On Friday May 20, 2016, Professor Chapman Rackaway of Fort Hays State University briefed members and guests of the Wichita Pachyderm Club on the August primary elections. Two surprises: Will Jerry Moran have a Republican challenger, and who does Dr. Rackaway believe Donald Trump should select for a running mate? This is an audio presentation. Accompanying visual aids are here.
Some citizen activists and Wichita city council members believe that a single $500 campaign contribution from a corporation has a corrupting influence. But stacking dozens of the same $500 contributions from executives and spouses of the same corporation? Not a problem.
On December 1, 2015 the Wichita City Council considered an ordinance regarding campaign finance for city elections. A Wichita Eagle article on the topic started with: “A proposed change in city ordinance would allow corporations, labor unions and political action committees to have a greater influence on Wichita politics. For years, city elections have remained insulated from the power of those groups, unlike national and state elections, because Wichita ordinance specifically forbids them from contributing to local campaigns.” 1
The city believed the proposed action was necessary to comply with recent court rulings. Under the proposed ordinance — which was passed by the council — corporations, labor unions, and political action committees would be able to make a single campaign contribution per election cycle of up to $500, the same limit as for individuals.
During the council meeting, citizens testified as to the terrible consequences should the council pass this ordinance. Here are a few excerpts taken from the minutes of the meeting:
“Citizens United has unleashed Frankenstein monsters purchasing our government with their pocket money.”
“Stated corruption and conflicts of interest have become institutionalized and what City legal counsel suggests will sell the Council and the City of Wichita to the highest bidder.”
“Stated according to a lengthy report last week, by the Pew Research Center, across party lines people are distrustful and concerned about big money in politics.”
“Stated big money does not donate, it invests and buys democracy. Stated she is asking the City Council to keep big money out of the City Council elections.”
“Allowing big money into City elections is a concern.”
“Stated the City has been independent and has a freedom from influence that the state and the nation do not enjoy. Stated you will then be under the thumb of people who want to control you. which is scary to those of them who are highly opposed to this situation and hopes that the Council will think of them and how this vote will benefit them.”
“Stated the League [of Women Voters] has studied campaign finance over the years at all three levels. Stated they are currently involved in the study of money and politics and their position currently reads that they want to improve the methods of financing political campaigns in order to ensure the public’s right to know and combat corruption and undue influence, which is their biggest concern.”
In its reporting after the meeting, the Eagle reported more concern: 2
But those who oppose the measure said they were concerned about opening up local elections to party-affiliated groups like PACs and about transparency since PACs do not have to report their individual donors.
“Individuals should decide elections, not corporations,” Frye said.
Several members of the public spoke against the changes.
“People in the shadows are going to be pulling your strings,” said Russ Pataki.
“It’s very worrisome what big money has done to state and national politics. The city has been independent (of that),” said Lynn Stephan to the council before the vote. “You have a freedom from influence the state and nation don’t enjoy.”
So, people are concerned about the corrupting influence of political campaign donations from corporations and political action committees. Citizens — and the Wichita Eagle — believe that currently the city council is free from this influence.
But the reality of city council campaign financing is different.
Stacked campaign contributions received by James Clendenin from parties associated with Key Construction. Click for larger version.In my testimony at the December 1 meeting, I explained that there are a few corporations that stack campaign contributions in a way that circumvents prohibitions. Although I did not mention it at the meeting, sometimes campaign finance reporting laws allowed this to happen without disclosure until after relevant action had happened. To illustrate, here is a timeline of events involving just one company and its campaign contributions.
2008 and 2009
Executives of Key Construction and their spouses make six contributions to the Lavonta Williams campaign, totaling $3,000.
2010 and 2011
Executives of Key Construction and their spouses make eight contributions to the Carl Brewer campaign, totaling $4,000. Brewer was Wichita mayor running for re-election in 2011.
Executives of Key Construction and their spouses make eight contributions to the Jeff Longwell campaign, totaling $4,000.
2012
The City of Wichita is preparing to build a new airport terminal with a cost of around $100 million. Key Construction and Dondlinger and Sons Construction are two bidders. The contract is controversial. Dondlinger submitted a lower bid than Key, but it was alleged that Dondlinger’s bid did not meet certain requirements.
January 24, 2012
Executives of Key Construction and their spouses make six contributions to the James Clendenin campaign, totaling $3,000.
Stacked campaign contributions to Lavonta Williams from Key Construction associates. Click for larger version.April 2, 2012
On this day and the next, executives of Key Construction and their spouses make eight contributions to the Jeff Longwell campaign for Sedgwick County Commission, totaling $4,000. At the time, Longwell was a Wichita city council member.
April 17, 2012
On this day and the next, executives of Key Construction and their spouses make eight contributions to the Lavonta Williams campaign, totaling $4,000.
July 16, 2012
An executive of a Michigan construction company and his wife contribute $1,000 to Longwell’s campaign for county commission. The company, Walbridge, is partnering with Wichita-based Key Construction to bid on the Wichita airport terminal contract.3
July 17, 2012
The Wichita city council votes in favor of Key Construction and Walbridge on a dispute over the airport terminal contract, adding over $2 million to its cost. Brewer, Longwell, Williams, and Clendenin participated in the meeting and voted. City documents state the job of the council this day was to determine whether the staff who made the decision in favor of Key Construction “abused their discretion or improperly applied the law.”4
July 20, 2012
An additional $2,250 in contributions from Walbridge executives to the Jeff Longwell campaign for Sedgwick County Commission campaign is reported.
January 2013
Williams and Clendenin file campaign finance reports for the calendar year 2012. This is the first opportunity to learn of the campaign contributions from Key Construction executives and their spouses during 2012. For Williams, the Key Construction-related contributions were the only contributions received for the year. Clendenin received contributions from Key Construction-related individuals and parties associated with one other company during the year.
Is there a pattern? Yes. Key Construction uses its executives and their spouses to stack individual contributions, thereby bypassing the prohibition on campaign contributions from corporations. This has been going on for some time. It is exactly the type of corrupting influence that citizens are worried about. It has been taking place right under their eyes, if they knew how or cared to look. And Key Construction is not the only company to engage in this practice.
Just to summarize: The Wichita city council was charged to decide whether city officials had “abused their discretion or improperly applied the law.” That sounds almost like a judicial responsibility. How much confidence should we have in the justice of a decision if a majority of the judges have taken multiple campaign contributions from executives (and their spouses) of one of the parties?
In some ways, it is understandable that citizens might not be aware of this campaign contribution stacking. The campaign finance reports that council members file don’t contain the name of contributors’ employers. It takes a bit of investigation to uncover the linkage between contributors and the corporations that employ them. For citizens, that might be considered beyond the call of duty. But we should expect better from organizations like the League of Women Voters.
Certainly there is no excuse for the Wichita Eagle to miss or avoid things like this. Even worse, it is disgraceful that the Eagle would deny the problem, as it did in its November 23 article quoted above.
In summary, some citizen activists — most council members, too — believe that a single $500 campaign contribution from a corporation has a corrupting influence. But stacking dozens of the same $500 contributions from executives and spouses of the same corporation? Not a problem.
Political campaign contributions are a form of speech and should not be regulated. What we need are so-called pay-to-play laws, which regulate the linkage between campaign contributions and council member participation in matters that benefit donors.5
Either that, or we need council members with sufficient character to recognize when they should refrain from voting on a matter.
An op-ed written under the banner of a non-profit organization appears to violate the ban on electioneering.
In a recent Wichita Eagle op-ed, former state budget director and senior fellow at the Kansas Center for Economic Growth Duane Goosen offered some wise advice to Kansas voters: “Before voting, check out legislative candidates carefully.”1
But he then follows immediately with this: “If a candidate supported Brownback’s fiscal experiment and wants to stay the course, being a financially literate voter requires marking your ballot for somebody else.”
This seems to cross a line, that line being electioneering by non-profit organizations. KCEG itself is not a recognized non-profit organization. Instead, it is a side project of Kansas Action for Children, Inc., which is a section 501(c)(3) tax-exempt organization.
In exchange for their tax exempt status, these organizations face certain restrictions. In particular, the Internal Revenue Service says these organizations are “absolutely prohibited from directly or indirectly participating in, or intervening in, any political campaign on behalf of (or in opposition to) any candidate for elective public office.”2
The IRS says voter education activities conducted in a non-partisan manner are allowed. But: “On the other hand, voter education or registration activities with evidence of bias that (a) would favor one candidate over another; (b) oppose a candidate in some manner; or (c) have the effect of favoring a candidate or group of candidates, will constitute prohibited participation or intervention.”3
The candidates Goossen recommends voting against, while not named in his op-ed, are a clearly-defined set. Their names appear in news stories, editorials, the Journal of the House of Representatives and other places. This is an example of “oppose a candidate in some manner,” and is where Goossen appears to cross the line from voter education to electioneering.
In this episode of WichitaLiberty.TV: Andy Hooser of KQAM’s The Voice of Reason joins Bob Weeks to discuss presidential and Kansas politics. View below, or click here to view at YouTube. Episode 116, broadcast April 17, 2016.
KNEA says: “Jeff Melcher, the man who has fought to completely eliminate collective bargaining and other rights for teachers continued his war today with his bill intended to end teacher representation.”
The bill simply mandates elections every three years on whether teachers are satisfied with their current representation, which is almost always KNEA or an affiliate. It’s not surprising the union is opposed to this. Accountability, after all.
KNEA says: “Make no mistake, the intent of this bill is to end professional representation for teachers and leave them as at-will indentured labor.” Indentured labor!Government employees as indentured labor! By whom are teachers indentured? Other government employees (principals and superintendents)? What, do principals and superintendents get masters and doctors degrees in learning how to indenture the teachers that work for them? Why do professionals like these need a labor union to manage their relationship? Who would want to enter a profession where a labor union is needed to protect them from their bosses (or oppressors, as the teachers union would lead us to believe)?
KNEA says: “In a very fundamental way, this war on teachers and schools is about selling off public schools to the highest corporate bidder and making a quality education a privilege not a right.”
Here we see bashing of capitalism. You see, the teachers union believes that education can’t be run by the private sector. Never mind that charter schools and for-profit schools are successful in many areas of the country — but their teachers are not often union members. Second, with school choice programs the state still pays for students to attend private and charter schools. All that changes is parents have the privilege of choice for the children.
KNEA says: “Would force the teachers to pay for state mandated elections.”
No, the union pays for the elections.
In 2014 the City of Wichita recommended voters spend $250 million on a new water supply. But since voters rejected the tax to support that spending, the cost of providing adequate water has dropped, and dropped a lot.
The events surrounding the need for a new water supply is a troubling episode in the history of Wichita government. During the prelude to the November 2014 election, citizens were presented with a gloomy scenario that could be fixed only with a sales tax and the spending of $250 million. After voters said no to that, new plans emerged that are much less expensive. Lily Tomlin once said “No matter how cynical you become, it’s never enough to keep up.” This episode shows Wichita city leaders — both in and out of government — reinforcing the truth of Tomlin’s observation.
On December 1, 2015, the Wichita City Council held a workshop on the topic “Phased Approach for New Water Supply.”1 Alan King, Director of Public Works and Utilities, was the presenter. King emphasized that the impetus for a new water supply was for drought protection: “We presently have enough water with our current water resources to last us through our planning period of 2060, without drought.”
He continued: “When we come and talk to you about additional water resources, it is really only for one purpose, and that is drought protection. If there was no drought, we have no need. The water resources that we come in and are talking to you about, the only value they have for us is in drought protection.”
But a city document leading up to the sales tax election presented a different scenario. It threatened a lack of water for even residential use: “Building a new supply, along with conservation efforts, is the lowest cost option for providing sufficient water through 2060. Significant conservation will be needed if the current supplies are the sole sources of water for the coming decades; sever [sic] conservation requirements could be harmful to local businesses and quality of life. Adding a new water supply would provide enough water for future growth for the community’s residential, commercial, and industrial base.”2
This is an important point. We have sufficient water except for a period of extended drought. Even in that case, there is sufficient water for residential, commercial, and industrial use. The purpose of a new water supply is to avoid restrictions on outdoor watering, and in the most extreme drought, a savings of 15 percent of indoor water usage.
In his December presentation to the council, King presented several phases that the city can take. The first three have no cost, and King said these are underway.
After that, the city can spend $23 million for new wells and rehabilitation of existing wells at the ASR site.
After that, there is the possibility of “operational credits,” which involve a change to state regulations. If the state approves, the city can receive credits for sending ASR water directly to Wichita instead of recharging it in the Equus Beds. If not approved, the city could spend $47.2 million for new recharge wells in 2022. If these wells are built, the cost rises to $70.2 million. (On January 22 King made a presentation to the Equus-Walnut Regional Advisory Committee on this topic.3)
Phased Approach for New Water Supply. Click for larger.There is also the matter of the parallel pipeline. The existing pipeline from the Equus Beds and ASR to the city’s downtown water plant is old and won’t support higher rates of water transmission. The proposed parallel pipeline provides not only redundancy of a major part of our water infrastructure, but also increased capacity. The cost of this, estimated in 2014 at $86 million, was included in the $250 million price tag for ASR expansion. If the parallel pipeline cost is added to the previous phase costs, the cost rises to either $109 million or $156.2 million, depending on the fate of the operational credits regulation reform.
Either way, the cost is much less than the $250 million the city asked voters to consider in November 2014. And I think I’m being charitable of motives when I say “consider.” The clear and revealed preference of the city council and the city’s political class was passage of the sales tax, meaning the city would spend $250 million to achieve something the city now says can be provided for $109 million or $156.2 million. (Well, everyone except then-city council member and now-mayor Jeff Longwell, but his vote against placing the sales tax on the ballot was a naked political calculation.)
In information the city presented to voters in the run up to the November 2014 election, the city promised large water bill increases if the sales tax vote failed, writing: “If a new water supply is funded only through water rate increases, the capital cost portion of the rate will increase an estimated 24%. This is in addition to anticipated annual rate increases.”4
Possible water bill increases. Click for larger.King’s 2015 presentation to the council showed increases of nine percent for residential, commercial, and industrial customers.5
Citizens ought to wonder what lessons may be learned from this. Furthermore, I don’t believe there has been any coverage of this in the city’s mainstream news media. That is a problem, too. For more on this problem, see Wichita Eagle, where are you?
In this episode of WichitaLiberty.TV: Looking back at the Kansas presidential caucus and should it matter who becomes president. A new regulatory regime in Wichita probably won’t help its stated purpose, but will be harmful. Then, more about regulation. View below, or click here to view at YouTube. Episode 113, broadcast March 13, 2016.
On March 4, 2016 the Wichita Pachyderm Club featured representatives of Republican presidential campaigns. Phil Ruffin spoke on behalf of Donald Trump, Kansas State Treasurer Ron Estes for Marco Rubio, and Oklahoma Congressman Jim Bridenstine for Ted Cruz. Other campaigns did not respond to requests. This is an audio presentation.
In this episode of WichitaLiberty.TV: Radio show hosts Joseph Ashby and Andy Hooser join Bob Weeks to discuss Super Tuesday results and the contests going forward. View below, or click here to view at YouTube. Episode 112, broadcast March 6, 2016.
On Friday May 20, 2016, Professor Chapman Rackaway of Fort Hays State University briefed members and guests of the Wichita Pachyderm Club on the August primary elections. Two surprises: Will Jerry Moran have a Republican challenger, and who does Dr. Rackaway believe Donald Trump should select for a running mate? This is an audio presentation. Accompanying visual aids are here.
