oversight

Campaign Finance Reform: Early Experiences of Two States That Offer Full Public Funding for Political Candidates

Published by the Government Accountability Office on 2003-05-09.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

             United States General Accounting Office

GAO          Report to Congressional Committees




May 2003
             CAMPAIGN FINANCE
             REFORM

             Early Experiences of
             Two States That Offer
             Full Public Funding
             for Political
             Candidates




GAO-03-453
                                                May 2003


                                                CAMPAIGN FINANCE REFORM

                                                Early Experiences of Two States That
Highlights of GAO-03-453, a report to
Congressional Committees                        Offer Full Public Funding for Political
                                                Candidates


In 2000 and 2002, Maine and                     In both Maine and Arizona, the number of legislative candidates who chose
Arizona held the nation’s first                 to use public financing for their campaigns increased greatly from 2000 to
elections under voluntary programs              2002. In perspective, 59 percent of Maine’s and 36 percent of Arizona’s
that offered full state funding for             current legislators successfully ran as publicly financed candidates in the
political candidates who ran for                2002 election. Also, in Arizona’s 2002 election, publicly financed candidates
legislative and certain statewide
offices. The goals of these
                                                won seven of the nine available seats in races for statewide offices, including
programs, passed as ballot                      Governor.
initiatives by citizens in these
states, included increasing                     Legislative Candidates and Election Results in Maine and Arizona
electoral competition and curbing
increases in the cost of campaigns.

Congress has considered
legislation for public financing of
congressional elections nearly
every session since 1956, although
no law has been enacted. In the
Bipartisan Campaign Reform Act
(P.L. 107-155 (2002)), Congress
mandated that GAO study the
results of the unique public
financing programs in Maine and
Arizona.

For the 2000 and 2002 elections in
Maine and Arizona, this report
provides:

•    Statistics on the number of
     candidates who chose to                    In comparing the 2000 and 2002 elections to those in 1996 and 1998, GAO’s
     campaign with public funds                 findings regarding changes in electoral competition were inconclusive.
     and the number who were                    Various measures—contested races (more than one candidate per race),
     elected.                                   incumbent reelection rates, and incumbent victory margins—reflect mixed
                                                results. Also, these results may have been affected by term limits,
•    Observations, based on limited             redistricting, and other factors. Average legislative candidate spending
     data, regarding the extent to              decreased in Maine but increased in Arizona in 2000 and 2002, compared to
     which the goals of the public
     funding programs were met.
                                                previous years. Further, particularly in 2002, both states experienced
                                                increases in independent expenditures—a type of campaign spending
                                                whereby political action committees or other groups expressly support or
                                                oppose a candidate. The extent of spending for public policy messages
                                                without explicit election advocacy is not known.

                                                In sum, with only two elections from which to observe legislative races and
www.gao.gov/cgi-bin/getrpt?GAO-03-453.          only one election from which to observe most statewide races, it is too early
                                                to draw causal linkages to changes, if any, that resulted from the public
To view the full product, including the scope   financing programs in the two states.
and methodology, click on the link above.
For more information, contact Norman Rabkin
at (202) 512-8777 or rabkinn@gao.gov.
Contents


Letter                                                                                        1
               Results in Brief                                                               3
               Background                                                                     6
               Program Participation: More Candidates Opting to Use Public
                  Financing                                                                 11
               Voter Choice: Legislative and Statewide Candidates in Publicly
                  Funded Elections                                                          17
               Electoral Competition: Analysis of Elections in Maine and Arizona            29
               Influence of Interest Groups: Mixed Views on Effects of Public
                  Financing of Campaigns                                                    44
               Campaign Spending: Average Candidate Spending Decreased in
                  Maine but Increased in Arizona; Independent Expenditures
                  Became More Prominent in Both States; Extent of Issue
                  Advocacy Spending Not Known                                               51
               Voter Participation: No Clear Link to Public Financing Program               61
               Concluding Observations                                                      64

Appendix I     Objectives, Scope, and Methodology                                           67
               Objectives                                                                   67
               Overview of Our Scope and Methodology                                        67
               Scope and Methodology: Statistical Information Regarding the 2000
                 and 2002 Elections                                                         68
               Scope and Methodology: Extent to Which Goals of Public
                 Financing Programs Were Met                                                69

Appendix II    Overview of the Public Financing Programs for
               Election Campaigns in Maine and Arizona                                      83
               Purposes of the Public Financing Programs                                    83
               Candidates Must Qualify to Receive Public Funding                            85
               Amounts of Allowable Public Funding for Participating Candidates             86
               Revenue Sources for the Public Financing Programs                            88
               Administration of the Public Financing Programs                              90
               Reduced Contribution Limits and Additional Reporting
                 Requirements for Nonparticipating Candidates                               92

Appendix III   Summary of Legal Challenges to Maine’s and
               Arizona’s Public Financing Programs                                          94
               Legal Challenges to the Maine Clean Election Act                             94
               Legal Challenges to Arizona’s Citizens Clean Elections Act                   97



               Page i                          GAO-03-453 Public Funding of Political Campaigns
Appendix IV    Survey of Candidates for Office in the Maine 2000
               Elections                                                                  101



Appendix V     Survey of Candidates for Office in the Arizona 2000
               Elections                                                                  109



Appendix VI    Comments Received in Our Survey of Candidates for
               Office in Maine’s and Arizona’s 2000 Elections    117
               Comments Provided by Maine Candidates                                      117
               Comments Provided by Arizona Candidates                                    129

Appendix VII   GAO Contacts and Acknowledgments                                           140
               GAO Contacts                                                               140
               Staff Acknowledgments                                                      140
               Other Acknowledgments                                                      140

Bibliography                                                                              141



Tables
               Table 1: Maine’s Primary and General Elections in 2000 and 2002—
                        Number of Candidates Who Used Public Financing and
                        Number of Races with at Least One Participating
                        Candidate                                                          12
               Table 2: Results of Maine’s General Elections in 2000 and 2002—
                        Campaign Status and Number of Participating Candidates
                        Elected by Office                                                  13
               Table 3: Arizona’s Primary and General Elections in 2000 and
                        2002—Number of Candidates Who Used Public Financing
                        and Number of Races with at Least One Participating
                        Candidate                                                          15
               Table 4: Results of Arizona’s General Election in 2000 and 2002—
                        Campaign Status and Number of Participating Candidates
                        Elected by Office                                                  16




               Page ii                        GAO-03-453 Public Funding of Political Campaigns
Table 5: Average Number of State Legislature Candidates Per
         District Race in Maine and Arizona (1996, 1998, 2000, and
         2002)                                                               19
Table 6: Percentage of Participating Legislative Candidates by
         Political Party Affiliation in Maine and Arizona (2000 and
         2002)                                                               22
Table 7: Number of Third-party or Independent Candidates In
         Maine and Arizona State Legislative Races (1996, 1998,
         2000, and 2002)                                                     23
Table 8: Number of Arizona Corporation Commission Candidates
         (1994, 1996, 1998, 2000, and 2002)                                  24
Table 9: Number of Candidates for Maine and Arizona Statewide
         Races (1994, 1998, and 2002)                                        25
Table 10: Maine and Arizona Citizenry Views (in Percentages) on
         Clean Election Law                                                  49
Table 11: Spending by Candidates for Statewide Offices in Arizona
         (1998 and 2002)                                                     57
Table 12: Spending by Candidates for Statewide Offices in Arizona
         by Participation Status (2002)                                      58
Table 13: Independent Expenditures in Maine and Arizona (1998,
         2000, and 2002)                                                     59
Table 14: Voter Turnout in Maine, Arizona, and the United States,
         1988 through 2000                                                   62
Table 15: Results of Logistic Regression Models Testing the Effect
         of Public Financing Programs on Competitive Races                   72
Table 16: List of Organizations (and Title of Individuals)
         Interviewed in Maine                                                75
Table 17: List of Organizations (and Title of Individuals)
         Interviewed in Arizona                                              76
Table 18: Seed Money Limits and Number of Qualifying $5
         Contributions                                                       86
Table 19: Public Funding Available to Each Participating Candidate
         in 2000                                                             88
Table 20: Revenue Sources and Amounts for Public Financing
         Programs in 2000                                                    89
Table 21: Maine Clean Election Act Litigation                                95
Table 22: Arizona Litigation – Title of Ballot Initiative                    98
Table 23: Arizona Litigation – Nomination and Appointment
         Process to the Citizens Clean Elections Commission                  98
Table 24: Arizona Litigation – Sources for Public Funding                   100
Table 25: Comments Received in Our Survey of Candidates for
         Office in Maine’s 2000 Elections                                   118



Page iii                        GAO-03-453 Public Funding of Political Campaigns
          Table 26: Comments Received in Our Survey of Candidates for
                  Office in Arizona’s 2000 Elections                                  130


Figures
          Figure 1: Response of Candidates in the 2000 Election Regarding
                   Which Factor (Term Limits or Public Funding) Played a
                   Greater Role in Attracting New Candidates to Run for
                   Office                                                              20
          Figure 2: Percentages of Participating Candidates Who Answered
                   That the Availability of Public Funding Was a Great or
                   Very Great Factor in Their Decision to Run for Office in
                   2000                                                                21
          Figure 3: Reasons Why Candidates Chose to Participate in the
                   Public Financing Program                                            26
          Figure 4: Reasons Why Candidates Did Not Participate in the
                   Public Financing Program                                            28
          Figure 5: Contested and Uncontested Races in Maine’s Legislative
                   (House and Senate) Primary Elections (1996, 1998, 2000,
                   and 2002)                                                           32
          Figure 6: Contested and Uncontested Races in Arizona’s Legislative
                   (House and Senate) Primary Elections (1996, 1998, 2000,
                   and 2002)                                                           33
          Figure 7: Publicly Financed Candidates in Maine’s Contested
                   Legislative Primary Races (2000 and 2002)                           34
          Figure 8:Publicly Financed Candidates in Arizona’s Contested
                   Legislative Primary Races (2000 and 2002)                           35
          Figure 9: Incumbent Reelection Rates in Maine’s Legislative Races
                   (1996, 1998, 2000, and 2002)                                        37
          Figure 10: Incumbent Reelection Rates in Arizona’s Legislative
                   Races (1996, 1998, 2000, and 2002)                                  38
          Figure 11: Competitive Legislative Races in Maine (1996, 1998,
                   2000, and 2002)                                                     41
          Figure 12: Competitive Senate Races in Arizona (1996, 1998, 2000,
                   and 2002)                                                           43
          Figure 13: Candidate Responses about Public Financing Program
                   and Interest Group Influence                                        45
          Figure 14: Candidate Responses about the Public Financing
                   Program and Confidence in Government                                46
          Figure 15: Average Maine and Arizona Legislative Candidate
                   Spending (1996, 1998, 2000, and 2002)                               54




          Page iv                         GAO-03-453 Public Funding of Political Campaigns
Figure 16: Average Maine and Arizona Legislative Candidate
         Spending by Participation Status (2000 and 2002)                                 55
Figure 17: Extent to Which Candidates in the 2000 Elections
         Agreed with the Statement That Independent
         Expenditures Would Become Increasingly Important in
         2002 and Future Elections                                                        60
Figure 18: Extent to Which Candidates in the 2000 Elections
         Agreed with the Statement That Issue Advocacy Spending
         Would Increase in the 2002 and Future Elections                                  61




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Page v                                 GAO-03-453 Public Funding of Political Campaigns
United States General Accounting Office
Washington, DC 20548




                                   May 9, 2003

                                   The Honorable Trent Lott
                                   Chairman
                                   The Honorable Christopher J. Dodd
                                   Ranking Member
                                   Committee on Rules and Administration
                                   United States Senate

                                   The Honorable Robert W. Ney
                                   Chairman
                                   The Honorable John B. Larson
                                   Ranking Member
                                   Committee on House Administration
                                   House of Representatives

                                   Because the subject involves both politics and money, campaign finance
                                   reform can be contentious as well as complex. Congress has considered
                                   legislation for public financing of congressional elections nearly every
                                   session since 1956, although no law has been enacted. Traditionally, to
                                   identify promising ways to address complex or contentious issues, the
                                   federal government has drawn upon the diverse experiences of the
                                   “laboratories of democracy,” the states. In this regard, Section 310 of the
                                   Bipartisan Campaign Reform Act of 20021 mandated that we study and
                                   report on the year 2000 elections in two states, Maine and Arizona. To
                                   provide a broader perspective, we also obtained statistics and related
                                   information regarding the 2002 elections in the two states.

                                   The 2000 and 2002 elections in Maine and Arizona were the first instances
                                   in the nation’s history where candidates seeking state legislature seats or
                                   certain statewide offices had the option to fully fund their campaigns with
                                   public monies. Our review of the history of Maine’s and Arizona’s public
                                   financing programs, including discussions with key officials in each state,
                                   identified five goals of the programs. That is, the programs generally were
                                   intended to increase voter choice by encouraging more candidates to run
                                   for office; increase electoral competition by, among other means, having
                                   fewer uncontested races; reduce the influence of special interest groups


                                   1
                                    P.L. 107-155 (2002).



                                   Page 1                           GAO-03-453 Public Funding of Political Campaigns
and, thereby, enhance citizens’ confidence in government; curb increases
in the cost of campaigns; and increase voter participation (e.g., increase
turnout for elections). Both programs became law through the respective
state’s ballot-initiative process—Maine (1996) and Arizona (1998).

Under the new campaign financing programs in Maine and Arizona,
“participating candidates”—those who agreed to forego private
fundraising and who qualified to take part in the respective state’s public
financing program—received a set amount of money for their primary and
general election campaigns. Also, publicly financed candidates could
receive additional matching funds based on spending by or for privately
financed (“nonparticipating”) candidates, who—while subject to state
limits and disclosure rules—engaged in traditional means to raise money
from individuals, corporations, and political action committees.

In accordance with the mandate specified in Section 310 of Public Law
107-155, and as agreed with your offices, this study:

•   Provides statistics showing the number of candidates who chose to use
    public funds to run for legislative seats or statewide offices in the 2000
    and 2002 elections in Maine and Arizona, the seats or offices for which
    they were candidates, whether the candidates were incumbents or
    challengers, whether the candidates were successful in their bids, and
    the number of races in which at least one candidate ran an election
    with public funds.

•   Describes the extent to which the goals of Maine’s and Arizona’s public
    financing programs were met in the 2000 and 2002 elections.
    Specifically, we describe what changes occurred, if any, regarding five
    indicators—voter choice (number of candidates), electoral
    competition, interest group influence, campaign spending, and voter
    participation (voter turnout)—indicators related to the goals of the
    programs.

In conducting our study, we reviewed relevant studies and reports
regarding campaign finance reform in the United States generally, as well
as in Maine and Arizona specifically. We visited Maine and Arizona to
interview responsible election officials and representatives of various
interest groups. Also, for both states, we obtained and analyzed available
statistical data and related information about the 2000 and 2002 elections.
To obtain further perspectives on the effects of public financing, we
surveyed all candidates, including those who used public financing as well
as those who did not, who ran in the 2000 primary and general elections in



Page 2                            GAO-03-453 Public Funding of Political Campaigns
                   Maine and Arizona. Further, we contracted with professional pollsters to
                   obtain the views of projectable samples of citizens in Maine and Arizona. It
                   should be emphasized that describing or interpreting the effects of public
                   financing in Maine and Arizona should be approached cautiously, partly
                   because one election cycle’s results or even two election cycles’ results
                   may not be representative. Also, term limits, redistricting, the ambiguous
                   environment that surrounded the implementation of the new campaign
                   finance programs, and other factors not directly related to public or
                   private financing can affect electoral campaigns and results. We conducted
                   our work from April 2002 to March 2003 in accordance with generally
                   accepted government auditing standards. Appendix I presents more details
                   about our objectives, scope, and methodology.


                   In both Maine and Arizona, the number of legislative candidates who
Results in Brief   chose to use public financing for their campaigns increased greatly from
                   2000 to 2002. In the 2000 primary and general elections, approximately one
                   of every three candidates in Maine and one of every four candidates in
                   Arizona chose to participate in the state’s public financing program. In the
                   2002 primary and general elections, participation increased significantly in
                   both states, with about one-half or more of all candidates participating. In
                   perspective, after the 2000 general elections, the elected legislators who
                   had run with public funds held 33 percent of the total seats in Maine’s
                   legislature and 18 percent of the total seats in Arizona’s legislature. After
                   the 2002 general elections, the proportions increased to 59 percent of
                   Maine’s legislature and 36 percent of Arizona’s legislature. Also, of the
                   seven statewide offices in Arizona’s 2002 general election, publicly funded
                   candidates won seven of nine seats, which included Governor, Secretary
                   of State, Attorney General, State Treasurer, State Mine Inspector, and
                   Corporation Commissioner (two of three seats).2

                   It is too soon to determine the extent to which the goals of Maine’s and
                   Arizona’s public financing programs are being met. That is, with only two
                   elections from which to observe legislative races and only one election
                   from which to observe most statewide races, limited data are available to
                   draw causal linkages to changes, if any, that occurred in voter choice
                   (number of candidates), electoral competition, interest group influence,




                   2
                   Nonparticipating candidates won election for the third seat on the Corporation
                   Commission and for the other statewide office (Superintendent of Public Instruction).




                   Page 3                                 GAO-03-453 Public Funding of Political Campaigns
campaign spending, and voter participation (e.g., voter turnout)—five
indicators related to the goals of the programs:

•   Voter choice. While one goal of public financing was to encourage
    more candidates to run for office, the average numbers of state
    legislature candidates per district race in Maine and Arizona in the 2000
    and 2002 elections were not notably different than the averages for the
    two previous elections, 1996 and 1998. In both states, a higher
    proportion of Democratic candidates participated in the public funding
    program, and the number of participating third-party or independent
    candidates generally increased from the 2000 to the 2002 primary and
    general elections. Regarding races for statewide offices, most
    candidates in Arizona opted to participate in the public funding
    program in the 2002 elections. Our survey of candidates in Maine’s and
    Arizona’s 2000 elections found mixed perspectives as to which of two
    factors—public funding for campaigns or open seats due to term-
    limited vacancies—played a greater role (or equal roles) in attracting
    new candidates to run for office. However, most of the participating
    candidates who responded to our survey—55 percent in Maine and 56
    percent in Arizona—answered that the availability of the public
    financing program was a great or very great factor in their decision to
    run for office in 2000.

•   Electoral competition. The public financing programs were expected to
    make elections more competitive, but our analyses were inconclusive.
    Experts generally agreed on three measures of competitiveness—
    increases in the percentage of contested races (races with more than
    one candidate), decreases in incumbents’ reelection rates, or
    reductions in the incumbents’ victory margins. The percentages of
    contested legislative races in Maine’s primary elections were relatively
    unchanged in 2000 and 2002, compared with 1998, and were less than
    the percentage of contested legislative races in 1996. The percentages
    of contested legislative races in Arizona’s primary elections increased
    in 2000 and 2002, compared with1998; however, the percentage of
    contested races in 2000 was about the same as 1996. About 85 percent
    of the contested legislative primary races in Maine’s and Arizona’s 2002
    elections had publicly financed candidates. Legislative incumbent
    reelection rates remained about the same in both states after public
    financing was introduced. Incumbent victory margins, which we used
    to identify competitive races, reflected a mixed picture. That is, we
    defined a competitive race as one in which the difference in the
    percentage of vote garnered between the winning incumbent and the
    runner-up was 15 points or less; and, under this definition, trends (if
    any) were not clearly evident. Further analysis—examining several



Page 4                           GAO-03-453 Public Funding of Political Campaigns
    factors such as incumbency and candidate spending—showed that
    candidate participation in the public financing programs in Maine and
    Arizona had no effect on competitive races as defined by incumbent
    victory margins. However, the results of this analysis should be
    interpreted with caution, given the relatively few variables we used and
    the limited amount of data available.

•   Interest group influence. Responses to our surveys of candidates and
    citizens in Maine and Arizona, as well as our interviews with interest
    group representatives, reflected mixed views. In our survey of
    candidates in Maine’s and Arizona’s 2000 elections, we asked them to
    what extent, if at all, they agreed with the statement that, once elected,
    candidates who participated in the public financing program have been
    more likely to serve the broader interests of their constituents as a
    whole and less likely to be influenced by specific individuals or groups.
    The survey results reflected mixed views. Most of the responding
    nonparticipating candidates—67 percent in Maine and 68 percent in
    Arizona—answered to “little or no extent.” In contrast, many of the
    responding participating candidates—42 percent in Maine and 56
    percent in Arizona—answered to a “great or very great extent.” Also, in
    our fall 2002 survey of voting-age citizens in Maine and Arizona, of the
    respondents who acknowledged some awareness of the respective
    state’s applicable law, almost two-thirds in both states answered that
    there was no effect on their confidence in government or it was too
    soon to tell. Additionally, slightly more respondents in each state
    answered that the law had greatly or somewhat increased their
    confidence in state government—17 percent in Maine and 21 percent in
    Arizona—than did respondents who answered that the law had greatly
    or somewhat decreased their confidence—8 percent in Maine and 15
    percent in Arizona.

•   Campaign spending. Under the public financing programs in the 2000
    and 2002 elections, average legislative candidate spending decreased in
    Maine but increased in Arizona, compared to previous elections. Also,
    particularly in the 2002 elections, both states experienced increases in
    independent expenditures—a type of campaign spending whereby
    political action committees, other groups, or individuals communicate
    messages to voters that support or oppose a clearly identified
    candidate but without coordination with any candidate. The 2002
    increases in independent expenditures largely were associated with the
    gubernatorial races in both states. Because it is not regulated, the
    extent of spending for issue advocacy—that is, public policy messages
    that do not refer to a particular candidate—is not known.




Page 5                            GAO-03-453 Public Funding of Political Campaigns
             •   Voter participation. Although a goal of the public financing programs
                 was to increase voter participation, turnout in Maine’s and Arizona’s
                 2000 elections did not significantly differ from prior presidential
                 election years. While turnout can be influenced by many factors,
                 including the level of media interest and the extent of grassroots efforts
                 to get out the vote, public financing of candidates was probably not a
                 major factor in the 2000 elections. Our survey of voting-age citizens in
                 Maine and Arizona in the fall of 2002 indicated that large segments of
                 these populations—an estimated 60 percent in Maine and an estimated
                 37 percent in Arizona—were still unaware of the respective state’s
                 public financing program.

             Overall, in response to our survey of candidates in Maine and Arizona,
             many of the respondents’ comments followed ideological lines, as may be
             expected. For example, although there were some exceptions,
             nonparticipating candidates generally commented that public financing of
             political campaigns was an inappropriate use of tax dollars, whereas
             participating candidates usually endorsed public financing. Collectively,
             the widely divergent and sometimes virulent comments seem to indicate
             that reaching a consensus regarding the merits of the public financing
             programs may be unlikely, at least in the foreseeable future. Nonetheless,
             irrespective of political ideologies or partisanship, state agency officials
             and other observers told us they anticipate that—based on election
             strategies or other decisional factors—increasing numbers of candidates
             will choose to run with public funding in future years. If so, the
             continuation of the public financing programs may depend not only on
             efforts to substantiate the programs’ merits but also on efforts to sustain
             public support for providing the larger amounts of total funds that will be
             needed.

             We are not making any recommendations in this report.


             As with most campaign finance reform issues, the concept of public
Background   funding for political campaigns—that is, a finance system in which the
             public treasury provides cash grants to candidates or political parties—
             generates impassioned arguments from both proponents and opponents.
             Generally, proponents of public funding assert that privately financed
             election campaigns (1) give disproportionate influence to special interest
             groups, other organizations, and wealthy individuals and (2) present
             fundraising burdens or barriers that dissuade many potential candidates
             from running for office, particularly women and minority candidates. On
             the other hand, opponents assert that public funding forces taxpayers to



             Page 6                            GAO-03-453 Public Funding of Political Campaigns
contribute to candidates whom they do not support, inappropriately
inserts the government into the electoral process, and uses tax dollars that
could be spent for higher-priority needs. Further, given an inherent link
between political speech and political spending, some opponents argue
that any limitation on campaign contributions restricts free speech and
violates the First Amendment.

Competing arguments aside, there is widespread recognition that
designing and implementing an effective campaign finance system is
difficult due to the inherent complexities and the need to consider and
reconcile multiple goals that are diverse and at times conflicting. For
instance, according to one report:3

“A well-functioning campaign finance system must protect freedom of speech, advance
competitive elections, curtail special interest influence, and promote the equal political
voice of all citizens, while minimizing the burden of regulation on candidates, contributors,
[and] other participants in the process … Campaign finance reform requires respect for the
open and dynamic character of the American political process, the evolving nature of
campaigns, and the variety of circumstances and campaign styles across the country.
Campaign finance reform must avoid burdening particular candidates or groups or
providing advantages to their opponents. Reform must also take into account how
candidates, contributors, and others will respond to particular efforts to regulate their
behavior.”

In fact, in nearly every session since 1956, Congress has considered
legislation for public financing of congressional elections, although no law
has been enacted. Most recently, in the 107th Congress, companion bills
were introduced in the House (H.R. 1637) and Senate (S. 719) proposing
public funding and certain media benefits to congressional candidates who
would qualify by collecting a set number of $5 contributions and by
refusing all other contributions to their campaign. The declarations
section of H.R. 1637 states that public financing would enhance American
democracy by, among other means, creating a more level playing field for
incumbents and challengers, eliminating the potentially inherent conflict
of interest caused by the private financing of election campaigns, and
allowing elected officials more time to carry out their public
responsibilities without the constant preoccupation with raising money.



3
  The Association of the Bar of the City of New York, Commission on Campaign Finance
Reform (Richard Briffault, Executive Director), Dollars and Democracy: A Blueprint for
Campaign Finance Reform, Fordham University Press (New York, NY: 2000).




Page 7                                  GAO-03-453 Public Funding of Political Campaigns
These bills were referred to committee in 2001, but no further action was
taken before the Congress ended.

Despite the various complexities or challenges, several states, cities, or
other local jurisdictions across the nation currently have public financing
programs, although most are relatively limited in scale, covering only a
small number of offices or providing only a small amount of the funds
needed to finance a campaign. For example, programs that provide some
public funding for state legislative candidates were introduced by
Minnesota in 1976 and Wisconsin in 1977. Minnesota’s program, which is
funded by an optional state income tax check-off and by a fixed general
fund appropriation, is available to candidates for state legislative seats and
certain statewide offices who agree to set spending limits.4 Eligible
candidates may receive up to 50 percent of the spending limit in public
funds, which are allocated based on a statutory formula. Wisconsin’s
program is also funded through an optional state income tax check-off and
is available for legislative candidates as well as candidates for certain
statewide offices who agree to spending limits and restrictions on
contributions from political action committees.5 Public funds are awarded
in the general election to candidates who received a set percentage of the
total primary vote and are limited based on a statutory ceiling and the total
number of candidates who applied for public funding.

More recently, in 1997, Vermont’s legislature passed a campaign finance
reform law that established a voluntary, full public financing program for
candidates for statewide offices. The program was first implemented in
the 2000 election for the offices of governor and lieutenant governor and
was expanded in 2002 to include additional statewide offices.6 In 1998, by
ballot initiative, voters in Massachusetts passed a law that created a
voluntary, full public financing program for candidates for the state
legislature and certain statewide offices, including governor and lieutenant




4
 Minn. Stat. Ann. ch. 10A (2002).
5
 Wis. Stat. Ann. ch. 11 (2001).
6
 1997 Vermont Campaign Finance Reform Act, Vt. Stat. Ann. tit. 17 § 2801-2883 (2002).




Page 8                                 GAO-03-453 Public Funding of Political Campaigns
governor.7 However, the law was not fully implemented due to funding
controversy. In particular, for the 2002 elections, the state legislature did
not release money to fund the law’s implementation. After intervention of
Massachusetts’ Supreme Judicial Court,8 some candidates in the 2002
election were funded with proceeds generated by the auctioning of state
assets.

Published studies reviewing some of the longer standing public financing
programs have reported mixed findings regarding effects. For example, a
1995 study of Minnesota’s public financing program for legislative
candidates reported that, after the program was introduced in 1976,
incumbents’ overall vote shares did not decrease, although challengers
who received significant amounts of public funds due to the program’s
grant structure fared better against incumbents than those who had less
money to spend.9 Similarly, a 1995 study of Wisconsin’s program of public
funding for legislative candidates reported that elections did not become
more competitive after the program was introduced in 1977, but the
spending gap between incumbents and challengers was narrowed.10
Further, recent studies of public funding programs in New York City and
Los Angeles—programs that provide matching funds to participating
candidates—reported that the programs have generally increased electoral
competition and have helped challengers to mount credible campaigns




7
 The Massachusetts Clean Elections Law, Ma. Gen. Laws ch. 55A (2002). From one
perspective, Massachusetts’ program can be characterized as a “partial” public financing
program. That is, publicly financed candidate must collect campaign contributions, ranging
from $5 to $100, which can be solicited only during the relevant qualifying period. In the
2002 gubernatorial race, for example, a publicly financed candidate could have collected
$486,000 in cash contributions and $37,800 of in-kind contributions. Similarly, a publicly
financed candidate for the state house of representatives could have collected $6,500 in
cash contributions and $3,200 of in-kind contributions.
8
 Supreme Judicial Court for the Commonwealth of Massachusetts, Case No. SJC-08677
(Jan. 2002).
9
 Patrick D. Donnay and Graham P. Ramsden, “Public Financing of Legislative Elections:
Lessons from Minnesota,” Legislative Studies Quarterly, vol. 20, no. 3 (1995).
10
 Kenneth R. Mayer and John M. Wood, “The Impact of Public Financing on Electoral
Competitiveness: Evidence from Wisconsin, 1964-1990,” Legislative Studies Quarterly, vol.
20, no. 1 (1995).




Page 9                                 GAO-03-453 Public Funding of Political Campaigns
against incumbents.11 However, the studies noted that participating
candidates in these programs were disadvantaged by spending limits or by
limited funding when faced with high spending by opponents or large
independent expenditures on their opponent’s behalf.

Of the approximately 14 states with direct public financing programs,
Maine and Arizona are unique in having functioning programs that offer
full public funding for qualified candidates for the state legislature and
certain statewide offices. In November 1996, Maine voters approved a
citizen’s initiative—the Maine Clean Election Act12—establishing the
nation’s first program of full public financing for qualified candidates for
the state legislature and for one executive branch office (governor).
Similarly, in November 1998, Arizona voters passed the Citizens Clean
Elections Act,13 which provides full public funding for qualified candidates
for the state legislature and various statewide (executive branch) offices.14
In both Maine and Arizona, candidates who choose to participate in the
public funding programs must first qualify by raising a set number of
$5 contributions from voters. Regarding implementation of these acts, in
both states, the public financing programs became available for candidates
beginning with year 2000 elections.

Appendix II provides more detailed information about the design and
implementation of Maine’s and Arizona’s public financing programs, and
appendix III presents summary information about various legal challenges
to Maine’s 1996 statute and Arizona’s 1998 statute, including challenges to
funding sources for Arizona’s program.




11
   Paul Ryan, “A Statute of Liberty: How New York City’s Campaign Finance Law is
Changing the Face of Local Elections (2003),” and “Eleven Years of Reform: Many
Successes-More to be Done: Campaign Financing in the City of Los Angeles (2001),” reports
in the series “Public Financing in American Elections” sponsored by the Center for
Governmental Studies, (Los Angeles, California), http://www.cgs.org/publications
(downloaded Feb. 20, 2003).
12
     Me. Rev. Stat. Ann. tit. 21-A § 1121, et seq.
13
     Ariz. Rev. Stat. Ann. § 16-940, et seq.
14
  Applicable executive branch offices are Governor, Secretary of State, Attorney General,
Treasurer, Corporation Commissioners, Superintendent of Public Instruction, and Mine
Inspector.




Page 10                                        GAO-03-453 Public Funding of Political Campaigns
                             In the 2000 primary and general elections, about one of every three
Program                      candidates in Maine and one of every four candidates in Arizona chose to
Participation: More          use public financing for their campaigns. In the 2002 primary and general
                             elections, participation in the public financing program increased
Candidates Opting to         significantly in both states, with about one-half or more of all candidates
Use Public Financing         participating. Regarding results, 62 of the 116 publicly funded candidates
                             in Maine’s 2000 general election were elected to office, as were 110 of the
                             231 publicly funded candidates in the state’s 2002 general election. In
                             Arizona’s 2000 general election, 16 of the 44 publicly funded candidates
                             were elected to office, as were 39 of the 89 publicly funded candidates in
                             the state’s 2002 general election.

                             In perspective, after the 2000 general elections, the elected legislators who
                             had run with public funds held 33 percent of the total seats in Maine’s
                             legislature and 18 percent of the total seats in Arizona’s legislature. After
                             the 2002 general elections, the proportions increased to 59 percent of
                             Maine’s legislature and 36 percent of Arizona’s legislature. Also, of the
                             seven statewide offices in Arizona’s 2002 general election, publicly funded
                             candidates won seven of nine seats, which included Governor, Secretary
                             of State, Attorney General, and State Treasurer.


Participating Candidates     Maine’s 1996 voter-initiated system provides full public funding to
and Results Statistics for   qualified candidates for state legislative seats and the governor’s office.
Elections in Maine           The state legislature consists of 151 seats in the House of Representatives
                             and 35 seats in the Senate. Incumbents in all 186 legislative seats serve
                             2-year terms. Thus, in the primary and general elections, which are held
                             biannually (i.e., in each even-numbered year), all legislative seats are on
                             the ballot. In 2000, the first year for which public funds were available for
                             election campaigns in Maine, candidates potentially eligible for such funds
                             included all candidates for the state legislature.15

                             In Maine’s 2000 primary and general elections, approximately one of every
                             three candidates chose to participate in the state’s program for pubic
                             financing of campaigns, as table 1 shows. Also, 33 percent of the primary
                             election races and 47 percent of the general election races in 2000 had at
                             least one participating candidate. In the next election, 2002, participation
                             in the public financing program increased significantly. Specifically, in



                             15
                              Under Maine’s 1996 law, qualified candidates for office of Governor became eligible to
                             receive public funding beginning in 2002.




                             Page 11                                GAO-03-453 Public Funding of Political Campaigns
                                            Maine’s 2002 elections, 51 percent of all candidates in the primary election
                                            and 62 percent of all candidates in the general election were publicly
                                            funded. Further, 52 percent of the primary election races and 79 percent of
                                            the general election races in 2002 had at least one participating candidate.

Table 1: Maine’s Primary and General Elections in 2000 and 2002—Number of Candidates Who Used Public Financing and
Number of Races with at Least One Participating Candidate

Candidates and races                                                              Maine primary election            Maine general election
2000 elections
Candidates:                                                                       Number       Percentage          Number             Percentage
Nonparticipating (used private financing)                                            253             69%              236                   67%
Participating (used public financing)                                                116               31             116                     33
Total                                                                                369            100%              352                  100%
Races:a
With no participating candidates                                                      231             67%                 98                   53%
With at least one participating candidate                                             112               33                88                     47
Total                                                                                 343            100%                186                  100%
2002 elections
Candidates:
Nonparticipating (used private financing)                                             196             49%                144                   38%
Participating (used public financing)                                                 208               51               231                     62
Total                                                                                 404            100%                375                  100%
Races:a
With no participating candidates                                                      176             48%                 39                   21%
With at least one participating candidate                                             194               52               148                     79
Total                                                                                 370            100%                187                  100%
                                            Source: GAO analysis of state data.

                                            Note: Maine has 151 House districts and 35 Senate districts. Voters elect one legislator for each
                                            district. The ballot for the 2002 election cycle included gubernatorial candidates, who were eligible to
                                            participate in the public financing program.
                                            a
                                             In counting election races, we included all races in which there was a candidate on the ballot
                                            regardless of whether or not the candidate faced a challenger.


                                            In Maine’s 2000 general election, of the 116 candidates who ran with public
                                            financing, 62 were elected to office. As table 2 shows, the 62 elected
                                            participating candidates consisted of 35 incumbents and 27 challengers. In
                                            Maine’s 2002 general election, of the 231 candidates who ran with public
                                            financing, 110 were elected to office (55 incumbent and 55 challengers).

                                            In perspective, after the 2000 general election, the elected legislators who
                                            had run with public funds (62 candidates) held 33 percent of the 186 total
                                            seats in Maine’s legislature. After the 2002 general election, with 110




                                            Page 12                                         GAO-03-453 Public Funding of Political Campaigns
                                         successful publicly funded candidates, the proportion increased to 59
                                         percent of the state legislature.

Table 2: Results of Maine’s General Elections in 2000 and 2002—Campaign Status and Number of Participating Candidates
Elected by Office

                                                                         Maine House of
                                                                                                                                    a
 Participating candidates: Incumbents, challengers, and results          Representatives        Maine Senate            Governor        Totals
 2000 general election
 Campaign status of participating candidates:
                                                                                                                                    b
 Number of incumbents                                                                     26                  11                            37
 Number of challengersc                                                                                                             b
                                                                                          55                  24                            79
                                                                                                                                    b
 Total number of participating candidates                                                 81                  35                           116
                                                                                                                                    b
 Participating candidates elected:
                                                                                                                                    b
 Number of participating incumbents elected                                               24                  11                             35
 Number of participating challengers electedc                                                                                       b
                                                                                          21                   6                             27
                                                                                                                                    b
 Total number elected                                                                     45                  17                             62
                                                                                                                                    b
 2002 general election
                                                                                                                                    b
 Campaign status of participating candidates:
 Number of incumbents                                                                    42                   20                   0        62
 Number of challengersc                                                                 136                   32                   1       169
 Total number of participating candidates                                               178                   52                   1       231
 Participating candidates elected
 Number of participating incumbents electedc                                              36                  19                   0        55
 Number of participating challengers electedC                                             47                   8                   0        55
 Total number elected                                                                     83                  27                   0       110
Source: GAO analysis of state data.
                                         a
                                          In Maine’s 2000 election, the public financing program was not applicable to the Office of Governor.
                                         In the 2002 election, term limits prohibited the incumbent governor from running.
                                         b
                                             Not applicable.
                                         c
                                         As used in the table, “challengers” consist of all nonincumbent candidates. Thus, any candidate who
                                         was not an incumbent is counted as a challenger, even if that candidate did not face an opponent.


Participating Candidates                 As mentioned previously, Arizona’s 1998 statute provides a system for full
and Results Statistics for               public funding to qualified candidates for state legislative seats and certain
Elections in Arizona                     statewide offices. The state legislature consists of 60 seats in the House of
                                         Representatives and 30 seats in the Senate. Members in all 90 legislative
                                         seats serve 2-year terms. Thus, in the primary and general elections, which
                                         are held biannually (i.e., in each even-numbered year), all legislative seats
                                         are on the ballot. In 2000, the first year for which public funds were
                                         available for election campaigns in Arizona, candidates potentially eligible




                                         Page 13                                     GAO-03-453 Public Funding of Political Campaigns
for such funds included all candidates for the state legislature, as well as
the candidates who ran for seats on the Corporation Commission.16

In Arizona’s 2000 primary and general elections, approximately one of
every four candidates chose to participate in the state’s program for public
financing of campaigns, as table 3 shows. Also, 40 percent of the primary
election and 34 percent of the general election races in 2000 had at least
one participating candidate. In the next election, 2002, participation in the
public financing program increased significantly—with about half of all
candidates choosing to participate and with about two-thirds of all races
having at least one participating candidate.




16
  Under Arizona’s 1998 law, qualified candidates for other statewide offices—Governor,
Secretary of State, Attorney General, Treasurer, Superintendent of Public Instruction, and
Mine Inspector—can also qualify to receive public funding. Candidates for these offices
were eligible to receive public funding beginning in 2002, the first year after passage of the
law in which elections were held for these offices. See Ariz. Rev. Stat. Ann. § 19-951.




Page 14                                  GAO-03-453 Public Funding of Political Campaigns
Table 3: Arizona’s Primary and General Elections in 2000 and 2002—Number of Candidates Who Used Public Financing and
Number of Races with at Least One Participating Candidate

 Candidates and races                                             Arizona primary election                        Arizona general election
 2000 elections
 Candidates:                                                         Number             Percentage                 Number               Percentage
 Nonparticipating (used private financing)                              174                   75%                     117                     73%
 Participating (used public financing)                                   59                     25                     44                       27
 Totala                                                                 233                  100%                     161                    100%
 Races:
 With no participating candidates                                           74                  60%                       28                    45%
 With at least one participating candidate                                  49                    40                      34                      55
 Total                                                                     123                 100%                      62c                   100%
 2002 elections
 Candidates:                                                          Number            Percentage                 Number                Percentage
 Nonparticipating (used private financing)                               126                  48%                      90                      50%
 Participating (used public financing)b                                  136                    52                     89                        50
 Total                                                                   262                 100%                     179                     100%
 Races:
 With no participating candidates                                           46                  36%                       23                    34%
 With at least one participating candidate                                  81                    64                      45                      66
 Total                                                                     127                 100%                       68                   100%
Source: GAO analysis of state data.

                                             Note: Arizona has 30 legislative districts. Voters elect two representatives and one senator for each
                                             district. For House races, the top two vote-getters in each district’s general election win the seats. The
                                             2000 election cycle included only one statewide office, the Corporation Commission, with two of the
                                             Commission’s three seats up for election. The ballot for the 2002 election cycle included seven
                                             statewide offices—Governor, Secretary of State, Attorney General, State Treasurer, Superintendent
                                             of Public Instruction, State Mine Inspector, and three seats for the Corporation Commission, which
                                             was expanded from three to five Commissioners. The number of candidates and races in this table
                                             include the relevant statewide offices for both years. For example, in 2000, the 62 general election
                                             races consisted of 30 races for House of Representatives seats (with each race involving 2 seats), 30
                                             races for Senate seats, and 2 races for seats on the Corporation Commission; and, in 2002, the 68
                                             general election races consisted of 30 House, 30 Senate, and 8 statewide office races.
                                             a
                                               In the 2000 primary and general elections combined, a total of 237 candidates ran for seats in the
                                             legislature or the Corporation Commission. Of this total, four candidates—two who ran as
                                             Independents and two with general election write-in status—did not run in the primary elections.
                                             Thus, the number of candidates in the primary elections was 233. In the 2000 elections, all 59 of the
                                             publicly funded (participating) candidates ran in the primaries; in contrast, in the 2002 elections, 3 of
                                             the total 139 participating candidates ran in the general election only (see note b).
                                             b
                                              Three participating candidates in the 2002 election cycle did not run primary campaigns; these were
                                             one Independent candidate for Governor and two Independent candidates for the legislature.
                                             Including the 3 Independents, a total of 139 candidates participated in the public financing program in
                                             the 2002 primary and general elections combined.


                                             In Arizona’s 2000 general election, of the 44 candidates who ran with
                                             public financing, 16 were elected to office—14 for legislative seats and
                                             2 for the Corporation Commission. As table 4 shows, the 16 elected
                                             participating candidates consisted of 6 incumbents and 10 challengers. In


                                             Page 15                                       GAO-03-453 Public Funding of Political Campaigns
                                         the 2002 general election, of the 89 candidates who ran with public
                                         financing, 39 were elected (9 incumbents and 30 challengers) to office—32
                                         for legislative seats and 7 for statewide offices.

                                         In perspective, after the 2000 general election, the elected legislators who
                                         had run with public funds (14 candidates) held 18 percent of the 90 total
                                         seats in Arizona’s legislature. After the 2002 general election, with 32
                                         successful publicly funded legislative candidates, the proportion increased
                                         to 36 percent of the state legislature. Also, of the seven statewide offices in
                                         Arizona’s 2002 general election, publicly funded candidates won 7 of
                                         9 seats, which included the state’s chief executive (Governor), as well as
                                         the Secretary of State, the Attorney General, and the State Treasurer.

Table 4: Results of Arizona’s General Election in 2000 and 2002—Campaign Status and Number of Participating Candidates
Elected by Office

 Participating candidates: Incumbents, challengers,              Arizona House of                                    Statewide
                                                                                                                              a
 and results                                                      Representatives            Arizona Senate            offices           Totals
 2000 general election
 Campaign status of participating candidates:
 Number of incumbents                                                               5                         1                 0                6
 Number of challengersb                                                            25                        10                 3               38
 Total number of participating candidates                                          30                        11                 3               44
 Participating candidates elected:
 Number of participating incumbents elected                                         5                         1                 0                6
 Number of participating challengers electedb                                       7                         1                 2               10
 Total number elected                                                              12                         2                 2               16
 2002 general electionc
 Campaign status of participating candidates:
 Number of incumbents                                                               9                         1                2                12
 Number of challengersb                                                            47                        16               14                77
 Total number of participating candidates                                          56                        17               16                89
 Participating candidates elected:
 Number of participating incumbents elected                                         6                         1                2                 9
 Number of participating challengers electedb                                      21                         4                5                30
 Total number elected                                                              27                         5               7d                39
Source: GAO analysis of state data.
                                         a
                                          In Arizona’s 2000 elections, the public financing program was available to qualified candidates for
                                         only one statewide office (Corporation Commission). In the 2002 elections, in addition to the
                                         Corporation Commission, qualified candidates for six other statewide offices became eligible to
                                         receive public funding—Governor, Secretary of State, Attorney General, State Treasurer,
                                         Superintendent of Public Instruction, and State Mine Inspector.
                                         b
                                         As used in the table, “challengers” consist of all nonincumbent candidates. Thus, any candidate who
                                         was not an incumbent is counted as a challenger, even if that candidate did not face an opponent.




                                         Page 16                                      GAO-03-453 Public Funding of Political Campaigns
                          c
                           A 5-member independent redistricting commission was created with the passing of a ballot
                          proposition in 2000 and was charged with redrawing Arizona’s 30 legislative districts for the 2002
                          elections. Because all 30 legislative districts were redrawn for the 2002 elections, most incumbents
                          who chose to run for reelection did so in a district that was numbered differently from the district they
                          represented in the previous term. In comparing the 2002 list of legislative candidates and the 2000
                          legislative roster, we labeled a 2002 candidate as an incumbent if he or she held a seat from the
                          previous session in the same chamber.
                          d
                          These seven successful candidates involved races for the following statewide offices: Governor,
                          Secretary of State, Attorney General, State Treasurer, State Mine Inspector, and Corporation
                          Commission (two seats).




                          In Maine and Arizona, there were not any notable changes in the average
Voter Choice:             number of state legislature candidates per district race when comparing
Legislative and           the 1996 and 1998 traditionally financed elections with the publicly
                          financed elections in 2000 and 2002. While there were some instances of
Statewide Candidates      multiple-candidate races for legislative seats in Arizona, there was not a
in Publicly Funded        large presence of participating candidates in these races. In both states, a
                          higher proportion of Democratic candidates participated in the public
Elections                 funding program, and the number of participating third-party or
                          independent legislative candidates generally increased from the 2000 to
                          the 2002 primary and general elections. In the 2002 elections, one-half or
                          more of Maine’s and Arizona’s third-party or independent legislative
                          candidates participated in the public financing program. Regarding races
                          for statewide offices, most candidates in Arizona opted to participate in
                          the public funding program in the 2002 elections.

                          Our survey of candidates in Maine’s and Arizona’s 2000 elections found
                          mixed perspectives as to which of two factors—public funding for
                          campaigns or open seats due to term-limited vacancies—played a greater
                          role (or equal roles) in attracting new candidates to run for office. Most of
                          the nonparticipating candidates who responded—64 percent in Maine and
                          58 percent in Arizona—answered that open seats were a greater factor
                          than public funding. Of the participating candidates who responded, the
                          largest percentage in Maine (43 percent) answered that both factors
                          played equal roles, and the largest percentage in Arizona (39 percent)
                          answered that public funding was a greater factor.


Increasing Voter Choice   Proponents of the public financing initiatives in Maine and Arizona
Was a Goal of Public      contended that public funding would encourage more individuals to run
Financing Programs        for office, thereby giving voters more choices on the ballot. Opponents
                          have said that an increase in the number of candidates on the ballot alone




                          Page 17                                       GAO-03-453 Public Funding of Political Campaigns
                             would not necessarily result in more diversity17 or representation of a
                             wider range of political views, nor guarantee that a broader array of issues
                             would be debated in campaigns. During our study, the state officials and
                             researchers we interviewed said that changes in the number of candidates
                             per race—as well as changes in the breadth of party affiliations, such as
                             third-party or independent representation—would be important indicators
                             to measure over several election cycles.


Little Variance in Average   As table 5 shows, the average number of state legislature candidates per
Number of State              district race in Maine and Arizona did not vary greatly over the 4 election
Legislature Candidates Per   years examined. In Maine, on average, there was about one candidate per
                             race in the primary elections and about two candidates per race in the
District Race                general elections.

                             In Arizona, the average number of candidates in the house primary
                             elections was about two candidates per race, since up to two candidates
                             per political party can be nominated for the general election. In the house
                             general elections, two candidates are elected per district; the average
                             number of candidates was about three per race in each of the election
                             years. For Arizona’s senate elections, the average number of candidates
                             was about one for primary election races and about two for general
                             election races.




                             17
                              Officials from the Maine and Arizona Secretary of State offices told us that they do not
                             collect data on state candidates’ race or sex. Therefore, we did not compare these
                             demographics of candidates in the recent (2000 and 2002) and the previous elections.




                             Page 18                                 GAO-03-453 Public Funding of Political Campaigns
Table 5: Average Number of State Legislature Candidates Per District Race in Maine and Arizona (1996, 1998, 2000, and 2002)

                                                                 Primary and general                           Average number of candidates
 State                     Legislature                           election                                            per district race
                                                                                                             1996       1998         2000               2002
 Maine                     House of Representatives              Primary                                       1.2        1.1          1.1                1.1
                                                                 General                                       2.0        1.8          1.9                2.0
                           Senate                                Primary                                       1.2        1.0          1.1                1.1
                                                                 General                                       2.0        1.9          2.1                2.0
 Arizona                   House of Representatives              Primarya                                      2.5        2.2          2.5                2.7
                                                                 Generalb                                      3.4        3.1          3.4                3.5
                           Senate                                Primary                                       1.2        1.2          1.4                1.4
                                                                 General                                       1.8        1.5          1.9                1.7
Source: GAO analysis of state data.

                                                      Note: All Arizona legislative districts were reconfigured in the 2002 elections.
                                                      a
                                                      The two candidates receiving the most votes in the Arizona primary are the party nominees in the
                                                      general election.
                                                      b
                                                       The two candidates in each house district receiving the most votes in the general election are
                                                      elected.


                                                      Although there were no notable changes in the average number of
                                                      candidates per race, there were some races in the Arizona 2000 house
                                                      primary election that had large numbers of candidates on the ballot. For
                                                      example, in one House district, nine Republicans ran for the party
                                                      nomination; none of these candidates were publicly funded. In another
                                                      district, eight Democrats ran for the party nomination, of which three were
                                                      publicly funded. According to Arizona officials, the availability of public
                                                      funding was not the main reason for the large numbers of candidates in
                                                      some districts. The officials speculated that the increase in certain races
                                                      resulted from open seats due to term limits.

                                                      As mentioned previously, we surveyed all candidates who ran for state
                                                      legislature seats and applicable statewide offices in Maine’s and Arizona’s
                                                      2000 elections. The survey results showed mixed perspectives as to which
                                                      of two factors—public funding for campaigns or open seats due to term-
                                                      limited vacancies—played a greater role (or equal roles) in attracting new
                                                      candidates to run for office. As figure 1 shows, most of the
                                                      nonparticipating candidates who responded—64 percent in Maine and 58
                                                      percent in Arizona—answered that open seats were a greater factor than
                                                      public funding. Of the participating candidates who responded, the largest
                                                      percentages in Maine (43 percent) and Arizona (39 percent) answered that
                                                      both factors played equal roles.




                                                      Page 19                                       GAO-03-453 Public Funding of Political Campaigns
Figure 1: Response of Candidates in the 2000 Election Regarding Which Factor (Term Limits or Public Funding) Played a
Greater Role in Attracting New Candidates to Run for Office

                                 Maine candidates                                                                  Arizona candidates
  GAO survey question: In your opinion, which played a greater role in attracting        GAO survey question: In your opinion, which played a greater role in attracting
  new candidates to run for office?                                                      new candidates to run for office?


                              Total possible: 100%                                                               Total possible: 100%

                                                                64%                                                                             58%
  Open seats due to                                                                      Open seats due to
  term-limited                                                                           term-limited
  vacancies                                 24%                                          vacancies                         16%


                                3%                                                                                    8%
  Public funding for                                                                     Public funding for
  campaigns                                                                              campaigns
                                            25%                                                                                      37%


                                         19%                                                                                     29%
  Both factors played                                                                    Both factors played
  equal roles                                                                            equal roles
                                                         43%                                                                           39%



                                                                      Nonparticipating

                                                                      Participating

Source: Responses to GAO’s survey (see app. IV and V).



                                                               Further, most of the participating candidates who responded to our
                                                               survey—55 percent in Maine and 56 percent in Arizona—answered that
                                                               the availability of the public financing program was a great or very great
                                                               factor in their decision to run for office in 2000 (see fig. 2).




                                                               Page 20                                  GAO-03-453 Public Funding of Political Campaigns
Figure 2: Percentages of Participating Candidates Who Answered That the Availability of Public Funding Was a Great or Very
Great Factor in Their Decision to Run for Office in 2000


                               Maine candidates                                                                      Arizona candidates
  GAO survey question: Overall, to what extent, if at all, do you agree with the          GAO survey question: Overall, to what extent, if at all, do you agree with the
  statement that the availability of public funding was a factor in your decision to      statement that the availability of public funding was a factor in your decision to
  run for office in 2000?                                                                 run for office in 2000?
                              Total possible: 100%                                                                  Total possible: 100%

  Great or very                                           55%
                                                                                          Great or very                                            56%
  great extent                                                                            great extent


                                                                      Participating

Source: Responses to GAO’s survey (see app. IV and V).

                                                             Note: This question was asked only of candidates participating in the public financing program. All
                                                             104 Maine respondents were state legislative candidates. In Arizona, of the 39 respondents, 35 were
                                                             state legislative candidates and 4 were Corporation Commission candidates.




Political Party Affiliation                                  As shown in table 6, for the 2000 and 2002 elections in both states, about
of Publicly Funded                                           one-half or more of all participating candidates were affiliated with the
Candidates in Maine and                                      Democratic party. Further, in both states, the percentage of participating
                                                             Republican candidates generally increased from 2000 to 2002 in the
Arizona                                                      primary and general elections.




                                                             Page 21                                       GAO-03-453 Public Funding of Political Campaigns
Table 6: Percentage of Participating Legislative Candidates by Political Party Affiliation in Maine and Arizona (2000 and 2002)

                                                                                                         Percentage of participating candidates
                                                         Primary and               Number of
                                                         general                 participating
 State                    Legislature                    elections                candidates                Democrat          Republican       Othera
 Maine - 2000             House of Representatives       Primaryb                           80                  68%                 29%           4%
                                                         Generalb                           81                    70                  23           6
                          Senate                         Primary                            36                    56                  44           0
                                                         General                            35                    54                  46           0
              2002
                          House of Representatives       Primaryb                            156                   62%                  35%        4%
                                                         General                             177                     58                   34         8
                          Senate                         Primary                              50                     48                   48         4
                                                         General                              52                     46                   50         4
 Arizona -2000 House of Representatives                  Primaryb                             40                   68%                  23%       10%
                                                         Generalb                             30                     73                   13        13
                          Senate                         Primary                              14                     86                   14         0
                                                         General                              11                     82                   18         0
               2002
                          House of Representatives       Primary                              86                   50%                  47%        3%
                                                         General                              56                     57                   36         7
                          Senate                         Primary                              25                     64                   28         8
                                                         Generalb                             17                     65                   18        18
Source: GAO analysis of state data.

                                                     Note: All Arizona legislative districts were reconfigured in the 2002 elections.
                                                     a
                                                     Includes third-party (e.g., Green, Libertarian, and Reform) and independent candidates.
                                                     b
                                                     Does not add to 100 percent due to rounding.


                                                     As table 7 shows, the number of third-party or independent legislative
                                                     candidates who participated in the public funding program increased
                                                     almost twofold or greater from the 2000 to the 2002 primary and general
                                                     elections in Maine and the general elections in Arizona. In 2002, over one-
                                                     half of Maine’s third-party or independent candidates participated in the
                                                     public financing program, as did one-half or more of Arizona’s third-party
                                                     or independent candidates. In Maine, most were candidates of the Green
                                                     Independent Party, which had primary election ballot status in 2000 and
                                                     2002. Representatives of the Maine Green Independent Party told us that
                                                     one of their goals was to qualify candidates for public funding in order to
                                                     promote the party’s platform.




                                                     Page 22                                       GAO-03-453 Public Funding of Political Campaigns
Table 7: Number of Third-party or Independent Candidates In Maine and Arizona State Legislative Races (1996, 1998, 2000,
and 2002)

                                       Primary and
 State           Legislature           general elections              Number of third-party or independent candidates
                                                                 1996    1998             2000                     2002
                                                                                           Participating            Participating
                                                                Total    Total      Total    (% of total)    Total    (% of total)
 Maine           House of              Primary                      0        1          4        3 (75%)       12         8 (67%)
                 Representatives and
                 Senate
                                       General                     24       17          30       5 (17%)         28        16 (57%)
 Arizona         House of              Primary                     17        8          22       4 (18%)          8         5 (63%)
                 Representatives and
                 Senate
                                       General                     17        7          19       4 (21%)         14         7 (50%)
Source: GAO analysis of state data.



Most Statewide Office                            In Maine, the public financing program was not applicable for any
Candidates Opted for                             statewide office races in 2000. In Arizona, candidates for one statewide
Public Financing in                              office—the Corporation Commission—were eligible for public funds
                                                 beginning in the 2000 elections. As table 8 shows, in Arizona’s 2000
Arizona’s 2002 Election                          primary election, five of the eight candidates for the Corporation
                                                 Commission chose to participate in the public financing program, as did
                                                 three of the six candidates in the general election. Two of the participating
                                                 candidates were elected to office in 2000.

                                                 In 2002, five of the eight primary election candidates for the Corporation
                                                 Commission were publicly funded, and five of the six general election
                                                 candidates were publicly funded. Participating candidates won two of the
                                                 three available seats.




                                                 Page 23                           GAO-03-453 Public Funding of Political Campaigns
Table 8: Number of Arizona Corporation Commission Candidates (1994, 1996, 1998,
2000, and 2002)

    Election      Candidates and seats                           1994         1996    1998   2000a   2002
    Primary       Number of candidates                              5            2b      3       8       8
                                                                      c           c      c
                  Number of participating candidates                                             5       5
    General       Number of candidates                               3           4       2       6       6
                  Number of open seats                               1           1       1       2       3
                  Average number of candidates per                 3.0         4.0     2.0     3.0     2.0
                  open seat
                                                                      c           c      c
                  Number of participating candidates                                            3       5
Source: GAO analysis of state data.
a
    Public financing was first available in 2000 for this statewide office.
b
    Does not include 2 write-in candidates.
c
    Not applicable.


In Maine, the governor’s election is the only statewide office race eligible
for public campaign financing, and the 2002 elections were the first time
public financing was available for this race. The Republican and Green
Independent Party candidates were publicly funded in the gubernatorial
primary, and the Green Independent candidate also ran in the general
election. During the campaign, the Green Independent Party candidate
spent about $837,000 in public funds to run his gubernatorial campaign
against three traditionally financed competitors in the general election—a
Democrat, a Republican, and an Independent. In the general election, the
Green Independent Party candidate received about 47,000 votes, or about
9.3 percent of the total votes cast.

In Arizona, candidates for six statewide offices were eligible for public
funding for the first time in 2002 (see table 9). For these six statewide
offices, 20 of the 30 candidates who ran in the primary election were
publicly funded, and 11 of the 17 candidates who ran in the general
election were publicly funded. Five of the six winners of these statewide
races were publicly funded—that is, participating candidates won races
for the offices of Governor, Secretary of State, Attorney General, State
Treasurer, and State Mine Inspector.




Page 24                                          GAO-03-453 Public Funding of Political Campaigns
                          Table 9: Number of Candidates for Maine and Arizona Statewide Races (1994, 1998,
                          and 2002)

                                                                                               Election year
                                                                               1994         1998            2002a
                                                                               Total        Total      Total Participating
                              Maine
                              Governor
                              Primary election                                    13            5b           4                  2
                              General election                                     4            5b           4                  1
                              Arizona
                              Governor
                              Primary election                                      6            7           9                  5
                              General election                                      3            4           4                  2
                              Secretary of State
                              Primary election                                      5            3           5                  4
                              General election                                      3            2           3                  2
                              Attorney General
                              Primary election                                     2b            3           5                  2
                              General                                              2b            3           3                  2
                              State Treasurer
                              Primary election                                      2            2           3                  3
                              General election                                      3            2           2                  2
                              Superintendent of Public
                              Instruction
                              Primary election                                      4           1b           6                  4
                              General election                                      2           1b           3                  1
                              State Mine Inspector
                              Primary election                                     1b           1b          2b                  2
                              General election                                     1b           1b          2b                  2
                          Source: GAO analysis of state data.

                          Note: The term of all offices is 4 years. The number of candidates in the primary elections is the total
                          of all candidates listed on the ballot for all political party primaries (including Democrat, Republican,
                          Libertarian, Reform, Green, and Independent). Write-in candidates are not included.
                          a
                              Public financing was first available in 2002 for these statewide offices.
                          b
                              Incumbent candidate ran for reelection.




Candidates’ Views about   Reasons why candidates chose to participate in the public funding
Participation and         program in the 2000 elections are presented in figure 3, which shows the
Nonparticipation in the   results of our survey of candidates. Most of the participating candidates
                          who responded—76 percent in Maine and 81 percent in Arizona—agreed
Public Funding Program    to a great or very great extent with the statement that they chose to
                          participate in the public funding program because they did not want to feel



                          Page 25                                          GAO-03-453 Public Funding of Political Campaigns
                                                              obligated to special interest groups or lobbyists. Further, about three-
                                                              fourths of the responding participating candidates from both states (77
                                                              percent in Maine and 74 percent in Arizona) agreed to a great or very great
                                                              extent with the statement that receiving public funds allowed them to
                                                              spend more time discussing issues in their campaign.

Figure 3: Reasons Why Candidates Chose to Participate in the Public Financing Program


      GAO survey question: To what extent, if at all, do you                           I did not think I would be able to raise enough funds through traditional
      agree with the following statements as to why you                                means to run a competitive campaign.
      chose to run your campaign with public funds in the
                                                                                                     Total possible:                               100%
      2000 elections:
                                                                                        Maine                          34%


      Note: Percentages are candidates who agreed with the statement to a great         Arizona                              45%
      or very great extent.


        Other than collecting "seed money" and $5 contributions, I am opposed          Receiving public funds allowed me to spend more time discussing
        to traditional methods of funding election campaigns.                          issues.

                       Total possible:                                100%                           Total possible:                               100%

         Maine                                   45%                                    Maine                                                  77%


         Arizona                                    50%                                 Arizona                                              74%



                                                                                       I believe that the public financing program promotes the accountability
        I did not want to feel obligated to special interest groups or lobbyists.
                                                                                       of legislators to the public.

                       Total possible:                                100%                           Total possible:                               100%

         Maine                                                   76%                    Maine                                        60%


         Arizona                                                   81%                  Arizona                                          68%



                                                                       Participating


Source: Responses to GAO's survey (see app. IV and V).



                                                              On the other hand, an analysis of why candidates chose not to participate
                                                              in the public funding program in the 2000 elections is presented in figure 4.
                                                              About 60 percent or more of the nonparticipating candidates who
                                                              responded to our survey answered that they agreed to a great or very great
                                                              extent with the following statements:




                                                              Page 26                                 GAO-03-453 Public Funding of Political Campaigns
•   Public funds are better used for purposes other than election
    campaigns (59 percent in Maine and 64 percent in Arizona).

•   Public funding forces taxpayers to fund candidates that they may not
    support (61 percent in Maine and 68 percent in Arizona).




Page 27                          GAO-03-453 Public Funding of Political Campaigns
Figure 4: Reasons Why Candidates Did Not Participate in the Public Financing Program


       GAO survey question: To what extent, if at all, do you                                     I did not want restrictions on my campaign spending.
       agree with the following statements as to why you
       chose to run your campaign with private rather than
                                                                                                                Total possible:                                 100%
       public funds in the 2000 elections:
                                                                                                   Maine                          31%


                                                                                                   Arizona                        30%
      Note: Percentages are candidates who agreed with the statement to a great
      or very great extent.

                                                                                                  I had sufficient funds without using public funds.
        I am opposed to public funding of election campaigns.


                       Total possible:                                 100%                                     Total possible:                                 100%

         Maine                                       50%                                           Maine                                   47%


         Arizona                                         54%                                       Arizona                           36%



        I believe that public funds are better used for purposes other than                       I believe that public funding forces taxpayers to fund candidates that they
        election campaigns.                                                                       may not support.

                       Total possible:                                 100%                                     Total possible:                                 100%

         Maine                                             59%                                     Maine                                           61%


         Arizona                                               64%                                 Arizona                                             68%



        I believe that the use of public funds adds burdensome reporting                          I did not want to participate in the public financing program because the legal
        requirements to election campaigns.                                                       status of the program was uncertain for much of the 2000 election cycle.a

                       Total possible:                                 100%                                     Total possible:                                 100%

         Maine                                 41%                                                 Maine       Not applicable

         Arizona                                               63%                                 Arizona                              42%




                                                                         Nonparticipating


Source: Responses to GAO's survey (see app. IV and V).
                                                                 a
                                                                  Given the status of legal challenges to the respective state’s clean election law (see app. III), this
                                                                 question was asked only of Arizona candidates.


                                                                 Figure 4 further shows that, in Arizona, unresolved legal challenges to the
                                                                 state’s public financing program during the 2000 election cycle was a


                                                                 Page 28                                         GAO-03-453 Public Funding of Political Campaigns
                           decisional factor to a great or very great extent for 42 percent of the
                           nonparticipating candidates who responded to our survey. Legal
                           challenges to Arizona’s public financing program (see app. III) persisted
                           throughout the 2000 and 2002 election cycles.


                           To date, two election cycles (2000 and 2002) have occurred under the
Electoral                  public financing programs in Maine and Arizona. In comparing data from
Competition: Analysis      these and the two most recent nonpublic financing years (1996 and 1998)
                           using three measures of electoral competition—contested races,
of Elections in Maine      incumbent reelection rates, and incumbent victory margins—our analysis
and Arizona                showed:

                           •   The percentages of contested legislative races in Maine’s primary
                               elections were relatively unchanged in 2000 and 2002, compared with
                               1998, and were less than the percentage of contested legislative races
                               in 1996. The percentages of contested legislative races in Arizona’s
                               primary elections increased in 2000 and 2002, compared with 1998;
                               however, the percentage of contested races in 2000 was about the same
                               as 1996. About 85 percent of the contested legislative primary races in
                               Maine’s and Arizona’s 2002 elections had publicly financed candidates.

                           •   Legislative incumbent reelection rates remained about the same in both
                               states after public financing was introduced.

                           •   Incumbent victory margins, which we used to identify competitive
                               races, reflected a mixed picture. That is, we defined a competitive race
                               as one in which the difference in the percentage of vote garnered
                               between the winning incumbent and the runner-up was 15 points or
                               less and under this definition, trends (if any) were not clearly evident.
                               Further analysis, which examined several factors related to election
                               outcomes, found that whether a race included publicly financed
                               candidates in 2000 and 2002 had no effect on this measure of
                               competitiveness. However, the results of this analysis should be
                               interpreted with caution, given the relatively few variables we used and
                               the limited amount of data available.

Increasing Electoral       A principal goal of public financing laws is to increase electoral
Competition Was a          competition. The term “electoral competition” refers to the level of
Principal Goal of Public   competition for elected positions as demonstrated by whether races were
                           contested and by the percentage of the vote candidates received. For
Financing                  example, levels of electoral competition can vary from none at all in the
                           case of an uncontested race in which the sole candidate receives 100



                           Page 29                           GAO-03-453 Public Funding of Political Campaigns
percent of the vote, to an election in which several candidates vie
competitively for a position, each winning a significant portion of the vote.
Proponents of the initiatives to adopt public financing laws in both states
supported the goal of increasing electoral competition. In Maine,
proponents said that the initiative would level the playing field so that
challengers would have a chance against incumbents. The findings section
of Arizona’s Act states that the traditional election financing system gave
incumbents an unhealthy advantage over challengers and discouraged
qualified candidates without personal wealth or access to other funds
from running. Further, state officials and other stakeholders we
interviewed in both Maine and Arizona agreed that one purpose of the
states’ public financing laws was to increase electoral competition.

According to some political observers, “A chief standard of success for a
public finance scheme is increasing competitiveness, which increases the
voters’ ultimate check on other abuses and is a measure of the
responsiveness of a legislature.”18 Proponents of public financing for
campaigns contend that public funding could increase electoral
competition by allowing candidates, especially candidates challenging
incumbents, to overcome the financial hurdles that would otherwise
prevent them from entering a race. Further, proponents argue that public
funding promotes competition by giving more candidates the opportunity
to effectively communicate with the electorate once they have entered the
race.19 On the other hand, opponents we interviewed in Maine and Arizona
believe that public financing does not attract candidates who have a broad
base of constituency support and, therefore, even though more new
candidates may enter races and win, the quality of representation will be
questionable.

As a part of this review, we examined changes in electoral competition in
state legislative races by comparing the two most recent nonpublic
funding election years (1996 and 1998) with the two public funding
election years (2000 and 2002). In reviewing public finance and election
literature, we did not find a standard approach for measuring changes in
electoral competition. However, we did identify three widely used



18
 Kenneth R. Mayer and John M. Wood, “The Impact of Public Financing on Electoral
Competitiveness: Evidence from Wisconsin, 1964-1990,” Legislative Studies Quarterly, vol.
20, no. 1 (1995), 75.
19
 Richard Briffault, “Public Funding and Democratic Elections,” University of
Pennsylvania Law Review, vol. 148 (1999), 568-572.




Page 30                                GAO-03-453 Public Funding of Political Campaigns
                            measures of electoral competition—percentages of contested races,
                            incumbent reelection rates, and incumbent victory margins. The first
                            measure refers to the percentage of all races that had more than one
                            candidate running for the position. Because the concern about competitive
                            races is particularly focused on the ability of challengers to mount credible
                            campaigns against incumbents, the other two measures specifically
                            involve incumbents. Incumbent reelection rates examine the percentage of
                            incumbents (running for reelection) who were reelected. Incumbent
                            victory margin examines the difference between the percentage of the vote
                            going to winning incumbents and the runners-up.


Contested Races in Maine    One measure of electoral competition is the percentage of all races for
and Arizona                 seats in the legislature that are contested. As previously mentioned, a chief
                            goal in making public funds available for campaigns was to help potential
                            candidates overcome the financial barriers that deterred them from
                            running, which would result in fewer uncontested races. In Maine and
                            Arizona, uncontested races were much more common in the primary than
                            in general elections from 1996 to 2002.20 Thus, we focused solely on the
                            primary elections and considered a primary election race contested if
                            more than one candidate ran in the political party’s district race.21 If public
                            financing had enticed more candidates to run in the primary election
                            races, we would expect that after 1998, increasing percentages of races
                            would be contested.

Changes in Contested-Race   In Maine, as figure 5 shows, the introduction of public financing in the
Percentages                 2000 election did not correspond with a significant increase in contested
                            primary races. The percentages of contested legislative races in Maine’s
                            primary elections remained relatively unchanged in 2000 (7 percent) and
                            2002 (8 percent), compared with 1998 (6 percent), and were less than the
                            percentage of contested legislative races in 1996 (12 percent). More



                            20
                              The number of contested general election races for seats in Maine’s and Arizona’s house
                            and senate averaged 77 percent of the total applicable races in election years 1996 through
                            2000, while the number of contested primary election races averaged 19 percent of the total
                            applicable races. There were more contested general election races because candidates
                            from both the Democratic and the Republican parties usually ran. In contrast, there was
                            often only one candidate in the primary party races.
                            21
                             Arizona has multimember house districts, so that two representatives are elected from
                            each district. Due to the multimember district arrangement, a contested primary race was
                            one in which three candidates ran in a primary race, since two candidates automatically
                            advanced to the general election race.




                            Page 31                                GAO-03-453 Public Funding of Political Campaigns
                                                         detailed analysis, including coverage of additional years, would be
                                                         necessary to determine whether the percentage of contested legislative
                                                         primary races in 1996 (12 percent) was historically high and if the change
                                                         from 1998 to 2002 differs from past changes in Maine.

Figure 5: Contested and Uncontested Races in Maine’s Legislative (House and Senate) Primary Elections (1996, 1998, 2000,
and 2002)

Maine

         Total races: 364                       Total races: 342                            Total races: 343                    Total races: 367

                                                        6%                                         7%                                  8%
                   12%




              88%                                     94%                                       93%                                 92%



              1996                                    1998                                      2000                                2002

                     Public financing not available                                                    Public financing available


                                                                   Contested races

                                                                   Uncontested races

Source: GAO analysis of state data.

                                                         Note: Of the 343 races in the 2000 elections, 25 (7.3 percent) were contested.


                                                         In Arizona, as figure 6 shows, the percentages of contested legislative
                                                         races in the state’s primary elections were higher in 2000 (30 percent) and
                                                         in 2002 (38 percent) than in 1998 (18 percent). However, the percentage of
                                                         contested races in 2000 was about the same as in 1996 (29 percent). More
                                                         data encompassing additional election years before and after public
                                                         financing was introduced would be necessary to identify any trend.




                                                         Page 32                                       GAO-03-453 Public Funding of Political Campaigns
Figure 6: Contested and Uncontested Races in Arizona’s Legislative (House and Senate) Primary Elections (1996, 1998, 2000,
and 2002)

Arizona

        Total races: 112                        Total races: 100                       Total races: 118                    Total races: 107



                                                             18%
                        29%                                                                        30%                                  38%


                                                      82%                                  70%                                 62%
               71%



              1996                                    1998                                 2000                                2002

                     Public financing not available                                               Public financing available


                                                                   Contested races

                                                                   Uncontested races

Source: GAO analysis of state data.




Publicly Financed Candidates                             Two election cycles provide a limited basis for projecting whether the
and Contested Races                                      percentage of contested races will increase in Maine’s and Arizona’s
                                                         primary elections. However, we examined the 2000 and 2002 races in
                                                         Maine and Arizona to determine the extent to which contested races had
                                                         publicly financed candidates. In Maine’s legislative primary elections, as
                                                         figure 7 shows, 56 percent of the contested races in 2000 had publicly
                                                         financed candidates, and the percentage increased to 86 percent in 2002.
                                                         Overall, however, there were still many more uncontested races (318 and
                                                         338) than contested races (25 and 29) in both 2000 and 2002.




                                                         Page 33                                  GAO-03-453 Public Funding of Political Campaigns
Figure 7: Publicly Financed Candidates in Maine’s Contested Legislative Primary
Races (2000 and 2002)




          Total races: 25                           Total races: 29


                                                            14%
                       44%
      56%
                                                       86%



              2000                                     2002

           Races with publicly financed candidates

           Races with all traditional candidates.

Source: GAO analysis of state data.


If publicly financed candidates had not run in Maine’s 2000 and 2002
primary elections, there would likely have been fewer contested races. For
example, in our survey of candidates in Maine’s 2000 election, we asked
the publicly financed candidates to what extent the availability of public
funding had been a factor in their decision to run for office. Of the 20
publicly financed challengers who ran in contested races in Maine’s 2000
legislative primaries, 13 returned our survey questionnaire. Eight of those
13 candidates answered that the availability of public funding influenced
their decision to run to a great extent. Only one candidate answered that
the availability of public funding was of little or no importance in the
decision to run.

In Arizona’s legislative primary elections, as figure 8 shows, a significant
percentage of the contested races in 2000 (40 percent) had publicly
financed candidates, and the percentage more than doubled in 2002 (85
percent). Similarly to Maine, however, there were still more uncontested
races (83 and 66) than contested races (35 and 41) in 2000 and 2002.




Page 34                                    GAO-03-453 Public Funding of Political Campaigns
                       Figure 8:Publicly Financed Candidates in Arizona’s Contested Legislative Primary
                       Races (2000 and 2002)



                                 Total races: 35                          Total races: 41


                                                                                    15%


                             40%              60%

                                                                             85%



                                      2000                                   2002

                                  Races with publicly financed candidates

                                 Races with all traditional candidates.

                       Source: GAO analysis of state data.


                       Since such a high percentage of the contested primary legislative races in
                       Arizona’s 2000 and 2002 elections had publicly financed candidates, as in
                       Maine, there would likely have been fewer contested races if those
                       candidates had not run. In our survey of candidates in Arizona’s 2000
                       election, we asked the publicly financed candidates to what extent the
                       availability of public funding had been a factor in their decision to run for
                       office. Of the 19 publicly financed challengers who ran in contested races
                       in Arizona’s 2000 legislative primaries, 12 returned our survey
                       questionnaire. Half of those candidates answered that the availability of
                       public funding influenced their decision to run to a great extent. Three of
                       the 12 candidates answered that the availability of public funding was of
                       little or no importance in their decision to run.


Incumbent Reelection   A second measure of electoral competition is incumbent reelection rates
Rates in Maine and     in the general legislative elections in Maine and Arizona. Some political
Arizona                observers have asserted that electoral competition is primarily determined
                       by the ability of challengers to mount credible campaigns against




                       Page 35                                   GAO-03-453 Public Funding of Political Campaigns
                                incumbents.22 Also, many believe that incumbents begin a race with
                                numerous advantages over challengers—advantages such as name
                                recognition with the public, free media attention, and the opportunity to
                                provide constituency services.23 For these reasons, incumbent reelection
                                rates are typically high in states throughout the nation. For example, a
                                1991 study—covering 10 election cycles (during 1968 through 1986) for
                                legislative seats in 16 states—found that 92 percent of 11,711 house
                                incumbents seeking reelection were successful. The same study reported
                                that 88 percent of 2,547 senate incumbents were successful.24 If public
                                financing in Maine and Arizona helped to improve challengers’ ability to
                                mount credible campaigns against incumbents, one indication might be
                                lower incumbent reelection rates in 2000 and 2002, as compared to
                                election years before public financing was introduced.

Incumbent Reelection Rates in   As figure 9 shows, the incumbent reelection rates in Maine’s house
Maine                           remained relatively unchanged over the 4 years, with the exception of a
                                slight increase in 2000 (91 percent). Comparatively, these reelection rates
                                in Maine’s house were near, but slightly below the 16-state average (92
                                percent) reported by the 1991 study mentioned previously. Although
                                incumbent reelection rates for Maine’s house did not change much over
                                the 4 election years we reviewed, 4 of the 10 incumbents who were
                                defeated in 2000, and 10 of the 14 incumbents who were defeated in 2002
                                lost to publicly financed candidates.




                                22
                                 Kenneth R. Mayer and John M. Wood, “The Impact of Public Financing on Electoral
                                Competitiveness,” 74.
                                23
                                     Richard Briffault, “Public Funding and Democratic Elections,” 569.
                                24
                                 James C. Garand, “Electoral Marginality in State Legislative Elections, 1968-86,”
                                Legislative Studies Quarterly, vol. 16, no. 1 (1991), 14-15. The states included in this
                                analysis were California, Colorado, Connecticut, Delaware, Iowa, Kentucky, Michigan,
                                Missouri, Nebraska, New Mexico, Ohio, Oklahoma, Pennsylvania, Rhode Island, Utah, and
                                Wisconsin.




                                Page 36                                    GAO-03-453 Public Funding of Political Campaigns
                                Figure 9: Incumbent Reelection Rates in Maine’s Legislative Races (1996, 1998,
                                2000, and 2002)

                                Incumbent reelection rates in percentages
                                100                                                100 (31/31)



                                 96
                                                                                                          91                           92
                                                91
                                                                                                        (20/22)                      (23/25)
                                 92           (21/23)

                                                                                                          91
                                                                                                       (105/115)
                                 88                                            89
                                                                            (105/118)
                                                    86
                                 84              (88/102)                                                                              85
                                                                                                                                     (81/95)


                                 80


                                  0
                                                   1996                          1998                    2000                         2002
                                                          Public financing not                                    Public financing
                                                                available                                            available

                                          House
                                          Senate
                                Source: GAO analysis of state data.

                                Note: The numbers in parentheses represent the number of incumbent victories over total number of
                                incumbents running for reelection in that year.


                                As shown in figure 9, incumbent reelection rates in Maine’s senate also did
                                not change significantly after public financing was introduced. The
                                incumbent reelection rates ranged from 91 percent to 100 percent—91
                                percent in 1996 and 2000, 100 percent in 1998, and 92 percent in 2002.
                                These rates for all 4 election years in Maine’s senate were higher than the
                                senate average (88 percent) from the 1991 study mentioned above.
                                However, of the two senate incumbents who lost in 2000, one lost to a
                                publicly financed candidate, and in 2002, both incumbents who were
                                defeated lost to publicly financed candidates.

Incumbent Reelection Rates in   Figure 10 shows incumbent reelection rates for Arizona’s house and senate
Arizona                         for the 4 most recent general election cycles. The house incumbent
                                reelection rate was 98 percent in 1998 and then dropped 4 percentage




                                Page 37                                                 GAO-03-453 Public Funding of Political Campaigns
points in each of the two publicly funded elections.25 The 90-percent rate in
2002 was slightly lower than the 16-state average (92 percent) mentioned
previously. On the other hand, the incumbent reelection rate in Arizona’s
senate was 96 percent in 1998 and then increased to 100 percent in both
2000 and 2002, the same rate as in 1996.

Figure 10: Incumbent Reelection Rates in Arizona’s Legislative Races (1996, 1998,
2000, and 2002)

Incumbent reelection rates in percentages
                                                                   100 (20/20)             100 (13/13)
                          100 (19/19)           98
100
                                              (44/45)


     96
                                                96
                     95                       (23/24)
                   (41/43)                                             94
     92                                                              (33/35)


                                                                                                 90
     88                                                                                        (27/30)



     84




     80


     0
                   1996                       1998                   2000                      2002
                       Public financing not                                 Public financing
                             available                                         available

          House
          Senate

Source: GAO analysis of state data.

Note 1: The numbers in parentheses represent the number of incumbent victories and the total
number of incumbents running for reelection in that year.

Note 2: Because all 30 legislative districts were redrawn for the 2002 elections, most incumbents who
chose to run for reelection did so in a district that was numbered differently from the district they
represented in the previous term. In comparing the 2002 list of legislative candidates and the 2000
legislative roster, we labeled a 2002 candidate as an incumbent if he or she held a seat from the
previous session in the same chamber.




25
 None of the incumbent losses in Arizona’s house in the 2000 and 2002 general elections
were to publicly financed candidates.




Page 38                                              GAO-03-453 Public Funding of Political Campaigns
Incumbent Victory Margins   A third measure of electoral competition is incumbent victory margins.
in Maine and Arizona        This measure involves examining the difference between the percentage of
                            votes received by the winning incumbents and the second-place finishers.
                            As discussed previously, incumbents enjoy many inherent advantages over
                            challengers. One disadvantage most challengers face is the difficulty in
                            raising campaign funds, which impacts their ability to run an effective
                            campaign. In order to make their name and campaign message known to
                            the public, challengers need to raise money for advertisements and other
                            campaign activities. However, challengers are faced with a circular
                            problem. Campaign contributors generally view challengers as more likely
                            to lose an election than an incumbent; yet, challengers cannot run a
                            competitive campaign unless they can raise money.26 For these reasons,
                            according to proponents, public financing programs would allow
                            challengers to compete more effectively. An indicator of competing more
                            effectively would be a narrowing of the electoral gap between the
                            incumbent winners and the runners-up, not simply whether some
                            incumbents were defeated.

                            Although our review of applicable literature and our discussions with
                            experts confirmed that measuring incumbent victory margins in legislative
                            races is a good indicator of electoral competition, there is disagreement on
                            which margin of difference indicates a competitive race. The studies we
                            reviewed were essentially split between using a difference of 10
                            percentage points or less of the vote or using a difference of 20 percentage
                            points or less of the vote. A margin of 10 percentage points is considered
                            to be more conservative than 20 percentage points because the former
                            represents a higher bar for challengers to meet. We took a central
                            approach and defined a competitive race as one in which the difference in
                            the percentage of the vote garnered between the winning incumbent and
                            the runner-up was 15 points or less. For example, consider a race with two
                            candidates, one the incumbent and the other a challenger. If the
                            incumbent garnered 57 percent of the vote and the challenger garnered 43
                            percent of the vote, the incumbent’s margin of victory would be 14
                            percentage points. Under our definition, this hypothetical race would be
                            competitive because the incumbent won by 15-or-less percentage points.

                            Using our definition, we analyzed all of the legislative general election
                            races in Maine and Arizona that had incumbent wins against at least one



                            26
                             Kenneth R. Mayer and John M. Wood, “The Impact of Public Financing on Electoral
                            Competitiveness,” 74.




                            Page 39                              GAO-03-453 Public Funding of Political Campaigns
                                challenger during the four most recent elections—1996, 1998, 2000, and
                                2002. If the public financing programs helped challengers to run more
                                competitive races against incumbents, we would expect to find larger
                                percentages of competitive races in 2000 and 2002 than in 1996 and 1998.

Competitive Legislative Races   Changes in the percentages of contested races after public financing was
in Maine                        introduced varied between Maine’s house and the senate. As figure 11
                                shows, the percentages of competitive house races in 2000 (31 percent)
                                and 2002 (29 percent) were greater than the percentage in 1998 (21
                                percent) but similar to the percentage in 1996 (32 percent). On the other
                                hand, the percentage of competitive senate races in 2002 (50 percent) was
                                greater than each of the three previous election years.

                                In order to more thoroughly explore the relationship between publicly
                                financed elections and competitive races, in further analysis we examined
                                the effects of several factors relevant to election outcomes and found that
                                whether a race included publicly financed candidates in 2000 and 2002 had
                                no effect on incumbent victory margins. That is, we analyzed the effect of
                                participation in the public financing program on competitiveness after
                                controlling for other factors, such as candidates’ campaign status
                                (incumbent or not) and candidates’ spending.27 However, the results of this
                                analysis should be interpreted with caution, given the relatively few
                                variables we used and the limited amount of data available.




                                27
                                     See appendix I for a discussion of the scope and methodology of our analysis.




                                Page 40                                    GAO-03-453 Public Funding of Political Campaigns
Figure 11: Competitive Legislative Races in Maine (1996, 1998, 2000, and 2002)

Percentage of competitive races
                                                                                                                                              50
 50
                                                                                                                                            (10/20)


 40
                  32                                                                     31
 30             (24/75)                                                                (24/78)
                                                                                                                             29
                                                                                                                           (19/65)
                                                                   22                                    21
                                  21               21
 20                              (4/19)          (16/77)          (6/27)
                                                                                                        (4/19)


 10


  0
                          1996                             1998                                  2000                                2002

                             Public financing not available                                             Public financing available


                                                                        Maine House

                                                                        Maine Senate

Source: GAO analysis of state data.

                                                            Note: The numbers in parentheses represent the number of competitive races divided by the number
                                                            of total races with incumbent wins, which gives the percentage at each data point.


                                                            Since incumbent victory margins, as a measure of electoral competition,
                                                            exclude races in which a challenger won, we also examined the general
                                                            legislative races in 2000 and 2002 to determine the funding status of
                                                            winning challengers. Of the 79 publicly financed legislative challengers
                                                            who ran for a seat in Maine’s 2000 general election, 27 won, representing
                                                            44 percent of the total number of winning challengers that year. In Maine’s
                                                            2002 general election, of the 168 publicly financed legislative challengers
                                                            who ran, 55 won, representing 67 percent of the total number of winning
                                                            challengers that year.

Competitive Legislative Races                               In Arizona, changes in the percentages of competitive general legislative
in Arizona                                                  races across the 4 election years were mixed. For Arizona’s legislative
                                                            elections, our analysis was limited to senate races only because the state’s




                                                            Page 41                                              GAO-03-453 Public Funding of Political Campaigns
house races involve multimember districts, which does not lend itself to
analysis using incumbent victory margins.28

As figure 12 shows, 29 percent (2 of 7) of Arizona’s senate races were
competitive in 1998. This percentage increased to 40 percent (6 of 15) in
2000 and then dropped to 33 percent (2 of 6) in 2002. No trends are
apparent in simply comparing the change in the percentages of
competitive races across the 4 election years. However, similar to the
finding in Maine, we analyzed the effects of several factors relevant to
election outcomes and found that the presence of publicly financed
candidates in a race had no effect on incumbent victory margins in
Arizona’s 2000 and 2002 senate races.29




28
  This measure of competition, incumbent victory margins, involved looking at the
difference in the percentage of the vote garnered by winning incumbents and runners-up.
Therefore, all races included in this analysis had a winning incumbent. In Arizona’s
multimember house districts (two representatives are elected in each district), there were
several possible combinations of winning incumbents, including cases in which one
incumbent won while the other lost. These possible combinations meant that incumbent
victory margins in Arizona’s house races could not be readily compared with victory
margins in Arizona’s senate races, nor to races for Maine’s legislature.
29
     See appendix I for a discussion of the scope and methodology of our analysis.




Page 42                                    GAO-03-453 Public Funding of Political Campaigns
Figure 12: Competitive Senate Races in Arizona (1996, 1998, 2000, and 2002)

Percentage of competitive races
                                                                                                    40
40                                                                                                 (6/15)
35                                                                                                                                 33
                                                                                                                                   (2/6)
                                                              29
30
                                                              (2/7)
25

20

15
                                 10
10
                               (1/10)
  5

  0
                       1996                            1998                                 2000                            2002

                            Public financing not available                                         Public financing available

                                                                      Arizona Senate only

Source: GAO analysis of state data.

                                                         Note 1: The numbers in parentheses represent the number of competitive races divided by the
                                                         number of total races with incumbent wins, which gives the percentage at each data point.
                                                         Note 2: Because all 30 legislative districts were redrawn for the 2002 elections, most incumbents who
                                                         chose to run for reelection did so in a district that was numbered differently from the district they
                                                         represented in the previous term. In comparing the 2002 list of legislative candidates and the 2000
                                                         legislative roster, we labeled a 2002 candidate as an incumbent if he or she held a seat from the
                                                         previous session in the same chamber.


                                                         Again, because the measure of incumbent victory margins excludes races
                                                         in which a challenger won, we also examined Arizona’s general election
                                                         senate races in 2000 and 2002 to determine the funding status of winning
                                                         challengers. Of the 10 publicly financed challengers who ran for a senate
                                                         seat in Arizona’s 2000 general election, only one succeeded, representing
                                                         10 percent of the total number of winning challengers in the senate that
                                                         year. In Arizona’s 2002 general election, of the 16 publicly financed
                                                         challengers who ran for a senate seat, four won, representing 24 percent of
                                                         the total number of winning challengers in the senate that year.




                                                         Page 43                                            GAO-03-453 Public Funding of Political Campaigns
                            Proponents and opponents of public financing programs have competing
Influence of Interest       perspectives regarding the effect of such programs on the influence of
Groups: Mixed Views         interest groups. For instance, an operative question can be posed as
                            follows: Do citizens feel that, once elected, candidates who ran their
on Effects of Public        campaigns with public funding have been more likely to serve the broader
Financing of                interests of their constituents as a whole and less likely to be influenced
                            by specific individuals or groups? This question is not readily amenable to
Campaigns                   quantitative analysis, and responses to our surveys of political candidates
                            and citizens in Maine and Arizona—as well as our interviews with interest
                            group representatives—reflected mixed views.


Reducing the Influence of   As mentioned previously, proponents assert that an intended effect of
Interest Groups Was a       public financing programs is to enhance the confidence of citizens in
Goal of Public Financing    government by reducing the influence of special interests and increasing
                            the integrity of the political process. For instance, the “findings and
                            declarations” section of Arizona’s 1998 Act stated, in part, that the current
                            election-financing system “effectively suppresses the voices and influence
                            of the vast majority of Arizona citizens in favor of a small number of
                            wealthy special interests” and “undermines public confidence in the
                            integrity of public officials.”

                            On the other hand, opponents assert that, under the traditional campaign
                            finance system, the voices of all citizens are represented through
                            competing interest groups. Opponents further assert there is no evidence
                            that government-financed campaigns attract more worthy candidates than
                            does the traditional system or that, once elected, the publicly subsidized
                            candidates vote any differently as legislators than do traditionally financed
                            candidates. Moreover, some opponents question whether the voters in
                            Maine or Arizona read much beyond the title—”clean elections”—of the
                            ballot initiatives.


Mixed Responses from Our    As mentioned previously, we surveyed all candidates who ran for state
Survey of Political         legislature seats and applicable statewide offices in Maine’s and Arizona’s
Candidates                  2000 elections. Among other questions, we asked candidates to what
                            extent, if at all, they agreed with the statement that once elected,
                            candidates who participated in the public financing program have been
                            more likely to serve the broader interests of their constituents as a whole
                            and less likely to be influenced by specific individuals or groups. As figure
                            13 shows, the survey results reflected mixed views. Most of the responding
                            nonparticipating candidates—67 percent in Maine and 68 percent in
                            Arizona—answered to “little or no extent.” In contrast, many of the


                            Page 44                           GAO-03-453 Public Funding of Political Campaigns
                                                               responding participating candidates—42 percent in Maine and 56 percent
                                                               in Arizona—answered to a “great or very great extent.”

Figure 13: Candidate Responses about Public Financing Program and Interest Group Influence

                                 Maine candidates                                                                 Arizona candidates
  GAO survey question: To what extent, if at all, do you agree with the statement       GAO survey question: To what extent, if at all, do you agree with the statement
  that, once elected, candidates who participated in the public financing program       that, once elected, candidates who participated in the public financing program
  have been more likely to serve the broader interests of their constituents as a       have been more likely to serve the broader interests of their constituents as a
  whole and less likely to be influenced by specific individuals or groups?             whole and less likely to be influenced by specific individuals or groups?

                              Total possible:                            100%                                   Total possible:                              100%

                                  7%                                                                                7%
  Great or very                                                                         Great or very
  great extent                                                                          great extent
                                                         42%                                                                          56%



                                                                 67%                                                                                68%
  Little or no extent                                                                   Little or no extent
                                       16%                                                                                  23%



                                                                     Nonparticipating

                                                                     Participating

Source: Responses to GAO's survey (see app. IV and V).



                                                               In our survey, we also asked candidates to what extent, if at all, they
                                                               agreed with the statement that their respective state’s public financing
                                                               program enhanced the public’s confidence in government. Here again, the
                                                               survey results reflected mixed views from nonparticipating and
                                                               participating candidates. Of the responding candidates, figure 14 shows
                                                               that most of the nonparticipating candidates answered to “little or no
                                                               extent,” whereas many of the participating candidates answered to a
                                                               “great or very great extent.”




                                                               Page 45                                  GAO-03-453 Public Funding of Political Campaigns
Figure 14: Candidate Responses about the Public Financing Program and Confidence in Government

                                     Maine candidates                                                                  Arizona candidates
  GAO survey question: To what extent, if at all, do you agree with the statement      GAO survey question: To what extent, if at all, do you agree with the statement
  that the public financing program enhanced the public’s confidence in                that the public financing program enhanced the public’s confidence in
  government?                                                                          government?

                              Total possible: 100%                                                              Total possible: 100%

                                3%                                                                                3%
  Great or very                                                                        Great or very
  great extent                                                                         great extent
                                                  35%                                                                                      51%



                                                              64%                                                                                    71%
  Little or no extent                                                                  Little or no extent
                                      14%                                                                                15%




                                                                    Nonparticipating

                                                                    Participating

Source: Responses to GAO’s survey (see app. IV and V).



                                                          Further, our survey of candidates for office in Maine’s and Arizona’s 2000
                                                          elections contained an ending statement inviting respondents to provide
                                                          any comments they believed were important about the effects of the
                                                          respective state’s public financing program. Examples of comments from
                                                          participating candidates included the following (see app. VI):

                                                          •    To be elected to the state legislature and not feel beholden to anyone
                                                               except constituents is a liberating feeling.

                                                          •    The most important effect of the public financing program has been to
                                                               free legislatures from the influence of campaign contributors.

                                                          •    Public financing takes special interest money out of government. This
                                                               approach is the only way that elections should be run, at the state level
                                                               and nationally.

                                                          •    Arizonans seem well aware that the link between special interest
                                                               money and special interest laws is strong and want to change it.
                                                               Arizona and Maine are leading the way in the nation.

                                                          On the other hand, examples of comments from nonparticipating
                                                          candidates included the following (see app. VI):



                                                          Page 46                                      GAO-03-453 Public Funding of Political Campaigns
                           •    Special interests continue to exert tremendous influence on both
                                privately and publicly funded candidates. The only difference is that
                                the influence on privately funded candidates is fully disclosed and
                                reported, while the influence on “clean” candidates is not disclosed
                                anywhere.

                           •    Under the public funding program, lobbyists are able to continue their
                                influence by simply “volunteering” to collect $5 qualifying contributions
                                for participating candidates.

                           •    People voted for the public funding program because they thought dirty
                                campaigning (e.g., personal attack ads) would stop. Yet, the 2000
                                election was one of the dirtiest campaign scenes in years.

                           •    The “clean election” designation for those taking advantage of the
                                public funding program implies that the traditional candidate may not
                                be “clean.” This is unfortunate and should be changed.


Mixed Responses from Our   We contracted with professional pollsters to obtain the views of
Survey of Citizens         projectable samples of voting-age citizens in Maine and Arizona. Generally,
                           this polling effort was designed to determine the extent to which the
                           citizenry were aware of the respective state’s public financing program
                           and to obtain citizenry views about whether the program has increased
                           citizens’ confidence in government and decreased the influence of special
                           interest groups. The wording of the specific questions was developed by
                           us, with some assistance from the polling organizations (see app. I).30

                           As table 10 shows, we asked voting-age citizens their views regarding the
                           effect of the public financing program on the influence of special interest
                           groups. Of the polled citizens who acknowledged some awareness of the
                           respective state’s applicable law, over one-half in both states answered
                           that there was no effect or it was too soon to tell. In Maine, more
                           respondents answered that the law had greatly or somewhat decreased
                           special interest influence (25 percent) than did respondents who answered




                           30
                             In designing the questions, we used the term “clean election” because this wording has
                           been widely used in the media, was used in the ballot initiatives, and also is part of the title
                           of the respective state’s law. Thus, in reference to voter awareness, the term “clean
                           election” likely is more commonly recognized than an alternative term such as “public
                           financing program.”




                           Page 47                                   GAO-03-453 Public Funding of Political Campaigns
that the law had greatly or somewhat increased special interest influence
(7 percent).

As table 10 further shows, we also asked voting-age citizens their views
regarding the effect of the public financing program on their confidence in
government. Of the polled citizens who acknowledged some awareness of
the respective state’s applicable law, almost two-thirds in both states
answered that there was no effect or it was too soon to tell. Additionally,
slightly more respondents in each state answered that the law had greatly
or somewhat increased their confidence in state government—17 percent
in Maine and 21 percent in Arizona—than did respondents who answered
that the law had greatly or somewhat decreased their confidence—8
percent in Maine and 15 percent in Arizona.




Page 48                         GAO-03-453 Public Funding of Political Campaigns
                              Table 10: Maine and Arizona Citizenry Views (in Percentages) on Clean Election
                              Law

                                                                                                          Maine         Arizona
                                                      GAO survey questions and response              voting-age      voting-age
                                                                                                               a                 a
                                  Topic               options                                          citizens        citizens
                                  Influence of        Would you say that the state’s clean election law has greatly increased,
                                  special             somewhat increased, has had no effect, has somewhat decreased, or
                                  interest            greatly decreased the influence of special interest groups on legislators,
                                  groups              or is it too soon to tell?a
                                                        Greatly increased                                    2%              4%
                                                        Somewhat increased                                     5              12
                                                        Had no effect                                         21              25
                                                        Somewhat decreased                                    21                9
                                                        Greatly decreased                                      4                2
                                                        Too soon to tell                                      34              39
                                                        Unsure or declined to answer                          12                9
                                  Citizens’           Would you say that the state’s clean election law has greatly increased,
                                  confidence in       somewhat increased, has had no effect, has somewhat decreased, or
                                  state               greatly decreased your confidence in state government, or is it too soon
                                                               a
                                  government          to tell?
                                                        Greatly increased                                    2%              2%
                                                        Somewhat increased                                    15              19
                                                        Had no effect                                         39              33
                                                        Somewhat decreased                                     5              10
                                                        Greatly decreased                                      3                5
                                                        Too soon to tell                                      26              26
                                                        Unsure or declined to answer                           9                4
                              Source: Summary statistics of GAO-contracted polling of voting-age citizens of Maine and Arizona (see app. I).

                              Notes: These two questions were asked only if the citizen indicated some awareness of the state’s
                              clean election law. For Maine, the number of respondents for these questions was 157, and the
                              maximum 95-percent confidence interval for these survey results is plus or minus 8 percentage
                              points. For Arizona, the number of respondents for these questions was 433, and the maximum 95-
                              percent confidence interval for these survey results is plus or minus 5 percentage points.
                              a
                              Percentages may not total 100 percent due to rounding.



Interest Group Views on       We interviewed interest group representatives31 in Maine and Arizona to
Effects of Public Financing   obtain their views on the effects of the public financing programs—
Programs                      including changes, if any, in how they interact with political candidates
                              and legislators after inception of the programs. Unlike our surveys of



                              31
                               These representatives included, for example, officers of and/or lobbyists for organizations
                              such as the Maine Bankers Association, Maine Medical Association, Arizona Chamber of
                              Commerce, and Arizona Education Association (see app. I).




                              Page 49                                                   GAO-03-453 Public Funding of Political Campaigns
candidates and citizens, the results of our interest groups interviews are
anecdotal and may not be representative of all interest groups in the
states. Nonetheless, similar to the candidate and citizen survey results, the
lobbyists we interviewed had mixed views.

Representatives of one interest group told us that traditional campaign
contributions do not necessarily influence an elected candidate’s
subsequent voting record; rather, the contributions help donors obtain
access to discuss issues. Another lobbyist said that public funding had not
reduced the influence of special interests. This individual noted that
publicly funded candidates often are beholden to unions, trade
associations, or other organizations instrumental in helping these
candidates raise the required number of $5 qualifying contributions. In
contrast, another lobbyist said that public financing of campaigns has had
a positive effect on the political process and has improved government.
This individual explained that the relationship between a lobbyist and a
candidate/legislator now tends to be more professional and focuses on the
contents or merits of proposed legislation rather than on campaign
contributions.

Some interest group representatives commented that the public funding
programs—particularly as increasing numbers of candidates participate—
are causing changes in the roles of lobbyists and interest groups. For
instance, the representatives noted that (except for seed money and $5
qualifying contributions) publicly funded candidates are prohibited from
soliciting campaign contributions, which results in fewer opportunities for
lobbyists to inform these candidates about the interests of clients. The
representatives also noted that more contribution money now is going to
political action committees or other groups, which has led to increased
spending (“independent expenditures”) to support or oppose certain
candidates.

Generally, the interest group representatives noted that it is too soon to
tell whether legislators who ran with public funds serve the broader
interests of their constituents any differently or better than do traditionally
funded candidates.




Page 50                           GAO-03-453 Public Funding of Political Campaigns
                          Under the public financing programs in the 2000 and 2002 elections,
Campaign Spending:        average legislative candidate spending decreased in Maine but increased in
Average Candidate         Arizona, compared with previous elections. Also, particularly in the 2002
                          elections, both states experienced increases in independent
Spending Decreased        expenditures—a type of campaign spending whereby political action
in Maine but              committees, other groups, or individuals communicate messages to voters
                          that support or oppose a clearly identified candidate but without
Increased in Arizona;     coordination with any candidate. The 2002 increases in independent
Independent               expenditures largely were associated with the gubernatorial races in both
Expenditures Became       states. Because it is not regulated, the extent of spending for issue
                          advocacy—that is, public policy messages that do not refer to a specific
More Prominent in         candidate—is not known.
Both States; Extent of
Issue Advocacy
Spending Not Known

Campaign Spending was a   According to proponents of the public financing programs in Maine and
Principal Concern of      Arizona, escalating campaign costs helped deter candidates from running
Public Financing          for office. For example, a 1992 study conducted by the Maine Citizens
                          Leadership Fund, a group cited as a catalyst behind Maine’s law,
Proponents                concluded in part that, “The cost of running for the Maine legislature is
                          exploding.” Additional findings in that report suggested that “next steps”
                          should include eliminating access to wealth as a determinant of a citizen’s
                          influence within the political process, halting and reversing the escalating
                          costs of elections, and challenging the assumptions that public elections
                          can and should be privately financed. Similarly, the “findings and
                          declarations” preamble to Arizona’s law states that the “current election-
                          financing system” allows Arizona elected officials to accept large
                          campaign contributions from private interests; favors a small number of
                          wealthy special interests; and drives up the cost of running for state office,
                          discouraging otherwise qualified candidates who lack personal wealth or
                          access to special-interest funding.

                          Accordingly, the public funding programs in Maine and Arizona each were
                          designed to have a two-pronged approach for reducing campaign
                          spending. That is, each program

                          •   imposed spending limits and certain other requirements on candidates
                              who chose to participate in the public financing program and




                          Page 51                           GAO-03-453 Public Funding of Political Campaigns
                        •    reduced the total amount of money that nonparticipating candidates
                             were allowed to accept from each campaign contributor.

                        The intended outcome of this approach was to lower the cost of running
                        for office by reducing and capping the amount of money available for
                        campaign spending.32 Generally, campaign spending comprises two
                        components—spending by candidates and independent expenditures.
                        Both of these spending components are tracked by the agencies
                        responsible for administering the public financing programs—Maine’s
                        Commission on Governmental Ethics and Election Practices and Arizona’s
                        Citizens Clean Elections Commission. Such tracking is important because
                        publicly financed candidates can receive matching funds based on
                        spending by or for traditionally financed candidates, or spending opposing
                        a participating candidate.

                        On the other hand, neither commission tracks issue advocacy spending.
                        Issue advocacy—interpreted by the courts as being protected free
                        speech—usually takes the form of media advertisements that do not
                        expressly advocate for or against a clearly identified political candidate.
                        Generally, there are no requirements for reporting issue advocacy
                        spending to any state or federal agency.


Average Legislative     Compared to the 1996 and 1998 elections, average legislative candidate
Candidate Spending      spending decreased in Maine in the 2000 and 2002 elections but increased
Declined in Maine but   in Arizona, as figure 15 shows. Specifically, for Maine house races, average
                        candidate spending in the recent elections (2000 and 2002) was lower than
Increased in Arizona    the averages for previous elections (1996 and 1998), although the 2002
                        average reflected an increase from 2000. For Maine senate races, average
                        candidate spending decreased in each of the two recent elections. In
                        Arizona, however, average legislative candidate spending increased
                        substantially—by about 55 percent for house candidates and 80 percent
                        for senate candidates—in the first year that public funding became
                        available. These dissimilar spending trends may be partly due to
                        differences in the two states’ provisions for distributing funds to
                        candidates who participated in the public financing program. In Maine’s
                        program, distribution amounts were based on whether the participating



                        32
                         For the 2000 elections, appendix II shows the amount of campaign funds provided to
                        candidates who participated in the public funding programs and the contribution caps
                        applicable to nonparticipating candidates.




                        Page 52                               GAO-03-453 Public Funding of Political Campaigns
candidate ran for a house or a senate seat. But, in Arizona’s program, equal
amounts were distributed to participating legislative candidates,
regardless of legislative office type (see app. II). Thus, in Arizona’s 2000
elections, a participating house or senate candidate who faced a
challenger in both the primary and general elections received a minimum
of $23,389.33 This guaranteed minimum allocation was $6,189 more than
the average amount that house candidates spent in 1998. If the release of
matching funds34 had been triggered, the potential maximum allocation to
a house candidate in Arizona would have been $70,166 in 2000, after
adjustment for inflation.




33
  This is the actual 2000 election total allocation of $25,000—adjusted for inflation to 1996
dollars to permit comparison to the inflation-adjusted average amount shown in figure 15
for 1998 and other years—for a participating candidate who faced a challenger and did not
receive any matching funds.
34
  After initial funding allocations, publicly financed candidates can receive additional funds
(i.e., matching funds) based on spending by or for privately financed (nonparticipating)
candidates, who—while subject to state limits and disclosure rules—engage in traditional
means to raise money from individuals, corporations, and political action committees (see
app. II).




Page 53                                  GAO-03-453 Public Funding of Political Campaigns
Figure 15: Average Maine and Arizona Legislative Candidate Spending (1996, 1998, 2000, and 2002)

                                       Maine                                                                                 Arizona
  Thousands of Dollars                                                                      Thousands of Dollars
  25                                                                                        35                                                            32.6
                                                          20.3                              30
  20                                                                                                                26.7                                            27.1
                                                $18.4                                                                         25.3
                                                                  16.8a     16.4            25
  15                                                                                        20                                                   18.1
                                                                                                           17.2                        $16.9
                                                                                                 $15.8
  10                                                                                        15

                    5.5                                                                     10
         $4.8                          4.5
    5                         3.8
                                                                                             5

    0                                                                                        0
         1996     1998      2000      2002     1996     1998      2000      2002                 1996      1998     2000      2002     1996     1998      2000      2002
        Public financing    Public financing   Public financing   Public financing               Public financing   Public financing   Public financing   Public financing
         not available         available        not available        available                    not available        available        not available        available


             Maine House                                                                             Arizona House

             Maine Senate                                                                            Arizona Senate

Source: GAO analysis of state data.

                                                             Note: In the figure, we did not include any candidate who reported spending zero dollars or did not
                                                             run in the general election. For those candidates, spending includes primary and general election
                                                             amounts combined. With 1996 as the base year, we adjusted all spending amounts for inflation using
                                                             the Department of Commerce’s (Bureau of Economic Analysis) gross domestic product implicit price
                                                             deflator.
                                                             a
                                                             Includes one candidate who spent $143,199. When this candidate is excluded, the average drops to
                                                             $15,065.


                                                             For the two elections (2000 and 2002) under the public financing programs
                                                             in Maine and Arizona, we compared average spending by nonparticipating
                                                             and participating legislative candidates. As figure 16 shows:

                                                             •     In Maine house races, average spending by each type of candidate was
                                                                   roughly equal each year—with nonparticipating candidate spending
                                                                   slightly higher in 2000, and participating candidate spending slightly
                                                                   higher in 2002. For Maine senate races in 2000, average spending by
                                                                   nonparticipating candidates was comparatively higher. However, one
                                                                   candidate in the 2000 senate race spent $143,199 in winning the
                                                                   election (fig. 16, note a). In 2002 senate races, participating candidates
                                                                   spent more than nonparticipating candidates, on average.

                                                             •     In Arizona, for house races in both years, average spending by
                                                                   participating candidates was considerably higher than average



                                                             Page 54                                      GAO-03-453 Public Funding of Political Campaigns
                                                                  spending by nonparticipating candidates. For senate races,
                                                                  nonparticipating candidates had the higher spending average in 2000,
                                                                  whereas participating candidates had the higher spending average in
                                                                  2002.

Figure 16: Average Maine and Arizona Legislative Candidate Spending by Participation Status (2000 and 2002)


                                       Maine                                                                                Arizona
  Thousands of dollars                                                                   Thousands of dollars
  20           19.1a                                                                      30              28.3     29.0                                          28.5
                                                                                                                            27.0                26.8     26.3
                                                                          16.8
                                                         15.3                             25
   15                                 14.5
                                                                                                $20.0                                 $19.8
                                                                                          20

   10                                                                                     15

                                                                                          10
    5                                           $4.4              4.5
          $3.9                3.5
                                                                                            5

    0                                                                                       0
         Nonparticipating     Participating    Nonparticipating   Participating                 Nonparticipating    Participating     Nonparticipating   Participating
           candidates          candidates        candidates        candidates                     candidates         candidates         candidates        candidates

                       2000                                  2002                                            2000                                   2002

             Maine House                                                                            Arizona House

             Maine Senate                                                                           Arizona Senate

Source: GAO analysis of state data.

                                                             Note: In the figure, we did not include any candidate who reported spending zero dollars or did not
                                                             run in the general election. For those candidates, spending includes primary and general election
                                                             amounts combined. With 1996 as the base year, we adjusted all spending amounts for inflation using
                                                             the Department of Commerce’s (Bureau of Economic Analysis) gross domestic product implicit price
                                                             deflator.
                                                             a
                                                             Includes one candidate who spent $143,199. When this candidate is excluded, the average drops to
                                                             $15,664.




                                                             Page 55                                        GAO-03-453 Public Funding of Political Campaigns
Spending by Statewide        In Maine, the gubernatorial election is the only statewide office race where
Office Candidates in Maine   candidates may choose to participate in the public financing program. The
and Arizona                  first election in which candidates for this office were eligible to participate
                             was 2002. We compared candidate spending35 for the two most recent
                             gubernatorial elections (2002 and 1998) in Maine:

                             •    Total spending by gubernatorial candidates was about $930,000 in 1998
                                  and about $3.4 million in 2002.36 Average gubernatorial candidate
                                  spending was about $186,000 in 1998 and about $843,000 in 2002.

                             •    In 2002, only one gubernatorial candidate (Green Independent Party)
                                  ran with public funding in both the primary and the general elections.
                                  This candidate spent a total of approximately $837,000. One other
                                  candidate (Republican Party) ran and lost as a participating candidate
                                  in the primary election. This candidate spent approximately $296,000.

                             In Arizona, there are seven statewide office races where candidates may
                             choose to participate in the program—Governor, Attorney General,
                             Secretary of State, Corporation Commissioner, State Treasurer,
                             Superintendent of Public Instruction, and Mine Inspector. In 2000, only
                             candidates for Corporation Commissioner were eligible to participate in
                             the public funding program. Candidates for the other statewide offices
                             became eligible to participate in 2002. Table 11 compares spending for
                             statewide offices in 1998 and 2002, the 2 most recent years where all
                             statewide offices were on the ballot in Arizona.




                             35
                              Candidates who reported spending zero dollars or did not run in the general election are
                             not included. Total and average spending amounts include primary and general election
                             spending combined, unless otherwise described. With 1996 as the base year, we adjusted
                             all spending amounts for inflation using the Department of Commerce’s (Bureau of
                             Economic Analysis) gross domestic product implicit price deflator.
                             36
                               The 1998 gubernatorial race included the incumbent, who received approximately 59
                             percent of the popular vote. In the 2002 election, the incumbent was prohibited by term
                             limits from running.




                             Page 56                                GAO-03-453 Public Funding of Political Campaigns
Table 11: Spending by Candidates for Statewide Offices in Arizona (1998 and 2002)

    Dollars in thousands
                                               Average and total candidate spending by
                                                            election year
    Office                                        1998                 2002
                                               Average       Total    Average       Total
    Governor                                    $833.3   $3,333.0     $1,131.3   $5,656.6
    Attorney General                            $762.4   $1,524.8       $292.6     $585.3
    Secretary of State                          $239.3     $478.7       $159.9    $479.6
    Corporation Commissionera                   $139.2     $278.3        $97.2     $583.0
    State Treasurer                              $69.0      $69.0       $106.5     $213.1
    Superintendent of Public Instruction         $14.4      $28.8       $349.5    $699.0
    State Mine Inspector                           $8.2       $8.2       $54.6     $109.3
Source: GAO analysis of state data.

Note 1: Spending amounts do not include any candidate who reported spending zero dollars or did
not run in the general election. For those candidates, spending includes primary and general election
amounts combined. With 1996 as the base year, we adjusted all spending amounts for inflation using
the Department of Commerce’s (Bureau of Economic Analysis) gross domestic product implicit price
deflator.

Note 2: Because some races had a very small number of candidates, and some candidates spent a
very small or very large amount, averages may be misleading. For example, in the 2002 race for
Superintendent of Public Instruction, one of the three general election candidates spent nearly
$600,000.
a
 In 1998, there was one open seat for Corporation Commissioner. In 2000, there were two open seats
for Corporation Commissioner—one for a term ending in 2005 and one for a term ending in 2007,
where a total of about $311,000 and an average of about $78,000 was spent. In 2002, there were
three Corporation Commission seats open; one race was for two seats with terms ending in 2005,
and the other race was for one seat with a term ending in 2007.


For the 2002 election in Arizona, table 12 compares spending by
nonparticipating and participating candidates for statewide offices. As
shown, four of the seven statewide office races had both nonparticipating
and participating candidates—Governor, Secretary of State, Corporation
Commissioner, and Superintendent of Public Instruction. In three of the
four races, the average and total spending amounts by participating
candidates exceeded those of the nonparticipating candidates. In the race
for the other statewide office—Superintendent of Public Instruction—the
nonparticipating candidate spent about five times more than the
participating candidate.




Page 57                                     GAO-03-453 Public Funding of Political Campaigns
                           Table 12: Spending by Candidates for Statewide Offices in Arizona by Participation
                           Status (2002)

                               Dollars in thousands
                                                                  Average and total candidate spending by participation
                               Office                                                     status
                                                                 Nonparticipating candidates     Participating candidates
                                                                      Average           Total      Average           Total
                               Governor                                  $658.3      $1,974.9      $1,840.8       $3,681.8
                                                                               a             a
                               Attorney General                                                      $292.6         $585.3
                               Secretary of State                           $3.3         $3.3        $238.1        $476.3
                               Corporation                                $38.5         $38.5        $108.9         $544.5
                               Commissioner
                                                                               a             a
                               State Treasurer                                                         $106.5          $213.1
                               Superintendent of                         $590.6        $590.6          $108.4          $108.4
                               Public Instruction
                                                                               a             a
                               State Mine Inspector                                                      $54.6         $109.3
                           Source: GAO analysis of state data.

                           Note: Spending amounts do not include any candidate who reported spending zero dollars or did not
                           run in the general election. For those candidates, spending includes primary and general election
                           amounts combined. With 1996 as the base year, we adjusted all spending amounts for inflation using
                           the Department of Commerce’s (Bureau of Economic Analysis) gross domestic product implicit price
                           deflator.
                           a
                               Not applicable.


Independent Expenditures   Maine’s definition of “independent expenditures”37 generally follows that
Increasing in Maine and    established by the U.S. Supreme Court in a 1976 ruling.38 That is,
Arizona                    independent expenditures are for campaign communications in the form
                           of “express advocacy”—explicitly endorsing or opposing one candidate by
                           using words such as “vote for,” “elect,” “cast your ballot for,” “vote
                           against,” or “defeat.”39 Arizona’s definition includes the same guidance, but
                           also broadens the definition of “express advocacy” to include, “A
                           campaign slogan or words that can have no other reasonable meaning than
                           to advocate the election or defeat of one or more clearly identified
                           candidate(s).”40 In both states, all other political communications not
                           falling into the express advocacy category, such as public policy messages


                           37
                                Me. Rev. Stat. Ann. tit. 21-A §1019.
                           38
                                Buckley v. Valeo, 424 U.S. 1 (1976).
                           39
                                Id. at 44.
                           40
                            Arizona Citizens Clean Election Commission, Independent Expenditures A.R.S § 16-941
                           (D): Candidates for Statewide and Legislative Offices, available at
                           http://www.ccec.state.az.us/ccecscr/pub/indExpend.asp (last visited April 25, 2003).




                           Page 58                                         GAO-03-453 Public Funding of Political Campaigns
that do not explicitly endorse or oppose a candidate, are called “issue
advocacy” communications.41

Typically, independent expenditures are undertaken in federal and state
elections by political action committees to support or oppose candidates
to a greater extent than permitted by rules applicable to direct campaign
contributions. The Director of Maine’s Commission on Governmental
Ethics and Election Practices told us that, for 1998 and earlier years, the
amounts of reported independent expenditures in the state were
negligible. However, in the 2000 and 2002 elections in Maine, and in the
2002 elections in Arizona, independent expenditures increased
significantly. The 2002 increases were largely associated with
gubernatorial races in both states. More specifically (see table 13):

•     In Maine, of the $595,000 total independent expenditures in 2002, about
      67 percent were associated with one gubernatorial candidate. The
      other 33 percent was associated with 118 legislative candidates.

•     In Arizona, of the $2.6 million total independent expenditures in 2002,
      more than 92 percent was associated with two gubernatorial
      candidates.42

Table 13: Independent Expenditures in Maine and Arizona (1998, 2000, and 2002)

 Dollars in thousands
 State                                      Independent expenditures by election year
                                                    1998         2000                 2002
 Maine                                         negligible      $136.0               $595.0
 Arizona                                          $80.7         $38.3             $2,610.4
Source: Data provided by state officials.



Our survey of Maine’s and Arizona’s candidates in the 2000 elections
included a question asking for views about the role of independent
expenditures in future elections. Figure 17 shows that most of the
traditionally funded candidates who responded—55 percent in Maine and



41
 Richard Briffault, The Political Parties and Campaign Finance Reform, 100 Colum. L.
Rev. 620, 631 (2000).
42
 In 2002, two registered campaign committees spent a combined total of $2,408,834 in
Arizona. According to campaign finance reports filed with the Arizona Secretary of State,
all of this spending was associated with the race for governor.




Page 59                                      GAO-03-453 Public Funding of Political Campaigns
                                                               52 percent in Arizona—agreed to a great or very great extent with the
                                                               statement that independent expenditures will play an increasingly
                                                               significant role in the 2002 and future elections. Also, many of the publicly
                                                               funded candidates who responded—47 percent in Maine and 33 percent in
                                                               Arizona—expressed similar agreement. Further, this view was shared by
                                                               many of the other knowledgeable individuals we interviewed in the two
                                                               states.

Figure 17: Extent to Which Candidates in the 2000 Elections Agreed with the Statement That Independent Expenditures
Would Become Increasingly Important in 2002 and Future Elections


                                Maine candidates                                                                  Arizona candidates
  GAO survey question: To what extent, if at all, do you agree with the statement      GAO survey question: To what extent, if at all, do you agree with the statement
  that independent expenditures will play an increasingly significant role in the      that independent expenditures will play an increasingly significant role in the
  2002 and future elections?                                                           2002 and future elections?
                              Total possible: 100%                                                              Total possible: 100%

                                                           55%                                                                             52%
  Great or very                                                                        Great or very
  great extent                                                                         great extent
                                                         47%                                                                     33%



                                                                    Nonparticipating

                                                                    Participating

Source: Responses to GAO’s survey (see app. IV and V).



Views on Issue Advocacy                                        Because spending for issue advocacy is not regulated, we found no
Spending in Maine and                                          sources to quantify these funds in Maine and Arizona. Our survey of
Arizona                                                        Maine’s and Arizona’s candidates in the 2000 elections included a question
                                                               asking for views about future levels of issue advocacy spending. As figure
                                                               18 shows, most of the traditionally funded candidates who responded—
                                                               63 percent in Maine and 55 percent in Arizona—agreed to a great or very
                                                               great extent with the statement that increasing amounts of money will be
                                                               spent for issue advocacy ads in the 2002 and future elections. Also, many
                                                               of the publicly funded candidates who responded—45 percent in Maine
                                                               and 28 percent in Arizona—expressed similar agreement.




                                                               Page 60                                 GAO-03-453 Public Funding of Political Campaigns
Figure 18: Extent to Which Candidates in the 2000 Elections Agreed with the Statement That Issue Advocacy Spending Would
Increase in the 2002 and Future Elections


                                 Maine candidates                                                                    Arizona candidates
  GAO survey question: To what extent, if at all, do you agree with the statement        GAO survey question: To what extent, if at all, do you agree with the statement
  that increasing amounts of money will be spent for issue advocacy ads in the           that increasing amounts of money will be spent for issue advocacy ads in the
  2002 and future elections?                                                             2002 and future elections?
                              Total possible: 100%                                                                Total possible: 100%

                                                                63%                                                                            55%
  Great or very                                                                          Great or very
  great extent                                                                           great extent
                                                         45%                                                                     28%



                                                                      Nonparticipating

                                                                      Participating

Source: Responses to GAO’s survey (see app. IV and V).




                                                               In the 2000 election, voter turnout in Maine increased 4 percentage points
Voter Participation:                                           compared with the previous presidential election year (1996), whereas
No Clear Link to                                               Arizona’s turnout remained unchanged. Because voter turnout can be
                                                               influenced by numerous factors, the extent (if any) to which the public
Public Financing                                               financing programs in these states affected turnout is not easily
Program                                                        quantifiable. However, these programs probably had limited effect on
                                                               turnout in the 2000 elections, particularly given that many of Maine’s and
                                                               Arizona’s voting-age citizens were unaware of their respective state’s
                                                               public financing program.


Comparison of 2000                                             Voter turnout—usually defined as the number of votes cast in a race
Turnout to Previous                                            divided by the voting-age population—is an important component of
Elections                                                      citizens’ participation in the political process. As a multiyear trend,
                                                               turnout percentages in the United States indicate that much of the
                                                               electorate is largely disengaged from politics, although turnout
                                                               percentages consistently have been higher in presidential election years
                                                               than in mid-term congressional election years. Regarding individual states,
                                                               Maine’s turnout generally has exceeded the national turnout percentages,
                                                               while Arizona’s turnout has been below the national figures.

                                                               Specifically, to provide an overview perspective, table 14 shows voter
                                                               turnout in Maine, Arizona, and the United States for the 4 most recent
                                                               presidential election years and 3 recent mid-term congressional election



                                                               Page 61                                   GAO-03-453 Public Funding of Political Campaigns
                           years. As shown, for the 2000 election (a presidential election year), voter
                           turnout in Maine was 68 percent, which was an increase of 4 percentage
                           points over turnout in the previous presidential election year, 1996—
                           whereas, Arizona’s turnout was 42 percent in both of these years (2000 and
                           1996).

                           Table 14: Voter Turnout in Maine, Arizona, and the United States, 1988 through 2000

                                                                                            Turnout as a percentage of voting-age
                                                                                                         population
                               Election year                                                 Maine        Arizona     United States
                               1988a                                                           62%            46%              50%
                               1990                                                              57             36               37
                               1992a                                                             73             53               55
                               1994                                                              55             39               39
                               1996a                                                             64             42               49
                               1998                                                              45             29               36
                               2000a                                                             68             42               51
                               Average of 1988, 1992, and 1996                                 66%            47%              51%
                               Average of 1990, 1994, and 1998                                 52%            35%              37%
                           Source: GAO analysis of state, Federal Elections Commission, and U.S. Census Bureau data.

                           Note: At the time of our study, data were unavailable to calculate turnout as a percentage of the
                           voting-age population for the 2002 elections.
                           a
                           Presidential election year.


Voter Turnout Influenced   According to some analysts, voter turnout can be predicted based on
by Many Factors            various factors, such as age, income, recency of registration, and previous
                           voting history. For example, studies have shown that much higher
                           percentages of older Americans vote than do younger citizens.
                           Nevertheless, the extent (if any) to which Maine’s and Arizona’s public
                           financing programs affected these states’ voter turnout in the 2000
                           elections is not easily quantifiable. That is, voter turnout can be influenced
                           by a broad range of factors, including the following:

                           •     The candidates and their messages: Do the candidates have personal
                                 popularity, or are the candidates uninspiring? Are there sharp issue
                                 distinctions?

                           •     Mobilization efforts: How extensive are the parties’ grassroots efforts
                                 to get out the vote?

                           •     Media interest: Are there high-profile, competitive contests? Do the
                                 races have statewide or national importance?



                           Page 62                                                GAO-03-453 Public Funding of Political Campaigns
                           •    Campaign spending: What amounts of financial resources have
                                candidates, parties, and interest groups expended on the campaign?
                                Increased campaign spending, however, does not necessarily translate
                                into greater numbers of voters at the polls.

                           •    Negative advertising: Has negative advertising resulted in voter
                                cynicism and disaffection? According to the Committee for the Study of
                                the American Electorate,43 negative advertising does tend to decrease
                                voter turnout.

                           In short, voter behavior is a complicated, multivariate topic—with no one
                           reason explaining voting or nonvoting.


Many Citizens Unaware of   There is some indication, however, that Maine’s and Arizona’s public
Public Financing Program   financing programs probably had limited effect on voter turnout in the
                           2000 elections. That is, as part of our study, we contracted with
                           professional pollsters to determine the extent to which a projectable
                           sample of voting-age citizens in these two states were aware of the
                           respective state’s public financing program. According to the polling
                           results, an estimated 60 percent of Maine’s voting-age citizens and an
                           estimated 37 percent of Arizona’s voting-age citizens answered that they
                           knew “nothing at all” about the public financing program.44

                           In actuality, these “unawareness” percentages may be understated in
                           reference to the time of the 2000 elections. Our polling of voting-age
                           citizens in Maine and Arizona was conducted in October 2002, which was
                           almost 2 years after the 2000 elections. During this 2-year period, the
                           respective public financing program received considerable amounts of
                           publicity—based on the promotional efforts of program proponents, as
                           well as on the legal challenges or other opposition voiced by opponents.
                           Had our polling been conducted in late 2000, the unawareness percentages
                           may have been even greater than 60 percent and 37 percent, respectively.




                           43
                             Based in Washington, D.C., the committee is an independent research organization that
                           focuses on issues involving citizen engagement in politics.
                           44
                             Appendix I discusses the scope and methodology of the polls of voting-age citizens. The
                           maximum sampling error for the Maine survey at the 95-percent level of statistical
                           confidence is plus or minus 8 percentage points, and the maximum for the Arizona survey
                           is plus or minus 5 percentage points.




                           Page 63                                GAO-03-453 Public Funding of Political Campaigns
               In sum, high levels of citizenry unawareness, coupled with a broad range
               of other potentially relevant factors, lessen the likelihood that the public
               financing program was a significant influence on voter turnout in Maine’s
               and Arizona’s 2000 elections.


               Under Maine’s and Arizona’s public financing programs, with only two
Concluding     elections from which to observe legislative races and only one election
Observations   from which to observe most statewide races, it is too early to precisely
               draw causal linkages to resulting changes, if any, involving voter choice,
               electoral competition, interest group influence, campaign spending, and
               voter participation. Many factors can affect elections—factors such as
               term limits and redistricting, state and local campaign issues, and even
               whether the particular year involved a presidential or a gubernatorial
               election. In implementing these new wide-ranging campaign finance
               reforms, state officials told us that many factors contributed to an
               uncertain and constantly changing environment—such as legal challenges
               to the program—which also affected these elections. Thus, it is difficult to
               separate or disassociate the effects of these factors from the effects of the
               public financing programs.

               Moreover, even for other states that have a longer history with more
               limited forms of public financing, published studies have reported mixed
               findings on the effects of the programs. As represented in the available
               literature, there seems to be little agreement as to how public financing
               programs affect elections.

               Our work indicated that perceptions of Maine’s and Arizona’s public
               financing programs are widely divergent and frequently ideologically
               based. Irrespective of differences in perceptions or ideologies, it is clear
               that—in both states—considerably larger numbers of candidates chose to
               participate in the public funding programs in 2002 than in 2000. In both
               states, many observers told us they expected that future elections will
               experience continued growth in program participation. For example,
               political party officers we interviewed said that, even though they may
               oppose the program for ideological or other reasons, public funding
               presents strategic opportunities that any candidate must consider.

               Some researchers have pointed out that, in some instances, electoral
               competitiveness may be enhanced by increased campaign spending. Thus,
               two goals of the public financing programs—increase electoral
               competition and curb increases in campaign spending—can be at odds
               with each other. Also, state officials and candidates told us that campaign


               Page 64                          GAO-03-453 Public Funding of Political Campaigns
spending can increase when political action committees, other groups, or
individuals make independent expenditures in a competitive race to
support a traditionally funded candidate—which, in turn, could trigger
matching funds for a publicly financed candidate. Further, critics have
argued that, in Maine, the public financing program’s goal of curbing
increases in campaign spending is undermined because participating
candidates are allowed to form political action committees to raise funds
and make independent expenditures to support or oppose other
candidates.

Finally, in terms of legislative flexibility for making adjustments to meet
future fiscal circumstances or other needs, one aspect of the two states’
public financing programs is distinctly different. As mentioned previously,
the respective programs became law in Maine and Arizona through citizen
initiative. In Maine, once such an initiative has been supported and
becomes law, the standard legislative process can be used to make
subsequent changes or modifications. In Arizona, however, any law
enacted through such a process is afforded unique protection. For an
initiative-based law to be changed in Arizona, the modification (e.g.,
amendment) must be supported by three-fourths of the members of each
body of the legislature, and the modification must also further the intent of
the initial law. Thus, while Maine’s public financing program is as flexible
as any other general statute, Arizona’s program is relatively inflexible. In
response to our inquiries, for example, staff of Arizona’s Citizens Clean
Elections Commission told us that, although there were concerns that the
reporting requirements of the state’s 1998 Act were too complex and had
led to many honest mistakes on the part of campaign volunteers, the
prospects for changing the law were limited, given the legislative hurdles.


We are sending copies of this report to interested congressional
committees and subcommittees. We will also make copies available to
others on request. In addition, the report will be available at no charge on
GAO’s Web site at http://www.gao.gov.




Page 65                          GAO-03-453 Public Funding of Political Campaigns
If you or your staffs have any questions about this report or wish to
discuss the matter further, please contact me at (202) 512-8777 or Danny
R. Burton at (214) 777-5600. Other key contributors are acknowledged in
appendix VII.




Norman J. Rabkin, Managing Director
Homeland Security and Justice Issues




Page 66                         GAO-03-453 Public Funding of Political Campaigns
                  Appendix I: Objectives, Scope, and
Appendix I: Objectives, Scope, and
                  Methodology



Methodology

                  In accordance with the mandate specified in Section 310 of the Bipartisan
Objectives        Campaign Reform Act of 2002 (P.L. 107-155, 2002), this study:

                  •   Provides statistics showing the number of candidates who chose to use
                      public funds to run for legislative seats or statewide offices in the 2000
                      elections in Maine and Arizona, the seats or offices for which they were
                      candidates, whether the candidates were incumbents or challengers,
                      whether the candidates were successful in their bids, and the number
                      of races in which at least one candidate ran an election with public
                      funds.

                  •   Describes the extent to which the goals of Maine’s and Arizona’s public
                      financing programs were met in the 2000 elections. That is, we studied
                      what changes, if any, occurred in voter choice (number of candidates),
                      electoral competition, interest group influence, campaign spending,
                      and voter participation (voter turnout)—five indicators related to goals
                      of the programs.

                  To provide a broader perspective, as we agreed with the offices of the
                  Chairmen and Ranking Members of the Senate Committee on Rules and
                  Administration and the Committee on House Administration, this study
                  also presents available statistics and related information regarding the
                  2002 elections in Maine and Arizona.


                  Initially, we conducted a literature search to identify relevant reports,
Overview of Our   studies, articles, and other documents regarding campaign finance reform
Scope and         in the United States generally, as well as in Maine and Arizona specifically.
                  Because campaign finance reform can be both complex and contentious,
Methodology       we wanted to ensure that our background reading included a broad
                  spectrum of views, encompassing both proponents and opponents of
                  public financing. (See bibliography.)

                  Also, we reviewed information available on the Web sites of the state
                  agencies responsible for administering the respective public financing
                  program in the two study states—Maine’s Commission on Governmental
                  Ethics and Election Practices (www.state.me.us/ethics) and Arizona’s
                  Citizens Clean Elections Commission (www.ccec.state.az.us).

                  Generally, in directly addressing the objectives, we analyzed available
                  statistical data on the 2000 and 2002 elections in Maine and Arizona,
                  visited both states to interview election officials and interest group
                  representatives, analyzed responses from a survey of all candidates who



                  Page 67                              GAO-03-453 Public Funding of Political Campaigns
                          Appendix I: Objectives, Scope, and
                          Methodology




                          ran in the 2000 elections for seats in the Maine and Arizona legislatures
                          and the Arizona Corporation Commission, and contracted with
                          professional pollsters to obtain the views of voting-age citizens in both
                          states. Further details about the scope and methodology of our work
                          regarding each of the objectives are presented in separate sections below.


                          To obtain the congressionally mandated and the agreed-upon statistical
Scope and                 information regarding the 2000 and 2002 elections, we contacted officials
Methodology:              at Maine’s and Arizona’s Office of the Secretary of State—the agencies
                          responsible for supervising and administering elections laws and activities,
Statistical Information   including certifying state candidates for the ballot and tabulating official
Regarding the 2000        election results. Also, we contacted officials at Maine’s Commission on
                          Governmental Ethics and Election Practices and Arizona’s Citizens Clean
and 2002 Elections        Elections Commission—the agencies responsible for administering the
                          respective state’s public financing program, including certifying that
                          applicable candidates have met qualifications for receiving public funds.
                          Specifically, for each state, we obtained data showing

                          •   the number of candidates who chose to use public funds to run for
                              legislative seats or statewide offices in the 2000 and the 2002 elections,

                          •   the seats or offices for which they were candidates,

                          •   whether the candidates were incumbents or challengers,

                          •   whether the candidates were successful in their bids,

                          •   and the number of races in which at least one candidate ran an election
                              with public funds (see tables 1 through 4).

                          As used in our report, “challengers” consist of all nonincumbent
                          candidates. Thus, a candidate who was not an incumbent is called a
                          challenger, even if that candidate did not face an opponent. Also, in
                          counting races, we included all races in which there was a candidate on
                          the ballot regardless of whether or not the candidate faced a challenger.




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                      In studying the extent to which the goals of the public financing programs
Scope and             in Maine and Arizona were met, we focused on identifying what changes, if
Methodology: Extent   any, occurred regarding five indicators—voter choice (number of
                      candidates), electoral competition, interest group influence, campaign
to Which Goals of     spending, and voter participation (voter turnout). The scope and
Public Financing      methodology of our work included
Programs Were Met     •   conducting various data-based analyses of the 2000 and 2002 elections
                          in both states;

                      •   interviewing individuals in both states—e.g., elected officials, political
                          party leaders, and interest group representatives—to obtain a wide
                          range of perspectives;

                      •   surveying all candidates who ran in the 2000 elections for seats in the
                          Maine and Arizona legislatures and the Arizona Corporation
                          Commission; and

                      •   contracting with professional pollsters to obtain the views of voting-
                          age citizens in both states.

                      Specifically, the following sections separately discuss the scope and
                      methodology of our work for each the five goal-related indicators. It
                      should be emphasized that describing or interpreting the effects of public
                      financing on elections should be approached cautiously, partly because 1
                      election cycle’s results or even 2 election cycle’s results may not be
                      sufficient. Also, term limits, redistricting, the ambiguous environment that
                      surrounded the implementation of the new campaign finance programs,
                      and other factors not directly related to public or private financing can
                      affect electoral campaigns and results.


Voter Choice          To determine whether public financing encouraged more state legislative
                      candidates to run for office, we calculated the average annual number of
                      candidates per legislative primary and general election race for the 4 most
                      recent election years (1996, 1998, 2000, and 2002). Also, to determine
                      whether there were different types of candidates running for office, we
                      compared candidates’ party affiliations and the number of third-party or
                      independent legislative candidates for these 4 election years and
                      determined if these candidates participated in the public financing
                      program. Further, for applicable statewide offices, which generally have
                      4-year terms, we compared the number of candidates in the 3 most recent
                      election years (1994, 1998, and 2002) and determined to what extent these



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                        candidates were publicly funded (2002). To conduct these analyses, we
                        obtained data on candidates from

                        •   the state of Maine’s Department of the Secretary of State and the Maine
                            Commission on Governmental Ethics and Election Practices and

                        •   the state of Arizona’s Secretary of State Office and the Citizens Clean
                            Elections Commission.

                        Also, our survey (discussed below) of candidates in Maine’s and Arizona’s
                        2000 elections included questions about voter choice.


Electoral Competition   In designing our approach, we first reviewed public finance literature and
                        identified three widely used measures of electoral competition—number
                        of contested races (races with more than one candidate), incumbent
                        reelection rates, and incumbent victory margins. We then analyzed
                        election data in Maine and Arizona using these three measures:

                        •   Number of contested races. We measured whether there was an
                            increase in the number of contested (more than one candidate on the
                            ballot) legislative primary election races in Maine and Arizona over
                            4 election years (1996, 1998, 2000, and 2002). For 2000 and 2002, we
                            identified the extent to which the contested races had publicly funded
                            candidates.

                        •   Incumbent reelection rates. We measured whether there was a change
                            in the number of incumbents being reelected to office in Maine and
                            Arizona over 4 election years (1996, 1998, 2000, and 2002).

                        •   Incumbent victory margins. For legislative general election races in
                            Maine and Arizona, we measured the margin of difference between the
                            incumbent winners of the races and the runners-up. Based on our
                            literature review and discussions with researchers, we defined races as
                            being “competitive” if the difference in votes garnered between the
                            winning incumbent and the runner-up was 15 percentage points or less.
                            We then examined the extent to which these competitive races had
                            publicly funded candidates.

                        Also, our survey (discussed below) of candidates in Maine’s and Arizona’s
                        2000 elections included questions about electoral competition.




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Logistic Regression Models   To test the overall effect, if any, of Maine’s and Arizona’s public financing
                             programs on competitive races as defined by incumbent victory margins,
                             we used logistic regression models. Logistic regression is a standard
                             multivariate statistical procedure for estimating the size and significance
                             of the effects of categorical or continuous variables on dichotomous
                             outcomes, such as whether or not election races were competitive. We
                             tested the effect of five independent variables on our dependent variable,
                             competitive races. As mentioned previously, we defined a competitive race
                             as one in which the difference in votes garnered between the winner and
                             the runner-up was 15 percentage points or less. Our five independent
                             variables were four categorical variables—public financing program
                             participation or nonparticipation, winning candidate campaign status
                             (incumbent or not), election year (2000 or 2002), and legislative seat
                             (House or Senate)—and one continuous variable, that is, total candidate
                             spending by the winner and runner-up.

                             The size of the effects is measured by odds ratios, which indicate how the
                             odds on being in one category of the outcome measure (in our case, an
                             election race being competitive) vary across categories or values of the
                             different variables being considered. Essentially, the odds of an election
                             race being competitive were obtained by simply dividing the number of
                             competitive races by the number of races that were not competitive. For
                             example, among total races in which either candidate (the winner or the
                             runner-up) participated in the public financing program, if 50 candidates
                             were competitive while 10 were not, the odds on races with a participating
                             candidate being competitive were 5.0 (or 50 divided by 10). If, among total
                             races in which neither candidate (the winner or the runner-up)
                             participated in the public financing program, 100 were competitive while
                             10 were not, the odds on races with a nonparticipating candidate being
                             competitive were 10.0 (or 100 divided by 10). The odds ratio obtained by
                             dividing the former odds by the latter (i.e., 5.0 divided by 10.0 equals 0.50)
                             provides an estimate of the difference between races with and without
                             publicly financed candidates and can be interpreted as indicating that the
                             races with a participating candidate are half as likely to be competitive
                             compared with races with nonparticipating candidates.

                             Table 15 shows the results—the odds ratio coefficients—of our tests using
                             the logistic regression models. As indicated, the odds ratio coefficients
                             associated with participation in Maine’s public financing program (0.65)
                             and Arizona’s program (3.43) were not significant at the 0.05 level. That is,
                             the results indicate that participation did not significantly affect
                             competitive races. However, these results should be interpreted with



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                                           caution, given the relatively few variables and the limited amount of data
                                           included in the models.

Table 15: Results of Logistic Regression Models Testing the Effect of Public Financing Programs on Competitive Races

 Variables                                                                                                         Odds ratio coefficients
 Categorical variables                                                                                                 Mainea        Arizonab
 Public financing program participation: Races in which at least one candidate (the winner or the
 runner-up) participated in the program (versus races in which neither candidate participated)                             0.65            3.43
 Winning candidate campaign status: Races in which the winner was an incumbent (versus races in
                                                                                                                               c
 which the winner was not an incumbent)                                                                                   0.34             1.18
 Election year: Races in year 2000 (versus races in year 2002)                                                            0.54c            3.99
                                                                                                                                                d
 Legislative seat: Races for House seats (versus races for Senate seats)                                                  1.56
 Continuous variable
 Total candidate spending: Total amount spent in a race by both candidates (winner and
 runner-up) combined                                                                                                      1.03c           1.02c
Source: GAO analysis of state data.

                                           Note: Our analysis included data for only the winner and the runner-up in elections with more than
                                           two candidates.
                                           a
                                               Includes both House and Senate races.
                                           b
                                               Includes only Senate races.
                                           c
                                               Odds ratio coefficients that are significant at the 0.05 level.
                                           d
                                               Data not applicable.




Interest Group Influence                   To address this topic, we included relevant questions in our survey of
                                           candidates in Maine’s and Arizona’s 2000 elections. Also, we contracted
                                           with professional pollsters who conduct omnibus telephone surveys with
                                           representative samples of voting-age citizens specifically in Maine and
                                           Arizona. Our surveys of candidates and citizens are discussed in more
                                           detail in separate sections below. Further, in both states, we interviewed
                                           various interest group representatives (see tables 16 and 17).


Campaign Spending                          To determine changes in candidate spending in Maine and Arizona, we
                                           calculated average legislative candidate spending over 4 election years
                                           (1996, 1998, 2000, and 2002) and statewide candidate spending over
                                           2 election years (1998 and 2002). For comparisons across years and to
                                           observe any trends, with 1996 as the base year and using the Department
                                           of Commerce’s (Bureau of Economic Analysis) gross domestic product
                                           implicit price deflator, we adjusted all candidate spending for inflation.
                                           Data on candidate spending in Maine were available for 1996, 1998, and
                                           2000 in annual and biennial reports published by Maine’s Commission on



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                          Governmental Ethics and Election Practices. Candidate spending data for
                          Maine’s 2002 elections were available electronically from the Maine Public
                          Access Campaign Finance site.1 Data for candidate spending in Arizona
                          were provided to us electronically by the Office of the Secretary of State.

                          To the extent possible, we also identified independent expenditures as
                          they related to these elections. Also, in both states, we obtained
                          testimonial evidence regarding the significance of issue advocacy
                          spending. Further, our survey (discussed below) of candidates in Maine’s
                          and Arizona’s 2000 elections included questions about campaign spending.


Voter Participation       To provide an overview perspective, we used data from the Federal
                          Elections Commission and the U.S. Census Bureau to calculate voter
                          turnout as a percentage of the voting-age populations in Maine, Arizona,
                          and the United States for election years 1988 through 2000.2 We focused in
                          particular on comparing turnout in 2000—the first year of the public
                          financing programs in Maine and Arizona—and turnout in the 3 previous
                          presidential election years (1988, 1992, and 1996). We focused on these
                          years because turnout percentages across the nation consistently have
                          been higher in presidential election years than in mid-term congressional
                          election years.

                          Also, we reviewed various studies, articles, and other literature to obtain
                          an understanding of the various factors that can influence voter turnout.
                          Further, as discussed in more detail below, we contracted with
                          professional pollsters to conduct a survey in October 2002 to determine
                          the extent to which projectable samples of voting-age citizens in Maine
                          and Arizona were aware of the respective state’s public financing program.


Interviews in Maine and   We interviewed various individuals in Maine and Arizona to obtain
Arizona                   perspectives on the effects of the respective state’s public financing
                          program. We judgmentally selected interviewees to ensure coverage of one
                          or both chambers of the state legislature, the major and independent
                          political parties, candidates who participated in the state’s public
                          financing program and those who did not, agency officials responsible for


                          1
                           www.mainecampaignfinance.com/public/home.asp
                          2
                           At the time of our study, data were not available to calculate turnout as a percentage of
                          voting-age population for the 2002 elections.




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administering the program, and interest groups (see tables 16 and 17).
Regarding the last category (interest groups), our selections were based
on a number of considerations, including (1) suggestions made by state
agency officials knowledgeable about political activism in the state and
(2) the amounts of financial contributions or expenditures made by
groups, as reported in publicly available records.




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Table 16: List of Organizations (and Title of Individuals) Interviewed in Maine

 Name of organization                 Title of individuals contacted                   Notes
 House of Representatives             Speaker of the House (District 31)               Democrat. Ran in 2000 as a participating candidate;
                                                                                       prohibited by term limits from running in 2002.
                                      Floor Leader (Minority) (District 38)            Republicans. Opposed to public financing for
                                      Assistant Floor Leader (District 85)             candidates.
                                      Representative (District 99)                     Democrat. Elected in 2000; ran as a participating
                                                                                       candidate in the public financing program. Formerly
                                                                                       was Executive Director of the Commission on
                                                                                       Governmental Ethics and Election Practices.
 Senate                               Floor Leader                                     Democrat. Ran in 2000 as a participating candidate.
                                      (District 15)                                    Was lead plaintiff in lawsuit challenging the
                                                                                       constitutionality of the public financing program (see
                                                                                       app. III).
                                      Senator (District 6)                             Republican. First-time candidate elected in 2000; ran
                                                                                       as participating candidate in public financing program.
                                                                                       Defeated 16-year incumbent.
                                      Senator (District 23)                            Democrat. Elected in 2000 in a race for an open seat;
                                                                                       ran as a participating candidate.
 Maine Democratic Party               Chair                                            Provided party views on effects of the Maine Clean
 Maine Republican Party               Executive Director                               Election Act.
 Green Independent Party              Co-chairpersons
 Commission on Governmental           Executive Director                               Responsible for administering the Maine Clean
 Ethics and Election Practices                                                         Election Act.
 Department of the Secretary of       Deputy Secretary of State (Bureau of             Responsible for supervising and administering all
 State                                Corporations, Elections and                      elections of federal, state, and county offices and
                                      Commissions)                                     referenda; preparing ballot types and other elections
                                                                                       materials; and tabulating official election results.
 Department of Audit (State           Director of Audit                                Responsible for determining whether monies in the
 Auditor)                                                                              Maine Clean Election Fund have been managed
                                                                                       appropriately.
 Maine Citizens for Clean             Steering Committee                               Consists of many of the groups that promoted the
 Elections (a project of the Maine                                                     ballot initiative that led to passage of the Maine Clean
 Citizen Leadership Fund)                                                              Election Act. Among others, the groups represented
                                                                                       include the League of Women Voters, Common
                                                                                       Cause, Northeast Action, and the Dirigo Alliance.
 Maine Bankers Association            President-Treasurer                              A trade organization representing the interests of
                                                                                       Maine’s banking industry, trust companies, and
                                                                                       financial service providers.
 Maine Medical Association            General Counsel                                  A voluntary association of Maine physicians. Services
                                                                                       include legislative and regulatory assistance, such as
                                                                                       tracking bills and facilitating dialogue with the
                                                                                       legislature and the bureaucracy.
 Preti, Flaherty, Beliveau, Pachios   Attorney                                         One of Maine’s largest law firms. Client services
 & Haley, LLC                                                                          include lobbying representation.
 Colby College (Waterville)           Associate Professor of Government                A nationally recognized expert on campaign finance
                                                                                       reform.
Source: GAO.

                                              Note: These individuals held these positions at the time of our interviews.




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Table 17: List of Organizations (and Title of Individuals) Interviewed in Arizona

 Name of organization                   Title of individuals contacted                   Notes
 House of Representatives               Representative (District 1)                      Democrat. Ran in the 2000 election as a
                                                                                         participating candidate in the public financing
                                                                                         program.
                                        Representative (District 6)                      Republican. Opposed to the public financing
                                                                                         program.
 Citizens Clean Elections Commission    Commissioner (Chair)                             Responsible for administering the Citizens
                                                                                         Clean Elections Act.
                                        Commissioner                                     Served as first chairman of the Commission.
                                                                                         Current appointment expires in 2004.
                                        Executive Director                               Responsible for administering the Citizens
                                                                                         Clean Elections Act.
                                        Deputy Director
 Office of the Secretary of State       Election Services Division                       Responsible for certifying state candidates,
                                                                                         initiatives, and referenda for the ballot;
                                                                                         certifying the results of statewide elections;
                                                                                         and accepting the filing of campaign finance
                                                                                         reports.
 Corporation Commission                 Commissioner                                     In the 2000 election, ran for statewide office
                                                                                         (Corporation Commission) as participating
                                                                                         candidate in the public financing program.
 Office of the Auditor General          Auditor                                          Principal author of report issued by Arizona
                                                                                         Auditor General, Citizens Clean Elections
                                                                                         Commission Special Review (Jan. 11, 2002).
 Clean Elections Institute, Inc.        Executive Director                               A nonprofit advocacy group “dedicated to the
                                                                                         fair and impartial implementation of the
                                                                                         Citizens Clean Elections Act.”
 Arizona Democratic Party               Coordinated Campaign Director                    Provided party views on effects of the
                                                                                         Arizona Citizens Clean Elections Act.
 Arizona Republican Party               Political Director
 Arizona Green Party                    Party activist                                   Formerly served as a Commissioner of the
                                                                                         Citizens Clean Elections Commission.
 Goldwater Institute                    Director of Urban Growth and Economic            Author of, Is Cleanliness Political Godliness?
                                        Development Studies                              Arizona’s Clean Elections Law after Its First
                                                                                         Year (Nov. 30, 2001).
 Arizona Education Association          President                                        Association membership is open to
                                                                                         employees of all Arizona public schools,
                                                                                         college and university employees, retired
                                                                                         educators, and college students studying to
                                                                                         be teachers. It is the state’s largest
                                                                                         professional organization.
 Fennemore Craig (law firm)             Government relations attorney                    Specializes in the areas of lobbyist regulation
                                                                                         and campaign finance at both the federal and
                                                                                         Arizona levels. Advises candidates,
                                                                                         contributors, and political committees on
                                                                                         complying with campaign finance reporting
                                                                                         requirements.




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 Name of organization          Title of individuals contacted                        Notes
 Arizona Chamber of Commerce   Chamber Staff                                         The Chamber represents Arizona businesses
                               • Senior Vice President, Public Affairs               in interfacing with legislators and regulators
                               • Vice President, Marketing and                       at the state capital and with members of
                                  Communications                                     Arizona’s congressional delegation.
                               • Manager, Public Affairs
                               Chamber Member Representatives
                               • Executive Director, Home Builders
                                  Association of Central Arizona
                               • Swift Transportation Co., Inc.
Source: GAO.

                                  Note: These individuals held these positions at the time of our interviews.




Candidate Surveys                 To obtain further perspectives on the effects of public financing, we
                                  surveyed by mail all candidates, including those who used public financing
                                  as well as those who did not, who ran in the 2000 primary and general
                                  elections in Maine and Arizona. Among other topics, the questionnaires
                                  asked for candidates’ opinions on various aspects of how public financing
                                  affected the 2000 primary and general elections in their states; their own
                                  decisions about whether or not to use public funding; participating
                                  candidates’ experiences with the public financing program; and their
                                  opinions about public financing of campaigns, in general, and in the
                                  2002 and future elections in their state. Overall, the two questionnaires
                                  were identical, with the exception of a few questions to account for
                                  differences between the states’ election laws. We pretested the
                                  questionnaires with both participating and nonparticipating candidates in
                                  each state and made relevant changes to the questions based upon these
                                  pretests. Copies of the Maine and Arizona questionnaires, along with the
                                  results to each question, are in appendixes IV and V, respectively.

                                  We mailed questionnaires to 379 candidates in Maine and received
                                  269 usable questionnaires; we mailed questionnaires to 237 candidates in
                                  Arizona and received 143 usable questionnaires. These completed
                                  questionnaires represented response rates of 72 percent for Maine and
                                  61 percent for Arizona.3 We made extensive efforts to encourage
                                  candidates to complete and return the questionnaires, including advance
                                  telephone calls to candidates informing them about the upcoming survey,
                                  up to three follow-up telephone calls to nonrespondents, and up to two


                                  3
                                    Two candidates in Arizona and six candidates in Maine were removed from the
                                  denominator when calculating response rates after we learned that these persons were
                                  deceased at the time of the survey.




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follow-up mailings of the questionnaires. We performed this work during
July through December 2002.

We conducted a response bias analysis to determine whether the
candidates who returned completed questionnaires were substantially
different from the candidates who were mailed questionnaires, in terms of
whether they had been participating or nonparticipating candidates in the
2000 elections. For each state, we found that both participating and
nonparticipating candidates returned completed questionnaires in
approximately the same proportions in which the candidates had
comprised the initial mail-out groups. For the Maine survey, 36 percent
of the initial mail-out group was participating candidates, compared with
39 percent of the candidates who returned completed questionnaires. For
Arizona, 24 percent of the initial mail-out group was participating
candidates, and 27 percent who returned completed questionnaires were
participating candidates. Therefore, we do not consider the results of our
Maine and Arizona candidate surveys to have response bias on this
characteristic.

Because this was not a sample survey, but rather a census of all candidates
who ran for office in 2000, there are no sampling errors. However, the
practical difficulties of conducting any survey may introduce errors,
commonly referred to as nonsampling errors. For example, measurement
errors are introduced if difficulties exist in how a particular question is
interpreted or in the sources of information available to respondents in
answering a question. In addition, coding errors may occur if mistakes are
entered into a database. We took extensive steps in the development of the
questionnaires, the collection of data, and the editing and analysis of data
to minimize total survey error. To reduce measurement error, we
conducted two rounds of pretesting of the questionnaires with both
participating and nonparticipating candidates to make sure questions and
response categories were interpreted in a consistent manner. In addition,
we edited all completed surveys for consistency and, if necessary,
contacted respondents to clarify responses. All questionnaire responses
were double key-entered into our database (that is, the entries were
100 percent verified), and a random sample of the questionnaires was
further verified for completeness and accuracy. In addition, all computer
syntax was peer reviewed and verified by separate programmers to ensure
that the syntax was written and executed correctly.




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Polls of Voting-Age      Regarding changes in interest group influence due to public financing of
Citizens                 campaigns, we contracted with professional pollsters who conduct
                         omnibus telephone surveys with representative samples of voting-age
                         citizens specifically in Maine and Arizona. Generally, this polling effort
                         was designed to determine the extent to which citizens in each state were
                         aware of their state’s public financing program and to obtain their views
                         about whether the program has decreased the influence of special interest
                         groups, made legislators more accountable to voters, and increased
                         confidence in government. The surveys consisted of two sets of questions
                         that we developed, with some assistance from the polling organizations.
                         As shown below, except for some minor wording differences customized
                         for the respective state, the two sets of questions were the same for both
                         Maine and Arizona.4 Questions 2, 3, and 4 in each set were not asked of any
                         individual who, in response to question 1, acknowledged knowing “nothing
                         at all” about the applicable state’s clean election law or was unsure or
                         declined to answer. We pretested the questions with members of the
                         general public in each state and made relevant changes to the questions
                         based upon these pretests.

Maine Survey Questions   The questions used in the Maine survey were as follows:

                         1. I would like to ask you about Maine’s clean election law. This law
                            provides campaign money to candidates running for governor and for
                            candidates to the state legislature. Would you say you know a lot,
                            some, a little, or nothing at all about Arizona’s clean election law?

                         2. Now, I would like to ask you about Maine legislators in general who
                            ran their campaigns with public funds in the 2000 elections. Would you
                            say that these sate legislators who received public funds have been
                            much more, somewhat more, somewhat less, or much less accountable
                            to voters than legislators who did not get public funds, or has it not
                            made any difference?

                         3. To what extent do you think Maine’s clean election law has decreased
                            or increased the influence of special interest groups on legislators?
                            Would you say the law has greatly decreased, somewhat decreased,



                         4
                          In designing the questions, we used the term “clean election” because this wording has
                         been widely used in the media, was used in the ballot initiatives, and also is part of the title
                         of the respective state’s law. Thus, in reference to voter awareness, the term “clean
                         election” likely is more commonly recognized than an alternative term such as “public
                         financing program.”




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                               has had no effect, has somewhat increased, or greatly increased the
                               influence of special interest groups, or is it too soon to tell?

                           4. To what extent has Maine’s clean election law increased or decreased
                              your confidence state government? Would you say the law has greatly
                              increased, somewhat increased, has had no effect, has somewhat
                              decreased, or greatly decreased your confidence in state government,
                              or is it too soon to tell?

Arizona Survey Questions   The questions used in the Arizona survey were as follows:

                           1. I would like to ask you about Arizona’s clean election law. This law
                              provides campaign money to candidates running for statewide office,
                              such as the Corporation Commission or governor and for candidates to
                              the state legislature. Would you say you know a lot, some, a little, or
                              nothing at all about Arizona’s clean election law?

                           2. Now, I would like to ask you about Arizona legislators in general who
                              ran their campaigns with public funds in the 2000 elections. Would you
                              say that these state legislators who received public funds have been
                              much more, somewhat more, somewhat less, or much less accountable
                              to voters than legislators who did not get public funds, or has it not
                              made any difference?

                           3. To what extent do you think Arizona’s clean election law has
                              decreased or increased the influence of special interest groups on
                              legislators? Would you say the law has greatly decreased, somewhat
                              decreased, has had no effect, has somewhat increased, or greatly
                              increased the influence of special interest groups, or is it too soon to
                              tell?

                           4. To what extent has Arizona’s clean election law increased or
                              decreased your confidence state government? Would you say the law
                              has greatly increased, somewhat increased, has had no effect, has
                              somewhat decreased, or greatly decreased your confidence in state
                              government, or is it too soon to tell?

Contracted Polling         To conduct the Maine poll, we contracted with Market Decisions (South
Organizations              Portland, ME). During October 15-31, 2002, the firm completed telephone
                           interviews with 400 randomly selected adults (age 18 or older) in Maine.
                           The sample of telephone numbers called was based on a list of telephone
                           prefixes (the first 3 digits in the 7-digit numbers) used throughout the
                           state. The polling results are considered generalizable to households with
                           telephones, given that every residential telephone number had an equal



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               probability of selection. Up to 10 calls were made with households to
               obtain completed interviews. The 400 completed interviews represent a
               survey response rate of 30 percent.

               To conduct the Arizona poll, we contracted with Behavior Research
               Center, Inc. (Phoenix, AZ). During October 1-7, 2002, the firm completed
               telephone interviews with 713 heads of household in Arizona. To ensure a
               random selection of households proportionately allocated throughout the
               sample universe, the firm used a computer-generated, random digit dial
               telephone sample, which selected households based on residential
               telephone prefixes and included all unlisted and newly listed households.
               Telephone interviewing was conducted during approximately equal cross
               sections of daytime, evening, and weekend hours—a procedure designed
               to ensure that all households were equally represented regardless of work
               schedules. Up to 4 calls were made with households to obtain completed
               interviews. The 713 completed interviews represent a survey response rate
               of 35 percent.

Survey Error   As indicated above, all surveys are subject to errors. Because random
               samples of each state’s population were interviewed in these omnibus
               surveys, the results are subject to sampling error, which is the difference
               between the results obtained from the samples and the results that would
               have been obtained by surveying the entire populations under
               consideration. Measurements of sampling errors are stated at a certain
               level of statistical confidence. The maximum sampling error for the Maine
               survey at the 95-percent level of statistical confidence is plus or minus
               8 percentage points, and the maximum for the Arizona survey is plus or
               minus 5 percentage points. Additionally, the results of these surveys may
               be subject to unknown nonresponse bias due to relatively low response
               rates.

               A few of the Maine and Arizona citizens who were interviewed may have
               been 18 years of age at the time of the interviews in October 2002—and,
               thus, would have been only 16 years of age (nonvoters) at the time of the
               elections in 2000. While the polling data do not permit an exact
               quantification of these young respondents, the numbers probably are quite
               small and would not affect the validity of the survey results. For the
               713 completed interviews in Arizona, for example, polling data show that
               54 respondents (7.6 percent) were in the age range of 18 to 24 years.


Data Quality   We assessed the quality of electronic data provided to us by officials in
               Maine and Arizona by testing the data for internal consistency; validating


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                       Appendix I: Objectives, Scope, and
                       Methodology




                       the data using other sources; and, to the extent possible, reviewing the
                       associated documentation. Based on these tests, we determined that the
                       data were sufficiently accurate for our purposes.


Commission Review of   As an additional quality-assurance measure, we asked officials of the state
Draft Report           agencies responsible for administering the respective public financing
                       program in the two study states to review a draft copy of our report for
                       accuracy and clarity before its final issuance. Specifically, on April 16,
                       2003, we provided a report draft to the Chair of Maine’s Commission on
                       Governmental Ethics and Election Practices and the Chair of Arizona’s
                       Citizens Clean Elections Commission.




                       Page 82                              GAO-03-453 Public Funding of Political Campaigns
                   Appendix II: Overview of the Public Financing
Appendix II: Overview of the Public
                   Programs for Election Campaigns in Maine
                   and Arizona


Financing Programs for Election Campaigns
in Maine and Arizona
                   Maine voters, by a margin of 56 percent to 44 percent, passed the Maine
                   Clean Election Act (“Maine’s Act”) in November 1996. Arizona voters, by a
                   margin of 51 percent to 49 percent, passed the Citizens Clean Elections
                   Act (“Arizona’s Act”) in November 1998. These ballot initiatives
                   established optional financing programs for candidates desiring to use
                   public funds to finance their campaigns, as an alternative to traditional
                   fundraising means. The Maine and Arizona programs are unique in being
                   the first instances of state programs that offer full public funding—not just
                   partial funding—of election campaigns for qualified candidates seeking
                   state legislature seats and certain statewide offices. Regarding
                   implementation, both states’ public financing programs became available
                   for candidates beginning with elections in 2000. Generally, participating
                   candidates—those candidates who agree to forego private fund raising and
                   who otherwise qualify to take part in the respective state’s public
                   financing program—receive a set amount of money for their primary and
                   general election campaigns. Under Maine’s Act and Arizona’s Act,
                   nonparticipating candidates—those candidates who choose to continue
                   using traditional means for financing campaigns—are subject to limits on
                   contributions and new reporting requirements.

                   This appendix provides a brief overview of the public financing programs
                   for election campaigns in Maine and Arizona. Detailed information is
                   available on the Web sites of the state agencies responsible for
                   administering the respective program—Maine’s Commission on
                   Governmental Ethics and Election Practices (www.state.me.us/ethics) and
                   Arizona’s Citizens Clean Elections Commission (www.ccec.state.az.us).

                   Generally, proponents assert that the purposes of campaign finance
Purposes of the    reform are to increase voter choice and electoral competition, allow
Public Financing   candidates to give more attention to voters and less to donors, and reduce
                   the influence of special interests on elected officials. That is, from an
Programs           overall perspective, proponents assert that public financing programs
                   should enhance the confidence of citizens in government by increasing the
                   integrity of the political process and the accountability of officials.

                   As indicated, Maine’s Act and Arizona’s Act were passed by voters as
                   ballot initiatives. Thus, unlike laws passed by state legislatures, these
                   statutes have no accompanying legislative history that would document
                   the progress of a particular proposal before the legislature. In reference to
                   determining the purpose of statutes passed by this process, one court has
                   noted that, “The search for legislative purpose or motive is always
                   dangerous; it is even more difficult in the case of an initiative or
                   referendum involving all the voters, where it is impossible to know what


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                             Appendix II: Overview of the Public Financing
                             Programs for Election Campaigns in Maine
                             and Arizona




                             the multitude read, heard or believed in deciding how to vote.”1
                             Nonetheless, in addition to the specific language of the statutes, available
                             interpretive sources include various media accounts of the ballot
                             initiatives, commentary materials prepared by organizations that
                             sponsored the initiatives, and court decisions on various provisions of the
                             statutes.


Purposes of Maine’s Public   The Maine Clean Election Act has no section that specifically details the
Financing Program            purposes, goals, or objectives of the law. To get the initiative on the ballot,
                             a coalition of interest groups, the Maine Voters for Clean Elections,2
                             collected about 65,000 signatures. At that time, the coalition and other
                             proponents advertised that the public financing program would “take big
                             money out of politics” by limiting what politicians spend on campaigns,
                             reducing contributions from special interests and increasing enforcement
                             of election laws. They said that the initiative, if passed, would decrease the
                             influence of wealthy individuals, corporations and political action
                             committees in politics, and would level the playing field so that
                             challengers would have a chance against incumbents. Politicians would
                             then spend more time focusing on the issues that affect all of their
                             constituents rather than spend time on pursuing money for their
                             campaigns. Further, proponents also advertised that the public financing
                             program would allow candidates who do not have access to wealth the
                             opportunity to compete on a more equal financial footing with
                             traditionally funded candidates, restore citizen’s faith and confidence in
                             government, and give new candidates a fighting chance against
                             incumbents. According to Maine State officials and interest group
                             representatives we interviewed, there was not any organized opposition to
                             the initiative when it was on the ballot.


Purposes of Arizona’s        Arizona’s Act does have a “findings and declarations” section that
Public Financing Program     addresses intent. Specifically, the “findings” subsection of the Citizens
                             Clean Elections Act, passed by voters in 1998, noted that the state’s
                             current election-financing system



                             1
                              Daggett v. Webster, 81 F. Supp. 2d 128, 135 (D. Me. 2000).
                             2
                             Including the American Association of Retired Persons (Maine Chapter), Maine A.F.L.-
                             C.I.O., League of Women Voters of Maine, Common Cause/Maine, Natural Resources
                             Council of Maine, Maine People’s Alliance, Money and Politics Project, and Peace Action
                             Maine.




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                     Appendix II: Overview of the Public Financing
                     Programs for Election Campaigns in Maine
                     and Arizona




                     •   allows elected officials to accept large campaign contributions from
                         private interests over which they have governmental jurisdiction;

                     •   provides incumbents an unhealthy advantage over challengers;

                     •   hinders communication to voters by many qualified candidates;

                     •   effectively suppresses the voices and influence of the vast majority of
                         Arizona citizens in favor of a small number of wealthy special interests;

                     •   undermines public confidence in the integrity of public officials;

                     •   costs average taxpayers millions of dollars in the form of subsidies and
                         special privileges for campaign contributors;

                     •   drives up the cost of running for state office, discouraging otherwise
                         qualified candidates who lack personal wealth or access to special-
                         interest funding; and

                     •   requires that elected officials spend too much time raising funds rather
                         than representing the public.

                     Further, the “declarations” subsection of Arizona’s 1998 Act stated that:

                     “The people of Arizona declare our intent to create a clean elections system that will
                     improve the integrity of Arizona state government by diminishing the influence of special-
                     interest money, will encourage citizen participation in the political process, and will
                     promote freedom of speech under the U.S. and Arizona Constitutions. Campaigns will
                     become more issue-oriented and less negative because there will be no need to challenge
                     the sources of campaign money.”



                     In Maine and Arizona, candidates who wish to receive public funds for
Candidates Must      campaigning must qualify by (1) agreeing to forego self-financing and all
Qualify to Receive   private contributions, except for a limited amount of “seed money” and
                     (2) demonstrating citizen support by collecting a set number of
Public Funding       $5 contributions from registered voters. For example, as table 18 shows, a
                     candidate for Maine’s House of Representatives may raise $500 of seed
                     money and must receive a $5 qualifying contribution from at least
                     50 registered voters, and a candidate for Arizona’s House of
                     Representatives may raise $2,500 of seed money and must receive at least
                     200 qualifying contributions.




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                                                Appendix II: Overview of the Public Financing
                                                Programs for Election Campaigns in Maine
                                                and Arizona




Table 18: Seed Money Limits and Number of Qualifying $5 Contributions

                                                                                                Seed money limitsa
                                                                                                               Individual             Number of $5
 State           State legislature and applicable executive branch offices                  Total cap   contribution limit            contributions
 Maine           House of Representatives                                                       $500                $100                         50
                 Senate                                                                       $1,500                $100                        150
                 Governor                                                                    $50,000                $100                      2,500
 Arizona         House of Representatives                                                     $2,500                $100                        200
                 Senate                                                                       $2,500                $100                        200
                 Corporation Commission                                                      $10,000                $100                      1,500
                 Governor                                                                    $40,000                $100                      4,000
                 Attorney General                                                            $20,000                $100                      2,500
                 Secretary of State                                                          $20,000                $100                      2,500
                 Treasurer                                                                   $10,000                $100                      1,500
                 Superintendent of Public Instruction                                        $10,000                $100                      1,500
                 Mine Inspector                                                               $5,000                $100                        500
Source: GAO analysis of state data.

                                                Note: In the initial year of implementation (2000), Maine’s public funding program covered candidates
                                                for legislative seats only, and Arizona’s program covered candidates for legislative seats and the
                                                Corporation Commission. Beginning in 2002, Maine’s program was extended to cover candidates for
                                                governor, and Arizona’s program was extended to cover candidates for governor and various other
                                                executive branch offices.
                                                a
                                                 To help with the qualifying process, candidates seeking to be certified to receive public funding may
                                                raise and spend limited amounts of seed money. In Arizona, these funds are called “early
                                                contributions,” and the base amounts are established in statute and adjusted for inflation every 2
                                                years. The adjusted amount of early contributions for Arizona’s 2002 election cycle is limited to $110
                                                per individual contributor.




                                                After being certified by the state as having met qualifying requirements,
Amounts of Allowable                            participating candidates receive initial distributions (predetermined
Public Funding for                              amounts) of public funding and are also eligible for additional matching
                                                funds based on spending by or for privately funded opponents. For
Participating                                   example, in Maine’s 2000 elections (see table 19):
Candidates
                                                •   Each participating candidate in a contested race for the state House of
                                                    Representatives received an initial distribution of pubic funds in the
                                                    amount of $1,141 for the primary election and an amount of $3,252 for
                                                    the general election. Under Maine’s Act, these amounts were based on
                                                    average expenditures in similar races in the two previous election
                                                    cycles (1998 and 1996).

                                                •   Also, under Maine’s Act, the maximum allowable matching funds
                                                    available to a participating candidate were capped at double the initial
                                                    distribution that the candidate received for his or her contested race.



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Programs for Election Campaigns in Maine
and Arizona




    Matching funds are triggered when the participating candidate is
    outspent by a privately funded opponent. Further, matching funds can
    be based on independent expenditures that benefit an opponent’s
    campaign. Generally, independent expenditures are campaign
    expenditures made by individuals or groups without coordination with
    any candidate and are communications (such as political ads or
    mailings) that expressly advocate the election or defeat of a clearly
    identified candidate.

In Arizona’s 2000 elections (see table 19), qualified candidates for the
House of Representatives or Senate who were in contested party primary
elections initially received $10,000. After the primary, successful major
party candidates who were opposed in the general election then received
an additional $15,000.3 Independent candidates received 70 percent of the
sum of the original primary and general election spending limits, and
unopposed candidates received only the total of their $5 qualifying
contributions as the spending limit for that election. Participating
candidates for the state legislature could also use $500 of their personal
monies for their campaigns, and participating candidates for statewide
offices could use $1,000.

Participating candidates also received matching funds when an opposing,
nonparticipating candidate exceeded the primary or general election
spending limits. Matching funds were also provided to participating
candidates when independent expenditures were made on behalf of a
nonparticipating candidate in the race.




3
 The Secretary of State adjusts these base amounts, established in Arizona’s Act, for
inflation every 2 years.




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                                                Appendix II: Overview of the Public Financing
                                                Programs for Election Campaigns in Maine
                                                and Arizona




Table 19: Public Funding Available to Each Participating Candidate in 2000


                                                             Primary election public funds                 General election public funds
                                                                         Maximum                                       Maximum
                                                                         allowable        Total                        allowable        Total
                                                                 Initial matching        public                Initial matching        public
 State           Office               Type of race        distribution       funds     funding          distribution       funds     funding
 Maine           House of             Contested
                 Representatives                               $1,141        $2,282        $3,423             $3,252        $6,504         $9,756
                                      Uncontested                $511             0          $511                  0             0              0
                 Senate               Contested                $4,334        $8,668       $13,002            $12,910       $25,820        $38,730
                                      Uncontested              $1,785             0        $1,785                  0             0              0
 Arizona         House of             Contested
                 Representatives
                 and Senate                                   $10,000       $20,000       $30,000            $15,000       $30,000        $45,000
                                      Uncontesteda
                 Corporation          Contested
                 Commission                                   $40,000       $80,000      $120,000            $60,000      $120,000      $180,000
                                      Uncontesteda
Source: GAO analysis of state data.
                                                a
                                                In Arizona, each participating candidate in an uncontested race received public funding in an amount
                                                equal to $5 times the number of qualifying signatures that the candidate obtained.


                                                In Maine, a total of about $865,000 in public funds was authorized in
                                                2000 for the 134 participating candidates who ran in the primary and/or
                                                general elections for state legislature. Candidates returned about
                                                $108,000 of unused money to the Maine Clean Election Fund. In Arizona, a
                                                total of $1.9 million in public funds was distributed in 2000 to the
                                                59 participating candidates—54 candidates for the state legislature and
                                                5 candidates for the Arizona Corporation Commission.


                                                Various revenue sources are used to support the public financing
Revenue Sources for                             programs. As table 20 shows, appropriations were by far the largest
the Public Financing                            funding source in Maine in 2000, whereas a surcharge on civil and criminal
                                                fines and penalties was the leading source in Arizona. As noted in table 20,
Programs                                        the constitutionality of this funding provision in Arizona’s Act has been
                                                challenged in court but has been upheld.




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                                                    Appendix II: Overview of the Public Financing
                                                    Programs for Election Campaigns in Maine
                                                    and Arizona




Table 20: Revenue Sources and Amounts for Public Financing Programs in 2000

                                                                                                                 Annual revenue (in
 State             Revenue sources                                                                             thousands of dollars)        Percentage
 Maine             Appropriations: On or before January 1st of each year, the state treasurer is                             $2,000               70%
                   to transfer $2 million from the General Fund to a special, dedicated fund
                   (the Maine Clean Election Fund).
                   Tax check-offs: Under a tax check-off program, a Maine resident can                                              523a                18
                   designate that $3 be paid to the Maine Clean Election Fund. A husband and
                   wife filing jointly may each designate $3.
                   Qualifying contributions: The $5 qualifying contributions collected by                                             56                 2
                   participating candidates are deposited in the Maine Clean Election Fund.
                   Miscellaneous: Other income includes interest earned, penalties, and seed                                        277                 10
                   money collected by candidates and deposited in the Maine Clean Election
                   Fund.
 Total                                                                                                                           $2,856            100%
 Arizona           Fines, forfeitures, and penalties: This source includes a 10-percent                                          $4,665             68%
                                                                                            b
                   surcharge imposed on certain civil and criminal fines and penalties.
                   Collections go in the Citizens Clean Elections Fund.
                   Tax check-offs and donations: By marking an optional check-off box on their                                    1,943                 28
                   state income tax returns, Arizona taxpayers can make a $5 contribution to
                   the Citizens Clean Elections Fund. A taxpayer that checks this box receives
                   a $5 reduction ($10 if filing jointly) in the amount of tax. Also, taxpayers may
                   redirect a specified amount of owed taxes—up to 20 percent or $500
                   (ceiling adjusted periodically), whichever is greater—to the Citizens Clean
                   Elections Fund and receive a dollar-for-dollar tax credit.
                   Qualifying contributions: The $5 qualifying contributions collected by                                           136                  2
                   participating candidates are deposited in the Citizens Clean Elections Fund.
                   Filing and title certificate fees: This source includes all lobbyist fees.c                                      104                  2
                   Arizona’s Act imposed a $100 annual fee (amount adjusted periodically) on
                   registered lobbyists who represent commercial or for-profit activities.
 Total                                                                                                                           $6,848            100%
Source: GAO analysis of state data.
                                                    a
                                                    Revenue reflects tax check-off income for previous years, when taxpayers were contributing to the
                                                    Maine Clean Election fund, but no elections were held. For the 1999 tax year, $266,907 had been
                                                    deposited into the Maine Clean Election Fund through income tax check-offs.
                                                    b
                                                     In June 2002, the Arizona Court of Appeals ruled that the surcharge provision of the Arizona Act was
                                                    unconstitutional and that collections of the surcharge should cease. In July 2002, pending its review,
                                                    the Arizona Supreme Court issued an order to stay enforcement of the lower court’s decision. Later
                                                    that year, the Arizona Supreme Court reversed the Court of Appeals and held the surcharge provision
                                                    to be constitutional. On January 9, 2003, the Institute for Justice appealed the Arizona Supreme
                                                    Court decision on behalf of plaintiff May to the U.S. Supreme Court. However, the U.S. Supreme
                                                    Court has decided to not hear the challenge to the Arizona law (see app. III).
                                                    c
                                                     In December 2001, Arizona’s Maricopa County Superior Court ruled that the lobbyist fee was
                                                    unconstitutional. Lavis v. Bayless, No. CV-2001-006078 (Arizona Superior Court, 2001). The
                                                    collected money has been returned to lobbyists.


                                                    Table 20 also indicates that in 2000, about 18 percent of Maine’s funding
                                                    and about 28 percent of Arizona’s funding came from state income tax
                                                    check-off donations and other voluntary donations. In Maine, $523,000 in
                                                    funding came from state income tax check-off donations that had


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                        Appendix II: Overview of the Public Financing
                        Programs for Election Campaigns in Maine
                        and Arizona




                        accumulated from 2 tax years prior to the 2000 elections. For tax year
                        1999, approximately 63,000 state income tax returns were filed with check-
                        off donations to the Maine Clean Election Fund, which represented about
                        10 percent of the 599,000 total returns filed in the state. In Arizona, the
                        $1.943 million in revenue included $1.829 million from state income tax
                        check-off donations in 2000. These tax check-off donations came from
                        approximately 246,000 of the 2.1 million state income tax returns filed, or
                        about 12 percent of the returns filed through December 2000, for tax year
                        1999. In perspective, about 11 percent of federal income tax returns had
                        $3 check-off contributions to the Presidential Election Campaign Fund4 in
                        tax year 2000, which is used to finance qualified presidential candidates
                        and national political parties.


                        Both Maine’s Act and Arizona’s Act established commissions to implement
Administration of the   the public financing program and enforce provisions of the Acts. In Maine,
Public Financing        the responsibility for administering Maine’s Act, including management of
                        the Maine Clean Election Fund, was given to Maine’s Commission on
Programs                Governmental Ethics and Election Practices. The Commission consists of
                        five members appointed by the Governor, subject to review by the joint
                        standing committee of the state legislature having jurisdiction over legal
                        affairs and confirmation by the state legislature. The Commission employs
                        a director and staff to carry out the day-to-day operations of the program.
                        In addition to financing election campaigns of candidates participating in
                        the public financing program, the Maine Clean Election Fund also pays for
                        administrative and enforcement costs of the Commission related to the
                        Act. In 2000, the Commission’s total expenditures from the fund were
                        $861,774, including $111,081 in administrative costs.5 The administrative
                        costs included staff payroll and other miscellaneous expenses.




                        4
                         Beginning in 1976, taxpayers have had the option of contributing to the Presidential
                        Election Campaign Fund by checking off a box on their federal income tax return. Funding
                        is provided to qualified presidential candidates for their primary campaigns and to major
                        political parties for presidential nominating conventions, and grants to presidential
                        nominees for their general election campaigns. In 1994, the check-off was increased from
                        $1 to $3.
                        5
                          State of Maine, Report of the Commission on Governmental Ethics and Election Practices
                        to the Joint Standing Committee on Legal and Veterans Affairs, Documenting, Evaluating
                        and Making Recommendations Relating to the Administration, Implementation and
                        Enforcement of the Maine Clean Election Act and Maine Clean Election Fund. Augusta,
                        ME, 2001.




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Appendix II: Overview of the Public Financing
Programs for Election Campaigns in Maine
and Arizona




As a part of the responsibility for implementing and enforcing Maine’s Act,
the Commission is to investigate violations of the requirements for
campaign reports and campaign financing activities of both participating
and nonparticipating candidates. The Commission has authority to assess
civil penalties against any person who violates any provision of the act. A
summary report released by the Commission in August 2001 reported that
enforcement of the act required minimal Commission activity during the
2000 election year.

In Arizona, the Citizens Clean Elections Commission was newly created by
Arizona’s Act and consists of five members selected by the state’s highest-
ranking officials from opposing parties. These state officials choose one
new commissioner per year. No more than two commissioners may be
from the same political party or county, and commissioners may not have
run for or held office, nor been appointed to or elected for any office for
the 5 years prior to being chosen as a commissioner. As established by
Arizona’s Act, the Commission employs an executive director to facilitate
administration of the program, including voter education and enforcement
of the act’s provisions. The executive director is, in turn, responsible for
determining additional staffing needs and hiring accordingly. Arizona’s Act
caps Commission spending for a calendar year at $5 times the number of
Arizona resident personal income tax returns filed the previous calendar
year. Of that amount, the Commission may use up to 10 percent for
administration and enforcement activities and up to 10 percent for voter
education activities. The remainder of Commission spending goes to
participating candidates’ campaign funds. For example, in calendar year
2000, the Commission’s spending cap was $9,979,355—$5 times the
1,995,871 personal income tax returns filed in calendar year 1999 (for tax
year 1998). The Commission’s total revenue for calendar year 2000 was
less than the prescribed spending cap at $6,847,843. In 2000, the
Commission’s expenditures totaled $3,176,711—$668,562 for
administration and enforcement, $590,725 for voter education, and
$1,917,424 for campaign funds.6

The Commission’s responsibility for enforcing campaign finance laws
established by Arizona’s Act covers contribution limits, spending limits,
and reporting requirements that affect both participating and
nonparticipating candidates. Cases of possible violations may be initiated



6
 State of Arizona, Citizens Clean Elections Commission, Annual Report: January 1,
2000—December 31, 2000. Phoenix, AZ, 2000, 38-40.




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                        Programs for Election Campaigns in Maine
                        and Arizona




                        with the Commission in one of two ways: either by an external complaint
                        or through information that comes to the Commission’s attention
                        internally. The Commission may assess civil penalties after investigating
                        compliance matters and finding probable cause of a violation unless the
                        candidate comes into compliance within a set time frame or a settlement
                        agreement is reached. For example, in 2000, the Commission reviewed
                        19 externally generated complaints, 5 of which were forwarded to the
                        office of the Secretary of State due to jurisdictional issues, while 9 cases
                        were dismissed and 4 were dropped because the candidate came into
                        compliance. The Commission reached a settlement agreement with the
                        candidate in the remaining case. Of the 16 internally initiated compliance
                        matters in 2000, the Commission found only 1 case with probable cause of
                        a campaign finance violation. The candidate in that case came into
                        compliance within the required time frame.7


                        Before the passage of Maine’s Act and Arizona’s Act, political campaigns in
Reduced Contribution    the two states were financed completely with private funds, subject to
Limits and Additional   certain statutory limitations on contributions from individuals and others.
                        There were no limitations placed on expenditures by candidates of their
Reporting               personal wealth. Under the new laws, this latter aspect of campaign
Requirements for        financing remains true for candidates who choose not to participate in the
                        respective state’s public financing program. That is, for their own races,
Nonparticipating        nonparticipating candidates can still spend as much of their personal
Candidates              funds as they please.

                        On the other hand, nonparticipating candidates are subject to new
                        limitations on the amounts of contributions they can accept. In Maine, for
                        example, a nonparticipating candidate for the state legislature may accept
                        up to $250 per donor, and a nonparticipating gubernatorial candidate may
                        accept up to $500 per donor. Previously, the candidates could have
                        collected up to $1,000 from individuals and up to $5,000 from political
                        committees and corporations. In Arizona, contributions from individuals
                        and political committees are now limited to $270 per donor for
                        nonparticipating candidates for the state legislature and $700 to
                        nonparticipating candidates for applicable executive branch offices.
                        Arizona’s new limitations represent a 20 percent reduction from the
                        contribution ceilings that existed previously.




                        7
                         Id. 25.




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Programs for Election Campaigns in Maine
and Arizona




In order to administer the public financing programs, nonparticipating
candidates have additional reporting requirements. For example:

•   In Maine, a nonparticipating candidate must notify the Commission on
    Governmental Ethics and Election Practices when his or her receipts
    total 101 percent of the Commission’s initial allocation of pubic funds
    to a participating candidate.

•   In Arizona, a nonparticipating candidate must file original and
    supplemental campaign finance reports with the Secretary of State
    when the candidate makes expenditures that exceed 70 percent of the
    primary election spending limit or receives contributions (less the
    expenditures through the primary) that exceed 70 percent of the
    general election spending limit.




Page 93                                GAO-03-453 Public Funding of Political Campaigns
                      Appendix III: Summary of Legal Challenges to
Appendix III: Summary of Legal Challenges
                      Maine’s and Arizona’s Public Financing
                      Programs


to Maine’s and Arizona’s Public Financing
Programs
                      The legal challenges to the public financing programs in Maine and
                      Arizona raised many issues. The Maine Clean Election Act, passed in
                      November 1996, took effect in the 2000 elections. Preceding the elections,
                      elected officials, political action committees, and campaign contributors
                      challenged the law in federal court on federal constitutional grounds. The
                      litigation focused on First Amendment issues raised by what plaintiffs
                      regarded as the impermissibly coercive nature of the act, limitations on
                      campaign contributions, and the grouping of independent expenditures
                      with a candidate’s expenditures.

                      Arizona voters passed the Citizens Clean Elections Act in November
                      1998, and it also took effect in the 2000 elections. An Arizona political
                      action committee, an Arizona lobbyist, and Arizona voters challenged the
                      act on state constitutional grounds. Furthermore, the challenges in
                      Arizona included contesting the sources of funding, the validity of the title,
                      and the process for selecting members that sit on the Citizens Clean
                      Elections Commission.

                      This appendix provides a summary of the legal challenges to the Maine
                      Clean Election Act and Arizona’s Citizens Clean Elections Act.


                      In a March 2000 opinion, the United States Court of Appeals for the First
Legal Challenges to   Circuit validated the Maine Clean Election Act. After consolidating
the Maine Clean       appeals, the First Circuit upheld two lower court decisions and ruled that
                      the First Amendment rights of candidates, contributors, and political
Election Act          action committees were not violated by the public finance scheme and
                      contribution limits established in the Maine Clean Election Act.

                      Since the Maine Clean Election Act was first approved by a voter initiative,
                      it has been the subject of a great deal of litigation. Almost immediately
                      after voters of Maine approved the Act, the first suits were brought against
                      the state. Eventually, after a number of cases were dismissed on
                      procedural grounds, the federal district court for Maine ruled on the
                      constitutionality of the act. Table 21 summarizes the results of the legal
                      challenges. Following table 21 is a more detailed synopsis of the court of
                      appeals decision and the district court cases.




                      Page 94                               GAO-03-453 Public Funding of Political Campaigns
                                             Appendix III: Summary of Legal Challenges to
                                             Maine’s and Arizona’s Public Financing
                                             Programs




Table 21: Maine Clean Election Act Litigation

 Case citation                               Synopsis of the legal challenge                  Decision of the court
 U.S. Court of Appeals for the First Circuit
 Daggett v. Commission on Governmental The U.S. Court of Appeals consolidated the             The U.S. Court of Appeals for the First
 Ethics and Election Practices,              appeals from two lower court decisions. One      Circuit upheld the constitutionality of the
 205 F. 3d 445                               set of appellants included past and current      Act. The court held that: (1) Maine’s public
 (1st Cir. 2000).                            candidates, the Libertarian Party of Maine,      financing scheme provided a roughly
                                             and an individual campaign contributor.          proportionate mix of benefits and
                                             Their major complaint was that the statute       detriments to candidates seeking public
                                             was impermissibly coercive, thereby              funding, such that it did not burden the
                                             unconstitutionally burdening the First           First Amendment rights of candidates or
                                             Amendment rights of candidates. The other        contributors; (2) the independent
                                             set of appellants included an individual         expenditures requirement did not limit the
                                             contributor and two political action             freedom of speech and association of the
                                             committees. Their major complaint was that       independent contributors; and (3) the
                                             the provision for matching funds for             reduced contribution limits of $250 did not
                                             independent expenditures was                     infringe on appellants’ First Amendment
                                             unconstitutional. Both sets of appellants also   rights because the limits served an
                                             contested the constitutionality of the           important government interest in avoiding
                                             reduced contribution limits.                     corruption and were closely tailored to
                                                                                              serve that interest.
Source: GAO analysis of court decision.



                                             The Court of Appeals for the First Circuit, in Daggett v. Commission on
                                             Governmental Ethics and Election Practices, 205 F. 3d 445 (1st Cir. 2000),
                                             addressed three arguments. First, the court ruled that the $250
                                             contribution limits were supported by a “sufficiently important
                                             governmental interest to which the ceilings are closely tailored.” Daggett
                                             v. Comm’n on Governmental Ethics and Election Practices, 205 F.3d 445,
                                             459. Relying on a recent U.S. Supreme Court decision, Nixon v. Shrink
                                             Missouri PAC, 528 U.S. 377 (2000), the First Circuit held that there was
                                             sufficient evidentiary support of the threat of corruption or its appearance
                                             to implement the limits. As to the consequences, the First Circuit decided
                                             that the limits on contributions had a minimal effect on people who wish
                                             to support a candidate directly.

                                             The First Circuit also held that the matching funds provision for
                                             participating candidates does not violate the First Amendment rights of
                                             the nonparticipating candidates. Furthermore, the court agreed with the
                                             district judge that the reporting requirements imposed on privately
                                             financed candidates are not an undue burden and serve an important and
                                             narrowly tailored governmental interest. The court said that these sections
                                             of the act do not restrict the amount of money nonparticipating candidates
                                             can spend; rather, the sections level the playing field by providing
                                             matching funds for participating candidates.



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Finally, the First Circuit held that the cumulative effect of the act was not
impermissibly coercive. The court cited several examples of election laws
in other states that were similar or more restrictive and not found
coercive. The court concluded that neither the matching funds provision
nor the labels associated with participating and nonparticipating
candidates are such strong incentives that candidates are forced to accept
public funding.

In the first district court case, Daggett v. Webster, 74 F. Supp. 2d 53 (D. Me.
1999), plaintiffs challenged the act on a number of issues, mainly focusing
on the trigger provision—that is, when privately funded candidates raise
funds above a certain amount, publicly funded candidates receive
matching funds—and additional reporting requirements imposed on
privately funded candidates. Of the seven claims raised by plaintiffs, all
were rejected by the district court:

•   The court found the Maine Clean Election Act offers incentives, but the
    incentives are not overwhelming or of an order that can be said to
    create profound disparities.

•   The court held that the Maine Election Commission is not labeling
    publicly funded candidates as “clean”; the state cannot control what
    candidates choose to call themselves or their opponents.

•   The court stated there was nothing unfair and no profound disparity in
    providing publicly funded candidates matching funds equivalent to
    what their privately funded opponents raise.

•   The court held that triggers, tied to the amount privately funded
    candidates raise and not to the amount they spend, is a legitimate
    approach for the legislation to take.

•   The district court upheld the additional reporting requirements
    imposed on privately funded candidates who receive, spend, or
    obligate more than 1 percent over the amount distributed to their
    publicly funded opponents.

•   The court held that independent expenditures spent to support a
    candidate (including negative ads targeting the candidate’s opponent)
    must be reported by the candidate as money spent on his or her
    campaign.

•   Finally, the court ruled that funds spent on public funding for primary
    elections are relatively small, and separate allocations for primary


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                         elections are necessary to make the act’s public financing measure
                         effective.

                      The other district court case, Daggett v. Webster, 81 F. Supp. 2d 128 (D.
                      Me. 2000), involved a challenge to the lowered contribution limits.
                      Plaintiffs in that case challenged the $250 contribution limits for state
                      legislative candidates and the $500 contribution limits for gubernatorial
                      candidates. The court did not rule on the $500 limit on gubernatorial
                      candidates because there was no gubernatorial race at the time. The
                      district court did, however, uphold the $250 individual contribution limit
                      to a state senate or house candidate. In reaching its decision, the court did
                      not focus on the monetary limit but instead analyzed three constitutional
                      interests at stake: contributors’ free speech, candidates’ free speech, and
                      freedom of association. These constitutional interests were elucidated in
                      the U.S. Supreme Court’s opinion in Buckley v. Valeo, 424 U.S. 1 (1976).


                      The Arizona Supreme Court upheld the Citizens Clean Elections Act, but
Legal Challenges to   not before a number of provisions were severed by the courts because
Arizona’s Citizens    they were unconstitutional under the Arizona Constitution. Three separate
                      cases made their way through the state judicial system before reaching the
Clean Elections Act   state’s highest court. In the first case, the court ruled that despite an
                      oversight by the drafters, the title of the ballot initiative was constitutional.
                      The Arizona Supreme Court ruled in the second case that the nomination
                      and selection of commissioners to the Citizens Clean Elections
                      Commission was unconstitutional in part; however, the court also ruled
                      that those parts could be severed, allowing the Citizens Clean Elections
                      Act to stand. Finally, the court held that funding for public campaigns
                      from a surcharge on criminal and civil fines was constitutional.
                      Before the initiative even got on the ballot of the general election, the act
                      was challenged. The claims that were litigated in Arizona were different
                      from those raised in Maine. Political action committees and individual
                      citizens raised state constitutional challenges to the title of the act, and the
                      process of appointing commissioners to the Citizens Clean Elections
                      Commission, the sources of funding for the law. Tables 22 through 24
                      provide a summary of the litigation. Following each table is a more
                      detailed synopsis of the cases.




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Table 22: Arizona Litigation – Title of Ballot Initiative

 Case citation                            Synopsis of the legal challenge                           Decision of the court
 Arizona Supreme Court
 Meyers v. Bayless,                       The plaintiff, an Arizona voter, brought the action       The Supreme Court of Arizona held that even though
 965 P. 2d 768                            seeking the court to revoke the certification of the      the initiative did not have a title, Article II did have a
 (Ariz. 1998)                             ballot initiative because it lacked a title.              title and it was the only article in the initiative. That
                                                                                                    combination of factors was enough for the court to
                                                                                                    hold that the initiative substantially complied with the
                                                                                                    title requirement.
Source: GAO analysis of court decision.



                                                            Before the Arizona initiative for clean elections was placed on the ballot,
                                                            an action was brought seeking the court to revoke the certification of the
                                                            ballot initiative because it lacked a title. The lower court in Arizona held
                                                            that the words, “Citizens Clean Elections Act,” which were not at the top
                                                            of the measure but on the third line as the title of an article, met the title
                                                            requirement. The Arizona Supreme Court agreed. The court held that for
                                                            an initiative petition, the legal sufficiency standard requires substantial,
                                                            not necessarily technical, compliance with the law.

Table 23: Arizona Litigation – Nomination and Appointment Process to the Citizens Clean Elections Commission

 Case citation                                           Synopsis of the legal challenge                     Decision of the court
 Arizona Supreme Court
 Citizens Clean Elections                               Citizens Clean Elections Commission and              The Arizona Supreme Court heard this
 Commission v. Myers,                                   Arizonans for Clean Elections appealed the           appeal on an expedited review process. The
 196 Ariz. 516, 1 P.3d 706 (Ariz. 2000)                 Superior Court decision. They argued that            court held that: (1) the Commission on
                                                        the sections challenged were constitutional or       Appellate Court Appointments did not have
                                                        at least severable from the rest of the act. On      the authority to nominate Clean Elections
                                                        cross-petition, VotePac challenged the               Commissioners; (2) the Commission on
                                                        validity of the title of the act and asserted that   Appellate Court Appointments provisions
                                                        the requirement of Supreme Court members             could be severed from the act; (3) the Senate
                                                        to select Clean Elections Commissioners              could concur with any removal decisions the
                                                        violated the Arizona Constitution.                   Governor made of Clean Elections
                                                                                                             Commissioners; (4) the title of the act was still
                                                                                                             valid; (5) members of the Supreme Court
                                                                                                             could not appoint commissioners to the Clean
                                                                                                             Elections Commission; and (6) the section of
                                                                                                             the act requiring Arizona Supreme Court
                                                                                                             members to appoint Clean Elections
                                                                                                             Commissioners could be severed from the
                                                                                                             rest of the act.
Source: GAO analysis of court decision.



                                                            Prior to the 2000 elections, a registered Arizona political action committee
                                                            and citizens of Arizona challenged the Citizens Clean Elections Act,
                                                            seeking a declaration of the act’s invalidity. The Superior Court for



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Maricopa County held that the act was invalid. See Votepac v. Bayless, CV
99-11937 (Superior Court of Arizona, 2000). The Citizens Clean Elections
Commission and the Arizonans for Clean Elections appealed the decision
of the Superior Court to the Arizona Supreme Court in an expedited
review process.

The Arizona Supreme Court, in Citizens Clean Elections Commission v.
Myers, 196 Ariz. 516, 1 P.3d 706 (Ariz. 2000), upheld the law, but required
certain provisions—regarding how commissioners were nominated and
appointed to the Citizens Clean Elections Commission—be severed for
violating the Arizona Constitution. First, the Arizona Supreme Court held
that the Commission on Appellate Court Appointments could not
nominate Clean Elections Commissioners because it was beyond the
scope of their constitutional authority under the state constitution. The
court held that any exercise of legislative power is subject to the
limitations imposed by the state constitution. In this case, the authority
that the Citizens Clean Elections Act gave the Commission on Appellate
Court Appointments to appoint Clean Elections Commissioners was
beyond its scope. That section of the Act requiring the Commission on
Appellate Court Appointments to nominate Clean Elections
Commissioners was removed, and the governor was required to select
Clean Elections Commissioners without the slate of candidates from the
Commission on Appellate Court Appointments.

The Arizona Supreme Court next examined the section of the Citizens
Clean Elections Act requiring senatorial concurrence in the governor’s
decision to remove any member of the Citizens Clean Elections
Commission. The court disagreed with the trial court and held that there
was no violation of separation of powers. Because the Citizens Clean
Elections Commission is an independent agency, the requirement for
senatorial concurrence does not hinder the governor’s ability to carry out
his or her duties.

The Arizona Supreme Court addressed the issue of whether it was
unconstitutional under the state constitution for members of the Supreme
Court of Arizona to make appointments to the Citizens Clean Elections
Commission. The Arizona Supreme Court held that the act violated the
doctrine of separation of powers to the extent that it included members of
the court as officials who could appoint members of the Commission. The
court reasoned that the appointment process was unrelated to the court’s
judicial power and that members of the court (an apolitical body) were
called upon to make political decisions. The court held that the provision



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                                                        in question was severable from the rest of the Act and allowed the rest of
                                                        the act to stand.

Table 24: Arizona Litigation – Sources for Public Funding

 Case citation                            Synopsis of the legal challenge                      Decision of the court
 Arizona Supreme Court
 May v. McNally,                          Secretary of State, State Treasurer, and Citizens    The Supreme Court of Arizona reversed the Court
 203 Ariz. 425, 55 P.3d 768               Clean Elections Commission sought review of the      of Appeals and held the surcharge funding
 (Ariz. 2002)                             Court of Appeals decision that struck down the 10-   provision to be constitutional. The high court
                                          percent surcharge provision in the Citizens Clean    reasoned: (1) the surcharge was a tax assessed
                                          Elections Act.                                       against all citizens who pay civil and criminal fines;
                                                                                               (2) there was no defined association, so
                                                                                               germaneness is irrelevant; (3) the government
                                                                                               could use public funds to finance political speech;
                                                                                               and (4) funds were allocated in a viewpoint neutral
                                                                                               way to safeguard First Amendment rights.
Source: GAO analysis of court decision.



                                                        The most recent challenge to the Citizens Clean Elections Act focused on
                                                        whether two of the act’s sources of funding violated the First Amendment.
                                                        The two sources that were challenged were an annual $100 fee from
                                                        lobbyists who work for commercial or for-profit entities and a 10-percent
                                                        surcharge imposed on all persons paying civil and criminal fines, such as
                                                        parking fines. The lobbyist fees were found to be unconstitutional by the
                                                        Superior Court; however, the court also found the provisions severable.
                                                        See Lavis v. Bayless, CV 2001-006078 (Superior Court of Arizona, 2001).
                                                        The 10-percent surcharge on civil and criminal fines was ultimately
                                                        decided by the Arizona Supreme Court to be constitutional.

                                                        The Arizona Supreme Court found that those paying the surcharge were
                                                        not linked to any one viewpoint or message; instead, the surcharge funded
                                                        all qualified candidates. Furthermore, the court found that the surcharge
                                                        was not applied in an unconstitutional manner or for an unconstitutional
                                                        purpose.

                                                        The Institute for Justice, a public interest litigation organization, recently
                                                        appealed the decision, on behalf of State Representative and plaintiff Steve
                                                        May, to the U.S. Supreme Court. However, the U.S. Supreme Court has
                                                        decided to not hear the challenge to the Arizona law.




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                      Appendix VI: Comments Received in Our
Appendix VI: Comments Received in Our
                      Survey of Candidates for Office in Maine’s
                      and Arizona’s 2000 Elections


Survey of Candidates for Office in Maine’s
and Arizona’s 2000 Elections
                      Our survey by mail1 of all candidates for office in Maine’s and Arizona’s
                      2000 elections contained an ending statement inviting respondents to
                      provide any comments they believed were important about the effects of
                      the respective state’s public financing program (see app. IV and V). We did
                      not independently evaluate the merits of the respondents’ comments.
                      However, we did group and list the comments by topic, as presented in the
                      following two sections—the first for comments provided by Maine
                      candidates and the second for comments provided by Arizona candidates.
                      With some exceptions, such as responses that were irrelevant or unclear,
                      substantially all of the comments are arrayed by topic in a table in the
                      respective section. To ensure inclusiveness and avoid subjectivity in
                      presenting the comments, we did not eliminate any candidate’s comments
                      even though the comments perhaps were the same as (or very similar to)
                      comments made by another candidate. Also, except for some minor
                      editing for grammar or clarity, the comments are presented as worded by
                      the responding candidates.

                      As perhaps may be expected, many of the comments followed ideological
                      lines. For example, although there were some exceptions, nonparticipating
                      candidates generally commented that financing the campaigns of political
                      candidates was an inappropriate use of tax dollars, whereas participating
                      candidates usually endorsed public financing. Collectively, the widely
                      divergent and sometimes virulent comments seem to indicate that
                      reaching a consensus regarding the value of the public financing programs
                      may be unlikely, at least in the foreseeable future.


                      We received written comments from 157 respondents to our survey of
Comments Provided     candidates for office in Maine’s 2000 elections. In reference to Maine’s
by Maine Candidates   public financing program, the 157 respondents consisted of 97
                      nonparticipating candidates and 60 participating candidates.
                      Table 25 presents the comments of the responding candidates.



                      1
                       Appendix I discusses the scope and methodology of our work regarding the survey
                      questionnaires we mailed to candidates. This work—including pretesting of the
                      questionnaires, initial distribution, and follow-up inquiries—was conducted during July
                      through December 2002. We mailed the survey to the candidates in mid-August 2002, which
                      was close in timing to the primary election date in each state. Maine’s primary election was
                      June 11, 2002, and Arizona’s primary election was September 10, 2002. Although the survey
                      was mailed to candidates who ran in Maine’s and Arizona’s 2000 elections, some of the
                      comments provided by the candidates were related to events surrounding the 2002
                      elections in each state.




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Table 25: Comments Received in Our Survey of Candidates for Office in Maine’s 2000 Elections

Topic                 Nonparticipating candidate comments                                          Participating candidate comments
Use of public funds   The public financing program is a tax on the citizens of this state and is   This is a good program and should
                      allowing a large amount of money to be spent by some individuals at          be continued, although some
                      taxpayers’ expense.                                                          changes are needed.

                      Tax funding of campaigns is an immoral and unproductive welfare              This is a great program. It needs to
                      program for politicians and will not work. I advocate abolishing all         be continued, with some tightening-
                      contribution and spending limits and reporting requirements. Campaign        up of loopholes.
                      finance laws protect incumbents and enhance the power of the press,
                      while destroying the First Amendment rights of others.                       This is a terrific program, even if it is
                                                                                                   not perfect.
                      I am opposed to spending Maine’s hard-earned tax dollars on
                      campaigns. If you are popular with your constituents and they believe        My personal experience was that the
                      in you and what you stand for, they will donate to your campaign.            public financing program was a valid
                                                                                                   attempt at campaign reform.
                      I totally disagree with using the state’s tax dollars and general fund to
                      finance candidates. If clean elections was based on only the amount          While the public financing program is
                      collected for the signatures, I may support it. Otherwise, it adds one       not perfect, it begins the process of
                      more layer of state bureaucracy.                                             returning power to the people.

                      No taxpayer should be forced to support a candidate financially.             The program has enhanced
                      Political action committee (PAC) spending and union support (i.e.,           democracy and will return power to
                      workers paid with no management accounting for cost) made the so-            voters in the long run.
                      called “clean” election system a joke. GAO’s questionnaire is slanted
                      towards the continuance of this outrageous program.                          This program helps the electoral
                                                                                                   process and is good for democracy.
                      My strongest objection to the program is that it forces taxpayers to fund
                      candidates that they may not support.                                     Maine’s public financing program
                                                                                                should be a pilot program for federal
                      Many people complained to me that their money should not be used for elections.
                      everyone. They felt the candidate should raise his or her own money
                      with a cap on the amount spent.                                           The Maine Clean Election Act is the
                                                                                                   best thing that could ever happen to
                      Public funding is a bad way to finance campaigns.                            our government. It is a great example
                                                                                                   for national elections, and such
                      There are better uses of public money. If people would use it,               reform should be greatly
                      accountability exists in the private funding system.                         encouraged.

                      Publicly funded elections fly directly in the face of freedom.               I support the use of publicly funded
                                                                                                   elections. I think it is good for the
                      Tax dollars should not be used for campaigns.                                people of Maine and, for that matter,
                                                                                                   any state.
                      Paying health insurance for our retired teachers should be done before
                      we begin to subsidize names on ballots. Maine has the highest state
                      and local taxes of any state in the nation, and our income tax hits its
                      highest rate at approximately $14,000 per year. Our legislative districts
                      are small; raising campaign contributions by canvassing door to door
                      and attending PTA meetings is the norm. People know each other
                      here.




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Topic   Nonparticipating candidate comments                                               Participating candidate comments
        The money spent on this program could be spent on the needs of
        senior citizens, such as prescription drugs.

        Maine cannot afford to fund candidates at the expense of taxpayers.

        I am not a proponent of the public financing program. In difficult times,
        as we now have, I do not feel that taxpayers should be funding
        elections.

        Public financing is another drain on public funds.

        The public financing program is another sock-it-to-the-taxpayer form of
        taxation. In my opinion, voters were not aware of what they were voting
        for in 1996. The voters saw the words “clean elections” and thought it
        would solve the issue. The program infringes on the First Amendment
        guarantee of free speech.

        With $250 million or more in revenue shortfalls versus spending
        commitments, Maine should not be financing elections when there are
        insufficient funds to pay for day-to-day operations of government.

        Due to the present state deficit, the public funding program should be
        reduced or repealed. It is a luxury that the state can ill afford. It is hard
        for me to use taxpayers’ money when there are so many more
        important needs.

        Public financing is wonderful for first-time candidates because they
        have difficulty raising money. But, special interests will always find
        ways to promote their allies. Thus, all in all, tax money can be put to
        better use.

        I ran with traditional financing in 2000 and with public financing in 2002.
        Public funding has made it easier to run as a state representative; I
        have more time to go to the voters’ homes. But, I am not sure if they
        like candidates spending taxpayer money.

        Taxpayer funds should not be spent in this manner. Taxpayers have no
        real understanding of the process and the “games” that are played.

        There are lots of problems with this program. It should be repealed.

        Public financing has added millions of dollars to political campaigns
        without any other noticeable changes. We are spending public funds on
        something that is of no benefit to the taxpayers. Ask the person on the
        street if his or her legislator is a participant or not in the public financing
        program. The blank stare you get will answer your question.

        The current budget crisis will erode public support for taxpayer funding
        of politicians, as will the giving of $1 million in public funds to a Green
        Party candidate for governor.




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Topic            Nonparticipating candidate comments                                         Participating candidate comments
Number of        The only reason more candidates will opt for public financing is that the   The program gives a greater number
candidates and   law and its implementation are punitive towards traditionally funded        of people a chance to run for office.
electoral        candidates.
competition                                                                                  I support Maine’s public financing
                 This year (2002), there seem to be quite a few candidates, at least in      program. We have been able to
                 my area, who have chosen to be clean election candidates. They did it       recruit more candidates of diverse
                 only to avoid having to raise money. They did not talk to constituents to   backgrounds.
                 obtain the $5 contributions; friends did it for them. The law has made
                 candidates more lazy, especially incumbents.                                I know my opponent could not have
                                                                                             run without public funding, and I am
                 More candidates are choosing public financing because it involves no        pleased that he did run.
                 fundraising efforts. It is a somewhat lazy approach of letting taxpayers
                 do your work.                                                               Without public funding, I would not
                                                                                             have been able to launch a
                 If the goal of Maine’s public financing program was to elect people for     campaign or run as a candidate.
                 office who would not normally be elected, I believe it was partly
                 successful. Time will tell if the people got what they wanted.              Absent the public financing program,
                                                                                             I seriously doubt that I would have
                 Maine’s public financing system has proven to be very successful. It        ever run for office. And, I am sure
                 especially helped to recruit female candidates.                             that many other candidates were
                                                                                             similarly influenced by the program.
                 The public financing program has made it easier to find candidates in
                 rural districts.                                                            I remain a committed supporter of
                                                                                             clean elections. A greater and more
                 The program may have encouraged some candidates to run, but it has          varied population of candidates is
                 not had much effect in my opinion.                                          now able to run. The requirements
                                                                                             are high enough to exclude
                 This may be a simplistic view, but I think the Maine Clean Election Act     candidates who lack community
                 does make a difference. Although I withdrew my candidacy, I                 support or credibility. The system is
                 considered it much more seriously because I knew public funding             well run in Maine.
                 would help me to run a decent campaign against a very strong
                 incumbent.                                                                  Public financing is changing the
                                                                                             nature and number of candidates
                 The program has encouraged massive fraud by having insincere                and campaigns in Maine. In
                 “paper candidates” take the money and run half-hearted campaigns            particular, third-party candidates are
                 just to tie up the incumbent. Also, they use the money (for phone           accessing funds to run viable
                 banks, graphic artists, overhead, etc.) to support other competitive        campaigns. In general, my
                 campaigns. Further, because fundraising expenditures are not                constituents seem to support the
                 deducted, conventional candidates have a financial disadvantage.            motivating principles that initiated this
                                                                                             program but do not understand
                                                                                             where the money is coming from.
                 People voted for the Maine Clean Election Act because they thought
                 dirty campaigning (e.g., personal attack ads) would stop. Yet, the 2000
                 election was one of the dirtiest campaign scenes that I have witnessed      I have significant concerns when a
                 in over 30 years. I got many calls asking, “How come so and so can          third-party candidate, such as the
                 say that about her opponent?” I explained that all Maine’s Act does is      Green Party’s gubernatorial
                 to ensure that tax dollars will pay for participating candidates’           candidate in the 2002 election, can
                 campaigns. This is a very bad piece of legislation.                         get public funding even though he
                                                                                             received a mere 5 percent of the
                                                                                             votes in the previous election. It is a
                 Races will continue to get nastier because, by law, independent             terrible waste to use public funds for
                 expenditures and issue advocacy spending cannot be coordinated with         an unelectable candidate’s
                 or attributed to candidates.                                                propaganda.




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                                       Survey of Candidates for Office in Maine’s
                                       and Arizona’s 2000 Elections




Topic            Nonparticipating candidate comments                                            Participating candidate comments
                 I am very concerned about how marginal third-party candidates will             Candidates running for a higher or
                 influence the outcome of close elections. I think we will have too many        statewide office (e.g., governor)
                 officials elected with less than 50 percent of the vote. We may need to        should have to demonstrate viability
                 have run-off elections.                                                        by first being elected to serve in a
                                                                                                lower office.
                 Public financing only clutters the field of candidates by putting radicals
                 on the ballots—radicals who get support only from a few other radicals.    The only reservation I have is that
                 If a candidate cannot garner enough support to run, he is not capable      public financing can be obtained by
                 of performing the duties of office. The people know who should run,        people who cannot win an election
                 and they show it with contributions. Get rid of public financing!          because they are too single-issue
                                                                                            oriented or are not widely supported.
                 Soliciting contributions enlightens the voters about the political program They become spoilers, potentially
                 of the potential candidate. Also, this traditional fundraising process     causing candidates to be elected by
                 shows the reluctance of voters to contribute or not contribute to the      a plurality rather than a majority.
                 candidate’s program.
                                                                                            There are about 4,000 to 5,000
                 Public financing is creating a Green Party spoiler in the governor’s race voters in each House district. A
                 in the 2002 election.                                                      candidate’s physical ability to
                                                                                            campaign has at least as much to do
                                                                                            with the outcome as money. It is
                                                                                            possible to knock on every door in a
                                                                                            district if necessary.

                                                                                                Party loyalty and party organization
                                                                                                are critical to helping a clean
                                                                                                elections candidate. Such candidates
                                                                                                must have a “campaign place” in
                                                                                                order to be effective.
Interest Group   The implication that publicly funded candidates are “clean” and                Accepting public financing gives me
Influence        traditional candidates are not is offensive to me. The hypothesis that         the feeling that I truly represent the
                 Maine legislators are driven by whoever provides financial support to          people and not a lobby.
                 campaigns is bogus. This program is a solution looking for a problem.
                                                                                                Running as a clean election
                 I resent the fact of being labeled a dirty candidate if I do not participate   candidate was a liberating
                 in the program.                                                                experience that most people seemed
                                                                                                to appreciate.
                 The “clean election” designation for those taking advantage of the
                 public funding program implies that the traditional candidate may not be The program has contributed to
                 “clean.” This is unfortunate and should be changed.                      lessening the impact on and control
                                                                                          of candidacies by special interests.
                 The use of “clean” is a poor choice of words as it denotes a negative    However, term limits have increased
                 for the other candidates.                                                the impact of lobbies in the halls and
                                                                                          committee rooms. The final result
                 I think the public is being deluded into thinking that public financing  regarding the influence of lobbies
                 takes big money out of elections and that the term “clean candidate”     may be negligible, but more “regular”
                 means something. I also think partisanship is even more involved in      people are running for office.
                 elections now than when individuals had to pay their own way or raise
                 their own funds.                                                               Public confidence in politics is crucial
                                                                                                if democracy is to survive. Publicly
                 Maine’s current law does not adequately limit the behind-the-scenes            financed campaigns help to increase
                 roles played by the most powerful players, that is, the parties and their      that confidence by leveling the
                 most powerful lobby groups—business, labor, National Rifle                     playing field and driving candidates




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                             Survey of Candidates for Office in Maine’s
                             and Arizona’s 2000 Elections




Topic   Nonparticipating candidate comments                                         Participating candidate comments
        Association, abortion rights, etc. They put out the most blatant negative   back to grassroots campaigns that
        ads and literature. Successful candidates know exactly to whom they         connect them directly with voters.
        are beholden, even if the candidates received no money directly from
        these groups.                                                               There is no question that public
                                                                                    financing requires constituent
        If the program’s purpose was to ensure some integrity in the election       participation. Running a campaign is
        process, it is a huge failure. If they lack integrity, candidates and       not about getting and raising money;
        supporters will always find loopholes.                                      it is about meeting and talking to the
                                                                                    people and engaging them in the
        I feel that the program has increased negative presentations by             election process.
        advocacy groups, and it could have the effect of weakening the two-
        party system. Special interests rather than candidates will have the        I welcomed the ability to be
        greatest voice. Without their consent, candidates could be endorsed by      independent from groups who try to
        groups in ads that do not reflect the candidates’ views.                    exert influence on the basis of
                                                                                    monetary support.
        I believe the program has helped restore the public’s faith in the
        integrity of candidates. Hopefully, many other states, and eventually       To be elected to the state legislature
        Congress, will adopt public funding of elections.                           and not feel beholden to anyone
                                                                                    except my constituents is a liberating
        I did not accept funding from any group. I ran a low-key campaign and       feeling.
        paid my own bills. In this way, when I walked through the door at
        Maine’s House of Representatives, I was my own person. I owed no            The most important effect of the
        one person or any group anything.                                           public financing program has been to
                                                                                    free legislatures from the influence of
        The public funding program removes a certain contact with people for        campaign contributors.
        fundraising. Some view traditional candidates as being influenced by
        funding services; others view such candidates as being responsive.          The program has removed private
                                                                                    fund raising. The issue is: How
        I have found that voters generally do not care whether you are running      influential were the private check
        as a publicly funded candidate or not. Maine’s Act was passed as a          writers on the way legislators voted.
        knee-jerk reaction to a ballot irregularity.                                It did not impact me, because I voted
                                                                                    on the basis of whether legislation
        Until honest people are elected, you will not have clean elections.         was good or bad for my constituents
        Maine’s law does the complete opposite of its intended purpose.             and the people of Maine.

                                                                                    I like the idea of not having to answer
                                                                                    to big companies after they give big
                                                                                    bucks to your campaign.

                                                                                    I felt a great deal of freedom after
                                                                                    being elected because I had only my
                                                                                    constituents to answer to.

                                                                                    Make Maine’s law stronger and
                                                                                    continue to reduce the role of
                                                                                    lobbying groups.

                                                                                    The program may lead to changing
                                                                                    this country from an oligarchy of
                                                                                    corporate and special interests to
                                                                                    something approaching democracy.
                                                                                    I probably would not be a traditionally




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                                       Appendix VI: Comments Received in Our
                                       Survey of Candidates for Office in Maine’s
                                       and Arizona’s 2000 Elections




Topic              Nonparticipating candidate comments                                     Participating candidate comments
                                                                                           funded candidate because financial
                                                                                           influence is too much of a precedent
                                                                                           in state and national campaigns.

                                                                                           It is time that the rich, both personal
                                                                                           and companies, be stopped from
                                                                                           running our country. With “clean
                                                                                           elections,” the candidates’ time and
                                                                                           energy will be spent on
                                                                                           communicating and working with the
                                                                                           people they represent.

                                                                                           The general public is in great need of
                                                                                           education regarding the benefits of
                                                                                           publicly financed elections systems.
                                                                                           The public believes that all politicians
                                                                                           are bought and paid for by special
                                                                                           interest groups, and the public is not
                                                                                           all wrong.

                                                                                           I wish PACs and special interests
                                                                                           could be stopped from interfering
                                                                                           with democracy.

                                                                                           The way Maine’s law is now written,
                                                                                           a publicly funded candidate must
                                                                                           demonstrate a strong fund-raising
                                                                                           ability and come up with more private
                                                                                           donors than usually found in a
                                                                                           traditional campaign. Where are
                                                                                           likely donors found? Sources are the
                                                                                           same as used by traditional
                                                                                           candidates—groups with
                                                                                           membership lists, such as political
                                                                                           parties, unions, service
                                                                                           organizations, non-profit and activist
                                                                                           entities, and church groups, as well
                                                                                           as people you work with. In short,
                                                                                           special interests have not been
                                                                                           removed from campaigns.
Campaign           Independent expenditures are a big problem for senate and statewide     I am very concerned that
spending:          office races.                                                           independent expenditures and issue
independent                                                                                advocacy will be the major source of
expenditures and   Maine now has a soft money problem where none existed before. Our       information for the voters. Both of
issue advocacy     campaigns are now much more expensive, and the races have more          these types of communications come
spending           dirty politics than ever. Political action committees (PACs) spend the  from somewhere other than the
                   same or more money now—in addition to the “clean funds,” doubling       candidate, perhaps even serving to
                   expenditures. The public can no longer trace the money being dumped trump the candidate’s message due
                   into campaigns. Special interest groups and lobbyists are stronger here to unlimited funds. The increase in
                   now more than ever because it is almost impossible to get elected       independent expenditure is an
                   without PAC expenditures. More issue advocacy and soft money move unintended consequence of public
                   through the party organizations. This program was a bad move for        funding.
                   Maine.




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                             Survey of Candidates for Office in Maine’s
                             and Arizona’s 2000 Elections




Topic   Nonparticipating candidate comments                                   Participating candidate comments
        Maine’s public financing program has created a major problem with softIssue advocacy spending is a
        money—independent expenditures and issue advocacy—where none          loophole in the clean elections law.
        existed before.                                                       Under current policy, participating
                                                                              candidates can benefit from such
        The public financing program has created a soft money problem in      spending without breaking the rules
        Maine, when no problem existed prior to the change.                   of the public financing program. It
                                                                              puts candidates who follow the
        Independent expenditures are increasing. Every candidate under a true program fairly at a disadvantage. We
        clean election system should receive exactly the same amount of       must not allow issue advocacy
        funds, and independent expenditures should not be allowed under the   communications to mention the
        law.                                                                  names of candidates or parties.

        I ran as a traditional candidate in 2000. I am running with public funds     Independent expenditures are the
        in 2002 because my opponent is also publicly financed. There are too         only trouble spot. I do not know how
        many ways that independent expenditures can be made and just as              to solve it, except by requirement to
        many ways the incumbent can spend to inform his or her constituency.         file (maybe 6 weeks before the
        Public financing is not always really an equal playing field. Why not just   election) an “intent” to make
        limit the amount of money a candidate can raise?                             expenditures on behalf of a
                                                                                     candidate. It drove me crazy when a
                                                                                     group in 2000 did a mailing on my
        It is erroneous to believe that candidates are unaware of independent        behalf that misled voters on where I
        expenditures. Both Democratic and Republican party leaders use               stood on the issue. I had no control
        PACs to exploit the loophole.                                                over the mailing, which also resulted
                                                                                     in freeing up money for my opponent
        If public funds are used, PACs should be outlawed.                           to spend.

        The “clean” candidates are using “leadership PACs” to collect funds for      There is no accountability for
        other candidates. The parties are finding ways to get around limits.         independent expenditures. A publicly
        Labor unions and interest groups are just going on as usual.                 financed candidate is at the mercy of
                                                                                     last-minute independent
        PAC money can be used by all except the candidate. It is much too            expenditures for opponents and has
        easy to get around the regulations.                                          no opportunity to respond in kind
                                                                                     before the election.
        In its infancy, the public funding program creates more of a hardship for
        the participating candidate, as the races most often are composed of      Candidates should not be allowed to
        one participating and one non-participating candidates. Traditional       create their own PACs.
        candidates have the ability to go to special interest groups and bury a
        publicly financed opponent under a volume of ads.                         Leadership, particularly in the
                                                                                  Democratic Party, continues to raise
        The public financing program does not help the system because more        monies to share with candidates.
        independent expenditures are occurring, which thwarts the intent of the
        program.                                                                  There should be limits on
                                                                                  independent expenditures and
        I have already seen an extensive shift to advocacy advertising. It is a   outside monies. I ran my campaign in
        real change in how elections are done. Total spending has really          one of Maine’s poorest counties; to
        grown.                                                                    ask individuals to finance large
                                                                                  amounts for politics is obscene.
        Independent candidates, such as myself, are seriously disadvantaged
        in that there are no limits on issue advocacy spending and independent To limit “hard” money from going
        expenditures, since no one does these on our behalf. I did not chose      “soft,” there must be restrictions
        public financing, but not because of spending limits. I won each of my    (e.g., disclosure, disincentives, etc.)
        races with increasing majorities and spent far less than $6,000.          on independent expenditures.
        Campaigns do not have to be expensive.



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                                         Survey of Candidates for Office in Maine’s
                                         and Arizona’s 2000 Elections




Topic               Nonparticipating candidate comments                                         Participating candidate comments
                    I think that if you are running as a clean candidate, none of the parties
                    should spend money on the candidate.




Campaign            There is more money in Maine politics than ever before. The clean           I feel that the public financing
spending: overall   elections law has done more harm than good.                                 program decreased the amount of
amounts                                                                                         money spent in my race.
                    Public financing of elections has increased the amount of money spent
                    on campaigns in this state. I am sorry that I voted as a legislator for this Publicly financed campaigns helped
                    program.                                                                     me to be more responsible with my
                                                                                                 finances. I made a conscious effort to
                    Having a publicly financed opponent in 2000 drove my spending higher be more thrifty so as not to deplete
                    because I knew he had enough money for radio and TV; and, his party the public coffer.
                    was running negative ads against some of our candidates. I bought
                    several thousand dollars of radio ads that I had not planned to spend. I Maine’s public financing program has
                    expect to spend less money in the 2002 election because my opponent removed a lot of “big money” from
                    did not qualify for public funds.                                            legislative races.

                    I was unopposed in my 2000 campaign; the total cost was only about          I take exception to the fact that
                    $1,900. Public financing reduces the fund-raising of traditionally          candidates who participated in the
                    financed candidates. Some constituents who support public financing         public funding program were still able
                    no longer contribute to the campaigns of privately funded candidates,       to be associated with PACs.
                    although the constituents still support the candidate and did contribute
                    in the past.                                                                If you are a “clean election
                                                                                                candidate,” you should not be
                    I found that candidates who were in the public financing program            allowed to form a PAC for a
                    bragged about the fact that they spent more money than when they            leadership position.
                    were not in program because it was not money they had to raise.
                                                                                                A candidate should be allowed to
                    All candidates should be allowed to receive and spend no more than          spend only the allotted amount of
                    $5,000 per campaign year to support their campaign—or an amount             money—with no other financing,
                    equal to that of their opponent, if less than $5,000.                       such as PACs.

                    I limited my campaign expenditures to $5,000 and dedicated my efforts       Unfortunately, pressure to raise
                    to the less-costly, door-to-door campaign.                                  money for the party caucuses will
                                                                                                continue to affect voting within the
                    The provisions of the law that made corporate contributions illegal and     parties at the state level.
                    reduced the maximum contributions from individuals were good.
                                                                                                More funds should be available to
                    Allowing matching funds for little effort by a public financed candidate    challengers than to incumbents, who
                    does not make sense. An example is the Green Party candidate in the         have the advantage of receiving
                    2002 gubernatorial race. Consistently unable to get votes from Maine        extra press coverage and using their
                    voters, he will probably get over $1 million of taxpayer money and may      office newsletters and materials from
                    become a “spoiler.”                                                         previous elections.



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                                     Survey of Candidates for Office in Maine’s
                                     and Arizona’s 2000 Elections




Topic           Nonparticipating candidate comments                                      Participating candidate comments
                Lots of public money goes to the participating candidates, who spend     In 2000, inadequate funding was
                about four times the amounts they would spend if taxpayer funds were     available for Senate races. As an
                not being used.                                                          incumbent, I had a huge advantage
                                                                                         over my publicly funded opponent. In
                The public funds are too easily spent—overkill on signs and junk—a big 2002, I faced a traditionally funded
                waste. Many candidates who use public funds know it is a joke; but, it   opponent. Loopholes allowed him to
                is easy money.                                                           raise money in an uncontested
                                                                                         primary—money that never will be
                The amount of money needed to finance a House of Representatives         matched and gave him an unfair
                race in rural Maine is not the same as that needed for urban areas. If   advantage.
                the Maine Clean Election Act is retained, the initial dollars to be
                distributed to a participating candidate should be recalculated based on In 2000, I had no opposition in my
                the particular district’s record. Having an opponent who was publicly    race for the state legislature.
                funded forced me to more than double my funding and expenditures in However, because I am so
                2002 compared to 2000.                                                   passionate about public financing, I
                                                                                         ran as a clean elections candidate. In
                Because public funding amounts are based on average expenditures in 2002, I am running again with public
                previous cycles, the program pours money into non-competitive races      funds. I have a Republican opponent
                and provides insufficient funds for competitive districts.               and feel that I have more than
                                                                                         enough money to win again.
                Public funding is more important in Senate races than House races
                because of geography and the need for more campaign dollars.

                In early 2002, thousands of dollars were given out in public financing
                for a special election to fill a vacated legislative seat. These sums led to
                a spending spree for a seat to be filled for only a few weeks.

                Participation in the public financing program makes a candidate think
                before spending. The program is a step in the right direction and is
                good for cleaner elections.
Program scope   All candidates should be on an equal playing field. Either all candidates      I believe that public financing should
                or none should be publicly financed.                                           not be granted to incumbents. The
                                                                                               program’s purpose should be to
                The program is flawed because it is not mandatory and universal.               encourage newcomers and not to
                                                                                               perpetuate career politicians.
                Public financing should be for all candidates or none. As it stands now,
                the program is a farce.

                For this system to work, it must become a requirement across the
                board. I sincerely hope this will happen, because it then will accomplish
                what I would like to believe was the original purpose—to elect
                representatives unencumbered by obligation to select populations.

                The program should apply only to candidates for the state legislature
                and not to gubernatorial candidates.




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                                       Survey of Candidates for Office in Maine’s
                                       and Arizona’s 2000 Elections




Topic            Nonparticipating candidate comments                                             Participating candidate comments
Program          The Maine Governmental Ethics and Election Practices Commission is              The possibility of abuse should be
administration   run by the majority party. Thus, one party is “off the hook,” and the           studied so as to avoid candidates
                 other party’s members are harassed.                                             taking advantage of the process.
                                                                                                 Greater clarity needs to be brought to
                 The reporting procedures are a burden and unreliable.                           the process. A candidate was able to
                                                                                                 spend $385 for a dinner for four
                 Sections of Maine’s law regarding reporting are problematic. What               people, while I was not allowed to
                 happens when a non-participant goes over time frames and limits for             purchase a copy machine that cost
                 outside expenditures?                                                           less.

                 The reporting forms and information requirements are worse than those My local jurisdiction consistently
                 for tax purposes.                                                           violated my civil rights and made it
                                                                                             almost impossible for me to comply
                                                                                             with the new law in a timely fashion.
                 The idea of publicly financed campaigns is good. It is my perception,
                 however, that Maine’s program adds to the time spent on filling out and
                 filing forms. One of my greatest fears is that I may make a mistake on a To be useful, matching funds based
                 form, or fail to submit a report on time, and be held up to criticism as an on last-minute expenditures by a
                 incompetent or a criminal. The system should be simplified if it is to be non-participating candidate should
                 effective.                                                                  be sent out earlier than the last week
                                                                                             of the campaign. Also, collection of
                                                                                             the $5 contributions should be
                 The requirement for $5 contributions should be dropped; people do not allowed in cash if the donees sign
                 understand it.                                                              the appropriate form.

                 The use of money orders for the $5 contributions should be banned.              There are lots of issues dealing with
                 Anyone can generate money orders to get credit for the required                 the timing of funds. My opponent
                 number of contributors.                                                         “hid” his expenses until the last
                                                                                                 minute. So, my matching funds came
                 I do not believe the public in general knows a great deal about the             too late to be helpful.
                 public funding process, unless they know a particular candidate who is
                 running in the program.                                                         Planned expenditures (with the
                                                                                                 knowledge of the candidate) timed
                 I did not run with public funds because I did not want to deal with the         just before the election must be
                 requirements. But, even though I got no public money, I ended up                controlled. The matching funds arrive
                 having to deal with the program’s requirements anyway because my                so late they have to be returned
                 opponent participated. So, in the future, I think that I will run with public   because it would be a waste to run a
                 funds if my opponent does.                                                      responding ad for the election.

                 Another bureaucracy will expand, more forms will be created, and the            When the $5 contributions are
                 bureaucracy in general will begin to influence who runs for public office       received, the routing numbers on the
                 and how. Eventually, the state will be making more rules in how people          checks should remain private for
                 should run.                                                                     their protection. Also, the law needs
                                                                                                 to be more specific about whether
                                                                                                 more than one check is needed for
                                                                                                 contributions from family members.

                                                                                                 Other than the last-minute
                                                                                                 expenditures of funds on behalf of
                                                                                                 Republican and Democratic
                                                                                                 candidates—expenditures made so
                                                                                                 late (although no doubt planned
                                                                                                 much earlier) that the matching funds
                                                                                                 could not be intelligently spent—I



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                             Survey of Candidates for Office in Maine’s
                             and Arizona’s 2000 Elections




Topic   Nonparticipating candidate comments                                         Participating candidate comments
                                                                                    believe that the public financing
                                                                                    program worked well and was fairly
                                                                                    implemented by the state officials.

                                                                                    One loophole involves bank accounts
                                                                                    opened by a candidate’s family
                                                                                    members and used to promote the
                                                                                    candidate.

                                                                                    I ran against an incumbent who was
                                                                                    able to send out a flyer at state
                                                                                    expense describing her
                                                                                    accomplishments as a state senator,
                                                                                    and she had weekly articles in the
                                                                                    press. None of this counted as
                                                                                    campaign expenses. The limitations
                                                                                    of Maine’s Act prevented me from
                                                                                    countering this. I could afford only
                                                                                    one flyer and just one or two small
                                                                                    newspaper advertisements. Our
                                                                                    press releases on issues were not
                                                                                    considered newsworthy, while an
                                                                                    incumbent senator’s activities were.
                                                                                    GAO’s survey did not explore the
                                                                                    effect that incumbency has on
                                                                                    campaigning.

                                                                                    There remain loopholes to be closed,
                                                                                    such as last-minute expenditures that
                                                                                    might incur a small “penalty” but
                                                                                    would result in an election victory.
Other   At the outset, the system seemed complicated. But, once tried, the          In Maine, the essential reality is that
        participants showed that it could be almost fun, politically speaking.      you are at a competitive
        Candidates had an additional chance for face-to-face contact with           disadvantage if you do not run as a
        potential constituents, and the candidates boasted about how well they      participating candidate.
        were able to do.
                                                                                     My opponent and I both used public
        I did not use public funding because I did not have time during the busy funds. We treated each other with
        legislative session.                                                         respect, and we encouraged our
                                                                                     supporters not to use dirty tricks. We
        The public program is ridiculous. Repeal this program or remove the          cooperated in trying to show that a
        holes left for money to still flow in. In its current form, the program is a clean campaign was better for all,
        sham.                                                                        even though we disagreed
                                                                                     remarkably on the issues.
        The name of the program should be changed to “Maine’s Taxpayer-
        Funded Elections Law.”                                                      Term limits must be repealed. Limits
                                                                                    are needed only on the number of
        In the 2000 election, I came in on the deadline and was unable to           years in committee chair and
        qualify for public funding; the funds would have assisted me greatly. In    leadership positions. State agencies
        the 2002 election, I did qualify and find that I can better use my time     and lobbyists are becoming more
        talking with and listening to people in the district. I support the Maine   and more powerful because of term
        Clean Election Act.                                                         limits.




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                                                                   Appendix VI: Comments Received in Our
                                                                   Survey of Candidates for Office in Maine’s
                                                                   and Arizona’s 2000 Elections




 Topic                              Nonparticipating candidate comments                                                         Participating candidate comments
                                    No one wants to run for office. The biggest problem is low pay and the                      In 2000, I decided to run for office
                                    amount of time spent in the state capital. You have to be retired or a                      because of term limits. Because I
                                    secondary wage earner in order to take the time needed.                                     was new to politics, the Democratic
                                                                                                                                chair thought I should go with public
                                    I am pleased to be running as a publicly funded candidate in my                             funding. It was right for me at the
                                    second campaign (2002); it proved to be simpler to manage.                                  time.

                                    More time is needed to evaluate the program.                                                The state legislature wanted to make
                                                                                                                                many changes in the public funding
                                    For every hour of effort that goes into drafting a law, three are spend                     program after the first election cycle.
                                    trying to skirt it.                                                                         Small tweaking is okay; but, in my
                                                                                                                                opinion, there should be no real big
                                                                                                                                changes until after one or two more
                                    In 2000, my publicly financed opponent found numerous ways to get                           election cycles.
                                    around the regulations. It made a mockery of the intent of the law. The
                                    program gave her free assistance, which was worth a great deal
                                    financially. Whatever one person invents, another person will find a
                                    way to circumvent.

                                    Influential parties and organizations are already trying to sway public
                                    opinion against public financing.

                                    The law had no effect on number of votes cast.

                                    The program is a wasted effort..
Source: Response to question 25 of GAO’s survey of candidates for office in Maine’s 2000 elections (see app. IV).

                                                                   Note: Each sentence (or paragraph) entry under a given topic in the table is a comment uniquely
                                                                   attributable to one candidate. That is, under each topic, each entry is a comment from a separate
                                                                   person. Some candidates provided comments that covered more than one topic. In these instances,
                                                                   the table presents the applicable portion of the comments under the appropriate topic.




                                                                   We received written comments from 86 respondents to our survey of
Comments Provided                                                  candidates for office in Arizona’s 2000 elections. In reference to the state’s
by Arizona                                                         public financing program, the 86 respondents consisted of 66
                                                                   nonparticipating candidates and 20 participating candidates.
Candidates                                                         Table 26 presents the comments of the responding candidates.




                                                                   Page 129                                         GAO-03-453 Public Funding of Political Campaigns
                                          Appendix VI: Comments Received in Our
                                          Survey of Candidates for Office in Maine’s
                                          and Arizona’s 2000 Elections




Table 26: Comments Received in Our Survey of Candidates for Office in Arizona’s 2000 Elections


Topic                    Nonparticipating candidate comments                                      Participating candidate comments
Use of public funds      The public financing program should be judged unconstitutional.          Public financing is a very good thing
                         Arizona laws already restrict campaign fundraising and provide for       but definitely is not a panacea for our
                         full disclosure. The public funding program is an issue of the           money-dominated political system.
                         Democrats, was given a catchy name on the ballot, and is
                         supported by the liberal media. The program’s purpose is to gain         The program is costing taxpayers a
                         advantage over Republicans.                                              lot of money that could be going to
                                                                                                  more worthwhile uses for the state.
                         The public was hoodwinked to approve this initiative (by a margin
                         of less than 1 percent) with ads stating the initiative would “get dirty The program is an excellent example
                         money out of politics.”                                                  of campaign finance reform. All
                                                                                                  states should have it.
                         The public financing program should be available for all city, state,
                         and federal elections.                                                   Having run as a participating
                                                                                                  candidate, I am convinced of the
                         Since the number of participating candidates increased significantly value of public financing of elections.
                         from 2000 to 2002, many candidates must feel that public financing Candidates have more time to spend
                         is a good program. I surely do. In 2000, there was too much              with voters, adequate funds are
                         uncertainty about the law to use it in a competitive district. I spent   provided for message delivery, and
                         only $7,000 and lost by 180 votes out of 12,000. My opponent             participants must demonstrate that
                         spent $40,000 or nearly $200 for each of the 180 votes.                  they possess the bona fides of a
                                                                                                  serious candidate.
                         Although it would have saved me time and money, I do not believe
                         it is the government’s role to finance campaigns. Taxes are too
                         high, and these dollars should be used on beneficial programs.

                         Public financing is campaign welfare.

                         The program wastes public funds, infringes on free speech rights,
                         goes against the founding principles of our country, and increases
                         fraud.

                         Arizona is in dire financial need. These funds should be spent on
                         existing programs now being cut or eliminated. Candidates, staff,
                         and precinct committeemen start looking like beggars trying to
                         achieve their quotas of $5 contributions.

                         The program is a socialist scam.

                         Public funding is a terrible program and will destroy the democratic
                         elections process if continued.

                         Most candidates, including me, have little faith in the ability of the
                         new public financing program to work.
                         The program is tyrannical, punitive, and anti-American. It is lazy
                         man’s financing.

                         All candidates should raise their own money. If you cannot raise
                         money—i.e., you do not have support—you should not be given tax




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                                        Appendix VI: Comments Received in Our
                                        Survey of Candidates for Office in Maine’s
                                        and Arizona’s 2000 Elections




Topic                  Nonparticipating candidate comments                                       Participating candidate comments
                       dollars. Yes, reform is needed, but funding everyone with public
                       money is not the answer.

                       The law is a disaster and is designed to benefit the state’s
                       Democratic Party.

                       Arizona’s law is a moral outrage, suppresses free speech, and
                       violates political and civil rights. The public financing program fails
                       in its objective to “take the money out of politics.” The program
                       simply creates a new political game with new rules and with money
                       still playing a key role.

                       The public funding program is bad policy, forces people to support
                       candidates they do not agree with, and is unconstitutional.

                       The public funding program is unconstitutional.

                       The program is the worst concept to be proposed for elections. The
                       government should not be buying elected officials.

                       Public funding is a terrible program that should be discontinued. It
                       is a sham by liberals to obtain money to get elected.

                       Because I believe in true freedom of speech not hampered or
                       helped through government, I do not support public financing of
                       private campaigns. Further, the implementation of Arizona’s Act
                       has all but eliminated free, fair, and democratic elections in the
                       state.
Number of candidates   There may be more candidates this year, but there is less debate          While I fully support the public
and electoral          about even fewer ideas. The hot issue in the Republican                   financing program, the court
competition            gubernatorial and Attorney General campaigns this year (2002),            challenges reduced its efficacy in
                       was cash versus accrual accounting and punctuality in campaign            both 2000 and 2002.
                       paper work. A vigorous campaign about education, taxes, and
                       health care was lost because a government agency charged with             The program increased the number
                       regulating finance for traditional candidates could not decide what       of candidates running; most are not
                       the rules were before the contest began and dictated the terms of         qualified.
                       the public dialogue by distracting the media and the public with
                       press conferences, egregious fines, and threats to disqualify             Public financing is the only way that
                       legitimate candidates from the ballot. Arizona gained candidates,         concerned, qualified, working
                       but we lost debate on the issues that matter.                             individuals can become directly
                                                                                                 involved in the electoral and
                       Clean elections money allowed some good candidates to be able             governing process. It provides for a
                       to run.                                                                   more direct form of participation in
                                                                                                 our republican form of government.
                       I think it is a great way to get more people to run for office in
                       Arizona. Had I known more, I would have run as a participating            Clean elections open the door to the
                       candidate in 2000.                                                        American dream of running for office.
                                                                                                 Now, not just the rich and those “in
                       Why should taxpayers fund fringe candidates? What publicly                bed” with lobbyists can run. Qualified
                       funded candidate ran and won who would not have won with the              people can run and strengthen our
                       traditional method of raising money?                                      democracy. I can only hope more
                                                                                                 states adopt public financing to clean




                                        Page 131                                  GAO-03-453 Public Funding of Political Campaigns
                                  Appendix VI: Comments Received in Our
                                  Survey of Candidates for Office in Maine’s
                                  and Arizona’s 2000 Elections




Topic            Nonparticipating candidate comments                                      Participating candidate comments
                 It is very difficult to assess the Arizona system from the 2000 cycle.   up politics.
                 The system was in legal limbo for a significant time, and fewer
                 candidates participated for that reason. The 2002 cycle has many         More candidates are able to run for
                 more participating candidates and will be a more realistic test run.     office.
                 Hopefully, the system will fulfill its promises.
                                                                                  I ran for statewide office in 2002.
                 There were no new people elected because of public funding. Term Without public funding, I would not
                 limits are the reason for new faces.                             have run.

                 The program is great. It increased the competition dramatically in       Since 2000 was the first election
                 2002, and the effect should be huge by 2004.                             under the public financing program,
                                                                                          participation was not as great as it is
                 Public funding is insufficient to offset a well-heeled opponent.         this year (2002).

                 Pubic financing has opened up the political process to individuals
                 who, in the past, either could not self-finance their campaign or had
                 little or no access to contributors.

                 The program increases the number of unqualified candidates.

                 The program helps to bring in more candidates. Some changes are
                 needed in the law, but it should not be repealed.

                 Under the program, some not very bright people are getting
                 elected, not because of their views or abilities but because they
                 can make a bigger splash with signs and advertising. The balance
                 now is too far in favor of publicly financed candidates.

                 Under the public funding program, fringe candidates with no
                 support run and waste resources.

                 “Clean elections” is a bad law that favors incumbents with
                 established name recognition.

                 Public funding helped many new candidates run in 2000, especially
                 in Tucson. The program was a significant boost to the Pima County
                 Green Party, which ran candidates in most races. Many of these
                 candidates made respectable showings at the polls. The program
                 is very positive and should be continued.

                 Too many candidates are running (prompted by term limits,
                 redistricting, and government funding), and confusing elections are
                 resulting. Candidates lacking viability are being encouraged (rather
                 than discouraged) from running. The traditional funding system is
                 an excellent way to separate the wheat from the chaff early on,
                 before the public is forced to confront a herd of candidates on the
                 ballot.
Interest Group   Special interests can hide behind the collection of the $5 qualifying    In 1996, I had to raise my own
Influence        contributions. Under normal campaign limits, a special interest          money. In 2000, it was wonderful not
                 could at best raise 10 to 20 percent of a traditional candidate’s        having to raise money and not
                 money. With clean elections, a special interest can be responsible       having to jump through hoops to get
                 for collecting all of a participating candidate’s $5 qualifying          endorsements to obtain money.



                                  Page 132                                 GAO-03-453 Public Funding of Political Campaigns
                         Appendix VI: Comments Received in Our
                         Survey of Candidates for Office in Maine’s
                         and Arizona’s 2000 Elections




Topic   Nonparticipating candidate comments                                      Participating candidate comments
        contributions. In reality, under clean elections, special interest
        involvement can be hidden or cloaked from disclosure.                    To me, it was wonderful not having to
                                                                                 go to individual committees to grovel
        In Arizona, the publicly funded candidates accepted seed money           for money. I felt more powerful and
        from special interests at the same rate that I did as a non-             independent. It was a better feeling
        participating candidate. If anyone believes that I can be influenced     than when I ran in 1998.
        by $270, then they do not want me.
                                                                                 Public financing takes special
        Special interest groups and lobbyists have had, do have, and will        interest money out of government.
        always have a significant influence on the process.                      This approach is the only way that
                                                                                 elections should be run, at both the
        A candidate should serve his or her constituency instead of special      state level and nationally.
        interest groups.
                                                                                 With public financing, my interaction
        The public funding program does help to reduce the impact of             with traditional lobbyists changed;
        lobbyists.                                                               they had to pursue me. Some PACs
                                                                                 seemed to automatically oppose me,
        The program does remove a lot of special interest money from the         even though I might have supported
        process, which results in better public policy.                          their issues. These entities seemed
                                                                                 to respect only those candidates
                                                                                 whom they could support financially.
        Having candidates interface with $5 contributors to get funding is       Arizonans seem well aware that the
        much better than obtaining money from special interest                   link between special interest money
        contributors.                                                            and special interest laws is strong
                                                                                 and want to change it. Arizona and
        The worst thing I disliked was that spokespersons for the Citizens       Maine are leading the way in the
        Clean Elections Commission constantly referred to traditional            nation. Let’s hope a federal clean
        candidates as bad apples. However, I felt that my integrity and          elections law is passed.
        honesty were intact.
                                                                              Lobbyists will have less influence on
        Any candidate still needs groups of people for support, whether it is candidates and legislators.
        for financial support or the vote. So, a participating candidate can
        still be lobbied. The public funding program does not make a
        participating candidate any less biased.

        Well-organized candidates were able to raise the $5 qualifying
        contributions with the assistance of organizations, unions, and
        special interest groups. I would have had to do it all on my own,
        with individual contributions. That was not possible for me; I did not
        have a campaign organization to help.

        In 2000, I ran with traditional funding. But, in 2002, because of an
        extremely wealthy candidate in my race, I chose to try the public
        financing program. It has been a disaster, and I would never do it
        again. It was easier to obtain sufficient money through fundraisers
        than to collect the $5 contributions. Labor unions collected most of
        the $5 contributions for Democratic candidates; there was not
        much work done by the candidates.

        The cash nature of the $5 contributions makes bundling and illegal
        activity in collection significant and not trackable.
        Under the public funding program, lobbyists are able to continue




                         Page 133                                  GAO-03-453 Public Funding of Political Campaigns
                                     Appendix VI: Comments Received in Our
                                     Survey of Candidates for Office in Maine’s
                                     and Arizona’s 2000 Elections




Topic               Nonparticipating candidate comments                                       Participating candidate comments
                    their influence by simply “volunteering” to collect $5 contributions
                    for participating candidates.

                    Public funding does not produce “clean” campaigns or any real
                    fairness. Political influence of special interests remains
                    undiminished. Influence is gained by arranging for qualifying
                    contributions.

                    Special interests continue to exert tremendous influence on both
                    privately and publicly funded candidates. The only difference is that
                    the influence on privately funded candidates is fully disclosed and
                    reported, while the influence on “clean” candidates is not disclosed
                    anywhere.
Campaign spending   Clean elections allowed many people to just waste and spend           The proliferation of campaign
                    money to run.                                                         materials direct mailed in the 2002
                                                                                          primary has become disgusting.
                    I object to the fact that a participating candidate can get public
                    money to match or equal the amount of money provided by
                    supporters of a traditional candidate. Clean elections is a bad law.

                    In my first two elections, I spent about $18,000, whereas my
                    opposition spent $42,000. So, money did not buy the election; the
                    message did.

                    The program is unfair to non-participating candidates. Participating
                    candidates get more money than non-participating candidates,
                    which raises the cost of campaigns from being kitchen-table
                    campaigns to high-priced, complex campaigns. Some candidates
                    spend money on non-campaign activities. The money should not
                    go directly to candidates.

                    I feel strongly that there should be spending limits on all
                    candidates.

                    Public financing has greatly increased the cost of campaigns.

                    The program has fueled the campaign services industry, allowing
                    more money to go to owners of printing shops and yard sign
                    makers. Public financing had little effect on the outcome of
                    elections in 2000. Voters may be disappointed to know that tax
                    dollars had this end result.

                    The 2002 election is the most costly I have ever witnessed. We
                    received more full color mailings than has ever been the case. In
                    the 2000 election, at least one candidate took public money, hired
                    family, and never appeared anywhere. Incumbents with campaign
                    money from previous years still have an advantage. The limitations
                    on campaign contributions to non-participating candidates are
                    arbitrary and unfair.

                    Except for gubernatorial candidates, the amounts of public funding
                    are significantly insufficient.




                                     Page 134                                     GAO-03-453 Public Funding of Political Campaigns
                         Appendix VI: Comments Received in Our
                         Survey of Candidates for Office in Maine’s
                         and Arizona’s 2000 Elections




Topic   Nonparticipating candidate comments                                    Participating candidate comments
        Rural candidates are disadvantaged because of the huge,
        disproportionate cost of travel. Public funds are not available in
        time to meet the logistics of traveling to a sign printer and then
        distributing signs over vast areas and multiple communities.

        The 2002 election cycle has pointed out some glaring problems
        with Arizona’s Act, including a possible inadequacy of funding and
        problems with interpretation of the law.

        It was disappointing to see how tax dollars were spent by the
        participating candidates—computers and other equipment kept for
        personal use after the election, travel expenses, dinners out, and
        parties. It was a disgrace.

        In the primary election, the program does not provide enough
        money for a new candidate to complete against an incumbent or to
        compete in a redistricted area. Also, late in campaigns, non-
        participating candidates have a great advantage in planning and
        controlling expenses.

        Public funding can be used as an unfair weapon. In one primary in
        2000, my publicly funded opponent obtained matching money and
        spent the entire amount on a smear campaign directed at me. The
        goal seemed not so much to win but to destroy my credibility in
        order to improve the chances of another competing candidate who
        had a similar political philosophy. Receiving six negative campaign
        flyers in the mail at one time—flyers that were publicly financed—
        was objectionable.

        Participating candidates were allowed a higher level of spending
        than me. As soon as I raised more than they were allowed in the
        primary, they received more funds. I should have been allowed to
        raise and spend as much as they were allowed in the primary and
        general elections.

        Public funding sounds good in theory but fails miserably in terms of
        producing positive results. Campaigns are more expensive.
        Statewide candidates spend a great amount of time begging for $5
        contributions. A traditional candidate actually has much more time
        to meet constituents, talk to them about issues, and get to know
        their concerns.

        There is no level playing field. Those accepting taxpayer financing
        enjoy a tremendous advantage over those who raise money from
        friends and family in terms of actual cash available for
        campaigning, as well as advantages in reporting requirements,
        disclosure of campaign strategy, and the burden of horrendous
        IRS-style audits. My publicly funded opponent was given funds to
        communicate with voters to match money that I spent to pay taxes,
        fund official legislative business, and raise funds. A taxpayer-
        financed candidate will generally enjoy a 25-percent cash
        advantage over a traditionally funded one.




                         Page 135                                 GAO-03-453 Public Funding of Political Campaigns
                                            Appendix VI: Comments Received in Our
                                            Survey of Candidates for Office in Maine’s
                                            and Arizona’s 2000 Elections




Topic                      Nonparticipating candidate comments                                     Participating candidate comments
Program scope              I believe all candidates should get public funds and that the $5
                           contributions requirement should be dropped. I dislike asking
                           people for money, whether it’s the public or special interests. I’d
                           rather pay my own way or have each candidate get an equal
                           amount. I would not participate in the public funding program
                           unless all candidates received the funds, without the $5
                           contribution requirement.

                       If you want a system for financially challenged candidates,
                       establish a welfare program to provide seed money for individuals
                       who can prove financial need.
Program administration The Citizens Clean Elections Commission does not have clear                 Public funding needs to be available
                       rules; it is very easy to make mistakes in filings, which can result in     early in order for the recipient to plan
                       severe sanctions or penalties. This is discouraging possible new            his or her campaign advertising
                       candidates from considering the public financing route. The                 effectively. All printers and
                       absolute power of the Commission is scary.                                  advertisers require payment in
                                                                                                   advance.
                           The reporting is not fair and equal for both types of candidates.
                           Traditional candidates have to report more often than candidates        The pamphlets (covering all
                           who use public money. Clean elections changed the rules many            candidates) distributed to every
                           times during the campaign.                                              registered voter were very
                                                                                                   informative. Plus, the pamphlets
                           A non-participating candidate has to go through all the ridiculous      included a vote-by-mail request form,
                           reporting requirements. A participating candidate does not need to      which should help voter turnout.
                           use funds to raise money; but, a non-participating candidate does,
                           and it gets counted towards what a participating candidate gets         I complained to the Secretary of the
                           from the public. This is totally unfair.                                State and the Attorney General about
                                                                                                   an opponent who inappropriately
                           There are too many reports.                                             received additional financing.
                                                                                                   Nothing was done about it; I never
                           The reporting obligations are significant and time consuming, but       even received an answer.
                           the system is well thought-out.
                                                                                                   The Citizens Clean Elections
                           Our system is draconian in its reporting requirements. The Citizens     Commission tells you what you can
                           Clean Elections Commission struggles with interpretation of the law     say, whom you can say it to, when
                           and is often challenged. The law places unfair limits on                you can say it, and how you say it.
                           contributions to non-participants. In short, it is a terrible law and   This is a grotesque violation of our
                           should be repealed.                                                     First Amendment rights.

                           The Citizens Clean Elections Commission is just another                 I went to all of the available training
                           government agency gone amuck.                                           programs but still was fined at the
                                                                                                   end of my campaign for not properly
                                                                                                   closing my committee. The Secretary
                           Even when running unopposed, non-participating candidates still         of State’s office took over a month to
                           have to do all the time-consuming reporting.                            notify me, and the fine was $10 per
                                                                                                   day. Since I had spent all of my
                           The program puts unreasonable reporting demands on non-                 public money, the fine ($270) was
                           participating candidates, which detracts from the campaigning           mine to pay. My opponent tried to get
                           process.                                                                the Commission to fine me for
                                                                                                   accepting an in-kind contribution of
                           The Citizens Clean Elections Commission needs to be more                sign poles. To defend myself
                           professionally trained to give accurate answers. Information given      required much time and effort.
                           out is often wrong or it changes without notification. Also, the        Clearer rules would be helpful.




                                            Page 136                                 GAO-03-453 Public Funding of Political Campaigns
                        Appendix VI: Comments Received in Our
                        Survey of Candidates for Office in Maine’s
                        and Arizona’s 2000 Elections




Topic   Nonparticipating candidate comments                                     Participating candidate comments
        Commission needs to be able to skim finance reports and act on          Not all bugs were worked out during
        violations. Enforcement is weak.                                        the first year (2000). Some
                                                                                candidates nearly lost their seats
        Arizona’s Act places different standards on participating and           trying to do the process. Things
        nonparticipating candidates in direct violation of the Fourteenth       tended to operate much better this
        Amendment equal protection clause. Upon some perceived                  year (2002).
        violation, an unelected board can remove a candidate’s name from
        the ballot without any recourse for the state’s citizens.               There should be stiffer penalties for
                                                                                participating and nonparticipating
        A nonparticipating candidate has to go through all the ridiculous       candidates who break the law.
        reporting requirements. Also, a participating candidate does not
        need to use funds to raise money, whereas the fund-raising
        expenditures made by a nonparticipating candidate are counted
        toward what a participating candidate gets in public funds. This is
        totally unfair.

        The Citizens Clean Elections Commission is the fourth branch of
        government and is accountable to no one. The Commission makes
        its own rules for all candidates.

        The Commission should have spent some time and money on
        public information ads. My district has many rural areas, and many
        people had not heard of the clean elections program. I spent most
        of my time trying to explain the law rather than discussing important
        education, health, and environment issues. Therefore, I was not
        able to get the qualifying signatures needed to obtain public
        funding.

        Under the public financing program, reporting is overly
        burdensome, and the Commission is not accountable to anyone.
        Before the program, Arizona already had a good system of limited
        contributions and open reporting requirements.

        As the rules change, candidates and their finance managers
        become confused about requirements.

        The additional requirements for both participating and non-
        participating candidates have become a political tool to bludgeon
        opponents with.

        The candidate debates and forums were not advertised sufficiently,
        and turnout was poor at best.

        Arizona’s law has served only to get candidates in trouble due to
        the capricious, ad hoc nature of the Citizens Clean Elections
        Commission and its unfair, confusing campaign finance rulings and
        procedures.

        The Commission has gotten politically involved and hurt several
        campaigns.




                        Page 137                                 GAO-03-453 Public Funding of Political Campaigns
                         Appendix VI: Comments Received in Our
                         Survey of Candidates for Office in Maine’s
                         and Arizona’s 2000 Elections




Topic   Nonparticipating candidate comments                                        Participating candidate comments
        To assure compliance with reporting requirements necessitated
        having a full-time person, which resulted in less time for campaign
        issues.

        The Commission’s red tape and subjective rulemaking are barriers
        to involvement. Constituents think the paperwork is ridiculous and a
        waste of time and would prefer to give me a $100 check rather than
        mess with a $5 contribution and paperwork. I stopped trying to
        qualify for public funds because I was taking 15 to 20 minutes to
        explain the program to voters rather than discussing issues. Also,
        the timeline for qualifying is absurd; funding can occur as late as 1
        week before the election, which penalizes a participating candidate.
        The Commission has become an advocacy group that shoots from
        the hip publicly and has unclear rules and onerous obligations. The
        Commission has no accountability for its actions and is attempting
        to influence the outcomes of elections rather than simply reviewing
        the process.

        The current funding program uses processes that are very similar
        to the way the Soviet Union mismanaged its economy.

        Arizona’s Act requires traditional candidates to disclose to their
        opponents on a daily basis their every campaign activity during the
        heat of the campaign. This is information that the “clean”
        candidates keep secret until after the election. Think about filing
        your taxes every day, itemizing every expenditure, and making it
        available on the Internet for all to see. It’s practically the same for
        candidates who refuse government funds, but not for those who
        accept them. The cost of compliance is immense, and the
        advantage given your opponent is insurmountable. Also, this year
        (2002), the Commission decided to randomly audit 10 traditional
        candidates during the campaign, even though there were no
        allegations of impropriety. This served only as a means for the
        government to distract the candidates from their campaigns in
        order to give yet another advantage to the preferred “clean”
        candidates. Also, the Commission zealously audited every
        candidate against whom a “clean” candidate complained,
        regardless of whether the complaint had validity or not. This just
        another “service” the Commission provides to the candidates it
        prefers.

        The computer software was not compatible with a MAC.
Other   Most candidates, myself included, had little faith in the ability of the
        new public financing program to work.

        Public funding would be fine if our law did not punish people who
        fund privately. As it is now, the law is very unfair.

        Public funding, the Redistricting Commission, and term limits have
        “dumbed down” the legislature.

        Several publicly funded candidates with less than creditable
        backgrounds are now running for legislative seats. The public



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                                                                   Appendix VI: Comments Received in Our
                                                                   Survey of Candidates for Office in Maine’s
                                                                   and Arizona’s 2000 Elections




 Topic                                    Nonparticipating candidate comments                                                    Participating candidate comments
                                          funding program gives the candidates the power to run without
                                          much personal financial loss or scrutiny of past transgressions.

                                          I entered the 2000 campaign late in the process. I would have used
                                          public financing if my decision to run had not occurred 2 weeks
                                          before submittal of petitions.

                                          Individual contribution limits should be lowered from $5 to $1.

                                          The program has resulted in more public debate and media
                                          coverage.

                                          Public funding laws in Arizona need to be improved by making
                                          them less complex and more consistent internally.

                                          The grossly misnamed law (“clean elections”) violates the First
                                          Amendment.
Source: Response to question 23 of GAO’s survey of candidates for office in Arizona’s 2000 elections (see app. V).

                                                                   Note: Each sentence (or paragraph) entry under a given topic in the table is a comment uniquely
                                                                   attributable to one candidate. That is, under each topic, each entry is a comment from a separate
                                                                   person. Some candidates provided comments that covered more than one topic. In these instances,
                                                                   the table presents the applicable portion of the comments under the appropriate topic.




                                                                   Page 139                                          GAO-03-453 Public Funding of Political Campaigns
                  Appendix VII: GAO Contacts and
Appendix VII: GAO Contacts and
                  Acknowledgments



Acknowledgments

                  Norman J. Rabkin, (202) 512-8777
GAO Contacts      Danny R. Burton, (214) 777-5600


                  In addition to the above, staff who made key contributions to this report
Staff             were David P. Alexander, Leo M. Barbour, Lindy Coe-Juell, Glenn Dubin,
Acknowledgments   Ann H. Finley, Marco F. Gomez, Nancy K. Kawahara, John W. Mingus, Jan
                  B. Montgomery, Demian T. Moore, Terry L. Richardson, and Wendy
                  Turenne.


                  We gratefully acknowledge the time and cooperation of state agency
Other             officials, political party and interest group representatives, and other
Acknowledgments   knowledgeable individuals in Maine and Arizona who assisted us in this
                  study. Further, we thank the political candidates who responded to our
                  survey questionnaires regarding the 2000 elections in Maine and Arizona.




                  Page 140                         GAO-03-453 Public Funding of Political Campaigns
                  Bibliography
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