September 1, 2017

Ethics hearing highlights ambiguity in public finance rules

In Albuquerque’s city hall earlier this week, dozens of people watched lawyers argue before an elections and ethics board over whether a city council candidate intentionally defrauded citizens of about $38,000.

City Council candidate Javier Benavidez qualified for public financing after his campaign collected almost 400 qualified contributions of $5 along with signatures from each contributor.

Prominent Albuquerque attorney Pat Rogers argued Benavidez purposefully allowed his campaign to forge signatures and falsify contributions and called the campaign’s actions a “very serious issue.”

In his opening statement, he accused Benavidez of “cheating.”

Rogers argued that Benavidez did not correctly collect contributions, and therefore defrauded taxpayers by using public money for his campaign.

Rogers is a former Republican National Committeeman and former go-to counsel for Gov. Susana Martinez. Benavidez is the former executive director of the SouthWest Organizing Project, a group that works on racial and economic justice issues.

An attorney for Benavidez argued that even if his campaign broke rules, it was unintentional.

One of the candidate’s lawyers, Molly Schmidt-Nowara, told the ethics board that the campaign never meant  to defraud anyone.

“Are there some errors? I think the [Albuquerque’s Office of the Inspector General] report shows there were,” Schmidt-Nowara said.

She called Rogers’ strategy “intimidating” and said it caused a “shock and awe effect.”

The city’s ethics board is not expected to make a decision until September 11, and both sides still have affidavits and written closing arguments to submit. But the deeper issue is the city’s murky public financing rules, which some critics say should be improved and clarified.

Benavidez, along with a handful of other city council candidates, opted to use public money to fund his campaign instead of relying on private campaign fundraising.

Candidates need to collect a certain number of $5 contributions from registered voters, along with their name, address and signature to qualify for public financing. The process proved difficult for some candidates, and all but one mayoral candidate steered away from public financing after they failed to collect enough contributions.

Rogers presented evidence he said showed that members of Benavidez’s campaign covered the $5 for some voters. He argued that money qualified as both a contribution to the campaign, and also an expenditure as it was paid by the campaign. Regardless of where the money came from and what agreements were made between voters and campaigners, the Albuquerque City Attorney’s office said the city election code does not adequately address if someone can loan $5 to a contributor or if it should be filed as a campaign loan, contribution or expenditure.

The Albuquerque Office of the Inspector General submitted its own investigation to the ethics board, which included input from an Assistant City Attorney John Dubois.

Dubois’ interpretation adds some clarification but also highlights the ambiguity in the city’s election code. According to the Inspector General report, Dubois said the code does not allow a candidate or a representative of the campaign to loan or gift the $5 contribution. However, the report said, “it is an undecided legal question whether a contributor can authorize anyone else to pay the contribution on behalf of the registered voter for convenience at time of signature.”

Rogers declined to speak with NM Political Report, but left a voicemail citing the open case.

On behalf of Benavidez, Schmidt-Nowara said city officials should now take a look at public financing rules and address some specifics.

“The city attorney’s input about provisions were telling,” Schmidt-Nowara said.”They did a good job expressing there was some real ambiguity.”

Almost a decade old, the city’s public financing rules haven’t changed much since its inception.

Common Cause New Mexico Executive Director Viki Harrison agreed the city’s public financing is ripe for updates. The Albuquerque City Council recently attempted to update the rules by allowing candidates to receive a little less than twice the funding they are now eligible to receive. Harrison said she’s been lobbying for more changes than just a money increase for five years, with little success. A measure to increase public financing failed to go before voters  last November after the Bernalillo County Commission said there wasn’t enough room on the ballot.

Public financing or tax dollars

Both nationally and in New Mexico, the idea of publicly financed campaigns is divisive. Proponents say it keeps special interests from bankrolling candidates, ideally ensuring the candidates are not beholden to anyone but the general public.

Mayoral candidate and New Mexico State Auditor Tim Keller is running his campaign with the idea that his campaign is only funded by public funds, and often says “how we get [to city hall] matters.”

Opposition to public financing, at least in New Mexico, comes from more than one point of view. Some say public financing is a misuse of tax dollars.

Libertarian city council candidate Paul Ryan McKenney previously told NM Political Report he doesn’t think taxes should go to finance candidates.

“In short, I think that tax dollars should be used to help people here in the city and not to run political campaigns,” McKenney said.

Other candidates criticized the public finance system saying it doesn’t do what it is supposed to.

Mayoral candidate Brian Colόn, for example, previously told NM Political Report “the system is completely broken.”

Keller has been criticized for running as a publicly financed candidate while also benefitting from an independent expenditure committee, similar to Political Action Committees in state and federal races, known as a Measure Finance Committee.

Last month, the Albuquerque Journal, in an editorial, cited the Keller measure finance committee as one reason “campaign financing doesn’t level [the] playing field.”

Regardless of the merits or faults of public financing, Albuquerque voters approved the public financing provision almost a decade ago.

Harrison, whose group is a proponent of public financing, said the responsibility to update the rules lays completely with the city council.

“The bottom line is, this has to be fixed,” Harrison said.

No easy fix

During the ethics hearing earlier this week, testimony and evidence showed that some people approached by Benavidez’s campaign said they did not have $5 to contribute. It’s unclear if those who were approached lacked the $5 completely or if they didn’t have the cash on hand. According to affidavits, campaign workers offered to pitch in their own money.

Qualifying contributions can be made with a credit card, check or cash. But, candidates who accept credit card contributions are responsible for setting up their own way of accepting payment. Even if a candidate accepts $5 contributions through a campaign website, the city election code requires contributors to sign in person.

Harrison said technology and federal laws have changed since Albuquerque passed its public financing rules. For example, Harrison said, the U.S. Supreme Court ruled on Citizens United v. Federal Election Commission after the city adopted public financing, but no major changes to Albuquerque’s public finance rules have been made since then.

The Albuquerque City Council has discussed public financing rules and proposed increasing how much a qualified candidate can receive from public funds.

Councilors Don Harris and Pat Davis* co-sponsored a measure to increase public financing to each qualified candidate, but disagreements between the Bernalillo County Commission and the City Council about ballot space essentially kept it off the ballot last year.

Both Harris and Davis both used public funds for their respective campaigns in the past.

Davis told NM Political Report fixing public financing will not be simple or easy and the council may have to “go back and look at a new public finance issue from scratch.”

But, Davis said, it will probably have to wait until after the city election on October 3.

“[Revisiting public financing rules] is something I would love to see us do with a new council in December,” Davis said.

Of course, if the ethics board rules in Benavidez’s favor and he wins the election on October 3, he could have a chance at revising the city’s election code.

Benavidez told NM Political Report if he is elected to the council he would push for a more progressive public financing program that provides voters with contribution vouchers.

“I’d go even further [than updating the rules] and push for a democracy dollars system like Seattle,” Benavidez said.
*Note: Pat Davis is the executive director of ProgressNow New Mexico. ProgressNow New Mexico helps find funding for NM Political Report. No one in the organization, including Davis, has any input in the editorial process of this or any other story.