Prairie Playground for Special Interests to Test Campaign Finance Initiative

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August 17, 2016; USA Today

South Dakota has long been a testing ground for political initiatives brought by out-of-state interests. The combination of relative ease in putting initiated issues on the state’s election ballot and the low costs of political campaigning provide opportunity for advocates and their opponents to test arguments and strategies to sway voters to adopt or reject new laws. The 2016 South Dakota general election ballot will include no fewer than ten initiated measures, constitutional amendments, and referred laws. Four of these ballot questions concern the conduct of elections, and one—Initiated Measure 22—has attracted significant investment on both sides from non-South Dakotans, and little or no financial support from within the state.

IM 22 proposes to “revise State campaign finance and lobbying laws, create a publicly funded campaign finance program, create an ethics commission, and appropriate funds.” Highly unusual for an initiated measure, the actual text is 34 pages long. The state-mandated “Attorney General’s Statement” summarizing the measure for voters is five paragraphs long.

USA Today reports that the battle lines are drawn between proponents Massachusetts-based Represent.Us and Koch brothers–backed Americans for Prosperity in opposition. According to the South Dakotans for Ethics Reform state campaign finance report, Represent.Us provided 100 percent of the cash in 2015 funds to draft and organize the ballot petition as well as additional in-kind support. Funding for the 501(c)(4) Represent.Us social welfare organization comes almost exclusively from the related Represent.Us Education Fund, a 501(c)(3) public charity that receives significant support from the William and Flora Hewlett Foundation (see here and here) and the Rockefeller Brothers Fund.

Information on donors to the 501(c)(4) Americans for Prosperity is both more and less available, as the organization is known to be supported by the Koch brothers’ network of wealthy conservative donors, but their exact contribution amounts are not known and members’ names are only disclosed by accident. According to USA Today:

The Koch network is one of the most influential groups in conservative politics. Some 700 like-minded donors each pledge to give least $100,000 annually to a mix of educational, policy and political organizations affiliated with the Kochs that push a small-government agenda. The network is on track to spend about $750 million during the 2016 election cycle, about a third of which will be directed to politics, officials say.

The Defeat22.com group in South Dakota filed its state organization papers only recently, and organization papers do not include financial information or donor lists. Defeat22 has announced publicly that it has developed a network of partners, with business interests including the state’s chamber of commerce, SD Retailers Association, and SD Farm Bureau. In addition, Americans for Prosperity, Concerned Women for America, and other conservative groups have joined.

Proponents of IM 22 say that their proposed reforms will increase campaign transparency and level the playing field in elections, as well as establish ethics guidelines and oversight in the only state with no restrictions on lobbyist gifts to politicians. Opponents promote free speech issues and see IM 22 as a threat to First Amendment freedoms. In addition, the public financing of state campaigns through “democracy vouchers” is portrayed as a politicians’ grab of taxpayer dollars that will take funds away from other state priorities.

South Dakota’s IM 22 ballot issue is an illustration of how out-of-state interests can promote their agendas in a state’s election process and attract in-state allies to support those agendas. It’s also an example of how important it is to look at who is really behind a ballot issue’s support or opposition. We think it’s noteworthy that the pro-IM 22 group makes no voluntary public reference to its outside support or financing, and the anti-22 group cites Americans for Prosperity only as one supporter among many and does not reference its Koch connection at all. When the integrity of campaign finance and elections is at stake, it would help voters for the key players to disclose more about themselves.—Michael Wyland

  • Update: The comment about South Dakota being the “only state with no restrictions on lobbyist gifts to politicians” was based, as the hyperlink documents, on a web page found at the National Council of State Legislatures (NCSL). Subsequently, a South Dakota state legislator let me know that he had asked the state’s Legislative Research Council (LRC, the SD legislature’s nonpartisan permanent staff), to document the restrictions under South Dakota state law. “We have restrictions in SDCL 22-12A-4, 2-12-9 and 2-12-11 as well as in our constitution,” he said. He has contacted the state’s representative to NCSL and requested the web page in question be corrected.