GO Item2
July 20, 2017
Worksession
MEMORANDUM
July 18, 2017
TO:
FROM:
Government Operations and Fiscal Policy Committee
Robert H. Drummer, Senior Legislative
Attomeyf?lit)
Worksession:
Expedited Bill 25-17, Elections - Public Campaign Financing -
SUBJECT:
Amendments
Expedited Bill 25-17, Elections - Public Campaign Financing - Amendments, sponsored
by Councilmember Navarro, Vice President Riemer, and Councilmembers Katz, and Eirich, was
introduced on July 11. A public hearing was held on July 18.
Bill 25-17 would:
(1)
permit a candidate to correct a mistake in an application for certification within a
certain time;
(2)
clarify that a candidate may receive a matching public contribution during the
general election for certain unmatched qualifying contributions received during the
primary election; and
(3)
permit a candidate to use unspent funds returned to the County after an election as
a credit against any repayment required for a public contribution mistakenly
received.
Background
Bill 16-14, Elections - Public Campaign Financing, was enacted on September 30, 2014
and signed into law on October 6, 2014. Bill 16-14 established the first public campaign finance
system for County elections in Maryland.
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The law designates the Maryland State Board of
Elections to certify candidates and generally administer the public campaign financing system.
The Director of Finance is responsible for establishing a Public Election Fund and distributing the
public contributions to certified candidates. The Council has appropriated approximately $11
million to date for the Public Election Fund.
A candidate needs to obtain a specific number of small contributions from a County
resident of between $5 and $150 to qualify for public funding. Each of these qualifying
On July 3, 2017, the Howard County Council overrode the Executive's veto of a public campaign financing law that
will take effect for the 2022 elections.
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contributions must be received during the qualifying period. Section 16-18 defines the qualifying
period as:
Qualifying period means the period of time beginning on January 1 following the
last election for the office the candidate seeks and ending 45 days before the date
of the primary election. The qualifying period for a special election under Section
16-17 must be set by Council resolution.
A candidate for Executive must collect at least 500 qualifying contributions and an aggregate total
of at least $40,000 to qualify. A candidate for At-Large Councilmember must collect at least 250
qualifying contributions and an aggregate total of at least $20,000. A candidate for District
Councilmember must collect at least 125 qualifying contributions and an aggregate total of at least
$10,000.
A candidate for Executive certified to receive public funding will be eligible for a matching
contribution of $6 for each dollar of a qualifying contribution for the first $50 of the contribution;
$4 for each dollar of the second $50; and $2 for each dollar of the third $50. The match for a
candidate for Councilmember is $4 for each dollar of the first $50; $3 for each dollar of the second
$50; and $2 for each dollar of the third $50. For example, a candidate for Executive who collects
3 qualifying contributions of $50 will receive $900 in matching funds and a candidate who collects
1 qualifying contribution of $150 would receive $600 in matching funds. The maximum public
contribution for a candidate for Executive is $750,000 for the primary and $750,000 for the general
election. The maximum public contribution for each election for At-Large Councilmember is
$250,000 and the maximum public contribution for each election for District Councilmember is
$125,000.
A candidate who voluntarily accepts a public contribution must pay for all campaign
expenses with the qualifying contributions, the matching public contributions, and a personal loan
from the candidate and the candidate's spouse of no more than $6000 from each.
The Executive adopted regulations implementing this law that were approved by the
Council on October 6, 2015. The State Board of Elections Summary Guide for candidates can be
found at:
https://www.campaignfinance.maryland.gov/PEF Summary Guide EDITION MAY 2017 fin
al.pdf
The Council's website contains information about the public campaign system at:
http://www.montgomerycountymd.gov/COUNCIL/public campaign finance.html
Government Operations and Fiscal Policy Committee Worksession
On June 22, 2017, the Government Operations and Fiscal Policy Committee received an
update on the status of the public campaign finance system from David Crow, Finance, and Jared
DeMarinis, Director - Division of Candidacy and Campaign Finance for the State Board of
Elections. See ©6-7. The Committee discussed several issues that have arisen as the system goes
through its initial election. The Committee decided to introduce legislation to resolve these
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outstanding issues for the 2018 election cycle.
outstanding issues.
Expedited Bill 25-17 would resolve these
Public Hearing
The lone speaker, Sharon
L.
Cohen, opposed the Bill. See ©8-13. Ms. Cohen is the Vice-
Chair of the Committee to Recommend Funding for the Public Election Fund, but she testified as
an individual. Ms. Cohen argued that it is inappropriate to change the rules in the middle of the
game and that the Bill would benefit those candidates seeking public campaign financing. Ms.
Cohen also alleged that Councilmembers who are running for a County office in the next election
have a conflict of interest.
Issues
1.
Is it appropriate to enact changes to the public campaign finance system after candidates
have already entered the system?
A significant change to the system at this late date would be unfair to candidates. For
example, any change in the number of qualifying contributions required, the amount of the match,
or the limits on the amount of contributions received would be significant changes to the system
that should not be made for the 2018 election. However, the Bill would not make a significant
change to the system that is likely to unduly help or hurt a candidate. Each issue was raised by the
State Board of Elections or the Department of Finance at the GO Committee discussion on June
22. Each of these issues was subject to different interpretations under the current law that can
either be resolved by a Court or by legislative amendment. Resolution of each issue by a legislative
Council staff
amendment is preferable because speed of clarification is important.
recommendation:
clarify these issues by legislation.
2. Does a Councilmember who plans to run for County office in 2018 have a conflict of
interest in acting on this Bill?
The County Ethics Law governs conflicts of interest. Section 19A-11 provides:
Sec.19A-11. Participation ofpublic employees.
(a)
Prohibitions. Unless permitted by a waiver, a public employee must not participate
in:
(I)
any matter that affects, in a manner distinct from its effect on the public
generally, any:
(A)
property in which the public employee holds an economic interest;
(BJ
business in which the public employee has an economic interest; or
(C)
property or business in which a relative has an economic interest,
if
the public employee knows about the relative's interest;
(2)
any matter
if
the public employee knows or reasonably should know that
any party to the matter is:
(A)
any business in which the public employee has an economic interest
or is an officer, director, trustee, partner, or employee;
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(BJ
(CJ
(D)
(E)
(F)
any business in which a relative has an economic interest,
if
the
public employee knows about the interest;
any business with which the public employee has an active
application, is negotiating, or has any arrangement for prospective
employment;
·
any business that is considering an application from, negotiating
with, or has an arrangement with a relative about prospective
employment,
if
the public employee knows about the application,
negotiations, or the arrangement;
any business or individual that is a party to an existing contract with
the public employee or a relative,
if
the contract could reasonably
result in a conflict between private interests and official duties;
any business that is engaged in a transaction with a County agency
another business owns a direct interest in the business;
the public employee or a relative has a direct interest in the
other business; and
the public employee reasonably should know of both direct
(iii)
interests;
any business that is subject to regulation by the agency with which
the public employee is affiliated
if:
(i)
another business owns a direct interest in the business;
(ii)
the public employee or a relative has a direct interest in the
other business; and
(iii)
the public employee reasonably should know of both direct
interests; or
any creditor or debtor of the public employee or a relative
if
the
creditor or debtor can directly and substantially affect an economic
interest of the public employee or relative.
(i)
(ii)
if:
(G)
(HJ
(b)
Exceptions.
(1)
If
a disqualification under subsection (a) leaves less than a quorum capable
ofacting, or
if
the disqualified public employee is required by law to act or
is the only person authorized to act, the disqualified public employee may
participate or act
if
the public employee discloses the nature and
circumstances ofthe conflict.
*
*
*
Section 19A-1 l prohibits participating in a matter that would provide a financial benefit to
the public employee.
It
prohibits acting on a matter that would financially benefit the employee
or a close relative or a business owned by the employee or a close relative. These provisions do
not easily apply to voting on a Bill that governs the public financing system for the next election
because running for office is not' a business. In fact, voting on the original Bill raised a similar
potential issue for each Councilmember. Even if§ 19A-11 could be interpreted to raise a conflict
of interest with this vote, the exception would apply because Councilmembers are the only public
employees authorized to vote on legislation.
Council staff recommendation:
Councilmembers
who are candidates for County elected office in 2018 are eligible to act on this Bill.
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3. Should a candidate be permitted to correct a mistake in an application for certification
within a certain time?
Section 16-22(c) permits a candidate to submit only one application for certification. For
example, if a candidate for Executive submits 505 qualifying contributions for certification and
the State Board disqualifies 6 due to errors in the name or residence, the candidate would be barred
from receiving any matching contributions. The Bill would avoid this harsh result by permitting
a candidate to correct a mistake within the earlier of 10 business days or the end of the qualifying
period.
The potential loss of the right to participate in the system due to an easily correctible
mistake in the submission is too harsh a punishment that would discourage candidates from using
the public campaign financing system.
Council staff recommendation:
approve the amendment.
4. Should a candidate receive a matching public contribution during the general election for
an unmatched qualifying contribution received after reaching the maximum contribution
during the primary election?
Once a certified candidate receives the maximum public contribution for the primary, the
candidate may receive additional qualifying contributions before the primary election. Since the
candidate has already received the maximum public contribution, these additional qualifying
contributions would not be matched. It is unclear if the candidate is eligible to receive matching
public contributions for these unmatched qualifying contributions during the general election
campaign if the candidate wins the primary election. Bill 25-17 would clarify that the candidate
would receive matching public contributions during the general election campaign for these
unmatched qualifying contributions if otherwise eligible.
A certified candidate can choose to save some of his or her public contributions received
for the primary for later use in the general election under current law. This amendment would be
consistent with that option. Without the right to use these unmatched qualifying contributions if
the candidate wins the primary, a candidate would be forced to either turn down additional
qualifying contributions after reaching the cap until the general election campaign or forgo a
possible match for them. Although one can argue that a resident who gives a candidate a qualifying
contribution during the primary election campaign may not choose to support that candidate in the
general election, the candidate can use that qualifying contribution for the general election
campaign even if it is not matched. Permitting the candidate to use these unmatched qualifying
contributions to receive a public contribution during the general election campaign, if otherwise
eligible, encourages candidates to use the public campaign financing system.
Council staff
recommendation:
approve the amendment.
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5. Should a candidate be permitted to use unspent funds returned to the County after an
election as a credit against any repayment required for a public contribution mistakenly
received?
The regulations require a candidate who receives matching public contributions in error to
return these funds. The law also requires a candidate to return unspent money to the Public
Election Fund after the election.
It
is unclear if a candidate who received money in error can pay
this money back with unspent money the candidate would otherwise be required to return. Bill
25-17 would clarify that the candidate would receive a credit for returned unspent funds against
any repayment required for a public contribution received in error.
This amendment would result in full reimbursement to the Public Election Fund for money
disbursed in error without penalizing a candidate for the erroneous disbursement.
Council staff
recommendation:
approve the amendment.
This packet contains:
Expedited Bill 25-17
Legislative Request Report
State Board Status Update - June 22, 2017
Testimony of Sharon L. Cohen
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Expedited Bill No.
25-17
Concerning: Elections - Public Campaign
Financing - Amendments
Revised: June
26, 2017
Draft No.
_1_
Introduced:
July
11, 2017
Expires:
January
11, 2019
Enacted: _ _ _ _ _ _ _ _ __
Executive: _ _ _ _ _ _ _ _ __
Effective: _ _ _ _ _ _ _ _ __
Sunset Date: .......,_,_N""on..,_,e<--------
Ch. _ _ , Laws of Mont. Co. _ _ __
COUNTY COUNCIL
FOR MONTGOMERY COUNTY, MARYLAND
Lead Sponsors: Councilmember Navarro, Vice President Riemer and Councilmembers Katz and
Elrich
AN EXPEDITED ACT
to:
(1)
permit a candidate to correct a mistake in an application for certification within a
certain time;
(2)
clarify
that a candidate may receive a matching public contribution during the general
election for certain unmatched qualifying contributions received during the primary
election;
(3)
permit a candidate to use unspent funds returned to the County after an election as a
credit against any repayment required for a public contribution mistakenly received;
and
(4)
generally amend the law concerning public campaign financing for County elections.
By amending
Montgomery County Code
Chapter 16, Elections
Section 16-22 and 16-23
Boldface
Underlining
[Single boldface brackets]
Double underlining
[[Double boldface brackets]]
* * *
Heading or defined term.
Added to existing law by original bill.
Deleted.from existing law by original bill.
Added by amendment.
Deletedfrom existing law or the bill by amendment.
Existing law unaffected by bill.
The County Council for Montgomery County, Maryland approves the following Act:
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EXPEDITED BILL
NO. 25-17
1
Sec.
1.
Sections 16-22 and 16-23 are amended as follows:
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3
4
16-22. Board determination.
(a)
The Board must certify an applicant candidate if the Board finds that the
candidate has received the required number of qualifying contributions
and the required aggregate total dollars for the office no later than 10
business days after receiving:
( 1)
a declaration from the candidate agreeing to follow the regulations
governing the use of a public contribution;
(2)
a campaign finance report that includes:
(A)
(B)
a list of each qualifying contribution received;
a list of each expenditure made by the candidate during the
qualifying period; and
(C)
the receipt associated with each contribution and
expenditure; and
(3)
a certificate of candidacy for a covered office.
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6
7
8
9
10
11
12
13
14
15
16
17
18
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(b)
(
c)
The decision by the Board whether to certify a candidate is final.
A candidate may submit only one application for certification for any
election. A candidate may correct any mistakes in the application for
certification within the earlier of:
20
21
ill
10 business days after receiving notice that the Board denied the
application; or
22
23
24
ru
(
d)
the end of the qualifying period.
If
the Board certifies a candidate, the Board must authorize the Director
to disburse a public contribution to the candidate's publicly funded
campaign account.
25
26
16-23. Distribution of public contribution.
*
*
*
27
r:;\
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EXPEDITED BILL
No.
25-17
1
2
3
4
(h)
A participating candidate must submit a receipt for each ·qualifying
contribution to the Board to receive a public contribution. The Director
must deposit the appropriate public contribution into a participating
candidate's publicly funded campaign account within 3 business days
after the Board authorizes the public contribution.
5
6
7
(i)
A candidate may receive £! matching public contribution during the
general election for an unmatched qualifying contribution received
during the primary election after the candidate has received the maximum
public contribution for the primary election if the candidate is otherwise
eligible to receive matching public contributions during the general
election.
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9
10
11
12
13
14
15
16
17
18
ill
If the Director mistakenly distributes£! public contribution to£! candidate
greater than the candidate was entitled to receive, the candidate must
repay the funds mistakenly distributed within~ business days after being
notified of the mistake. Any unspent funds returned to the County after
an election may be used as £! credit against any repayment required for £!
public contribution mistakenly received.
.(k}
Consumer Price Index adjustment.
The Chief Administrative Officer
must adjust the public contribution limits established in Subsection (a)(3)
and the eligible contribution limit established in Subsection (c), effective
July 1, 2018, and July 1 of each subsequent fourth year, by the annual
average increase, if any, in the Consumer Price Index for the previous 4
calendar years. The Chief Administrative Officer must calculate the
adjustment to the nearest multiple of 10 dollars, and must publish the
amount of this adjustment not later than March 1 of each fourth year.
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Sec. 2.
Expedited Effective Date.
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The Council declares that this legislation is necessary for the immediate
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EXPEDITED BILL
No. 25-17
1
2
3
protection of the public interest. This Act takes effect on the date on which it becomes
law.
Approved:
4
Roger Berliner, President, County Council
5
Approved:
Date
6
Isiah Leggett, County Executive
7
Date
This is a correct copy ofCouncil action.
8
Linda M. Lauer, Clerk of the Council
Date
w
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LEGISLATIVE REQUEST REPORT
Expedited Bill 25-17
Elections
-
Public Campaign Financing
-
Amendments
DESCRIPTION:
Bill 25-17 would:
(1)
permit a candidate to correct a mistake in an application for
certification
within
a certain time;
(2)
clarify that a candidate may receive a matching public
contribution during the general election for certain unmatched
qualifying contributions received during the primary election;
and
(3)
permit a candidate to use unspent funds returned to the County
after an election as a credit against any repayment required for
a public contribution mistakenly received.
PROBLEM:
The issues addressed in the Bill arose during the initial
implementation of the Public Campaign Financing Law.
GOALS AND
To resolve the outstanding issues in the Law.
OBJECTIVES:
COORDINATION:
Finance, County Attorney
FISCAL IMPACT:
Office of Management and Budget, Finance
ECONOMIC
IMPACT:
EVALUATION:
EXPERIENCE
ELSEWHERE:
SOURCE OF
INFORMATION:
To be determined.
NIA
NIA
Robert H. Drummer, Senior Legislative Attorney
APPLICATION
WITHIN
MUNICIPALITIES:
Not applicable
PENALTIES:
NI
A
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MARYLAND
STATE BOARD OF ELECTIONS
P.O. BOX 6486, ANNAPOLIS, MD 21401-0486
David
J.
McManus, Chairman
Patrick
J.
Hogan, Vice Chairman
Michael R. Cogan
Kelley Howells
Gloria Lawlah
PHONE (410) 269-2840
Linda H. Lamone
Administrator
Nikki
Charlson
Deputy Administrator
June 22, 2017
Montgomery County Council
Government Operations and Fiscal Policy Committee
Montgomery County Public Election Fund
Current Status of the Program:
The Montgomery law was the model for Howard County to implement its public
financing program.
17 candidates have filed a declaration of intent to participate.
The first day to file a report for certification is July 4.
Software changes have been made and implemented to receive the additional
requirements necessary to receive reports and calculate the public contribution.
A Summary Guide has been published detailing the program requirements and including
a "how to" on filing reports.
A webinar is scheduled for July 11- a powerpoint slideshow will be provided.
Additionally, the webinar will be recorded and published for others to watch at their
own convenience.
Resources:
Current resources are spread thin.
The county should provide for sufficient personnel to administer and implement
outreach, coordinate between the Committee to Recommend Funding for the Public
Election Fund, SBE and the Department of Finance, and answer questions from
candidates and the public.
Additional resources are needed for any post-election audit. The Department of
Finance should be the lead in conducting any audit of public finances received.
Legislative Fixes:
As the program gains more and more participants, new issues have arisen that require
legislative action for the next election to provide clarity.
Here are some of the issues that the Department of Finance and SBE have identified:
o What is the definition of a county resident? Is there a time limit needed to
reside in-County in order be considered a county reside.nt?
o Are there any violations that would remove a candidate from the program or
can a candidate remedy the violation and remain a certified candidate?
• Who determines what these violations are and when one is
committed?
FAX (410) 974- 2019
Toll Free Phone Number (800) 222-8683
h+-+-'"'•IJ ......... ,
,...1,......,._,,..,. __ ........... _,, __ _. --··
151 West Street Suite 200
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o
o
o
Do qualifying contributions received and used in a primary election but not
matched due to a candidate achieving the maximum threshold remain eligible
for matching for the general election?
Do contested elections include write-in candidates or only candidates listed on
the ballot?
Personal liability for candidates, treasurers, and chairs and whether there are
any penalties for violations committed by contributors.
(j)
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1l
Testimony from Sharon L. Cohen
Resident of Potomac, MD
Before The Montgomery County Council on
Expedited Bill 25-17
-
Public Campaign Finance Amendments
July 18, 2017
Good afternoon my name is Sharon Cohen. I am a life long county resident from
Potomac, Maryland. By way of background, I am a Member of the Montgomery
County Republican Central Committee from Legislative District 15, and also serve
as the Vice-Chair of the Council's Committee to Recommend Funding for the
Public Election Fund (PEF). Having spent over two years examining the PEF
program along side other PEF Committee members, I have a broad understanding
of this new program. But today I testify solely on my on behalf, and I am speak in
strong opposition to Expedited bill 25-17. I ask that my full written statement be
included in the record.
I will be brief and to the point. Changing the PEF law when we are three-quarters
through the current the election cycle is unfair and the law changes under
consideration today creates a potential conflict of interest on the Council's part.
As you know, 2018 candidates for county elected office have already filed. Some
candidates choose to file and qualify as PEF candidates. Others choose NOT to
qualify for PEF. PEF and non-PEF candidates both have already started collecting
campaign contributions for the 2018 election, and at least one current
Councilmemberstarted collecting qualifying PEF contributions as far back as the
fall of 2016.
Perhaps non-PEF candidates looked at the law and the legally strict requirements
-- including the potential for disqualification and other workability issues -- and
determined the risks and challenges were too high for the benefit of receiving
matching funds. Perhaps because there was so little public information on the
MD Board of Elections website, or the County's website for that matter, about the
PEF program until early 2017, such candidates did not have easy public access or
the correct information about the law, the regulations, FAQs, how to file and
required forms for the program. Lacking that information, perhaps it was just
easier to file as a non-PEF candidate. Who knows?
Regardless of the reasons, 2018 candidates have ALREADY made decisions to run
as PEF candidates or NOT. Candidates are ALREADY collecting campaign.
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contributions. Further, perhaps some prospective candidates decided to NOT run
at all once they looked at the detailed legal rules and regulations for running as a
PEF candidate.
The primary election is now less than one year away and the filing deadline is
about 6 months from now. Actually, we are in the final quarter of the 2018
election cycle that began on January 1, 2015. Changing the PEF law mid-stream
goes against the rules of fair play. Changing the PEF law now in the third quarter
of the 2018-election cycle creates unfair advantage for PEF candidates!
Expedited bill 25-17 would:
1) permit a candidate to correct a mistake when filing for certification
2) "clarify" that a candidate may receive matching public contribution during
the general election for certain unmatched qualifying contributions
received during the primary election; and
3) permit a candidate to use unspent funds returned to the County after an
election as a credit against any repayment required for a public
contribution mistakenly received
Each of these law changes weakens the PEF law and its regulations as currently
enacted. Let's remember first and foremost the PEF program spends taxpayer
funds! At this time, the Council has allocated $11 million in taxpayer funds to the
PEF pot, and more funds could be added by the Council next year in the 2018_
budget process or via a supplemental appropriation at any time. Spending
taxpayer money on county elections MUST include strict rules and clear
consequences - such as disqualification from the program - otherwise funds
could be disbursed inappropriately.
Keeping the high bar consequence of disqualification from the program is a must.
Candidates receiving taxpayer dollars in matching funds must have this penalty of
disqualification placed on them so that each campaign establishes adequate
auditing procedures in order to validate campaign contributions BEFORE they are
submitted to the Maryland Board of Elections. Candidates should not be given a
pass for sloppy record keeping.
More importantly, when the Council considered and passed the PEF program in
2014 the original text of the PEF bill limited qualifying contributions from
individuals to those that were registered County voters. At that time, the
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Maryland Board of Elections advised the Council it had no way to verify residency
because their only source of information is the voter rolls. Instead, the Council
ignored the advice of the Board of Elections to keep the "registered voter
limitation" and went with the term resident, which I point out is not defined in
statute. This means that if the Maryland Board of Elections cannot verify
residency, then each PEF campaign MUST assume this responsibility; otherwise
the PEF program is potentially ripe for fraud. And the consequence of
disqualification from the PEF program is the ONLY insurance policy taxpayers have
that the candidates themselves will take the necessary steps to validate residency
of those contributing, as well as assure individual contributions are validly
collected, aggregated, and reported.
The aggregation of an individual's contributions is another key accounting and
records keeping issue that PEF candidates MUST address before submitting to
qualify. The PEF matching ratios are tied to the amount contributed, with a higher
matching rate for lower dollar contributions. For County Executive, for example,
contributions $50.00 and under are matched at 6 to one or $300.00 is matched
for one $50.00 contribution. Between $50.00 and $100.00 the match rate is 4 to
1 and the match rate is 2 to 1 for amounts between $100.00 to $150.00. If an
individual gave $150.00 the total match would be $600.00 for a County Executive
candidate that qualified. If however, that individual contributed in three
installments of $50.00 each under the names: Bobby Smith, then Robert Smith
and then Rob Smith without proper aggregation of all three separate
contributions, and if this error was NOT caught by the Maryland Board of
Elections, the matching pay out would be $900.00 or 50 percent MORE than the
candidate should have received. To prevent these errors from the outset, each
campaign MUST have record-keeping systems in place and verification.procedures
to properly add up/aggregate contributions from the same individual.
Yes this is not easy, but in my opinion the verification process is necessary. If
candidates expect to receive taxpayer funds for their elections then they have a
fiduciary responsibility to make sure their campaigns can validly collect, aggregate
and report such contributions. Indeed honest mistakes will be made and some
contributions will be disqualified and NOT matched. Therefore, each candidate
should collect above and beyond the mere threshold limit to qualify to handle
simple errors.
This is done in other arenas. For example, when collecting signatures
a
petition to add a question to the ballot everyone knows you have to collect
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significantly more signatures than required as some will be disqualified. Further
in the signature petition process after such signatures are submitted, if there are
not enough due to disqualification, the petition sponsors cannot go back after
filing and
11
cure or edit" what was submitted. What is submitted is final and either
there are sufficient signatures to put the question on the ballot OR natl The same
clear approach, should apply to the PEF program. We should think of this like a
final exam, once you submit your answers (in the case file to qualify) that should
be it and there should be no post-submission redo.
The second law change under consideration - to
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clarify" that a candidate may
receive matching public contribution during the general election for certain
unmatched qualifying contributions received during the primary election - is NOT
a clarification. This is a major policy change and one that benefits well-
established candidates, major party candidates and incumbents. If adopted this
law change would allow PEF candidates to collect and spend qualifying
contributions in the primary election beyond those that could be matched
11
because the upper pay out limit was reached, and then bank the value" those
contributions for matching in the general election.
This significant policy change, if adopted ignores the difference between the
primary and general elections. In the primary election, one runs to be elected as
the nominee of one's party. Lesser-known or established parties may have fewer
candidates running in the primary, fewer that qualify for PEF in the primary.
Consequently, it's doubtful that many would have sufficient
11
carry forward
contributions," compared to well known, established, or incumbents candidates.
11
This so-called clarification" thereby substantially disadvantages candidates in the
general election who did not come close to receiving the max pay out in the
primary.
If the Council really wants to "increase opportunities for more residents to run for
office," as noted as one of the goals of the PEF program on the County's website,
then the general election should be a new race between nominees of various
parties and NOT put one party's nominee ahead of the gate because they were
able to bank and carry forward primary contributions into the general for PEF
matching.
The final law change sought at this time -- permitting a candidate to use unspent
funds returned to the County after an election as a credit against any repayment
required for a public contribution mistakenly received- is wholly inappropriate.
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The law requires unspent funds to be returned to the PEF program within 30 days
post election. Those funds returned obviously include matching funds. But
allowing those returned funds -- that include matching funds -- to be a credit
against any repayment required for a public contribution mistakenly received,
smacks of allowing ill-gotten gains to pay for a fine.
During the June 22 Government Operations Committee hearing on the PEF
program, this matter was discussed. Staff to the County Executive noted that one
should not be able to use matched funds to pay back funds received in excess of
what should have been paid/matched because the original error must be
remedied, and "public dollars cannot be sent back to pay for your mistake." But
this law change would do just that, the language in Expedited bill 25-17 would
allow public dollars to cover a campaign's mistake. So again, the Council wants to
reduce the onus put on PEF candidatesto have systems in place to validly collect,
aggregate, and report qualifying PEF contributions before they are submitted.
Keeping the onus on PEF candidates is critical to protecting taxpayers $11 million
that goes to pay for County elections because there is no required audit under the
PEF law. Further, there are no funds or staffing at the County level to audit post
election or, more importantly, in real time during the election when matching
funds are dispersed. Other than the Maryland Board of Elections finding an error
here and there OR if citizens groups examine every contribution, such mistakes
may not be found at all.
Further, I ask if the Council identifies additional problems or challenges with the
PEF law, how many more expedited bills will the Council attempt to move
between now and the 2018 Primary or General Election? Why just these changes
before us today? Where does this end?
Many of you seek to qualify as PEF candidates for re-election or election to higher
office in the County and are undoubtedly now confronted with some of the
challenges of the PEF program that you yourselves created and enacted into law
in 2014. Now you want a redo, You want to make it easier on yourselves as PEF
candidates to qualify for matching funds -- which I point out are taxpayer dollars
to the tune of $11 million.
I argue the time for a redo is after the 2018 election and NOT when we are three-
quarters through the election cycle. Making changes mid-cycle is unfair pure and
simple. The Council's move to enact law changes now that that benefit your own
nd
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campaigns as PEF candidates -- making it easier for you receive matching funds
from
$11
million pot of tax payer funds -- creates a conflict of interest on your
part.
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GO Item2
July 20, 2017
Worksession
MEMORANDUM
July 18, 2017
TO:
FROM:
Government Operations and Fiscal Policy Committee
Robert H. Drummer, Senior Legislative
Attomeyf?lit)
Worksession:
Expedited Bill 25-17, Elections - Public Campaign Financing -
SUBJECT:
Amendments
Expedited Bill 25-17, Elections - Public Campaign Financing - Amendments, sponsored
by Councilmember Navarro, Vice President Riemer, and Councilmembers Katz, and Eirich, was
introduced on July 11. A public hearing was held on July 18.
Bill 25-17 would:
(1)
permit a candidate to correct a mistake in an application for certification within a
certain time;
(2)
clarify that a candidate may receive a matching public contribution during the
general election for certain unmatched qualifying contributions received during the
primary election; and
(3)
permit a candidate to use unspent funds returned to the County after an election as
a credit against any repayment required for a public contribution mistakenly
received.
Background
Bill 16-14, Elections - Public Campaign Financing, was enacted on September 30, 2014
and signed into law on October 6, 2014. Bill 16-14 established the first public campaign finance
system for County elections in Maryland.
1
The law designates the Maryland State Board of
Elections to certify candidates and generally administer the public campaign financing system.
The Director of Finance is responsible for establishing a Public Election Fund and distributing the
public contributions to certified candidates. The Council has appropriated approximately $11
million to date for the Public Election Fund.
A candidate needs to obtain a specific number of small contributions from a County
resident of between $5 and $150 to qualify for public funding. Each of these qualifying
On July 3, 2017, the Howard County Council overrode the Executive's veto of a public campaign financing law that
will take effect for the 2022 elections.
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contributions must be received during the qualifying period. Section 16-18 defines the qualifying
period as:
Qualifying period means the period of time beginning on January 1 following the
last election for the office the candidate seeks and ending 45 days before the date
of the primary election. The qualifying period for a special election under Section
16-17 must be set by Council resolution.
A candidate for Executive must collect at least 500 qualifying contributions and an aggregate total
of at least $40,000 to qualify. A candidate for At-Large Councilmember must collect at least 250
qualifying contributions and an aggregate total of at least $20,000. A candidate for District
Councilmember must collect at least 125 qualifying contributions and an aggregate total of at least
$10,000.
A candidate for Executive certified to receive public funding will be eligible for a matching
contribution of $6 for each dollar of a qualifying contribution for the first $50 of the contribution;
$4 for each dollar of the second $50; and $2 for each dollar of the third $50. The match for a
candidate for Councilmember is $4 for each dollar of the first $50; $3 for each dollar of the second
$50; and $2 for each dollar of the third $50. For example, a candidate for Executive who collects
3 qualifying contributions of $50 will receive $900 in matching funds and a candidate who collects
1 qualifying contribution of $150 would receive $600 in matching funds. The maximum public
contribution for a candidate for Executive is $750,000 for the primary and $750,000 for the general
election. The maximum public contribution for each election for At-Large Councilmember is
$250,000 and the maximum public contribution for each election for District Councilmember is
$125,000.
A candidate who voluntarily accepts a public contribution must pay for all campaign
expenses with the qualifying contributions, the matching public contributions, and a personal loan
from the candidate and the candidate's spouse of no more than $6000 from each.
The Executive adopted regulations implementing this law that were approved by the
Council on October 6, 2015. The State Board of Elections Summary Guide for candidates can be
found at:
https://www.campaignfinance.maryland.gov/PEF Summary Guide EDITION MAY 2017 fin
al.pdf
The Council's website contains information about the public campaign system at:
http://www.montgomerycountymd.gov/COUNCIL/public campaign finance.html
Government Operations and Fiscal Policy Committee Worksession
On June 22, 2017, the Government Operations and Fiscal Policy Committee received an
update on the status of the public campaign finance system from David Crow, Finance, and Jared
DeMarinis, Director - Division of Candidacy and Campaign Finance for the State Board of
Elections. See ©6-7. The Committee discussed several issues that have arisen as the system goes
through its initial election. The Committee decided to introduce legislation to resolve these
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outstanding issues for the 2018 election cycle.
outstanding issues.
Expedited Bill 25-17 would resolve these
Public Hearing
The lone speaker, Sharon
L.
Cohen, opposed the Bill. See ©8-13. Ms. Cohen is the Vice-
Chair of the Committee to Recommend Funding for the Public Election Fund, but she testified as
an individual. Ms. Cohen argued that it is inappropriate to change the rules in the middle of the
game and that the Bill would benefit those candidates seeking public campaign financing. Ms.
Cohen also alleged that Councilmembers who are running for a County office in the next election
have a conflict of interest.
Issues
1.
Is it appropriate to enact changes to the public campaign finance system after candidates
have already entered the system?
A significant change to the system at this late date would be unfair to candidates. For
example, any change in the number of qualifying contributions required, the amount of the match,
or the limits on the amount of contributions received would be significant changes to the system
that should not be made for the 2018 election. However, the Bill would not make a significant
change to the system that is likely to unduly help or hurt a candidate. Each issue was raised by the
State Board of Elections or the Department of Finance at the GO Committee discussion on June
22. Each of these issues was subject to different interpretations under the current law that can
either be resolved by a Court or by legislative amendment. Resolution of each issue by a legislative
Council staff
amendment is preferable because speed of clarification is important.
recommendation:
clarify these issues by legislation.
2. Does a Councilmember who plans to run for County office in 2018 have a conflict of
interest in acting on this Bill?
The County Ethics Law governs conflicts of interest. Section 19A-11 provides:
Sec.19A-11. Participation ofpublic employees.
(a)
Prohibitions. Unless permitted by a waiver, a public employee must not participate
in:
(I)
any matter that affects, in a manner distinct from its effect on the public
generally, any:
(A)
property in which the public employee holds an economic interest;
(BJ
business in which the public employee has an economic interest; or
(C)
property or business in which a relative has an economic interest,
if
the public employee knows about the relative's interest;
(2)
any matter
if
the public employee knows or reasonably should know that
any party to the matter is:
(A)
any business in which the public employee has an economic interest
or is an officer, director, trustee, partner, or employee;
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(BJ
(CJ
(D)
(E)
(F)
any business in which a relative has an economic interest,
if
the
public employee knows about the interest;
any business with which the public employee has an active
application, is negotiating, or has any arrangement for prospective
employment;
·
any business that is considering an application from, negotiating
with, or has an arrangement with a relative about prospective
employment,
if
the public employee knows about the application,
negotiations, or the arrangement;
any business or individual that is a party to an existing contract with
the public employee or a relative,
if
the contract could reasonably
result in a conflict between private interests and official duties;
any business that is engaged in a transaction with a County agency
another business owns a direct interest in the business;
the public employee or a relative has a direct interest in the
other business; and
the public employee reasonably should know of both direct
(iii)
interests;
any business that is subject to regulation by the agency with which
the public employee is affiliated
if:
(i)
another business owns a direct interest in the business;
(ii)
the public employee or a relative has a direct interest in the
other business; and
(iii)
the public employee reasonably should know of both direct
interests; or
any creditor or debtor of the public employee or a relative
if
the
creditor or debtor can directly and substantially affect an economic
interest of the public employee or relative.
(i)
(ii)
if:
(G)
(HJ
(b)
Exceptions.
(1)
If
a disqualification under subsection (a) leaves less than a quorum capable
ofacting, or
if
the disqualified public employee is required by law to act or
is the only person authorized to act, the disqualified public employee may
participate or act
if
the public employee discloses the nature and
circumstances ofthe conflict.
*
*
*
Section 19A-1 l prohibits participating in a matter that would provide a financial benefit to
the public employee.
It
prohibits acting on a matter that would financially benefit the employee
or a close relative or a business owned by the employee or a close relative. These provisions do
not easily apply to voting on a Bill that governs the public financing system for the next election
because running for office is not' a business. In fact, voting on the original Bill raised a similar
potential issue for each Councilmember. Even if§ 19A-11 could be interpreted to raise a conflict
of interest with this vote, the exception would apply because Councilmembers are the only public
employees authorized to vote on legislation.
Council staff recommendation:
Councilmembers
who are candidates for County elected office in 2018 are eligible to act on this Bill.
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3. Should a candidate be permitted to correct a mistake in an application for certification
within a certain time?
Section 16-22(c) permits a candidate to submit only one application for certification. For
example, if a candidate for Executive submits 505 qualifying contributions for certification and
the State Board disqualifies 6 due to errors in the name or residence, the candidate would be barred
from receiving any matching contributions. The Bill would avoid this harsh result by permitting
a candidate to correct a mistake within the earlier of 10 business days or the end of the qualifying
period.
The potential loss of the right to participate in the system due to an easily correctible
mistake in the submission is too harsh a punishment that would discourage candidates from using
the public campaign financing system.
Council staff recommendation:
approve the amendment.
4. Should a candidate receive a matching public contribution during the general election for
an unmatched qualifying contribution received after reaching the maximum contribution
during the primary election?
Once a certified candidate receives the maximum public contribution for the primary, the
candidate may receive additional qualifying contributions before the primary election. Since the
candidate has already received the maximum public contribution, these additional qualifying
contributions would not be matched. It is unclear if the candidate is eligible to receive matching
public contributions for these unmatched qualifying contributions during the general election
campaign if the candidate wins the primary election. Bill 25-17 would clarify that the candidate
would receive matching public contributions during the general election campaign for these
unmatched qualifying contributions if otherwise eligible.
A certified candidate can choose to save some of his or her public contributions received
for the primary for later use in the general election under current law. This amendment would be
consistent with that option. Without the right to use these unmatched qualifying contributions if
the candidate wins the primary, a candidate would be forced to either turn down additional
qualifying contributions after reaching the cap until the general election campaign or forgo a
possible match for them. Although one can argue that a resident who gives a candidate a qualifying
contribution during the primary election campaign may not choose to support that candidate in the
general election, the candidate can use that qualifying contribution for the general election
campaign even if it is not matched. Permitting the candidate to use these unmatched qualifying
contributions to receive a public contribution during the general election campaign, if otherwise
eligible, encourages candidates to use the public campaign financing system.
Council staff
recommendation:
approve the amendment.
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5. Should a candidate be permitted to use unspent funds returned to the County after an
election as a credit against any repayment required for a public contribution mistakenly
received?
The regulations require a candidate who receives matching public contributions in error to
return these funds. The law also requires a candidate to return unspent money to the Public
Election Fund after the election.
It
is unclear if a candidate who received money in error can pay
this money back with unspent money the candidate would otherwise be required to return. Bill
25-17 would clarify that the candidate would receive a credit for returned unspent funds against
any repayment required for a public contribution received in error.
This amendment would result in full reimbursement to the Public Election Fund for money
disbursed in error without penalizing a candidate for the erroneous disbursement.
Council staff
recommendation:
approve the amendment.
This packet contains:
Expedited Bill 25-17
Legislative Request Report
State Board Status Update - June 22, 2017
Testimony of Sharon L. Cohen
F:\LAW\BILLS\1725 Elections - Public Campaign Finance - Amendments\GO Memo.Docx
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Expedited Bill No.
25-17
Concerning: Elections - Public Campaign
Financing - Amendments
Revised: June
26, 2017
Draft No.
_1_
Introduced:
July
11, 2017
Expires:
January
11, 2019
Enacted: _ _ _ _ _ _ _ _ __
Executive: _ _ _ _ _ _ _ _ __
Effective: _ _ _ _ _ _ _ _ __
Sunset Date: .......,_,_N""on..,_,e<--------
Ch. _ _ , Laws of Mont. Co. _ _ __
COUNTY COUNCIL
FOR MONTGOMERY COUNTY, MARYLAND
Lead Sponsors: Councilmember Navarro, Vice President Riemer and Councilmembers Katz and
Elrich
AN EXPEDITED ACT
to:
(1)
permit a candidate to correct a mistake in an application for certification within a
certain time;
(2)
clarify
that a candidate may receive a matching public contribution during the general
election for certain unmatched qualifying contributions received during the primary
election;
(3)
permit a candidate to use unspent funds returned to the County after an election as a
credit against any repayment required for a public contribution mistakenly received;
and
(4)
generally amend the law concerning public campaign financing for County elections.
By amending
Montgomery County Code
Chapter 16, Elections
Section 16-22 and 16-23
Boldface
Underlining
[Single boldface brackets]
Double underlining
[[Double boldface brackets]]
* * *
Heading or defined term.
Added to existing law by original bill.
Deleted.from existing law by original bill.
Added by amendment.
Deletedfrom existing law or the bill by amendment.
Existing law unaffected by bill.
The County Council for Montgomery County, Maryland approves the following Act:
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EXPEDITED BILL
NO. 25-17
1
Sec.
1.
Sections 16-22 and 16-23 are amended as follows:
2
3
4
16-22. Board determination.
(a)
The Board must certify an applicant candidate if the Board finds that the
candidate has received the required number of qualifying contributions
and the required aggregate total dollars for the office no later than 10
business days after receiving:
( 1)
a declaration from the candidate agreeing to follow the regulations
governing the use of a public contribution;
(2)
a campaign finance report that includes:
(A)
(B)
a list of each qualifying contribution received;
a list of each expenditure made by the candidate during the
qualifying period; and
(C)
the receipt associated with each contribution and
expenditure; and
(3)
a certificate of candidacy for a covered office.
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
(b)
(
c)
The decision by the Board whether to certify a candidate is final.
A candidate may submit only one application for certification for any
election. A candidate may correct any mistakes in the application for
certification within the earlier of:
20
21
ill
10 business days after receiving notice that the Board denied the
application; or
22
23
24
ru
(
d)
the end of the qualifying period.
If
the Board certifies a candidate, the Board must authorize the Director
to disburse a public contribution to the candidate's publicly funded
campaign account.
25
26
16-23. Distribution of public contribution.
*
*
*
27
r:;\
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EXPEDITED BILL
No.
25-17
1
2
3
4
(h)
A participating candidate must submit a receipt for each ·qualifying
contribution to the Board to receive a public contribution. The Director
must deposit the appropriate public contribution into a participating
candidate's publicly funded campaign account within 3 business days
after the Board authorizes the public contribution.
5
6
7
(i)
A candidate may receive £! matching public contribution during the
general election for an unmatched qualifying contribution received
during the primary election after the candidate has received the maximum
public contribution for the primary election if the candidate is otherwise
eligible to receive matching public contributions during the general
election.
8
9
10
11
12
13
14
15
16
17
18
ill
If the Director mistakenly distributes£! public contribution to£! candidate
greater than the candidate was entitled to receive, the candidate must
repay the funds mistakenly distributed within~ business days after being
notified of the mistake. Any unspent funds returned to the County after
an election may be used as £! credit against any repayment required for £!
public contribution mistakenly received.
.(k}
Consumer Price Index adjustment.
The Chief Administrative Officer
must adjust the public contribution limits established in Subsection (a)(3)
and the eligible contribution limit established in Subsection (c), effective
July 1, 2018, and July 1 of each subsequent fourth year, by the annual
average increase, if any, in the Consumer Price Index for the previous 4
calendar years. The Chief Administrative Officer must calculate the
adjustment to the nearest multiple of 10 dollars, and must publish the
amount of this adjustment not later than March 1 of each fourth year.
19
20
21
22
23
24
25
26
Sec. 2.
Expedited Effective Date.
27
The Council declares that this legislation is necessary for the immediate
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EXPEDITED BILL
No. 25-17
1
2
3
protection of the public interest. This Act takes effect on the date on which it becomes
law.
Approved:
4
Roger Berliner, President, County Council
5
Approved:
Date
6
Isiah Leggett, County Executive
7
Date
This is a correct copy ofCouncil action.
8
Linda M. Lauer, Clerk of the Council
Date
w
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LEGISLATIVE REQUEST REPORT
Expedited Bill 25-17
Elections
-
Public Campaign Financing
-
Amendments
DESCRIPTION:
Bill 25-17 would:
(1)
permit a candidate to correct a mistake in an application for
certification
within
a certain time;
(2)
clarify that a candidate may receive a matching public
contribution during the general election for certain unmatched
qualifying contributions received during the primary election;
and
(3)
permit a candidate to use unspent funds returned to the County
after an election as a credit against any repayment required for
a public contribution mistakenly received.
PROBLEM:
The issues addressed in the Bill arose during the initial
implementation of the Public Campaign Financing Law.
GOALS AND
To resolve the outstanding issues in the Law.
OBJECTIVES:
COORDINATION:
Finance, County Attorney
FISCAL IMPACT:
Office of Management and Budget, Finance
ECONOMIC
IMPACT:
EVALUATION:
EXPERIENCE
ELSEWHERE:
SOURCE OF
INFORMATION:
To be determined.
NIA
NIA
Robert H. Drummer, Senior Legislative Attorney
APPLICATION
WITHIN
MUNICIPALITIES:
Not applicable
PENALTIES:
NI
A
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MARYLAND
STATE BOARD OF ELECTIONS
P.O. BOX 6486, ANNAPOLIS, MD 21401-0486
David
J.
McManus, Chairman
Patrick
J.
Hogan, Vice Chairman
Michael R. Cogan
Kelley Howells
Gloria Lawlah
PHONE (410) 269-2840
Linda H. Lamone
Administrator
Nikki
Charlson
Deputy Administrator
June 22, 2017
Montgomery County Council
Government Operations and Fiscal Policy Committee
Montgomery County Public Election Fund
Current Status of the Program:
The Montgomery law was the model for Howard County to implement its public
financing program.
17 candidates have filed a declaration of intent to participate.
The first day to file a report for certification is July 4.
Software changes have been made and implemented to receive the additional
requirements necessary to receive reports and calculate the public contribution.
A Summary Guide has been published detailing the program requirements and including
a "how to" on filing reports.
A webinar is scheduled for July 11- a powerpoint slideshow will be provided.
Additionally, the webinar will be recorded and published for others to watch at their
own convenience.
Resources:
Current resources are spread thin.
The county should provide for sufficient personnel to administer and implement
outreach, coordinate between the Committee to Recommend Funding for the Public
Election Fund, SBE and the Department of Finance, and answer questions from
candidates and the public.
Additional resources are needed for any post-election audit. The Department of
Finance should be the lead in conducting any audit of public finances received.
Legislative Fixes:
As the program gains more and more participants, new issues have arisen that require
legislative action for the next election to provide clarity.
Here are some of the issues that the Department of Finance and SBE have identified:
o What is the definition of a county resident? Is there a time limit needed to
reside in-County in order be considered a county reside.nt?
o Are there any violations that would remove a candidate from the program or
can a candidate remedy the violation and remain a certified candidate?
• Who determines what these violations are and when one is
committed?
FAX (410) 974- 2019
Toll Free Phone Number (800) 222-8683
h+-+-'"'•IJ ......... ,
,...1,......,._,,..,. __ ........... _,, __ _. --··
151 West Street Suite 200
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o
o
o
Do qualifying contributions received and used in a primary election but not
matched due to a candidate achieving the maximum threshold remain eligible
for matching for the general election?
Do contested elections include write-in candidates or only candidates listed on
the ballot?
Personal liability for candidates, treasurers, and chairs and whether there are
any penalties for violations committed by contributors.
(j)
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1l
Testimony from Sharon L. Cohen
Resident of Potomac, MD
Before The Montgomery County Council on
Expedited Bill 25-17
-
Public Campaign Finance Amendments
July 18, 2017
Good afternoon my name is Sharon Cohen. I am a life long county resident from
Potomac, Maryland. By way of background, I am a Member of the Montgomery
County Republican Central Committee from Legislative District 15, and also serve
as the Vice-Chair of the Council's Committee to Recommend Funding for the
Public Election Fund (PEF). Having spent over two years examining the PEF
program along side other PEF Committee members, I have a broad understanding
of this new program. But today I testify solely on my on behalf, and I am speak in
strong opposition to Expedited bill 25-17. I ask that my full written statement be
included in the record.
I will be brief and to the point. Changing the PEF law when we are three-quarters
through the current the election cycle is unfair and the law changes under
consideration today creates a potential conflict of interest on the Council's part.
As you know, 2018 candidates for county elected office have already filed. Some
candidates choose to file and qualify as PEF candidates. Others choose NOT to
qualify for PEF. PEF and non-PEF candidates both have already started collecting
campaign contributions for the 2018 election, and at least one current
Councilmemberstarted collecting qualifying PEF contributions as far back as the
fall of 2016.
Perhaps non-PEF candidates looked at the law and the legally strict requirements
-- including the potential for disqualification and other workability issues -- and
determined the risks and challenges were too high for the benefit of receiving
matching funds. Perhaps because there was so little public information on the
MD Board of Elections website, or the County's website for that matter, about the
PEF program until early 2017, such candidates did not have easy public access or
the correct information about the law, the regulations, FAQs, how to file and
required forms for the program. Lacking that information, perhaps it was just
easier to file as a non-PEF candidate. Who knows?
Regardless of the reasons, 2018 candidates have ALREADY made decisions to run
as PEF candidates or NOT. Candidates are ALREADY collecting campaign.
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contributions. Further, perhaps some prospective candidates decided to NOT run
at all once they looked at the detailed legal rules and regulations for running as a
PEF candidate.
The primary election is now less than one year away and the filing deadline is
about 6 months from now. Actually, we are in the final quarter of the 2018
election cycle that began on January 1, 2015. Changing the PEF law mid-stream
goes against the rules of fair play. Changing the PEF law now in the third quarter
of the 2018-election cycle creates unfair advantage for PEF candidates!
Expedited bill 25-17 would:
1) permit a candidate to correct a mistake when filing for certification
2) "clarify" that a candidate may receive matching public contribution during
the general election for certain unmatched qualifying contributions
received during the primary election; and
3) permit a candidate to use unspent funds returned to the County after an
election as a credit against any repayment required for a public
contribution mistakenly received
Each of these law changes weakens the PEF law and its regulations as currently
enacted. Let's remember first and foremost the PEF program spends taxpayer
funds! At this time, the Council has allocated $11 million in taxpayer funds to the
PEF pot, and more funds could be added by the Council next year in the 2018_
budget process or via a supplemental appropriation at any time. Spending
taxpayer money on county elections MUST include strict rules and clear
consequences - such as disqualification from the program - otherwise funds
could be disbursed inappropriately.
Keeping the high bar consequence of disqualification from the program is a must.
Candidates receiving taxpayer dollars in matching funds must have this penalty of
disqualification placed on them so that each campaign establishes adequate
auditing procedures in order to validate campaign contributions BEFORE they are
submitted to the Maryland Board of Elections. Candidates should not be given a
pass for sloppy record keeping.
More importantly, when the Council considered and passed the PEF program in
2014 the original text of the PEF bill limited qualifying contributions from
individuals to those that were registered County voters. At that time, the
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Maryland Board of Elections advised the Council it had no way to verify residency
because their only source of information is the voter rolls. Instead, the Council
ignored the advice of the Board of Elections to keep the "registered voter
limitation" and went with the term resident, which I point out is not defined in
statute. This means that if the Maryland Board of Elections cannot verify
residency, then each PEF campaign MUST assume this responsibility; otherwise
the PEF program is potentially ripe for fraud. And the consequence of
disqualification from the PEF program is the ONLY insurance policy taxpayers have
that the candidates themselves will take the necessary steps to validate residency
of those contributing, as well as assure individual contributions are validly
collected, aggregated, and reported.
The aggregation of an individual's contributions is another key accounting and
records keeping issue that PEF candidates MUST address before submitting to
qualify. The PEF matching ratios are tied to the amount contributed, with a higher
matching rate for lower dollar contributions. For County Executive, for example,
contributions $50.00 and under are matched at 6 to one or $300.00 is matched
for one $50.00 contribution. Between $50.00 and $100.00 the match rate is 4 to
1 and the match rate is 2 to 1 for amounts between $100.00 to $150.00. If an
individual gave $150.00 the total match would be $600.00 for a County Executive
candidate that qualified. If however, that individual contributed in three
installments of $50.00 each under the names: Bobby Smith, then Robert Smith
and then Rob Smith without proper aggregation of all three separate
contributions, and if this error was NOT caught by the Maryland Board of
Elections, the matching pay out would be $900.00 or 50 percent MORE than the
candidate should have received. To prevent these errors from the outset, each
campaign MUST have record-keeping systems in place and verification.procedures
to properly add up/aggregate contributions from the same individual.
Yes this is not easy, but in my opinion the verification process is necessary. If
candidates expect to receive taxpayer funds for their elections then they have a
fiduciary responsibility to make sure their campaigns can validly collect, aggregate
and report such contributions. Indeed honest mistakes will be made and some
contributions will be disqualified and NOT matched. Therefore, each candidate
should collect above and beyond the mere threshold limit to qualify to handle
simple errors.
This is done in other arenas. For example, when collecting signatures
a
petition to add a question to the ballot everyone knows you have to collect
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significantly more signatures than required as some will be disqualified. Further
in the signature petition process after such signatures are submitted, if there are
not enough due to disqualification, the petition sponsors cannot go back after
filing and
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cure or edit" what was submitted. What is submitted is final and either
there are sufficient signatures to put the question on the ballot OR natl The same
clear approach, should apply to the PEF program. We should think of this like a
final exam, once you submit your answers (in the case file to qualify) that should
be it and there should be no post-submission redo.
The second law change under consideration - to
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clarify" that a candidate may
receive matching public contribution during the general election for certain
unmatched qualifying contributions received during the primary election - is NOT
a clarification. This is a major policy change and one that benefits well-
established candidates, major party candidates and incumbents. If adopted this
law change would allow PEF candidates to collect and spend qualifying
contributions in the primary election beyond those that could be matched
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because the upper pay out limit was reached, and then bank the value" those
contributions for matching in the general election.
This significant policy change, if adopted ignores the difference between the
primary and general elections. In the primary election, one runs to be elected as
the nominee of one's party. Lesser-known or established parties may have fewer
candidates running in the primary, fewer that qualify for PEF in the primary.
Consequently, it's doubtful that many would have sufficient
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carry forward
contributions," compared to well known, established, or incumbents candidates.
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This so-called clarification" thereby substantially disadvantages candidates in the
general election who did not come close to receiving the max pay out in the
primary.
If the Council really wants to "increase opportunities for more residents to run for
office," as noted as one of the goals of the PEF program on the County's website,
then the general election should be a new race between nominees of various
parties and NOT put one party's nominee ahead of the gate because they were
able to bank and carry forward primary contributions into the general for PEF
matching.
The final law change sought at this time -- permitting a candidate to use unspent
funds returned to the County after an election as a credit against any repayment
required for a public contribution mistakenly received- is wholly inappropriate.
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The law requires unspent funds to be returned to the PEF program within 30 days
post election. Those funds returned obviously include matching funds. But
allowing those returned funds -- that include matching funds -- to be a credit
against any repayment required for a public contribution mistakenly received,
smacks of allowing ill-gotten gains to pay for a fine.
During the June 22 Government Operations Committee hearing on the PEF
program, this matter was discussed. Staff to the County Executive noted that one
should not be able to use matched funds to pay back funds received in excess of
what should have been paid/matched because the original error must be
remedied, and "public dollars cannot be sent back to pay for your mistake." But
this law change would do just that, the language in Expedited bill 25-17 would
allow public dollars to cover a campaign's mistake. So again, the Council wants to
reduce the onus put on PEF candidatesto have systems in place to validly collect,
aggregate, and report qualifying PEF contributions before they are submitted.
Keeping the onus on PEF candidates is critical to protecting taxpayers $11 million
that goes to pay for County elections because there is no required audit under the
PEF law. Further, there are no funds or staffing at the County level to audit post
election or, more importantly, in real time during the election when matching
funds are dispersed. Other than the Maryland Board of Elections finding an error
here and there OR if citizens groups examine every contribution, such mistakes
may not be found at all.
Further, I ask if the Council identifies additional problems or challenges with the
PEF law, how many more expedited bills will the Council attempt to move
between now and the 2018 Primary or General Election? Why just these changes
before us today? Where does this end?
Many of you seek to qualify as PEF candidates for re-election or election to higher
office in the County and are undoubtedly now confronted with some of the
challenges of the PEF program that you yourselves created and enacted into law
in 2014. Now you want a redo, You want to make it easier on yourselves as PEF
candidates to qualify for matching funds -- which I point out are taxpayer dollars
to the tune of $11 million.
I argue the time for a redo is after the 2018 election and NOT when we are three-
quarters through the election cycle. Making changes mid-cycle is unfair pure and
simple. The Council's move to enact law changes now that that benefit your own
nd
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campaigns as PEF candidates -- making it easier for you receive matching funds
from
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million pot of tax payer funds -- creates a conflict of interest on your
part.
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