.   This report highlights a very different kind of political corruption: wholesale electoral corruption that occurs when a tiny elite determines who runs for office and who wins elections.  Although the focus of this report is on the 2000 congressional primaries in Ohio, the concerns raised are applicable in most every state and are particularly magnified in the 2000 presidential primaries.  

III. Ohio Primaries are Predominantly Funded by Large Donors  

Most candidates for federal office depend upon the support of a few individuals who can afford to give substantially to their campaign.  Exclusive $1000, $500, or $250 per person fundraisers are commonplace during the election process.  In 1998, 59% of all itemized contributions to Ohio federal candidates came from large contributors giving between $200-$1000.   Although detailed data is not yet available for the entire primary period, in the first half of 1999, two out of every five contributions to a federal candidate in Ohio was from a $1000 donor.   Maximum contributions to Ohio congressional candidates made up 46% of the money received from individual donors during the same period.  The candidates with the largest number of maximum donors, as of mid-year 1999, are listed below. 

TOP 10 CANDIATES WITH THE MOST $1000 DONORS (mid-year 1999) 

 * = incumbent

(For full table see Appendix C) 

NOTE: Many candidates also raise significant large donor sums from Political Action Committees (PACs).  Due to the difficulties of determining whether PACs raise large or small contributions we have excluded the consideration of all PAC contributions in our analysis.

IV. Large Donors Represent a Minority of Ohio Residents 

Very few Ohio residents are large donors.   In the first half of 1999, only one out of every 10,000 Ohioans (0.01%) gave a contribution over $200 to a 2000 congressional candidate.  Similarly, during the entire 1997-98 election cycle, only 0.15% of all Ohioans contributed more than $200 to a congressional candidate.    

These numbers would be somewhat less troubling if large donors were representative of the majority of the population.  According to a national survey funded by the Joyce Foundation during the 1996 congressional elections, of those who gave contributions over $200, 95% were white, 80% were male, 50% were over 60 years of age, and 81% had annual incomes greater than $100,000.  These numbers are very different from the population of the United States at that time: 17% were non-white, 51% were women, 12.8% were over 60, and only 4.6% declared an income over $100,000 on their tax returns.   Another interesting similarity among large donors is that they tend to have some interest or association with business.  According to the same poll, 65% of donors giving more than $200 belonged to a business group.   

V.  Out-of-State Contributions Help Fund Ohio Primaries  

Federal candidates running for office in Ohio raise a significant proportion of their campaign funds from out-of-state.  In the first half of 1999, 19% of all money raised from individual contributions over $200 was not from Ohio residents.    

TOP 10 CANDIDATES WITH THE LARGEST AMOUNT OUT-OF-STATE 

 * = incumbent

(For full table see Appendix D)

VI. Large Donors Determine Who Runs and Who Doesn’t 

Elections provide the ultimate opportunity for big money interests to shape the political agenda of the coming years.  Our existing system of big money campaigning grants large donors the privilege of selecting viable candidates.  Because a good proportion of campaign money is raised before the election year, large donors give incumbents an early fundraising advantage that often helps deter possible challengers who are not backed by big money.  By mid year 1999, only one challenger in the 17^th district, Robert Hagan, had raised more money than the incumbent. (See Appendix C)  Maximum $1000 donors made up 46% of all money received from contributions during this period.  Of the 20 incumbents in Ohio, 16 will go unchallenged in the primary, and a third of them have no challenger in the general election.  Large donors can be even more influential and important in open seat races where they can collectively raise the profile of a candidate who is favorable to their interests before other candidates enter the race.   For example, in the 12^th district, two Republican contenders, Gene Watts and Pat Tiberi, raised significant amounts from large $1000 donors early in the race. (See table in section III)   

Money concerns can also discourage potential candidates from running for office.  An extensive survey by the University of Colorado in 1997 found that 34% of potential House candidates were strongly discouraged from running because of the prospect of “having to raise large sums of money to fund [a] campaign.”  Classic examples of this phenomenon can be seen in Elizabeth Dole’s withdrawal from the presidential race.  She was nationally known, polled second to Gov. George Bush in some national polls, yet lacked a network of large donors.   Dole sited fundraising difficulties as the reason for exiting the race.  Senator and presidential candidate John McCain sympathized: “I’m sorry she lost the battle of the bucks instead of ideas.”   Similarly, Republican Sen. John Kasich’s presidential campaign dissolved after only five months of fundraising.  His campaign manger, Karen Johnson, acknowledged the importance of money: “When you raise $600,000 in one quarter and somebody else raises $30 million, it’s a wake-up call.  With such limited resources, we couldn’t have competed.”  Despite some present anomalies, like Sen. John McCain, lesser-funded candidates rarely succeed in the “wealth primary.”   Even before the New Hampshire primaries, McCain had raised 30% of his total funds from individuals giving less than $200, three times more the proportion raised by the other major contenders.  Under our current big money system, candidates who the majority of citizens might rally behind, if they had $1000, $500 or even $200 to give, have little chance of competing with this year’s big money players.   

 VII. Access to Big Money Increases the Chance of Winning 

In today’s world of media-centered, high-priced campaigns, money has become the cornerstone of a successful race.  While presidential candidate Steve Forbes’ campaign and other personal funded campaigns have shown that money alone does not guarantee success, the lack of big money almost always precludes success.  Despite the current limits on individual contributions, campaign spending continues to explode, encouraging ambitious candidates to concentrate on a small pool of wealthy donors who can afford to give large contributions.  In 1998, 100% of Ohio congressional candidates who spent the most won the election.  

TOP 10 OHIO FUNDRAISERS                        TOP 10 OHIO SPENDERS 

Candidate                      $ Raised in 1999         Candidate                      $ Spent in 1999

 *Data does not consider amendments to end of year reports filed by candidates.  Updated information can be found on our website at www.pirg.org/elections

* = incumbent

(For full table see Appendix B) 

Another side effect of big money campaigns is the surge in the number of independently wealthy candidates.  In the 106^th congress, Roll Call magazine reported that 97 Senators and House members are millionaires, but due to numerous low estimates of individual assets the number is probably well over 100.  In Ohio, fundraising ability is the primary measure of a candidate’s “elect-ability.”  As early as September 1999, the Columbus Dispatch reported that Democratic insiders were worried about the ”elect-ability” of a Democratic Senate challenger, Richard Cordray.  Insiders were quoted as saying: “Cordray…. isn’t seen as the type of candidate who can raise the money needed to run a successful Senate race.”   In the Republican camp, former Congressman and wealthy construction executive Frank Cremeans, has the necessary access to funds and offers a formidable challenge to the incumbent.  Some House candidates have solidified their campaigns by contributing personal money to their own campaign.  For example, Dwight Bryan, who is challenging Marcy Kaptur’s seat in the 9^th district, has contributed $18,000 in personal funds to his campaign.  

 VIII.  Conclusions 

The need for campaign finance reform is greater than ever.   Campaign fundraisings continue at a rapid pace while candidates rely more and more on wealthy special interests for campaign funding.  Our current campaign finance law, which allows large donors to control the election process, does not result in a representative democracy.   Instead, it encourages politicians to be more accountable to their large donors, who put them in office, than to their constituents.  Fundraising ability should be a measure of a candidate’s popularity among their constituents, not just among the wealthy special interests.  To restore political equality and vitality the system must be reformed so that all citizens can afford to participate in the candidate selection process. 

IX. Recommendations 

Real solutions call for drastic reform measures that would restore a working democracy in America and give ordinary citizens an equal opportunity for political involvement.  A comprehensive campaign finance reform plan should include the following provisions: 

·        LOW CONTRIBUTION LIMITS: Contribution limits for all candidates and all races should be lowered to $100, an amount average citizens can afford. 

·        LIMITED SPENDING: The use of personal wealth in campaigns should be limited through spending caps so that no candidate has an unfair financial advantage.

·        IN-DISTRICT FUNDRAISING: Candidates should be required to raise all or most of their funds from within their district in order to minimize the influence of outside interests.

·        FREE MEDIA: Free TV, radio, and mail should be provided to candidates to decrease the cost of campaigns and to give candidates more equal opportunities to get their message out.

·        TAX CREDITS: Tax credits should be given for small donations (up to $100) to encourage greater participation from ordinary citizens.

·        SOFT MONEY BAN: Unlimited and unregulated “soft money” contributions to political parties should be banned in order to limit the influence of big money special interests.

In a truly reformed system, candidates would raise small amounts of money from a large proportion of their constituents.  Candidates and politicians would be accountable to the people in their district, and would act and vote in a way that promoted the interests and concerns of the people they represented.

X. Methodology 

Due to paper filing of most candidates’ financial disclosure forms, requiring the FEC to enter individual contributions by hand, the most recent electronic data available of individual contributions is from mid-year 1999 (January 1, 1999 to June 30,1999).   Total numbers for the end of year 1999 were recorded from each candidate’s disclosure forms and made available by the Federal Elections Commission (FEC).    Electronic filing of contributions by candidates would allow for greater public scrutiny of funds.   

The mid-year 1999 number of contributors for each candidate are from the Center for Responsive Politics (CRP) (www.opensecrets.org) for the period January 1, 1999 to June 30, 1999. 

The mid-year total receipts and disbursements are those reported on the FECInfo (www.tray.com) website in October 1999. 

The number of $1000 contributions were found through sorting the individual donors for each candidate listed on CRP’s website by amount and summing $1000 donations.   The numbers no not include contributors who gave multiple small contributions that collectively totaled $1000.  Because the FEC does not require disclosure of contributions under $200, these contributions were not considered in this analysis. 

The number of Ohioans who contributed over $200 to a candidate is calculated for each candidate, as listed on FECInfo, and summed for the state. 

The percentage of Ohio candidates who raised the most money and also won the general election was determined from total sums raised in the 1997-98 election cycle, as reported to the FEC. 

The population estimates are from the U.S. Census Bureau, mid year 1998 for 1997-98 election cycle calculations and mid year 1999 for first half of 1999 calculations.  The number of total and $1000 contributors for the state assumes that each contribution represents a single individual.  This is an under-estimate since many individuals give multiple contributions to a candidate throughout the year.

Appendix A: Legislative Update 

Current reform bills aim to close the soft money loophole that allows corporations, unions, and wealthy individuals to give unlimited and unregulated contributions to political parties.  Unfortunately, some members of Congress are supporting anti-reform measures that would increase the amount wealthy individuals can contribute to a candidate.  Last year Ohio Representatives Boehner (8), Hobson (7), and Oxley (4) voted for an amendment that would have tripled all contribution limits.  The amendment failed by a vote of 300 to 127. 

On October 28, 1999 Senator Chuck Hagel (R-NE) introduced an anti-reform bill to triple all contribution limits and cap soft money contributions at $60,000.  This bill has the potential to distract Senators from debate on comprehensive campaign finance reforms in the year 2000.  There are currently seven cosponsors of the Hagel bill, including Ohio Senator DeWine, and Senator Mitch McConnell (R-KY) has indicated that he will hold hearings on the bill early in 2000. 

The most significant problem with the Hagel bill and other amendments to raise contribution limits is that they would reinforce an already corrupt campaign financing system that largely excludes the public from selecting the candidates of their choice.  Higher contribution limits would give more power to wealthy special interests, decrease the importance of small donors, and could jeopardize state reforms that call for lower limits.  

As we have seen in Ohio, large donors are already extremely powerful players in the election process.  Higher contribution limits would advantage candidates who have raised a relatively large proportion of their funds from maximum donors.  These candidates could raise significantly more money if they could solicit $3000 instead of $1000 from major donors.  On the other hand, raising the limits would further disadvantage candidates who are funded largely by small donors and lack the support of wealthy special interests.   

The very least Congress could and should do this year is ban the unlimited and unregulated soft money contributions to political parties, as a first step toward comprehensive reform.   Any further weakening of legislation, such as increasing the hard money contribution limits, would be a disaster for the reform movement and would most certainly increase, not decrease, the role of big money in politics.  

APPENDIX B: Total Raised and Spent in 1999

APPENDIX C: Funds From Maximum Donors (mid-year 1999)

APPENDIX D: Out-of-State Donations (mid-year 1999)