Patrick Madden and Craig Holman discuss the pay-to-play in DC Politics

October 2015

by Barbara Yeomans

At our Fall Luncheon on October 3, 2015, league members and guests were treated to lively presentations by Patrick Madden, award-winning Investigative Reporter for WAMU, and Dr. Craig Holman, Public Citizen’s lobbyist on Campaign Finance and Government Ethics.  They focused on the “pay-to-play” culture in DC.

Patrick Madden, WAMU Investigative Reporter

Patrick Madden, WAMU Investigative Reporter

Mr. Madden has covered City Hall for WAMU since 2006.  He cited three “rules”:

  • candidates need to raise money to win,
  • DC lawmakers have unprecedented power, and
  • special interests will always find a way into the politics. 

Madden noted that it is rare for an incumbent to lose a race in the District. 

The District has set comparatively low limits for individual donors ($500 for a Councilmember race and $2,000 for a Mayoral candidate).  However, corporations get around the limits by bundling with Limited Liability Corporations 

Companies have great interest in Council races because of its power over city contracts.  The District is unique in that the Council must approve contracts over $1 million after agencies negotiate them. Note that the Mayor and Council govern at the city, county and state levels, and there are just 13 Council members. Major contracts are negotiated in a range of areas such as development, street paving, administering Medicaid, and utilities. There is keen business interest in getting, or blocking, awards. Officials do not believe they are being unduly influenced. Contractors who donate have stated that they simply want a chance to be heard and to have help untangling red tape.  

Mr. Madden has undertaken several detailed projects following the money and the creative ways campaign funds are raised and has developed an extensive database tracking campaign contributions and contract awards. He noted companies often use a “Friends and Family Plan” to bundle contributions. He found that a number of affiliated companies were coordinating contributions, but in each case they all had the same address and were owned by one company. 

Madden’s detailed analysis showed that the years in which developers get breaks coincide with their highest donations. He found $1.7 billion in tax breaks for 133 companies in the past 10 years, and more than one third of those breaks went to 10 developers. 

The District Council passed “pay-to-pay” legislation prohibiting bundling, designed to take effect after the 2015 Mayoral/Council elections. There are other ways of working deals.  Madden recently reported on a new Super PAC created by Mayor Bowser’s supporters. Under the law they can raise unlimited dollars because this is a non-election year.  

Craig Holman, lobbyist on Campaign Finance and Government Ethics, Public Citizen

Craig Holman, lobbyist on Campaign Finance and Government Ethics, Public Citizen

Dr. Holman echoed Madden’s concerns about the harms caused by corruption, and he praised Madden’s investigations, saying that no one else has put together a database tracking contributions and contracting. He called pay-to-play the most pernicious corruption at the state and local levels.  It contributes to waste of resources as awards can go to unqualified or incompetent contractors; it undermines the public’s confidence in government; and it can cause legitimate businesses to think twice about competing.  It can also derail promising political careers. 

Holman has written several strong reform bills in other jurisdictions. In New Jersey, then Governor McGreavy did not support the bill, and it lost by one vote in the legislature.  Later seeking to ameliorate a scandal, he implemented it by executive order. Among reforms Holman advocates are strict contribution limits for corporations of $250/2 years, a total ban from negotiation to terms of a contract, application to both candidates and parties, and definition of a business contributor to include principals, officials, and families of those who own 15% or more of the company. He also calls for disclosure subject to penalties, whereby a contractor self-certifies its compliance with DC’s new campaign finance legislation.

Dr. Holman has examined models around the country of strong “pay-to-pay” legislation, including those of 15 states, the federal Securities Exchange Commission, and the city of Philadelphia.  DC had a project to develop such legislation.  Holman worked with then-Attorney General Nathan and drafted the strongest “pay-to-pay” legislation in the country.   During then-Mayor Gray’s tenure, both the Administration and relevant District Council committee lost interest.  Although Tommy Wells introduced the legislation, it was defeated 12-1. Mr. Holman has the draft “on the ready.”  Following the presentations, LWVDC 1st Vice President Alex Dickson led a question- and-answer period with the audience who were very much engaged.