Council hears Gray’s outline in reforming campaign finances

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D.C. Mayor Vincent C. Gray will send a package of campaign finance reforms to the D.C. Council by mid-July that answers mounting calls to eliminate pay-to-play politics without resorting to sweeping bans that the nation’s highest court has deemed unconstitutional, the city’s top legal officer said Monday.

Attorney General Irvin B. Nathan said the administration wants to bar those who hold, or are bidding on, “sizable” public contracts from contributing to city politicians who hold influence over their contracts.

Officials also seek to disclose the chain of ownership between high-octane donors who maximize their donations to campaigns through subsidiaries to “conceal their identities behind a corporate veil.” Corporations that contribute to a candidate, he said, should be required “to identify all subsidiaries, affiliates and controlling shareholders.”

Mr. Nathan laid out the mayor’s plans before the council’s Committee on Government Operations. Committee Chairman Muriel Bowser, Ward 4 Democrat, had scheduled the hearing to vet existing campaign finance bills before the council.

Mr. Gray’s reforms are based on best-practices in some states and attempt to level the playing field for nonincumbents who run for office in the District while protecting the constitutional right of corporations and other organizations to donate to campaigns in light of recent U.S. Supreme Court rulings that uphold free speech.

On Monday, the justices decided the landmark 2010 ruling in Citizens United v. Federal Election Commission extended to the states by striking down a Montana law that barred corporations from making independent expenditures - not just direct donations - in support or opposition to candidates.

Mr. Nathan said “disclosure requirements, rather than strict limitations or outright bans, are the best way to deal with independent expenditures.”

Mr. Gray’s proposal dovetails with the spirit of Ballot Initiative 70 - a grass-roots effort to let voters decide whether the District should ban corporate donations to its local political campaigns - but offers specific curbs rather than an outright ban, Mr. Nathan said.

The mayor’s legislation should be transmitted to the council within weeks, but it will not be vetted and amended by lawmakers until the fall. Earlier Monday, council Chairman Phil Mendelson, a Democrat, said campaign finance reform would be a top priority for the council when it returns from its summer recess in September.

Mr. Gray has alluded in recent weeks to his meetings with Mr. Nathan to develop the reforms, as city politicians face increasing pressure to set limits on influence-peddling between powerful lobbyists and contractors and the District’s public servants at the John A. Wilson Building.

FBI agents raided the home and offices of prolific D.C. political contributor Jeffrey E. Thompson in March. Although the businessman has not been accused of wrongdoing, the probe has renewed calls for increased disclosure on campaign finance reports and prohibitions on “bundling” among individual networks of far-flung donors and corporations that use multiple limited-liability companies to maximize their donations within the statutory cap on individual contributions.

“Amid criminal convictions and allegations that have undermined public confidence in our electoral system and have led some to make unwarranted and unfounded claims that the more than 600,000 residents of this great city are unable to govern themselves, the mayor and this administration believe legislative campaign-finance reform should be a high probity to restore public trust in our electoral system,” Mr. Nathan told the committee.

Among Mr. Gray’s reforms, proposed legislation would bar lobbyists from bundling contributions from other parties, although they could still make personal donations; ban contributions in the form of money orders that exceed $25; require that all reports to the Office of Campaign Finance to be filed electronically; and require candidates to certify that their committees have made every effort to comply with the law.

He also recommended additional funding for the D.C. Office of Campaign Finance, which is charged with auditing and enforcing laws related to political contributions.

Committee members appeared receptive to the proposal, although they noted the difficulty of reaching a consensus and the vexing task of ferreting out who owns subsidiary companies that donate to particular campaigns.

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