A Summary of H.R. 6448, the Empowering Citizens Act

The Empowering Citizens Act (H.R. 6448) introduced in the House on September 20, 2012 is comprehensive campaign finance reform legislation to empower citizens to play a central role in financing presidential and congressional elections by matching their small contributions with multiple public funds.

The Act also establishes new rules to prohibit the kind of candidate-specific Super PACs that are functioning as arms of the presidential campaign in 2012, to strengthen the prohibition on candidates coordinating with other Super PACs and outside spending groups and to allow parties to make unlimited expenditures in coordination with their candidates who participate in the matching funds system to respond to outside group spending.

The Act is sponsored by Representative David Price (D-NC) and Chris Van Hollen (D-MD).Other original co-sponsors of the Act include Representatives Walter Jones (R-NC), John Larson (D-CT), Robert Brady (D-PA), John Sarbanes (D-MD) and Anna Eshoo (D-CA).

The Act combines the Presidential Funding Act (H.R.414) introduced earlier this year by Representatives Price and Van Hollen to repair the presidential public financing system with a new proposal to create a similar small donor empowerment system for congressional races. The legislation builds on a proposal to create a small donor matching funds system for congressional races set forth in a report released in August 2012 by Democracy 21 and the Brennan Center and on the successful small donor empowerment system used to finance New York City elections.

According to Democracy 21 President Fred Wertheimer:

By empowering small donors, the Act will dilute the role and importance of influence-seeking money, reduce the opportunities for government corruption and provide candidates with an alternative way to finance their campaigns without becoming obligated and indebted to their funders.

Small Donor Financing of Federal Elections

Under the Act, the first $250 of individual contributions to presidential and congressional candidates who participate in the system would be matched with public funds at a 5 to 1 ratio. This places citizens in charge of determining the candidates who receive public matching funds and the amounts they receive.

A candidate participating in the system would receive $1,250 in public funds for a $250 contribution, for a total of $1,500. This provides important new incentives for citizens to give and for candidates to seek small donations. In the case of a larger contribution, only the first $250 of the contribution is eligible to be matched.

In return, candidates who participate in the matching funds system have to abide by a reduced limit on individual contributions of $1,250 per donor, per election, or one-half of the current $2,500 limit per donor, per election.

The contribution limits would remain unchanged for candidates who do not participate in the system.

There would be no spending limit for candidates who participate in the system. Candidate spending limits are no longer viable in the wake of the Citizens United decision since outside groups can now make unlimited expenditures in races funded by unlimited contributions.

There would be a limit on the total amount of public funds available to each presidential, Senate or House candidate. Candidates participating in the system could continue to raise private contributions (subject to the $1,250 contribution limit) after they have received the maximum amount of public funds for which they are eligible.

In order to qualify for public financing for presidential races, a presidential candidate would have to raise $25,000 from individuals in each of at least 20 states, counting only the first $250 of a contribution from a single donor who resides in that state.

In order to qualify for public financing for House races, a House candidate has to raise $40,000 from at least 400 in-state individual donors, counting only the first $250 of a contribution from a single donor. In order to qualify for public financing for Senate races, a Senate candidate has to raise the same amount as a House candidate multiplied by the number of congressional districts in the Senate candidate’s state.

Increasing the Ability of Participating Candidates to Respond to Outside Spending Groups

The Act contains an important new legislative proposal that would greatly improve the ability of candidates to respond to spending by Super PACs and other outside groups in their campaigns. National parties would be permitted to coordinate with participating candidates in the system to make unlimited party expenditures in support of those candidates, provided the party spending came from a pool of contributions to the party limited to $1,250 per donor per year.

Ending Candidate-Specific Super PACs, Strengthening Rules Prohibiting Coordination

The Act includes the first comprehensive proposal to strengthen and override the ineffectual coordination regulations adopted by the FEC. This includes provisions to end candidate-specific Super PACs that in reality function as arms of the candidates they are supporting, such as Restore Our Future, which is supporting Mitt Romney, and Priorities USA, which is supporting President Obama.

The Act defines a candidate and Super PAC to be coordinated where:

• the Super PAC is directly or indirectly established by or at the request or suggestion of, or with the encouragement of, or with the express or tacit approval of the candidate or the agents of the candidate it supports;
• the candidate or the candidate’s agents solicit funds or engage in other fundraising activity for the Super PAC, including by providing or sharing fundraising lists with the Super PAC;
• the Super PAC is established, directed or managed by former political, media or fundraising advisers or consultants to the candidate or entities controlled by the candidate; or
• the Super PAC has had more than incidental communications with the candidate or the candidate’s agents about the candidate’s campaign needs or activities or about the Super PAC’s possible or actual campaign activities with respect to the candidate or the candidate’s campaign
• the Super PAC has retained the professional services of any person who during the same election cycle has provided or is providing professional services relating to the campaign to the candidate or the candidate’s campaign.

Since coordinated expenditures are treated as in-kind contributions to the candidate, these new coordination rules would limit the amount a candidate-specific Super PAC could spend on behalf of the candidate to the amount a PAC can contribute to a candidate, generally $5,000 per year. This would have the effect of ending the kind of candidate-specific Super PACs that are being used in the 2012 presidential elections.

The Act also strengthens the rules prohibiting coordination between candidate and outside spending groups by treating as coordinated communications any payments for campaign ads made by any person pursuant to any general or particular understanding, or based on more than incidental discussions, with the candidate or the candidate’s agents about the payments.

Prohibiting Candidates and their Agents from Raising Any Money for Super PACs  

The Act prohibits candidates from raising any funds for a Super PAC or for any 527 organization not registered as a federal political committee that can receive unlimited contributions.  Currently, as interpreted by the FEC, candidates and officeholders and their agents can solicit funds for a Super PAC or a non-federally registered 527 group as long as the candidates or officeholders indicate they are only asking for contributions in amounts that comply with federal contribution limits.

This has allowed wink and nod fundraising by federal officeholders and candidates for unlimited contributions for Super PACs. Under current FEC rules, candidates and their agents directly participate in Super PAC fundraising events where unlimited funds are being raised. By their appearance and comments at such fundraisers, candidates, in essence, are permitted by the FEC to raise unlimited contributions.  Such fundraising would be prohibited by the Act.