Editor’s Note: This story was provided by the Center for Public Integrity as part of the Center’s State Integrity Investigation.
By Chad Selweski
In November 2013, Michigan lawmakers revealed the lengths to which they’d go to maintain the state’s secret system of funding election campaign activities.
A Senate committee was meeting in the Capitol to discuss and approve a bill that would double the maximum amount that individuals could contribute to legislative, executive and judicial candidates. The senators were told that the higher limits were unnecessary because 99 percent of Michiganians never give the maximum amount.
Then something puzzling happened. In a rare move, the legislators called a recess midway through the session. A lobbyist in the audience who was friendly with the committee chairman, it was later learned, received an urgent phone call warning that Secretary of State Ruth Johnson had just announced new administrative rules requiring the disclosure of campaign donors in all circumstances.
When the committee reconvened, an amendment was hastily attached to the legislation, which would override Johnson’s decision and preserve Michigan’s “dark money” campaign practices. House and Senate approval of the bill soon followed, as did Gov. Rick Snyder’s signature.
“We don’t have full public disclosure and it’s not because good people failed to do the right thing, it’s because those bastards did the wrong thing. It was a hostile action,” said Rich Robinson, the state’s top campaign watchdog at the nonpartisan Michigan Campaign Finance Network. “And the fruits of those actions were tens of millions of dollars of undisclosed campaign cash.”
The shadowy aspects of Michigan’s money-driven politics serves as a key reason why the state ranks last among the 50 states with a grade of F and a numerical score of 50 out of 100 from the State Integrity Investigation, a data-driven assessment of state government transparency and accountability by the Center for Public Integrity and Global Integrity. Michigan received an F in 10 of the 13 categories of government operations that were examined.
The first State Integrity report, released in 2012, gave Michigan a similar score – 58, an F, though the state ranked 44th that time. The two scores are not directly comparable, however, due to changes made to improve and update the project and its methodology.
Stealth Campaigns Standard Procedure
A significant factor in Michigan’s 2015 ranking is its lack of effective disclosure rules for officials in nearly all facets of state government. Conflicts of interest and potential public corruption remain buried in an honor system with no honor.
Thanks to loopholes created by the legislature, big spenders representing special interests can dramatically influence an election without leaving a trace.
Campaigns increasingly rely upon shadow groups that independently pay for so-called issue ads. Those ads praise or demonize a candidate in a manner that’s virtually indistinguishable from a traditional TV spot. But the commercials avoid the magic words — “vote for” or “vote against” — that would require disclosure of the money behind the sales pitch.
The 2013 doubling of Michigan contribution limits set the maximum gift to a gubernatorial candidate at $6,800 for an individual, $68,000 for political action committees and $136,000 for state party central committees. But that’s just a starting point in this multi-layered political parlor game. Unregulated funding for those dominant issues ads derives largely from PACs, super PACs and political party groups that can accept unlimited amounts of campaign cash from across the nation.
At the same time, the office of the secretary of state, Michigan’s top election official, operates as a record-keeping agency, not an enforcement unit. It enjoys no subpoena powers and generally does not initiate investigations.
Former Michigan Democratic Party chairman Mark Brewer recently concluded that Michigan’s political system is “the Wild West … with no sheriff in town.”
Dark Money Means Justice Denied
High-rollers in many states exert undue influence over legislation and executive orders. But in Michigan, campaign cash also taints the judicial system.
The independent Michigan Campaign Finance Network reported that since 2000, state Supreme Court campaigns have been awash in nearly $40 million worth of television political advertisements, with the donors kept off the books. A similarly veiled process dominates campaigns for attorney general. In a state where candidates for the judiciary face virtually no professional standards or performance evaluations, critics say the judges, particularly Supreme Court justices, are merely “politicians in black robes.”
The State Bar of Michigan has engaged in attempts to fix this system by demanding full disclosure, to no avail. Jules Olsman, an attorney who serves on the State Bar board, said his clients routinely question the fairness of the state’s judicial process given the steady stream of campaign ads at election time.
“If the judge hearing my case received $10,000 from opposing counsel or their clients, I should have a right to know that,” Olsman said. “At this point, it’s more than a suspicion. It happens all the time.”
Weak or Non-Existent Disclosure Laws
The dark money that dominates Michigan politics takes on another definition in the daily workings of state courts, the legislature, the governor’s office and cabinet members. That’s because the state doesn’t require officials to disclose their financial holdings and outside income.
A judge may hear a case involving a lawsuit aimed at a corporation in which he has a financial interest, but the attorneys involved – and the jury – would have no way of knowing. Legislators can influence the outcome of bills that will directly affect businesses back home in which they serve as silent partners.
Recusals remain rare in Michigan courts, and they are even rarer in the state House and Senate. When apparent conflicts of interest arise due to a lawmaker’s occupation, it’s nearly unheard of for a fellow legislator to publicly call for an abstention.
In Michigan, the cozy relationships between well-heeled lobbyists and pliable lawmakers also remain largely in the dark. Under the weak disclosure rules, lawmakers can accept nominal gifts. But it is the duty of the lobbyist, not the lawmaker, to report these gifts.
In addition, state law requires those in the lobbying business to report their activities in such a vague format that the public cannot determine who is influencing whom. Lobbyists do not have to report which legislator or executive branch official they wined and dined unless they spent more than $59 in a month, or $375 in the calendar year, on that individual. Advocates of greater transparency say the top recipients of a lobbyist’s largesse benefit from considerably more than what’s disclosed.
Worse yet, lobbying firms also do not reveal which issues and legislation they advocated for or against.
Robert LaBrant, a veteran business lobbyist, concedes that the disclosure reports essentially “have no meaning.”
Details of Scandal Kept Secret
Another example of the lack of transparency in Michigan government is that the Legislature long ago exempted itself and the governor’s office from the state Freedom of Information Act.
When a sex scandal involving two House members emerged in August, including an elaborate cover-up that allegedly involved misuse of tax dollars, an internal investigation concluded the couple had engaged in misconduct. A public records request by The Detroit News to obtain the investigative report was denied. Instead, the House speaker chose a private law firm to write a 7 ½-page summary of the findings for public consumption.
This lack of openness permeates all levels of state government.
The state lacks a strong “revolving door” law that prevents elected officials and key executive branch administrators from going directly out of a government post and into a job at a lobbying firm. The only restriction in the books prohibits lawmakers from lobbying immediately if they resign before the end of their terms in office.
Cronyism and favoritism are essentially accepted practices in the Legislature, the judiciary and the governor’s office, as all staffers are political appointees – at-will employees who can be hired or fired for no reason at all. Top officials at each state department also are afforded no civil service protections.
The state Ethics Board serves largely as an obscure, toothless agency that does not investigate wrongdoing and, when it does find a violation, merely recommends a punishment to the guilty employee’s department.
State Sen. Steve Bieda has introduced bills since 2003 seeking mandates for personal asset disclosures, campaign finance transparency and the reporting of all gifts. He never came close to success.
“Michigan is an embarrassing outlier on openness in government,” Bieda said. “We need to step up to the plate.”
This story is from the Center for Public Integrity, a nonprofit, nonpartisan investigative news organization in Washington, D.C. It is part of State Integrity 2015. How do each state’s laws and practices deter corruption, promote transparency and enforce accountability? Click here to read more stories in this investigation.