Are There Two Sides of Out-of-State Money in Politics? About those Embattled Ballot Questions

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One of the easiest charges one can lodge at one’s political campaign opponent is that their campaign is financed by out-of-state interests that, by definition, can’t know or care about what our people and communities think or need. Out-of-state money allegedly delegitimizes a proponent or opponent in the eyes of home-state voters. This charge is used in both candidate elections (especially those for the U.S. House and Senate) and in statewide ballot issue elections.

The argument has widely differing validity based on what is being decided by the voters. A strong distinction exists between a state’s ballot initiative elections and candidate elections for a state’s representatives in national office; in other words, U.S. House and Senate elections.

NOTE: In this essay, I am discussing legal contributions to legitimate candidates and campaigns. There are intricate and intriguing discussions to be had elsewhere about state-based limitations on out-of-state political contributions, the post-Citizens United and post-McCutcheon landscape of 501(c)(4) contributions, corporate and labor union financing of elections, etc. Perhaps I’ll address those issues elsewhere, as I addressed related subjects in my paper, “Nonprofit Political Speech in a Post-Citizens United and IRS Scandal Environment.”

Statewide Ballot Initiatives

In many U.S. states, there are initiatives, referenda, and constitutional amendments on the ballot each election day. Not all states have the same processes for getting an issue on the ballot, and some states have more restrictive rules than others about what can be placed on the ballot and under what conditions. Given this state-by-state variability, it’s not unusual for states where ballot access is easier and, often, campaign costs are lower to have a disproportionate number of issues to vote on.

Many of these ballot initiatives are based on issues important to residents outside the states where the voters will have their say. These non-resident or out-of-state individuals, businesses, labor unions, advocacy groups, and other interests seek ballot support not only to change the law in affected states, but also to use these successes as precedent when attempting to make similar changes in other states.

Advocates of resolving ballot issues without out-of-state participation say one easy way to assess an issue’s legitimacy (as they perceive it) is to analyze who is supporting it—the individuals, groups, and others who are devoting time, money, and services to influence voters. If it appears to be both led and financed by state-based people and groups, it’s grassroots. If the impetus and money come from elsewhere and the people are either hired using outside money or are a small group of volunteers “fronting” for the campaign, it’s a fake grassroots campaign, or “astroturf.”

It’s possible for both sides of a statewide ballot issue to be astroturf, since groups securing a ballot position in a state often attract opposing interests to a state’s campaign. In fact, opponents within a state where a ballot issue is in play may solicit sympathetic national groups and donors to support them. One recurring example is workplace-related ballot issues, where out-of-state labor and business groups may enter a state to continue longstanding disputes.

The counterargument is that what happens in one state can affect other states. Environmental regulation is a good example of this, since air and water seldom stop at a state’s borders. A nonprofit’s mission may have a legitimate national or international reach which, by definition, includes all states. Protection of animals and abortion are two examples of causes that cross state borders, as are issues involving poverty and civil rights.

While true, the effect of a state’s laws on residents of another state is indirect at best. The proximate benefit or harm of a statewide ballot initiative is felt by the residents of that state. This makes it reasonable to analyze the geographic source of funds and organizational support for a ballot initiative when evaluating the pertinence of the issue to the state’s voters.

One defense of out-of-state resources dedicated to statewide ballot initiatives is that many candidates, especially including candidates for the U.S. Senate and House of Representatives, receive significant amounts in out-of-state contributions. An influential committee chair or long-serving legislator may receive 75 percent or more of their financial support from out-of-state donors, especially if their home state is relatively modest in population and/or economy. Fellow legislators and celebrities visit a candidate’s state, encouraging the voters to support and vote for the candidate.

If out-of-state money is OK for a state’s candidates for the U.S. House and Senate, why shouldn’t it be OK for statewide ballot initiatives? Why shouldn’t the sauce for the goose also be sauce for the gander?

Candidate Elections

The answer is relatively simple, yet often overlooked. Senate and Congressional candidates have the opportunity to influence legislation, regulation, and oversight everywhere in the country. For example, John Thune, the current chair of the Senate Commerce Committee, is from my home state of South Dakota. As a Senate committee chair, he wields significant influence and power over commerce across the United States. His decisions have the potential to affect all industries, all professions, and much of the national economy. However, even a newly elected legislator sent to Washington votes on all bills, sits on multiple committees, and has liaison with all federal agencies. They have access to other powerful people, including their own colleagues, with the potential to exert influence and even control.

The national scope of their offices is not only an opportunity to affect all states (not just their own); it is an expectation and a duty that comes with their office. They represent not only their home state’s (or home district’s) interests; they are expected to act in the best interest of the nation as a whole.

A senator or house member’s state or congressional district may vote for a legislator, but out-of-state interests have a legitimate—and proximate—interest in that legislator’s performance in Washington. In fact, there have often been lobbyists and political mavens who bemoan a state’s poor choice of legislators sent to Washington, often believing that the folks back home have no idea of how those legislators work when they are away from home and in Washington.

Conclusion

The decision to support an out-of-state candidate or ballot initiative is one each donor can make. The decision to accept out-of-state donations is one for each candidate or ballot initiative committee to make (though a few states are considering limitations on the circumstances for doing so). Current federal law allows the practice, and recent U.S. Supreme Court decisions (especially McCutcheon) have been sympathetic to the relatively free flow of campaign contributions, including a donor supporting candidates in multiple states and races.

Out-of-state money donated for political campaigns, especially U.S. House and Senate campaigns, is far more reasonable in candidate elections than it is when applied to statewide ballot initiatives. The key reason is the scope of the campaign’s capacity and geography for proximate, direct effect. Therefore, it is appropriate to challenge an initiative’s expression of a state’s voters’ collective will and desires when those campaigns are financed primarily from outside its borders. On the other hand, candidate elections for the House and Senate have a built-in native element in their residency requirements for both candidacy and voting. Campaign finance offers the opportunity for residents and interests from across the country to give time, money, and other resources—but not their votes—to support or oppose candidates for national offices based on multi-state and national concerns.

We encourage readers to talk back to this column. What are your opinions?