STATE OF THE STATE

More than 30 years ago, a panel of nonpolitical folks faced the heady challenge of deciding the fate of one of Illinois' most prominent men.

In his book, A Political Passage, David Kenney recounts the 1965 trial of former Gov. William Stratton, who was indicted the previous year on charges he evaded nearly $46,700 in taxes on unreported income between 1957 and 1960. Prosecuting attorneys accused Stratton of illegally using his campaign fund for personal expenses: improvements on his farm, dresses for his wife, shoes for his horses — even such purchases from upscale Abercrombie and Fitch as a book on wildlife, a wine rack and air mattresses.

The defense team, meanwhile, argued that Stratton's role as candidate, party leader and public official made the expenditures political instead of personal. To make the case, it brought out a parade of politicos, including the venerable U.S. Sen. Everett Dirksen, to testify on Stratton's behalf. State Rep. John Lewis, who was speaker of the House in 1963, gave Stratton more than testimony: As he left the witness stand, the Marshall legislator offered the former governor $50 "to do with as he sees fit, to use ... in any way he wants." In response, Stratton asked the judge, "Your honor, may I have your permission to accept this? ... It's my 51st birthday." Judge Hubert L. Will's reaction: "I don't control contributions."

Jurors found Stratton innocent — a decision that many attributed to Dirksen's testimony, which advocated giving a politician leeway in deciding when expenditures are personal and when they're political. There were no laws on Illinois' books at the time requiring politicians to report contributions, no guidelines for spending.

"It was a very loose atmosphere," whether it came to giving, accepting or spending contributions, says Jack Van Der Slik, head of the Legislative Studies Center at the University of Illinois at Springfield. "We're talking about the kind of atmosphere where people who had state jobs knew they were expected to give 2 percent of their salaries back to the party. You paid for your job."

As loose as things were regarding campaign financing and spending then, not much has changed in the three decades since, according to a recent report by the Illinois Campaign Finance Project, coordinated by Illinois Issues magazine and UIS. The only new law on the books on the subject was passed in 1974: It calls for candidates to itemize all receipts and expenditures over $150 with the State Board of Elections.

Given the enormous growth in campaign costs and the amount of money some public officials accumulate in their war chests, it's time to consider reforming the way politicians raise and spend money, says UIS professor Kent Redfield, who wrote the project report. Political watchdog groups and some lawmakers have long made the same argument.

Indeed, even former Gov. Stratton — a co-chair of the project — says he's appalled by the cash raised and spent in today's campaigns. "When I ran for office, we got money in little bits trickling in," he says. "I don't know how much I spent in a campaign [candidates weren't required to keep track of spending at the time], but it was a fraction of what is spent today." Between 1990, when the state board first compiled aggregate campaign spending figures, and 1994, the total cost of legislative races alone nearly doubled— from $9.5 million to $18.5 million, according to Redfield.

But where should reforms be directed? After all, the controversial nature of campaign financing in Illinois covers several areas: who can contribute how much money to whom for campaigns; how much money is spent on campaigns; and what people can do with leftover contributions once their political careers have ended.

In Illinois, unlike two-thirds of the states, there are no limits on the amount of money individuals and special interest groups (known as political action committees, or PACs) can donate to a candidate. In Missouri, individuals, corporations, labor unions, PACs and regulated industries are limited to $200 donations per candidate, according to the Federal Election Commission — though these limits face a legal challenge. Michigan and Florida place $500 limits on individual, labor union and PAC donations. New York limits contributors to $5,000 per candidate.

The absence of limits in Illinois led to some staggering contributions from

6 ¦ April 1996 Illinois Issues

interest groups in 1994, the campaign finance project found. The Illinois State Medical Society donated $1.3 million to legislative candidates that year, up from $641,000 four years earlier. The Illinois Education Association gave $936,000, up from $343,000 in 1990. Contributions from gambling interests increased 20-fold, from $50,000 in 1990 to $1 million in 1994.

Several proposals have been introduced in the General Assembly over the years that would have limited individuals' and groups' contributions to candidates, but they rarely have made it through the first stage of the legislative process.

This session, a bill has been introduced that would limit individuals' contributions to a candidate to $500 each for the primary and general elections, and limit PACs to $2,500 each. But legislative leaders, who reap most of the donations and then dole them out as they see fit, don't want to limit the money they can collect. Without limits, they can build up their own war chests and keep a tight rein on members of their parties, who must turn to the leaders for money come election time. It's an incentive for rank-and-file lawmakers to remain loyal to their party chiefs when considering how to vote on controversial issues.

Huge contributions translate into huge amounts of money spent by candidates on everything from direct mail to television advertising to staff salaries to fundraising itself. In 1994, candidates for the governor's office, other statewide offices and the legislature spent $63.4 million in the primary and general elections. Spending records were set in both a state Senate race ($1.34 million in District 29 in Chicago's northern suburbs) and a House race ($701,000 for the District 103 seat in Champaign).

But if it's unlikely Illinois will see contribution limits enacted, it's even less likely spending limits will become law. In its 1976 Buckley v. Valeo decision, the U.S. Supreme Court struck down a federal effort to limit campaign spending by a candidate. It held that such limits violate the First Amendment freedoms of expression and association. The court upheld limits on contributions.

As a result of the ruling, some states have adopted public financing for political campaigns similar to the procedure for funding presidential elections. Tax checkoffs or surcharges usually fund campaigns in such states in exchange for candidates' agreement to limit spending.

A few other states, such as New Hampshire and Nebraska, set voluntary spending limits for several offices. If candidates agree to the limits but end up exceeding them, they are subject to harsh monetary penalties.

"I'd be amazed if anyone pushed for public financing in Illinois," Redfield says. "It's such anathema to the legislative leaders and governor here. I think it would be a waste of time."

The most promising subject for campaign finance reform could be control of candidates' campaign war chests after they retire from politics. These accounts can build up hefty sums: Former Republican Gov. James R. Thompson left office with more than $1 million in his political fund, while Illinois Senate President Phil Rock, a Democrat, retired with a balance of $625,000.

Currently, if former elected officials close out their campaign committees, they are prohibited from converting the cash to personal use. But nothing requires them to close the committees when they leave office. If they don't close them, they can spend the money indefinitely.

If they convert the money to personal use, it is considered taxable income. However, they can loan the money to themselves.

"One of the most disturbing [practices] is the ethically questionable use of campaign contributions to pay for country club dues, out-of-state travel, no-interest personal loans, parking tickets, professional sporting event admissions and funeral expenses," says Redfield. "A lack of timely public scrutiny and the absence of rigorous restrictions in Illinois campaign finance law allow such abuses to go unchecked."

Former state Rep. Jim Nowlan, a senior fellow at the University of Illinois' Institute for Government and Public Affairs in Urbana, says the absence of rules allows retired politicians to loan themselves money without requiring them to pay it back.

Like Van Der Slik, Nowlan points to the past as a time of real abuse when it came to money and politics, a time when out-and-out bribery was common. He recounted his own days in the legislature when some of his colleagues went to jail for taking cash in exchange for voting for higher weight limits for the ready-mix cement trucking industry.

But critics argue that today dollars are merely channeled into campaign coffers, that contributions can amount to little more than legalized bribery. In fact, one look at the list of top contributors to Illinois legislative campaigns does make it clear that huge donations from special interest groups often translate into favorable votes on matters important to those groups. At the top of the givers' list in 1994 was the Illinois State Medical Society, which gave more than $1.3 million that year.

The group traditionally donates funds to Republican candidates, and has been a perennial backer of tort reform measures in hopes of bringing down physicians' malpractice costs.

After the 1994 elections, when Republicans gained control of both legislative chambers, many of the society's long-sought reforms finally passed. When the House was dominated by Democrats, who are largely funded by trial lawyers and labor groups opposed to such reforms, the measures were consistent failures.

While some caution such contributions can't be characterized as a quid pro quo for votes, others say the potential for abuse is there when so much cash is at stake.

"Ethical behavior may have been improved a bit from the past," says Nowlan. "But you can still take temptation away from the devil by setting some kinds of limits on what can and can't be done."

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