On his first day in office Dec. 7, Assemblymember Alex Lee introduced a bill that proposes to ban businesses from donating to any political candidates in the state and opens the door for public financing of election campaigns.
If it passes, AB 20 would fulfill one of the promises Lee — a socialist Democrat from Milpitas and the Legislature’s youngest member at age 25 — made during his campaign. He says the bill would shift the political weight away from special interests like business and toward the average person.
But some political observers question whether the bill, dubbed The Clean Money Act of 2021, would significantly change anything if it passes and suggest it could result in less transparency behind political contributions.
“The very real or perceived influence of big money in politics is detrimental to democracy,” Lee said in an interview Tuesday.
“And coming out still on the heels of an outgoing president who was trying to undermine our democracy, it’s so important that we do everything we can to restore the faith of our electorate,” he said.
Lee’s bill, which got the signatures of Assembly members Ash Kalra of San Jose, Bill Quirk of Hayward and Kevin McCarty of Sacramento as well as state Sen. Ben Allen of Redondo Beach, would amend the Political Reform Act of 1974 to ban any “business entity” from making a direct contribution to a candidate. It wouldn’t ban such contributions from unions or trade associations.
Lee pledged not to take any corporate money during his campaign for office, but did from from dozens of unions and trade associations.
AB 20 would require a two-thirds vote in both the Assembly and Senate to pass. A similar ban is already in effect for candidates at the federal level and in 22 states, Lee said.
Because of the landmark U.S. Supreme Court decision in Citizens United v. FEC in 2010, however, businesses still would be allowed to contribute unlimited amounts of money to outside groups such as political action committees if AB 20 passes.
Those PACs can make large independent expenditures to influence elections, such as the hundreds of millions spent by Uber, Lyft, and DoorDash to back Proposition 22, or the millions 49ers owner Jed York poured into the Santa Clara City Council race.
“What this bill is doing is making sure we can close as many windows as we can. It’s kind of like playing a game of whack-a-mole with corporate special interest money,” Lee said.
But Jessica Levinson, a Loyola Law School professor who studies money in politics, said Lee should be cautious about cutting off direct contributions, which can be more easily tracked by voters through campaign finance filings than PAC money.
“One window, we know we can look through it, and the other window, it might be filled with shattered glass and totally opaque, and frankly there’s no chance in hell we’ll ever be able to see through it any time soon,” she said in an interview Tuesday.
“We know, unfortunately, time and time again, if you limit the contributions, it doesn’t just make the money disappear, it goes into another, typically less transparent place, like an independent expenditure,” she said.
“This isn’t a matter of something’s better than nothing. Something actually might be worse than nothing in this particular situation,” Levinson said.
Matilde Bombardini, an associate professor of business and public policy at UC Berkeley’s Haas School of Business, said the bill could send a message to the public that lawmakers don’t want businesses to “have an excessive weight in the decisions” they make.
“That’s a good message to send on one hand, but on the other hand, from a practical point of view, it remains to be seen how much this is going to actually discourage business involvement in campaign financing,” Bombardini said.
“Just based on what we have seen since the 1970s in federal campaign finance, that has not removed businesses from being present,” she added.
AB 20 also pushes the Legislature to create a public financing system for elections in California to help candidates run for office without the backing of wealthy donors.
“Public financing has a transformative potential when it comes to building a political system that lifts up regular people and prioritizes the voice of diverse communities instead of special interests,” said Jonathan Mehta Stein, executive director of California Common Cause, a nonprofit that supports taking money out of politics.
Stein said in typical elections, politicians focus mostly on “high value targets,” often ignoring people who don’t vote or who can’t afford to donate to a campaign.
Seattle, for instance, provides each household with “democracy vouchers” worth $100 to donate to candidates and causes of their choice, increasing their engagement and pushing candidates to rethink whose door is worth knocking.
Lee’s bill doesn’t currently explain how the process would work in California.
Levinson is skeptical.
“Public financing in an ideal world makes an enormous amount of sense, but we don’t live in that world. We live in a world of unlimited independent expenditures, and it’s not clear to me that in reality, it’s good to use our scarcest resource, which is taxpayer dollars, to fund campaigns when private money is still so available,” she said.
Even though California is run by Democrats, Levinson suggested the bill’s chances aren’t good.
“People who won under the current (campaign finance) system tend not to love changing the current system, so it’s not always about party affiliation,” she said.
Lee acknowledged it will be difficult to get the needed support for a “political culture change,” but said he’s optimistic.
