Finance reform a sham

BY DENNIS J. WILLARD
Beacon Journal Columbus Bureau

In 1995, after nearly a decade of scandals had eroded public trust in the legislature, state lawmakers were applauding one another for finally passing a campaign finance reform law.

Behind the scenes, these same state lawmakers were laughing all the way to the bank.

Make that banks.

For in the aftermath of the new campaign finance law that limited contributions from individuals and political action committees (PACs) to $5,000 per election, lawmakers would jokingly begin referring to each other as ``banks.''

As safe as an offshore haven, as legal as a loophole big enough to accommodate a Brink's truck, legislators acting as ``banks'' have been collecting smaller, more frequent contributions from many of the same political depositors that once weighed in with five- and six-figure checks.

``You don't do these kinds of shenanigans unless you're trying to maintain the influence of the wealthy,'' said Ohio Citizen Action researcher Laura Yeomans.

A legislative bank works like this: Contributors donate to a legislative bank. Then the campaign committee or bank contributes the money to another candidate, party or legislative caucus.

Since 1995, legislative ``banks'' have steered $8.2 million in contributions to the four legislative caucuses, $1.1 million to other legislative candidates and at least $948,000 to state and county political parties.

A Republican state lawmaker who asked to remain anonymous said it is not against the law, but added ``lawmakers wrote the law.''

``When you act as a bank, you're asked to do a lot of things (to move money around),'' the Republican lawmaker said.

The $10 million-plus does not include a single penny out of a legislator's pocket from his or her wages. Legislative banks are taking money, contributed to them in the name of their campaign, and giving it away -- an odd practice by a group of people who claim to hate to raise money.

The banks have in effect robbed the campaign finance reform law of any real meaning in the legislature.

While individuals and PACs are limited to giving $5,000 to a candidate in an election, legislative ``banks'' can give unlimited amounts to their caucus and political parties.

These caucuses, through another loophole in the law, can spend unlimited amounts on television advertising for candidates.

The result: Big contributors still continue to pump large amounts of money into the political bloodstream while the average citizen has little or no impact on the selection and election of candidates.

The powerful legislative caucuses, controlled in recent years by Senate President Dick Finan, R-Cincinnati, and House Speaker Jo Ann Davidson, R-Reynoldsburg, have as much cash as they need to weigh in on and win the rare competitive legislative races waged around the state.

Meanwhile, the brazen are growing bolder. This year, lawmakers are openly boasting about handing out lists of legislative ``banks'' to lobbyists, individuals and PACs to feed the money machine.

Not all banks are equal

Not all lawmakers are banks and some banks are bigger than others.

The biggest banks run the legislature.

Davidson has been speaker since 1995. Finan has been president since 1997. Neither needs money to be re-elected.

Yet Davidson has raised $1.1 million since 1995 and has given away more than 94 cents of every dollar contributed to her by others. Finan has given an even larger percentage of money away -- more than 97 percent.

Most of their money has been moved to the biggest bank vaults in the legislature -- the caucus campaign funds they control.

The Ohio House Republican Campaign Committee has raised $10.1 million from 1995 through the primary in 2000. The Republican Senate Campaign Committee took in $7.7 million during the same period.

Democrats also use the banking system in the legislature, but they raise fewer dollars -- about $1 for every $5 raised by legislative Republicans -- because they have been the minority party since campaign finance reform went into effect.

Legislative leaders were banks before the campaign finance reform law. Former House Speaker Vernal Riffe perfected the caucus political machine by holding birthday parties every year to raise large amounts of money to spend on Democratic legislative candidates in election years.

In the pre-reform days, the only restraint on contributions was potential embarrassment. Powerful PACs and influential individuals deposited checks up to $100,000 in the caucuses.

The reform law was hailed as a way to stop the big checks and involve more people in the process.

Lawmakers, the logic followed, would be forced to find other contributors.

Instead, they went looking for other lawmakers. The need to expand the banking system, to branch out, became a matter of political survival.

John Green, a University of Akron political science professor, compared contributions pre- and post-reform.

He discovered the big checks were gone, there was a decline in smaller donations, $200 or less, and a ``squeeze toward the middle'' or an increase in the number of checks ranging from $201-$2,500.

``Individual and organizational repeat donors in 1998 gave more and smaller donations to a larger number of candidates and committees than in 1994, especially to state party committees, thus largely preserving the relative importance of major donors and organizations in the Ohio campaign finance system,'' Green's study found.

Green said his study did not follow the contributions, but a common approach to circumventing limits is to spread contributions out.

``The largest donors have not disappeared from politics,'' Green said.

Making a list

The need for legislative banks to raise money for the caucuses, parties and other candidates is too important to leave to happenstance.

So the caucuses and their leaders are heavily involved in helping banks raise money. Full-time fund-raisers are hired and contributors are tracked.

In 1998, Finan sent letters to contributors indicating the amounts they had given to date and how much they could still donate without exceeding the limits. He declined to discuss his fund raising for this story.

This year, Kyle Sisk, who has worked for the House Republicans, was asked to double his duties as a fund-raiser for the Senate Republicans -- making the GOP legislative campaign a one-stop shop in ways.

Sisk is responsible for pointing out banks to contributors.

A lobbyist for one of the largest PACs in the state said Sisk met with his organization and talked about ``friends of the caucus.''

The PAC was asked to contribute to the ``friends.''

Sisk has also helped distribute lists of lawmakers -- some need to raise money for their own campaigns, most are banks -- to contributors.

One of those lists, three pages long with the names of 48 lawmakers, has been an embarrassment to Rep. Larry Householder, R-Glenford, who is expected to replace Davidson as speaker next year.

``The whole purpose behind the list was to show contributors who needed help and where we wanted to focus our campaigns,'' Householder said.

``I might be the first to put it on paper, but there has always been suggestions on how people could be helpful,'' Householder said.

Little opposition

Most banks are in safe districts with token or no opposition.

They don't need money to buy expensive commercials, raise name recognition, mail fliers, conduct polls or pay consultants for strategies to defeat an opponent.

There are 21 lawmakers currently seated in the Ohio General Assembly who have moved more than $100,000 each from their campaigns to caucuses, local and state parties or other legislative candidates since 1995.

Rep. Priscilla Mead, R-Upper Arlington, has been elected four times since 1993 by wide margins and is not facing Democratic opposition for the Senate in November.

Her colleagues trust her to handle politically difficult assignments.

For example, Mead played a pivotal role in passing electric deregulation legislation in 1999 and was among those present when lawmakers went behind closed doors to negotiate with utility lobbyists to forge the final bill.

Mead doesn't need money, but she still accepts contributions.

And Bank Mead makes contributions.

Legislative candidates, normally, can give unlimited amounts to their own caucus. But they are limited, like PACs and individuals, to giving $5,000 to the other legislative chamber's caucus.

Not Bank Mead.

Since Mead is in the House and running for the Senate, a loophole in the reform law allows her to give unlimited amounts to caucuses in each chamber this year.

So Bank Mead gave $20,000 to House Republicans and $30,000 to Senate Republicans. Her contributions represented almost one of every two dollars raised by the caucuses right before the primary.

``It's money that assures my working with the team,'' Mead said. ``In this case, I've been fortunate enough to work with the majority. In 1992, when I came in, I wasn't able to work with the majority.''

Democrats controlled the Ohio House until 1995.

``If you can't raise the money, you can't get to the television, and you can't have the majority that is large enough to achieve an agenda,'' Mead said.

There's another loophole in the law that affects Mead's term-limited legislative colleagues who are not trying to move to the other chamber.

Departing legislators can redesignate their campaign committees by simply naming a new treasurer and declaring they are not running for legislative or statewide office.

They are then free to accept unlimited contributions from PACs and individuals.

These lawmakers are still allowed to give unlimited amounts of money to their caucus until they leave the legislature. It's legislative banking without boundaries.

According to the secretary of state's office, five of this year's term-limited lawmakers have redesignated their campaign committees, including Speaker Davidson. Whether they are accepting five and six-figure contributions from PACs and individuals and moving the money to the caucuses will be hidden until the last of the end-of-year finance reports are filed in January.

Maintaining power

There is a good reason for all the banking that goes on in the legislature.

Every two years, voters decide races in 99 House and half the Senate districts.

Although only a handful of these campaigns are competitive, the caucuses weigh in heavily with money collected from their banks to maintain power and the majority.

Three of the top six candidates who have been helped by the House Republican caucus since the 1995 reform law have been from the Akron area.

In 1996, the Republican caucus used banking money to pay for a string of negative ads to help Bryan Williams unseat Rep. Karen Doty, D-Akron.

Williams has received $353,000 from the caucus.

Rep. Kevin Coughlin, R-Cuyahoga Falls, has received $334,000 and Rep. Twyla Roman, R-Springfield Township, $280,000 from the House caucus to help them win against candidates with less money and fewer advertisements.

Coughlin said he has been a ``workhorse'' for the caucus after receiving help for his initial run for office.

``I have been one of the top eight contributors to the caucus since I've been here,'' Coughlin said. ``The bottom line is, no amount of campaign finance reform is going to change the basic cost of a 30-second ad on TV.''

Davidson said the caucus encourages candidates to eventually ``self-fund'' their campaigns, but ``we're the safe harbor here. We're the safety net when they are first getting started.''

Another local lawmaker has helped and benefited as a candidate from the banking system.

Sen. Roy Ray, R-Bath Township, is chairman of the powerful Senate Finance and Financial Institutions Committee responsible for writing state budgets, so he is popular with anyone who has a financial stake in the process.

Ray is also one of the biggest banks in the legislature, ranking fourth by giving $311,000 since 1995 to caucuses, political parties and other legislative candidates.

In 1998, he was running for re-election and facing ethical questions about being paid $161,500 as a consultant for FirstEnergy about the same time he was sponsoring legislation that would help electric utilities recover billion dollar investments in nuclear power plants.

In early October of that year, Ray gave the caucus $80,000. Within the month, the caucus would spend $135,000 on television commercials for Ray. He was re-elected.

Ray proves the banking doors swing both ways. Two years earlier, Ray gave the Senate Republican caucus $100,000.

The caucus needed money to pay for a Cleveland television blitzkrieg to elect state Sen. Robert Gardner, R-Madison.

Gardner is known as the $1 million man after running the most expensive race in Ohio Senate history.

Ray is still helping. Although he is term limited, he continues to raise money and gave the caucus $50,000 in 1999.

Republicans need the money in another $1 million race this year -- and already have poured thousands into Cleveland TV stations for ads for Sen. Robert Spada, R-Parma Heights, appointed last year to fill a vacancy.

Ed Boyle, a former North Olmsted mayor running against Spada, said both candidates will depend on Columbus for money, but the Republicans can raise more.

``The Republican caucus doesn't give the candidate the money. They loan it to him. They not only buy the position, but they buy the legislator's loyalty. Spada will owe the caucus money and his vote in Columbus,'' Boyle said.

Spada would not agree to be interviewed for this article.

Lobbyists irritated

The legislative banking system has created friction between lawmakers and lobbyists in Columbus.

Thomas Green, a Columbus lobbyist who heads the Ohio Lobbying Association, and Secretary of State Kenneth Blackwell squared off in a debate in May after Blackwell's spokesman criticized lobbyists for becoming more ``brazen'' as term limits forced veteran legislators to leave.

Green said legislators are not raising money in their local districts, and instead hold frequent fund-raisers in Columbus.

The lobbying group is going to recommend changes next year in the campaign finance reform law, Green said.

He said the limits on contributions to individual candidates should remain, but the caps on donations to the caucuses and parties should be lifted because they are meaningless.

Green said the contributions to the caucus would be traceable that way.

UA's Green, no relation to the lobbyist, said there are ways to reduce the ``influence of fat cats.''

He said there could be aggregate limits placed on PAC and individual donations, and caps on contributions from lawmakers to caucuses.

Green said the in-kind contributions that pay for expensive advertising could be stopped, and spending by the parties and caucuses could be limited to get-out-the-vote efforts and party slates.

But he said political parties are the only organizations spending money on challengers.

``My only caution is that reformers should be careful not to undermine the challengers because PACs and individuals don't give to challengers,'' Green said.

Nevertheless, the banking system is so ingrained and lawmakers so emboldened that some can't stop despite leaving the legislature.

Rep. Donald Mottley, R-West Carrollton, is term limited and not on the ballot in 2000.

Still, he asked for $500 per person this year in a fund-raiser advertised ``to support Representative Mottley's effort to help other candidates in 2000.''

Dennis J. Willard can be reached at 614-224-1613 or dwillard@qn.net
OHIO'S BIG `BANKS'

BANK DAVIDSON: House Speaker Jo Ann Davidson, R-Reynoldsburg, $1.1 million. Term limited.

BANK FINAN: Senate President Richard Finan, R-Evendale, $886,000. Term limited in 2002.

BANK GARDNER: House Speaker Pro Tem Randall Gardner, R-Bowling Green, $366,000. Term limited, running for Ohio Senate.

BANK ARONOFF: Former Senate President Stanley Aronoff, R-Cincinnati, $369,000. Left Senate in 1996 to become Columbus lobbyist.

BANK RAY: Sen. Roy Ray, R-Bath Township, $311,000. Term limited in 2002.

BANK TIBERI: Rep. Patrick Tiberi, R-Columbus, $262,972. Term limited, running for U.S. House.

BANK HARRIS: Sen. Bill Harris, R-Ashland, $227,000. Appointed to Ohio Senate in August.

BANK HOTTINGER: Sen. Jay Hottinger, R-Newark, $179,000. Up for re-election in 2002.

BANK MEAD: Rep. Priscilla Mead, R-Upper Arlington, $177,000. Term limited, running for Ohio Senate.

BANK VAN VYVEN: Rep. Dale Van Vyven, R-Sharonville, $174,000. Term limited.

BANK CUPP: Senate President Pro Tem Robert Cupp, R-Lima, $173,000. Term limited, running for Allen County commissioner.

BANK JOHNSON: Former Rep. Tom Johnson, R-New Concord, $173,000. Johnson was named Gov. Bob Taft's budget director in 1999.

BANK OLMAN: Rep. Lynn Olman, R-Maumee, $171,000. Running for re-election.

BANK KEARNS: Sen. Merle Grace Kearns, R-Springfield, $168,000. Term limited, running for Ohio House.

BANK CAREY: Rep. John Carey, R-Wellston, $145,000. Running for re-election.

BANK JACOBSON: Rep. Jeff Jacobson, R-Vandalia, $142,000. Term limited, running for Ohio Senate.

BANK CORBIN: Rep. Robert L. Corbin, R-Centerville, $139,000. Term limited.

BANK WACHTMANN: Sen. Lynn Wachtmann, R-Napoleon, $135,000. Up for re-election in 2002.

BANK COUGHLIN: Rep. Kevin Coughlin, R-Cuyahoga Falls, $133,000. Running for re-election.

BANK BOGGS: Former Minority Leader Ross Boggs, D-Andover, $132,000. Deposed as minority leader in 1999, resigned office for gubernatorial appointment.

BANK BUCHY: Rep. Jim Buchy, R-Greenville, $132,000. Term limited, lost primary for Ohio Senate seat.

BANK RIFFE: Former House Speaker Vernal Riffe, D-Wheelersburg, $127,977. Riffe retired in 1994, but continued to contribute until his death.

BANK BLESSING: Sen. Louis Blessing, R-Cincinnati, $117,000. Running for re-election.

BANK WOMER BENJAMIN: Rep. Ann Womer Benjamin, R-Aurora, $117,000. Running for reelection.

BANK JOHNSON: Sen. Bruce Johnson, R-Columbus, $116,000. Term limited.

BANK CATES: Rep. Gary W. Cates, R-West Chester, $109,000. Running for re-election.

Note: Contributions are rounded off. They were made sometime between 1995 and the primary in 2000 to legislative caucuses, other legislative candidates, state and county parties. The figures do not include contributions to statewide and local candidates.

Source: Beacon Journal analysis of secretary of state records.