Nagle on Withdrawal As Cure for Campaign Contributions

Anonymous

Tue, 12/03/2013 - 06:47

Campaign Finance

It was pointed out to me by Justin Levitt, a professor at Loyola Law
School Los Angeles, that back in 2000 John Copeland Nagle, a
professor at Notre Dame Law School, wrote a law review article
suggesting what I call the Westminster Approach to campaign
contributions from those seeking benefits from the recipient
official's government. The article, which focuses on Congress, is
entitled "<a href="http://papers.ssrn.com/sol3/papers.cfm?abstract_id=969810" target="”_blank”">The
Recusal Alternative to Campaign Finance Legislation</a>" (37 Harv.
J. on Legis. 69 (2000)). 
 
The Westminster Approach, named after a 1996 ethics law in
Westminster, CO, requires an official who has received a gift,
including a campaign contribution, above a certain dollar amount to
withdraw from participation in a matter involving the contributor.
This means that there is no contribution limit, but if a contributor goes
beyond the gift limit, the recipient official is not in a position
to help the contributor. Therefore, there is nothing to be gained (1) by
making large contributions in the hope that they will benefit the
contributor, or (2) by requiring the payment of large contributions in
order to play.

Here is how Nagle put his proposal:<blockquote>

[A]llow contributors to give whatever they want to political
candidates, but require successful candidates to recuse themselves
from voting on or participating in any legislation or other matters
that directly affect those contributors.</blockquote>

He argued that this goes more directly to the problem with large
contributions: influence and the appearance of influence. To
that I would add pay to play, a term which surprisingly
does not appear in this article. 
 
Nagle explained the benefits of this approach, which are essentially
to protect contributors' free speech rights and everyone's freedom
as individuals (only the freedom of officials as officials is
limited):<blockquote>

Corruption and its appearance are avoided, the First Amendment is
protected, and contributors and candidates 
are free to decide what to do.</blockquote>

Equally clear is Nagle's explanation of the basis for this approach:<blockquote>

Influence and money are not identical, and one can be regulated
without imperiling the other.</blockquote>

Past Gifts as Pre-Existing Conflicts 
The most interesting aspect of Nagle's article is that it presents
past gifts as equivalent to pre-existing conflicts of interest. In
ethics codes, withdrawal from participation cures a pre-existing
conflict situation, but not a gift. Gifts are instead prohibited, so
that no new conflict situation is created or old situation made
worse. And campaign contributions are usually excepted from the gift
prohibition, due to First Amendment free speech rights (however,
some states and local governments (e.g., Connecticut and
Philadelphia) do prohibit campaign contributions from contractors
and lobbyists, due to the appearance of corruption they create). 
 
What Nagle's solution does is focus not on the prohibition of new
gifts (as gift provisions do) but rather on the equivalence of past
gifts and pre-existing conflicts. A past gift creates a
relationship that, like a business or personal relationship, is sufficiently special to require withdrawal. Since the
cure for the conflict created by this relationship is withdrawal rather than prohibition, there is no free speech
issue (especially after <a href="http://www.cityethics.org/content/supreme-courts-local-government-recus…; target="”_blank”">the
Carrigan decision put this to rest</a>, at least with respect to
voting) and, therefore, no need to except campaign contributions.
Past gifts (including ones made in the hallway before a public
meeting, whether a present for an official's spouse or a campaign
contribution) can be cured by withdrawal from any matter involving
the giver. 
 
Influencing an Official's Selection 
Nagle made an interesting observation that involves the difference
between gifts and campaign contributions. Gifts, he said, are
intended to influence an official's actions, while campaign
contributions are intended to influence the selection of the
individual who will have the authority to take action. He analogized
campaign contributions to gifts made to an official with the intent
to get the official to appoint to an important position an
individual the contributor believes would give him a sympathetic ear
or push the contributor's goals himself. 
 
Such a gift would be prohibited, but a campaign contribution is not.
Therefore, the usual solutions are to limit such contributions, so
they are less likely to be seen as a bribe, either directly or by
means of a public campaign financing program. Nagle's solution
provides a third alternative, which unfortunately has scarcely been
experimented with. 
 
How Contributors and Candidates Would Respond to the Nagle Approach 
Nagle's speculation as to how his approach would affect contributors
and candidates is complex and applied only to Congress, so I will
put it in my own words, with changes that make the approach more
relevant to a local legislature, and with the addition of some of my
own speculations. 
 
One possibility is that the contributor would give sizeable
contributions to numerous council members, so that there would not
be a quorum left to decide the issue. In this situation, the Rule of
Necessity would come into play, and all the council members would be
permitted to vote. But if this were to keep happening, it would
create such a serious appearance of impropriety that council members
would either have to refuse contributions from interested parties,
or there would be strong support for a law banning such
contributions. 
 
Another possibility is that a council member might accept
sizeable contributions from numerous interested parties, and withdraw from
participation in numerous matters. This would be seen as a failure
to represent constituents, and it would, therefore, be unlikely that
the council member would be re-elected. This would make council
members reject such contributions. 
 
On the other hand, if the council member were to accept no sizeable
contributions from interested parties, he may find it difficult to
fund a successful campaign. If their fundraising were seriously
hampered in this way, council members would be more likely to
support a public campaign financing program. In fact, if a council
were to consider putting Nagle's approach into practice, the
discussion of its ramifications might lead the council to embrace public
financing instead. But this is a solution that Nagle opposed. 
 
Elsewhere, Nagle made a valuable observation regarding the effects
of his approach: "If contributions dried up once legislators
could no longer act on behalf of a contributor, that would suggest
that the purpose of contributions was to influence the legislator
all along. But if contributions continued apace, then the hypothesis
that contributions are designed to influence a legislator would be
hard to sustain." ("<a href="http://papers.ssrn.com/sol3/papers.cfm?abstract_id=969717" target="”_blank”">Corruption,

Pollution and Politics</a>", 110 Yale Law Journal 293, 312 (2000)) 
 
Under the Nagle approach, candidates would have to be very careful
about whom they accept sizeable contributions from. If a candidate opposed a
big riverfront development, she would have to be careful to return
sizeable contributions not only from interested parties who shares her
opposition, but also from interested parties who supportedthe
development and who might, therefore, try to nullify her vote by
sending her a sizeable contribution. Such a contribution would be a more
worthwhile investment for the interested party than, under normal
circumstances, a contribution to someone who may support the
development. 
 
Council staff would have to draw up as complete a list as possible
of those individuals and entities who are or may be involved in
upcoming matters before the council. But no such list could be
complete. Therefore, the fear that one might unknowingly accept a
contribution that requires withdrawal may cause officials to either
limit the size of the contributions they accept from anyone, or to
embrace public financing. On the other hand, a strategy of stealth
contributions could very well backfire on the interested parties who
employ it, making it impossible for their supporters to continue
their support in the face of public disgust. This would likely put
an end to this strategy. 
 
There is a tendency to see the Nagle/Westminster approach as an end
in itself. However, as shown above, considering or taking this
approach may not stop there. Its implications and ramifications may
lead to campaign finance reform, including public campaign
financing, at least if state law clearly allows a local government
to pass campaign finance laws (in some states, the prospect of
expensive litigation, or simply uncertainty, can keep local governments from passing such
laws). 
 
Some More Points About the Nagle Approach 
Nagle points out that, as the law stands now, campaign contributions
are considered bribes if evidence can be shown of a quid pro quo.
Therefore, in some cases, requiring withdrawal would actually
protect the recipient of a contribution from an interested party
from being the object of a criminal action. 
 
Nagle discusses the situation involving elected judges. At that
time, no court had found that a judge has to recuse himself from a
case involving a campaign supporter. Since then, the U.S. Supreme
Court, in Caperton v. A. T. Massey Coal Co, 556 U.S. 868</a> (2009), has held
that the Due Process clause of the Fourteenth Amendment requires a
judge to recuse himself not only when actual bias has been
demonstrated or when the judge has an economic interest in the
outcome of the case, but also when "extreme facts" create a
"probability of bias." In this case, the extreme fact was a huge
independent expenditure from the owner of A. T. Massey Coal, to
support the candidacy of one of the Supreme Court judges that
decided the case. 
 
Contributors Whose Benefits Would Be Non-Financial 
One of the most unusual things Nagle did was treat the financial and
non-financial benefits of a campaign contributor the same. To him,
it didn't matter whether the contributor is a company that is
seeking a permit or an environmental organization opposed to the
granting of the permit. Each of them has an interest in the matter
and should be treated the same. 
 
When I refer to non-financial benefits, I do not include the benefit
of winning a matter on the basis of one's beliefs. Conflicts of
interest only refer to special benefits. Preventing a development is
no more beneficial to members of an environmental organization than
to the community as a whole. This is not, however, true of the
members of a neighborhood association or of a business association, if those members' businesses
would be likely to specially benefit from (or be harmed by) the
development. At the local level, rather than at the federal level,
which is the focus of Nagle's article, far more large contributions
are made by those with special interests than by those with
ideological interests. 
 
One could argue that the environmental organization would be seen as
trying to influence the vote in the same way as the developer or the neighborhood or
business association. But this attempt to influence is not a matter
of self-interest. There is no appearance of seeking to influence in
order to get something personal. There is also no possibility of pay
to play. Giving money to support a candidate with similar views, or
trying to influence one who is on the fence, is what politics is
supposed to be about. 
 
Why Contributions Should Not Be Unlimited, Even Under the Nagle Approach 
One way in which I disagree with Nagle is that I believe that the
Westminster/Nagle approach should complement rather than replace
contribution limits. A policy-oriented organization or individual
with strong feelings about a particular policy should be allowed to
make sizeable contributions to candidates it supports or that it wants to pay
attention to its arguments. But they should not be allowed to make
unlimited contributions, so that either the supporters of one point
of view dominate an election or, on the other hand, so that the
election is turned into a disproportionate battle that crowds out
other issues and voices. This is not a conflict of interest issue
and, therefore, has nothing to do with the goals of the
Westminster/Nagle approach. 
 
Even in a jurisdiction that takes Nagle's approach, contribution
limits are still valuable, although they need not be quite so low.
And if officials choose public campaign financing, with voluntary
contribution limits (some programs involve few contributions at all)
and expenditure limits, there still need to be contribution limits
(albeit higher ones) for nonparticipating candidates, or no one will
participate. 
 
At the local level, the great
advantage of Nagle's approach is that a city or county can pass it,
as a government ethics provision, while it most likely would not be
allowed, or be willing, to pass a contribution limit, because in
most states campaign finance is done only at the state level (even
where local campaign finance laws are permitted, or may be permitted
after litigation). 
 
Limitations of the Approach 
The Westminster/Nagle approach is a useful tool to lessen influence,
pay to play, and the appearance of impropriety that accompanies
large contributions from individuals and entities seeking special
benefits that elected officials decide on or have influence over..
But it is not a cure-all. Most important, it has less effect on
campaign contributions that reward an elected official after the
fact (it has some effect, because such contributions would
still prevent the recipient from participating when problems arise
relating to the matter, or when a renewal or an amendment is
considered). 
 
One solution to the rewarding campaign contribution problem is to
prohibit interested parties from making contributions to officials
for, say, a year after the end of a matter in which they were
involved. This is another example of how the Westminster/Nagle
approach can be effectively complemented by campaign finance laws. 
 
An Institutional Rather Than Individual Issue 
It is important to see the Westminster/Nagle approach not as a way
to deal with individual corruption. Because large contributions from
interested parties are extremely common, they undermine public trust
in an aggregate manner, not one contribution at a time. They are a
classic example of institutional corruption. 
 
Similarly, the Westminster/Nagle approach will solve the problem not
withdrawal by withdrawal, but by making such contributions
problematic so that local campaign fundraising will have to change
in a qualitative manner. The long-run result will not be a lot of
withdrawals, but either a public financing program or a greater
effort to involve the community in local elections, so that most
contributions come not from interested parties, but rather from
ordinary citizens who believe particular candidates are best for
their community. 
 
Where Else the Money May Flow 
Nagle recognizes that his approach would lead to more money going
through PACs and political parties (his paper was written before
other sorts of independent expenditure became a popular
alternative). In response, he argues that his approach could be
applied to contributions from PACs, at least to the extent that
their interests can be identified. 
 
As for political parties, Nagle notes that "Money given to political
parties is not as corrupting as money given directly to candidates." 
 
Instead of campaign contributions, Nagle notes, interested parties
would tend to use lobbyists more frequently. But, he argues,
"without the tool of campaign contributions as a threat, a
legislator faces relatively limited sanctions from a disappointed
lobbyist." 
 
Application to Independent Expenditures 
In "<a href="http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1676108" target="”_blank”">Confronting
the Impact of Citizens United</a>," 29 Yale L. & Pol'y Rev.
217, 231 (2010), Justin Levitt suggests that Nagle's approach may be
extended to cover substantial independent expenditures. Levitt notes
one difference: that a candidate cannot reject independent
expenditures the way she can campaign contributions. 
 
Levitt makes an interesting observation about the other side of
candidate support: the threat of supporting the opposition. He
says that a requirement to withdraw might "modestly increase
legislative backbone to withstand such a threat. ... recusal would
also disable the opponent from yielding the desired benefit if he or
she should win a corporate-fueled campaign." 
 
Conclusion 
Sadly, the great majority of law review articles and judicial
opinions that cite Nagle's article are focused on judicial recusal,
not on the withdrawal of legislators. Those articles that deal with
campaign finance reform quickly dismiss the feasibility of the
approach. Therefore, there is no extended discussion of Nagle's
excellent idea or how it has succeeded or failed in Westminster,
Colorado, in New Jersey, or elsewhere. 
 
This blog post will hopefully start a serious consideration of this
approach and what it says about the institutional corruption
involved in interested parties making large contributions to
candidates who will influence and make decisions that directly
affect the contributors. 
 
Robert Wechsler 
Director of Research-Retired, City Ethics 
 
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