Money, ethics and the future of Michigan

This summer, the annual battle over the Michigan budget will once again demand media attention as Democrats and Republicans organize special interests to shape the way our government contracts with its citizens.

At the end of the budget process, Michigan citizens may see the state abandon the status quo and take a fundamentally different approach to taxes, education, corrections and a host of other state programs.

Unfortunately, the influence special interest groups hold in Michigan is enormous. This influence is protected by a network of ethics laws that shroud our legislative process in secrecy and legally permit large amounts of special interest money to enter our government.

The untold story of this year’s budget debate is the amount of money that legally changes hands on a daily basis in order to garner political influence in the State of Michigan.

Going into the 2010 election year, Michigan’s public officials are gearing up a massive local and statewide fundraising apparatus. According to the Michigan Campaign Finance Network, the 2008 election cycle for the House of Representatives was the most expensive ever, with $19.2 million spent – and this year it will likely be even more. Michigan finance laws limit the amount of personal donations to candidates, but the state has no limits on independent donations to party committees or PACs.

This loophole allows for legal laundering of campaign funds around state fundraising limits and hides the source of funds from the public eye by creating a sort of “middle man” through which funds flow. As a result, it’s impossible to track the influence of the ultra-rich as they give to candidates across the state.

For example, Jon Stryker, a wealthy liberal donor, gave over $4 million to PACs that then distributed the money across state campaigns, making it impossible to track the funds. The separation of the donor from the candidate perpetuates the shroud of secrecy that has enveloped Michigan government.

Outside of campaigns, Michigan ethics laws continue to provide lobbyists with a wealth of tools to exert influence over public officials. Michigan has some of the most lax lobbying disclosure laws in the nation. For example, a lobbyist can spend $700 on travel expenses for a lobbyable official without having to report that expense to the state. The last several years have seen a 25% increase in the amount of money spent by lobbyists above and beyond the thresholds mentioned above. Lobbying has become a $30 million dollar a year business that legally hides many of the expenditures made to officials.

The most glaring hole in Michigan ethics laws are the requirements set on lobbyists to disclose what issues and public officials they spend their $30 million on. Lobbyists are only required to report lobbying expenditures twice a year, which conveniently shields legislatures from criticism until well after controversial legislation is debated. Additionally, unlike federal law, lobbyists are not required to claim what issues and bills they are directly advocating for or against.

Michigan law also stands in stark contrast to Wisconsin ethics laws that require lobbyists to state precisely what bills it is lobbying for or against and the amount of billable hours charged to their clients. These tight laws allow Wisconsin citizens to track the precise path of money in state politics and even allows for the calculation of the most expensive pieces of legislation moving through the Wisconsin legislature.

When the University of Michigan begins lobbying policy makers in Lansing, they will be only one voice amongst many demanding special treatment in the Michigan budget. Competing with the University are extremely wealthy business interests that want to keep taxes low or seek additional tax cuts.

Recent history shows that when University funding is pitted against private business interests, it is the funding of our public universities that loses. One example of the primacy of money in politics is the state’s tax on beer and wine. This tax has not been raised since 1962 and, today, the tax on a six-pack of beer is less than 1%, yet we continue to slash education funding in the state.

Coincidently, the Michigan Beer and Wine Wholesalers PAC is one of the heaviest campaign contributors and one of the largest players in the lobbying expenditure game. Michigan Beer and Wine Wholesalers ranks above several unions, auto dealers, the Chamber of Commerce, and Comcast in contributing to campaigns both Democratic and Republican. In return, any attempt to raise the tax in order to fund our schools or fix our roads has been declared “off the table.”

Mandating the end of money in politics would be both unrealistic and unconstitutional. To bring accountability to Michigan’s public officials this state must demand financial disclosure laws that are both robust and timely. An electronic system where Michigan citizens can see where lobbying dollars are going and where candidates are receiving contributions from would make Michigan a leader in ethics laws.

Additionally, current disclosure laws require biannually and quarterly disclosure, which means that legislation and issues are far past when lobbying expenditures are reported. Michigan can be a leader in mandating that these expenditures and donations be posted in near real-time so that all of Michigan’s citizens can see who is holding their representatives accountable.

The question of ethics in Michigan politics boils down to a debate over priorities. Do we value the interests of big business over the interest of an educated society? Do we value a free and transparent government over a government under the sway of wealthy donors and gift givers?

In order for citizens to hold accountable their public officials, we must tighten ethics laws in Michigan and shine more light on this growing problem. The battle to define the future of Michigan must be fought under the public eye and not in the restaurants and junkets hosted in Lansing behind closed doors.

Nathaniel Styer is an Undergraduate Fellow at the Center for Ethics in Public Life (CEPL). CEPL provides students with the opportunity and support to develop, explore and pursue research on ethical issues or to plan activities related to ethics in public life for the UM community. Visit ethics.umich.edu for more information about CEPL.