City may limit campaign donations

State Supreme Court ruling clears the way

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One-quarter of Pittsburgh Mayor Luke Ravenstahl's campaign money came in checks of $10,000 or more.

His sometime rival, Councilman William Peduto, got a campaign check for $50,000.

Allegheny County Executive Dan Onorato faced little opposition for re-election, and built a $1.9 million war chest that could be ammo in a run for governor.

Some say those are signs of a campaign finance system run amok.

Reformers recently learned that they might be able to do something about it. The state Supreme Court on Dec. 28 ruled that a Philadelphia campaign finance ordinance that limits contributions doesn't violate state law, in effect allowing other municipalities to do the same.

Now Mr. Peduto has drafted legislation like Philadelphia's, putting a cap on contributions, as he tried to do in 2004. Mr. Ravenstahl said he's also looking at other reforms, like posting contribution information online.

The Supreme Court's 4-2 decision paves the way for city and county campaign cash limits, said Barry Kauffman, executive director of Common Cause/Pennsylvania. He thinks contribution limits are essential "to eliminate, or at least reduce, the possibility of corrupt relationships between donors and public officials."

Pennsylvania is one of just 12 states that put no limits on campaign contributions by individuals, partnerships and political action committees. Corporations and unions can't contribute directly, but can set up PACs to do so.

Philadelphia is both a city and a county. In late 2006, its council passed and its mayor signed an ordinance limiting contributions to candidates for mayor, council and six row offices to $2,500 by individuals and $10,000 for business partnerships or PACs.

Just-elected Mayor Michael Nutter sought to have the limits enforced during his race last year. Rival candidates sued, claiming state law preempts municipalities from governing elections. The court disagreed.

Mr. Peduto said he had been waiting for the court to rule before revisiting the issue, and will propose legislation this month. His draft ordinance would limit individual contributions in city races to $2,500, and donations from PACs to $5,000.

Anyone who contributed the maximum would be barred from receiving no-bid contracts from the city.

"It would eliminate the pay-to-play system," he said.

Mr. Kauffman said the numbers proposed by Mr. Peduto seem a bit high.

"Once you start getting over $1,000, we're beginning to have doubts" about whether a contribution could influence policy, he said.

The proposed limits would have modest effect on council races, where most candidates get just one or two five-figure contributions from family or friends.

Mr. Ravenstahl worried that caps on contributions would make it harder to raise money, potentially allowing someone with personal wealth to swoop in and buy an office.

Limits could allow "an elite person, a wealthy person, the opportunity to spend countless dollars," because court decisions have said that government can't cap the use of a candidate's personal funds. Limits "would therefore put somebody that's not as wealthy, like myself or the other council members, at a disadvantage."

The Philadelphia ordinance deals with that. If any candidate pours $250,000 or more of personal wealth into a race, the other candidates can then collect contributions of double the normal limits. Mr. Peduto's legislation mirrors that, though he noted he's open to amendments.

Mr. Ravenstahl said his administration is "looking at a variety of different options ... A lot of it boils down, as far as I'm concerned, to transparency, and people just having the ability to know who's giving to whom. So we're looking at posting that information on a Web site.

"I'm not taking anything off the table," he added, including contribution limits.

Mr. Ravenstahl raised $1.15 million in 2006 and 2007. At least $299,000 of that came from 25 supporters -- including individuals and labor union PACs -- that wrote checks of $10,000 or more.

They include William Kratsa Jr., whose family firm was recently picked to build a hotel on a city-controlled South Oakland site; Jack Piatt, whose Millcraft Industries is the central player in city-backed Downtown development; and Merrill Stabile, whose Alco Parking manages some city garages and benefits from parking tax cuts.

In other cases, multiple executives from development firms with matters before the city teamed up to donate significant amounts. Owners of Walnut Capital, for instance, gave $16,000 in multiple checks while getting city help for their Bakery Square project. Executives from Boston-based Beacon/Corcoran Jennison gave $23,000 months after the mayor brokered a deal allowing expansion of its Oak Hill development in the Hill District.

"Once you get to that range of contribution, you're getting into relationships which can be tainted," said Mr. Kauffman. "That could get [donors] at least immediate access, and perhaps even preferred consideration for contracts and permits."

Mr. Peduto got the year's biggest contribution to the mayor's race -- $50,000 from William Benter, owner of Acusis Medical Transcription. After he dropped his bid, he gave $8,000 back as part of a partial refund to his big donors.

He said he didn't feel bad about taking that check.

"The person that I took the contribution from, and the businesses he owns, have no, zero, involvement with city government," Mr. Peduto said.

He also got a $10,000 contribution from Sara West, an apartment developer who has opposed some new city landlord regulations. He gave her back $1,600.

Mark DeSantis raised $430,000 in a failed Republican bid to topple Mr. Ravenstahl. Though he benefited from eight checks for $10,000, he said lower contribution limits would help challengers.

"Vendors, potential vendors, people doing business with government can give $20,000, $30,000, or even $50,000," said Mr. DeSantis, adding that the money typically goes to incumbents. "You have to put some kind of ceiling on the individual amounts. The feds did that years ago."

Federal law allows individuals to give candidates for president, the Senate and the House no more than $2,300, and PACs can donate $5,000.

Forty-five states have passed laws that, on average, limit individual contributions to gubernatorial candidates to $3,500 and to legislators at $1,500, according to the National Conference of State Legislators.

"Between Philadelphia and Pittsburgh having campaign finance reform as an agenda item, we may finally be able to get Pennsylvania to realize that we're [nearly] the only state without contribution limits, meaning the pay-to-play system is alive and well," said Mr. Peduto.

Mr. Onorato, through a spokesman, said he believes campaign finance should be regulated at the state, not county, level.

Several veteran County Council members, who considered campaign check limits a few years ago, agreed with Mr. Onorato. They worried that contribution limits would keep county officials from raising money that they could later use in races against state officials who face no limits.

"Let's say Onorato as county executive is running for governor against [state Auditor General] Jack Wagner in the [Democratic] primary," said Republican county Councilman Vince Gastgeb. "Why does Jack get to raise as much as he wants while Dan is limited? ... Reform's good. The struggle we had was the uniformity issue."

County Council President Rich Fitzgerald, a Democrat, agreed, adding that he'd ultimately like to see public financing of campaigns to eliminate the fund-raising game entirely.

Portland, Ore., Albuquerque, N.M., and New York City have instituted public financing of campaigns, said Deborah Goldberg, Democracy Program director at the Brennan Center for Justice at the New York University School of Law.

Five-figure donations to local campaigns "can't be good for the political process," she said. "It can't be good for accountability to the people. As honest as our representatives usually are, they can't help but worry about what's going to happen to the sources of the money they need for elections if they don't keep in mind the interests of the donors."


Correction/Clarification: (Published Jan. 8, 2008) Twelve states, including Pennsylvania, put no limits on campaign contributions by individuals, partnerships and political action committees, according to the National Conference of State Legislatures. The number of such states was wrong in this story as originally published Jan. 7, 2007.

Rich Lord can be reached at rlord@post-gazette.com or 412-263-1542.


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