by Peter Quist | 2011-10-06
The U.S. Supreme Court’s January 2010 Citizens United v FEC ruling permitted corporations and unions to use their general treasuries to pay for independent communications targeting federal candidates. Prior to the ruling, Michigan was one of 24 states that prohibited the use of corporate or union treasuries to fund independent spending activities targeting state candidates. In the time following the ruling, Michigan’s ban fell, along with the others. Another ruling, Michigan Chamber of Commerce et al. v Land, a U.S. District Court case decided in July 2010, allowed treasury funds to be used to make contributions to Michigan political committees that are formed exclusively for the purpose of making independent expenditures.1
This report first examines the state of Michigan’s independent spending disclosure rules, practices, and data availability, and then provides an analysis of the independent spending in Michigan from 2006 through 2010, discussing targeted races and top spenders.
Michigan requires robust reporting of independent spending activities that expressly advocate for or against state candidates. Independent spending committees sponsored by a corporation or union must also include the name of that sponsor in the committee name,2 which helps the public identify independent spending by these entities.
However, Michigan does not require disclosure of electioneering communications (communications that clearly identify a candidate within a certain time of an election but do not expressly advocate for the defeat or election of that candidate), because of an administrative concern that the lack of a clear statutory definition would make the disclosure of these expenditures fail a judicial challenge.3
The lack of reporting of electioneering communications spending represents a gaping hole in Michigan’s disclosure laws. Additionally, the robust reporting requirements for independent expenditures may provide incentive for spenders to use electioneering communications to exploit this hole in the state’s disclosure requirements.
The independent spending total in 2010 was up only slightly from that of the comparable 2006 election. It is impossible, however, to identify any trends in electioneering communications spending due to the lack of reporting requirements.
At least one example of newly permitted corporate independent spending targeting candidates in Michigan was evident in 2010. For many years the Michigan Realtors Association, a 501(c)(6) corporation, has maintained a committee to make direct political contributions. In 2010, it established a separate committee to make independent expenditures using the association’s treasury funds.4 At least $250,000 of this new committee’s money came from the Michigan Association of Realtors’ membership assessments.5
However, three other groups spent substantially more than the Michigan Association of Realtors—without the use of corporate or union treasury money. The Michigan Democratic Party, the Michigan Republican Party, and the Coalition for Progress were consistently the top independent spenders in each of the three elections examined. These three entities collectively spent $17 million, which is 85 percent of the total spent over the three-cycle period.
The National Institute on Money in State Politics collects independent spending reports filed by individuals and committees with state disclosure agencies in states that provide the most robust disclosure.
The Institute used the information provided on disclosure reports to assign an occupation code to the filers. When that information was not provided, staff conducted additional research to determine a filer’s economic interest, where possible. The occupation codes are based on the Standard Industrial Classification system used by the federal government.
If an expenditure listed multiple targets, and the amount paid did not specify how much was attributable to each target, the target amount was left blank. Therefore, the total spent on each target may be under-reported.
The Institute does not equate money spent in opposition to one candidate with money spent in support of that candidate’s opponent and instead discusses the money spent on each race. Only expenditures made for the purpose of influencing state elections were reported.
The Institute excluded independent spending data reported by two ballot measure committees active during the 2008 election: Michigan Citizens Against Unrestricted Science & Experimentation (MICAUSE), and Citizens Protecting Michigan’s Kids. Their data was excluded because each committee was targeting the measure around which the committee was formed, so these were not in fact independent expenditures as defined by the state of Michigan.6
Michigan requires some filers to report their independent expenditures electronically and allows others to report on paper.7 Data from electronic filers is provided in a database from the state. The state’s downloadable database does not include expenditure purpose information, which commonly describes what the expenditure specifically procured, but the state does have this information in its internal database, and the Institute ordered a database that included this information.
Reports filed on paper must be viewed as online images, and the Institute manually entered this data into its database.
Michigan statute defines an independent expenditure as “an expenditure by a person if the expenditure is not made at the direction of, or under the control of, another person and if the expenditure is not a contribution to a committee.”8 Michigan’s campaign finance manual for political committees further states “Independent expenditures are expenditures made on behalf of a candidate or a ballot question without the direction or control of the candidate's committee or a committee supporting or opposing the ballot question and are not contributions to the committee.”9
Michigan unfortunately does not collect information on the type of independent spending generally referred to as electioneering communications. These expenditures are not defined under state law, so an administrative decision was made to not require their disclosure, from the concern that, without a clear statutory definition, such a requirement would not stand up to a legal challenge. Therefore, an analysis of independent spending in Michigan is necessarily incomplete, and the numbers in this report are conservative. The Michigan Campaign Finance Network recently examined electioneering communications in the form of television broadcasts for races for Michigan Supreme Court, governor, secretary of state, and attorney general from 2000 through 2010, and estimated these expenditures at nearly $70 million over the decade. This estimate is also conservative, because it does not include money spent on radio buys, mailings, and other forms of electioneering communications.10
Entities that make independent expenditures targeting candidates and totaling at least $100 but less than $500 in a calendar year must file an Independent Expenditure Report disclosing this activity. Once they reach the $500 aggregate targeting candidates, they must register an independent expenditure committee that contains the name of the sponsoring corporation or union, if any, within the committee name.11 This committee is then required to disclose its activity.
Corporations and labor unions have been permitted to spend treasury funds on independent expenditures targeting ballot measures since before the Citizen’s United decision. Once they reach $500 per calendar year targeting one or more measures, they are required to register a ballot question committee.12
A political committee or ballot question committee that does not receive or spend $1,000 or more per year may request a reporting waiver, exempting it from having to disclose its activity, as noted on the statement of organization forms applicable to each committee type.13
To the extent that the independent spending is reported, Michigan provides some of the better data in the country. The targets are clearly identified by name and office, and the seat of the district for which the target is running is frequently (not always) included, as well. There does appear to be a lack of standardization of the office and district information that could be improved by requiring electronic filers to select this information for each target from a standardized list rather than enter the information themselves. Of course, this is more difficult to address with paper filers. Disclosure of the target’s party affiliation is not required. The entity being paid by each expenditure (the payee) and the date of the expenditure are both consistently disclosed.
Additionally, every record from 2006 through 2010 clearly identifies whether the expenditure supported or opposed its target. This information is critical to any analysis of independent spending in a state. Although it would seem obvious to require it, such information is not required in some states. The amount directed at each target is also identified in Michigan, even in cases where one expenditure has multiple targets.
Top Independent Spenders in Michigan, 2006–2010
Sixty-six organizations spent $20.1 million independently targeting state elections in Michigan from 2006 through 2010. This is 91 percent less than the $214.4 million that candidates and ballot measure committees raised in direct contributions.
The independent expenditure total in 2010 was up only slightly from that of the comparable 2006 election. It is impossible, however, to identify any trends in electioneering communications spending due to the lack of reporting requirements.
Costs associated with direct mailings and TV and radio broadcasts accounted for 70 percent of the independent spending across the three cycles. Mailings reached $7.9 million, while broadcasts reached $6.3 million.
Political party committees were responsible for 56 percent ($11.2 million) of the independent expenditures. Liberal policy interests followed with $6.3 million. Abortion policy interests spent $1.5 million, with pro-choice groups spending $1 million and pro-life groups spending just short of $500,000.
Just ten organizations accounted for 96 percent of the total independent expenditures made by 66 organizations, 2006–2010. Those 10 organizations each spent more than $100,000. The top three of them together spent $17 million, which is 85 percent of the total spent over the three-cycle period. The Michigan Republican Party led with $7.6 million, the Coalition for Progress spent $6.2 million, and the Michigan Democratic Party followed with $3.2 million.
Since corporate or union treasury funds can go only to ballot question committees or to committees formed exclusively to make independent expenditures, the Michigan Republican Party and the Michigan Democratic Party received no corporate or union treasury funds.14
The Coalition for Progress and EMILY’s List also made direct campaign contributions in addition to independent expenditures, and as a result, neither of these organizations could receive corporate or union treasury funds.15 The Coalition for Progress, a group that almost exclusively supported Democrats and opposed Republicans, raised $11.3 million during the 2006–2010 cycles. Jon L. Stryker, of the Arcus Foundation, a gay and lesbian advocacy group,16 provided $10.2 million over that time, or 90 percent of this group’s funding. EMILY's List, a group dedicated to electing Democratic women who support abortion rights, was funded by contributions from a variety of individuals.
Of the $20.1 million of independent spending, $18.9 million was spent by committees that listed a Michigan address. The other $1.2 million came almost entirely from Washington, D.C.
Out-of-state independent spenders demonstrated a keen interest in Michigan’s gubernatorial races. All told, more than $1.1 million of their $1.2 million was spent on the 2006 gubernatorial contest, and $39,424 was spent on the 2010 gubernatorial contest. All of the EMILY’s List money went to support Democrat Jennifer Granholm in the 2006 gubernatorial campaign, while all of the National Right to Life Committee’s money went to support her Republican opponent, Dick Devos, Jr. Most of the money from Working America ($39,424) was used to support Virg Bernero in the 2010 gubernatorial campaign.
Although out-of-state independent spenders focused 92 percent of their money on the two gubernatorial races, in-state spenders targeted gubernatorial races with only 14 percent of their money. The 2006 gubernatorial campaign was the most highly targeted by in-state independent expenditures, garnering $2.3 million. However, the 2010 gubernatorial race was relegated to the tenth-most-targeted race by in-state spenders over the 2006–2010 period. These in-state committees focused almost as much on two of the supreme court races as they did on the two gubernatorial contests. These races are examined in more detail later in this report.
Top Funders of Independent Spending in Michigan, 2006–2010
In some states, identifying the sources of funding to independent expenditure committees can be difficult. In Michigan, this trend is less pronounced, in part because independent expenditure committees sponsored by an organization must have the organization’s name in the name of the committee. However, entities that fund electioneering communications are not disclosed.
Jon L. Stryker, of the Arcus Foundation, was the leading funder of independent expenditures in Michigan over the three election cycles. Stryker gave $12.5 million directly to the committees making independent expenditures in Michigan, easily eclipsing any other funder. Other leading individuals were Robert M. Lynas of RA Miller Industries ($1.3 million); Dick Devos, Sr. of Amway/Alticor ($1.3 million);17 and Pat Stryker of the Bohemian Foundation ($515,000).
2010 Elections in Michigan
In 2010, $7.8 million in independent spending targeted state campaigns in Michigan, which is 88 percent less than the $67.6 million raised in direct campaign contributions by candidates and ballot measure committees. This was the first year in which corporate and union treasury money could be used to fund independent expenditures in Michigan. Under Michigan law, any committee that makes direct contributions to candidates cannot receive funding from corporate or union treasuries.19 Rather, money raised by a committee that accepts corporate or union treasury funds to make independent expenditures must be used only to make independent expenditures and cannot be contributed to candidate campaigns or to other committees that contribute to candidate campaigns.
The top five spenders accounted for 96 percent of the independent money spent in 2010. The Michigan Republican Party in particular focused on independent expenditures, spending $5.2 million in 2010, or almost 14 times the $378,558 they gave in direct contributions to candidates, and two-thirds of the money spent by all groups on Michigan independent expenditures in 2010.
More than half (57 percent) of the money raised by the Michigan Republican Party in 2010 came from the Republican Governors Association, and a gubernatorial race was on the ballot. However, the state party spent almost all of its independent expenditures—$4.7 million of $5.2 million—on legislative and judicial races, targeting the state supreme court race more than any other single contest.
Each of the top five spenders spent more independently than they did on direct contributions to candidates and ballot measure committees. As noted above, the Michigan Republican Party, the Coalition for Progress, and the Michigan Democratic Party did not receive union or corporate treasury funds. The Michigan Association of Realtors received $450,100 in funding. Of this, $250,000 came from their own Issues Mobilization Fund, which in turn is funded by the membership assessments of the Michigan Association of Realtors.21 The National Association of Realtors, based in Chicago, also gave the Michigan association $200,000. The reported contribution is not descriptive enough to determine that this money came from the national association’s membership assessments, but it may have, as there does not appear to be a record of this expenditure reported by any of this association’s political committees to the Michigan Department of State, the Illinois State Board of Elections, or the Federal Elections Commission. As previously stated, independent expenditure funding from corporations was prohibited in Michigan before 2010 (including all nonprofit corporations).
The race for two positions on the Michigan Supreme Court garnered the most independent spending of any state race in 2010.22 Overall, the $1.8 million spent independently to affect this race amounted to 78 percent of the $2.3 million given in direct campaign contributions. Two incumbent justices were seeking reelection: Robert P. Young (who won) and Alton T. Davis (who lost). Three challengers vied for those seats, one of whom, Mary Beth Kelly, won.
Justice Young was the most heavily targeted candidate. Five groups spent $864,597 independently to support Young, exceeding the $842,351 he raised in direct contributions. The groups supporting Young were led by the Michigan Republican Party with $634,345 and the Michigan Association of Realtors with $225,000. The Michigan Democratic Party was the sole group opposing Young, spending $8,290.
The same five groups that supported Young spent $864,658 on Kelly’s supreme court campaign, more than double the $420,118 she raised on her own. As with Young, the Michigan Republican Party and the Michigan Association of Realtors led the independent spending in support of Kelly, with $634,345 and $225,000, respectively. No independent expenditures were made opposing Kelly.
Justice Alton Thomas Davis and his challenger, Denise Langford Morris, were also targeted. As with the first two candidates, most of the money spent targeting them came from party committees. The Michigan Democratic Party spent $54,237 and $43,507 in support of Davis and Morris, respectively, which amounted to virtually all of the independent expenditure money targeting each of these candidates. The independent money spent on Davis was a fraction compared to the $984,387 he raised through direct contributions, which did not prove enough to retain his seat.
The race for the open seat in state Senate District 29 was targeted by $445,705 in independent expenditures, amounting to 28 percent when compared to the $1.6 million raised in contributions. Democrat David LaGrand was targeted by $303,734 ($235,630 in support and $68,104 in opposition). The Coalition for Progress and the Michigan Democratic Party spent the most money in support, $135,772 and $96,411, respectively. The Michigan Republican Party spent $68,104 opposing LaGrand.
David Hildenbrand was the target of most of the remaining independent expenditures in this race. All $141,879 spent targeting him was in support. The Michigan Republican Party and Business Leaders for Michigan PAC II spent the lion’s share, with $76,309 and $62,570, respectively. Business Leaders for Michigan PAC II did not make direct contributions; it was funded by a variety of corporations listing Michigan addresses. Business Leaders for Michigan, the organization sponsoring that PAC, was formed by the uniting of Detroit Renaissance and the Michigan Business Leadership Council in 2009.23
Of interest, the Michigan gubernatorial contest was relegated to the third-highest independent expenditure total in 2010, drawing $421,190, which is less than 2 percent compared to the total raised by the nine gubernatorial candidates via direct contributions. Three candidates—Rick Snyder, Mike Cox, and Virg Bernero—were the targets of almost all of the expenditures. Snyder was supported by $238,115 in independent expenditures, $237,800 of which came from the Michigan Republican Party. Snyder was opposed by $39,984 in independent expenditure money, led by $37,901 from Right to Life of Michigan. Right to Life of Michigan spent $75,241 to support Mike Cox, accounting for all independent expenditures targeting Cox. Virg Bernero was supported by $58,158, led by $39,424 from Working America (an affiliate of the AFL-CIO) and $17,949 from the Michigan Democratic Party. The Michigan Republican Party spent $7,501 opposing Bernero.
Independent spending in Michigan totaled $4.5 million in 2008, or 89 percent less than the $40.4 million raised in direct campaign contributions by candidates and ballot measure committees.
The top three spenders were the same as in 2010 and 2006. The Coalition for Progress spent $2.3 million, the Michigan Democratic Party spent $1.1 million, and the Michigan Republican Party spent $805,897. Together, the independent spending by these three entities totaled $4.1 million, or fully 92 percent of the money spent independently in 2008. No other group spent more than $100,000 that year.
The Coalition for Progress, as in 2010, did not make direct contributions to candidates or ballot measure committees in 2008. The Michigan Democratic Party made direct contributions to candidates and ballot measures totaling $487,281, less than half what they spent independently. The Michigan Republican Party gave $65,100 in contributions (including a $65,000 loan to state supreme court candidate Cliff Taylor).
The contest for Cliff Taylor’s state supreme court seat was targeted by the most independent spending. This nonpartisan race attracted $788,396 in independent expenditures supporting two of the three candidates: incumbent Cliff Taylor and challenger Diane Hathaway. The independent spending targeting these candidates equated to 30 percent compared to the $2.6 million these candidates received in direct campaign contributions.
Diane Hathaway, who challenged Taylor for his state supreme court seat, was the beneficiary of $522,315; Taylor was supported by $266,081. Hathaway won the race, despite Taylor’s incumbency advantage and the fact that he raised $1.9 million in direct campaign contributions compared to Hathaway’s $753,736. The state parties were responsible for almost all of the independent money spent on this race. The Michigan Democratic Party spent $522,203 to support Hathaway; the Michigan Republican Party spent $264,798 to support Taylor.
The race for an open seat in House District 39 drew $441,369 in independent expenditures. The Coalition for Progress independently spent $364,598 to support Democrat Lisa Brown. This time, the Coalition’s horse won the race.
2006 Elections in Michigan
Independent expenditures targeting 2006 state campaigns totaled $7.8 million, which is 93 percent less compared to the $106.5 million raised in direct contributions by candidates and ballot measure committees.
The three entities spending the most independent money in 2006 were the same three as in 2008 and 2010: the Coalition for Progress, the Michigan Republican Party, and the Michigan Democratic Party. Each of these entities spent more than $1 million. The Coalition for Progress led with $3.1 million, spending heavily on the 2006 gubernatorial campaign. The Michigan Republican Party spent $1.6 million. The Michigan Democratic Party spent $1.3 million.
As in 2008 and 2010, the Coalition for Progress made no direct contributions to candidates or ballot measure committees, and the two state parties spent substantially less on contributions than they did on independent expenditures: the Michigan Democratic Party’s direct contributions to candidates and ballot measure committees totaled $561,003, and the Michigan Republican Party’s direct contribution total was $143,354.
The gubernatorial race, featuring a contest between incumbent Democrat Jennifer Granholm and Republican challenger Dick Devos, Jr., was independently targeted by $3.4 million. This amounted to 43 percent of all the independent expenditure money spent in 2006.
In the high-profile gubernatorial election, Granholm was targeted by $1.8 million in expenditures supporting her and $60,354 opposing her. The biggest supporting spenders were EMILY’s List with $974,407; the Coalition for Progress with $323,189; and the Michigan Democratic Party with $317,464. The Michigan Republican Party and Right to Life of Michigan provided all of the $60,354 spent opposing Granholm. Republican challenger Dick Devos was targeted by $1.5 million, mostly in opposition. He was targeted by only $174,456 supporting his campaign, led by a combined $172,664 from National Right to Life and Right to Life of Michigan. Independent expenditures opposing Devos totaled $1.3 million, almost exclusively from the Coalition for Progress.
Senate Districts 6 and 13 were the next two most-targeted races, with $525,390 and $453,584, respectively. The Michigan Republican Party and the Coalition for Progress were responsible for most of this money. The Republican Party spent $401,522, including $216,516 to support Laura Toy in District 6 and $185,006 to support John Pappageorge in District 13. The Coalition for Progress spent $399,514, including $249,622 to oppose Toy and $20,683 to support Democrat Glenn Anderson in District 6; and $113,494 to oppose Pappageorge and $15,715 to support Democrat Andy Levin in District 13.
The required independent spending reports in Michigan are more robust than in most other states, thanks largely to the required information about the target and the consistent implementation of this disclosure. In addition, the requirement that a committee sponsored by an organization include the name of that organization in the committee’s name also helps the public to quickly identify who is behind the independent expenditures in Michigan.
However, Michigan has a gaping hole in their disclosure process: it is essential for the Michigan Legislature to clearly define and require the reporting of electioneering communications.
An examination of the available data shows that, although funding of independent expenditures via corporate and union treasury funds was allowed for the first time in the 2010 election, there was no flood of this money. The same three entities that led the independent spending in 2006 and 2008 also led the independent spending in 2010, and did not use corporate or union treasuries to do so. However, there was at least one identifiable example of such spending by the Michigan Association of Realtors, which exclusively targeted the 2010 supreme court race. However, without disclosure of electioneering communications expenditures, it is not possible to identify trends in spending on electioneering communications, or to know how much corporate or union treasury money is being used to fund these expenditures.
- 5. The 2010 October tri-annual report filed by the independent expenditure committee notes $250,000 in contributions from the Michigan Realtors Association’s Issues Mobilization Fund. The website for the Michigan Association of Realtors notes at that this fund is financed by membership assessments. A more detailed illustration of how this association’s membership assessments are allocated can be found at .mirealtors.com/content/BecomeAMember.htm, accessed September 15, 2011.
- 6. Per email from the director of the Disclosure Data Division of the Michigan Bureau of Elections, on June 24, 2011.
- 7. Appendix D of the campaign finance manuals of Michigan, available at .michigan.gov/documents/APPENDICIES_FOR_ALL_CFR_MANUALS__84723_7.pdf, accessed August 16, 2011.
- 8. Michigan Compiled Laws §169.209 (2), available at http://legislature.mi.gov/doc.aspx?mcl-169-209, accessed August 16, 2011.
- 10. Rich Robinson, “$70 Million Hidden in Plain View: Michigan’s Spectacular Failure of Campaign Finance Disclosure, 2000-2010,” Michigan Campaign Finance Network, June 2011, available from .mcfn.org/pdfs/reports/MICFN_HiddenInPlainViewP-rev.pdf, accessed June 28, 2011.
- 11. “Impact of Recent Federal Court Cases on Independent Expenditures by Corporations, Unions and Domestic Dependent Sovereigns,” Michigan Department of State, available from ,1607,7-127-48294-230881--F,00.html, accessed June 14, 2011.
- 13. The statement of organization form for political committees is available at . The form for ballot question committees is available at .michigan.gov/documents/BQSOwithEF_71581_7.pdf, accessed August 16, 2011.
- 15. “Impact of Recent Federal Court Cases on Independent Expenditures by Corporations, Unions and Domestic Dependent Sovereigns,” Michigan Department of State, available from ,1607,7-127-48294-230881--F,00.html, accessed June 14, 2011.
- 16. “About Us,” Arcus Foundation, available at .arcusfoundation.org/socialjustice/about_us/, accessed September 21, 2011.
- 17. This figure represents the contributions the Institute was able to definitively ascribe to Dick Devos, Sr. Dick Devos, Jr. is also politically active and some contributions do not indicate which of the two is contributing. Other members of the Devos family are also politically active.
- 18. Political Party Committee Manual, Michigan Department of State, pg 11, available at .michigan.gov/documents/Political_Party_Manual_71270_7.pdf,accessed September 22, 2011.
- 19. “Impact of Recent Federal Court Cases on Independent Expenditures by Corporations, Unions and Domestic Dependent Sovereigns,” Michigan Department of State, available from ,1607,7-127-48294-230881--F,00.html, accessed June 14, 2011.
- 20. “Frequently Asked Questions: Where do I find information about U.S. Supreme Court Decision Issued January 21, 2010 Citizens United v Federal Elections Commission?”, Michigan Department of State, available from ,1607,7-127-48294-230881--F,00.html, accessed July 29, 2011.
- 21. Michigan Association of Realtors Issues Mobilization Fund, available from , accessed July 28, 2011.
- 22. All Michigan Supreme Court candidates ran against each other for two seats, and the two candidates receiving the most votes won.
- 23. “Detroit Renaissance Becomes Business Leaders for Michigan!,” Michigan Turnaround Plan, available from =60,accessed September 22, 2011.