Committee passes campaign finance reform legislation to city council

The Seattle City Council Select Committee on Campaign Finance Reform voted a bill out of committee on Jan. 7 that would prohibit foreign-influenced corporations from contributing to political campaigns and PACs, and another that would increase transparency in political advertising.

Seattle City Council chair Lorena González introduced her Clean Campaign Act suite of ordinances late last year, following an election season where many candidates received massive campaign support from political committees backed by big business.

One ordinance that did not pass out of committee on Tuesday would limit contributions to independent expenditure committees, commonly known as “Super PACs,” to $5,000 a person.

González said in committee that the bill prohibiting foreign-influenced corporations from buying elections was a way to set up a mechanism in Seattle to enforce federal law that already exists barring foreign influence in elections.

“We do not have currently in Seattle a mechanism by which to effectively investigate and enforce whether or not that federal laws are being upheld,” González said. “So really what we are trying to do… is effectively import existing prohibitions in federal law to provide our Seattle Ethics and Elections Commission the tools they need to be able to both understand, investigate and enforce current federal law in our local elections.”

According to the bill, a foreign-influenced corporation is defined by a corporation with a single foreign owner who owns 1 percent or more of a corporation, or two or more foreign owners who own 5 percent or more of a single corporation.

If the bill passes during the Jan. 13 Seattle City Council meeting, foreign-influenced corporations would be barred in Seattle from contributing to campaigns for elected office, making independent expenditures to benefit political campaigns, or contributing to Super PACS.

Under the bill, all corporations contributing to a campaign, making an independent expenditure, or contributing to a Super PAC would have to certify with the SEEC that it is not considered a foreign-influenced corporation .

District 7 Councilmember Andrew Lewis said the bill would take federal law one step further by defining a foreign-influenced company so specifically.

“My understanding is there is still, at the federal level, a loophole… where a PAC that is mostly funded by a company that may be owned by a foreign company can still, under federal law — and it is allowed — have a PAC. This ordinance would close that loophole,” Lewis said.

The second bill that passed committee will also be brought to the Jan. 13 Seattle City Council meeting to be considered for passage. It would define a “Qualified Public Communication” (QPC) as a “paid advertisement intended to influence political decisions,” according to a presentation by city analyst Lish Whitson.

Commercial advertisers would need to maintain records for these paid advertisements for four years after they air. The books of account would need to catalog the advertisement itself, disclose the leaders of the corporations that are placing the QPCs, divulge the rates charged for the advertisements, and detail the subjects of the ad, and the names of candidates, committees and treasures associated with them.

These enhanced transparency measures would be in effect year-round and are not limited to election-related matters.

González said the initial goal was to crack down on election-related matters, but issue-based legislation was deemed to also need more transparency.

“That is a big shift, both in the sense that it would apply to issue-related advocacy and… in it applying year-round are two significant changes in this space,” González said, “in addition to requiring some additional information be retained by the commercial advertisers for purposes of understanding what their activity is to bolster transparency in this, in this space,” Gonzalez said.

The bill capping contributions to independent expenditure committees to $5,000 was not put to a vote, and will need to be discussed further.

One of the key aspects of the bill is the creation of Limited Contributor Committees (LCCs), which after a passed amendment, is defined in the bill as a committee of political contributors that has existed for nine months before each election, which would require contributions from at least 100 persons, which would be limited to less $100 and allow for LCCs to support each other. The legislation was amended on Jan. 7 to increase the cap on how much an LCC can contribute in independent expenditures for a candidate or issue from $5,000 to $10,000.

González did not put this bill up for a vote out of committee because she said she wanted to ensure that it was in the best shape before leaving the committee.

“It is more important to get it right than to get it done,” she said.

There was $4.25 million in independent expenditures made during the 2019 district council races, which accounted for nearly 45 percent of campaign spending, up from 7.8 percent in 2009. It accounted for 22.7 percent of spending in 2017.

The Civic Alliance for a Sound Economy, the Seattle chamber's political action committee, took in $2.66 million in contributions last year to back business-friendly council candidates, with Amazon providing $1.5 million of that total.

District 3 Councilmember Kshama Sawant plans to launch her renewed Tax Amazon campaign during her swearing-in ceremony on Jan. 13. The e-commerce giant and a number of large companies backed a referendum campaign in 2018 that convinced the Seattle City Council to repeal an employee-hours (head) tax that would have affected companies reporting more than $20 million in taxable gross receipts.