Oregon is on the verge of creating limits on campaign cash — without a ballot fight

Oregon lawmakers are on the verge of a remarkable feat: Passing limits on political giving that have support from Democrats, Republicans, good government groups and some of the state’s most prolific campaign donors.

On Tuesday night, top lawmakers in the state House introduced a revamped version of House Bill 4024, their proposal for instituting campaign finance limits.

The new bill contains a number of changes to a high-speed proposal that’s been negotiated and revised repeatedly in the space of the five-week legislative session. But it comes with one especially notable addition its authors have sought: Backing from good government groups that have been planning to put their own campaign finance proposal on the November ballot.

If the peace holds — and lawmakers can muscle the bill before the session adjourns in the coming days — the state would avoid an expensive and potentially ugly ballot fight later this year.

That outcome looked likely Wednesday, as the bill sped out of a legislative committee and then received a 52-5 vote in the House. It now goes to the Senate. Gov. Tina Kotek supports the bill, a spokesperson said.

“This is a historic moment,” said Jason Kafoury of Honest Elections Oregon, one of the key groups behind the ballot measure push. “In the history of Oregon, the Legislature has never passed contribution limits. We are at the cusp.”

The negotiated agreement appeared in an amendment to HB 4024, introduced by House Majority Leader Julie Fahey, D-Eugene, and House Minority Leader Jeff Helfrich, R-Hood River. It builds off of two prior drafts that lawmakers heard public testimony on in recent weeks, but with some key changes.

Those include lower limits for so-called “small-donor committees,” political groups that accept no more than $250 from any individual per calendar year. The committees are expected to be used extensively by labor unions to support candidates and causes.

Under the new version of the bill, small-donor committees would be limited to giving statewide candidates the equivalent of $10 for every one of their donors. For state lawmakers and local elections, they could give $5 per donor. Both those provisions are lower than the limits initially floated in the bill, which would have let the committees give statewide candidates $33,000 for every 2,500 donors, and legislative or local candidates $16,500 for every 2,500 donors.

The negotiated bill also reduced the money that can be given to candidates from “membership organizations,” nonprofit organizations formed by business interests, advocacy groups, or any other interested party. They would now be limited to giving statewide candidates $26,400 per election, rather than $33,000. They could give legislative or local candidates $13,200.

Honest Elections Oregon and its allies also won changes that limit what kinds of entities can contribute to candidates.

The initial business and labor proposal said any “person” could donate $3,300 per election to a candidate. But “person” has a broad legal definition that includes corporations, clubs and other entities. The new bill narrows the groups allowed to contribute the same amount as an individual, but still permits corporations to give candidates up to $3,300 per election.

Limits would not kick in until January 2027.

The bill would also:

• Attempt to stop the practice of incumbent lawmakers handpicking their successors. It would force incumbents to file for reelection no later than a week before the deadline for others to run. That’s a response to a practice of lawmakers waiting until the last minute to declare they won’t run, giving a leg up to allies who want to take their place.
• Change state law to ensure that campaign contributions made in exchange for an official act are considered illegal bribery.
• Allow local campaign finance systems, such as the city of Portland’s, to remain in place.

In total, Honest Elections and its allies negotiated 17 changes to the initial proposal labor and business groups introduced in February, according to a memo the group created to explain those tweaks.

The alterations were hammered out in extensive negotiations — mediated by Fahey’s office — that stretched through the weekend and were still occurring well into Tuesday afternoon.

The result is a bill that was praised as a fair compromise as it got a unanimous vote out of the House Rules Committee on Wednesday morning.

“I think this is a better bill than anything the Legislature has considered before,” Fahey said. “That’s because it combines both the legal expertise from the Honest Elections coalition members and the applied experience of people who engage in campaigns.”

Even so, none of those who testified on the bill Wednesday was overly effusive about its details. Kafoury called it “acceptable enough for a starting point,” saying his group would press for improvements during next year’s session.

“This bill is not a perfect campaign finance system,” said Angela Wilhelms, CEO of the state’s largest business coalition, Oregon Business & Industry. “But that’s because ... no such system exists.”

Felisa Hagins, political director for the state’s largest labor group, the Service Employees International Union Oregon State Council, signaled her support — but also downplayed the notion that money is a corrupting force in politics.

“I believe that government is good and that you have come here to do the right thing and good things for the constituents you serve with the beliefs you have,” Hagins, whose union is a prolific political donor, told lawmakers. “And I don’t believe that a dollar here or a dollar there — or five or 10 or 20 or 30,000 — has fundamentally shifted any of those views. I believe that those dollars have come because we may have a shared view of the world.”

Completely removing money from politics is not possible. Even with strict limits on what candidates can accept, the U.S. Supreme Court has ruled nothing can stop interest groups from buying ads in support of candidates as long as they don’t coordinate with the candidate.

Those “independent expenditures” could play an increased role in Oregon if contribution limits pass. The business and labor groups that negotiated HB 4024 have said their goal was to keep Oregon’s contribution limits high enough that candidates are still in control of their campaigns – not ceding strategy to unconnected “dark money” groups.

“What we tried to find was a balance,” said Phil Bentley, president and CEO of the Oregon Health Care Association and one of the people who negotiated the bill. “With some of the other proposals, in my opinion, you’re just going to see a proliferation of independent expenditures because candidates are going to have if not one, maybe two hands tied behind their back.”

Even so, the potential that candidates will have less say in their campaigns in the future gives some lawmakers pause.

“The money’s going to be there, we’re just not going to have any say over how it’s spent,” said state Rep. Kim Wallan, R-Medford, who voted in favor of the bill in committee but opposed it on the House floor. “I understand the politics of the moment, but I just don’t like the idea.”

Oregon is one of five states in the nation with no limits on political giving, a fact that has increasingly led to eye-popping contributions from wealthy individuals and ever-more-expensive political races.

Kotek pledged to tackle campaign finance limits in the midst of a record-shattering gubernatorial race she spent roughly $30 million to win. The same race saw Nike co-founder Phil Knight personally giving more than $4 million to Kotek’s opponents.

But despite continued attention, and strong signals voters want contribution limits, lawmakers have punted the issue again and again.

“Finding agreement or compromise on an issue that people inside this building have such strong opinions on has proved to be very difficult over the years,” Fahey said in a committee hearing in February. “On top of that, the people outside of this building also have very strong opinions, and have been unwilling to compromise.”

That complicated history has made the swift path to a negotiated bill all the more unexpected.

Business and labor groups started talking in February about how to avoid the possibility that voters would implement a campaign finance system both disliked.

The groups often oppose one another in policy and political matters. Labor unions are key supporters of Democratic candidates, while corporations tend to favor Republicans. But they were united in their disdain for Initiative Petition 9, the campaign finance proposal put forward by Honest Elections and its allies.

Labor unions had already taken steps toward qualifying their own, competing ballot measure, potentially teeing up a confusing fight. The negotiations over HB 4024 were seen by some as a Hail Mary.

As early as Monday, that last-ditch effort seemed unlikely. Fahey and Helfrich introduced a version of the campaign finance bill last week that would have referred the plan to voters, likely ensuring competing ballot measures fighting to get the most votes.

Marathon negotiations Monday and Tuesday finally led to a truce and — perhaps — the first statewide political contribution limits Oregon has seen in decades.

Despite the deal, members of the coalition pushing Initiative Petition 9 issued a press release Wednesday that suggested their ballot measure would have created a better system.

“We expect unions and businesses would spend tens of millions to persuade Oregon voters to reject IP 9,” said Rebecca Gladstone of the League of Women Voters of Oregon. “We, in good faith, will support a legislative compromise for substantive reform during these last days of session. Oregon deserves better, so work must continue.”