I don't know, which I do occasionally.
All right, well, good morning, everyone.
Today is Tuesday, January 7th, 2020. It is 9.30 a.m.
Welcome to this meeting of the Select Committee on Campaign Finance Reform, a committee of the whole City Council.
I'm Council President Lorena Gonzalez, getting used to that, Chair of this committee.
I'm joined this morning by several of my colleagues, Council Member Tammy Morales, Alex Peterson, and Andrew Lewis.
And I think we will be joined by a few others as the meeting commences.
So I want to thank you all for being here with me this morning and looking forward to a robust conversation about this suite of bills.
If there is no objection, the agenda will be adopted.
Hearing no objection, today's agenda is adopted.
Really quickly, as a Council President's Chair report, there are three items on today's agenda.
We are continuing discussion of the Clean Campaigns Act, which are Council Bills 119, 730, 731, and 732. Lish Whitson from our Council Central Staff will be taking us through a briefing on all three pieces of this legislation, and that will be followed by discussion and potential vote on Council Bills 119, 731, and 119732 so only two out of the three bills.
So before we continue with the agenda, we will do what we always do in committee, which is hold a public comment at the top of our agenda.
I will call out each individual in the order that they signed up, and each speaker is provided up to two minutes to provide the committee with their public comment.
We always ask that each speaker start by stating their name for the record.
And again, there are timers in the front of the room here that let you know where you are on your time.
And then V will turn off the microphone at the end of your two minutes, and I'll ask you to wrap up your comments if you're exceeding your two minutes.
So we will go ahead and get started.
The first speaker is Colleen.
I'm having a hard time reading your last name.
Is it McHugh?
Okay, sorry.
Colleen is up first, and then following Colleen will be Patrick Burke.
Good morning City Council and welcome to your first official day after yesterday and thank you for most important thing I think as an individual who's been through ten election cycles.
For City Council I want to applaud this committee's work because this is really important and when you see the data that talks about 44% of independent expenditures creeping up into our elections that's scary.
And so just a few comments.
It's great the legislation includes all entities being equal.
Businesses treated the same, hopefully, as unions, as PACs for individual political affiliations, and as well as business all thrown together, they should be treated equally as far as the regulations go.
Secondly, since this committee is digging so deeply into the process of fair elections, we might backtrack and also include the democracy vouchers, because it was very disheartening to some of the members.
voters, in particular, because when a Councilmember running would not use the democracy voucher system, those democracy vouchers were available, and then they were targeted to different districts.
And with district elections going on, it turns out that some of the candidates actually had the majority of their money coming from a different district.
And so people were very confused about that.
And I don't know if this committee can address that, but I think that's a reform or something to look into that's very meaningful.
And then lastly, whatever legislation takes place, you guys are really smart, and many of you are attorneys, and to make sure that these laws are compliant with the election laws, which are very technical sometimes, to be sure that whatever you pass actually will get enacted without any challenges from ACLU, et cetera.
Thanks so much.
Thank You Colleen and welcome councilmember herbal to the table.
Thank you for being with us this morning We are gonna hear now from Patrick Burke followed by Alice wool
Morning.
I'm going to try and stick to the paper so I don't go off on a tangent here.
November 10, 2015, headlined on The Atlantic, city residents approve a public financing program in which voters will get $100 worth of election vouchers, the first of its kind in the nation.
March 3, 2016, less than four years later, I started getting involved in politics because I felt like this program was exactly what we needed to level this playing field.
I have worked on four City Council campaigns.
I can personally test that the most stressful times during a candidate's race is the money.
In this last cycle, we experienced the world's richest man try to influence our field plans with a bombardment of mailers, advertisement, and $100-an-hour canvassers.
With limits, we can fix this.
The whole process the initiative voucher program was drafted on was to get money out of politics.
This does the exact opposite.
In fact, it favors a very specific group.
In 2011, New York Times op-ed, Lauris Lessig said, who we should all look up, said in terms of curbing the democracy vouchers, or sorry, Citizens United, the only way that the money candidates would accept to finance his or her campaign would be either democracy vouchers or contributions capped at $100.
No PAC money, no $2,500 checks, small contributions only.
And if the voter didn't use the voucher, the money would pass to his or her party, or if an independent, it would go back to the public funding system.
That's setting up bold, firm limits.
That's progressive.
This legislation being discussed today while amended could be so much better.
I'm asking the council not to rush through this.
You newly elected just got here.
Are you comfortable with the amount of input you've had on this with a vote coming so soon?
This is going to lay the ground on the future of the playing field and will very well your reelection campaigns.
I would hope that you would come away of this piece of legislation to be able to go to any of your campaign staff without stutter or need of explanation from political consultants who this is ultimately really benefiting.
My public hope is in the next cycle or two it won't be so obvious this is aimed to directly benefit.
Thank you.
Thank you Patrick.
Next up is Alice followed by Megan.
Alice Wald, 6514 12th Avenue, Northwest, Seattle.
I'm here basically to thank Councilmember Gonzalez to be moving this ordinance forward and for taking seriously that our democracy needs to be fixed.
And this is one of the ways you can fix it is to deal with campaign contributions, making it easier for people that don't have big money and don't have big money supporters to run for election.
Having been a candidate myself, I know how difficult it is to spend all your time raising money, trying to be competitive with those who have more money than you do.
And I just am very thankful that this new council is taking this up as one of their very first priorities.
Thank you very much.
Thank you so much, Alice.
Next up is Megan, followed by Steve Robstello.
I was back in August on the Committee of Ethics and Elections when it was, I think it's held like on a certain Wednesday of the month, and the plan was that a super PAC can be 10 people, and of the 10 people, they can donate no more than $5,000.
And I know Uber and Uber and Airbnb have ties to foreign companies like of less than 1% or whatever and they were donating to the elections.
Just the fact that anybody would want to donate over 5,000 to election and that would ultimately force their win because people would be inundated with waves of like that are gonna brainwash them to vote for somebody who's gonna not be in their best interest ultimately if they're of the working class.
I think it's a really good idea to limit it to $5,000 per person in a super PAC of only 10. I know Shama Sawant couldn't take democracy vouchers because she had to take money from other people in the country who aligned with her ideas.
That nullifies democracy vouchers and makes them inept.
I think to flex your musculature by using outlandish amounts of money from somebody whose Amazon, when their workers walked out, because they were protesting their climate policies.
They were disciplined in a way that said, re-read our policy.
Well, if their policy isn't for a green economy, then I think people should walk out every Friday against them.
And also their workers in, And they're workers in factories.
So what is somebody like that trying to buy our elections?
How would society be shaped in our laws?
It would be not progressive, it would be retrogressive.
And also, are you gonna vote for the Iranian people?
I know Sawant's gonna introduce something.
There's people being held at the border of Canada.
Thank you, Megan.
Yeah, I hope you'll vote for the people from Iran trying to cross over from Canada into Seattle where they are residents of the US.
Thank you, Megan.
Next up is Steve, followed by Cindy Black.
Well, it's very interesting you're going to try and take on this problem.
And as long as we allow shell corporations and foreign or domestic to hide money in this country, good luck on cleaning things up.
I have a feeling that, and my question is, is this more a reaction to Amazon and the great amount of money that they spent which my first thought was never has anybody spent some money and got so little, but then I remembered some other elections in Seattle where similar things have happened before.
Until you start getting the Feds, the lawyers embarrassed, and the state embarrassed about the allowing of outright corruption in this country.
In other words, shell corporations.
People are not allowed to know who really owns things, who really spent the money.
This might be an exercise in futility, but I would hope that you would at least start and try to go the next step of the embarrassment that has to go further.
I have been most unhappy about the lowering of the degree of respect for citizens in this city.
Look at the tree ordinance.
We almost got one for the last council.
But the big holdup was he didn't want developers to be subject to it.
Main treecutter.
Mr. O'Sullivan, I need you to stay focused on the items on the agenda that are relevant to the plan of this committee.
Well, money and actions.
If you don't think money and actions are tied together, then I think this is a waste of time because money seems to be very close to the actions of this council.
Any entity that has zoning power typically gets the biggest amount of campaign contributions from the development industry.
Seattle is not an exception.
This cycle may have been slightly different, but that's the way it is.
Okay, thank you.
Next up is Cindy Black followed by Ken.
Good morning.
My name is Cindy Black.
I'm the executive director of Fix Democracy First.
We are a nonpartisan pro-democracy organization that works on local and state pro-democracy agendas and legislation.
And we want to first of all thank Councilmember Gonzalez and all of her staff for all the work they've done in championing this legislation.
The main reason why we wanted to bring this forward is because we saw the impact of independent expenditures long before this election cycle and realized that we need to defend democracy and be at the forefront in setting limits to independent expenditures.
We shouldn't be afraid to do this.
We have advocated for the vouchers for a long time.
In fact, Fix Democracy First used to be Washington Public Campaigns, and we worked to overturn the law to allow for public funding in Washington State again, opening the door for the Seattle vouchers.
Public funding of campaigns is very important to us, and we want to make sure we defend that.
And independent expenditures, we need to address that.
The vouchers were never meant to address the independent expenditures.
We need a separate bill to do that.
And so we think the legislation going forward with the limits on the independent expenditures, dealing with foreign influence corporations, and also expanding disclosure and transparency are very important to elections.
We know the people are behind it.
When we do polling on these numbers, over 70 to 80% of the people are behind this type of legislation.
So we urge the council to put it forward at a committee today and up for a vote next week.
And then hopefully we can begin to be, as always, Seattle has been a leader and hope to continue to do that.
So thank you all very much.
And please pass this forward.
Thank you.
Thanks, Cindy.
Next up is Ken.
Good morning.
My name's Ken Damond.
I'm also with Fix Democracy First, and I want to thank the council and especially Council Member Gonzalez also for leadership on this.
The one thing you'll find agreement upon across the political spectrum in our country today is that money plays too great a role in our political system, and that super PACs that can receive unlimited amounts of money, which is what makes them super, have become the Achilles heel of our democracy.
Today, I think you're going to be hearing from experts from Free Speech for People who have discovered that super PACs themselves have an Achilles heel.
And thanks to groups like Free Speech for People, League of Women Voters here in Seattle, and Fix Democracy First, you have an opportunity to be among the first in the country to strike a blow at that Achilles heel, bypassing legislation that limits the amount that can be given to super PACs, And in so doing, precipitating a Supreme Court hearing on this specific issue, which to my knowledge, they have never addressed directly.
So I want you to think of this as the other half, fixed democracy first uses tools as our metaphor.
This is the other half of the pair of pliers that we need to get a hold of money in politics.
Public funding is one side.
Eliminating easy ways to go around the rules, the reasonable rules for contribution limits and so forth in campaigns is the other.
And that's what this is.
I urge you not to pass up this opportunity.
It's too important.
It has too much potential to have national impact.
And what we need now really is national leadership.
You guys are in the position to do it.
Don't hesitate.
Don't pass it down the road.
Don't kick the can down the road.
We need to do this now.
Thank you.
Thank you.
That was the last person who signed up for public testimony.
Is there anyone in the audience who intended to sign up and provide us public testimony but didn't have an opportunity to do so?
Okay, seeing no one, we will go ahead and close out the period of public comment, and we will go ahead and move into the items of business on our agenda, which are the aforementioned three bills.
So I'm gonna ask V to read the short titles of all three bills into the record for discussion.
Agenda item one, Council Bill 11730, an ordinance related to elections, limiting contributions to independent expenditure committees for briefing and discussion.
Agenda item number two, Council Bill 119731, an ordinance related to elections prohibiting foreign-influenced corporations from making independent expenditures or contributing to campaigns and independent expenditure committees for briefing, discussion, and possible vote.
And, sorry.
agenda item number three council bill one one nine seven three two and ordinance related to political advertising and qualified public communications expanding commercial advertisers duty to maintain and provide records regarding political advertising and qualified public communications for briefing discussion and possible vote great thank you so much V okay we're gonna go ahead and kick off the discussion here we have a presentation and a memo from
Lish Whitson who joins us at the table.
So Lish, why don't you go ahead and introduce yourself, and then we'll go ahead and start going through the presentation.
All right.
Lish Whitson, Council Central staff.
So as mentioned, we're discussing three separate bills.
They were previously all part of one bill, and in between the last committee meeting in December, they've been split into three bills to be acted on separately.
I'm going to talk about existing conditions, and some of this will be very familiar to council members who were at the meeting in December, but spending in Seattle's elections, a summary of the current campaign finance regulations, and then talk about the bills individually.
There has been a significant increase in the amount of independent expenditure contributions over the last ten years.
In 2011, there were no independent expenditures.
This past year, we saw over $4 million in independent expenditures.
At the same time, we've decreased contribution limits, direct contribution limits to council members and added the democracy voucher program.
Overall, the 2019 race set a record for how much was spent on council campaigns.
And almost half of those funds were contributed to independent expenditure committees rather than to direct contributions to council members.
And then, Lish, in terms of this particular slide, the data that is here is just for the city council races.
It does not include, at this juncture, data on the city attorney's race or the mayoral race.
Is that information that is available to us that you could compile and create a similar chart for?
Yes.
I was trying to keep things as simple as possible.
change in configuration, basically every campaign cycle of the City Council races, it's difficult, but I was trying to limit the number of variables.
I would just ask that you compile that information for all of the different elections and campaigns that we've seen independent expenditures for and that the Democracy Voucher Program applies to.
Obviously the mayoral race isn't going to be subject to the Democracy Voucher Program until 2021, but I think there's still some data that would be helpful to the legislative record and to our thinking as policymakers, particularly as it relates to the independent expenditure bill.
A large chunk of the independent expenditures were provided to Civic Alliance for a Sound Economy, which is a PAC for the Seattle Chamber of Commerce.
But a number of other PACs also received significant funding.
And there are a range of different interests that are represented by the PACs, both business, union, and then smaller PACs like Neighborhoods for Smart Streets or District 1 Neighbors for Small Business have sort of more localized or specific interests in the election.
Lish, on this particular slide, is there data available from the Seattle Ethics and Elections Commission that tells us what the average contribution amount is for these donations that we see to these different interests?
Yeah, that's...
So, number of contributions and the average amount of the contribution?
Yeah.
Overall, I was just looking at this data, there were 19...
101 contributions to PACS in 2019, and 95 of those were over $5,000.
So 5% of them were over $5,000, the rest were under $5,000.
And the rest were under $5,000.
5,000 or less.
Yeah.
And then, and I think it would just be helpful to get even more granular detail, particularly for those under 5,000 and sort of if there's a way for us to analyze and evaluate if there's a correlation between volume of number of contributions and the amount of the contribution across that spectrum, I think that would be really helpful.
And colleagues, feel free to signal if you have other requests for information.
Again, when we're talking about the independent expenditure pieces in particular, we have ongoing work to do in this space, so this is a good opportunity to flag some additional data or analysis that you'd like LISH to engage in as we continue to and build the legislative record as to why it's important for us to implement reasonable regulations on the contributions to independent expenditure committees.
Council Member Herbold.
I'm just wondering, could you repeat that stat again?
Because I just remember my staff had asked you for that too.
So what percentage were above 5,000?
5% were above 5,000.
5,000, okay.
which was what you estimated to remember.
I think one of the things I'd just like to mention here that I'm just now really fully understanding is that large corporations, even under passage of this law, will still be able to engage in big money spending to support candidates.
They will still be able to make million dollar political expenditures, they just won't be able to give to a PAC.
And so that really helps me understand that this legislation is about addressing quid pro quo corruption and the threat of it.
We shouldn't kid ourselves that it's going to, quote, get big money out of politics, because with the passage of a bill like this, it's very likely that we will see some of that.
that shift where large corporations will directly finance election activities, but what we're really trying to get at is making sure that in doing so, that they aren't extracting commitments from people who are running for office.
So there's a strong component of transparency that I think from a policy perspective works against the appearance the perception and actual corruption within campaigns, either through independent expenditure activity or through direct contributions to campaigns.
And so I think that's a really important point to make.
Thanks.
OK.
Of those contributions, the largest by far was the contribution by Amazon, which elicited national news and denunciations candidates for president, but we saw other organizations also make very large independent expenditures, particularly SEIU and Unite Here.
But again, Lish, when we go back to the total contributions to 2019 political committees, that's the slide three, if we were to dig into, for example, the contributions and the source of contributions for CASE and people for Seattle, which are the two big numbers on that chart.
Is there a way for us to do that and be able to sort of, again, get some of that granular detail about who those contributors are?
Because I think that that is a good layer of information over The second, the next slide, which is slide four, and I think that would give us a better picture of who is the actual, who in terms of contributors are making these donations as opposed to organizationally who is making contributions to political expenditure activities.
So I've started to pull that out for these top contributors.
Amazon, Vulcan, and the Washington Association of Realtors, Expedia, NAOP.
R.C. Hedreen and Hedreen Holdings are all contributing to CASE.
Nick Hauenauer, SEIU Quality Care, UFCW PAC, and SEIU Washington State.
Oh, I see.
That's what the color coding is.
Yes.
Got it.
Okay.
And so when I look at this and see all the dark blue, maybe we can come up with more than just blue.
So the darkest blue shade, all of those donations were made to CAPE, and then as it gets, the gradation of color changes, that indicates which of those contributions is going to which political action committee.
But one of the great things about Seattle's election laws is that we require a full disclosure of contributions to an independent expenditure committees.
So we know $30 contributors to an independent expenditure committee.
We also know who those are.
Okay, so if I'm looking at that Amazon.com number of $1.5 million, are they required under current code, is Amazon required under current code to disclose who contributed the $1.5 million if it's multiple people at Amazon as opposed to just the corporate entity?
The corporate entity is contributing as a corporation.
Individual executives from the corporation would be individual contributors and would be listed separately.
I probably don't have the capacity to identify Well, we do have some information about where contributors work, so we may be able to dig down and identify whether particular individual contributors are working for Amazon or not, for example.
As it relates to particular contributors making contributions to PACs as opposed to directly to campaigns?
Right.
Okay.
And we also have information for direct contributions to campaigns.
and that 5% of giving that's above $5,000 is that by number of dollars or number of contributions?
A number of dollars.
Can we do it for a number of contributions as well?
Maybe.
I think if most contributors to independent expenditure committees make a single contribution.
Amazon, they made three contributions over the course of the campaign cycle.
But generally, it's one, maybe two.
All right.
So as we start talking about campaign finance regulations, just a reminder that the term person is, in this area of law, written particularly broadly.
It's not just an individual, but it can be a corporation, a union, a political party, almost anything.
Contribution is...
giving something and not expecting a return for it, basically.
A political committee is a group that intends to receive contributions or make expenditures in support of or opposition to a candidate or about a proposition.
There are political committees that are not super PACs that do coordinate with candidates, a super PAC or what this legislation would define as an independent expenditure committee is one that does not coordinate with a campaign.
And then independent expenditure is a expenditure on behalf of or opposing a campaign when it's completely independent of the campaign and it's not a contribution to that campaign.
Seattle's campaign contribution limits were adopted in 2015 with the Honest Elections Initiative.
For candidates that choose to participate in the Democracy Voucher Program, the limit is $250.
For candidates not participating, it's $500.
There are no limits on contributions to political committees under current law.
Contributions to both candidates and political committees must be disclosed, and campaigns may not participate in independent expenditures.
Seattle currently has no regulations regarding foreign contributions, but they are limited under national law.
Federal law prohibits contributions from foreign nationals and foreign principals in connection with any election.
Domestic subsidiaries of foreign contributions are eligible to contribute if the foreign parent doesn't finance election-related contributions or expenditures.
So again, there are some ways that foreign-owned corporations residing in the United States can contribute to campaigns or independent expenditures.
And again, I want to go back to this slide because I think it's really important.
What we are, I think the nuance here is that there is existing federal law that regulates in this space that applies to federal election, electoral activity.
It also applies to local elections.
But we do not have currently in Seattle a mechanism by which to effectively investigate and enforce whether or not those federal laws are being upheld, correct?
Correct.
Okay.
So really what we're trying to do through this particular one of the council bills is effectively import existing prohibitions and federal law to provide our Seattle Ethics and Elections Commission the tools they need to be able to both understand, investigate, and enforce current federal law in our local elections.
Yeah, it also goes more broadly and touches more types of foreign influence in campaigns and contributions.
By defining a percentage of how we believe foreign influence might seep into decision making related to making electoral contribution decisions.
Right.
Okay.
Just a follow-up question, Council Member Gonzalez, going on that same theme, just so I understand correctly as well.
My understanding is that there's still at the federal level a loophole where a federal, where a PAC that is mostly funded by a company that may be owned by a foreign company, can still under federal law, and that is allowed, have a PAC.
And this ordinance would close that loophole.
Is that a correct understanding?
Yeah, I think that that's correct.
Okay, so in that respect, it would also broaden the prohibitions on a foreign influence corporation interfering in local politics through a PAC.
Correct.
Okay, thank you.
Okay.
In terms of political advertising, commercial advertisers, companies that accept money to advertise in the political realm, are required to maintain documents and books of account.
Under current city law, it needs to include names and addresses of persons placing an advertisement.
nature and extent of the advertising, cost and method of payment.
These regulations only apply to campaigns, not legislative activity or anything that happens outside of the two years of the campaign period.
They must be open for public inspection.
during normal business hours and during the election and for at least three years after the election.
As you may have read, there has been difficulty actually seeing those records for some organization, companies accepting political advertising over the last couple of years.
So this is the existing framework?
Right.
Okay.
And then moving to penalties for breaking these laws.
The Ethics and Elections Commission has the authority to levy civil penalties up to $5,000 in return of the contribution.
For an illegal contribution, the penalty can be the greater of either two times the contribution amount or $5,000 in return of the contribution, illegal contribution.
Thank you.
You'd mentioned just a moment ago that there has been some difficulty in confirming compliance with the transparency part of this, of the current regulations, and being able to review the books.
Given that there are civil penalties already in the existing law, can you just talk a little bit more about why that is?
I'm not sure why the companies like Facebook have had a hard time complying with the regulations.
Why have we not enforced those regulations?
So our laws mirror state laws on this issue and the state has been enforcing the regulations on those and has brought those companies to court.
So it's been pursued at the state level rather than the local level.
I have a follow-up question.
So with this new ordinance, how big is our departure from that state regulatory framework and would we be in a space where there's things that only we can enforce under the municipal code now and that we can't rely on the state to enforce?
Yeah, so the proposed commercial advertising bill would provide more detail about what needs to be retained.
So if a commercial advertiser retains something is in compliance with the more general regulations that We just talked about the names and addresses of the persons placing an advertisement, nature and extent of the advertising, cost and method of payment.
But, for example, doesn't include a copy of the advertisement, which is one of the things that would be required under the legislation, then they would be in violation of the city law and not the state law.
And I think just to put a finer point on that, nothing in this bill would preclude the state from doing their own investigation on either a parallel or subsequent track, correct?
Correct.
OK.
So our proposal in this ordinance would simply create stricter requirements than what currently exists under state law, correct?
Okay, Council Member Herbold.
And given that it seems that Ethics in Elections isn't currently using its authority to enforce and is instead deferring to the state's ability to enforce, I would love, Lish, if you could get some more information from Ethics in Elections about whether these changes would result in they're being they're being more active in in enforcement of this area rather than deferring to the state.
One thing we have heard from the Ethics and Elections Commission and it's reflected in the fiscal note for at least a couple of the bills is that in order to enforce these bills they probably will need more investigators and so you should consider potentially adding another position there to help to enforce this legislation.
in addition to what's already listed in the fiscal note?
No, at the level listed in the fiscal note.
That's what I thought, because my recollection was that the fiscal note takes into account the expressed need by the Commission for additional resources for investigation, so sounds like we don't need to add more than what is currently there at this point.
Okay.
Okay, so moving on to the three Clean Campaigns Acts.
The first one, Constable 119730, addresses independent expenditures.
defines independent expenditure committee as a political committee that intends to make or that does make independent expenditures.
And it places a limit on contributions to independent expenditure committees of $5,000.
It also creates a new category of political committee called a limited contributor committee.
These are committees that receive a large number of small dollar contributions, less than $500 or from another limited contributor committee and from a larger number of persons.
So at least 150 persons for a district council race and up to 600 persons for limited contributor committees that want to make a contribution in the context of a mayoral race.
And there would be no limits on contributions from these LCCs to other political committees.
At the last committee meeting, we discussed a set of amendments to the limited contributor committee idea, limit on contributions from LCCs at $10,000 compared to the $5,000 that other persons would be held to, requiring limited contributor committees to certify that they meet the definition, and lowering both the monetary amount and the number of persons contributing to the committee that define the committee.
Any questions about the proposed amendment, colleagues?
Okay, so this is an amendment that we need to make a motion and a second to adopt and include in the base legislation, correct, Lish?
Correct.
Okay.
So colleagues, I'll just say that on this particular amendment, we had a pretty robust conversation about it at the December 16th meeting of my committee last year.
I recognize that some of you weren't here for that, but effectively what we are trying to do here from a policy perspective is twofold.
One is, create an opportunity to recognize that when we're talking about the appearance of corruption or the perception of corruption, it's important for us to acknowledge that there is a, at least nationally, information that tells us that when the contributions are large from a small volume of people that that does have a negative impact in terms of people believing that corruption has seeped into the electoral democratic process.
So the theory behind the limited contributory committee is to recognize that If the true intent here is to address the appearance and perception of corruption, then we need to provide a model by which a large volume of donors at a small dollar amount are still allowed to engage in this political activity.
but in a manner that doesn't create that perception of corruption.
So I have really sort of struggled with where to set the number in terms of how to qualify for a limited contributor committee.
and have landed on thinking that instead of having a $500 or less contribution, that it would be wiser for us in terms of addressing that appearance of corruption concern to lower the contribution amount to $100 or less for each person who is contributing.
Likewise, making sure that we can see from LCCs that they are supported by a larger volume of people is important.
And so we've set the number at 100 and have standardized that number for all of the races that it would apply to.
So district council races, at-large council races, city attorney races, and mayoral races would all be under the same standard.
I think that will help to bolster the commission's ability to just standardize how they're going to enforce and investigate this particular component of the legislation.
And it'll also, again, meet the policy demands of wanting to really make sure that we're still acknowledging that There is a lesser concern as it relates to the appearance of corruption when we're talking about political activity that is being fueled by small dollar donations from a large number, large volume of people.
So that's where the 100 by 100 model came from, from my perspective, to be able to do this.
The second component that I would say that is motivating this particular amendment is around you'll notice that there's a limit on contributions from LCCs to $10,000.
So originally we had introduced a bill that would, once you qualify as an LCC, there would be no limits to the LCC in terms of contributions that LCCs could make to other political committees who are engaging in independent expenditures.
We had heard concerns from the Seattle Ethics and Elections Commission, as well as advocates in this campaign finance reform space, that that could be an exception that swallowed the rule and the intent that we were trying to get at, which was, again, limiting political committee contributions in a way that would truly and meaningfully address the quid pro quo corruption concerns, including appearance of corruption.
So as a result of that, I've moved from having no limits once you qualify as an LCC to having a limit, but the limit would be at $10,000 as opposed to the $5,000 limit that would apply to non-LCC qualified committees.
So that is in a nutshell the motivation and the intent behind this particular amendment to Council Bill 119730. Lish was nodding as I was speaking, so I'm assuming that means that I have accurately described the policy as it is reflected in the amendment.
But Lish, let us know if I've mischaracterized anything.
The only other thing to add is that requiring the committees to certify that they meet the definition will make it much easier for the Ethics of Elections Commission to enforce the regulations.
So similar to some obligations that exist in other places in the legislation, particularly around the foreign-influenced corporations, we're shifting the burden to the people engaging in the political activity to provide us with a certification under the penalty of perjury that they, in fact, meet the definitions here that I think really cleans up the ability for the commission to be able to do enforcement without potentially stepping into other privacy concerns that will exist from a very diverse set of stakeholders.
Any questions, comments, concerns?
Council Member Herbold.
I was a person who, at the last committee meeting, needed some time with this amendment after receiving several briefings on the intent and the the wisdom really of lowering the contribution limit in order to ensure that these limited contributor committees are entities that aren't able to basically create a new loophole.
I'm much more comfortable with this proposed change to the legislation than I was last time.
I believe we are not going to vote this bill out of committee, but is it your intent to vote on the amendments?
Yeah, I'd like to have the amendment incorporated into the base legislation, even though I won't be moving at this point to vote this particular bill out of committee today.
Okay, any other questions or concerns for for us to address before I move the amendment.
Okay.
I'm going to move Amendment 1 to Council Bill 119730 as described.
Second.
Okay, it's been moved and seconded.
All those in favor say aye.
Aye.
Any opposed?
No opposition.
So the motion carries and the Amendment 1 to Council Bill 119730 passes and will be incorporated into the base legislation.
Before we move, I know we're getting set to shift gears into the next council bill.
Again, I just really want to clarify that we have some additional work to do to be able to continue to develop the legislative record as it relates to this particular council bill 119730, which specifically relates to political committee activity or super PACs as we've been commonly referring to them.
I was hoping that we would be able to have that legislative record much better built by now, but unfortunately a lot more questions have come up and including by some of our newest council members and really appreciate the immediate engagement on the policy issues here and I think we would all benefit from having just a little bit more time to develop that legislative record, to make sure that we have any pending legal questions answered, and then lastly, to continue to engage in some stakeholder additional stakeholder engagement, particularly with individuals who are going to be directly impacted by this new framework of laws once they pass.
So I'm hoping that for the first quarter of this year, we will be able to do all of those three things and be able to build a legislative record, make sure that we have all of the legal questions answered for us as policymakers, and then complete stakeholder engagement so that first thing in quarter two, we are all in a position to feel extremely comfortable about the defensibility of what we're doing and why we are doing it, and that we have a clear, established legislative record with evidence and facts that support our policymaking decisions.
We know that anytime we challenge the status quo and power and the systems of power, there will be individuals who will react negatively to that.
And so we want to be in the best position to defend our actions.
And I believe that the evidence exists and the record will be able to be built to really hit the nail on the head that what we are doing here is addressing corruption and the appearance and perception of corruption in our elections, and that is a worthy challenge to take up as a city council.
So we will not be voting this bill out.
It has been amended.
I am extremely grateful to Councilmember Herbold, who will continue this work in the first quarter, along with my staff, to accomplish all of those things while I'm out on maternity leave.
Today's my last day in the office before I head out and have a baby.
So I'm really appreciative to you, Council Member Herbold, for agreeing to see this piece of the work over the finish line.
So with that being said, are there any questions about process related to this particular council mill?
Great.
So we will move now into the second I do intend to call this one to vote and vote it out of committee for consideration by full council on Monday.
Lish.
All right.
So, Council Bill 119731 addresses corporations that have significant foreign ownership that is at a level where it could influence decisions about political contributions.
And the key definition is in the middle of the page, foreign influence corporation, is defined as having a single foreign owner that owns 1% or more of the corporation, two or more foreign owners that include 5% or more of the corporation, and or a foreign owner that participates directly or indirectly in corporate decision making regarding political activities.
And I should mention at the December, I think, third meeting of the Gender Equity Committee, we heard expert testimony from Ellen Weintraub from the Federal Elections Commission and a Harvard professor who indicated that these were appropriate limits in terms of threshold where a corporation is being influenced by an owner.
So the bill would state that foreign influence corporations would not be permitted to contribute to campaigns for elected office, make independent expenditures, or contribute to independent expenditure committees.
Corporations that do want to make a contribution to a campaign, make an independent expenditure, or contribute to an independent expenditure committee would be required to certify that they are not foreign influenced.
Have we done any sort of look back and analysis of the corporations that have contributed to political campaigns?
What percentage of them would be impacted by a bill like this?
No.
Is that something that's possible to do before full council or would that just be too exhaustive of a task?
So that's...
Or we just don't have that information?
Yeah, we probably could find the information, but it's a whole new area of disclosure that I probably couldn't get that done this week, just given I don't know how foreign or how ownership records for corporations are constructed.
May I ask a question?
This applies also to ballot measures.
No, okay, no, okay.
Thank you That's a good question councilmember Peterson the none of the three bills would apply to To ballot measures foreign influence corporations, you'll see that there is There was some language included that would that would apply here in the foreign influence corporation space that would say that foreign influence corporations just can't make contributions directly to campaigns just like independent expenditure contributions.
So that would be new.
But we're staying away from ballot initiatives at this juncture.
The federal courts have determined that while a foreign person can't participate through direct contributions or independent expenditures, or through direct contributions, they may make statements on issues of political interest.
And so we're trying to avoid any issue like that.
Thank you.
All right.
Was there just one slide?
There's just one there.
All right.
Catching up after stepping out for just a minute.
Okay, so any other questions or concerns, colleagues, about the Foreign Influence Corporations Bill?
All right, so I'm gonna call this one to vote.
So I will move that the committee recommend passage of Council Bill 19731. It's been moved and seconded.
Are there any further comments or discussion?
Okay, so hearing none, those in favor of the committee recommending passage of the bill vote aye.
Aye.
Any opposed?
Any abstentions?
Motion carries and the committee will recommend passage of Council Bill 119731 for this January 13th at the full City Council meeting.
Thank you.
And we will now move to the next bill, which is regarding political advertising 119732.
So this bill also introduces a new term, qualified public communication.
It's defined as a paid advertisement that's intended to influence political decisions.
In relation to a statement I just made, it's not prohibiting those paid advertisements.
It's just requiring that advertisers keep information on their books about who's making those statements.
So it's requiring some disclosure regarding the statements, but not providing any limits on them.
Commercial advertisers would be required to maintain documents and books of account for qualified public communications for four years after the communication occurs.
It would require advertisers to keep documents and books of account that include the advertisement leaders of any corporations placing a qualified public communication, rates charged for the advertisements, subjects of the advertisement, the names of candidates, the election, or the legislative issue, and names of candidates, candidate committees, and treasurers for campaigns that are placing advertisements.
So, except as sort of listed here, these requirements apply for Commercial advertising both for campaigns and for qualified public communications relate to legislative acts outside the campaign act.
Council Member Herbold.
So under the 2008 lobbyist registration law, there are some disclosure related requirements related to legislative actions of the council and I believe of the executive as well.
And so this bill enhances some of the requirements around issue-based legislative lobbying.
But as I understand it, it's only during an election.
So why would we not want to have those enhanced transparency requirements year-round?
specifically for the issue-based legislative lobbying?
What this bill does is it actually does apply regulations that we currently apply during the election process to other types of political advertising outside of the election process.
So I think it does exactly what you suggested, that the qualified public communication is not An election-related activity is an activity all the rest of the four-year cycle or two-year cycle when elections aren't necessarily occurring.
Okay, so that requirement is year-round.
It is not triggered for issue-based lobbying, legislative lobbying, during an election cycle.
Right.
Okay, I misread an earlier memo.
Alright, I appreciate that.
Thank you.
And that is a big shift, both in the sense that it would apply to issue-related advocacy and that the temporal change around it applying year-round are two significant changes in this space, in addition to requiring some additional information be retained by the commercial advertiser for purposes of understanding what their activity is to bolster transparency in this space.
I felt that it was really important to make sure to include all of those three components, particularly the one around issue-related lobbying we saw during the debate around the employee hours tax in particular.
If you recall, Council Member Herbold, that there were some qualified public, what would have been considered qualified public communications and paid advertisement to influence political opinion around that policy that were being posted pretty actively online and through other digital social media platforms with no disclosures to tell people who was funding them, and ultimately, very little requirement to disclose to the commission, much less to the public, who was funding them, at what level they were being funded, and why.
And so it's, I felt it was really important to make sure that if that activity was going to occur, which I expect that it will continue to occur, that at a minimum we are requiring a level of transparency that really allows the person who is receiving the message and being targeted by the message to understand who they're being targeted by.
and to require them to retain that information in a way that will really promote transparency in our electoral process.
So that's the motivation behind this change, which seems small in the grand scheme and scale of things, but really will go a long way towards adding transparency to how political advertisements communicate information to the general public, not only about candidates and campaigns, but also about legislative priorities that the city is advancing through its legislative process.
Any questions or comments on this one?
All right, so seeing none, I do intend to move this one out of committee as well.
There are no amendments for us to consider.
So I will move the committee recommend passage of Council Bill 119732. Second.
Okay, it's been moved and seconded.
Are there any other further comments on the bill?
Hearing none, those in favor of the committee recommending passage of the bill vote aye.
Aye.
Those opposed, vote no.
And there are no abstentions.
The motion carries and the committee will recommend passage of Council Bill 119732 to be considered at the January 13th City Council meeting.
Okay, colleagues, that was the last item on our agenda.
Look at that, record time, it's only 10.36.
I am just...
Flabbergasted at how quickly that went so I really want to thank you all for your engagement particularly the newer council members I know that you all are jumping in And and really sort of grappling with the policy issues here I I do believe that the two council bills that we voted out of committee today are pretty straightforward and simple and have broad consensus and support both among stakeholders and here in City Council.
I do think that the first council bill related to independent expenditures, while in theory and principle there is lots of support for it, there are still some unanswered questions as I summarized moments ago and believe that we could benefit from a little bit more time and I hope that you all agree with that.
So I do want to apologize to my friends over at Fix Democracy for not being able to get that out of committee now.
But I think that, again, we want to, it's more important to get it right than to just get it done.
And we will get it done.
And when we get it done, we will feel very, very strongly about the work product that comes out of this committee.
really appreciate your all's flexibility and willingness to continue to work with us and to understand what we're trying to ultimately accomplish and appreciate the ongoing support and engagement there.
So that is the last item on our agenda.
Are there any closing remarks or comments by anybody?
Council Member Hurdle?
I just want to thank you for your work on this incredibly important legislation and want to signal to advocacy groups who care deeply about this election reform that I will be convening conversations about some of the unanswered questions around the Super PAC bill and I'm excited to work with Councilmember Gonzalez's staff in convening some of those conversations over the next few weeks.
So, thank you.
Councilmember Morales.
Thank you.
Well, I want to thank you for bringing these issues up and thank the advocates for bringing this to the Council.
This is clearly really important.
We all experienced this in the last election.
We know how important this work is.
And I want to thank you for being willing to slow down this particular piece because there are many of us who are new.
We have some more questions.
We'll definitely be talking with advocates and talking with the legislative staff to make sure that we understand this better and to make sure that the final product is one that we can all be really proud of.
Thank you.
Thank you, Council Member Morales.
Anyone else?
All right.
I'm really excited to have this considered on Monday.
Unfortunately, I will not be there, but I will be cheering you all on.
I'm also not going to commit to watching it on Seattle Channel, because I will likely be dealing with a newborn who is just several days old by the 13th.
But I really want to appreciate your all's understanding and your ongoing engagement in the issue.
I agree with you, Council Member Morales, that this is extremely important issue and really appreciate the advocates, you know, beating the drum here and staying consistent in their advocacy in this space.
So it's been really, really helpful to me.
And I have learned a ton.
We have learned a ton in this space.
So thanks also to Vee Nguyen and Brianna Thomas in my office who have been doing excellent, superb staffing in this space.
Really appreciate all of their work.
So that is the last item on our agenda.
And we are now adjourned.