OpenSecrets’ Sheila Krumholz on campaign finance reform

Last month, the two leading watchdogs of U.S. political fundraising announced their merger. The Center for Responsive Politics (CRP) is the preeminent organization promoting financial transparency and tracking influence at the federal level, and The National Institute on Money has that honor at the state level. Together, their two databases are important research tools to the general public, academics, activists and media outlets (including this one).

The merged entity is now called OpenSecrets, which is also the name of the CRP’s website. Former CRP executive director Sheila Krumholz will continue on as head of the combined group. She started with CRP as an executive assistant in 1989 and became executive director in 2006. She recently joined Sacto Politico for an in-depth conversation about the merger and the U.S. campaign finance system.

Sacto Politico: For those who don’t follow our campaign finance system closely, can you share your assessment of money in politics right now?

Sheila Krumholz: Yes, well for many years now our system of campaign finance has been described as “anything goes” or the “wild west,” and those descriptions are never more apt than today. There is just so much volatility. Billionaires are effectively funding shadow campaigns through super PACs and dark money operations, and even running for office and self-funding those races. All told we tracked $14 billion in spending last cycle. That is double what was spent in the prior presidential election cycle. That gives you a sense of the trajectory that is just skyrocketing.

Some people say, “So what?” and point out Americans spend more on Valentine’s Day. However, I say we have to be concerned when the average winning 2020 House candidate spent $2.3 million, and it cost more than $27 million for the average winning Senate campaign. Those average winning costs are actually even more important than the $14 billion figure. Who among us has money for the millions upon millions of dollars needed for political office?

On the positive side, small donors are raising huge amounts, rapidly rising to become a real power center in U.S. politics. This is a good thing. It shows engagement and is a good way for voters to get involved in our political system. But those small donations have also become a huge profit center for fundraising consultants. Not all of those money bombs from $5 and $10 donors are as organic as they might appear at first glance.

S/P: And what is the state of the Federal Election Commission (FEC) who oversee the federal system?

Krumholz: We still have a dysfunctional FEC. I would say even it is even more woefully dysfunctional in the last few years. We’ve had years of basic agreements being stymied by partisanship, and then not having a quorum [during much of the Trump years]. So FEC commissioners were unable to even meet and decide the most basic decisions that the agency would typically take, like simple administrative fines for late filings. But even with a quorum, there is just something rotten in Demark.

Some would say the FEC was never designed to work. If we think of the Senate as a ponderous, slow-moving ship, then the FEC is a snail with it headed by three Democrats and three Republicans. All of this mixed with the hyper-partisanship to create a toxic mix.

SP: Given all the dark and gray money in our system, is it almost certain foreign players are involved financially in our elections?

We have adversaries who are very interested in our elections. It is not at all easy to ferret them out and given that the system is now setup to protect the anonymity of politically active donors, it stands to reason someone somewhere is spending money that came from foreign sources. And we have well-reported evidence in the past that they can and will try. This was the case in 2016 and 2020 and back in the 1990s with the soft-money scandal.

This is also connected to the FEC being hobbled. We have good civil servants, skilled smart people there, still doing their job no matter what political appointee is sitting in the commissioner chair. I’m grateful for that. It is crucial that work continues, but the agency has been also hobbled by budget issues. No matter where you sit on the ideological spectrum, we would do well to champion transparency as a fundamental aspect of our democracy.

S/P: That is at the federal level. What about at the state level?

Krumholz: Yes, that is interesting too. Our new partners at the National Institute on Money in Politics have witnessed the race for big money come in a big way to the state level. Increasingly, we see the same organizations bringing their big-money strategies down to competitive races at the state level to kind of build the “farm team” and influence the outcome. This is happening even in states where big money consultants and groups have no operation or business except that they want to shape the future.

S/P: Does the merger between the CRP and the National Institute on Money in Politics reflect a need to get bigger to keep up with the explosive growth of the political industrial complex?

Krumholz: It is a lot to monitor, yes, but the merger resulted from a confluence of events. We had started talking about it way back in 2012. Then logistically this started to make more sense when a key funder – the Hewlett Foundation in California – got behind it to give us the financial runway needed to integrate our massive data sets, maintain the quality of state and federal data, and keep access free for as many as possible. We also wanted to ensure continuity. We didn’t want to suddenly drop data sets that we have been curating for years and decades.

S/P: Are we at a crisis point? There’s the Citizens United ruling in 2010 and the $14 billion spent last cycle for federal races. Plus tens of millions of dollars spent on recent Supreme Court nominations, which was our last branch of government not infected by big money and big donors. In your assessment how dire is the situation for our democracy?

Krumholz: It has been a slow boil over most of my time in Washington. One outrage is quickly outstripped by the next. It’s hard to say we are seeing something we’ve never seen before because it seems it has been the same story, but everything has ramped up over a long period of time until we find ourselves in a political ecosystem we don’t even recognize.

And this has been turbocharged by the antagonism, the outright lethal mendacity of recent times, and also the unrecognizable partisan vitriol. I don’t think you can say one side owns it, but what’s new is the degree it really set us back on our heels. We’ve been experiencing the growth of partisan vitriol for some time, but it has really reached such a toxic level that even families talk about how the strife has torn apart their families.

S/P: How much is the huge amounts of money deepening the partisan vitriol, as both national parties feel a need to raise ever more money to feed their half of the political industrial complex?

Krumholz: I am not a political scientist, but my view is the big money does feed into it. I think of this town as half politics and half political industrial complex. Half policy and half political consultant. I’m not sure which has the upper hand these days, but I think political consultants with $14 billion in their pockets are sitting pretty nice atop this juggernaut. And it concerns me our politics have been overtaken by the money and this class of consultants who are manipulating the messages and the politics in ways that are not healthy.

But the money has funded the hammering of partisan messaging for years and decades. Does it date back to the Clinton Administration and the growth in soft money? That arguably led to the [China Gate] campaign finance scandal – that was bipartisan, by the way – involving the Lippo Group, Charlie Trie, John Huang, and the Hsi Lai Buddhist Temple. But well before that there was Reagan’s line about “Government is the problem not the solution,” and that cynicism was married with a different kind of cynicism that has allowed money to propel the political conversation.

S/P: We currently await a Supreme Court ruling in the transparency case of Americans for Prosperity Foundation v. Bonta. The case involves the limits of regulatory oversight by California’s version of the FEC, the Fair Political Practices Commission. The plaintiff – a Koch Brothers-backed nonprofit – claims organizations that make political donations have a First Amendment right to not disclose who donates to them. This has the potential to be Citizens United Part 2. What is at stake here?

Krumholz: In general, OpenSecrets does not take a position on campaign finance reforms and regulations. Our exception is in cases involving transparency, which is what this case is about. So I can on this we share the opinion of former Justice of the Supreme Court Antonin Scalia. He once famously wrote, “Requiring people to stand up in public for their political acts fosters civic courage, without which democracy is doomed. For my part, I do not look forward to a society which, thanks to the Supreme Court, campaigns anonymously… hidden from public scrutiny and protected from the accountability of criticism. This does not resemble the Home of the Brave.”

So to me, if you are a nonprofit like the Boys and Girls Club and you want to keep your donors anonymous, that is perfectly fine. But if your Boys and Girls Club suddenly wants to play in politics, push one candidate or defeat another candidate and that becomes a significant part of your mission, then the public has a good reason to wonder who is funding your group’s campaigns and whether or not they are our neighbors or average citizens. The public has a right to know whether your donors stand to gain or lose because they have business in front of the government.

The donors who wish to remain anonymous are often rich, powerful, connected, influential people, and we average citizens have a right to know what they are doing in our elections. Because they are definitely not playing for fun. This is for keeps. But this is the requirement of a free democracy: vigilance. We need to be vigilant against those who have conflicts of interest and want to hide behind rules that they are pushing so that they can influence the direction of our democracy without their fingerprints on it.

We went through this with Watergate, and we’ve been through campaign scandal after campaign scandal since. There is a reason campaign transparency must be protected. I’m sorry if that is embarrassing to billionaire donors who want to play without being shamed in the grocery store for their spending on politics. But do as Justice Scalia says and “be brave.”

S/P: Your main mission has been to promote greater transparency. Now that you are evolving into the larger OpenSecrets organization, any plans to evolve your mission and add a greater advocacy role?

Krumholz: We have talked about that for a long time. There is a view that we could pack a more powerful punch that way. After all, we wouldn’t be doing this work if we thought the system was a well-oiled machine, and there were no problems. But I think our nonpartisan role must be sacrosanct. We have earned a reputation for nonpartisanship, for unassailable data, for not cooking or spinning the numbers. We need to protect that, and advocates benefit because they can say their facts are not based on their own data but on OpenSecrets.

This could change I suppose, but my view at this time is the press, the public, the academics, the advocates who rely on our data are best served by our keeping our blinders on. We will continue to maintain and crunch the data so people can see the big picture and the long-term trends, and others can use that to make their own conclusions about money, influence and what reforms are needed.

CRP had long used the slogan “Count cash, make change.” So we count the cash, and others make the change. We track the fundraising, the revolving door, the personal finances of members of Congress and other forms of influence. Then advocates on the frontlines can use that to make the change.

SP: I think your news service is extremely underappreciated. I find the many stories about the latest campaign finance data, legislation, and lobbying pushes by different industries quite good. Yet your news service’s reach is fairly modest. What accounts for this?

Krumholz: Thank you for the kind words. I think our reporting is underappreciated as well. We have done some really excellent reporting that I think it is appreciated by reporters who cover these issues and can build on the reporting we’ve already done. We also when possible partner with news organizations like The Guardian, McClatchy News and CNN.

We’re very proud of our scoops and successes. We’ve won awards for public-service journalism from the Society of Professional Journalists. We recently won an honorable mention in online journalism from the NYU School of Journalism. In that case, it was for best nontraditional news source, which kind of tells you where we are viewed in the ecosystem. [She laughs.] But a lot of the exciting, important and new journalism organizations are nonprofit, like ours and yours. The alternative is more hedge funds gobbling up legendary reporting news outlets and stripping them of their resources.

I’m really proud of what we have created. I think our news service is only going to get better and better. We are growing in that regard. We’ve got very skilled young journalists who are writing for us, and I hope are benefitting from their work for us. They are being trained on using money in politics data and analysis and going onto careers with some of the prominent outlets in the United States.

And beyond our news service, I think we have and will continue to play a real important role in helping Americans understand how money influences politics. It is not usually a happy story, but I think it is one that is changing rapidly with more and more Americans understanding their place in the ecosystem. So I hope we can continue to be that kind of beacon of light and information that they can know and trust.