Mr. FAUNTROY. Now, may we hear from Richard W. Clark, Special Assistant to the President, Common Cause; accompanied by Ms. Linda Heard, Staff, State Issues Program?

Welcome, Mr. Clark, to the witness stand. I cannot help but comment on the indispensable role played by your organization in the lobbying for self-government and making possible these hearings, which we now have on the campaign finance reform legislation to govern what will be our local elections after May 7th.

STATEMENT OF RICHARD W. CLARK, SPECIAL ASSISTANT TO THE PRESIDENT, COMMON CAUSE; ACCOMPANIED BY LINDA HEARD, STAFF, STATE ISSUES PROGRAM

Mr. CLARK. Thank you for the compliment. I hope you are not going to be too disappointed tonight, because we are not going to make many specific recommendations on spending limitations and so forth. But our comments will be relatively general.

But I do want the Committee to be aware that we got some very detailed recommendations, and check lists as what we feel might be adequate for legislation affecting the District. And I will get into that a little in the testimony, but by and large, it will be statement of principles.

Mr. Chairman, I am Dick Clark and a resident of the District. And the testimony tonight is on behalf of Common Cause, which is a national citizens' lobby, and which also has over 6,000 members in the District of Columbia.

FINANCING CAMPAIGN

I feel that the issue of campaign financing is of paramount importance to the District of Columbia as it moves toward its continuing campaign to fulfill the right of suffrage and self-government.

The powers and responsibilities granted by the proposed charter to locally elected public officials will affect numerous aspects of the lives of the citizens of the District of Columbia. These elected officials will shape vast areas of public policy, including transportation, housing, education, delivery of social services and so forth.

It has long been a principal tenent of our democratic system of government, that is that the individuals popularly elected to fulfill such critical areas of responsibilities, that they must be accessible and accountable to the people they represent.

One of the components of such a system of responses and effective government is the procedure for regulating the financing of campaign. It is a logical extension, however, of the principle of Home Rule that primary responsibility for this regulation resides with the charter government of the District of Columbia. I think it would be inconsistent with the thrust of the charter itself for Congress to further impose its will on the future government.

However, there is presently no city council to enact such legislation, the existing regulations are grossly inadequate, and the city council and mayoral elections are rapidly approaching. Common Cause, which has almost since its inception been a strong proponent of home rule,

therefore urges the Congress of the United States to take steps to promote action on campaign finance legislation for 1974 elections only.

And I am not suggesting which way that be done. Perhaps there are two ways: one is that Congress act directly; and there is also the possibility that they could pass enabling legislation so that the local council could do it. I am not sure about the legality of that, but it is something that could be explored.

Events of the past year, which are well known to all of us, dramatically demonstrate how the system of financing campaigns may affect the accountability and responsiveness of public officials. Candidates are too easily beholden to large givers with special interests and demands.

Contributions are too often offered to ambitious candidates with a quid pro quo understanding that: "Take the money but do not forget my legislative needs."

Such a contribution is not a donation, but rather an investment to help insure political outcomes desired by the giver. As a lobbyist, I can assure you that when special interest contributions sit around a table on any legislative issue, and particularly as it affects the Congress and as I understand, it is the same at state levels and some local jurisdictions, the lobbyists sit around and determine which legislators they are going to take, and they are going to try to influence.

And I would say in the vast majority of those cases, it is people they have given contributions to; and therefore, believe or feel that these candidates or office-holders, rather, owe them some allegiance.

As a matter of fact, I can think of an example yesterday where I happened to be working on consumer protection agency legislation, which is before the Congress. And I remember very vividly one lobbyist, whose organization happens to be a major contribution to a large number of Congressional campaigns, was standing off the floor of the House of Representatives literally bellowing out as the members of the Congress came out, "this is a yes vote," or "this is a no vote" on the various amendments that were being offered.

I think that this is the kind of activity and the kind of thing that goes on that is what the intent of this legislation is all about.

To be specific, there is, for example, the Senator Minority Leader of Florida, a neurosurgeon, freely admits, according to the Miami Herald, soliciting $12,000 to $14,000 in contributions from the medical profession. In the words of the Minority Leader, "When I panhandle the medical people, I tell them as far as the Senate is concerned, I can be more effective than three or four lobbyists."

The citizens of the District of Columbia, because of their proximity and continual exposure to the scandals of "Watergate" may be more aware of the gravity of the problem of financing campaigns then most other citizens across the nation. D.C. citizens are also aware of the forthcoming election of a Mayor and City Council. I feel that the citizens will want assurance that their new government will be free from the corrupting influences of money in politics.

NEED FOR LEGISLATION

I happen to be a participant in a recent meeting of community activists in which this legislation, which is now under discussion, was

discussed at that meeting. One of the people in the group felt that the legislation was unnecessary, that it was unduly burdensome, that it may have had some Constitutional questions and was generally opposed. But I think a very pointed statement was made by one of the people who was also participating in that discussion and who, incidentally, happens to be a wife of a Congressman. And she said to the other person, "Do you really believe without some kind of control on campaign financing in the District of Columbia that the building codes are ever going to be changed?"

Citizens may gain some solace in knowing that the principle of campaign finance regulation has already been established in the District of Columbia. Upon passage of the charter some provisions of existing campaign finance law will apply to mayoral and city council candidates.

Each candidate and each supporting independent committee must file, for example, with the D.C. Board of Elections reports of contributions and expenditures both 5 days before and 30 days after each election. Independent committees must appoint a treasurer and chairman and register with the Board of Elections. No single independent committee may receive contributions or incur expenses in excess of $100,000.

Existing law contains additional provisions which apply to candidates for public office other than Mayor and City Council. I have included, for your use, a copy of the existing campaign finance statute of the District of Columbia.

It is commendable that some provisions to regulate the financing of campaigns do exist. The existing statutes are, however, devoid of some of the basic and essential components of good campaign finance regulation. For example, there is no independent enforcement agency nor provisions to limit the total candidate expenditures. In other ways it is deficient, including inadequate reporting and disclosure provisions and inadequate contribution limitations.

I would like to review now the elements which Common Cause regards as essential to effective campaign finance legislation.

First of all is full public disclosure; the first requirement is adequate and timely public disclosure of contributions offered directly or indirectly to a candidate. The reports should be accurate and extensive but simple enough to give the citizen a clear view of who is supporting the candidate and the nature of all expenditures.

REPORTING

I think these reporting requirements are particularly significant when you consider that most likely the information contained in such reports are going to serve as a basis for legislation that would come at a later date, or perhaps perfecting the legislation depending on what happens between now and the time that the new government takes effect.

At least two pre-election disclosure filings-one 30 to 40 days and one 7 to 10 days before each election are necessary to insure ample opportunity for public scrutiny and dissemination of information concerning the campaign reports. Continual post-election reports must

also be required until no surplus or deficit remains in the account, thereby insuring a public accounting of all campaign financial transactions.

Current D.C. election law provides for only one pre-election and one post-election report. The reports should disclose the name and address, occupation and principal place of business of each contributor in excess of, we suggest, $25 in the aggregate, as well as the date and amount of the contributions; and name and address of each payee receiving more than $25 and the amount, purpose and dates of the expenditures should also be included.

Granted, the thresholds for disclosure of contributions and expenditures are arbitrary amounts. A threshold of $25 will, however, adequately inform the voters of the nature and extent of the support and financial activity of the candidate, without being overly burdensome to the candidate.

LIMITATIONS ON CONTRIBUTIONS

Second is contribution limits; it is essential to limit the amount a person may contribute directly or indirectly in support of a candidate. By imposing campaign contribution limits, we permit a citizen to express his views by giving, but not in such a large amount that the contribution may win him favored treatment from a public official. The size of the contributor's wallet should not determine the importance of his cause.

The limits should also be graduated according to the office sought,. and apply separately to each primary, special and general election. In addition, contribution limitations should bear some percentage relationship. And as contained in one of the bills, at least we feel that one percent or less might be a good suggestion. And contribution limitations should bear some percentage relationship to the limitation on total expenditures.

It is of utmost importance to the first mayoral and council elections of the District of Columbia that reasonable, but tight contribution limits be established and stringently enforced. Current information indicates that there will be numerous candidates in the September and November 1974 district elections.

The small contributions of the average citizen of the city will therefore be spread among many candidates. Candidates will experience difficulty in raising sufficient funds; there is no question about that. Without adequate contribution controls, large special interest givers with bottomless purses may therefore easily influence the outcome of the election by supporting a few elected candidates. We feel this is one of the key abuses that campaign reform is intended to eliminate.

Additionally we recommend that contributions from the general fund of corporations and unions be prohibited. Governmental decisions are of great importance to corporations and unions. Such organizations have dramatically demonstrated their willingness to use the campaign contribution as a means to help insure favorable political outcomes. The Congress must follow the precedent it has set in Federal legislation by prohibiting contributions by unions and corporations in the District of Columbia as well.

LIMITATIONS ON EXPENDITURES

Third, expenditure limits; our duty not only lies in safeguarding the rights of citizens-we must also be attentive to the rights of candidates. Candidates must be assured of reasonably equal opportunity to present their positions and goals to the public. Money is the medium by which purchases this access. Therefore, good campaign financing legislation must limit the total expenditures incurred in support of a candidate.

Reasonable limits on expenditures, as with limitations on contributions, should be graduated according to the office sought and should apply to all expenditures incurred in support of the candidate.

We also feel criteria or empirical data which may be of use in establishing contribution and expenditure limits can be gleaned from the previous campaign finance experiences of the District of Columbia from the experiences and localities of other states across the Nation and from the research and rationale available from the Federal experience.

As

you are probably well aware, there are a number of Federal bills now pending, I think there are four campaign finance bills, as a matter of fact, and each of those bills they have developed some rationale and some formulas as to contribution limitations and justifications for why these limitations should be imposed.

I think that we are not talking necessarily in a vacuum and that our decisions do not have to be arbitrary. We for one would like to offer our assistance in looking at some of the races around the country. Comomn Cause has monitored some campaigns particularly in New York, New Jersey, Texas and Massachusetts, and their findings should be of interest to the committee.

We would like to make the reports of these campaigns available if you so request.

Enforcement is another very important concept and component of any campaign finance legislation. We would suggest that for effective administration and enforcement of campaign limitations and disclosure requirements, that each candidate should be required to designate a single campaign committee to receive contributions and incur expenses in support of the candidate.

CAMPAIGN FUND DEPOSITORY

Candidate should also designate a single campaign bank depository through which all financial transactions shall pass. Such a system would simplify accounting procedures, provide more understandable reports and make it easier for candidates to meet their legal responsibilities.

ENFORCEMENT AGENCY

Finally, and perhaps most importantly, a good campaign finance law must provide for a strong and independent enforcement agency. Members should be appointed in a manner that shelters them from influence by other public officials. There must be balanced representation in terms of partisan affiliation. No public official should be a member of the agency. And I repeat that here; no public official should be a member of the agency.