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Wednesday, April 3, 2013

Campaign finance limits lifted in mayoral race

Posted By on Wed, Apr 3, 2013 at 6:56 PM

The battle over the city's fledgling campaign-finance laws, which played out in the courtroom of Judge Joseph James this afternoon, was a two-part drama. And in the exciting climax, the now-defunct campaign of Michael Lamb, like the ghost of Hamlet's father, reached out from beyond the grave to exact revenge on rival candidate Bill Peduto. Because as it turns out, thanks to Lamb's own fundraising, Peduto's cherished campaign-finance rules have been suspended for this year's mayoral race.

Although it's bad form to give away the ending, the result of today's court action is this: There is now no limit to the amount of money you can donate to the mayoral candidate of your choice -- $50,000, $100,000, $1 million. So dust off those checkbooks!

That result was something of a surprise ending in the case, which began with Peduto seeking a preliminary injunction against both Lamb and former state Auditor General Jack Wagner. Both candidates, Peduto alleged, were using money from previous election campaigns in violation of the city's 2009 campaign-finance ordinance. And while Lamb was removed from the case, having abandoned his mayoral bid early this week, Act I of today's courtroom drama went badly for Wagner.

Wagner's lawyers tried to argue that their candidate was entitled to more than $300,000 he had in the bank from his previous runs for statewide office ... even though many of those contributions would have run afoul of city regulations limiting donations to $4,000 per election cycle for individuals, and $8,000 from PACs. The state places no cap on political contributions at all, and as noted here previously, Wagner's statewide fundraising power constituted a serious advantage over candidates bound by city rules. Which is why Peduto had sought a court order restricting him from tapping those funds.

"We're not asking the court to disadvantage anybody [or] harm anybody's campaign," said Peduto attorney Chuck Pascal; Peduto, he said, merely wanted to "put candidates on an equal footing." He acknowledged that Wagner's contributions had been legal under state law, but that allowing him to use the money for a city race would make a mockery of the local ordinance. After all, Pascal said, a candidate could claim to be running for state office, and "raise money with no limitation whatsoever" -- only to decide to run for city office "at the last minute."

While Pascal sat alone, Wagner was surrounded by three attorneys. His lead counsel, Edward B. Friedman, argued that Wagner had followed the rules -- which he repeatedly referred to as "poorly" or "shoddily" written. "Mr. Pascal ... has a lot of views about what he'd like to see," Friedman said. But "the clear language of the ordinance does not bar previous contributions at all."

You can examine the ordinance yourself here. Mostly, Friedman's argument was that Wagner had been running with a single campaign committee -- as the ordinance required -- and fully intended to follow the limits now that he was an official candidate for city office. Any fundraising prior to that declaration, Friedman said, wasn't prohibited by the ordinance.

Initially, James sounded sympathetic to Wagner. Throughout today's court drama, he groused that the ordinance had been poorly written; by day's end, he was openly hoping that it would be "amended between now and the next election." During Act I of this dispute, meanwhile, Friedman intimated that he had other legal arguments at hand. He said he was wary of using them, because he feared they would "undermine" the legality of the limits entirely -- and Wagner, he added, was "comfortable going forward with the limits imposed." He would only bring these nuclear-option arguments up, he said, if James rejected Wagner's first defense.

But like a gun in a Chekhov play, Friedman's arguments were bound to be heard.

After a brief recess, James ruled in Peduto's favor. Wagner was using the same campaign committee he'd always used, James said, but when he declared his candidacy for mayor, that organization was essentially reborn. The money previously in the account became, in effect, a contribution from an "old" state committee to a "new" one governed by the city's rules. (Ruling otherwise would "totally ignore the intent of the statute," James later said.)

Presumably, that would have put all but $4,000 of Wagner's money off-limits, since under the ordinance no committee -- even one that belongs to the candidate -- can give more than $4,000 to a candidate running for city office. But we never found out for sure, because that's when we moved on ... to the dramatic reversals of Act II.

As it turns out, Friedman's nuclear-option argument was discussed in this very space, in a pair of blog posts two months ago.

The city ordinance also says that if a candidate contributes more than $50,000 to his or her own campaign without first announcing plans to do so, the limits "shall not apply to any candidate for that specific [race]. (emphasis mine)" And as noted in those earlier blog posts, at the very end of 2012, Michael Lamb appeared to have done just that, making loans and contributions to his campaign totaling $52,000. Lamb promptly returned $2,000 of the money, getting him back under the $50,000 threshold. But even at the time I was writing those posts, there were serious questions about whether the damage had already been done.

In fact, Peduto himself had filed another petition, seeking a ruling on Lamb's activities from the county. He never got that ruling, but his petition cropped up in court today -- where it was used by Wagner's attorneys to help prove Lamb had voided the limits.

And thus was Pascal's victory in Act I overturned, as James scrawled out his order: "Since evidence establishes that a candidate contributed in excess of $50,000, the limitations on campaign contributions shall not apply to any candidate in the mayor's race for City of Pittsburgh in 2013."

The funny thing about this outcome is that, whatever the legal merits of the ordinance, the concept of limiting contributions is popular. So both sides are arguing they wanted to save the rules, but the other guy wouldn't let that happen. From my perspective, however, James felt he had little choice in the matter. He'd been presented evidence that Lamb had violated the limits, he said, and "I can't ignore that evidence." So he lifted the limits.

So who won? Maybe everyone except you and me.

Wagner, of course, gets to use his $300,000, and he told reporters he welcomed the chance to "get back to talking about issues." Though before doing so, he did manage to ding Peduto for helping to craft an "extremely poorly written" ordinance.

For his part, Pascal could claim that the main point is "we are all playing from the same rules now" -- even if that means playing by no rules at all. And there's an upside for Peduto, who seized the chance to portray himself as the champion of reform -- even if the champ had just lost a round. In his own meeting with reporters, Peduto said "I'm not happy" about the result, and pledged to break the "shackles" of the "political machine." But in the next breath, he predicted that he'd be able to raise "contributions of five digits" by nightfall. (He added that he didn't expect his overall fundraising goal -- about $1.1 million -- to change.)

Other winners today include TV stations: Peduto pledged that his campaign would be going up on air in the next few days, thanks in part to the infusion of cash he expects.

So who lost? Well, maybe print media: Peduto made clear you won't be seeing a lot of ads in this publication, or any others. Another group of potential losers: candidates for city council and other down-ballot races. The city's contribution limits do still apply to those races ... and one council candidate has already groused to me that, as more money gets shunted toward the mayoral candidates, fundraising for lower-ballot races just got harder.

But the real loser, of course, is anyone who hoped to keep big-dollar contributions out of this year's mayoral election. The irony of today's result is that everyone claimed to love contribution limits ... even while they participated in a process that dismantled them.

There's a final irony here too. When reporters asked Peduto about complaints that the ordinance had been poorly written, he pointed out that the law at the center of today's dispute was not the one he originally proposed. Peduto's first effort was a 2008 measure that Mayor Luke Ravenstahl vetoed, and the legislation had to be reworked afterwards. You can judge for yourself which measure was better composed. But here's the kicker: When Mayor Luke Ravenstahl vetoed the earlier bill, he said in a letter that the "most obvious problem" with it was "that it provides wealthy individuals with the ability to ... contribut[e] unlimited amounts from their own coffers." The $50,000 self-financing rule was created to address that concern, shared by some of Peduto's peers on council.

Of course, Peduto might have lost today even if it hadn't been for that $50,000 rule. Friedman did raise some other concerns about ambiguities in the ordinance, and claimed to have still more objections in his quiver. But Peduto's reform was, at least in part, undermined by the two candidates he'd originally set out to defeat this year. And neither one of those candidates is even in the race.

A-a-a-a-a-a-nd scene.

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