A fresh look at campaign financing

Our view: With the mid-term election settled, now is the time to close the embarrassment of loopholes in Maryland campaign finance rules

November 10, 2010

In law, there are loopholes — ambiguities that allow circumvention of rules — and there are outrageous loopholes that virtually nullify legal requirements. Maryland's campaign finance law has much of the former and is quickly approaching the latter.

Let's say, for instance, you are a fabulously wealthy businessman and wish to give a candidate for governor a lot more than the $4,000 to which you are restricted by law. No problem. There are any number of ways to circumvent the limit.

But here's the most galling one: Just file as a candidate for some minor elective office, Democratic State Central Committee, for instance. Donate $10 million to your campaign and then join the governor's slate of candidates. You are free to transfer the entire sum to your fellow candidate, and you can always drop out of the race yourself.

That may be the most appalling example of how Maryland campaign finance laws have fallen into disrepair, but it's not the only one. There are more holes in them than a wheel of Swiss Cheese left overnight in a West Baltimore alley.

Four years ago, prominent plaintiff's lawyer John P. Coale loaned Martin O'Malley $500,000 late in his ultimately successful bid to unseat Gov. Robert L. Ehrlich Jr. so the Democrat could buy TV ads in the closing days of the race. That final push was seen as critical to Mr. O'Malley's victory — and one might argue left him beholden to Mr. Coale, who is better known as the spouse of Greta Van Susteren.

Getting around campaign finance laws doesn't even require anything quite so dramatic. Donors need only form a limited liability corporation or LLC, a common arrangement in real estate. Companies can give money through multiple LLCs to not only avoid limits but to shield the true source of the funds.

As we've pointed out many times before, only a fool would break Maryland's campaign finance laws, as circumventing them is all too easy.

In September, Attorney General Douglas Gansler F. Gansler formed a bipartisan work group in consultation the Maryland Board of Elections to recommend new rules and propose legislation that would clarify the law. Mr. Gansler is the right person to pursue this, as many of the existing loopholes are enabled by years of legal opinions written by his office.

The timing is correct, too, as the weeks immediately after an election may be the only time when politicians aren't focused on their own fundraising needs. And the implications of the Supreme Court's ruling last year in the Citizens United case have now become more evident — it allowed interest groups to buy an astronomical number of attack ads.

Surely, Mr. Gansler's board can come up with a way to rein in the ever-expanding slate-based profit-sharing plan. Perhaps if candidates could only form a slate within a legislative district, the scale of the loophole wouldn't be quite so appalling. At the very least, candidates on a slate should be on the ballot (there was some sharing of funds by candidates after they lost in the primary).

Some loopholes may prove impossible to tackle. Revoking the LLC provision hasn't gotten far in Annapolis in recent years. And Republicans and Democrats aren't likely to see eye-to-eye on election law 100 percent of the time.

But even if the General Assembly finally embraces public financing in 2011 (offered, and rejected, as a modest, voluntary experiment in recent years), these changes will still be needed. In return, it may be time to loosen restrictions on individual contributions (currently $4,000 to a single candidate or $10,000 in aggregate).

Mr. Gansler wants the law to be clear and transparent. We hope for a bit more — some sensible reforms that keep the political playing field something close to fair and prevent special interests from thumbing their noses at restrictions. Voters deserve better.

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