Nagle on Withdrawal As Cure for Campaign Contributions

It was pointed out to me by Justin Levitt, a professor at Loyola Law School Los Angeles, that back in 2000 John Copeland Nagle, a professor at Notre Dame Law School, wrote a law review article suggesting what I call the Westminster Approach to campaign contributions from those seeking benefits from the recipient official's government. The article, which focuses on Congress, is entitled "The Recusal Alternative to Campaign Finance Legislation" (37 Harv. J. on Legis. 69 (2000)).

The Westminster Approach, named after a 1996 ethics law in Westminster, CO, requires an official who has received a gift, including a campaign contribution, above a certain dollar amount to withdraw from participation in a matter involving the contributor. This means that there is no contribution limit, but if a contributor goes beyond the gift limit, the recipient official is not in a position to help the contributor. Therefore, there is nothing to be gained (1) by making large contributions in the hope that they will benefit the contributor, or (2) by requiring the payment of large contributions in order to play.

Here is how Nagle put his proposal:

[A]llow contributors to give whatever they want to political candidates, but require successful candidates to recuse themselves from voting on or participating in any legislation or other matters that directly affect those contributors.

He argued that this goes more directly to the problem with large contributions:  influence and the appearance of influence. To that I would add pay to play, a term which surprisingly does not appear in this article.

Nagle explained the benefits of this approach, which are essentially to protect contributors' free speech rights and everyone's freedom as individuals (only the freedom of officials as officials is limited):

Corruption and its appearance are avoided, the First Amendment is protected, and contributors and candidates
are free to decide what to do.

Equally clear is Nagle's explanation of the basis for this approach:

Influence and money are not identical, and one can be regulated without imperiling the other.

Past Gifts as Pre-Existing Conflicts
The most interesting aspect of Nagle's article is that it presents past gifts as equivalent to pre-existing conflicts of interest. In ethics codes, withdrawal from participation cures a pre-existing conflict situation, but not a gift. Gifts are instead prohibited, so that no new conflict situation is created or old situation made worse. And campaign contributions are usually excepted from the gift prohibition, due to First Amendment free speech rights (however, some states and local governments (e.g., Connecticut and Philadelphia) do prohibit campaign contributions from contractors and lobbyists, due to the appearance of corruption they create).

What Nagle's solution does is focus not on the prohibition of new gifts (as gift provisions do) but rather on the equivalence of past gifts and pre-existing conflicts. A past gift creates a relationship that, like a business or personal relationship, is sufficiently special to require withdrawal. Since the cure for the conflict created by this relationship is withdrawal rather than prohibition, there is no free speech issue (especially after the Carrigan decision put this to rest, at least with respect to voting) and, therefore, no need to except campaign contributions. Past gifts (including ones made in the hallway before a public meeting, whether a present for an official's spouse or a campaign contribution) can be cured by withdrawal from any matter involving the giver.

Influencing an Official's Selection
Nagle made an interesting observation that involves the difference between gifts and campaign contributions. Gifts, he said, are intended to influence an official's actions, while campaign contributions are intended to influence the selection of the individual who will have the authority to take action. He analogized campaign contributions to gifts made to an official with the intent to get the official to appoint to an important position an individual the contributor believes would give him a sympathetic ear or push the contributor's goals himself.

Such a gift would be prohibited, but a campaign contribution is not. Therefore, the usual solutions are to limit such contributions, so they are less likely to be seen as a bribe, either directly or by means of a public campaign financing program. Nagle's solution provides a third alternative, which unfortunately has scarcely been experimented with.

How Contributors and Candidates Would Respond to the Nagle Approach
Nagle's speculation as to how his approach would affect contributors and candidates is complex and applied only to Congress, so I will put it in my own words, with changes that make the approach more relevant to a local legislature, and with the addition of some of my own speculations.

One possibility is that the contributor would give sizeable contributions to numerous council members, so that there would not be a quorum left to decide the issue. In this situation, the Rule of Necessity would come into play, and all the council members would be permitted to vote. But if this were to keep happening, it would create such a serious appearance of impropriety that council members would either have to refuse contributions from interested parties, or there would be strong support for a law banning such contributions.

Another possibility is that a council member might accept sizeable contributions from numerous interested parties, and withdraw from participation in numerous matters. This would be seen as a failure to represent constituents, and it would, therefore, be unlikely that the council member would be re-elected. This would make council members reject such contributions.

On the other hand, if the council member were to accept no sizeable contributions from interested parties, he may find it difficult to fund a successful campaign. If their fundraising were seriously hampered in this way, council members would be more likely to support a public campaign financing program. In fact, if a council were to consider putting Nagle's approach into practice, the discussion of its ramifications might lead the council to embrace public financing instead. But this is a solution that Nagle opposed.

Elsewhere, Nagle made a valuable observation regarding the effects of his approach:  "If contributions dried up once legislators could no longer act on behalf of a contributor, that would suggest that the purpose of contributions was to influence the legislator all along. But if contributions continued apace, then the hypothesis that contributions are designed to influence a legislator would be hard to sustain." ("Corruption, Pollution and Politics", 110 Yale Law Journal 293, 312 (2000))

Under the Nagle approach, candidates would have to be very careful about whom they accept sizeable contributions from. If a candidate opposed a big riverfront development, she would have to be careful to return sizeable contributions not only from interested parties who shares her opposition, but also from interested parties who supportedthe development and who might, therefore, try to nullify her vote by sending her a sizeable contribution. Such a contribution would be a more worthwhile investment for the interested party than, under normal circumstances, a contribution to someone who may support the development.

Council staff would have to draw up as complete a list as possible of those individuals and entities who are or may be involved in upcoming matters before the council. But no such list could be complete. Therefore, the fear that one might unknowingly accept a contribution that requires withdrawal may cause officials to either limit the size of the contributions they accept from anyone, or to embrace public financing. On the other hand, a strategy of stealth contributions could very well backfire on the interested parties who employ it, making it impossible for their supporters to continue their support in the face of public disgust. This would likely put an end to this strategy.

There is a tendency to see the Nagle/Westminster approach as an end in itself. However, as shown above, considering or taking this approach may not stop there. Its implications and ramifications may lead to campaign finance reform, including public campaign financing, at least if state law clearly allows a local government to pass campaign finance laws (in some states, the prospect of expensive litigation, or simply uncertainty, can keep local governments from passing such laws).

Some More Points About the Nagle Approach
Nagle points out that, as the law stands now, campaign contributions are considered bribes if evidence can be shown of a quid pro quo. Therefore, in some cases, requiring withdrawal would actually protect the recipient of a contribution from an interested party from being the object of a criminal action.

Nagle discusses the situation involving elected judges. At that time, no court had found that a judge has to recuse himself from a case involving a campaign supporter. Since then, the U.S. Supreme Court, in Caperton v. A. T. Massey Coal Co, 556 U.S. 868 (2009), has held that the Due Process clause of the Fourteenth Amendment requires a judge to recuse himself not only when actual bias has been demonstrated or when the judge has an economic interest in the outcome of the case, but also when "extreme facts" create a "probability of bias." In this case, the extreme fact was a huge independent expenditure from the owner of A. T. Massey Coal, to support the candidacy of one of the Supreme Court judges that decided the case.

Contributors Whose Benefits Would Be Non-Financial
One of the most unusual things Nagle did was treat the financial and non-financial benefits of a campaign contributor the same. To him, it didn't matter whether the contributor is a company that is seeking a permit or an environmental organization opposed to the granting of the permit. Each of them has an interest in the matter and should be treated the same.

When I refer to non-financial benefits, I do not include the benefit of winning a matter on the basis of one's beliefs. Conflicts of interest only refer to special benefits. Preventing a development is no more beneficial to members of an environmental organization than to the community as a whole. This is not, however, true of the members of a neighborhood association or of a business association, if those members' businesses would be likely to specially benefit from (or be harmed by) the development. At the local level, rather than at the federal level, which is the focus of Nagle's article, far more large contributions are made by those with special interests than by those with ideological interests.

One could argue that the environmental organization would be seen as trying to influence the vote in the same way as the developer or the neighborhood or business association. But this attempt to influence is not a matter of self-interest. There is no appearance of seeking to influence in order to get something personal. There is also no possibility of pay to play. Giving money to support a candidate with similar views, or trying to influence one who is on the fence, is what politics is supposed to be about.

Why Contributions Should Not Be Unlimited, Even Under the Nagle Approach
One way in which I disagree with Nagle is that I believe that the Westminster/Nagle approach should complement rather than replace contribution limits. A policy-oriented organization or individual with strong feelings about a particular policy should be allowed to make sizeable contributions to candidates it supports or that it wants to pay attention to its arguments. But they should not be allowed to make unlimited contributions, so that either the supporters of one point of view dominate an election or, on the other hand, so that the election is turned into a disproportionate battle that crowds out other issues and voices. This is not a conflict of interest issue and, therefore, has nothing to do with the goals of the Westminster/Nagle approach.

Even in a jurisdiction that takes Nagle's approach, contribution limits are still valuable, although they need not be quite so low. And if officials choose public campaign financing, with voluntary contribution limits (some programs involve few contributions at all) and expenditure limits, there still need to be contribution limits (albeit higher ones) for nonparticipating candidates, or no one will participate.

At the local level, the great advantage of Nagle's approach is that a city or county can pass it, as a government ethics provision, while it most likely would not be allowed, or be willing, to pass a contribution limit, because in most states campaign finance is done only at the state level (even where local campaign finance laws are permitted, or may be permitted after litigation).

Limitations of the Approach
The Westminster/Nagle approach is a useful tool to lessen influence, pay to play, and the appearance of impropriety that accompanies large contributions from individuals and entities seeking special benefits that elected officials decide on or have influence over.. But it is not a cure-all. Most important, it has less effect on campaign contributions that reward an elected official after the fact (it has some effect, because such contributions would still prevent the recipient from participating when problems arise relating to the matter, or when a renewal or an amendment is considered).

One solution to the rewarding campaign contribution problem is to prohibit interested parties from making contributions to officials for, say, a year after the end of a matter in which they were involved. This is another example of how the Westminster/Nagle approach can be effectively complemented by campaign finance laws.

An Institutional Rather Than Individual Issue
It is important to see the Westminster/Nagle approach not as a way to deal with individual corruption. Because large contributions from interested parties are extremely common, they undermine public trust in an aggregate manner, not one contribution at a time. They are a classic example of institutional corruption.

Similarly, the Westminster/Nagle approach will solve the problem not withdrawal by withdrawal, but by making such contributions problematic so that local campaign fundraising will have to change in a qualitative manner. The long-run result will not be a lot of withdrawals, but either a public financing program or a greater effort to involve the community in local elections, so that most contributions come not from interested parties, but rather from ordinary citizens who believe particular candidates are best for their community.

Where Else the Money May Flow
Nagle recognizes that his approach would lead to more money going through PACs and political parties (his paper was written before other sorts of independent expenditure became a popular alternative). In response, he argues that his approach could be applied to contributions from PACs, at least to the extent that their interests can be identified.

As for political parties, Nagle notes that "Money given to political parties is not as corrupting as money given directly to candidates."

Instead of campaign contributions, Nagle notes, interested parties would tend to use lobbyists more frequently. But, he argues, "without the tool of campaign contributions as a threat, a legislator faces relatively limited sanctions from a disappointed lobbyist."

Application to Independent Expenditures
In "Confronting the Impact of Citizens United," 29 Yale L. & Pol'y Rev. 217, 231 (2010), Justin Levitt suggests that Nagle's approach may be extended to cover substantial independent expenditures. Levitt notes one difference:  that a candidate cannot reject independent expenditures the way she can campaign contributions.

Levitt makes an interesting observation about the other side of candidate support:  the threat of supporting the opposition. He says that a requirement to withdraw might "modestly increase legislative backbone to withstand such a threat. ... recusal would also disable the opponent from yielding the desired benefit if he or she should win a corporate-fueled campaign."

Conclusion
Sadly, the great majority of law review articles and judicial opinions that cite Nagle's article are focused on judicial recusal, not on the withdrawal of legislators. Those articles that deal with campaign finance reform quickly dismiss the feasibility of the approach. Therefore, there is no extended discussion of Nagle's excellent idea or how it has succeeded or failed in Westminster, Colorado, in New Jersey, or elsewhere.

This blog post will hopefully start a serious consideration of this approach and what it says about the institutional corruption involved in interested parties making large contributions to candidates who will influence and make decisions that directly affect the contributors.

Robert Wechsler
Director of Research-Retired, City Ethics

---