Articles  
Electronic Filing Report 
Summary Press Release 
 
Campaign Finance Disclosure Is Going On-Line (Almost) Everywhere in North America;
Internet becoming medium of choice for electronic disclosure laws, according to new CGS report

Forty-nine state, local and provincial jurisdictions in the United States and Canada are implementing electronic reporting and disclosure systems for campaign finance information in 1998, more than double the number two years ago in 1996, according to a new report by the non-profit, Los Angeles-based Center for Governmental Studies (CGS).

For the past three years, CGS has surveyed all 50 American states, plus several other countries, to determine the extent to which they require political candidates to file their campaign finance information electronically and then make this information available electronically to the press and the public. Each year more and more jurisdictions go on-line.

The new CGS report, entitled Campaign Money on the Information Highway: Electronic Filing and Disclosure of Campaign Finance Reports (1998 Update), documents the rapid growth of campaign finance disclosure through electronic means.

The CGS study's major findings for 1998 are:

Throughout the United States and Canada, 49 jurisdictions have implemented or are in the process of implementing some form of electronic reporting systems this year. This is more than double the number of jurisdictions that had implemented such systems in 1996. Seventeen other jurisdictions are studying the issue. The trend is toward mandatory instead of voluntary disclosure systems. Four times as many jurisdictions this year are making electronic filing mandatory for most candidates and committees. The Internet is supplanting all other forms of electronic filing and disclosure. In 1996, no jurisdiction considered allowing candidates to file through the Internet because of security concerns; the diskette was the preferred method of filing. In 1998, most jurisdictions that allow electronic filing are establishing candidate filings systems via the Internet. The diskette is becoming outmoded. The State of Hawaii and the City of Seattle have developed the most comprehensive systems, which include mandatory filing via the Internet, modem or diskette for most candidates, and disclosure of this information to the public through the Internet. California will catch up by 2000,when its new electronic reporting and disclosure law becomes fully operational. British Columbia may also lead the pack when it implements its own modern electronic reporting and disclosure system. Only one American state has thus far expressed no interest in developing an electronic reporting system (Nevada). Electronic reporting and disclosure is so popular that several American cities are adopting such systems. Los Angeles, San Francisco, Seattle and New York City are leading the way. Despite some reluctance to disclose their own campaign finance information more widely, state legislatures generally are approving such programs. When they do not, state election agencies are implementing electronic reporting programs on their own, often as a cost-saving measure. So far, electronic reporting of campaign finance data is a North American phenomenon. Only the United States and Canada are adopting electronic reporting systems.
 
The Center for Governmental Studies is a non-profit research organization established to support state and local governments, academic institutions and public interest and civic organizations with a wide range of research and technical expertise in the areas of campaign finance, state and local finance, and voter information via the Internet.
The Center's electronic campaign finance disclosure report was made possible by a generous grant from the Rockefeller Family Fund, Inc. of New York, along with additional support from Carnegie Corporation, the James Irvine Foundation, the Joyce Foundation and the Florence and John Schumann Foundation. Copies of the report are available from CGS.

Benefits of Mandatory Electronic Filing of Contributions 
*ACCESS FOR THE ENTIRE STATE: candidates and citizens outside Austin would have immediate access on the internet.

*SAVES MONEY: saves the agency paper storage and retrieval costs

*BETTER ENFORCEMENT: makes agency audits much easier and quicker

*EASIER COMPLIANCE: the Ethics Commission can provide candidates the software to make filing very easy.

*HELPS CAMPAIGNS: software can be used by campaigns to organize contributions.

*EXEMPTS SMALL CAMPAIGNS: small campaigns or those that do not use computers to solicit or keep contributor records are exempted

*WORKS: Austin and 14 states have mandatory electronic filing without any problems. 

Reforming Texas Campaigns
By Tom ‘’Smitty’’ Smith and Fred Lewis

We are proud that Texas has a 21st century economy; we, however, are not so proud of our 19th century campaign finance system. Texas is one of only a few states that still relies solely on financial disclosure to regulate legislative and executive branch campaigns.  Unlike most states, we have no contribution limits of any kind. Like in the infamous robber baron days, wealthy interests can give unlimited sums to pass legislation financially benefiting themselves or promoting their idea of what is good for the rest of us. Fortunately, for the more unscrupulous, wealthy interests, Texas’ disclosure system has not been overhauled in 25 years and it is easy for them to hide their contributions by giving to shadow campaigns that do not report their activities.

Who, you might ask, could support such a system? Our Texas politicians, who have become coarsened to the errors of their ways. They remain bi-partisan in one area: their appetite for large contributions. A few of many examples. Republican Lt. Governor Perry and Comptroller Rylander received loans for more than one million dollars from three businessmen in the last days of their campaigns. Similarly, the Democratic candidate for Lt. Governor, John Sharp, received $550,000 from just three law firms in late October. Governor Bush raised $25,165,410, with 74% coming from contributions of $1,000 and greater. Five law firms gave the State Democratic Party 1/3 of its funds. One man alone, James Leininger, who is aligned with the religious right, contributed 2 or 3 million dollars in 1998 to Texas Republicans. We probably will never know for sure how much he gave because the disclosure system is so inadequate.

We have three, responsible bi-partisan proposals to bring Texas forward to at least the 20th  century:

Full Disclosure

Texas’ disclosure laws are loophole-ridden. Unlike model laws, they do not require separate reporting by large individual donors, lobbyists, and government contractors. These donors are obviously the most likely sources of undue influence. Texas also does not require candidates and political committees to list their contributors' employers and occupations. Without this critical information, it is exceedingly difficult to unravel coordinated, special interest giving by a company or industry. Nor does Texas have coherent laws as to so-called independent expenditures, which are often made, with a nod and a wink, in coordination with candidates.
 
Electronic Filing

Even if all the necessary information were reported in Texas, the data still would not be available to the public before the election without mandatory electronic filing. Fourteen states and a number of cities require candidates to file electronically. Texas’ candidates, however, file paper disclosure reports, even though most of them keep their contributor data in their computers. With electronic filing, contribution and expenditure information would be available on the internet within 24 hours. This would allow you to know if a candidate talks tough about an industry, say regulating tobacco use by kids, but then accepts large contributions from it. Small campaigns or those that do not use computers to solicit contributions would be exempt.

Some Texas politicians are in an uproar over the thought of joining the modern electronic era (or letting you easily look at their contribution sources). My favorite argument of theirs is that requiring electronic filing would embarrass those politicians who had to seek an exemption because their campaigns were computer-illiterate. The horror.
 
Contribution Limits

We also need reasonable limits on how much candidates may receive from one individual or PAC. The federal limits for individuals of $1,000 per candidate and $25,000 for all state campaigns should not burden any campaign too much. A $5,000 cap on PAC contributions is reasonable as well. We do not think a few individuals should be able to skew an election or buy candidates.

The only way Texas politicians will change our campaign system is if you demand it. They are happy with the status quo. Are you?

Mr. Smith is executive director of Public Citizen in Texas and Mr. Lewis is an Austin attorney.

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