    Campaign Finance Reform: Early Experiences of Two States That
    Offer Full Public Funding for Political Candidates (09-MAY-03,
    GAO-03-453).

    In 2000 and 2002, Maine and Arizona held the nation's first
    elections under voluntary programs that offered full state
    funding for political candidates who ran for legislative and
    certain statewide offices. The goals of these programs, passed as
    ballot initiatives by citizens in these states, included
    increasing electoral competition and curbing increases in the
    cost of campaigns. Congress has considered legislation for public
    financing of congressional elections nearly every session since
    1956, although no law has been enacted. In the Bipartisan
    Campaign Reform Act (P.L. 107-155 (2002)), Congress mandated that
    GAO study the results of the unique public financing programs in
    Maine and Arizona. For the 2000 and 2002 elections in Maine and
    Arizona, this report provides: (1) statistics on the number of
    candidates who chose to campaign with public funds and the number
    who were elected; and (2) observations, based on limited data,
    regarding the extent to which the goals of the public funding
    programs were met.
    -------------------------Indexing Terms-------------------------
    REPORTNUM:   GAO-03-453
        ACCNO:   A06858
      TITLE:     Campaign Finance Reform: Early Experiences of Two States
    That Offer Full Public Funding for Political Candidates
         DATE:   05/09/2003
      SUBJECT:   Election campaign financing
    	     Political candidates
    	     Data collection
    	     Statistical data
    	     Maine
    	     Arizona

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    GAO-03-453

    Report to Congressional Committees

    United States General Accounting Office

    GAO

    May 2003 CAMPAIGN FINANCE REFORM

    Early Experiences of Two States That Offer Full Public Funding for
    Political Candidates

    GAO- 03- 453

    In both Maine and Arizona, the number of legislative candidates who chose
    to use public financing for their campaigns increased greatly from 2000 to
    2002. In perspective, 59 percent of Maine*s and 36 percent of Arizona*s
    current legislators successfully ran as publicly financed candidates in
    the 2002 election. Also, in Arizona*s 2002 election, publicly financed
    candidates won seven of the nine available seats in races for statewide
    offices, including Governor.

    Legislative Candidates and Election Results in Maine and Arizona

    In comparing the 2000 and 2002 elections to those in 1996 and 1998, GAO*s
    findings regarding changes in electoral competition were inconclusive.
    Various measures* contested races (more than one candidate per race),
    incumbent reelection rates, and incumbent victory margins* reflect mixed
    results. Also, these results may have been affected by term limits,
    redistricting, and other factors. Average legislative candidate spending

    decreased in Maine but increased in Arizona in 2000 and 2002, compared to
    previous years. Further, particularly in 2002, both states experienced
    increases in independent expenditures* a type of campaign spending whereby
    political action committees or other groups expressly support or oppose a
    candidate. The extent of spending for public policy messages without
    explicit election advocacy is not known.

    In sum, with only two elections from which to observe legislative races
    and only one election from which to observe most statewide races, it is
    too early to draw causal linkages to changes, if any, that resulted from
    the public

    financing programs in the two states. In 2000 and 2002, Maine and

    Arizona held the nation*s first elections under voluntary programs that
    offered full state funding for political candidates who ran for

    legislative and certain statewide offices. The goals of these programs,
    passed as ballot

    initiatives by citizens in these states, included increasing electoral
    competition and curbing increases in the cost of campaigns. Congress has
    considered legislation for public financing of congressional elections
    nearly every session since 1956, although

    no law has been enacted. In the Bipartisan Campaign Reform Act (P. L. 107-
    155 (2002)), Congress mandated that GAO study the results of the unique
    public

    financing programs in Maine and Arizona.

    For the 2000 and 2002 elections in Maine and Arizona, this report
    provides:  Statistics on the number of candidates who chose to campaign
    with public funds and the number who were elected.  Observations, based
    on limited

    data, regarding the extent to which the goals of the public funding
    programs were met. CAMPAIGN FINANCE REFORM

    Early Experiences of Two States That Offer Full Public Funding for
    Political Candidates www. gao. gov/ cgi- bin/ getrpt? GAO- 03- 453. To
    view the full product, including the scope

    and methodology, click on the link above. For more information, contact
    Norman Rabkin at (202) 512- 8777 or rabkinn@ gao. gov. Highlights of GAO-
    03- 453, a report to

    Congressional Committees

    May 2003

    Page i GAO- 03- 453 Public Funding of Political Campaigns Letter 1 Results
    in Brief 3 Background 6 Program Participation: More Candidates Opting to
    Use Public Financing 11 Voter Choice: Legislative and Statewide Candidates
    in Publicly

    Funded Elections 17 Electoral Competition: Analysis of Elections in Maine
    and Arizona 29 Influence of Interest Groups: Mixed Views on Effects of
    Public Financing of Campaigns 44 Campaign Spending: Average Candidate
    Spending Decreased in Maine but Increased in Arizona; Independent
    Expenditures Became More Prominent in Both States; Extent of Issue
    Advocacy Spending Not Known 51 Voter Participation: No Clear Link to
    Public Financing Program 61 Concluding Observations 64 Appendix I
    Objectives, Scope, and Methodology 67

    Objectives 67 Overview of Our Scope and Methodology 67 Scope and
    Methodology: Statistical Information Regarding the 2000 and 2002 Elections
    68 Scope and Methodology: Extent to Which Goals of Public Financing
    Programs Were Met 69 Appendix II Overview of the Public Financing Programs
    for Election Campaigns in Maine and Arizona 83

    Purposes of the Public Financing Programs 83 Candidates Must Qualify to
    Receive Public Funding 85 Amounts of Allowable Public Funding for
    Participating Candidates 86 Revenue Sources for the Public Financing
    Programs 88 Administration of the Public Financing Programs 90 Reduced
    Contribution Limits and Additional Reporting Requirements for
    Nonparticipating Candidates 92 Appendix III Summary of Legal Challenges to
    Maine*s and Arizona*s Public Financing Programs 94 Legal Challenges to the
    Maine Clean Election Act 94 Legal Challenges to Arizona*s Citizens Clean
    Elections Act 97 Contents

    Page ii GAO- 03- 453 Public Funding of Political Campaigns Appendix IV
    Survey of Candidates for Office in the Maine 2000 Elections 101

    Appendix V Survey of Candidates for Office in the Arizona 2000 Elections
    109

    Appendix VI Comments Received in Our Survey of Candidates for Office in
    Maine*s and Arizona*s 2000 Elections 117

    Comments Provided by Maine Candidates 117 Comments Provided by Arizona
    Candidates 129 Appendix VII GAO Contacts and Acknowledgments 140 GAO
    Contacts 140 Staff Acknowledgments 140 Other Acknowledgments 140
    Bibliography 141

    Tables

    Table 1: Maine*s Primary and General Elections in 2000 and 2002* Number of
    Candidates Who Used Public Financing and Number of Races with at Least One
    Participating Candidate 12 Table 2: Results of Maine*s General Elections
    in 2000 and 2002*

    Campaign Status and Number of Participating Candidates Elected by Office
    13 Table 3: Arizona*s Primary and General Elections in 2000 and

    2002* Number of Candidates Who Used Public Financing and Number of Races
    with at Least One Participating Candidate 15 Table 4: Results of Arizona*s
    General Election in 2000 and 2002*

    Campaign Status and Number of Participating Candidates Elected by Office
    16

    Page iii GAO- 03- 453 Public Funding of Political Campaigns Table 5:
    Average Number of State Legislature Candidates Per District Race in Maine
    and Arizona (1996, 1998, 2000, and 2002) 19 Table 6: Percentage of
    Participating Legislative Candidates by

    Political Party Affiliation in Maine and Arizona (2000 and 2002) 22 Table
    7: Number of Third- party or Independent Candidates In Maine and Arizona
    State Legislative Races (1996, 1998,

    2000, and 2002) 23 Table 8: Number of Arizona Corporation Commission
    Candidates (1994, 1996, 1998, 2000, and 2002) 24 Table 9: Number of
    Candidates for Maine and Arizona Statewide Races (1994, 1998, and 2002) 25
    Table 10: Maine and Arizona Citizenry Views (in Percentages) on Clean
    Election Law 49 Table 11: Spending by Candidates for Statewide Offices in
    Arizona (1998 and 2002) 57 Table 12: Spending by Candidates for Statewide
    Offices in Arizona by Participation Status (2002) 58 Table 13: Independent
    Expenditures in Maine and Arizona (1998, 2000, and 2002) 59 Table 14:
    Voter Turnout in Maine, Arizona, and the United States, 1988 through 2000
    62 Table 15: Results of Logistic Regression Models Testing the Effect of
    Public Financing Programs on Competitive Races 72 Table 16: List of
    Organizations (and Title of Individuals) Interviewed in Maine 75 Table 17:
    List of Organizations (and Title of Individuals) Interviewed in Arizona 76
    Table 18: Seed Money Limits and Number of Qualifying $5 Contributions 86
    Table 19: Public Funding Available to Each Participating Candidate in 2000
    88 Table 20: Revenue Sources and Amounts for Public Financing Programs in
    2000 89 Table 21: Maine Clean Election Act Litigation 95 Table 22: Arizona
    Litigation * Title of Ballot Initiative 98 Table 23: Arizona Litigation *
    Nomination and Appointment

    Process to the Citizens Clean Elections Commission 98 Table 24: Arizona
    Litigation * Sources for Public Funding 100 Table 25: Comments Received in
    Our Survey of Candidates for Office in Maine*s 2000 Elections 118

    Page iv GAO- 03- 453 Public Funding of Political Campaigns Table 26:
    Comments Received in Our Survey of Candidates for Office in Arizona*s 2000
    Elections 130 Figures

    Figure 1: Response of Candidates in the 2000 Election Regarding Which
    Factor (Term Limits or Public Funding) Played a Greater Role in Attracting
    New Candidates to Run for Office 20 Figure 2: Percentages of Participating
    Candidates Who Answered

    That the Availability of Public Funding Was a Great or Very Great Factor
    in Their Decision to Run for Office in 2000 21 Figure 3: Reasons Why
    Candidates Chose to Participate in the

    Public Financing Program 26 Figure 4: Reasons Why Candidates Did Not
    Participate in the Public Financing Program 28 Figure 5: Contested and
    Uncontested Races in Maine*s Legislative (House and Senate) Primary
    Elections (1996, 1998, 2000, and 2002) 32 Figure 6: Contested and
    Uncontested Races in Arizona*s Legislative

    (House and Senate) Primary Elections (1996, 1998, 2000, and 2002) 33
    Figure 7: Publicly Financed Candidates in Maine*s Contested

    Legislative Primary Races (2000 and 2002) 34 Figure 8: Publicly Financed
    Candidates in Arizona*s Contested Legislative Primary Races (2000 and
    2002) 35 Figure 9: Incumbent Reelection Rates in Maine*s Legislative Races
    (1996, 1998, 2000, and 2002) 37 Figure 10: Incumbent Reelection Rates in
    Arizona*s Legislative Races (1996, 1998, 2000, and 2002) 38 Figure 11:
    Competitive Legislative Races in Maine (1996, 1998, 2000, and 2002) 41
    Figure 12: Competitive Senate Races in Arizona (1996, 1998, 2000,

    and 2002) 43 Figure 13: Candidate Responses about Public Financing Program
    and Interest Group Influence 45 Figure 14: Candidate Responses about the
    Public Financing Program and Confidence in Government 46 Figure 15:
    Average Maine and Arizona Legislative Candidate Spending (1996, 1998,
    2000, and 2002) 54

    Page v GAO- 03- 453 Public Funding of Political Campaigns Figure 16:
    Average Maine and Arizona Legislative Candidate Spending by Participation
    Status (2000 and 2002) 55 Figure 17: Extent to Which Candidates in the
    2000 Elections

    Agreed with the Statement That Independent Expenditures Would Become
    Increasingly Important in 2002 and Future Elections 60 Figure 18: Extent
    to Which Candidates in the 2000 Elections

    Agreed with the Statement That Issue Advocacy Spending Would Increase in
    the 2002 and Future Elections 61 This is a work of the U. S. Government
    and is not subject to copyright protection in the

    United States. It may be reproduced and distributed in its entirety
    without further permission from GAO. It may contain copyrighted graphics,
    images or other materials. Permission from the copyright holder may be
    necessary should you wish to reproduce copyrighted materials separately
    from GAO*s product.

    Page 1 GAO- 03- 453 Public Funding of Political Campaigns May 9, 2003 The
    Honorable Trent Lott Chairman

    The Honorable Christopher J. Dodd Ranking Member Committee on Rules and
    Administration United States Senate

    The Honorable Robert W. Ney Chairman The Honorable John B. Larson Ranking
    Member Committee on House Administration House of Representatives

    Because the subject involves both politics and money, campaign finance
    reform can be contentious as well as complex. Congress has considered
    legislation for public financing of congressional elections nearly every
    session since 1956, although no law has been enacted. Traditionally, to
    identify promising ways to address complex or contentious issues, the
    federal government has drawn upon the diverse experiences of the
    *laboratories of democracy,* the states. In this regard, Section 310 of
    the Bipartisan Campaign Reform Act of 2002 1 mandated that we study and
    report on the year 2000 elections in two states, Maine and Arizona. To
    provide a broader perspective, we also obtained statistics and related
    information regarding the 2002 elections in the two states.

    The 2000 and 2002 elections in Maine and Arizona were the first instances
    in the nation*s history where candidates seeking state legislature seats
    or certain statewide offices had the option to fully fund their campaigns
    with public monies. Our review of the history of Maine*s and Arizona*s
    public financing programs, including discussions with key officials in
    each state, identified five goals of the programs. That is, the programs
    generally were intended to increase voter choice by encouraging more
    candidates to run

    for office; increase electoral competition by, among other means, having
    fewer uncontested races; reduce the influence of special interest groups 1
    P. L. 107- 155 (2002).

    United States General Accounting Office Washington, DC 20548

    Page 2 GAO- 03- 453 Public Funding of Political Campaigns and, thereby,
    enhance citizens* confidence in government; curb increases in the cost of
    campaigns; and increase voter participation (e. g., increase

    turnout for elections). Both programs became law through the respective
    state*s ballot- initiative process* Maine (1996) and Arizona (1998).

    Under the new campaign financing programs in Maine and Arizona,
    *participating candidates** those who agreed to forego private fundraising
    and who qualified to take part in the respective state*s public financing
    program* received a set amount of money for their primary and general
    election campaigns. Also, publicly financed candidates could receive
    additional matching funds based on spending by or for privately financed
    (* nonparticipating*) candidates, who* while subject to state limits and
    disclosure rules* engaged in traditional means to raise money from
    individuals, corporations, and political action committees.

    In accordance with the mandate specified in Section 310 of Public Law 107-
    155, and as agreed with your offices, this study:

     Provides statistics showing the number of candidates who chose to use
    public funds to run for legislative seats or statewide offices in the 2000
    and 2002 elections in Maine and Arizona, the seats or offices for which
    they were candidates, whether the candidates were incumbents or
    challengers, whether the candidates were successful in their bids, and the
    number of races in which at least one candidate ran an election with
    public funds.

     Describes the extent to which the goals of Maine*s and Arizona*s public
    financing programs were met in the 2000 and 2002 elections. Specifically,
    we describe what changes occurred, if any, regarding five

    indicators* voter choice (number of candidates), electoral competition,
    interest group influence, campaign spending, and voter participation
    (voter turnout)* indicators related to the goals of the programs.

    In conducting our study, we reviewed relevant studies and reports
    regarding campaign finance reform in the United States generally, as well
    as in Maine and Arizona specifically. We visited Maine and Arizona to

    interview responsible election officials and representatives of various
    interest groups. Also, for both states, we obtained and analyzed available
    statistical data and related information about the 2000 and 2002
    elections. To obtain further perspectives on the effects of public
    financing, we

    surveyed all candidates, including those who used public financing as well
    as those who did not, who ran in the 2000 primary and general elections in

    Page 3 GAO- 03- 453 Public Funding of Political Campaigns Maine and
    Arizona. Further, we contracted with professional pollsters to obtain the
    views of projectable samples of citizens in Maine and Arizona. It

    should be emphasized that describing or interpreting the effects of public
    financing in Maine and Arizona should be approached cautiously, partly
    because one election cycle*s results or even two election cycles* results
    may not be representative. Also, term limits, redistricting, the ambiguous
    environment that surrounded the implementation of the new campaign finance
    programs, and other factors not directly related to public or private
    financing can affect electoral campaigns and results. We conducted our
    work from April 2002 to March 2003 in accordance with generally

    accepted government auditing standards. Appendix I presents more details
    about our objectives, scope, and methodology.

    In both Maine and Arizona, the number of legislative candidates who chose
    to use public financing for their campaigns increased greatly from 2000 to
    2002. In the 2000 primary and general elections, approximately one

    of every three candidates in Maine and one of every four candidates in
    Arizona chose to participate in the state*s public financing program. In
    the 2002 primary and general elections, participation increased
    significantly in both states, with about one- half or more of all
    candidates participating. In perspective, after the 2000 general
    elections, the elected legislators who

    had run with public funds held 33 percent of the total seats in Maine*s
    legislature and 18 percent of the total seats in Arizona*s legislature.
    After the 2002 general elections, the proportions increased to 59 percent
    of Maine*s legislature and 36 percent of Arizona*s legislature. Also, of
    the seven statewide offices in Arizona*s 2002 general election, publicly
    funded candidates won seven of nine seats, which included Governor,
    Secretary

    of State, Attorney General, State Treasurer, State Mine Inspector, and
    Corporation Commissioner (two of three seats). 2 It is too soon to
    determine the extent to which the goals of Maine*s and Arizona*s public
    financing programs are being met. That is, with only two

    elections from which to observe legislative races and only one election
    from which to observe most statewide races, limited data are available to
    draw causal linkages to changes, if any, that occurred in voter choice
    (number of candidates), electoral competition, interest group influence, 2
    Nonparticipating candidates won election for the third seat on the
    Corporation

    Commission and for the other statewide office (Superintendent of Public
    Instruction). Results in Brief

    Page 4 GAO- 03- 453 Public Funding of Political Campaigns campaign
    spending, and voter participation (e. g., voter turnout)* five indicators
    related to the goals of the programs:

     Voter choice. While one goal of public financing was to encourage more
    candidates to run for office, the average numbers of state legislature
    candidates per district race in Maine and Arizona in the 2000 and 2002
    elections were not notably different than the averages for the two
    previous elections, 1996 and 1998. In both states, a higher proportion of
    Democratic candidates participated in the public funding program, and the
    number of participating third- party or independent candidates generally
    increased from the 2000 to the 2002 primary and general elections.
    Regarding races for statewide offices, most candidates in Arizona opted to
    participate in the public funding program in the 2002 elections. Our
    survey of candidates in Maine*s and Arizona*s 2000 elections found mixed
    perspectives as to which of two

    factors* public funding for campaigns or open seats due to termlimited
    vacancies* played a greater role (or equal roles) in attracting new
    candidates to run for office. However, most of the participating
    candidates who responded to our survey* 55 percent in Maine and 56 percent
    in Arizona* answered that the availability of the public financing program
    was a great or very great factor in their decision to run for office in
    2000.

     Electoral competition. The public financing programs were expected to
    make elections more competitive, but our analyses were inconclusive.
    Experts generally agreed on three measures of competitiveness* increases
    in the percentage of contested races (races with more than one candidate),
    decreases in incumbents* reelection rates, or reductions in the
    incumbents* victory margins. The percentages of contested legislative
    races in Maine*s primary elections were relatively unchanged in 2000 and
    2002, compared with 1998, and were less than the percentage of contested
    legislative races in 1996. The percentages of contested legislative races
    in Arizona*s primary elections increased in 2000 and 2002, compared
    with1998; however, the percentage of contested races in 2000 was about the
    same as 1996. About 85 percent of the contested legislative primary races
    in Maine*s and Arizona*s 2002 elections had publicly financed candidates.
    Legislative incumbent reelection rates remained about the same in both
    states after public financing was introduced. Incumbent victory margins,
    which we used to identify competitive races, reflected a mixed picture.
    That is, we defined a competitive race as one in which the difference in
    the percentage of vote garnered between the winning incumbent and the
    runner- up was 15 points or less; and, under this definition, trends (if
    any) were not clearly evident. Further analysis* examining several

    Page 5 GAO- 03- 453 Public Funding of Political Campaigns factors such as
    incumbency and candidate spending* showed that candidate participation in
    the public financing programs in Maine and Arizona had no effect on
    competitive races as defined by incumbent

    victory margins. However, the results of this analysis should be
    interpreted with caution, given the relatively few variables we used and
    the limited amount of data available.  Interest group influence.
    Responses to our surveys of candidates and

    citizens in Maine and Arizona, as well as our interviews with interest
    group representatives, reflected mixed views. In our survey of candidates
    in Maine*s and Arizona*s 2000 elections, we asked them to

    what extent, if at all, they agreed with the statement that, once elected,
    candidates who participated in the public financing program have been more
    likely to serve the broader interests of their constituents as a whole and
    less likely to be influenced by specific individuals or groups. The survey
    results reflected mixed views. Most of the responding nonparticipating
    candidates* 67 percent in Maine and 68 percent in Arizona* answered to
    *little or no extent.* In contrast, many of the responding participating
    candidates* 42 percent in Maine and 56 percent in Arizona* answered to a
    *great or very great extent.* Also, in our fall 2002 survey of voting- age
    citizens in Maine and Arizona, of the respondents who acknowledged some
    awareness of the respective state*s applicable law, almost two- thirds in
    both states answered that there was no effect on their confidence in
    government or it was too soon to tell. Additionally, slightly more
    respondents in each state answered that the law had greatly or somewhat
    increased their confidence in state government* 17 percent in Maine and 21
    percent in Arizona* than did respondents who answered that the law had
    greatly or somewhat decreased their confidence* 8 percent in Maine and 15
    percent in Arizona.

     Campaign spending. Under the public financing programs in the 2000 and
    2002 elections, average legislative candidate spending decreased in Maine
    but increased in Arizona, compared to previous elections. Also,
    particularly in the 2002 elections, both states experienced increases in
    independent expenditures* a type of campaign spending whereby political
    action committees, other groups, or individuals communicate messages to
    voters that support or oppose a clearly identified candidate but without
    coordination with any candidate. The 2002

    increases in independent expenditures largely were associated with the
    gubernatorial races in both states. Because it is not regulated, the
    extent of spending for issue advocacy* that is, public policy messages
    that do not refer to a particular candidate* is not known.

    Page 6 GAO- 03- 453 Public Funding of Political Campaigns  Voter
    participation. Although a goal of the public financing programs was to
    increase voter participation, turnout in Maine*s and Arizona*s

    2000 elections did not significantly differ from prior presidential
    election years. While turnout can be influenced by many factors, including
    the level of media interest and the extent of grassroots efforts to get
    out the vote, public financing of candidates was probably not a major
    factor in the 2000 elections. Our survey of voting- age citizens in Maine
    and Arizona in the fall of 2002 indicated that large segments of these
    populations* an estimated 60 percent in Maine and an estimated 37 percent
    in Arizona* were still unaware of the respective state*s public financing
    program.

    Overall, in response to our survey of candidates in Maine and Arizona,
    many of the respondents* comments followed ideological lines, as may be
    expected. For example, although there were some exceptions,
    nonparticipating candidates generally commented that public financing of
    political campaigns was an inappropriate use of tax dollars, whereas
    participating candidates usually endorsed public financing. Collectively,
    the widely divergent and sometimes virulent comments seem to indicate that
    reaching a consensus regarding the merits of the public financing

    programs may be unlikely, at least in the foreseeable future. Nonetheless,
    irrespective of political ideologies or partisanship, state agency
    officials and other observers told us they anticipate that* based on
    election strategies or other decisional factors* increasing numbers of
    candidates will choose to run with public funding in future years. If so,
    the continuation of the public financing programs may depend not only on
    efforts to substantiate the programs* merits but also on efforts to
    sustain public support for providing the larger amounts of total funds
    that will be needed.

    We are not making any recommendations in this report. As with most
    campaign finance reform issues, the concept of public funding for
    political campaigns* that is, a finance system in which the public
    treasury provides cash grants to candidates or political parties*
    generates impassioned arguments from both proponents and opponents.
    Generally, proponents of public funding assert that privately financed
    election campaigns (1) give disproportionate influence to special interest
    groups, other organizations, and wealthy individuals and (2) present
    fundraising burdens or barriers that dissuade many potential candidates
    from running for office, particularly women and minority candidates. On
    the other hand, opponents assert that public funding forces taxpayers to
    Background

    Page 7 GAO- 03- 453 Public Funding of Political Campaigns contribute to
    candidates whom they do not support, inappropriately inserts the
    government into the electoral process, and uses tax dollars that could be
    spent for higher- priority needs. Further, given an inherent link

    between political speech and political spending, some opponents argue that
    any limitation on campaign contributions restricts free speech and
    violates the First Amendment.

    Competing arguments aside, there is widespread recognition that designing
    and implementing an effective campaign finance system is difficult due to
    the inherent complexities and the need to consider and reconcile multiple
    goals that are diverse and at times conflicting. For instance, according
    to one report: 3 *A well- functioning campaign finance system must protect
    freedom of speech, advance

    competitive elections, curtail special interest influence, and promote the
    equal political voice of all citizens, while minimizing the burden of
    regulation on candidates, contributors, [and] other participants in the
    process * Campaign finance reform requires respect for the

    open and dynamic character of the American political process, the evolving
    nature of campaigns, and the variety of circumstances and campaign styles
    across the country. Campaign finance reform must avoid burdening
    particular candidates or groups or providing advantages to their
    opponents. Reform must also take into account how candidates,
    contributors, and others will respond to particular efforts to regulate
    their behavior.*

    In fact, in nearly every session since 1956, Congress has considered
    legislation for public financing of congressional elections, although no
    law has been enacted. Most recently, in the 107th Congress, companion
    bills were introduced in the House (H. R. 1637) and Senate (S. 719)
    proposing public funding and certain media benefits to congressional
    candidates who would qualify by collecting a set number of $5
    contributions and by refusing all other contributions to their campaign.
    The declarations section of H. R. 1637 states that public financing would
    enhance American democracy by, among other means, creating a more level
    playing field for incumbents and challengers, eliminating the potentially
    inherent conflict of interest caused by the private financing of election
    campaigns, and

    allowing elected officials more time to carry out their public
    responsibilities without the constant preoccupation with raising money.

    3 The Association of the Bar of the City of New York, Commission on
    Campaign Finance Reform (Richard Briffault, Executive Director), Dollars
    and Democracy: A Blueprint for Campaign Finance Reform, Fordham University
    Press (New York, NY: 2000).

    Page 8 GAO- 03- 453 Public Funding of Political Campaigns These bills were
    referred to committee in 2001, but no further action was taken before the
    Congress ended.

    Despite the various complexities or challenges, several states, cities, or
    other local jurisdictions across the nation currently have public
    financing programs, although most are relatively limited in scale,
    covering only a small number of offices or providing only a small amount
    of the funds needed to finance a campaign. For example, programs that
    provide some public funding for state legislative candidates were
    introduced by Minnesota in 1976 and Wisconsin in 1977. Minnesota*s
    program, which is funded by an optional state income tax check- off and by
    a fixed general fund appropriation, is available to candidates for state
    legislative seats and certain statewide offices who agree to set spending
    limits. 4 Eligible candidates may receive up to 50 percent of the spending
    limit in public funds, which are allocated based on a statutory formula.
    Wisconsin*s program is also funded through an optional state income tax
    check- off and is available for legislative candidates as well as
    candidates for certain statewide offices who agree to spending limits and
    restrictions on contributions from political action committees. 5 Public
    funds are awarded in the general election to candidates who received a set
    percentage of the

    total primary vote and are limited based on a statutory ceiling and the
    total number of candidates who applied for public funding.

    More recently, in 1997, Vermont*s legislature passed a campaign finance
    reform law that established a voluntary, full public financing program for
    candidates for statewide offices. The program was first implemented in the
    2000 election for the offices of governor and lieutenant governor and was
    expanded in 2002 to include additional statewide offices. 6 In 1998, by
    ballot initiative, voters in Massachusetts passed a law that created a

    voluntary, full public financing program for candidates for the state
    legislature and certain statewide offices, including governor and
    lieutenant

    4 Minn. Stat. Ann. ch. 10A (2002). 5 Wis. Stat. Ann. ch. 11 (2001). 6 1997
    Vermont Campaign Finance Reform Act, Vt. Stat. Ann. tit. 17 S: 2801- 2883
    (2002).

    Page 9 GAO- 03- 453 Public Funding of Political Campaigns governor. 7
    However, the law was not fully implemented due to funding controversy. In
    particular, for the 2002 elections, the state legislature did

    not release money to fund the law*s implementation. After intervention of
    Massachusetts* Supreme Judicial Court, 8 some candidates in the 2002
    election were funded with proceeds generated by the auctioning of state
    assets.

    Published studies reviewing some of the longer standing public financing
    programs have reported mixed findings regarding effects. For example, a
    1995 study of Minnesota*s public financing program for legislative
    candidates reported that, after the program was introduced in 1976,
    incumbents* overall vote shares did not decrease, although challengers who
    received significant amounts of public funds due to the program*s grant
    structure fared better against incumbents than those who had less money to
    spend. 9 Similarly, a 1995 study of Wisconsin*s program of public funding
    for legislative candidates reported that elections did not become more
    competitive after the program was introduced in 1977, but the spending gap
    between incumbents and challengers was narrowed. 10 Further, recent
    studies of public funding programs in New York City and

    Los Angeles* programs that provide matching funds to participating
    candidates* reported that the programs have generally increased electoral
    competition and have helped challengers to mount credible campaigns

    7 The Massachusetts Clean Elections Law, Ma. Gen. Laws ch. 55A (2002).
    From one perspective, Massachusetts* program can be characterized as a
    *partial* public financing program. That is, publicly financed candidate
    must collect campaign contributions, ranging from $5 to $100, which can be
    solicited only during the relevant qualifying period. In the 2002
    gubernatorial race, for example, a publicly financed candidate could have
    collected

    $486,000 in cash contributions and $37,800 of in- kind contributions.
    Similarly, a publicly financed candidate for the state house of
    representatives could have collected $6,500 in cash contributions and $3,
    200 of in- kind contributions.

    8 Supreme Judicial Court for the Commonwealth of Massachusetts, Case No.
    SJC- 08677 (Jan. 2002). 9 Patrick D. Donnay and Graham P. Ramsden, *Public
    Financing of Legislative Elections: Lessons from Minnesota,* Legislative
    Studies Quarterly, vol. 20, no. 3 (1995). 10 Kenneth R. Mayer and John M.
    Wood, *The Impact of Public Financing on Electoral Competitiveness:
    Evidence from Wisconsin, 1964- 1990,* Legislative Studies Quarterly, vol.
    20, no. 1 (1995).

    Page 10 GAO- 03- 453 Public Funding of Political Campaigns against
    incumbents. 11 However, the studies noted that participating candidates in
    these programs were disadvantaged by spending limits or by

    limited funding when faced with high spending by opponents or large
    independent expenditures on their opponent*s behalf.

    Of the approximately 14 states with direct public financing programs,
    Maine and Arizona are unique in having functioning programs that offer
    full public funding for qualified candidates for the state legislature and
    certain statewide offices. In November 1996, Maine voters approved a
    citizen*s initiative* the Maine Clean Election Act 12 *establishing the
    nation*s first program of full public financing for qualified candidates
    for the state legislature and for one executive branch office (governor).
    Similarly, in November 1998, Arizona voters passed the Citizens Clean
    Elections Act, 13 which provides full public funding for qualified
    candidates for the state legislature and various statewide (executive
    branch) offices. 14 In both Maine and Arizona, candidates who choose to
    participate in the

    public funding programs must first qualify by raising a set number of $5
    contributions from voters. Regarding implementation of these acts, in both
    states, the public financing programs became available for candidates
    beginning with year 2000 elections.

    Appendix II provides more detailed information about the design and
    implementation of Maine*s and Arizona*s public financing programs, and
    appendix III presents summary information about various legal challenges
    to Maine*s 1996 statute and Arizona*s 1998 statute, including challenges
    to funding sources for Arizona*s program.

    11 Paul Ryan, *A Statute of Liberty: How New York City*s Campaign Finance
    Law is Changing the Face of Local Elections (2003),* and *Eleven Years of
    Reform: Many Successes- More to be Done: Campaign Financing in the City of
    Los Angeles (2001),* reports in the series *Public Financing in American
    Elections* sponsored by the Center for Governmental Studies, (Los Angeles,
    California), http:// www. cgs. org/ publications (downloaded Feb. 20,
    2003).

    12 Me. Rev. Stat. Ann. tit. 21- A S: 1121, et seq.

    13 Ariz. Rev. Stat. Ann. S: 16- 940, et seq.

    14 Applicable executive branch offices are Governor, Secretary of State,
    Attorney General, Treasurer, Corporation Commissioners, Superintendent of
    Public Instruction, and Mine Inspector.

    Page 11 GAO- 03- 453 Public Funding of Political Campaigns In the 2000
    primary and general elections, about one of every three candidates in
    Maine and one of every four candidates in Arizona chose to use public
    financing for their campaigns. In the 2002 primary and general

    elections, participation in the public financing program increased
    significantly in both states, with about one- half or more of all
    candidates participating. Regarding results, 62 of the 116 publicly funded
    candidates in Maine*s 2000 general election were elected to office, as
    were 110 of the 231 publicly funded candidates in the state*s 2002 general
    election. In

    Arizona*s 2000 general election, 16 of the 44 publicly funded candidates
    were elected to office, as were 39 of the 89 publicly funded candidates in
    the state*s 2002 general election.

    In perspective, after the 2000 general elections, the elected legislators
    who had run with public funds held 33 percent of the total seats in
    Maine*s legislature and 18 percent of the total seats in Arizona*s
    legislature. After the 2002 general elections, the proportions increased
    to 59 percent of Maine*s legislature and 36 percent of Arizona*s
    legislature. Also, of the seven statewide offices in Arizona*s 2002
    general election, publicly funded candidates won seven of nine seats,
    which included Governor, Secretary

    of State, Attorney General, and State Treasurer. Maine*s 1996 voter-
    initiated system provides full public funding to qualified candidates for
    state legislative seats and the governor*s office. The state legislature
    consists of 151 seats in the House of Representatives and 35 seats in the
    Senate. Incumbents in all 186 legislative seats serve 2- year terms. Thus,
    in the primary and general elections, which are held biannually (i. e., in
    each even- numbered year), all legislative seats are on the ballot. In
    2000, the first year for which public funds were available for election
    campaigns in Maine, candidates potentially eligible for such funds
    included all candidates for the state legislature. 15 In Maine*s 2000
    primary and general elections, approximately one of every three candidates
    chose to participate in the state*s program for pubic

    financing of campaigns, as table 1 shows. Also, 33 percent of the primary
    election races and 47 percent of the general election races in 2000 had at
    least one participating candidate. In the next election, 2002,
    participation in the public financing program increased significantly.
    Specifically, in 15 Under Maine*s 1996 law, qualified candidates for
    office of Governor became eligible to

    receive public funding beginning in 2002. Program

    Participation: More Candidates Opting to Use Public Financing

    Participating Candidates and Results Statistics for Elections in Maine

    Page 12 GAO- 03- 453 Public Funding of Political Campaigns Maine*s 2002
    elections, 51 percent of all candidates in the primary election and 62
    percent of all candidates in the general election were publicly

    funded. Further, 52 percent of the primary election races and 79 percent
    of the general election races in 2002 had at least one participating
    candidate.

    Table 1: Maine*s Primary and General Elections in 2000 and 2002* Number of
    Candidates Who Used Public Financing and Number of Races with at Least One
    Participating Candidate

    Candidates and races Maine primary election Maine general election 2000
    elections Candidates: Number Percentage Number Percentage

    Nonparticipating (used private financing) 253 69% 236 67% Participating
    (used public financing) 116 31 116 33

    Total 369 100% 352 100% Races: a With no participating candidates 231 67%
    98 53%

    With at least one participating candidate 112 33 88 47

    Total 343 100% 186 100% 2002 elections Candidates: Nonparticipating (used
    private financing) 196 49% 144 38%

    Participating (used public financing) 208 51 231 62

    Total 404 100% 375 100% Races: a With no participating candidates 176 48%
    39 21%

    With at least one participating candidate 194 52 148 79

    Total 370 100% 187 100%

    Source: GAO analysis of state data. Note: Maine has 151 House districts
    and 35 Senate districts. Voters elect one legislator for each district.
    The ballot for the 2002 election cycle included gubernatorial candidates,
    who were eligible to participate in the public financing program. a In
    counting election races, we included all races in which there was a
    candidate on the ballot

    regardless of whether or not the candidate faced a challenger.

    In Maine*s 2000 general election, of the 116 candidates who ran with
    public financing, 62 were elected to office. As table 2 shows, the 62
    elected participating candidates consisted of 35 incumbents and 27
    challengers. In

    Maine*s 2002 general election, of the 231 candidates who ran with public
    financing, 110 were elected to office (55 incumbent and 55 challengers).

    In perspective, after the 2000 general election, the elected legislators
    who had run with public funds (62 candidates) held 33 percent of the 186
    total seats in Maine*s legislature. After the 2002 general election, with
    110

    Page 13 GAO- 03- 453 Public Funding of Political Campaigns successful
    publicly funded candidates, the proportion increased to 59 percent of the
    state legislature.

    Table 2: Results of Maine*s General Elections in 2000 and 2002* Campaign
    Status and Number of Participating Candidates Elected by Office

    Participating candidates: Incumbents, challengers, and results Maine House
    of Representatives Maine Senate Governor a Totals

    2000 general election Campaign status of participating candidates: Number
    of incumbents 26 11 b 37 Number of challengers c 55 24 b 79 Total number
    of participating candidates 81 35 b 116 Participating candidates elected:
    b Number of participating incumbents elected 24 11 b 35 Number of
    participating challengers elected c 21 6 b 27 Total number elected 45 17 b
    62

    2002 general election b Campaign status of participating candidates: b
    Number of incumbents 42 20 0 62 Number of challengers c 136 32 1 169 Total
    number of participating candidates 178 52 1 231 Participating candidates
    elected Number of participating incumbents elected c 36 19 0 55

    Number of participating challengers elected C 47 8 0 55

    Total number elected 83 27 0 110

    Source: GAO analysis of state data. a In Maine*s 2000 election, the public
    financing program was not applicable to the Office of Governor.

    In the 2002 election, term limits prohibited the incumbent governor from
    running. b Not applicable.

    c As used in the table, *challengers* consist of all nonincumbent
    candidates. Thus, any candidate who was not an incumbent is counted as a
    challenger, even if that candidate did not face an opponent.

    As mentioned previously, Arizona*s 1998 statute provides a system for full
    public funding to qualified candidates for state legislative seats and
    certain statewide offices. The state legislature consists of 60 seats in
    the House of Representatives and 30 seats in the Senate. Members in all 90
    legislative seats serve 2- year terms. Thus, in the primary and general
    elections, which are held biannually (i. e., in each even- numbered year),
    all legislative seats are on the ballot. In 2000, the first year for which
    public funds were

    available for election campaigns in Arizona, candidates potentially
    eligible Participating Candidates

    and Results Statistics for Elections in Arizona

    Page 14 GAO- 03- 453 Public Funding of Political Campaigns for such funds
    included all candidates for the state legislature, as well as the
    candidates who ran for seats on the Corporation Commission. 16 In
    Arizona*s 2000 primary and general elections, approximately one of

    every four candidates chose to participate in the state*s program for
    public financing of campaigns, as table 3 shows. Also, 40 percent of the
    primary election and 34 percent of the general election races in 2000 had
    at least one participating candidate. In the next election, 2002,
    participation in the public financing program increased significantly*
    with about half of all candidates choosing to participate and with about
    two- thirds of all races having at least one participating candidate.

    16 Under Arizona*s 1998 law, qualified candidates for other statewide
    offices* Governor, Secretary of State, Attorney General, Treasurer,
    Superintendent of Public Instruction, and Mine Inspector* can also qualify
    to receive public funding. Candidates for these offices

    were eligible to receive public funding beginning in 2002, the first year
    after passage of the law in which elections were held for these offices.
    See Ariz. Rev. Stat. Ann. S: 19- 951.

    Page 15 GAO- 03- 453 Public Funding of Political Campaigns Table 3:
    Arizona*s Primary and General Elections in 2000 and 2002* Number of
    Candidates Who Used Public Financing and Number of Races with at Least One
    Participating Candidate

    Candidates and races Arizona primary election Arizona general election
    2000 elections Candidates: Number Percentage Number Percentage

    Nonparticipating (used private financing) 174 75% 117 73% Participating
    (used public financing) 59 25 44 27

    Total a 233 100% 161 100%

    Races: With no participating candidates 74 60% 28 45% With at least one
    participating candidate 49 40 34 55

    Total 123 100% 62 c 100% 2002 elections Candidates: Number Percentage
    Number Percentage

    Nonparticipating (used private financing) 126 48% 90 50% Participating
    (used public financing) b 136 52 89 50

    Total 262 100% 179 100%

    Races: With no participating candidates 46 36% 23 34% With at least one
    participating candidate 81 64 45 66

    Total 127 100% 68 100%

    Source: GAO analysis of state data. Note: Arizona has 30 legislative
    districts. Voters elect two representatives and one senator for each
    district. For House races, the top two vote- getters in each district*s
    general election win the seats. The 2000 election cycle included only one
    statewide office, the Corporation Commission, with two of the Commission*s
    three seats up for election. The ballot for the 2002 election cycle
    included seven statewide offices* Governor, Secretary of State, Attorney
    General, State Treasurer, Superintendent of Public Instruction, State Mine
    Inspector, and three seats for the Corporation Commission, which was
    expanded from three to five Commissioners. The number of candidates and
    races in this table include the relevant statewide offices for both years.
    For example, in 2000, the 62 general election races consisted of 30 races
    for House of Representatives seats (with each race involving 2 seats), 30
    races for Senate seats, and 2 races for seats on the Corporation
    Commission; and, in 2002, the 68 general election races consisted of 30
    House, 30 Senate, and 8 statewide office races.

    a In the 2000 primary and general elections combined, a total of 237
    candidates ran for seats in the legislature or the Corporation Commission.
    Of this total, four candidates* two who ran as Independents and two with
    general election write- in status* did not run in the primary elections.
    Thus, the number of candidates in the primary elections was 233. In the
    2000 elections, all 59 of the publicly funded (participating) candidates
    ran in the primaries; in contrast, in the 2002 elections, 3 of the total
    139 participating candidates ran in the general election only (see note
    b). b Three participating candidates in the 2002 election cycle did not
    run primary campaigns; these were

    one Independent candidate for Governor and two Independent candidates for
    the legislature. Including the 3 Independents, a total of 139 candidates
    participated in the public financing program in the 2002 primary and
    general elections combined.

    In Arizona*s 2000 general election, of the 44 candidates who ran with
    public financing, 16 were elected to office* 14 for legislative seats and
    2 for the Corporation Commission. As table 4 shows, the 16 elected

    participating candidates consisted of 6 incumbents and 10 challengers. In

    Page 16 GAO- 03- 453 Public Funding of Political Campaigns the 2002
    general election, of the 89 candidates who ran with public financing, 39
    were elected (9 incumbents and 30 challengers) to office* 32 for
    legislative seats and 7 for statewide offices.

    In perspective, after the 2000 general election, the elected legislators
    who had run with public funds (14 candidates) held 18 percent of the 90
    total seats in Arizona*s legislature. After the 2002 general election,
    with 32 successful publicly funded legislative candidates, the proportion
    increased to 36 percent of the state legislature. Also, of the seven
    statewide offices in Arizona*s 2002 general election, publicly funded
    candidates won 7 of 9 seats, which included the state*s chief executive
    (Governor), as well as the Secretary of State, the Attorney General, and
    the State Treasurer.

    Table 4: Results of Arizona*s General Election in 2000 and 2002* Campaign
    Status and Number of Participating Candidates Elected by Office

    Participating candidates: Incumbents, challengers, and results Arizona
    House of

    Representatives Arizona Senate Statewide offices a Totals 2000 general
    election Campaign status of participating candidates: Number of incumbents
    5 1 0 6

    Number of challengers b 25 10 3 38

    Total number of participating candidates 30 11 3 44

    Participating candidates elected: Number of participating incumbents
    elected 5 1 0 6 Number of participating challengers elected b 7 1 210

    Total number elected 12 2 2 16 2002 general election c Campaign status of
    participating candidates: Number of incumbents 9 1 2 12

    Number of challengers b 47 16 14 77

    Total number of participating candidates 56 17 16 89

    Participating candidates elected: Number of participating incumbents
    elected 6 1 2 9 Number of participating challengers elected b 21 4 5 30

    Total number elected 27 5 7d 39

    Source: GAO analysis of state data. a In Arizona*s 2000 elections, the
    public financing program was available to qualified candidates for

    only one statewide office (Corporation Commission). In the 2002 elections,
    in addition to the Corporation Commission, qualified candidates for six
    other statewide offices became eligible to receive public funding*
    Governor, Secretary of State, Attorney General, State Treasurer,
    Superintendent of Public Instruction, and State Mine Inspector. b As used
    in the table, *challengers* consist of all nonincumbent candidates. Thus,
    any candidate who

    was not an incumbent is counted as a challenger, even if that candidate
    did not face an opponent.

    Page 17 GAO- 03- 453 Public Funding of Political Campaigns c A 5- member
    independent redistricting commission was created with the passing of a
    ballot proposition in 2000 and was charged with redrawing Arizona*s 30
    legislative districts for the 2002

    elections. Because all 30 legislative districts were redrawn for the 2002
    elections, most incumbents who chose to run for reelection did so in a
    district that was numbered differently from the district they represented
    in the previous term. In comparing the 2002 list of legislative candidates
    and the 2000

    legislative roster, we labeled a 2002 candidate as an incumbent if he or
    she held a seat from the previous session in the same chamber. d These
    seven successful candidates involved races for the following statewide
    offices: Governor,

    Secretary of State, Attorney General, State Treasurer, State Mine
    Inspector, and Corporation Commission (two seats).

    In Maine and Arizona, there were not any notable changes in the average
    number of state legislature candidates per district race when comparing
    the 1996 and 1998 traditionally financed elections with the publicly
    financed elections in 2000 and 2002. While there were some instances of
    multiple- candidate races for legislative seats in Arizona, there was not
    a large presence of participating candidates in these races. In both
    states, a higher proportion of Democratic candidates participated in the
    public funding program, and the number of participating third- party or
    independent legislative candidates generally increased from the 2000 to
    the 2002 primary and general elections. In the 2002 elections, one- half
    or more of Maine*s and Arizona*s third- party or independent legislative
    candidates participated in the public financing program. Regarding races
    for statewide offices, most candidates in Arizona opted to participate in
    the public funding program in the 2002 elections. Our survey of candidates
    in Maine*s and Arizona*s 2000 elections found

    mixed perspectives as to which of two factors* public funding for
    campaigns or open seats due to term- limited vacancies* played a greater
    role (or equal roles) in attracting new candidates to run for office. Most
    of the nonparticipating candidates who responded* 64 percent in Maine and
    58 percent in Arizona* answered that open seats were a greater factor than
    public funding. Of the participating candidates who responded, the largest
    percentage in Maine (43 percent) answered that both factors played equal
    roles, and the largest percentage in Arizona (39 percent) answered that
    public funding was a greater factor.

    Proponents of the public financing initiatives in Maine and Arizona
    contended that public funding would encourage more individuals to run for
    office, thereby giving voters more choices on the ballot. Opponents have
    said that an increase in the number of candidates on the ballot alone
    Voter Choice: Legislative and

    Statewide Candidates in Publicly Funded Elections

    Increasing Voter Choice Was a Goal of Public Financing Programs

    Page 18 GAO- 03- 453 Public Funding of Political Campaigns would not
    necessarily result in more diversity 17 or representation of a wider range
    of political views, nor guarantee that a broader array of issues

    would be debated in campaigns. During our study, the state officials and
    researchers we interviewed said that changes in the number of candidates
    per race* as well as changes in the breadth of party affiliations, such as
    third- party or independent representation* would be important indicators
    to measure over several election cycles.

    As table 5 shows, the average number of state legislature candidates per
    district race in Maine and Arizona did not vary greatly over the 4
    election years examined. In Maine, on average, there was about one
    candidate per race in the primary elections and about two candidates per
    race in the general elections.

    In Arizona, the average number of candidates in the house primary
    elections was about two candidates per race, since up to two candidates
    per political party can be nominated for the general election. In the
    house general elections, two candidates are elected per district; the
    average number of candidates was about three per race in each of the
    election years. For Arizona*s senate elections, the average number of
    candidates was about one for primary election races and about two for
    general election races.

    17 Officials from the Maine and Arizona Secretary of State offices told us
    that they do not collect data on state candidates* race or sex. Therefore,
    we did not compare these demographics of candidates in the recent (2000
    and 2002) and the previous elections. Little Variance in Average

    Number of State Legislature Candidates Per District Race

    Page 19 GAO- 03- 453 Public Funding of Political Campaigns Table 5:
    Average Number of State Legislature Candidates Per District Race in Maine
    and Arizona (1996, 1998, 2000, and 2002) State Legislature Primary and
    general election Average number of candidates

    per district race 1996 1998 2000 2002

    Maine House of Representatives Primary 1.2 1. 1 1.1 1. 1 General 2.0 1. 8
    1.9 2. 0 Senate Primary 1.2 1. 0 1.1 1. 1

    General 2.0 1. 9 2.1 2. 0 Arizona House of Representatives Primary a 2.5
    2. 2 2.5 2. 7

    General b 3.4 3. 1 3.4 3. 5 Senate Primary 1.2 1. 2 1.4 1. 4

    General 1.8 1. 5 1.9 1. 7 Source: GAO analysis of state data.

    Note: All Arizona legislative districts were reconfigured in the 2002
    elections. a The two candidates receiving the most votes in the Arizona
    primary are the party nominees in the

    general election. b The two candidates in each house district receiving
    the most votes in the general election are elected.

    Although there were no notable changes in the average number of candidates
    per race, there were some races in the Arizona 2000 house primary election
    that had large numbers of candidates on the ballot. For example, in one
    House district, nine Republicans ran for the party nomination; none of
    these candidates were publicly funded. In another district, eight
    Democrats ran for the party nomination, of which three were publicly
    funded. According to Arizona officials, the availability of public

    funding was not the main reason for the large numbers of candidates in
    some districts. The officials speculated that the increase in certain
    races resulted from open seats due to term limits.

    As mentioned previously, we surveyed all candidates who ran for state
    legislature seats and applicable statewide offices in Maine*s and
    Arizona*s 2000 elections. The survey results showed mixed perspectives as
    to which of two factors* public funding for campaigns or open seats due to
    termlimited vacancies* played a greater role (or equal roles) in
    attracting new candidates to run for office. As figure 1 shows, most of
    the nonparticipating candidates who responded* 64 percent in Maine and 58
    percent in Arizona* answered that open seats were a greater factor than
    public funding. Of the participating candidates who responded, the largest
    percentages in Maine (43 percent) and Arizona (39 percent) answered that
    both factors played equal roles.

    Page 20 GAO- 03- 453 Public Funding of Political Campaigns Figure 1:
    Response of Candidates in the 2000 Election Regarding Which Factor (Term
    Limits or Public Funding) Played a Greater Role in Attracting New
    Candidates to Run for Office

    Further, most of the participating candidates who responded to our survey*
    55 percent in Maine and 56 percent in Arizona* answered that the
    availability of the public financing program was a great or very great
    factor in their decision to run for office in 2000 (see fig. 2).

    Open seats due to term- limited vacancies

    Maine candidates

    GAO survey question: In your opinion, which played a greater role in
    attracting new candidates to run for office?

    Total possible: 100% 64% 24%

    Public funding for campaigns

    3% 25%

    Both factors played equal roles

    19% 43%

    Open seats due to term- limited vacancies

    GAO survey question: In your opinion, which played a greater role in
    attracting new candidates to run for office?

    Total possible: 100% 58% 16%

    Public funding for campaigns

    8% 37%

    Both factors played equal roles

    29% 39%

    Arizona candidates

    Source: Responses to GAO*s survey (see app. IV and V).

    Nonparticipating Participating

    Page 21 GAO- 03- 453 Public Funding of Political Campaigns Figure 2:
    Percentages of Participating Candidates Who Answered That the Availability
    of Public Funding Was a Great or Very Great Factor in Their Decision to
    Run for Office in 2000

    Note: This question was asked only of candidates participating in the
    public financing program. All 104 Maine respondents were state legislative
    candidates. In Arizona, of the 39 respondents, 35 were state legislative
    candidates and 4 were Corporation Commission candidates.

    As shown in table 6, for the 2000 and 2002 elections in both states, about
    one- half or more of all participating candidates were affiliated with the
    Democratic party. Further, in both states, the percentage of participating
    Republican candidates generally increased from 2000 to 2002 in the primary
    and general elections. Political Party Affiliation

    of Publicly Funded Candidates in Maine and Arizona

    Great or very great extent

    Maine candidates

    GAO survey question: Overall, to what extent, if at all, do you agree with
    the statement that the availability of public funding was a factor in your
    decision to run for office in 2000?

    Arizona candidates

    Total possible: 100% 55% Great or very

    great extent GAO survey question: Overall, to what extent, if at all, do
    you agree with the

    statement that the availability of public funding was a factor in your
    decision to run for office in 2000?

    Total possible: 100% 56%

    Participating Source: Responses to GAO*s survey (see app. IV and V).

    Page 22 GAO- 03- 453 Public Funding of Political Campaigns Table 6:
    Percentage of Participating Legislative Candidates by Political Party
    Affiliation in Maine and Arizona (2000 and 2002) Percentage of
    participating candidates State Legislature

    Primary and general elections

    Number of participating

    candidates Democrat Republican Other a Maine - 2000 House of
    Representatives Primary b 80 68% 29% 4%

    General b 81 70 23 6 Senate Primary 36 56 44 0

    General 35 54 46 0

    2002 House of Representatives Primary b 156 62% 35% 4% General 177 58 34 8
    Senate Primary 50 48 48 4

    General 52 46 50 4

    Arizona -2000 House of Representatives Primary b 40 68% 23% 10% General b
    30 73 13 13 Senate Primary 14 86 14 0

    General 11 82 18 0

    2002 House of Representatives Primary 86 50% 47% 3% General 56 57 36 7
    Senate Primary 25 64 28 8

    General b 17 65 18 18 Source: GAO analysis of state data.

    Note: All Arizona legislative districts were reconfigured in the 2002
    elections. a Includes third- party (e. g., Green, Libertarian, and Reform)
    and independent candidates.

    b Does not add to 100 percent due to rounding.

    As table 7 shows, the number of third- party or independent legislative
    candidates who participated in the public funding program increased almost
    twofold or greater from the 2000 to the 2002 primary and general elections
    in Maine and the general elections in Arizona. In 2002, over onehalf

    of Maine*s third- party or independent candidates participated in the
    public financing program, as did one- half or more of Arizona*s third-
    party or independent candidates. In Maine, most were candidates of the
    Green Independent Party, which had primary election ballot status in 2000
    and 2002. Representatives of the Maine Green Independent Party told us
    that one of their goals was to qualify candidates for public funding in
    order to promote the party*s platform.

    Page 23 GAO- 03- 453 Public Funding of Political Campaigns Table 7: Number
    of Third- party or Independent Candidates In Maine and Arizona State
    Legislative Races (1996, 1998, 2000, and 2002)

    State Legislature Primary and general elections Number of third- party or
    independent candidates

    1996 1998 2000 2002 Total Total Total Participating

    (% of total) Total Participating (% of total)

    Maine House of Representatives and Senate

    Primary 0 1 4 3 (75%) 12 8 (67%) General 24 17 30 5 (17%) 28 16 (57%)
    Arizona House of

    Representatives and Senate

    Primary 17 8 22 4 (18%) 8 5 (63%) General 17 7 19 4 (21%) 14 7 (50%)
    Source: GAO analysis of state data.

    In Maine, the public financing program was not applicable for any
    statewide office races in 2000. In Arizona, candidates for one statewide
    office* the Corporation Commission* were eligible for public funds
    beginning in the 2000 elections. As table 8 shows, in Arizona*s 2000
    primary election, five of the eight candidates for the Corporation
    Commission chose to participate in the public financing program, as did
    three of the six candidates in the general election. Two of the
    participating candidates were elected to office in 2000.

    In 2002, five of the eight primary election candidates for the Corporation
    Commission were publicly funded, and five of the six general election
    candidates were publicly funded. Participating candidates won two of the

    three available seats. Most Statewide Office

    Candidates Opted for Public Financing in Arizona*s 2002 Election

    Page 24 GAO- 03- 453 Public Funding of Political Campaigns Table 8: Number
    of Arizona Corporation Commission Candidates (1994, 1996, 1998, 2000, and
    2002)

    Election Candidates and seats 1994 1996 1998 2000 a 2002

    Primary Number of candidates 5 2 b 3 88 Number of participating candidates
    c c c 5 5 General Number of candidates 3 4 2 6 6

    Number of open seats 1 1 1 2 3 Average number of candidates per open seat
    3.0 4.0 2.0 3. 0 2.0 Number of participating candidates c c c 3 5 Source:
    GAO analysis of state data. a Public financing was first available in 2000
    for this statewide office. b Does not include 2 write- in candidates.

    c Not applicable.

    In Maine, the governor*s election is the only statewide office race
    eligible for public campaign financing, and the 2002 elections were the
    first time public financing was available for this race. The Republican
    and Green Independent Party candidates were publicly funded in the
    gubernatorial primary, and the Green Independent candidate also ran in the
    general election. During the campaign, the Green Independent Party
    candidate spent about $837,000 in public funds to run his gubernatorial
    campaign

    against three traditionally financed competitors in the general election*
    a Democrat, a Republican, and an Independent. In the general election, the
    Green Independent Party candidate received about 47,000 votes, or about
    9.3 percent of the total votes cast.

    In Arizona, candidates for six statewide offices were eligible for public
    funding for the first time in 2002 (see table 9). For these six statewide
    offices, 20 of the 30 candidates who ran in the primary election were
    publicly funded, and 11 of the 17 candidates who ran in the general
    election were publicly funded. Five of the six winners of these statewide
    races were publicly funded* that is, participating candidates won races
    for the offices of Governor, Secretary of State, Attorney General, State
    Treasurer, and State Mine Inspector.

    Page 25 GAO- 03- 453 Public Funding of Political Campaigns Table 9: Number
    of Candidates for Maine and Arizona Statewide Races (1994, 1998, and 2002)

    Election year 1994 1998 2002 a Total Total Total Participating

    Maine Governor Primary election 13 5 b 4 2 General election 4 5 b 4 1

    Arizona Governor Primary election 6 7 9 5 General election 3 4 4 2

    Secretary of State Primary election 5 3 5 4 General election 3 2 3 2

    Attorney General Primary election 2 b 3 5 2 General 2 b 3 3 2

    State Treasurer Primary election 2 2 3 3 General election 3 2 2 2

    Superintendent of Public Instruction Primary election 4 1 b 6 4

    General election 2 1 b 3 1

    State Mine Inspector Primary election 1 b 1 b 2 b 2 General election 1 b 1
    b 2 b 2 Source: GAO analysis of state data. Note: The term of all offices
    is 4 years. The number of candidates in the primary elections is the total
    of all candidates listed on the ballot for all political party primaries
    (including Democrat, Republican, Libertarian, Reform, Green, and
    Independent). Write- in candidates are not included. a Public financing
    was first available in 2002 for these statewide offices.

    b Incumbent candidate ran for reelection.

    Reasons why candidates chose to participate in the public funding program
    in the 2000 elections are presented in figure 3, which shows the results
    of our survey of candidates. Most of the participating candidates who
    responded* 76 percent in Maine and 81 percent in Arizona* agreed to a
    great or very great extent with the statement that they chose to
    participate in the public funding program because they did not want to
    feel Candidates* Views about

    Participation and Nonparticipation in the Public Funding Program

    Page 26 GAO- 03- 453 Public Funding of Political Campaigns obligated to
    special interest groups or lobbyists. Further, about threefourths of the
    responding participating candidates from both states (77

    percent in Maine and 74 percent in Arizona) agreed to a great or very
    great extent with the statement that receiving public funds allowed them
    to spend more time discussing issues in their campaign.

    Figure 3: Reasons Why Candidates Chose to Participate in the Public
    Financing Program

    On the other hand, an analysis of why candidates chose not to participate
    in the public funding program in the 2000 elections is presented in figure
    4. About 60 percent or more of the nonparticipating candidates who
    responded to our survey answered that they agreed to a great or very great
    extent with the following statements:

    GAO survey question: To what extent, if at all, do you agree with the
    following statements as to why you chose to run your campaign with public
    funds in the 2000 elections: Note: Percentages are candidates who agreed
    with the statement to a great

    or very great extent. Maine I did not think I would be able to raise
    enough funds through traditional

    means to run a competitive campaign. Total possible: 100%

    34% Arizona 45%

    Maine Receiving public funds allowed me to spend more time discussing

    issues. Total possible: 100%

    77% Arizona Maine Other than collecting "seed money" and $5 contributions,
    I am opposed

    to traditional methods of funding election campaigns. Total possible: 100%

    45% 50% Arizona 74%

    Maine I believe that the public financing program promotes the
    accountability

    of legislators to the public. Total possible: 100%

    60% Arizona Maine I did not want to feel obligated to special interest
    groups or lobbyists.

    Total possible: 100% 76%

    81% Arizona 68% Source: Responses to GAO's survey (see app. IV and V).

    Participating

    Page 27 GAO- 03- 453 Public Funding of Political Campaigns  Public funds
    are better used for purposes other than election campaigns (59 percent in
    Maine and 64 percent in Arizona).  Public funding forces taxpayers to
    fund candidates that they may not

    support (61 percent in Maine and 68 percent in Arizona).

    Page 28 GAO- 03- 453 Public Funding of Political Campaigns Figure 4:
    Reasons Why Candidates Did Not Participate in the Public Financing Program

    a Given the status of legal challenges to the respective state*s clean
    election law (see app. III), this question was asked only of Arizona
    candidates.

    Figure 4 further shows that, in Arizona, unresolved legal challenges to
    the state*s public financing program during the 2000 election cycle was a

    GAO survey question: To what extent, if at all, do you agree with the
    following statements as to why you chose to run your campaign with private
    rather than public funds in the 2000 elections: Maine

    I did not want restrictions on my campaign spending. Total possible: 100%

    31% Arizona 30%

    Maine I had sufficient funds without using public funds.

    Total possible: 100% 47% Arizona Maine I am opposed to public funding of
    election campaigns.

    Total possible: 100% 50%

    54% Arizona 36% Maine I believe that public funding forces taxpayers to
    fund candidates that they

    may not support. Total possible: 100%

    61% Arizona Maine I believe that public funds are better used for purposes
    other than

    election campaigns. Total possible: 100%

    59% 64% Arizona 68%

    Maine Not applicable I did not want to participate in the public financing
    program because the legal

    status of the program was uncertain for much of the 2000 election cycle. a
    Total possible: 100%

    Arizona Maine I believe that the use of public funds adds burdensome
    reporting

    requirements to election campaigns. Total possible: 100%

    41% 63% Arizona 42%

    Source: Responses to GAO's survey (see app. IV and V). Note: Percentages
    are candidates who agreed with the statement to a great

    or very great extent.

    Nonparticipating

    Page 29 GAO- 03- 453 Public Funding of Political Campaigns decisional
    factor to a great or very great extent for 42 percent of the
    nonparticipating candidates who responded to our survey. Legal

    challenges to Arizona*s public financing program (see app. III) persisted
    throughout the 2000 and 2002 election cycles.

    To date, two election cycles (2000 and 2002) have occurred under the
    public financing programs in Maine and Arizona. In comparing data from
    these and the two most recent nonpublic financing years (1996 and 1998)
    using three measures of electoral competition* contested races, incumbent
    reelection rates, and incumbent victory margins* our analysis showed:

     The percentages of contested legislative races in Maine*s primary
    elections were relatively unchanged in 2000 and 2002, compared with 1998,
    and were less than the percentage of contested legislative races in 1996.
    The percentages of contested legislative races in Arizona*s primary
    elections increased in 2000 and 2002, compared with 1998; however, the
    percentage of contested races in 2000 was about the same as 1996. About 85
    percent of the contested legislative primary races in

    Maine*s and Arizona*s 2002 elections had publicly financed candidates.
    Legislative incumbent reelection rates remained about the same in both

    states after public financing was introduced.  Incumbent victory margins,
    which we used to identify competitive

    races, reflected a mixed picture. That is, we defined a competitive race
    as one in which the difference in the percentage of vote garnered between
    the winning incumbent and the runner- up was 15 points or less and under
    this definition, trends (if any) were not clearly evident. Further
    analysis, which examined several factors related to election

    outcomes, found that whether a race included publicly financed candidates
    in 2000 and 2002 had no effect on this measure of competitiveness.
    However, the results of this analysis should be interpreted with caution,
    given the relatively few variables we used and the limited amount of data
    available. A principal goal of public financing laws is to increase
    electoral

    competition. The term *electoral competition* refers to the level of
    competition for elected positions as demonstrated by whether races were
    contested and by the percentage of the vote candidates received. For
    example, levels of electoral competition can vary from none at all in the
    case of an uncontested race in which the sole candidate receives 100
    Electoral Competition: Analysis

    of Elections in Maine and Arizona

    Increasing Electoral Competition Was a Principal Goal of Public Financing

    Page 30 GAO- 03- 453 Public Funding of Political Campaigns percent of the
    vote, to an election in which several candidates vie competitively for a
    position, each winning a significant portion of the vote.

    Proponents of the initiatives to adopt public financing laws in both
    states supported the goal of increasing electoral competition. In Maine,
    proponents said that the initiative would level the playing field so that
    challengers would have a chance against incumbents. The findings section
    of Arizona*s Act states that the traditional election financing system
    gave incumbents an unhealthy advantage over challengers and discouraged
    qualified candidates without personal wealth or access to other funds from
    running. Further, state officials and other stakeholders we interviewed in
    both Maine and Arizona agreed that one purpose of the states* public
    financing laws was to increase electoral competition.

    According to some political observers, *A chief standard of success for a
    public finance scheme is increasing competitiveness, which increases the
    voters* ultimate check on other abuses and is a measure of the

    responsiveness of a legislature.* 18 Proponents of public financing for
    campaigns contend that public funding could increase electoral competition
    by allowing candidates, especially candidates challenging incumbents, to
    overcome the financial hurdles that would otherwise prevent them from
    entering a race. Further, proponents argue that public funding promotes
    competition by giving more candidates the opportunity to effectively
    communicate with the electorate once they have entered the

    race. 19 On the other hand, opponents we interviewed in Maine and Arizona
    believe that public financing does not attract candidates who have a broad
    base of constituency support and, therefore, even though more new
    candidates may enter races and win, the quality of representation will be
    questionable.

    As a part of this review, we examined changes in electoral competition in
    state legislative races by comparing the two most recent nonpublic funding
    election years (1996 and 1998) with the two public funding election years
    (2000 and 2002). In reviewing public finance and election literature, we
    did not find a standard approach for measuring changes in electoral
    competition. However, we did identify three widely used

    18 Kenneth R. Mayer and John M. Wood, *The Impact of Public Financing on
    Electoral Competitiveness: Evidence from Wisconsin, 1964- 1990,*
    Legislative Studies Quarterly, vol. 20, no. 1 (1995), 75.

    19 Richard Briffault, *Public Funding and Democratic Elections,*
    University of Pennsylvania Law Review, vol. 148 (1999), 568- 572.

    Page 31 GAO- 03- 453 Public Funding of Political Campaigns measures of
    electoral competition* percentages of contested races, incumbent
    reelection rates, and incumbent victory margins. The first

    measure refers to the percentage of all races that had more than one
    candidate running for the position. Because the concern about competitive
    races is particularly focused on the ability of challengers to mount
    credible campaigns against incumbents, the other two measures specifically

    involve incumbents. Incumbent reelection rates examine the percentage of
    incumbents (running for reelection) who were reelected. Incumbent victory
    margin examines the difference between the percentage of the vote going to
    winning incumbents and the runners- up.

    One measure of electoral competition is the percentage of all races for
    seats in the legislature that are contested. As previously mentioned, a
    chief goal in making public funds available for campaigns was to help
    potential candidates overcome the financial barriers that deterred them
    from running, which would result in fewer uncontested races. In Maine and

    Arizona, uncontested races were much more common in the primary than in
    general elections from 1996 to 2002. 20 Thus, we focused solely on the
    primary elections and considered a primary election race contested if more
    than one candidate ran in the political party*s district race. 21 If
    public financing had enticed more candidates to run in the primary
    election

    races, we would expect that after 1998, increasing percentages of races
    would be contested.

    In Maine, as figure 5 shows, the introduction of public financing in the
    2000 election did not correspond with a significant increase in contested
    primary races. The percentages of contested legislative races in Maine*s
    primary elections remained relatively unchanged in 2000 (7 percent) and
    2002 (8 percent), compared with 1998 (6 percent), and were less than the
    percentage of contested legislative races in 1996 (12 percent). More

    20 The number of contested general election races for seats in Maine*s and
    Arizona*s house and senate averaged 77 percent of the total applicable
    races in election years 1996 through 2000, while the number of contested
    primary election races averaged 19 percent of the total applicable races.
    There were more contested general election races because candidates from
    both the Democratic and the Republican parties usually ran. In contrast,
    there was often only one candidate in the primary party races. 21 Arizona
    has multimember house districts, so that two representatives are elected
    from

    each district. Due to the multimember district arrangement, a contested
    primary race was one in which three candidates ran in a primary race,
    since two candidates automatically advanced to the general election race.
    Contested Races in Maine

    and Arizona Changes in Contested- Race Percentages

    Page 32 GAO- 03- 453 Public Funding of Political Campaigns detailed
    analysis, including coverage of additional years, would be necessary to
    determine whether the percentage of contested legislative

    primary races in 1996 (12 percent) was historically high and if the change
    from 1998 to 2002 differs from past changes in Maine.

    Figure 5: Contested and Uncontested Races in Maine*s Legislative (House
    and Senate) Primary Elections (1996, 1998, 2000, and 2002)

    Note: Of the 343 races in the 2000 elections, 25 (7.3 percent) were
    contested.

    In Arizona, as figure 6 shows, the percentages of contested legislative
    races in the state*s primary elections were higher in 2000 (30 percent)
    and in 2002 (38 percent) than in 1998 (18 percent). However, the
    percentage of contested races in 2000 was about the same as in 1996 (29
    percent). More

    data encompassing additional election years before and after public
    financing was introduced would be necessary to identify any trend.

    Total races: 364 Total races: 342 Total races: 343 Total races: 367 88%

    12% 94%

    6% 93%

    7% 92%

    8%

    Public financing not available

    1996 1998 2000 2002

    Public financing available Source: GAO analysis of state data.

    Uncontested races Contested races

    Maine

    Page 33 GAO- 03- 453 Public Funding of Political Campaigns Figure 6:
    Contested and Uncontested Races in Arizona*s Legislative (House and
    Senate) Primary Elections (1996, 1998, 2000, and 2002)

    Two election cycles provide a limited basis for projecting whether the
    percentage of contested races will increase in Maine*s and Arizona*s
    primary elections. However, we examined the 2000 and 2002 races in Maine
    and Arizona to determine the extent to which contested races had publicly
    financed candidates. In Maine*s legislative primary elections, as figure 7
    shows, 56 percent of the contested races in 2000 had publicly financed
    candidates, and the percentage increased to 86 percent in 2002. Overall,
    however, there were still many more uncontested races (318 and 338) than
    contested races (25 and 29) in both 2000 and 2002. Publicly Financed
    Candidates

    and Contested Races

    Total races: 112 Total races: 100 Total races: 118 Total races: 107 71%

    29% 18% 30% 38%

    82% 70% 62%

    Public financing not available

    1996 1998 2000 2002

    Public financing available

    Uncontested races Contested races

    Source: GAO analysis of state data.

    Arizona

    Page 34 GAO- 03- 453 Public Funding of Political Campaigns Figure 7:
    Publicly Financed Candidates in Maine*s Contested Legislative Primary
    Races (2000 and 2002)

    If publicly financed candidates had not run in Maine*s 2000 and 2002
    primary elections, there would likely have been fewer contested races. For
    example, in our survey of candidates in Maine*s 2000 election, we asked
    the publicly financed candidates to what extent the availability of public
    funding had been a factor in their decision to run for office. Of the 20
    publicly financed challengers who ran in contested races in Maine*s 2000
    legislative primaries, 13 returned our survey questionnaire. Eight of
    those

    13 candidates answered that the availability of public funding influenced
    their decision to run to a great extent. Only one candidate answered that
    the availability of public funding was of little or no importance in the
    decision to run.

    In Arizona*s legislative primary elections, as figure 8 shows, a
    significant percentage of the contested races in 2000 (40 percent) had
    publicly financed candidates, and the percentage more than doubled in 2002
    (85 percent). Similarly to Maine, however, there were still more
    uncontested races (83 and 66) than contested races (35 and 41) in 2000 and
    2002.

    Source: GAO analysis of state data. Races with all traditional candidates.

    Races with publicly financed candidates

    Total races: 25 Total races: 29 2000 2002 56%

    44% 86%

    14%

    Page 35 GAO- 03- 453 Public Funding of Political Campaigns Figure 8:
    Publicly Financed Candidates in Arizona*s Contested Legislative Primary
    Races (2000 and 2002)

    Since such a high percentage of the contested primary legislative races in
    Arizona*s 2000 and 2002 elections had publicly financed candidates, as in
    Maine, there would likely have been fewer contested races if those
    candidates had not run. In our survey of candidates in Arizona*s 2000
    election, we asked the publicly financed candidates to what extent the
    availability of public funding had been a factor in their decision to run
    for office. Of the 19 publicly financed challengers who ran in contested
    races in Arizona*s 2000 legislative primaries, 12 returned our survey
    questionnaire. Half of those candidates answered that the availability of

    public funding influenced their decision to run to a great extent. Three
    of the 12 candidates answered that the availability of public funding was
    of little or no importance in their decision to run.

    A second measure of electoral competition is incumbent reelection rates in
    the general legislative elections in Maine and Arizona. Some political
    observers have asserted that electoral competition is primarily determined
    by the ability of challengers to mount credible campaigns against
    Incumbent Reelection

    Rates in Maine and Arizona

    Total races: 35 Total races: 41 2000 2002

    60% 40% 85%

    15%

    Source: GAO analysis of state data.

    Races with all traditional candidates. Races with publicly financed
    candidates

    Page 36 GAO- 03- 453 Public Funding of Political Campaigns incumbents. 22
    Also, many believe that incumbents begin a race with numerous advantages
    over challengers* advantages such as name recognition with the public,
    free media attention, and the opportunity to

    provide constituency services. 23 For these reasons, incumbent reelection
    rates are typically high in states throughout the nation. For example, a
    1991 study* covering 10 election cycles (during 1968 through 1986) for
    legislative seats in 16 states* found that 92 percent of 11,711 house
    incumbents seeking reelection were successful. The same study reported
    that 88 percent of 2,547 senate incumbents were successful. 24 If public
    financing in Maine and Arizona helped to improve challengers* ability to
    mount credible campaigns against incumbents, one indication might be lower
    incumbent reelection rates in 2000 and 2002, as compared to election years
    before public financing was introduced.

    As figure 9 shows, the incumbent reelection rates in Maine*s house
    remained relatively unchanged over the 4 years, with the exception of a
    slight increase in 2000 (91 percent). Comparatively, these reelection
    rates in Maine*s house were near, but slightly below the 16- state average
    (92 percent) reported by the 1991 study mentioned previously. Although
    incumbent reelection rates for Maine*s house did not change much over the
    4 election years we reviewed, 4 of the 10 incumbents who were defeated in
    2000, and 10 of the 14 incumbents who were defeated in 2002 lost to
    publicly financed candidates.

    22 Kenneth R. Mayer and John M. Wood, *The Impact of Public Financing on
    Electoral Competitiveness,* 74. 23 Richard Briffault, *Public Funding and
    Democratic Elections,* 569.

    24 James C. Garand, *Electoral Marginality in State Legislative Elections,
    1968- 86,*

    Legislative Studies Quarterly, vol. 16, no. 1 (1991), 14- 15. The states
    included in this analysis were California, Colorado, Connecticut,
    Delaware, Iowa, Kentucky, Michigan, Missouri, Nebraska, New Mexico, Ohio,
    Oklahoma, Pennsylvania, Rhode Island, Utah, and Wisconsin. Incumbent
    Reelection Rates in

    Maine

    Page 37 GAO- 03- 453 Public Funding of Political Campaigns Figure 9:
    Incumbent Reelection Rates in Maine*s Legislative Races (1996, 1998, 2000,
    and 2002)

    Note: The numbers in parentheses represent the number of incumbent
    victories over total number of incumbents running for reelection in that
    year.

    As shown in figure 9, incumbent reelection rates in Maine*s senate also
    did not change significantly after public financing was introduced. The
    incumbent reelection rates ranged from 91 percent to 100 percent* 91
    percent in 1996 and 2000, 100 percent in 1998, and 92 percent in 2002.
    These rates for all 4 election years in Maine*s senate were higher than
    the senate average (88 percent) from the 1991 study mentioned above.
    However, of the two senate incumbents who lost in 2000, one lost to a
    publicly financed candidate, and in 2002, both incumbents who were
    defeated lost to publicly financed candidates.

    Figure 10 shows incumbent reelection rates for Arizona*s house and senate
    for the 4 most recent general election cycles. The house incumbent
    reelection rate was 98 percent in 1998 and then dropped 4 percentage
    Incumbent Reelection Rates in

    Arizona

    Public financing not available Public financing

    available

    80 0 84

    88 92

    96 100

    2002 2000 1998 1996

    House

    Incumbent reelection rates in percentages

    Senate

    86 (88/ 102)

    89 (105/ 118)

    91 (105/ 115)

    85 (81/ 95) 91

    (21/ 23) 100 (31/ 31)

    91 (20/ 22)

    92 (23/ 25)

    Source: GAO analysis of state data.

    Page 38 GAO- 03- 453 Public Funding of Political Campaigns points in each
    of the two publicly funded elections. 25 The 90- percent rate in 2002 was
    slightly lower than the 16- state average (92 percent) mentioned
    previously. On the other hand, the incumbent reelection rate in Arizona*s

    senate was 96 percent in 1998 and then increased to 100 percent in both
    2000 and 2002, the same rate as in 1996.

    Figure 10: Incumbent Reelection Rates in Arizona*s Legislative Races
    (1996, 1998, 2000, and 2002)

    Note 1: The numbers in parentheses represent the number of incumbent
    victories and the total number of incumbents running for reelection in
    that year.

    Note 2: Because all 30 legislative districts were redrawn for the 2002
    elections, most incumbents who chose to run for reelection did so in a
    district that was numbered differently from the district they represented
    in the previous term. In comparing the 2002 list of legislative candidates
    and the 2000 legislative roster, we labeled a 2002 candidate as an
    incumbent if he or she held a seat from the previous session in the same
    chamber.

    25 None of the incumbent losses in Arizona*s house in the 2000 and 2002
    general elections were to publicly financed candidates. Source: GAO
    analysis of state data.

    Public financing not available Public financing

    available

    Incumbent reelection rates in percentages 80 84

    88 92

    96 100

    2002 2000 1998 1996 0

    House Senate

    95 (41/ 43)

    100 (19/ 19) 96 (23/ 24)

    98 (44/ 45)

    94 (33/ 35) 100 (20/ 20)

    90 (27/ 30) 100 (13/ 13)

    Page 39 GAO- 03- 453 Public Funding of Political Campaigns A third measure
    of electoral competition is incumbent victory margins. This measure
    involves examining the difference between the percentage of

    votes received by the winning incumbents and the second- place finishers.
    As discussed previously, incumbents enjoy many inherent advantages over
    challengers. One disadvantage most challengers face is the difficulty in
    raising campaign funds, which impacts their ability to run an effective
    campaign. In order to make their name and campaign message known to the
    public, challengers need to raise money for advertisements and other

    campaign activities. However, challengers are faced with a circular
    problem. Campaign contributors generally view challengers as more likely
    to lose an election than an incumbent; yet, challengers cannot run a
    competitive campaign unless they can raise money. 26 For these reasons,
    according to proponents, public financing programs would allow challengers
    to compete more effectively. An indicator of competing more effectively
    would be a narrowing of the electoral gap between the incumbent winners
    and the runners- up, not simply whether some incumbents were defeated.

    Although our review of applicable literature and our discussions with
    experts confirmed that measuring incumbent victory margins in legislative
    races is a good indicator of electoral competition, there is disagreement
    on which margin of difference indicates a competitive race. The studies we

    reviewed were essentially split between using a difference of 10
    percentage points or less of the vote or using a difference of 20
    percentage points or less of the vote. A margin of 10 percentage points is
    considered to be more conservative than 20 percentage points because the
    former represents a higher bar for challengers to meet. We took a central
    approach and defined a competitive race as one in which the difference in
    the percentage of the vote garnered between the winning incumbent and

    the runner- up was 15 points or less. For example, consider a race with
    two candidates, one the incumbent and the other a challenger. If the
    incumbent garnered 57 percent of the vote and the challenger garnered 43
    percent of the vote, the incumbent*s margin of victory would be 14

    percentage points. Under our definition, this hypothetical race would be
    competitive because the incumbent won by 15- or- less percentage points.
    Using our definition, we analyzed all of the legislative general election

    races in Maine and Arizona that had incumbent wins against at least one 26
    Kenneth R. Mayer and John M. Wood, *The Impact of Public Financing on
    Electoral Competitiveness,* 74. Incumbent Victory Margins

    in Maine and Arizona

    Page 40 GAO- 03- 453 Public Funding of Political Campaigns challenger
    during the four most recent elections* 1996, 1998, 2000, and 2002. If the
    public financing programs helped challengers to run more

    competitive races against incumbents, we would expect to find larger
    percentages of competitive races in 2000 and 2002 than in 1996 and 1998.

    Changes in the percentages of contested races after public financing was
    introduced varied between Maine*s house and the senate. As figure 11
    shows, the percentages of competitive house races in 2000 (31 percent) and
    2002 (29 percent) were greater than the percentage in 1998 (21 percent)
    but similar to the percentage in 1996 (32 percent). On the other hand, the
    percentage of competitive senate races in 2002 (50 percent) was greater
    than each of the three previous election years.

    In order to more thoroughly explore the relationship between publicly
    financed elections and competitive races, in further analysis we examined
    the effects of several factors relevant to election outcomes and found
    that whether a race included publicly financed candidates in 2000 and 2002
    had no effect on incumbent victory margins. That is, we analyzed the
    effect of participation in the public financing program on competitiveness
    after

    controlling for other factors, such as candidates* campaign status
    (incumbent or not) and candidates* spending. 27 However, the results of
    this analysis should be interpreted with caution, given the relatively few
    variables we used and the limited amount of data available.

    27 See appendix I for a discussion of the scope and methodology of our
    analysis. Competitive Legislative Races

    in Maine

    Page 41 GAO- 03- 453 Public Funding of Political Campaigns Figure 11:
    Competitive Legislative Races in Maine (1996, 1998, 2000, and 2002)

    Note: The numbers in parentheses represent the number of competitive races
    divided by the number of total races with incumbent wins, which gives the
    percentage at each data point. Since incumbent victory margins, as a
    measure of electoral competition,

    exclude races in which a challenger won, we also examined the general
    legislative races in 2000 and 2002 to determine the funding status of
    winning challengers. Of the 79 publicly financed legislative challengers
    who ran for a seat in Maine*s 2000 general election, 27 won, representing
    44 percent of the total number of winning challengers that year. In
    Maine*s 2002 general election, of the 168 publicly financed legislative
    challengers who ran, 55 won, representing 67 percent of the total number
    of winning challengers that year.

    In Arizona, changes in the percentages of competitive general legislative
    races across the 4 election years were mixed. For Arizona*s legislative
    elections, our analysis was limited to senate races only because the
    state*s Competitive Legislative Races

    in Arizona

    0 10

    20 30

    40 50

    Public financing not available

    Percentage of competitive races 1996

    32 21 (24/ 75)

    Source: GAO analysis of state data. (4/ 19)

    21 (16/ 77)

    22 31

    21 29

    50 (6/ 27)

    (24/ 78) (4/ 19)

    (19/ 65) (10/ 20)

    1998 2000 2002

    Public financing available

    Maine Senate Maine House

    Page 42 GAO- 03- 453 Public Funding of Political Campaigns house races
    involve multimember districts, which does not lend itself to analysis
    using incumbent victory margins. 28 As figure 12 shows, 29 percent (2 of
    7) of Arizona*s senate races were

    competitive in 1998. This percentage increased to 40 percent (6 of 15) in
    2000 and then dropped to 33 percent (2 of 6) in 2002. No trends are
    apparent in simply comparing the change in the percentages of competitive
    races across the 4 election years. However, similar to the finding in
    Maine, we analyzed the effects of several factors relevant to election
    outcomes and found that the presence of publicly financed candidates in a
    race had no effect on incumbent victory margins in Arizona*s 2000 and 2002
    senate races. 29 28 This measure of competition, incumbent victory
    margins, involved looking at the

    difference in the percentage of the vote garnered by winning incumbents
    and runners- up. Therefore, all races included in this analysis had a
    winning incumbent. In Arizona*s multimember house districts (two
    representatives are elected in each district), there were several possible
    combinations of winning incumbents, including cases in which one incumbent
    won while the other lost. These possible combinations meant that incumbent
    victory margins in Arizona*s house races could not be readily compared
    with victory margins in Arizona*s senate races, nor to races for Maine*s
    legislature.

    29 See appendix I for a discussion of the scope and methodology of our
    analysis.

    Page 43 GAO- 03- 453 Public Funding of Political Campaigns Figure 12:
    Competitive Senate Races in Arizona (1996, 1998, 2000, and 2002)

    Note 1: The numbers in parentheses represent the number of competitive
    races divided by the number of total races with incumbent wins, which
    gives the percentage at each data point.

    Note 2: Because all 30 legislative districts were redrawn for the 2002
    elections, most incumbents who chose to run for reelection did so in a
    district that was numbered differently from the district they represented
    in the previous term. In comparing the 2002 list of legislative candidates
    and the 2000 legislative roster, we labeled a 2002 candidate as an
    incumbent if he or she held a seat from the previous session in the same
    chamber.

    Again, because the measure of incumbent victory margins excludes races in
    which a challenger won, we also examined Arizona*s general election senate
    races in 2000 and 2002 to determine the funding status of winning

    challengers. Of the 10 publicly financed challengers who ran for a senate
    seat in Arizona*s 2000 general election, only one succeeded, representing
    10 percent of the total number of winning challengers in the senate that
    year. In Arizona*s 2002 general election, of the 16 publicly financed
    challengers who ran for a senate seat, four won, representing 24 percent
    of the total number of winning challengers in the senate that year.

    0 5

    10 15

    20 25

    30 35

    40

    Public financing not available

    Percentage of competitive races 1996

    10 Source: GAO analysis of state data.

    (1/ 10) 29

    40 33 (2/ 7)

    (6/ 15) (2/ 6)

    1998 2000 2002

    Public financing available

    Arizona Senate only

    Page 44 GAO- 03- 453 Public Funding of Political Campaigns Proponents and
    opponents of public financing programs have competing perspectives
    regarding the effect of such programs on the influence of interest groups.
    For instance, an operative question can be posed as

    follows: Do citizens feel that, once elected, candidates who ran their
    campaigns with public funding have been more likely to serve the broader
    interests of their constituents as a whole and less likely to be
    influenced

    by specific individuals or groups? This question is not readily amenable
    to quantitative analysis, and responses to our surveys of political
    candidates and citizens in Maine and Arizona* as well as our interviews
    with interest group representatives* reflected mixed views.

    As mentioned previously, proponents assert that an intended effect of
    public financing programs is to enhance the confidence of citizens in
    government by reducing the influence of special interests and increasing
    the integrity of the political process. For instance, the *findings and
    declarations* section of Arizona*s 1998 Act stated, in part, that the
    current election- financing system *effectively suppresses the voices and
    influence of the vast majority of Arizona citizens in favor of a small
    number of wealthy special interests* and *undermines public confidence in
    the integrity of public officials.*

    On the other hand, opponents assert that, under the traditional campaign
    finance system, the voices of all citizens are represented through
    competing interest groups. Opponents further assert there is no evidence
    that government- financed campaigns attract more worthy candidates than
    does the traditional system or that, once elected, the publicly subsidized
    candidates vote any differently as legislators than do traditionally
    financed candidates. Moreover, some opponents question whether the voters
    in Maine or Arizona read much beyond the title** clean elections** of the
    ballot initiatives.

    As mentioned previously, we surveyed all candidates who ran for state
    legislature seats and applicable statewide offices in Maine*s and
    Arizona*s 2000 elections. Among other questions, we asked candidates to
    what extent, if at all, they agreed with the statement that once elected,
    candidates who participated in the public financing program have been more
    likely to serve the broader interests of their constituents as a whole and
    less likely to be influenced by specific individuals or groups. As figure
    13 shows, the survey results reflected mixed views. Most of the responding
    nonparticipating candidates* 67 percent in Maine and 68 percent in
    Arizona* answered to *little or no extent.* In contrast, many of the
    Influence of Interest

    Groups: Mixed Views on Effects of Public Financing of Campaigns

    Reducing the Influence of Interest Groups Was a Goal of Public Financing

    Mixed Responses from Our Survey of Political Candidates

    Page 45 GAO- 03- 453 Public Funding of Political Campaigns responding
    participating candidates* 42 percent in Maine and 56 percent in Arizona*
    answered to a *great or very great extent.*

    Figure 13: Candidate Responses about Public Financing Program and Interest
    Group Influence

    In our survey, we also asked candidates to what extent, if at all, they
    agreed with the statement that their respective state*s public financing
    program enhanced the public*s confidence in government. Here again, the
    survey results reflected mixed views from nonparticipating and
    participating candidates. Of the responding candidates, figure 14 shows
    that most of the nonparticipating candidates answered to *little or no
    extent,* whereas many of the participating candidates answered to a *great
    or very great extent.*

    Great or very great extent

    Little or no extent

    Maine candidates

    GAO survey question: To what extent, if at all, do you agree with the
    statement that, once elected, candidates who participated in the public
    financing program have been more likely to serve the broader interests of
    their constituents as a whole and less likely to be influenced by specific
    individuals or groups?

    Arizona candidates

    GAO survey question: To what extent, if at all, do you agree with the
    statement that, once elected, candidates who participated in the public
    financing program have been more likely to serve the broader interests of
    their constituents as a whole and less likely to be influenced by specific
    individuals or groups?

    Total possible: 100% 7%

    42% 67% 16%

    Great or very great extent

    Little or no extent Total possible: 100%

    7% 56%

    68% 23%

    Source: Responses to GAO's survey (see app. IV and V).

    Nonparticipating Participating

    Page 46 GAO- 03- 453 Public Funding of Political Campaigns Figure 14:
    Candidate Responses about the Public Financing Program and Confidence in
    Government

    Further, our survey of candidates for office in Maine*s and Arizona*s 2000
    elections contained an ending statement inviting respondents to provide
    any comments they believed were important about the effects of the
    respective state*s public financing program. Examples of comments from
    participating candidates included the following (see app. VI):

     To be elected to the state legislature and not feel beholden to anyone
    except constituents is a liberating feeling.

     The most important effect of the public financing program has been to
    free legislatures from the influence of campaign contributors.

     Public financing takes special interest money out of government. This
    approach is the only way that elections should be run, at the state level
    and nationally.

     Arizonans seem well aware that the link between special interest money
    and special interest laws is strong and want to change it. Arizona and
    Maine are leading the way in the nation.

    On the other hand, examples of comments from nonparticipating candidates
    included the following (see app. VI):

    Great or very great extent

    Little or no extent

    Maine candidates

    GAO survey question: To what extent, if at all, do you agree with the
    statement that the public financing program enhanced the public*s
    confidence in government?

    Total possible: 100% 3%

    35% 64%

    Nonparticipating

    14% Great or very

    great extent Little or no extent

    Arizona candidates

    GAO survey question: To what extent, if at all, do you agree with the
    statement that the public financing program enhanced the public*s
    confidence in government?

    Total possible: 100% 3%

    51% 71% 15%

    Participating

    Source: Responses to GAO*s survey (see app. IV and V).

    Page 47 GAO- 03- 453 Public Funding of Political Campaigns  Special
    interests continue to exert tremendous influence on both privately and
    publicly funded candidates. The only difference is that

    the influence on privately funded candidates is fully disclosed and
    reported, while the influence on *clean* candidates is not disclosed
    anywhere.

     Under the public funding program, lobbyists are able to continue their
    influence by simply *volunteering* to collect $5 qualifying contributions
    for participating candidates.

     People voted for the public funding program because they thought dirty
    campaigning (e. g., personal attack ads) would stop. Yet, the 2000
    election was one of the dirtiest campaign scenes in years.

     The *clean election* designation for those taking advantage of the
    public funding program implies that the traditional candidate may not be
    *clean.* This is unfortunate and should be changed.

    We contracted with professional pollsters to obtain the views of
    projectable samples of voting- age citizens in Maine and Arizona.
    Generally, this polling effort was designed to determine the extent to
    which the citizenry were aware of the respective state*s public financing
    program and to obtain citizenry views about whether the program has
    increased

    citizens* confidence in government and decreased the influence of special
    interest groups. The wording of the specific questions was developed by
    us, with some assistance from the polling organizations (see app. I). 30
    As table 10 shows, we asked voting- age citizens their views regarding the
    effect of the public financing program on the influence of special
    interest

    groups. Of the polled citizens who acknowledged some awareness of the
    respective state*s applicable law, over one- half in both states answered
    that there was no effect or it was too soon to tell. In Maine, more
    respondents answered that the law had greatly or somewhat decreased
    special interest influence (25 percent) than did respondents who answered

    30 In designing the questions, we used the term *clean election* because
    this wording has been widely used in the media, was used in the ballot
    initiatives, and also is part of the title of the respective state*s law.
    Thus, in reference to voter awareness, the term *clean election* likely is
    more commonly recognized than an alternative term such as *public
    financing program.* Mixed Responses from Our

    Survey of Citizens

    Page 48 GAO- 03- 453 Public Funding of Political Campaigns that the law
    had greatly or somewhat increased special interest influence (7 percent).
    As table 10 further shows, we also asked voting- age citizens their views

    regarding the effect of the public financing program on their confidence
    in government. Of the polled citizens who acknowledged some awareness of
    the respective state*s applicable law, almost two- thirds in both states
    answered that there was no effect or it was too soon to tell.
    Additionally, slightly more respondents in each state answered that the
    law had greatly or somewhat increased their confidence in state
    government* 17 percent

    in Maine and 21 percent in Arizona* than did respondents who answered that
    the law had greatly or somewhat decreased their confidence* 8 percent in
    Maine and 15 percent in Arizona.

    Page 49 GAO- 03- 453 Public Funding of Political Campaigns Table 10: Maine
    and Arizona Citizenry Views (in Percentages) on Clean Election Law

    Topic GAO survey questions and response options

    Maine voting- age

    citizens a Arizona

    voting- age citizens a

    Influence of special interest groups

    Would you say that the state*s clean election law has greatly increased,
    somewhat increased, has had no effect, has somewhat decreased, or greatly
    decreased the influence of special interest groups on legislators, or is
    it too soon to tell? a Greatly increased 2% 4%

    Somewhat increased 5 12 Had no effect 21 25 Somewhat decreased 21 9
    Greatly decreased 4 2 Too soon to tell 34 39 Unsure or declined to answer
    12 9 Citizens* confidence in state

    government Would you say that the state*s clean election law has greatly
    increased,

    somewhat increased, has had no effect, has somewhat decreased, or greatly
    decreased your confidence in state government, or is it too soon to tell?
    a Greatly increased 2% 2%

    Somewhat increased 15 19 Had no effect 39 33 Somewhat decreased 5 10
    Greatly decreased 3 5 Too soon to tell 26 26 Unsure or declined to answer
    9 4 Source: Summary statistics of GAO- contracted polling of voting- age
    citizens of Maine and Arizona (see app. I). Notes: These two questions
    were asked only if the citizen indicated some awareness of the state*s
    clean election law. For Maine, the number of respondents for these
    questions was 157, and the maximum 95- percent confidence interval for
    these survey results is plus or minus 8 percentage points. For Arizona,
    the number of respondents for these questions was 433, and the maximum 95-
    percent confidence interval for these survey results is plus or minus 5
    percentage points. a Percentages may not total 100 percent due to
    rounding.

    We interviewed interest group representatives 31 in Maine and Arizona to
    obtain their views on the effects of the public financing programs*
    including changes, if any, in how they interact with political candidates
    and legislators after inception of the programs. Unlike our surveys of

    31 These representatives included, for example, officers of and/ or
    lobbyists for organizations such as the Maine Bankers Association, Maine
    Medical Association, Arizona Chamber of Commerce, and Arizona Education
    Association (see app. I). Interest Group Views on Effects of Public
    Financing

    Programs

    Page 50 GAO- 03- 453 Public Funding of Political Campaigns candidates and
    citizens, the results of our interest groups interviews are anecdotal and
    may not be representative of all interest groups in the

    states. Nonetheless, similar to the candidate and citizen survey results,
    the lobbyists we interviewed had mixed views.

    Representatives of one interest group told us that traditional campaign
    contributions do not necessarily influence an elected candidate*s
    subsequent voting record; rather, the contributions help donors obtain
    access to discuss issues. Another lobbyist said that public funding had
    not reduced the influence of special interests. This individual noted that

    publicly funded candidates often are beholden to unions, trade
    associations, or other organizations instrumental in helping these
    candidates raise the required number of $5 qualifying contributions. In
    contrast, another lobbyist said that public financing of campaigns has had
    a positive effect on the political process and has improved government.

    This individual explained that the relationship between a lobbyist and a
    candidate/ legislator now tends to be more professional and focuses on the
    contents or merits of proposed legislation rather than on campaign
    contributions.

    Some interest group representatives commented that the public funding
    programs* particularly as increasing numbers of candidates participate*
    are causing changes in the roles of lobbyists and interest groups. For
    instance, the representatives noted that (except for seed money and $5
    qualifying contributions) publicly funded candidates are prohibited from

    soliciting campaign contributions, which results in fewer opportunities
    for lobbyists to inform these candidates about the interests of clients.
    The representatives also noted that more contribution money now is going
    to political action committees or other groups, which has led to increased
    spending (* independent expenditures*) to support or oppose certain
    candidates.

    Generally, the interest group representatives noted that it is too soon to
    tell whether legislators who ran with public funds serve the broader
    interests of their constituents any differently or better than do
    traditionally funded candidates.

    Page 51 GAO- 03- 453 Public Funding of Political Campaigns Under the
    public financing programs in the 2000 and 2002 elections, average
    legislative candidate spending decreased in Maine but increased in

    Arizona, compared with previous elections. Also, particularly in the 2002
    elections, both states experienced increases in independent expenditures*
    a type of campaign spending whereby political action committees, other
    groups, or individuals communicate messages to voters that support or
    oppose a clearly identified candidate but without coordination with any
    candidate. The 2002 increases in independent expenditures largely were
    associated with the gubernatorial races in both states. Because it is not
    regulated, the extent of spending for issue advocacy* that is, public
    policy messages that do not refer to a specific candidate* is not known.

    According to proponents of the public financing programs in Maine and
    Arizona, escalating campaign costs helped deter candidates from running
    for office. For example, a 1992 study conducted by the Maine Citizens
    Leadership Fund, a group cited as a catalyst behind Maine*s law, concluded
    in part that, *The cost of running for the Maine legislature is
    exploding.* Additional findings in that report suggested that *next steps*
    should include eliminating access to wealth as a determinant of a
    citizen*s influence within the political process, halting and reversing
    the escalating costs of elections, and challenging the assumptions that
    public elections can and should be privately financed. Similarly, the
    *findings and declarations* preamble to Arizona*s law states that the
    *current electionfinancing system* allows Arizona elected officials to
    accept large campaign contributions from private interests; favors a small
    number of wealthy special interests; and drives up the cost of running for
    state office, discouraging otherwise qualified candidates who lack
    personal wealth or access to special- interest funding.

    Accordingly, the public funding programs in Maine and Arizona each were
    designed to have a two- pronged approach for reducing campaign spending.
    That is, each program

     imposed spending limits and certain other requirements on candidates who
    chose to participate in the public financing program and Campaign
    Spending:

    Average Candidate Spending Decreased in Maine but Increased in Arizona;
    Independent Expenditures Became More Prominent in Both States; Extent of
    Issue Advocacy Spending Not Known

    Campaign Spending was a Principal Concern of Public Financing Proponents

    Page 52 GAO- 03- 453 Public Funding of Political Campaigns  reduced the
    total amount of money that nonparticipating candidates were allowed to
    accept from each campaign contributor.

    The intended outcome of this approach was to lower the cost of running for
    office by reducing and capping the amount of money available for campaign
    spending. 32 Generally, campaign spending comprises two components*
    spending by candidates and independent expenditures. Both of these
    spending components are tracked by the agencies responsible for
    administering the public financing programs* Maine*s Commission on
    Governmental Ethics and Election Practices and Arizona*s Citizens Clean
    Elections Commission. Such tracking is important because publicly financed
    candidates can receive matching funds based on

    spending by or for traditionally financed candidates, or spending opposing
    a participating candidate.

    On the other hand, neither commission tracks issue advocacy spending.
    Issue advocacy* interpreted by the courts as being protected free speech*
    usually takes the form of media advertisements that do not expressly
    advocate for or against a clearly identified political candidate.
    Generally, there are no requirements for reporting issue advocacy spending
    to any state or federal agency.

    Compared to the 1996 and 1998 elections, average legislative candidate
    spending decreased in Maine in the 2000 and 2002 elections but increased
    in Arizona, as figure 15 shows. Specifically, for Maine house races,
    average candidate spending in the recent elections (2000 and 2002) was
    lower than the averages for previous elections (1996 and 1998), although
    the 2002 average reflected an increase from 2000. For Maine senate races,
    average candidate spending decreased in each of the two recent elections.
    In

    Arizona, however, average legislative candidate spending increased
    substantially* by about 55 percent for house candidates and 80 percent for
    senate candidates* in the first year that public funding became available.
    These dissimilar spending trends may be partly due to differences in the
    two states* provisions for distributing funds to

    candidates who participated in the public financing program. In Maine*s
    program, distribution amounts were based on whether the participating

    32 For the 2000 elections, appendix II shows the amount of campaign funds
    provided to candidates who participated in the public funding programs and
    the contribution caps applicable to nonparticipating candidates. Average
    Legislative Candidate Spending

    Declined in Maine but Increased in Arizona

    Page 53 GAO- 03- 453 Public Funding of Political Campaigns candidate ran
    for a house or a senate seat. But, in Arizona*s program, equal amounts
    were distributed to participating legislative candidates,

    regardless of legislative office type (see app. II). Thus, in Arizona*s
    2000 elections, a participating house or senate candidate who faced a
    challenger in both the primary and general elections received a minimum of
    $23,389. 33 This guaranteed minimum allocation was $6,189 more than

    the average amount that house candidates spent in 1998. If the release of
    matching funds 34 had been triggered, the potential maximum allocation to
    a house candidate in Arizona would have been $70,166 in 2000, after
    adjustment for inflation. 33 This is the actual 2000 election total
    allocation of $25,000* adjusted for inflation to 1996

    dollars to permit comparison to the inflation- adjusted average amount
    shown in figure 15 for 1998 and other years* for a participating candidate
    who faced a challenger and did not receive any matching funds. 34 After
    initial funding allocations, publicly financed candidates can receive
    additional funds (i. e., matching funds) based on spending by or for
    privately financed (nonparticipating) candidates, who* while subject to
    state limits and disclosure rules* engage in traditional means to raise
    money from individuals, corporations, and political action committees (see
    app. II).

    Page 54 GAO- 03- 453 Public Funding of Political Campaigns Figure 15:
    Average Maine and Arizona Legislative Candidate Spending (1996, 1998,
    2000, and 2002)

    Note: In the figure, we did not include any candidate who reported
    spending zero dollars or did not run in the general election. For those
    candidates, spending includes primary and general election amounts
    combined. With 1996 as the base year, we adjusted all spending amounts for
    inflation using the Department of Commerce*s (Bureau of Economic Analysis)
    gross domestic product implicit price deflator. a Includes one candidate
    who spent $143,199. When this candidate is excluded, the average drops to
    $15,065.

    For the two elections (2000 and 2002) under the public financing programs
    in Maine and Arizona, we compared average spending by nonparticipating and
    participating legislative candidates. As figure 16 shows:

     In Maine house races, average spending by each type of candidate was
    roughly equal each year* with nonparticipating candidate spending slightly
    higher in 2000, and participating candidate spending slightly higher in
    2002. For Maine senate races in 2000, average spending by nonparticipating
    candidates was comparatively higher. However, one candidate in the 2000
    senate race spent $143,199 in winning the election (fig. 16, note a). In
    2002 senate races, participating candidates spent more than
    nonparticipating candidates, on average.

     In Arizona, for house races in both years, average spending by
    participating candidates was considerably higher than average

    0 5

    10 15

    20 25

    30 35

    0 5

    10 15

    20 25

    Thousands of Dollars Thousands of Dollars

    Source: GAO analysis of state data. Public financing

    available Public financing

    available

    1996 1998

    Public financing not available

    Public financing not available

    2000 2002 1996 1998 2000 2002

    Public financing available

    Public financing available

    1996 1998

    Public financing not available

    Public financing not available

    2000 2002 1996 1998 2000 2002

    Maine Senate Maine House

    Maine

    Arizona Senate Arizona House

    Arizona

    $4.8 5.5 3.8 4.5

    $18.4 20.3

    16.8 a 16.4 $15.8 17.2

    26.7 25.3 $16.9 18.1

    32.6 27.1

    Page 55 GAO- 03- 453 Public Funding of Political Campaigns spending by
    nonparticipating candidates. For senate races, nonparticipating candidates
    had the higher spending average in 2000,

    whereas participating candidates had the higher spending average in 2002.

    Figure 16: Average Maine and Arizona Legislative Candidate Spending by
    Participation Status (2000 and 2002) Note: In the figure, we did not
    include any candidate who reported spending zero dollars or did not run in
    the general election. For those candidates, spending includes primary and
    general election amounts combined. With 1996 as the base year, we adjusted
    all spending amounts for inflation using the Department of Commerce*s
    (Bureau of Economic Analysis) gross domestic product implicit price
    deflator. a Includes one candidate who spent $143,199. When this candidate
    is excluded, the average drops to $15,664.

    0 5

    10 15

    20 25

    30 0 5

    10 15

    20 Thousands of dollars Thousands of dollars

    Source: GAO analysis of state data. Participating

    candidates Nonparticipating

    candidates Participating

    candidates Nonparticipating

    candidates

    2000 2002

    Maine Senate Maine House

    Maine

    Arizona Senate Arizona House

    Arizona

    $3.9 19.1 a

    3.5 14.5

    $4.4 15.3

    4.5 16.8

    Participating candidates Nonparticipating

    candidates Participating

    candidates Nonparticipating

    candidates

    2000 2002

    $20.0 28.3 29.0

    27.0 $19.8

    26.8 26.3 28.5

    Page 56 GAO- 03- 453 Public Funding of Political Campaigns In Maine, the
    gubernatorial election is the only statewide office race where candidates
    may choose to participate in the public financing program. The

    first election in which candidates for this office were eligible to
    participate was 2002. We compared candidate spending 35 for the two most
    recent gubernatorial elections (2002 and 1998) in Maine:  Total spending
    by gubernatorial candidates was about $930,000 in 1998

    and about $3.4 million in 2002. 36 Average gubernatorial candidate
    spending was about $186,000 in 1998 and about $843,000 in 2002.

     In 2002, only one gubernatorial candidate (Green Independent Party) ran
    with public funding in both the primary and the general elections. This
    candidate spent a total of approximately $837,000. One other candidate
    (Republican Party) ran and lost as a participating candidate in the
    primary election. This candidate spent approximately $296, 000.

    In Arizona, there are seven statewide office races where candidates may
    choose to participate in the program* Governor, Attorney General,
    Secretary of State, Corporation Commissioner, State Treasurer,
    Superintendent of Public Instruction, and Mine Inspector. In 2000, only
    candidates for Corporation Commissioner were eligible to participate in
    the public funding program. Candidates for the other statewide offices
    became eligible to participate in 2002. Table 11 compares spending for
    statewide offices in 1998 and 2002, the 2 most recent years where all
    statewide offices were on the ballot in Arizona.

    35 Candidates who reported spending zero dollars or did not run in the
    general election are not included. Total and average spending amounts
    include primary and general election spending combined, unless otherwise
    described. With 1996 as the base year, we adjusted all spending amounts
    for inflation using the Department of Commerce*s (Bureau of Economic
    Analysis) gross domestic product implicit price deflator. 36 The 1998
    gubernatorial race included the incumbent, who received approximately 59

    percent of the popular vote. In the 2002 election, the incumbent was
    prohibited by term limits from running. Spending by Statewide Office
    Candidates in Maine

    and Arizona

    Page 57 GAO- 03- 453 Public Funding of Political Campaigns Table 11:
    Spending by Candidates for Statewide Offices in Arizona (1998 and 2002)

    Dollars in thousands Average and total candidate spending by election year
    Office 1998 2002

    Average Total Average Total

    Governor $833.3 $3,333.0 $1,131.3 $5,656.6 Attorney General $762.4
    $1,524.8 $292.6 $585.3 Secretary of State $239.3 $478.7 $159.9 $479.6
    Corporation Commissioner a $139.2 $278.3 $97.2 $583.0 State Treasurer
    $69.0 $69.0 $106.5 $213.1 Superintendent of Public Instruction $14.4 $28.8
    $349.5 $699.0 State Mine Inspector $8.2 $8.2 $54.6 $109.3 Source: GAO
    analysis of state data. Note 1: Spending amounts do not include any
    candidate who reported spending zero dollars or did not run in the general
    election. For those candidates, spending includes primary and general
    election amounts combined. With 1996 as the base year, we adjusted all
    spending amounts for inflation using the Department of Commerce*s (Bureau
    of Economic Analysis) gross domestic product implicit price deflator.

    Note 2: Because some races had a very small number of candidates, and some
    candidates spent a very small or very large amount, averages may be
    misleading. For example, in the 2002 race for Superintendent of Public
    Instruction, one of the three general election candidates spent nearly
    $600,000. a In 1998, there was one open seat for Corporation Commissioner.
    In 2000, there were two open seats

    for Corporation Commissioner* one for a term ending in 2005 and one for a
    term ending in 2007, where a total of about $311,000 and an average of
    about $78,000 was spent. In 2002, there were three Corporation Commission
    seats open; one race was for two seats with terms ending in 2005, and the
    other race was for one seat with a term ending in 2007.

    For the 2002 election in Arizona, table 12 compares spending by
    nonparticipating and participating candidates for statewide offices. As
    shown, four of the seven statewide office races had both nonparticipating
    and participating candidates* Governor, Secretary of State, Corporation
    Commissioner, and Superintendent of Public Instruction. In three of the
    four races, the average and total spending amounts by participating
    candidates exceeded those of the nonparticipating candidates. In the race
    for the other statewide office* Superintendent of Public Instruction* the
    nonparticipating candidate spent about five times more than the
    participating candidate.

    Page 58 GAO- 03- 453 Public Funding of Political Campaigns Table 12:
    Spending by Candidates for Statewide Offices in Arizona by Participation
    Status (2002)

    Dollars in thousands Office Average and total candidate spending by
    participation status Nonparticipating candidates Participating candidates

    Average Total Average Total

    Governor $658.3 $1,974.9 $1,840.8 $3,681.8 Attorney General a a $292.6
    $585.3 Secretary of State $3.3 $3.3 $238.1 $476.3 Corporation Commissioner
    $38.5 $38.5 $108.9 $544.5 State Treasurer a a $106.5 $213.1 Superintendent
    of Public Instruction $590.6 $590.6 $108.4 $108.4 State Mine Inspector a a
    $54.6 $109.3 Source: GAO analysis of state data. Note: Spending amounts do
    not include any candidate who reported spending zero dollars or did not
    run in the general election. For those candidates, spending includes
    primary and general election amounts combined. With 1996 as the base year,
    we adjusted all spending amounts for inflation using the Department of
    Commerce*s (Bureau of Economic Analysis) gross domestic product implicit
    price deflator. a Not applicable.

    Maine*s definition of *independent expenditures* 37 generally follows that
    established by the U. S. Supreme Court in a 1976 ruling. 38 That is,
    independent expenditures are for campaign communications in the form of
    *express advocacy** explicitly endorsing or opposing one candidate by
    using words such as *vote for,* *elect,* *cast your ballot for,* *vote

    against,* or *defeat.* 39 Arizona*s definition includes the same guidance,
    but also broadens the definition of *express advocacy* to include, *A
    campaign slogan or words that can have no other reasonable meaning than to
    advocate the election or defeat of one or more clearly identified
    candidate( s).* 40 In both states, all other political communications not
    falling into the express advocacy category, such as public policy messages

    37 Me. Rev. Stat. Ann. tit. 21- A S:1019. 38 Buckley v. Valeo, 424 U. S. 1
    (1976). 39 Id. at 44. 40 Arizona Citizens Clean Election Commission,
    Independent Expenditures A. R. S S: 16- 941 (D): Candidates for Statewide
    and Legislative Offices, available at http:// www. ccec. state. az. us/
    ccecscr/ pub/ indExpend. asp (last visited April 25, 2003). Independent
    Expenditures

    Increasing in Maine and Arizona

    Page 59 GAO- 03- 453 Public Funding of Political Campaigns that do not
    explicitly endorse or oppose a candidate, are called *issue advocacy*
    communications. 41 Typically, independent expenditures are undertaken in
    federal and state

    elections by political action committees to support or oppose candidates
    to a greater extent than permitted by rules applicable to direct campaign
    contributions. The Director of Maine*s Commission on Governmental Ethics
    and Election Practices told us that, for 1998 and earlier years, the
    amounts of reported independent expenditures in the state were negligible.
    However, in the 2000 and 2002 elections in Maine, and in the 2002
    elections in Arizona, independent expenditures increased significantly.
    The 2002 increases were largely associated with gubernatorial races in
    both states. More specifically (see table 13):

     In Maine, of the $595,000 total independent expenditures in 2002, about
    67 percent were associated with one gubernatorial candidate. The other 33
    percent was associated with 118 legislative candidates.

     In Arizona, of the $2.6 million total independent expenditures in 2002,
    more than 92 percent was associated with two gubernatorial candidates. 42
    Table 13: Independent Expenditures in Maine and Arizona (1998, 2000, and
    2002)

    Dollars in thousands State Independent expenditures by election year 1998
    2000 2002

    Maine negligible $136.0 $595.0 Arizona $80.7 $38.3 $2,610.4 Source: Data
    provided by state officials.

    Our survey of Maine*s and Arizona*s candidates in the 2000 elections
    included a question asking for views about the role of independent
    expenditures in future elections. Figure 17 shows that most of the
    traditionally funded candidates who responded* 55 percent in Maine and

    41 Richard Briffault, The Political Parties and Campaign Finance Reform,
    100 Colum. L. Rev. 620, 631 (2000). 42 In 2002, two registered campaign
    committees spent a combined total of $2,408,834 in Arizona. According to
    campaign finance reports filed with the Arizona Secretary of State, all of
    this spending was associated with the race for governor.

    Page 60 GAO- 03- 453 Public Funding of Political Campaigns 52 percent in
    Arizona* agreed to a great or very great extent with the statement that
    independent expenditures will play an increasingly

    significant role in the 2002 and future elections. Also, many of the
    publicly funded candidates who responded* 47 percent in Maine and 33
    percent in Arizona* expressed similar agreement. Further, this view was
    shared by

    many of the other knowledgeable individuals we interviewed in the two
    states.

    Figure 17: Extent to Which Candidates in the 2000 Elections Agreed with
    the Statement That Independent Expenditures Would Become Increasingly
    Important in 2002 and Future Elections

    Because spending for issue advocacy is not regulated, we found no sources
    to quantify these funds in Maine and Arizona. Our survey of Maine*s and
    Arizona*s candidates in the 2000 elections included a question asking for
    views about future levels of issue advocacy spending. As figure 18 shows,
    most of the traditionally funded candidates who responded* 63 percent in
    Maine and 55 percent in Arizona* agreed to a great or very great extent
    with the statement that increasing amounts of money will be

    spent for issue advocacy ads in the 2002 and future elections. Also, many
    of the publicly funded candidates who responded* 45 percent in Maine and
    28 percent in Arizona* expressed similar agreement. Views on Issue
    Advocacy

    Spending in Maine and Arizona

    Great or very great extent

    Maine candidates

    GAO survey question: To what extent, if at all, do you agree with the
    statement that independent expenditures will play an increasingly
    significant role in the 2002 and future elections?

    Arizona candidates

    Total possible: 100% 55% 47%

    Great or very great extent

    GAO survey question: To what extent, if at all, do you agree with the
    statement that independent expenditures will play an increasingly
    significant role in the 2002 and future elections?

    Total possible: 100% 52% 33%

    Source: Responses to GAO*s survey (see app. IV and V).

    Nonparticipating Participating

    Page 61 GAO- 03- 453 Public Funding of Political Campaigns Figure 18:
    Extent to Which Candidates in the 2000 Elections Agreed with the Statement
    That Issue Advocacy Spending Would Increase in the 2002 and Future
    Elections

    In the 2000 election, voter turnout in Maine increased 4 percentage points
    compared with the previous presidential election year (1996), whereas
    Arizona*s turnout remained unchanged. Because voter turnout can be
    influenced by numerous factors, the extent (if any) to which the public
    financing programs in these states affected turnout is not easily
    quantifiable. However, these programs probably had limited effect on
    turnout in the 2000 elections, particularly given that many of Maine*s and
    Arizona*s voting- age citizens were unaware of their respective state*s
    public financing program.

    Voter turnout* usually defined as the number of votes cast in a race
    divided by the voting- age population* is an important component of
    citizens* participation in the political process. As a multiyear trend,
    turnout percentages in the United States indicate that much of the
    electorate is largely disengaged from politics, although turnout
    percentages consistently have been higher in presidential election years
    than in mid- term congressional election years. Regarding individual
    states, Maine*s turnout generally has exceeded the national turnout
    percentages, while Arizona*s turnout has been below the national figures.

    Specifically, to provide an overview perspective, table 14 shows voter
    turnout in Maine, Arizona, and the United States for the 4 most recent
    presidential election years and 3 recent mid- term congressional election
    Voter Participation: No Clear Link to

    Public Financing Program

    Comparison of 2000 Turnout to Previous Elections Great or very

    great extent

    Maine candidates

    GAO survey question: To what extent, if at all, do you agree with the
    statement that increasing amounts of money will be spent for issue
    advocacy ads in the 2002 and future elections?

    Arizona candidates

    Total possible: 100% 63% 45%

    Great or very great extent

    GAO survey question: To what extent, if at all, do you agree with the
    statement that increasing amounts of money will be spent for issue
    advocacy ads in the 2002 and future elections?

    Total possible: 100% 55% 28%

    Source: Responses to GAO*s survey (see app. IV and V).

    Nonparticipating Participating

    Page 62 GAO- 03- 453 Public Funding of Political Campaigns years. As
    shown, for the 2000 election (a presidential election year), voter turnout
    in Maine was 68 percent, which was an increase of 4 percentage

    points over turnout in the previous presidential election year, 1996*
    whereas, Arizona*s turnout was 42 percent in both of these years (2000 and
    1996).

    Table 14: Voter Turnout in Maine, Arizona, and the United States, 1988
    through 2000 Turnout as a percentage of voting- age

    population Election year Maine Arizona United States

    1988 a 62% 46% 50% 1990 57 36 37 1992 a 73 53 55 1994 55 39 39 1996 a 64
    42 49 1998 45 29 36 2000 a 68 42 51 Average of 1988, 1992, and 1996 66%
    47% 51% Average of 1990, 1994, and 1998 52% 35% 37% Source: GAO analysis
    of state, Federal Elections Commission, and U. S. Census Bureau data.
    Note: At the time of our study, data were unavailable to calculate turnout
    as a percentage of the voting- age population for the 2002 elections. a
    Presidential election year.

    According to some analysts, voter turnout can be predicted based on
    various factors, such as age, income, recency of registration, and
    previous voting history. For example, studies have shown that much higher
    percentages of older Americans vote than do younger citizens.
    Nevertheless, the extent (if any) to which Maine*s and Arizona*s public
    financing programs affected these states* voter turnout in the 2000
    elections is not easily quantifiable. That is, voter turnout can be
    influenced by a broad range of factors, including the following:

     The candidates and their messages: Do the candidates have personal
    popularity, or are the candidates uninspiring? Are there sharp issue
    distinctions?

     Mobilization efforts: How extensive are the parties* grassroots efforts
    to get out the vote?

     Media interest: Are there high- profile, competitive contests? Do the
    races have statewide or national importance? Voter Turnout Influenced

    by Many Factors

    Page 63 GAO- 03- 453 Public Funding of Political Campaigns  Campaign
    spending: What amounts of financial resources have candidates, parties,
    and interest groups expended on the campaign?

    Increased campaign spending, however, does not necessarily translate into
    greater numbers of voters at the polls.

     Negative advertising: Has negative advertising resulted in voter
    cynicism and disaffection? According to the Committee for the Study of the
    American Electorate, 43 negative advertising does tend to decrease voter
    turnout.

    In short, voter behavior is a complicated, multivariate topic* with no one
    reason explaining voting or nonvoting.

    There is some indication, however, that Maine*s and Arizona*s public
    financing programs probably had limited effect on voter turnout in the
    2000 elections. That is, as part of our study, we contracted with
    professional pollsters to determine the extent to which a projectable
    sample of voting- age citizens in these two states were aware of the
    respective state*s public financing program. According to the polling
    results, an estimated 60 percent of Maine*s voting- age citizens and an
    estimated 37 percent of Arizona*s voting- age citizens answered that they
    knew *nothing at all* about the public financing program. 44 In actuality,
    these *unawareness* percentages may be understated in

    reference to the time of the 2000 elections. Our polling of voting- age
    citizens in Maine and Arizona was conducted in October 2002, which was
    almost 2 years after the 2000 elections. During this 2- year period, the
    respective public financing program received considerable amounts of
    publicity* based on the promotional efforts of program proponents, as well
    as on the legal challenges or other opposition voiced by opponents. Had
    our polling been conducted in late 2000, the unawareness percentages may
    have been even greater than 60 percent and 37 percent, respectively. 43
    Based in Washington, D. C., the committee is an independent research
    organization that

    focuses on issues involving citizen engagement in politics. 44 Appendix I
    discusses the scope and methodology of the polls of voting- age citizens.
    The maximum sampling error for the Maine survey at the 95- percent level
    of statistical confidence is plus or minus 8 percentage points, and the
    maximum for the Arizona survey is plus or minus 5 percentage points. Many
    Citizens Unaware of

    Public Financing Program

    Page 64 GAO- 03- 453 Public Funding of Political Campaigns In sum, high
    levels of citizenry unawareness, coupled with a broad range of other
    potentially relevant factors, lessen the likelihood that the public
    financing program was a significant influence on voter turnout in Maine*s

    and Arizona*s 2000 elections. Under Maine*s and Arizona*s public financing
    programs, with only two elections from which to observe legislative races
    and only one election from which to observe most statewide races, it is
    too early to precisely draw causal linkages to resulting changes, if any,
    involving voter choice, electoral competition, interest group influence,
    campaign spending, and voter participation. Many factors can affect
    elections* factors such as

    term limits and redistricting, state and local campaign issues, and even
    whether the particular year involved a presidential or a gubernatorial
    election. In implementing these new wide- ranging campaign finance
    reforms, state officials told us that many factors contributed to an
    uncertain and constantly changing environment* such as legal challenges to
    the program* which also affected these elections. Thus, it is difficult to
    separate or disassociate the effects of these factors from the effects of
    the

    public financing programs. Moreover, even for other states that have a
    longer history with more limited forms of public financing, published
    studies have reported mixed findings on the effects of the programs. As
    represented in the available literature, there seems to be little
    agreement as to how public financing programs affect elections.

    Our work indicated that perceptions of Maine*s and Arizona*s public
    financing programs are widely divergent and frequently ideologically
    based. Irrespective of differences in perceptions or ideologies, it is
    clear

    that* in both states* considerably larger numbers of candidates chose to
    participate in the public funding programs in 2002 than in 2000. In both
    states, many observers told us they expected that future elections will
    experience continued growth in program participation. For example,
    political party officers we interviewed said that, even though they may
    oppose the program for ideological or other reasons, public funding
    presents strategic opportunities that any candidate must consider.

    Some researchers have pointed out that, in some instances, electoral
    competitiveness may be enhanced by increased campaign spending. Thus, two
    goals of the public financing programs* increase electoral

    competition and curb increases in campaign spending* can be at odds with
    each other. Also, state officials and candidates told us that campaign
    Concluding

    Observations

    Page 65 GAO- 03- 453 Public Funding of Political Campaigns spending can
    increase when political action committees, other groups, or individuals
    make independent expenditures in a competitive race to

    support a traditionally funded candidate* which, in turn, could trigger
    matching funds for a publicly financed candidate. Further, critics have
    argued that, in Maine, the public financing program*s goal of curbing
    increases in campaign spending is undermined because participating
    candidates are allowed to form political action committees to raise funds
    and make independent expenditures to support or oppose other candidates.

    Finally, in terms of legislative flexibility for making adjustments to
    meet future fiscal circumstances or other needs, one aspect of the two
    states* public financing programs is distinctly different. As mentioned
    previously, the respective programs became law in Maine and Arizona
    through citizen initiative. In Maine, once such an initiative has been
    supported and becomes law, the standard legislative process can be used to
    make subsequent changes or modifications. In Arizona, however, any law
    enacted through such a process is afforded unique protection. For an
    initiative- based law to be changed in Arizona, the modification (e. g.,
    amendment) must be supported by three- fourths of the members of each body
    of the legislature, and the modification must also further the intent of
    the initial law. Thus, while Maine*s public financing program is as
    flexible

    as any other general statute, Arizona*s program is relatively inflexible.
    In response to our inquiries, for example, staff of Arizona*s Citizens
    Clean Elections Commission told us that, although there were concerns that
    the reporting requirements of the state*s 1998 Act were too complex and
    had led to many honest mistakes on the part of campaign volunteers, the
    prospects for changing the law were limited, given the legislative
    hurdles. We are sending copies of this report to interested congressional

    committees and subcommittees. We will also make copies available to others
    on request. In addition, the report will be available at no charge on
    GAO*s Web site at http:// www. gao. gov.

    Page 66 GAO- 03- 453 Public Funding of Political Campaigns If you or your
    staffs have any questions about this report or wish to discuss the matter
    further, please contact me at (202) 512- 8777 or Danny

    R. Burton at (214) 777- 5600. Other key contributors are acknowledged in
    appendix VII.

    Norman J. Rabkin, Managing Director Homeland Security and Justice Issues

    Appendix I: Objectives, Scope, and Methodology

    Page 67 GAO- 03- 453 Public Funding of Political Campaigns In accordance
    with the mandate specified in Section 310 of the Bipartisan Campaign
    Reform Act of 2002 (P. L. 107- 155, 2002), this study:

     Provides statistics showing the number of candidates who chose to use
    public funds to run for legislative seats or statewide offices in the 2000
    elections in Maine and Arizona, the seats or offices for which they were
    candidates, whether the candidates were incumbents or challengers, whether
    the candidates were successful in their bids, and the number of races in
    which at least one candidate ran an election with public funds.

     Describes the extent to which the goals of Maine*s and Arizona*s public
    financing programs were met in the 2000 elections. That is, we studied
    what changes, if any, occurred in voter choice (number of candidates),
    electoral competition, interest group influence, campaign spending, and
    voter participation (voter turnout)* five indicators related to goals of
    the programs.

    To provide a broader perspective, as we agreed with the offices of the
    Chairmen and Ranking Members of the Senate Committee on Rules and
    Administration and the Committee on House Administration, this study also
    presents available statistics and related information regarding the 2002
    elections in Maine and Arizona.

    Initially, we conducted a literature search to identify relevant reports,
    studies, articles, and other documents regarding campaign finance reform
    in the United States generally, as well as in Maine and Arizona
    specifically.

    Because campaign finance reform can be both complex and contentious, we
    wanted to ensure that our background reading included a broad spectrum of
    views, encompassing both proponents and opponents of public financing.
    (See bibliography.) Also, we reviewed information available on the Web
    sites of the state

    agencies responsible for administering the respective public financing
    program in the two study states* Maine*s Commission on Governmental Ethics
    and Election Practices (www. state. me. us/ ethics) and Arizona*s Citizens
    Clean Elections Commission (www. ccec. state. az. us).

    Generally, in directly addressing the objectives, we analyzed available
    statistical data on the 2000 and 2002 elections in Maine and Arizona,
    visited both states to interview election officials and interest group
    representatives, analyzed responses from a survey of all candidates who
    Appendix I: Objectives, Scope, and

    Methodology Objectives

    Overview of Our Scope and Methodology

    Appendix I: Objectives, Scope, and Methodology

    Page 68 GAO- 03- 453 Public Funding of Political Campaigns ran in the 2000
    elections for seats in the Maine and Arizona legislatures and the Arizona
    Corporation Commission, and contracted with

    professional pollsters to obtain the views of voting- age citizens in both
    states. Further details about the scope and methodology of our work
    regarding each of the objectives are presented in separate sections below.

    To obtain the congressionally mandated and the agreed- upon statistical
    information regarding the 2000 and 2002 elections, we contacted officials
    at Maine*s and Arizona*s Office of the Secretary of State* the agencies
    responsible for supervising and administering elections laws and
    activities, including certifying state candidates for the ballot and
    tabulating official election results. Also, we contacted officials at
    Maine*s Commission on Governmental Ethics and Election Practices and
    Arizona*s Citizens Clean

    Elections Commission* the agencies responsible for administering the
    respective state*s public financing program, including certifying that
    applicable candidates have met qualifications for receiving public funds.
    Specifically, for each state, we obtained data showing

     the number of candidates who chose to use public funds to run for
    legislative seats or statewide offices in the 2000 and the 2002 elections,

     the seats or offices for which they were candidates,  whether the
    candidates were incumbents or challengers,  whether the candidates were
    successful in their bids,  and the number of races in which at least one
    candidate ran an election with public funds (see tables 1 through 4).

    As used in our report, *challengers* consist of all nonincumbent
    candidates. Thus, a candidate who was not an incumbent is called a
    challenger, even if that candidate did not face an opponent. Also, in
    counting races, we included all races in which there was a candidate on
    the ballot regardless of whether or not the candidate faced a challenger.
    Scope and Methodology:

    Statistical Information Regarding the 2000 and 2002 Elections

    Appendix I: Objectives, Scope, and Methodology

    Page 69 GAO- 03- 453 Public Funding of Political Campaigns In studying the
    extent to which the goals of the public financing programs in Maine and
    Arizona were met, we focused on identifying what changes, if

    any, occurred regarding five indicators* voter choice (number of
    candidates), electoral competition, interest group influence, campaign
    spending, and voter participation (voter turnout). The scope and
    methodology of our work included

     conducting various data- based analyses of the 2000 and 2002 elections
    in both states;

     interviewing individuals in both states* e. g., elected officials,
    political party leaders, and interest group representatives* to obtain a
    wide range of perspectives;

     surveying all candidates who ran in the 2000 elections for seats in the
    Maine and Arizona legislatures and the Arizona Corporation Commission; and

     contracting with professional pollsters to obtain the views of votingage
    citizens in both states.

    Specifically, the following sections separately discuss the scope and
    methodology of our work for each the five goal- related indicators. It
    should be emphasized that describing or interpreting the effects of public
    financing on elections should be approached cautiously, partly because 1

    election cycle*s results or even 2 election cycle*s results may not be
    sufficient. Also, term limits, redistricting, the ambiguous environment
    that surrounded the implementation of the new campaign finance programs,
    and other factors not directly related to public or private financing can
    affect electoral campaigns and results.

    To determine whether public financing encouraged more state legislative
    candidates to run for office, we calculated the average annual number of
    candidates per legislative primary and general election race for the 4
    most recent election years (1996, 1998, 2000, and 2002). Also, to
    determine whether there were different types of candidates running for
    office, we compared candidates* party affiliations and the number of
    third- party or independent legislative candidates for these 4 election
    years and determined if these candidates participated in the public
    financing program. Further, for applicable statewide offices, which
    generally have 4- year terms, we compared the number of candidates in the
    3 most recent

    election years (1994, 1998, and 2002) and determined to what extent these
    Scope and Methodology: Extent

    to Which Goals of Public Financing Programs Were Met

    Voter Choice

    Appendix I: Objectives, Scope, and Methodology

    Page 70 GAO- 03- 453 Public Funding of Political Campaigns candidates were
    publicly funded (2002). To conduct these analyses, we obtained data on
    candidates from

     the state of Maine*s Department of the Secretary of State and the Maine
    Commission on Governmental Ethics and Election Practices and

     the state of Arizona*s Secretary of State Office and the Citizens Clean
    Elections Commission. Also, our survey (discussed below) of candidates in
    Maine*s and Arizona*s

    2000 elections included questions about voter choice. In designing our
    approach, we first reviewed public finance literature and identified three
    widely used measures of electoral competition* number of contested races
    (races with more than one candidate), incumbent reelection rates, and
    incumbent victory margins. We then analyzed election data in Maine and
    Arizona using these three measures:

     Number of contested races. We measured whether there was an increase in
    the number of contested (more than one candidate on the ballot)
    legislative primary election races in Maine and Arizona over 4 election
    years (1996, 1998, 2000, and 2002). For 2000 and 2002, we identified the
    extent to which the contested races had publicly funded candidates.

     Incumbent reelection rates. We measured whether there was a change in
    the number of incumbents being reelected to office in Maine and Arizona
    over 4 election years (1996, 1998, 2000, and 2002).

     Incumbent victory margins. For legislative general election races in
    Maine and Arizona, we measured the margin of difference between the
    incumbent winners of the races and the runners- up. Based on our
    literature review and discussions with researchers, we defined races as
    being *competitive* if the difference in votes garnered between the
    winning incumbent and the runner- up was 15 percentage points or less. We
    then examined the extent to which these competitive races had publicly
    funded candidates.

    Also, our survey (discussed below) of candidates in Maine*s and Arizona*s
    2000 elections included questions about electoral competition. Electoral
    Competition

    Appendix I: Objectives, Scope, and Methodology

    Page 71 GAO- 03- 453 Public Funding of Political Campaigns To test the
    overall effect, if any, of Maine*s and Arizona*s public financing programs
    on competitive races as defined by incumbent victory margins, we used
    logistic regression models. Logistic regression is a standard

    multivariate statistical procedure for estimating the size and
    significance of the effects of categorical or continuous variables on
    dichotomous outcomes, such as whether or not election races were
    competitive. We tested the effect of five independent variables on our
    dependent variable,

    competitive races. As mentioned previously, we defined a competitive race
    as one in which the difference in votes garnered between the winner and
    the runner- up was 15 percentage points or less. Our five independent
    variables were four categorical variables* public financing program
    participation or nonparticipation, winning candidate campaign status
    (incumbent or not), election year (2000 or 2002), and legislative seat
    (House or Senate)* and one continuous variable, that is, total candidate
    spending by the winner and runner- up.

    The size of the effects is measured by odds ratios, which indicate how the
    odds on being in one category of the outcome measure (in our case, an
    election race being competitive) vary across categories or values of the
    different variables being considered. Essentially, the odds of an election
    race being competitive were obtained by simply dividing the number of
    competitive races by the number of races that were not competitive. For
    example, among total races in which either candidate (the winner or the
    runner- up) participated in the public financing program, if 50 candidates
    were competitive while 10 were not, the odds on races with a participating
    candidate being competitive were 5.0 (or 50 divided by 10). If, among
    total races in which neither candidate (the winner or the runner- up)
    participated in the public financing program, 100 were competitive while
    10 were not, the odds on races with a nonparticipating candidate being
    competitive were 10.0 (or 100 divided by 10). The odds ratio obtained by
    dividing the former odds by the latter (i. e., 5.0 divided by 10.0 equals
    0.50)

    provides an estimate of the difference between races with and without
    publicly financed candidates and can be interpreted as indicating that the
    races with a participating candidate are half as likely to be competitive
    compared with races with nonparticipating candidates.

    Table 15 shows the results* the odds ratio coefficients* of our tests
    using the logistic regression models. As indicated, the odds ratio
    coefficients associated with participation in Maine*s public financing
    program (0.65) and Arizona*s program (3. 43) were not significant at the
    0.05 level. That is, the results indicate that participation did not
    significantly affect competitive races. However, these results should be
    interpreted with Logistic Regression Models

    Appendix I: Objectives, Scope, and Methodology

    Page 72 GAO- 03- 453 Public Funding of Political Campaigns caution, given
    the relatively few variables and the limited amount of data included in
    the models.

    Table 15: Results of Logistic Regression Models Testing the Effect of
    Public Financing Programs on Competitive Races Variables Odds ratio
    coefficients Categorical variables Maine a Arizona b

    Public financing program participation: Races in which at least one
    candidate (the winner or the runner- up) participated in the program
    (versus races in which neither candidate participated) 0.65 3.43 Winning
    candidate campaign status: Races in which the winner was an incumbent
    (versus races in which the winner was not an incumbent) 0.34 c 1.18
    Election year: Races in year 2000 (versus races in year 2002) 0.54 c 3.99
    Legislative seat: Races for House seats (versus races for Senate seats)
    1.56 d

    Continuous variable Total candidate spending: Total amount spent in a race
    by both candidates (winner and runner- up) combined 1.03 c 1.02 c

    Source: GAO analysis of state data. Note: Our analysis included data for
    only the winner and the runner- up in elections with more than two
    candidates. a Includes both House and Senate races. b Includes only Senate
    races. c Odds ratio coefficients that are significant at the 0.05 level. d
    Data not applicable.

    To address this topic, we included relevant questions in our survey of
    candidates in Maine*s and Arizona*s 2000 elections. Also, we contracted
    with professional pollsters who conduct omnibus telephone surveys with
    representative samples of voting- age citizens specifically in Maine and
    Arizona. Our surveys of candidates and citizens are discussed in more
    detail in separate sections below. Further, in both states, we interviewed
    various interest group representatives (see tables 16 and 17). To
    determine changes in candidate spending in Maine and Arizona, we

    calculated average legislative candidate spending over 4 election years
    (1996, 1998, 2000, and 2002) and statewide candidate spending over 2
    election years (1998 and 2002). For comparisons across years and to
    observe any trends, with 1996 as the base year and using the Department of
    Commerce*s (Bureau of Economic Analysis) gross domestic product implicit
    price deflator, we adjusted all candidate spending for inflation. Data on
    candidate spending in Maine were available for 1996, 1998, and 2000 in
    annual and biennial reports published by Maine*s Commission on Interest
    Group Influence

    Campaign Spending

    Appendix I: Objectives, Scope, and Methodology

    Page 73 GAO- 03- 453 Public Funding of Political Campaigns Governmental
    Ethics and Election Practices. Candidate spending data for Maine*s 2002
    elections were available electronically from the Maine Public

    Access Campaign Finance site. 1 Data for candidate spending in Arizona
    were provided to us electronically by the Office of the Secretary of
    State.

    To the extent possible, we also identified independent expenditures as
    they related to these elections. Also, in both states, we obtained
    testimonial evidence regarding the significance of issue advocacy
    spending. Further, our survey (discussed below) of candidates in Maine*s

    and Arizona*s 2000 elections included questions about campaign spending.
    To provide an overview perspective, we used data from the Federal
    Elections Commission and the U. S. Census Bureau to calculate voter
    turnout as a percentage of the voting- age populations in Maine, Arizona,
    and the United States for election years 1988 through 2000. 2 We focused
    in particular on comparing turnout in 2000* the first year of the public
    financing programs in Maine and Arizona* and turnout in the 3 previous
    presidential election years (1988, 1992, and 1996). We focused on these
    years because turnout percentages across the nation consistently have been
    higher in presidential election years than in mid- term congressional
    election years.

    Also, we reviewed various studies, articles, and other literature to
    obtain an understanding of the various factors that can influence voter
    turnout. Further, as discussed in more detail below, we contracted with
    professional pollsters to conduct a survey in October 2002 to determine
    the extent to which projectable samples of voting- age citizens in Maine
    and Arizona were aware of the respective state*s public financing program.

    We interviewed various individuals in Maine and Arizona to obtain
    perspectives on the effects of the respective state*s public financing
    program. We judgmentally selected interviewees to ensure coverage of one
    or both chambers of the state legislature, the major and independent
    political parties, candidates who participated in the state*s public
    financing program and those who did not, agency officials responsible for

    1 www. mainecampaignfinance. com/ public/ home. asp 2 At the time of our
    study, data were not available to calculate turnout as a percentage of
    voting- age population for the 2002 elections. Voter Participation

    Interviews in Maine and Arizona

    Appendix I: Objectives, Scope, and Methodology

    Page 74 GAO- 03- 453 Public Funding of Political Campaigns administering
    the program, and interest groups (see tables 16 and 17). Regarding the
    last category (interest groups), our selections were based on a number of
    considerations, including (1) suggestions made by state

    agency officials knowledgeable about political activism in the state and
    (2) the amounts of financial contributions or expenditures made by groups,
    as reported in publicly available records.

    Appendix I: Objectives, Scope, and Methodology

    Page 75 GAO- 03- 453 Public Funding of Political Campaigns Table 16: List
    of Organizations (and Title of Individuals) Interviewed in Maine Name of
    organization Title of individuals contacted Notes

    House of Representatives Speaker of the House (District 31) Democrat. Ran
    in 2000 as a participating candidate; prohibited by term limits from
    running in 2002. Floor Leader (Minority) (District 38) Assistant Floor
    Leader (District 85)

    Republicans. Opposed to public financing for candidates.

    Representative (District 99) Democrat. Elected in 2000; ran as a
    participating candidate in the public financing program. Formerly was
    Executive Director of the Commission on Governmental Ethics and Election
    Practices. Senate Floor Leader

    (District 15) Democrat. Ran in 2000 as a participating candidate.

    Was lead plaintiff in lawsuit challenging the constitutionality of the
    public financing program (see app. III). Senator (District 6) Republican.
    First- time candidate elected in 2000; ran

    as participating candidate in public financing program. Defeated 16- year
    incumbent. Senator (District 23) Democrat. Elected in 2000 in a race for
    an open seat;

    ran as a participating candidate. Maine Democratic Party Chair Maine
    Republican Party Executive Director Green Independent Party Co-
    chairpersons

    Provided party views on effects of the Maine Clean Election Act.
    Commission on Governmental Ethics and Election Practices Executive
    Director Responsible for administering the Maine Clean

    Election Act. Department of the Secretary of State Deputy Secretary of
    State (Bureau of

    Corporations, Elections and Commissions) Responsible for supervising and
    administering all

    elections of federal, state, and county offices and referenda; preparing
    ballot types and other elections materials; and tabulating official
    election results. Department of Audit (State Auditor) Director of Audit
    Responsible for determining whether monies in the

    Maine Clean Election Fund have been managed appropriately. Maine Citizens
    for Clean Elections (a project of the Maine Citizen Leadership Fund)

    Steering Committee Consists of many of the groups that promoted the ballot
    initiative that led to passage of the Maine Clean Election Act. Among
    others, the groups represented include the League of Women Voters, Common

    Cause, Northeast Action, and the Dirigo Alliance. Maine Bankers
    Association President- Treasurer A trade organization representing the
    interests of

    Maine*s banking industry, trust companies, and financial service
    providers. Maine Medical Association General Counsel A voluntary
    association of Maine physicians. Services

    include legislative and regulatory assistance, such as tracking bills and
    facilitating dialogue with the legislature and the bureaucracy. Preti,
    Flaherty, Beliveau, Pachios & Haley, LLC Attorney One of Maine*s largest
    law firms. Client services

    include lobbying representation. Colby College (Waterville) Associate
    Professor of Government A nationally recognized expert on campaign finance

    reform. Source: GAO. Note: These individuals held these positions at the
    time of our interviews.

    Appendix I: Objectives, Scope, and Methodology

    Page 76 GAO- 03- 453 Public Funding of Political Campaigns Table 17: List
    of Organizations (and Title of Individuals) Interviewed in Arizona Name of
    organization Title of individuals contacted Notes

    House of Representatives Representative (District 1) Democrat. Ran in the
    2000 election as a participating candidate in the public financing
    program. Representative (District 6) Republican. Opposed to the public
    financing

    program. Citizens Clean Elections Commission Commissioner (Chair)
    Responsible for administering the Citizens

    Clean Elections Act. Commissioner Served as first chairman of the
    Commission. Current appointment expires in 2004.

    Executive Director Responsible for administering the Citizens Clean
    Elections Act. Deputy Director Office of the Secretary of State Election
    Services Division Responsible for certifying state candidates,

    initiatives, and referenda for the ballot; certifying the results of
    statewide elections; and accepting the filing of campaign finance

    reports. Corporation Commission Commissioner In the 2000 election, ran for
    statewide office

    (Corporation Commission) as participating candidate in the public
    financing program. Office of the Auditor General Auditor Principal author
    of report issued by Arizona

    Auditor General, Citizens Clean Elections Commission Special Review (Jan.
    11, 2002). Clean Elections Institute, Inc. Executive Director A nonprofit
    advocacy group *dedicated to the fair and impartial implementation of the

    Citizens Clean Elections Act.* Arizona Democratic Party Coordinated
    Campaign Director Provided party views on effects of the

    Arizona Citizens Clean Elections Act. Arizona Republican Party Political
    Director Arizona Green Party Party activist Formerly served as a
    Commissioner of the

    Citizens Clean Elections Commission. Goldwater Institute Director of Urban
    Growth and Economic

    Development Studies Author of, Is Cleanliness Political Godliness?
    Arizona*s Clean Elections Law after Its First Year (Nov. 30, 2001).
    Arizona Education Association President Association membership is open to

    employees of all Arizona public schools, college and university employees,
    retired educators, and college students studying to be teachers. It is the
    state*s largest professional organization. Fennemore Craig (law firm)
    Government relations attorney Specializes in the areas of lobbyist
    regulation and campaign finance at both the federal and Arizona levels.
    Advises candidates,

    contributors, and political committees on complying with campaign finance
    reporting requirements.

    Appendix I: Objectives, Scope, and Methodology

    Page 77 GAO- 03- 453 Public Funding of Political Campaigns Name of
    organization Title of individuals contacted Notes

    Arizona Chamber of Commerce Chamber Staff  Senior Vice President, Public
    Affairs

     Vice President, Marketing and Communications

     Manager, Public Affairs Chamber Member Representatives  Executive
    Director, Home Builders

    Association of Central Arizona

     Swift Transportation Co., Inc. The Chamber represents Arizona businesses

    in interfacing with legislators and regulators at the state capital and
    with members of Arizona*s congressional delegation.

    Source: GAO. Note: These individuals held these positions at the time of
    our interviews.

    To obtain further perspectives on the effects of public financing, we
    surveyed by mail all candidates, including those who used public financing
    as well as those who did not, who ran in the 2000 primary and general

    elections in Maine and Arizona. Among other topics, the questionnaires
    asked for candidates* opinions on various aspects of how public financing
    affected the 2000 primary and general elections in their states; their own
    decisions about whether or not to use public funding; participating
    candidates* experiences with the public financing program; and their
    opinions about public financing of campaigns, in general, and in the 2002
    and future elections in their state. Overall, the two questionnaires were
    identical, with the exception of a few questions to account for
    differences between the states* election laws. We pretested the
    questionnaires with both participating and nonparticipating candidates in
    each state and made relevant changes to the questions based upon these
    pretests. Copies of the Maine and Arizona questionnaires, along with the
    results to each question, are in appendixes IV and V, respectively.

    We mailed questionnaires to 379 candidates in Maine and received 269
    usable questionnaires; we mailed questionnaires to 237 candidates in
    Arizona and received 143 usable questionnaires. These completed
    questionnaires represented response rates of 72 percent for Maine and 61
    percent for Arizona. 3 We made extensive efforts to encourage

    candidates to complete and return the questionnaires, including advance
    telephone calls to candidates informing them about the upcoming survey, up
    to three follow- up telephone calls to nonrespondents, and up to two

    3 Two candidates in Arizona and six candidates in Maine were removed from
    the denominator when calculating response rates after we learned that
    these persons were deceased at the time of the survey. Candidate Surveys

    Appendix I: Objectives, Scope, and Methodology

    Page 78 GAO- 03- 453 Public Funding of Political Campaigns follow- up
    mailings of the questionnaires. We performed this work during July through
    December 2002.

    We conducted a response bias analysis to determine whether the candidates
    who returned completed questionnaires were substantially different from
    the candidates who were mailed questionnaires, in terms of whether they
    had been participating or nonparticipating candidates in the

    2000 elections. For each state, we found that both participating and
    nonparticipating candidates returned completed questionnaires in
    approximately the same proportions in which the candidates had comprised
    the initial mail- out groups. For the Maine survey, 36 percent of the
    initial mail- out group was participating candidates, compared with 39
    percent of the candidates who returned completed questionnaires. For
    Arizona, 24 percent of the initial mail- out group was participating
    candidates, and 27 percent who returned completed questionnaires were
    participating candidates. Therefore, we do not consider the results of our
    Maine and Arizona candidate surveys to have response bias on this
    characteristic.

    Because this was not a sample survey, but rather a census of all
    candidates who ran for office in 2000, there are no sampling errors.
    However, the practical difficulties of conducting any survey may introduce
    errors,

    commonly referred to as nonsampling errors. For example, measurement
    errors are introduced if difficulties exist in how a particular question
    is interpreted or in the sources of information available to respondents
    in answering a question. In addition, coding errors may occur if mistakes
    are entered into a database. We took extensive steps in the development of
    the questionnaires, the collection of data, and the editing and analysis
    of data to minimize total survey error. To reduce measurement error, we
    conducted two rounds of pretesting of the questionnaires with both
    participating and nonparticipating candidates to make sure questions and
    response categories were interpreted in a consistent manner. In addition,
    we edited all completed surveys for consistency and, if necessary,
    contacted respondents to clarify responses. All questionnaire responses
    were double key- entered into our database (that is, the entries were 100
    percent verified), and a random sample of the questionnaires was further
    verified for completeness and accuracy. In addition, all computer syntax
    was peer reviewed and verified by separate programmers to ensure that the
    syntax was written and executed correctly.

    Appendix I: Objectives, Scope, and Methodology

    Page 79 GAO- 03- 453 Public Funding of Political Campaigns Regarding
    changes in interest group influence due to public financing of campaigns,
    we contracted with professional pollsters who conduct

    omnibus telephone surveys with representative samples of voting- age
    citizens specifically in Maine and Arizona. Generally, this polling effort
    was designed to determine the extent to which citizens in each state were
    aware of their state*s public financing program and to obtain their views
    about whether the program has decreased the influence of special interest
    groups, made legislators more accountable to voters, and increased
    confidence in government. The surveys consisted of two sets of questions
    that we developed, with some assistance from the polling organizations. As
    shown below, except for some minor wording differences customized for the
    respective state, the two sets of questions were the same for both Maine
    and Arizona. 4 Questions 2, 3, and 4 in each set were not asked of any
    individual who, in response to question 1, acknowledged knowing *nothing
    at all* about the applicable state*s clean election law or was unsure or
    declined to answer. We pretested the questions with members of the general
    public in each state and made relevant changes to the questions based upon
    these pretests.

    The questions used in the Maine survey were as follows: 1. I would like to
    ask you about Maine*s clean election law. This law

    provides campaign money to candidates running for governor and for
    candidates to the state legislature. Would you say you know a lot, some, a
    little, or nothing at all about Arizona*s clean election law?

    2. Now, I would like to ask you about Maine legislators in general who ran
    their campaigns with public funds in the 2000 elections. Would you say
    that these sate legislators who received public funds have been much more,
    somewhat more, somewhat less, or much less accountable to voters than
    legislators who did not get public funds, or has it not

    made any difference? 3. To what extent do you think Maine*s clean election
    law has decreased

    or increased the influence of special interest groups on legislators?
    Would you say the law has greatly decreased, somewhat decreased,

    4 In designing the questions, we used the term *clean election* because
    this wording has been widely used in the media, was used in the ballot
    initiatives, and also is part of the title of the respective state*s law.
    Thus, in reference to voter awareness, the term *clean election* likely is
    more commonly recognized than an alternative term such as *public
    financing program.* Polls of Voting- Age

    Citizens Maine Survey Questions

    Appendix I: Objectives, Scope, and Methodology

    Page 80 GAO- 03- 453 Public Funding of Political Campaigns has had no
    effect, has somewhat increased, or greatly increased the influence of
    special interest groups, or is it too soon to tell?

    4. To what extent has Maine*s clean election law increased or decreased
    your confidence state government? Would you say the law has greatly
    increased, somewhat increased, has had no effect, has somewhat decreased,
    or greatly decreased your confidence in state government, or is it too
    soon to tell?

    The questions used in the Arizona survey were as follows: 1. I would like
    to ask you about Arizona*s clean election law. This law

    provides campaign money to candidates running for statewide office, such
    as the Corporation Commission or governor and for candidates to the state
    legislature. Would you say you know a lot, some, a little, or nothing at
    all about Arizona*s clean election law?

    2. Now, I would like to ask you about Arizona legislators in general who
    ran their campaigns with public funds in the 2000 elections. Would you say
    that these state legislators who received public funds have been much
    more, somewhat more, somewhat less, or much less accountable to voters
    than legislators who did not get public funds, or has it not

    made any difference? 3. To what extent do you think Arizona*s clean
    election law has

    decreased or increased the influence of special interest groups on
    legislators? Would you say the law has greatly decreased, somewhat
    decreased, has had no effect, has somewhat increased, or greatly increased
    the influence of special interest groups, or is it too soon to tell?

    4. To what extent has Arizona*s clean election law increased or decreased
    your confidence state government? Would you say the law has greatly
    increased, somewhat increased, has had no effect, has somewhat decreased,
    or greatly decreased your confidence in state government, or is it too
    soon to tell?

    To conduct the Maine poll, we contracted with Market Decisions (South
    Portland, ME). During October 15- 31, 2002, the firm completed telephone
    interviews with 400 randomly selected adults (age 18 or older) in Maine.
    The sample of telephone numbers called was based on a list of telephone
    prefixes (the first 3 digits in the 7- digit numbers) used throughout the
    state. The polling results are considered generalizable to households with
    telephones, given that every residential telephone number had an equal
    Arizona Survey Questions

    Contracted Polling Organizations

    Appendix I: Objectives, Scope, and Methodology

    Page 81 GAO- 03- 453 Public Funding of Political Campaigns probability of
    selection. Up to 10 calls were made with households to obtain completed
    interviews. The 400 completed interviews represent a

    survey response rate of 30 percent. To conduct the Arizona poll, we
    contracted with Behavior Research Center, Inc. (Phoenix, AZ). During
    October 1- 7, 2002, the firm completed telephone interviews with 713 heads
    of household in Arizona. To ensure a random selection of households
    proportionately allocated throughout the sample universe, the firm used a
    computer- generated, random digit dial telephone sample, which selected
    households based on residential telephone prefixes and included all
    unlisted and newly listed households. Telephone interviewing was conducted
    during approximately equal cross sections of daytime, evening, and weekend
    hours* a procedure designed to ensure that all households were equally
    represented regardless of work schedules. Up to 4 calls were made with
    households to obtain completed interviews. The 713 completed interviews
    represent a survey response rate

    of 35 percent. As indicated above, all surveys are subject to errors.
    Because random samples of each state*s population were interviewed in
    these omnibus surveys, the results are subject to sampling error, which is
    the difference between the results obtained from the samples and the
    results that would have been obtained by surveying the entire populations
    under consideration. Measurements of sampling errors are stated at a
    certain level of statistical confidence. The maximum sampling error for
    the Maine survey at the 95- percent level of statistical confidence is
    plus or minus

    8 percentage points, and the maximum for the Arizona survey is plus or
    minus 5 percentage points. Additionally, the results of these surveys may
    be subject to unknown nonresponse bias due to relatively low response
    rates.

    A few of the Maine and Arizona citizens who were interviewed may have been
    18 years of age at the time of the interviews in October 2002* and, thus,
    would have been only 16 years of age (nonvoters) at the time of the

    elections in 2000. While the polling data do not permit an exact
    quantification of these young respondents, the numbers probably are quite
    small and would not affect the validity of the survey results. For the 713
    completed interviews in Arizona, for example, polling data show that 54
    respondents (7.6 percent) were in the age range of 18 to 24 years.

    We assessed the quality of electronic data provided to us by officials in
    Maine and Arizona by testing the data for internal consistency; validating
    Survey Error

    Data Quality

    Appendix I: Objectives, Scope, and Methodology

    Page 82 GAO- 03- 453 Public Funding of Political Campaigns the data using
    other sources; and, to the extent possible, reviewing the associated
    documentation. Based on these tests, we determined that the data were
    sufficiently accurate for our purposes.

    As an additional quality- assurance measure, we asked officials of the
    state agencies responsible for administering the respective public
    financing program in the two study states to review a draft copy of our
    report for accuracy and clarity before its final issuance. Specifically,
    on April 16, 2003, we provided a report draft to the Chair of Maine*s
    Commission on Governmental Ethics and Election Practices and the Chair of
    Arizona*s Citizens Clean Elections Commission. Commission Review of

    Draft Report

    Appendix II: Overview of the Public Financing Programs for Election
    Campaigns in Maine and Arizona

    Page 83 GAO- 03- 453 Public Funding of Political Campaigns Maine voters,
    by a margin of 56 percent to 44 percent, passed the Maine Clean Election
    Act (* Maine*s Act*) in November 1996. Arizona voters, by a margin of 51
    percent to 49 percent, passed the Citizens Clean Elections

    Act (* Arizona*s Act*) in November 1998. These ballot initiatives
    established optional financing programs for candidates desiring to use
    public funds to finance their campaigns, as an alternative to traditional
    fundraising means. The Maine and Arizona programs are unique in being the
    first instances of state programs that offer full public funding* not just
    partial funding* of election campaigns for qualified candidates seeking
    state legislature seats and certain statewide offices. Regarding
    implementation, both states* public financing programs became available

    for candidates beginning with elections in 2000. Generally, participating
    candidates* those candidates who agree to forego private fund raising and
    who otherwise qualify to take part in the respective state*s public
    financing program* receive a set amount of money for their primary and
    general election campaigns. Under Maine*s Act and Arizona*s Act,
    nonparticipating candidates* those candidates who choose to continue using
    traditional means for financing campaigns* are subject to limits on
    contributions and new reporting requirements.

    This appendix provides a brief overview of the public financing programs
    for election campaigns in Maine and Arizona. Detailed information is
    available on the Web sites of the state agencies responsible for
    administering the respective program* Maine*s Commission on Governmental
    Ethics and Election Practices (www. state. me. us/ ethics) and Arizona*s
    Citizens Clean Elections Commission (www. ccec. state. az. us).

    Generally, proponents assert that the purposes of campaign finance reform
    are to increase voter choice and electoral competition, allow candidates
    to give more attention to voters and less to donors, and reduce the
    influence of special interests on elected officials. That is, from an
    overall perspective, proponents assert that public financing programs
    should enhance the confidence of citizens in government by increasing the
    integrity of the political process and the accountability of officials.

    As indicated, Maine*s Act and Arizona*s Act were passed by voters as
    ballot initiatives. Thus, unlike laws passed by state legislatures, these
    statutes have no accompanying legislative history that would document the
    progress of a particular proposal before the legislature. In reference to
    determining the purpose of statutes passed by this process, one court has
    noted that, *The search for legislative purpose or motive is always

    dangerous; it is even more difficult in the case of an initiative or
    referendum involving all the voters, where it is impossible to know what
    Appendix II: Overview of the Public

    Financing Programs for Election Campaigns in Maine and Arizona

    Purposes of the Public Financing Programs

    Appendix II: Overview of the Public Financing Programs for Election
    Campaigns in Maine and Arizona

    Page 84 GAO- 03- 453 Public Funding of Political Campaigns the multitude
    read, heard or believed in deciding how to vote.* 1 Nonetheless, in
    addition to the specific language of the statutes, available interpretive
    sources include various media accounts of the ballot initiatives,
    commentary materials prepared by organizations that

    sponsored the initiatives, and court decisions on various provisions of
    the statutes.

    The Maine Clean Election Act has no section that specifically details the
    purposes, goals, or objectives of the law. To get the initiative on the
    ballot, a coalition of interest groups, the Maine Voters for Clean
    Elections, 2 collected about 65,000 signatures. At that time, the
    coalition and other

    proponents advertised that the public financing program would *take big
    money out of politics* by limiting what politicians spend on campaigns,
    reducing contributions from special interests and increasing enforcement
    of election laws. They said that the initiative, if passed, would decrease
    the influence of wealthy individuals, corporations and political action

    committees in politics, and would level the playing field so that
    challengers would have a chance against incumbents. Politicians would then
    spend more time focusing on the issues that affect all of their
    constituents rather than spend time on pursuing money for their campaigns.
    Further, proponents also advertised that the public financing program
    would allow candidates who do not have access to wealth the opportunity to
    compete on a more equal financial footing with traditionally funded
    candidates, restore citizen*s faith and confidence in government, and give
    new candidates a fighting chance against

    incumbents. According to Maine State officials and interest group
    representatives we interviewed, there was not any organized opposition to
    the initiative when it was on the ballot.

    Arizona*s Act does have a *findings and declarations* section that
    addresses intent. Specifically, the *findings* subsection of the Citizens
    Clean Elections Act, passed by voters in 1998, noted that the state*s
    current election- financing system

    1 Daggett v. Webster, 81 F. Supp. 2d 128, 135 (D. Me. 2000). 2 Including
    the American Association of Retired Persons (Maine Chapter), Maine A. F.
    L. C. I. O., League of Women Voters of Maine, Common Cause/ Maine, Natural
    Resources Council of Maine, Maine People*s Alliance, Money and Politics
    Project, and Peace Action

    Maine. Purposes of Maine*s Public

    Financing Program Purposes of Arizona*s Public Financing Program

    Appendix II: Overview of the Public Financing Programs for Election
    Campaigns in Maine and Arizona

    Page 85 GAO- 03- 453 Public Funding of Political Campaigns  allows
    elected officials to accept large campaign contributions from private
    interests over which they have governmental jurisdiction;  provides
    incumbents an unhealthy advantage over challengers;

     hinders communication to voters by many qualified candidates;
    effectively suppresses the voices and influence of the vast majority of

    Arizona citizens in favor of a small number of wealthy special interests;
     undermines public confidence in the integrity of public officials;
    costs average taxpayers millions of dollars in the form of subsidies and

    special privileges for campaign contributors;  drives up the cost of
    running for state office, discouraging otherwise

    qualified candidates who lack personal wealth or access to specialinterest
    funding; and

     requires that elected officials spend too much time raising funds rather
    than representing the public.

    Further, the *declarations* subsection of Arizona*s 1998 Act stated that:
    *The people of Arizona declare our intent to create a clean elections
    system that will improve the integrity of Arizona state government by
    diminishing the influence of specialinterest money, will encourage citizen
    participation in the political process, and will promote freedom of speech
    under the U. S. and Arizona Constitutions. Campaigns will become more
    issue- oriented and less negative because there will be no need to
    challenge the sources of campaign money.*

    In Maine and Arizona, candidates who wish to receive public funds for
    campaigning must qualify by (1) agreeing to forego self- financing and all
    private contributions, except for a limited amount of *seed money* and (2)
    demonstrating citizen support by collecting a set number of

    $5 contributions from registered voters. For example, as table 18 shows, a
    candidate for Maine*s House of Representatives may raise $500 of seed
    money and must receive a $5 qualifying contribution from at least 50
    registered voters, and a candidate for Arizona*s House of Representatives
    may raise $2,500 of seed money and must receive at least 200 qualifying
    contributions. Candidates Must

    Qualify to Receive Public Funding

    Appendix II: Overview of the Public Financing Programs for Election
    Campaigns in Maine and Arizona

    Page 86 GAO- 03- 453 Public Funding of Political Campaigns Table 18: Seed
    Money Limits and Number of Qualifying $5 Contributions Seed money limits a
    State State legislature and applicable executive branch offices Total cap
    Individual

    contribution limit Number of $5 contributions

    Maine House of Representatives $500 $100 50 Senate $1,500 $100 150
    Governor $50,000 $100 2, 500 Arizona House of Representatives $2,500 $100
    200

    Senate $2,500 $100 200 Corporation Commission $10,000 $100 1, 500 Governor
    $40,000 $100 4, 000 Attorney General $20,000 $100 2, 500 Secretary of
    State $20,000 $100 2, 500 Treasurer $10,000 $100 1, 500 Superintendent of
    Public Instruction $10,000 $100 1, 500 Mine Inspector $5,000 $100 500
    Source: GAO analysis of state data.

    Note: In the initial year of implementation (2000), Maine*s public funding
    program covered candidates for legislative seats only, and Arizona*s
    program covered candidates for legislative seats and the Corporation
    Commission. Beginning in 2002, Maine*s program was extended to cover
    candidates for governor, and Arizona*s program was extended to cover
    candidates for governor and various other executive branch offices. a To
    help with the qualifying process, candidates seeking to be certified to
    receive public funding may

    raise and spend limited amounts of seed money. In Arizona, these funds are
    called *early contributions,* and the base amounts are established in
    statute and adjusted for inflation every 2 years. The adjusted amount of
    early contributions for Arizona*s 2002 election cycle is limited to $110
    per individual contributor.

    After being certified by the state as having met qualifying requirements,
    participating candidates receive initial distributions (predetermined
    amounts) of public funding and are also eligible for additional matching
    funds based on spending by or for privately funded opponents. For example,
    in Maine*s 2000 elections (see table 19):  Each participating candidate
    in a contested race for the state House of

    Representatives received an initial distribution of pubic funds in the
    amount of $1,141 for the primary election and an amount of $3,252 for the
    general election. Under Maine*s Act, these amounts were based on average
    expenditures in similar races in the two previous election cycles (1998
    and 1996).

     Also, under Maine*s Act, the maximum allowable matching funds available
    to a participating candidate were capped at double the initial
    distribution that the candidate received for his or her contested race.
    Amounts of Allowable Public Funding for

    Participating Candidates

    Appendix II: Overview of the Public Financing Programs for Election
    Campaigns in Maine and Arizona

    Page 87 GAO- 03- 453 Public Funding of Political Campaigns Matching funds
    are triggered when the participating candidate is outspent by a privately
    funded opponent. Further, matching funds can

    be based on independent expenditures that benefit an opponent*s campaign.
    Generally, independent expenditures are campaign expenditures made by
    individuals or groups without coordination with

    any candidate and are communications (such as political ads or mailings)
    that expressly advocate the election or defeat of a clearly identified
    candidate.

    In Arizona*s 2000 elections (see table 19), qualified candidates for the
    House of Representatives or Senate who were in contested party primary
    elections initially received $10,000. After the primary, successful major
    party candidates who were opposed in the general election then received an
    additional $15,000. 3 Independent candidates received 70 percent of the
    sum of the original primary and general election spending limits, and
    unopposed candidates received only the total of their $5 qualifying
    contributions as the spending limit for that election. Participating
    candidates for the state legislature could also use $500 of their personal
    monies for their campaigns, and participating candidates for statewide
    offices could use $1,000. Participating candidates also received matching
    funds when an opposing,

    nonparticipating candidate exceeded the primary or general election
    spending limits. Matching funds were also provided to participating
    candidates when independent expenditures were made on behalf of a
    nonparticipating candidate in the race.

    3 The Secretary of State adjusts these base amounts, established in
    Arizona*s Act, for inflation every 2 years.

    Appendix II: Overview of the Public Financing Programs for Election
    Campaigns in Maine and Arizona

    Page 88 GAO- 03- 453 Public Funding of Political Campaigns Table 19:
    Public Funding Available to Each Participating Candidate in 2000 Primary
    election public funds General election public funds

    State Office Type of race Initial distribution Maximum

    allowable matching

    funds Total

    public funding Initial distribution

    Maximum allowable matching

    funds Total

    public funding

    Maine House of Representatives Contested $1,141 $2,282 $3,423 $3,252
    $6,504 $9,756

    Uncontested $511 0 $511 0 0 0 Senate Contested $4,334 $8,668 $13,002
    $12,910 $25,820 $38,730

    Uncontested $1,785 0 $1,785 0 0 0 Arizona House of

    Representatives and Senate Contested

    $10,000 $20,000 $30,000 $15,000 $30,000 $45,000 Uncontested a Corporation

    Commission Contested $40,000 $80,000 $120,000 $60,000 $120,000 $180,000
    Uncontested a Source: GAO analysis of state data.

    a In Arizona, each participating candidate in an uncontested race received
    public funding in an amount equal to $5 times the number of qualifying
    signatures that the candidate obtained.

    In Maine, a total of about $865,000 in public funds was authorized in 2000
    for the 134 participating candidates who ran in the primary and/ or
    general elections for state legislature. Candidates returned about
    $108,000 of unused money to the Maine Clean Election Fund. In Arizona, a
    total of $1.9 million in public funds was distributed in 2000 to the 59
    participating candidates* 54 candidates for the state legislature and 5
    candidates for the Arizona Corporation Commission.

    Various revenue sources are used to support the public financing programs.
    As table 20 shows, appropriations were by far the largest funding source
    in Maine in 2000, whereas a surcharge on civil and criminal fines and
    penalties was the leading source in Arizona. As noted in table 20, the
    constitutionality of this funding provision in Arizona*s Act has been
    challenged in court but has been upheld. Revenue Sources for

    the Public Financing Programs

    Appendix II: Overview of the Public Financing Programs for Election
    Campaigns in Maine and Arizona

    Page 89 GAO- 03- 453 Public Funding of Political Campaigns Table 20:
    Revenue Sources and Amounts for Public Financing Programs in 2000 State
    Revenue sources Annual revenue (in

    thousands of dollars) Percentage

    Maine Appropriations: On or before January 1st of each year, the state
    treasurer is to transfer $2 million from the General Fund to a special,
    dedicated fund (the Maine Clean Election Fund).

    $2,000 70% Tax check- offs: Under a tax check- off program, a Maine
    resident can designate that $3 be paid to the Maine Clean Election Fund. A
    husband and wife filing jointly may each designate $3.

    523 a 18 Qualifying contributions: The $5 qualifying contributions
    collected by participating candidates are deposited in the Maine Clean
    Election Fund. 56 2 Miscellaneous: Other income includes interest earned,
    penalties, and seed money collected by candidates and deposited in the
    Maine Clean Election

    Fund. 277 10

    Total $2,856 100%

    Arizona Fines, forfeitures, and penalties: This source includes a 10-
    percent surcharge imposed on certain civil and criminal fines and
    penalties. b Collections go in the Citizens Clean Elections Fund.

    $4,665 68% Tax check- offs and donations: By marking an optional check-
    off box on their state income tax returns, Arizona taxpayers can make a $5
    contribution to the Citizens Clean Elections Fund. A taxpayer that checks
    this box receives a $5 reduction ($ 10 if filing jointly) in the amount of
    tax. Also, taxpayers may

    redirect a specified amount of owed taxes* up to 20 percent or $500
    (ceiling adjusted periodically), whichever is greater* to the Citizens
    Clean Elections Fund and receive a dollar- for- dollar tax credit.

    1,943 28 Qualifying contributions: The $5 qualifying contributions
    collected by participating candidates are deposited in the Citizens Clean
    Elections Fund. 136 2 Filing and title certificate fees: This source
    includes all lobbyist fees. c Arizona*s Act imposed a $100 annual fee
    (amount adjusted periodically) on registered lobbyists who represent
    commercial or for- profit activities.

    104 2

    Total $6,848 100%

    Source: GAO analysis of state data. a Revenue reflects tax check- off
    income for previous years, when taxpayers were contributing to the Maine
    Clean Election fund, but no elections were held. For the 1999 tax year,
    $266,907 had been deposited into the Maine Clean Election Fund through
    income tax check- offs. b In June 2002, the Arizona Court of Appeals ruled
    that the surcharge provision of the Arizona Act was

    unconstitutional and that collections of the surcharge should cease. In
    July 2002, pending its review, the Arizona Supreme Court issued an order
    to stay enforcement of the lower court*s decision. Later that year, the
    Arizona Supreme Court reversed the Court of Appeals and held the surcharge
    provision to be constitutional. On January 9, 2003, the Institute for
    Justice appealed the Arizona Supreme Court decision on behalf of plaintiff
    May to the U. S. Supreme Court. However, the U. S. Supreme Court has
    decided to not hear the challenge to the Arizona law (see app. III). c In
    December 2001, Arizona*s Maricopa County Superior Court ruled that the
    lobbyist fee was

    unconstitutional. Lavis v. Bayless, No. CV- 2001- 006078 (Arizona Superior
    Court, 2001). The collected money has been returned to lobbyists.

    Table 20 also indicates that in 2000, about 18 percent of Maine*s funding
    and about 28 percent of Arizona*s funding came from state income tax
    check- off donations and other voluntary donations. In Maine, $523,000 in
    funding came from state income tax check- off donations that had

    Appendix II: Overview of the Public Financing Programs for Election
    Campaigns in Maine and Arizona

    Page 90 GAO- 03- 453 Public Funding of Political Campaigns accumulated
    from 2 tax years prior to the 2000 elections. For tax year 1999,
    approximately 63,000 state income tax returns were filed with checkoff

    donations to the Maine Clean Election Fund, which represented about 10
    percent of the 599,000 total returns filed in the state. In Arizona, the
    $1.943 million in revenue included $1.829 million from state income tax
    check- off donations in 2000. These tax check- off donations came from
    approximately 246,000 of the 2.1 million state income tax returns filed,
    or about 12 percent of the returns filed through December 2000, for tax
    year 1999. In perspective, about 11 percent of federal income tax returns
    had $3 check- off contributions to the Presidential Election Campaign Fund
    4 in

    tax year 2000, which is used to finance qualified presidential candidates
    and national political parties.

    Both Maine*s Act and Arizona*s Act established commissions to implement
    the public financing program and enforce provisions of the Acts. In Maine,
    the responsibility for administering Maine*s Act, including management of
    the Maine Clean Election Fund, was given to Maine*s Commission on
    Governmental Ethics and Election Practices. The Commission consists of
    five members appointed by the Governor, subject to review by the joint
    standing committee of the state legislature having jurisdiction over legal
    affairs and confirmation by the state legislature. The Commission employs
    a director and staff to carry out the day- to- day operations of the
    program. In addition to financing election campaigns of candidates
    participating in the public financing program, the Maine Clean Election
    Fund also pays for

    administrative and enforcement costs of the Commission related to the Act.
    In 2000, the Commission*s total expenditures from the fund were $861, 774,
    including $111, 081 in administrative costs. 5 The administrative costs
    included staff payroll and other miscellaneous expenses.

    4 Beginning in 1976, taxpayers have had the option of contributing to the
    Presidential Election Campaign Fund by checking off a box on their federal
    income tax return. Funding is provided to qualified presidential
    candidates for their primary campaigns and to major political parties for
    presidential nominating conventions, and grants to presidential nominees
    for their general election campaigns. In 1994, the check- off was
    increased from $1 to $3.

    5 State of Maine, Report of the Commission on Governmental Ethics and
    Election Practices to the Joint Standing Committee on Legal and Veterans
    Affairs, Documenting, Evaluating and Making Recommendations Relating to
    the Administration, Implementation and

    Enforcement of the Maine Clean Election Act and Maine Clean Election Fund.
    Augusta, ME, 2001. Administration of the

    Public Financing Programs

    Appendix II: Overview of the Public Financing Programs for Election
    Campaigns in Maine and Arizona

    Page 91 GAO- 03- 453 Public Funding of Political Campaigns As a part of
    the responsibility for implementing and enforcing Maine*s Act, the
    Commission is to investigate violations of the requirements for

    campaign reports and campaign financing activities of both participating
    and nonparticipating candidates. The Commission has authority to assess
    civil penalties against any person who violates any provision of the act.
    A summary report released by the Commission in August 2001 reported that
    enforcement of the act required minimal Commission activity during the

    2000 election year. In Arizona, the Citizens Clean Elections Commission
    was newly created by Arizona*s Act and consists of five members selected
    by the state*s highestranking officials from opposing parties. These state
    officials choose one new commissioner per year. No more than two
    commissioners may be from the same political party or county, and
    commissioners may not have run for or held office, nor been appointed to
    or elected for any office for the 5 years prior to being chosen as a
    commissioner. As established by Arizona*s Act, the Commission employs an
    executive director to facilitate administration of the program, including
    voter education and enforcement of the act*s provisions. The executive
    director is, in turn, responsible for determining additional staffing
    needs and hiring accordingly. Arizona*s Act caps Commission spending for a
    calendar year at $5 times the number of Arizona resident personal income
    tax returns filed the previous calendar year. Of that amount, the
    Commission may use up to 10 percent for administration and enforcement
    activities and up to 10 percent for voter education activities. The
    remainder of Commission spending goes to participating candidates*
    campaign funds. For example, in calendar year 2000, the Commission*s
    spending cap was $9,979, 355*$ 5 times the 1,995,871 personal income tax
    returns filed in calendar year 1999 (for tax year 1998). The Commission*s
    total revenue for calendar year 2000 was less than the prescribed spending
    cap at $6, 847, 843. In 2000, the Commission*s expenditures totaled $3,
    176, 711*$ 668,562 for administration and enforcement, $590, 725 for voter
    education, and $1,917,424 for campaign funds. 6 The Commission*s
    responsibility for enforcing campaign finance laws

    established by Arizona*s Act covers contribution limits, spending limits,
    and reporting requirements that affect both participating and
    nonparticipating candidates. Cases of possible violations may be initiated
    6 State of Arizona, Citizens Clean Elections Commission, Annual Report:
    January 1,

    2000* December 31, 2000. Phoenix, AZ, 2000, 38- 40.

    Appendix II: Overview of the Public Financing Programs for Election
    Campaigns in Maine and Arizona

    Page 92 GAO- 03- 453 Public Funding of Political Campaigns with the
    Commission in one of two ways: either by an external complaint or through
    information that comes to the Commission*s attention internally. The
    Commission may assess civil penalties after investigating compliance
    matters and finding probable cause of a violation unless the

    candidate comes into compliance within a set time frame or a settlement
    agreement is reached. For example, in 2000, the Commission reviewed 19
    externally generated complaints, 5 of which were forwarded to the office
    of the Secretary of State due to jurisdictional issues, while 9 cases were
    dismissed and 4 were dropped because the candidate came into compliance.
    The Commission reached a settlement agreement with the candidate in the
    remaining case. Of the 16 internally initiated compliance matters in 2000,
    the Commission found only 1 case with probable cause of a campaign finance
    violation. The candidate in that case came into compliance within the
    required time frame. 7 Before the passage of Maine*s Act and Arizona*s
    Act, political campaigns in the two states were financed completely with
    private funds, subject to

    certain statutory limitations on contributions from individuals and
    others. There were no limitations placed on expenditures by candidates of
    their personal wealth. Under the new laws, this latter aspect of campaign
    financing remains true for candidates who choose not to participate in the
    respective state*s public financing program. That is, for their own races,
    nonparticipating candidates can still spend as much of their personal
    funds as they please.

    On the other hand, nonparticipating candidates are subject to new
    limitations on the amounts of contributions they can accept. In Maine, for
    example, a nonparticipating candidate for the state legislature may accept
    up to $250 per donor, and a nonparticipating gubernatorial candidate may
    accept up to $500 per donor. Previously, the candidates could have
    collected up to $1,000 from individuals and up to $5,000 from political
    committees and corporations. In Arizona, contributions from individuals
    and political committees are now limited to $270 per donor for

    nonparticipating candidates for the state legislature and $700 to
    nonparticipating candidates for applicable executive branch offices.
    Arizona*s new limitations represent a 20 percent reduction from the
    contribution ceilings that existed previously.

    7 Id. 25. Reduced Contribution

    Limits and Additional Reporting Requirements for Nonparticipating
    Candidates

    Appendix II: Overview of the Public Financing Programs for Election
    Campaigns in Maine and Arizona

    Page 93 GAO- 03- 453 Public Funding of Political Campaigns In order to
    administer the public financing programs, nonparticipating candidates have
    additional reporting requirements. For example:

     In Maine, a nonparticipating candidate must notify the Commission on
    Governmental Ethics and Election Practices when his or her receipts total
    101 percent of the Commission*s initial allocation of pubic funds to a
    participating candidate.

     In Arizona, a nonparticipating candidate must file original and
    supplemental campaign finance reports with the Secretary of State when the
    candidate makes expenditures that exceed 70 percent of the primary
    election spending limit or receives contributions (less the expenditures
    through the primary) that exceed 70 percent of the general election
    spending limit.

    Appendix III: Summary of Legal Challenges to Maine*s and Arizona*s Public
    Financing Programs

    Page 94 GAO- 03- 453 Public Funding of Political Campaigns The legal
    challenges to the public financing programs in Maine and Arizona raised
    many issues. The Maine Clean Election Act, passed in

    November 1996, took effect in the 2000 elections. Preceding the elections,
    elected officials, political action committees, and campaign contributors
    challenged the law in federal court on federal constitutional grounds. The
    litigation focused on First Amendment issues raised by what plaintiffs
    regarded as the impermissibly coercive nature of the act, limitations on
    campaign contributions, and the grouping of independent expenditures with
    a candidate*s expenditures.

    Arizona voters passed the Citizens Clean Elections Act in November 1998,
    and it also took effect in the 2000 elections. An Arizona political action
    committee, an Arizona lobbyist, and Arizona voters challenged the act on
    state constitutional grounds. Furthermore, the challenges in Arizona
    included contesting the sources of funding, the validity of the title, and
    the process for selecting members that sit on the Citizens Clean Elections
    Commission. This appendix provides a summary of the legal challenges to
    the Maine

    Clean Election Act and Arizona*s Citizens Clean Elections Act. In a March
    2000 opinion, the United States Court of Appeals for the First Circuit
    validated the Maine Clean Election Act. After consolidating appeals, the
    First Circuit upheld two lower court decisions and ruled that the First
    Amendment rights of candidates, contributors, and political action
    committees were not violated by the public finance scheme and contribution
    limits established in the Maine Clean Election Act.

    Since the Maine Clean Election Act was first approved by a voter
    initiative, it has been the subject of a great deal of litigation. Almost
    immediately after voters of Maine approved the Act, the first suits were
    brought against the state. Eventually, after a number of cases were
    dismissed on procedural grounds, the federal district court for Maine
    ruled on the constitutionality of the act. Table 21 summarizes the results
    of the legal challenges. Following table 21 is a more detailed synopsis of
    the court of appeals decision and the district court cases. Appendix III:
    Summary of Legal Challenges

    to Maine*s and Arizona*s Public Financing Programs

    Legal Challenges to the Maine Clean Election Act

    Appendix III: Summary of Legal Challenges to Maine*s and Arizona*s Public
    Financing Programs

    Page 95 GAO- 03- 453 Public Funding of Political Campaigns Table 21: Maine
    Clean Election Act Litigation Case citation Synopsis of the legal
    challenge Decision of the court

    U. S. Court of Appeals for the First Circuit Daggett v. Commission on
    Governmental Ethics and Election Practices, 205 F. 3d 445 (1st Cir. 2000).
    The U. S. Court of Appeals consolidated the

    appeals from two lower court decisions. One set of appellants included
    past and current candidates, the Libertarian Party of Maine, and an
    individual campaign contributor. Their major complaint was that the
    statute was impermissibly coercive, thereby unconstitutionally burdening
    the First Amendment rights of candidates. The other set of appellants
    included an individual contributor and two political action committees.
    Their major complaint was that the provision for matching funds for
    independent expenditures was unconstitutional. Both sets of appellants
    also contested the constitutionality of the

    reduced contribution limits. The U. S. Court of Appeals for the First

    Circuit upheld the constitutionality of the Act. The court held that: (1)
    Maine*s public financing scheme provided a roughly proportionate mix of
    benefits and detriments to candidates seeking public funding, such that it
    did not burden the First Amendment rights of candidates or contributors;
    (2) the independent expenditures requirement did not limit the freedom of
    speech and association of the independent contributors; and (3) the
    reduced contribution limits of $250 did not infringe on appellants* First
    Amendment rights because the limits served an important government
    interest in avoiding corruption and were closely tailored to

    serve that interest. Source: GAO analysis of court decision.

    The Court of Appeals for the First Circuit, in Daggett v. Commission on
    Governmental Ethics and Election Practices, 205 F. 3d 445 (1st Cir. 2000),
    addressed three arguments. First, the court ruled that the $250

    contribution limits were supported by a *sufficiently important
    governmental interest to which the ceilings are closely tailored.* Daggett
    v. Comm*n on Governmental Ethics and Election Practices, 205 F. 3d 445,
    459. Relying on a recent U. S. Supreme Court decision, Nixon v. Shrink

    Missouri PAC, 528 U. S. 377 (2000), the First Circuit held that there was
    sufficient evidentiary support of the threat of corruption or its
    appearance to implement the limits. As to the consequences, the First
    Circuit decided that the limits on contributions had a minimal effect on
    people who wish

    to support a candidate directly. The First Circuit also held that the
    matching funds provision for participating candidates does not violate the
    First Amendment rights of the nonparticipating candidates. Furthermore,
    the court agreed with the district judge that the reporting requirements
    imposed on privately financed candidates are not an undue burden and serve
    an important and

    narrowly tailored governmental interest. The court said that these
    sections of the act do not restrict the amount of money nonparticipating
    candidates can spend; rather, the sections level the playing field by
    providing matching funds for participating candidates.

    Appendix III: Summary of Legal Challenges to Maine*s and Arizona*s Public
    Financing Programs

    Page 96 GAO- 03- 453 Public Funding of Political Campaigns Finally, the
    First Circuit held that the cumulative effect of the act was not
    impermissibly coercive. The court cited several examples of election laws

    in other states that were similar or more restrictive and not found
    coercive. The court concluded that neither the matching funds provision
    nor the labels associated with participating and nonparticipating
    candidates are such strong incentives that candidates are forced to accept
    public funding.

    In the first district court case, Daggett v. Webster, 74 F. Supp. 2d 53
    (D. Me. 1999), plaintiffs challenged the act on a number of issues, mainly
    focusing on the trigger provision* that is, when privately funded
    candidates raise funds above a certain amount, publicly funded candidates
    receive matching funds* and additional reporting requirements imposed on
    privately funded candidates. Of the seven claims raised by plaintiffs, all
    were rejected by the district court:

     The court found the Maine Clean Election Act offers incentives, but the
    incentives are not overwhelming or of an order that can be said to create
    profound disparities.

     The court held that the Maine Election Commission is not labeling
    publicly funded candidates as *clean*; the state cannot control what
    candidates choose to call themselves or their opponents.

     The court stated there was nothing unfair and no profound disparity in
    providing publicly funded candidates matching funds equivalent to what
    their privately funded opponents raise.

     The court held that triggers, tied to the amount privately funded
    candidates raise and not to the amount they spend, is a legitimate
    approach for the legislation to take.

     The district court upheld the additional reporting requirements imposed
    on privately funded candidates who receive, spend, or obligate more than 1
    percent over the amount distributed to their

    publicly funded opponents.  The court held that independent expenditures
    spent to support a

    candidate (including negative ads targeting the candidate*s opponent) must
    be reported by the candidate as money spent on his or her campaign.

     Finally, the court ruled that funds spent on public funding for primary
    elections are relatively small, and separate allocations for primary

    Appendix III: Summary of Legal Challenges to Maine*s and Arizona*s Public
    Financing Programs

    Page 97 GAO- 03- 453 Public Funding of Political Campaigns elections are
    necessary to make the act*s public financing measure effective.

    The other district court case, Daggett v. Webster, 81 F. Supp. 2d 128 (D.
    Me. 2000), involved a challenge to the lowered contribution limits.
    Plaintiffs in that case challenged the $250 contribution limits for state
    legislative candidates and the $500 contribution limits for gubernatorial
    candidates. The court did not rule on the $500 limit on gubernatorial
    candidates because there was no gubernatorial race at the time. The
    district court did, however, uphold the $250 individual contribution limit
    to a state senate or house candidate. In reaching its decision, the court
    did not focus on the monetary limit but instead analyzed three
    constitutional interests at stake: contributors* free speech, candidates*
    free speech, and freedom of association. These constitutional interests
    were elucidated in the U. S. Supreme Court*s opinion in Buckley v. Valeo,
    424 U. S. 1 (1976).

    The Arizona Supreme Court upheld the Citizens Clean Elections Act, but not
    before a number of provisions were severed by the courts because they were
    unconstitutional under the Arizona Constitution. Three separate cases made
    their way through the state judicial system before reaching the state*s
    highest court. In the first case, the court ruled that despite an
    oversight by the drafters, the title of the ballot initiative was
    constitutional. The Arizona Supreme Court ruled in the second case that
    the nomination and selection of commissioners to the Citizens Clean
    Elections Commission was unconstitutional in part; however, the court also
    ruled

    that those parts could be severed, allowing the Citizens Clean Elections
    Act to stand. Finally, the court held that funding for public campaigns
    from a surcharge on criminal and civil fines was constitutional. Before
    the initiative even got on the ballot of the general election, the act was
    challenged. The claims that were litigated in Arizona were different from
    those raised in Maine. Political action committees and individual citizens
    raised state constitutional challenges to the title of the act, and the
    process of appointing commissioners to the Citizens Clean Elections
    Commission, the sources of funding for the law. Tables 22 through 24
    provide a summary of the litigation. Following each table is a more
    detailed synopsis of the cases. Legal Challenges to

    Arizona*s Citizens Clean Elections Act

    Appendix III: Summary of Legal Challenges to Maine*s and Arizona*s Public
    Financing Programs

    Page 98 GAO- 03- 453 Public Funding of Political Campaigns Table 22:
    Arizona Litigation * Title of Ballot Initiative Case citation Synopsis of
    the legal challenge Decision of the court

    Arizona Supreme Court Meyers v. Bayless, 965 P. 2d 768 (Ariz. 1998)

    The plaintiff, an Arizona voter, brought the action seeking the court to
    revoke the certification of the ballot initiative because it lacked a
    title.

    The Supreme Court of Arizona held that even though the initiative did not
    have a title, Article II did have a title and it was the only article in
    the initiative. That combination of factors was enough for the court to
    hold that the initiative substantially complied with the title
    requirement. Source: GAO analysis of court decision.

    Before the Arizona initiative for clean elections was placed on the
    ballot, an action was brought seeking the court to revoke the
    certification of the ballot initiative because it lacked a title. The
    lower court in Arizona held that the words, *Citizens Clean Elections
    Act,* which were not at the top of the measure but on the third line as
    the title of an article, met the title requirement. The Arizona Supreme
    Court agreed. The court held that for an initiative petition, the legal
    sufficiency standard requires substantial, not necessarily technical,
    compliance with the law.

    Table 23: Arizona Litigation * Nomination and Appointment Process to the
    Citizens Clean Elections Commission Case citation Synopsis of the legal
    challenge Decision of the court Arizona Supreme Court Citizens Clean
    Elections

    Commission v. Myers, 196 Ariz. 516, 1 P. 3d 706 (Ariz. 2000)

    Citizens Clean Elections Commission and Arizonans for Clean Elections
    appealed the Superior Court decision. They argued that

    the sections challenged were constitutional or at least severable from the
    rest of the act. On cross- petition, VotePac challenged the validity of
    the title of the act and asserted that the requirement of Supreme Court
    members to select Clean Elections Commissioners violated the Arizona
    Constitution.

    The Arizona Supreme Court heard this appeal on an expedited review
    process. The court held that: (1) the Commission on Appellate Court
    Appointments did not have

    the authority to nominate Clean Elections Commissioners; (2) the
    Commission on Appellate Court Appointments provisions

    could be severed from the act; (3) the Senate could concur with any
    removal decisions the Governor made of Clean Elections Commissioners; (4)
    the title of the act was still valid; (5) members of the Supreme Court
    could not appoint commissioners to the Clean Elections Commission; and (6)
    the section of the act requiring Arizona Supreme Court

    members to appoint Clean Elections Commissioners could be severed from the
    rest of the act. Source: GAO analysis of court decision.

    Prior to the 2000 elections, a registered Arizona political action
    committee and citizens of Arizona challenged the Citizens Clean Elections
    Act, seeking a declaration of the act*s invalidity. The Superior Court for

    Appendix III: Summary of Legal Challenges to Maine*s and Arizona*s Public
    Financing Programs

    Page 99 GAO- 03- 453 Public Funding of Political Campaigns Maricopa County
    held that the act was invalid. See Votepac v. Bayless, CV 99- 11937
    (Superior Court of Arizona, 2000). The Citizens Clean Elections

    Commission and the Arizonans for Clean Elections appealed the decision of
    the Superior Court to the Arizona Supreme Court in an expedited review
    process.

    The Arizona Supreme Court, in Citizens Clean Elections Commission v.
    Myers, 196 Ariz. 516, 1 P. 3d 706 (Ariz. 2000), upheld the law, but
    required certain provisions* regarding how commissioners were nominated
    and appointed to the Citizens Clean Elections Commission* be severed for

    violating the Arizona Constitution. First, the Arizona Supreme Court held
    that the Commission on Appellate Court Appointments could not nominate
    Clean Elections Commissioners because it was beyond the scope of their
    constitutional authority under the state constitution. The court held that
    any exercise of legislative power is subject to the limitations imposed by
    the state constitution. In this case, the authority that the Citizens
    Clean Elections Act gave the Commission on Appellate Court Appointments to
    appoint Clean Elections Commissioners was

    beyond its scope. That section of the Act requiring the Commission on
    Appellate Court Appointments to nominate Clean Elections Commissioners was
    removed, and the governor was required to select Clean Elections
    Commissioners without the slate of candidates from the Commission on
    Appellate Court Appointments.

    The Arizona Supreme Court next examined the section of the Citizens Clean
    Elections Act requiring senatorial concurrence in the governor*s decision
    to remove any member of the Citizens Clean Elections Commission. The court
    disagreed with the trial court and held that there was no violation of
    separation of powers. Because the Citizens Clean Elections Commission is
    an independent agency, the requirement for senatorial concurrence does not
    hinder the governor*s ability to carry out his or her duties.

    The Arizona Supreme Court addressed the issue of whether it was
    unconstitutional under the state constitution for members of the Supreme
    Court of Arizona to make appointments to the Citizens Clean Elections
    Commission. The Arizona Supreme Court held that the act violated the
    doctrine of separation of powers to the extent that it included members of
    the court as officials who could appoint members of the Commission. The
    court reasoned that the appointment process was unrelated to the court*s
    judicial power and that members of the court (an apolitical body) were
    called upon to make political decisions. The court held that the provision

    Appendix III: Summary of Legal Challenges to Maine*s and Arizona*s Public
    Financing Programs

    Page 100 GAO- 03- 453 Public Funding of Political Campaigns

    in question was severable from the rest of the Act and allowed the rest of
    the act to stand.

    Table 24: Arizona Litigation * Sources for Public Funding Case citation
    Synopsis of the legal challenge Decision of the court Arizona Supreme
    Court May v. McNally,

    203 Ariz. 425, 55 P. 3d 768 (Ariz. 2002)

    Secretary of State, State Treasurer, and Citizens Clean Elections
    Commission sought review of the Court of Appeals decision that struck down
    the 10- percent surcharge provision in the Citizens Clean Elections Act.

    The Supreme Court of Arizona reversed the Court of Appeals and held the
    surcharge funding provision to be constitutional. The high court reasoned:
    (1) the surcharge was a tax assessed against all citizens who pay civil
    and criminal fines; (2) there was no defined association, so germaneness
    is irrelevant; (3) the government could use public funds to finance
    political speech; and (4) funds were allocated in a viewpoint neutral way
    to safeguard First Amendment rights. Source: GAO analysis of court
    decision.

    The most recent challenge to the Citizens Clean Elections Act focused on
    whether two of the act*s sources of funding violated the First Amendment.
    The two sources that were challenged were an annual $100 fee from
    lobbyists who work for commercial or for- profit entities and a 10-
    percent surcharge imposed on all persons paying civil and criminal fines,
    such as parking fines. The lobbyist fees were found to be unconstitutional
    by the Superior Court; however, the court also found the provisions
    severable. See Lavis v. Bayless, CV 2001- 006078 (Superior Court of
    Arizona, 2001). The 10- percent surcharge on civil and criminal fines was
    ultimately decided by the Arizona Supreme Court to be constitutional.

    The Arizona Supreme Court found that those paying the surcharge were not
    linked to any one viewpoint or message; instead, the surcharge funded all
    qualified candidates. Furthermore, the court found that the surcharge was
    not applied in an unconstitutional manner or for an unconstitutional
    purpose.

    The Institute for Justice, a public interest litigation organization,
    recently appealed the decision, on behalf of State Representative and
    plaintiff Steve May, to the U. S. Supreme Court. However, the U. S.
    Supreme Court has decided to not hear the challenge to the Arizona law.

    Appendix IV: Survey of Candidates for Office in the Maine 2000 Elections
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    Appendix IV: Survey of Candidates for Office in the Maine 2000 Elections

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    Appendix V: Survey of Candidates for Office in the Arizona 2000 Elections
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    Appendix V: Survey of Candidates for Office in the Arizona 2000 Elections

    Appendix V: Survey of Candidates for Office in the Arizona 2000 Elections
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    Appendix V: Survey of Candidates for Office in the Arizona 2000 Elections
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    Appendix V: Survey of Candidates for Office in the Arizona 2000 Elections
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    Appendix V: Survey of Candidates for Office in the Arizona 2000 Elections
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    Appendix V: Survey of Candidates for Office in the Arizona 2000 Elections
    Page 116 GAO- 03- 453 Public Funding of Political Campaigns

    Appendix VI: Comments Received in Our Survey of Candidates for Office in
    Maine*s and Arizona*s 2000 Elections

    Page 117 GAO- 03- 453 Public Funding of Political Campaigns

    Our survey by mail 1 of all candidates for office in Maine*s and Arizona*s
    2000 elections contained an ending statement inviting respondents to
    provide any comments they believed were important about the effects of the
    respective state*s public financing program (see app. IV and V). We did

    not independently evaluate the merits of the respondents* comments.
    However, we did group and list the comments by topic, as presented in the
    following two sections* the first for comments provided by Maine
    candidates and the second for comments provided by Arizona candidates.
    With some exceptions, such as responses that were irrelevant or unclear,
    substantially all of the comments are arrayed by topic in a table in the
    respective section. To ensure inclusiveness and avoid subjectivity in
    presenting the comments, we did not eliminate any candidate*s comments
    even though the comments perhaps were the same as (or very similar to)
    comments made by another candidate. Also, except for some minor editing
    for grammar or clarity, the comments are presented as worded by the
    responding candidates.

    As perhaps may be expected, many of the comments followed ideological
    lines. For example, although there were some exceptions, nonparticipating
    candidates generally commented that financing the campaigns of political
    candidates was an inappropriate use of tax dollars, whereas participating
    candidates usually endorsed public financing. Collectively, the widely
    divergent and sometimes virulent comments seem to indicate that reaching a
    consensus regarding the value of the public financing programs may be
    unlikely, at least in the foreseeable future.

    We received written comments from 157 respondents to our survey of
    candidates for office in Maine*s 2000 elections. In reference to Maine*s
    public financing program, the 157 respondents consisted of 97
    nonparticipating candidates and 60 participating candidates. Table 25
    presents the comments of the responding candidates.

    1 Appendix I discusses the scope and methodology of our work regarding the
    survey questionnaires we mailed to candidates. This work* including
    pretesting of the questionnaires, initial distribution, and follow- up
    inquiries* was conducted during July through December 2002. We mailed the
    survey to the candidates in mid- August 2002, which was close in timing to
    the primary election date in each state. Maine*s primary election was June
    11, 2002, and Arizona*s primary election was September 10, 2002. Although
    the survey was mailed to candidates who ran in Maine*s and Arizona*s 2000
    elections, some of the comments provided by the candidates were related to
    events surrounding the 2002

    elections in each state. Appendix VI: Comments Received in Our

    Survey of Candidates for Office in Maine*s and Arizona*s 2000 Elections

    Comments Provided by Maine Candidates

    Appendix VI: Comments Received in Our Survey of Candidates for Office in
    Maine*s and Arizona*s 2000 Elections

    Page 118 GAO- 03- 453 Public Funding of Political Campaigns

    Table 25: Comments Received in Our Survey of Candidates for Office in
    Maine*s 2000 Elections Topic Nonparticipating candidate comments
    Participating candidate comments Use of public funds The public financing
    program is a tax on the citizens of this state and is

    allowing a large amount of money to be spent by some individuals at
    taxpayers* expense.

    Tax funding of campaigns is an immoral and unproductive welfare program
    for politicians and will not work. I advocate abolishing all contribution
    and spending limits and reporting requirements. Campaign finance laws
    protect incumbents and enhance the power of the press, while destroying
    the First Amendment rights of others.

    I am opposed to spending Maine*s hard- earned tax dollars on campaigns. If
    you are popular with your constituents and they believe in you and what
    you stand for, they will donate to your campaign. I totally disagree with
    using the state*s tax dollars and general fund to finance candidates. If
    clean elections was based on only the amount collected for the signatures,
    I may support it. Otherwise, it adds one more layer of state bureaucracy.

    No taxpayer should be forced to support a candidate financially. Political
    action committee (PAC) spending and union support (i. e., workers paid
    with no management accounting for cost) made the socalled *clean* election
    system a joke. GAO*s questionnaire is slanted towards the continuance of
    this outrageous program.

    My strongest objection to the program is that it forces taxpayers to fund
    candidates that they may not support.

    Many people complained to me that their money should not be used for
    everyone. They felt the candidate should raise his or her own money with a
    cap on the amount spent.

    Public funding is a bad way to finance campaigns. There are better uses of
    public money. If people would use it, accountability exists in the private
    funding system.

    Publicly funded elections fly directly in the face of freedom. Tax dollars
    should not be used for campaigns. Paying health insurance for our retired
    teachers should be done before we begin to subsidize names on ballots.
    Maine has the highest state and local taxes of any state in the nation,
    and our income tax hits its highest rate at approximately $14,000 per
    year. Our legislative districts are small; raising campaign contributions
    by canvassing door to door and attending PTA meetings is the norm. People
    know each other here.

    This is a good program and should be continued, although some changes are
    needed.

    This is a great program. It needs to be continued, with some tighteningup
    of loopholes. This is a terrific program, even if it is

    not perfect. My personal experience was that the public financing program
    was a valid attempt at campaign reform.

    While the public financing program is not perfect, it begins the process
    of returning power to the people. The program has enhanced democracy and
    will return power to

    voters in the long run. This program helps the electoral process and is
    good for democracy.

    Maine*s public financing program should be a pilot program for federal
    elections.

    The Maine Clean Election Act is the best thing that could ever happen to
    our government. It is a great example for national elections, and such
    reform should be greatly

    encouraged. I support the use of publicly funded elections. I think it is
    good for the people of Maine and, for that matter, any state.

    Appendix VI: Comments Received in Our Survey of Candidates for Office in
    Maine*s and Arizona*s 2000 Elections

    Page 119 GAO- 03- 453 Public Funding of Political Campaigns

    Topic Nonparticipating candidate comments Participating candidate comments

    The money spent on this program could be spent on the needs of senior
    citizens, such as prescription drugs.

    Maine cannot afford to fund candidates at the expense of taxpayers. I am
    not a proponent of the public financing program. In difficult times, as we
    now have, I do not feel that taxpayers should be funding elections.

    Public financing is another drain on public funds. The public financing
    program is another sock- it- to- the- taxpayer form of taxation. In my
    opinion, voters were not aware of what they were voting for in 1996. The
    voters saw the words *clean elections* and thought it would solve the
    issue. The program infringes on the First Amendment guarantee of free
    speech.

    With $250 million or more in revenue shortfalls versus spending
    commitments, Maine should not be financing elections when there are
    insufficient funds to pay for day- to- day operations of government.

    Due to the present state deficit, the public funding program should be
    reduced or repealed. It is a luxury that the state can ill afford. It is
    hard for me to use taxpayers* money when there are so many more important
    needs.

    Public financing is wonderful for first- time candidates because they have
    difficulty raising money. But, special interests will always find ways to
    promote their allies. Thus, all in all, tax money can be put to better
    use.

    I ran with traditional financing in 2000 and with public financing in
    2002. Public funding has made it easier to run as a state representative;
    I have more time to go to the voters* homes. But, I am not sure if they
    like candidates spending taxpayer money.

    Taxpayer funds should not be spent in this manner. Taxpayers have no real
    understanding of the process and the *games* that are played. There are
    lots of problems with this program. It should be repealed. Public
    financing has added millions of dollars to political campaigns without any
    other noticeable changes. We are spending public funds on something that
    is of no benefit to the taxpayers. Ask the person on the street if his or
    her legislator is a participant or not in the public financing program.
    The blank stare you get will answer your question.

    The current budget crisis will erode public support for taxpayer funding
    of politicians, as will the giving of $1 million in public funds to a
    Green Party candidate for governor.

    Appendix VI: Comments Received in Our Survey of Candidates for Office in
    Maine*s and Arizona*s 2000 Elections

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    Topic Nonparticipating candidate comments Participating candidate comments
    Number of candidates and electoral competition

    The only reason more candidates will opt for public financing is that the
    law and its implementation are punitive towards traditionally funded
    candidates.

    This year (2002), there seem to be quite a few candidates, at least in my
    area, who have chosen to be clean election candidates. They did it only to
    avoid having to raise money. They did not talk to constituents to obtain
    the $5 contributions; friends did it for them. The law has made candidates
    more lazy, especially incumbents.

    More candidates are choosing public financing because it involves no
    fundraising efforts. It is a somewhat lazy approach of letting taxpayers
    do your work.

    If the goal of Maine*s public financing program was to elect people for
    office who would not normally be elected, I believe it was partly
    successful. Time will tell if the people got what they wanted.

    Maine*s public financing system has proven to be very successful. It
    especially helped to recruit female candidates.

    The public financing program has made it easier to find candidates in
    rural districts.

    The program may have encouraged some candidates to run, but it has not had
    much effect in my opinion.

    This may be a simplistic view, but I think the Maine Clean Election Act
    does make a difference. Although I withdrew my candidacy, I considered it
    much more seriously because I knew public funding would help me to run a
    decent campaign against a very strong

    incumbent. The program has encouraged massive fraud by having insincere
    *paper candidates* take the money and run half- hearted campaigns just to
    tie up the incumbent. Also, they use the money (for phone banks, graphic
    artists, overhead, etc.) to support other competitive campaigns. Further,
    because fundraising expenditures are not deducted, conventional candidates
    have a financial disadvantage.

    People voted for the Maine Clean Election Act because they thought dirty
    campaigning (e. g., personal attack ads) would stop. Yet, the 2000
    election was one of the dirtiest campaign scenes that I have witnessed in
    over 30 years. I got many calls asking, *How come so and so can say that
    about her opponent?* I explained that all Maine*s Act does is to ensure
    that tax dollars will pay for participating candidates* campaigns. This is
    a very bad piece of legislation.

    Races will continue to get nastier because, by law, independent
    expenditures and issue advocacy spending cannot be coordinated with or
    attributed to candidates.

    The program gives a greater number of people a chance to run for office.

    I support Maine*s public financing program. We have been able to recruit
    more candidates of diverse backgrounds.

    I know my opponent could not have run without public funding, and I am
    pleased that he did run.

    Without public funding, I would not have been able to launch a campaign or
    run as a candidate.

    Absent the public financing program, I seriously doubt that I would have
    ever run for office. And, I am sure that many other candidates were
    similarly influenced by the program.

    I remain a committed supporter of clean elections. A greater and more
    varied population of candidates is now able to run. The requirements are
    high enough to exclude candidates who lack community support or
    credibility. The system is well run in Maine.

    Public financing is changing the nature and number of candidates and
    campaigns in Maine. In particular, third- party candidates are accessing
    funds to run viable campaigns. In general, my constituents seem to support
    the motivating principles that initiated this program but do not
    understand where the money is coming from.

    I have significant concerns when a third- party candidate, such as the
    Green Party*s gubernatorial candidate in the 2002 election, can get public
    funding even though he received a mere 5 percent of the votes in the
    previous election. It is a terrible waste to use public funds for an
    unelectable candidate*s propaganda.

    Appendix VI: Comments Received in Our Survey of Candidates for Office in
    Maine*s and Arizona*s 2000 Elections

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    Topic Nonparticipating candidate comments Participating candidate comments

    I am very concerned about how marginal third- party candidates will
    influence the outcome of close elections. I think we will have too many
    officials elected with less than 50 percent of the vote. We may need to
    have run- off elections.

    Public financing only clutters the field of candidates by putting radicals
    on the ballots* radicals who get support only from a few other radicals.
    If a candidate cannot garner enough support to run, he is not capable of
    performing the duties of office. The people know who should run, and they
    show it with contributions. Get rid of public financing!

    Soliciting contributions enlightens the voters about the political program
    of the potential candidate. Also, this traditional fundraising process
    shows the reluctance of voters to contribute or not contribute to the
    candidate*s program.

    Public financing is creating a Green Party spoiler in the governor*s race
    in the 2002 election. Candidates running for a higher or

    statewide office (e. g., governor) should have to demonstrate viability by
    first being elected to serve in a lower office.

    The only reservation I have is that public financing can be obtained by
    people who cannot win an election because they are too single- issue
    oriented or are not widely supported. They become spoilers, potentially
    causing candidates to be elected by a plurality rather than a majority.

    There are about 4,000 to 5,000 voters in each House district. A
    candidate*s physical ability to campaign has at least as much to do with
    the outcome as money. It is possible to knock on every door in a district
    if necessary.

    Party loyalty and party organization are critical to helping a clean
    elections candidate. Such candidates must have a *campaign place* in order
    to be effective.

    Interest Group Influence The implication that publicly funded candidates
    are *clean* and

    traditional candidates are not is offensive to me. The hypothesis that
    Maine legislators are driven by whoever provides financial support to
    campaigns is bogus. This program is a solution looking for a problem.

    I resent the fact of being labeled a dirty candidate if I do not
    participate in the program. The *clean election* designation for those
    taking advantage of the

    public funding program implies that the traditional candidate may not be
    *clean.* This is unfortunate and should be changed.

    The use of *clean* is a poor choice of words as it denotes a negative for
    the other candidates.

    I think the public is being deluded into thinking that public financing
    takes big money out of elections and that the term *clean candidate* means
    something. I also think partisanship is even more involved in elections
    now than when individuals had to pay their own way or raise

    their own funds. Maine*s current law does not adequately limit the behind-
    the- scenes roles played by the most powerful players, that is, the
    parties and their most powerful lobby groups* business, labor, National
    Rifle Accepting public financing gives me

    the feeling that I truly represent the people and not a lobby.

    Running as a clean election candidate was a liberating experience that
    most people seemed to appreciate.

    The program has contributed to lessening the impact on and control of
    candidacies by special interests. However, term limits have increased the
    impact of lobbies in the halls and

    committee rooms. The final result regarding the influence of lobbies may
    be negligible, but more *regular* people are running for office.

    Public confidence in politics is crucial if democracy is to survive.
    Publicly financed campaigns help to increase that confidence by leveling
    the playing field and driving candidates

    Appendix VI: Comments Received in Our Survey of Candidates for Office in
    Maine*s and Arizona*s 2000 Elections

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    Topic Nonparticipating candidate comments Participating candidate comments

    Association, abortion rights, etc. They put out the most blatant negative
    ads and literature. Successful candidates know exactly to whom they are
    beholden, even if the candidates received no money directly from these
    groups.

    If the program*s purpose was to ensure some integrity in the election
    process, it is a huge failure. If they lack integrity, candidates and
    supporters will always find loopholes.

    I feel that the program has increased negative presentations by advocacy
    groups, and it could have the effect of weakening the twoparty system.
    Special interests rather than candidates will have the greatest voice.
    Without their consent, candidates could be endorsed by groups in ads that
    do not reflect the candidates* views.

    I believe the program has helped restore the public*s faith in the
    integrity of candidates. Hopefully, many other states, and eventually
    Congress, will adopt public funding of elections.

    I did not accept funding from any group. I ran a low- key campaign and
    paid my own bills. In this way, when I walked through the door at Maine*s
    House of Representatives, I was my own person. I owed no one person or any
    group anything.

    The public funding program removes a certain contact with people for
    fundraising. Some view traditional candidates as being influenced by
    funding services; others view such candidates as being responsive.

    I have found that voters generally do not care whether you are running as
    a publicly funded candidate or not. Maine*s Act was passed as a knee- jerk
    reaction to a ballot irregularity.

    Until honest people are elected, you will not have clean elections.
    Maine*s law does the complete opposite of its intended purpose.

    back to grassroots campaigns that connect them directly with voters.

    There is no question that public financing requires constituent
    participation. Running a campaign is not about getting and raising money;
    it is about meeting and talking to the people and engaging them in the
    election process.

    I welcomed the ability to be independent from groups who try to exert
    influence on the basis of monetary support.

    To be elected to the state legislature and not feel beholden to anyone
    except my constituents is a liberating feeling.

    The most important effect of the public financing program has been to free
    legislatures from the influence of campaign contributors.

    The program has removed private fund raising. The issue is: How
    influential were the private check writers on the way legislators voted.
    It did not impact me, because I voted on the basis of whether legislation
    was good or bad for my constituents and the people of Maine.

    I like the idea of not having to answer to big companies after they give
    big bucks to your campaign.

    I felt a great deal of freedom after being elected because I had only my
    constituents to answer to.

    Make Maine*s law stronger and continue to reduce the role of lobbying
    groups.

    The program may lead to changing this country from an oligarchy of
    corporate and special interests to something approaching democracy. I
    probably would not be a traditionally

    Appendix VI: Comments Received in Our Survey of Candidates for Office in
    Maine*s and Arizona*s 2000 Elections

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    Topic Nonparticipating candidate comments Participating candidate comments

    funded candidate because financial influence is too much of a precedent in
    state and national campaigns.

    It is time that the rich, both personal and companies, be stopped from
    running our country. With *clean elections,* the candidates* time and
    energy will be spent on communicating and working with the people they
    represent.

    The general public is in great need of education regarding the benefits of
    publicly financed elections systems. The public believes that all
    politicians are bought and paid for by special interest groups, and the
    public is not all wrong.

    I wish PACs and special interests could be stopped from interfering with
    democracy.

    The way Maine*s law is now written, a publicly funded candidate must
    demonstrate a strong fund- raising ability and come up with more private
    donors than usually found in a traditional campaign. Where are

    likely donors found? Sources are the same as used by traditional
    candidates* groups with membership lists, such as political parties,
    unions, service organizations, non- profit and activist entities, and
    church groups, as well as people you work with. In short, special
    interests have not been removed from campaigns.

    Campaign spending: independent expenditures and

    issue advocacy spending

    Independent expenditures are a big problem for senate and statewide office
    races.

    Maine now has a soft money problem where none existed before. Our
    campaigns are now much more expensive, and the races have more dirty
    politics than ever. Political action committees (PACs) spend the same or
    more money now* in addition to the *clean funds,* doubling expenditures.
    The public can no longer trace the money being dumped into campaigns.
    Special interest groups and lobbyists are stronger here now more than ever
    because it is almost impossible to get elected without PAC expenditures.
    More issue advocacy and soft money move through the party organizations.
    This program was a bad move for

    Maine. I am very concerned that

    independent expenditures and issue advocacy will be the major source of
    information for the voters. Both of these types of communications come
    from somewhere other than the candidate, perhaps even serving to trump the
    candidate*s message due to unlimited funds. The increase in independent
    expenditure is an unintended consequence of public

    funding.

    Appendix VI: Comments Received in Our Survey of Candidates for Office in
    Maine*s and Arizona*s 2000 Elections

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    Topic Nonparticipating candidate comments Participating candidate comments

    Maine*s public financing program has created a major problem with soft
    money* independent expenditures and issue advocacy* where none existed
    before. The public financing program has created a soft money problem in

    Maine, when no problem existed prior to the change. Independent
    expenditures are increasing. Every candidate under a true clean election
    system should receive exactly the same amount of funds, and independent
    expenditures should not be allowed under the law.

    I ran as a traditional candidate in 2000. I am running with public funds
    in 2002 because my opponent is also publicly financed. There are too many
    ways that independent expenditures can be made and just as many ways the
    incumbent can spend to inform his or her constituency. Public financing is
    not always really an equal playing field. Why not just limit the amount of
    money a candidate can raise?

    It is erroneous to believe that candidates are unaware of independent
    expenditures. Both Democratic and Republican party leaders use PACs to
    exploit the loophole.

    If public funds are used, PACs should be outlawed. The *clean* candidates
    are using *leadership PACs* to collect funds for other candidates. The
    parties are finding ways to get around limits. Labor unions and interest
    groups are just going on as usual.

    PAC money can be used by all except the candidate. It is much too easy to
    get around the regulations.

    In its infancy, the public funding program creates more of a hardship for
    the participating candidate, as the races most often are composed of one
    participating and one non- participating candidates. Traditional
    candidates have the ability to go to special interest groups and bury a
    publicly financed opponent under a volume of ads.

    The public financing program does not help the system because more
    independent expenditures are occurring, which thwarts the intent of the
    program. I have already seen an extensive shift to advocacy advertising.
    It is a real change in how elections are done. Total spending has really
    grown.

    Independent candidates, such as myself, are seriously disadvantaged in
    that there are no limits on issue advocacy spending and independent
    expenditures, since no one does these on our behalf. I did not chose
    public financing, but not because of spending limits. I won each of my
    races with increasing majorities and spent far less than $6, 000.
    Campaigns do not have to be expensive.

    Issue advocacy spending is a loophole in the clean elections law. Under
    current policy, participating candidates can benefit from such spending
    without breaking the rules of the public financing program. It puts
    candidates who follow the program fairly at a disadvantage. We must not
    allow issue advocacy communications to mention the

    names of candidates or parties. Independent expenditures are the only
    trouble spot. I do not know how to solve it, except by requirement to file
    (maybe 6 weeks before the election) an *intent* to make expenditures on
    behalf of a candidate. It drove me crazy when a group in 2000 did a
    mailing on my behalf that misled voters on where I stood on the issue. I
    had no control over the mailing, which also resulted in freeing up money
    for my opponent

    to spend. There is no accountability for independent expenditures. A
    publicly financed candidate is at the mercy of last- minute independent
    expenditures for opponents and has no opportunity to respond in kind
    before the election.

    Candidates should not be allowed to create their own PACs.

    Leadership, particularly in the Democratic Party, continues to raise
    monies to share with candidates.

    There should be limits on independent expenditures and outside monies. I
    ran my campaign in

    one of Maine*s poorest counties; to ask individuals to finance large
    amounts for politics is obscene.

    To limit *hard* money from going *soft,* there must be restrictions (e.
    g., disclosure, disincentives, etc.) on independent expenditures.

    Appendix VI: Comments Received in Our Survey of Candidates for Office in
    Maine*s and Arizona*s 2000 Elections

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    Topic Nonparticipating candidate comments Participating candidate comments

    I think that if you are running as a clean candidate, none of the parties
    should spend money on the candidate.

    Campaign spending: overall amounts

    There is more money in Maine politics than ever before. The clean
    elections law has done more harm than good.

    Public financing of elections has increased the amount of money spent on
    campaigns in this state. I am sorry that I voted as a legislator for this
    program.

    Having a publicly financed opponent in 2000 drove my spending higher
    because I knew he had enough money for radio and TV; and, his party was
    running negative ads against some of our candidates. I bought several
    thousand dollars of radio ads that I had not planned to spend. I expect to
    spend less money in the 2002 election because my opponent did not qualify
    for public funds. I was unopposed in my 2000 campaign; the total cost was
    only about

    $1,900. Public financing reduces the fund- raising of traditionally
    financed candidates. Some constituents who support public financing no
    longer contribute to the campaigns of privately funded candidates,
    although the constituents still support the candidate and did contribute
    in the past.

    I found that candidates who were in the public financing program bragged
    about the fact that they spent more money than when they were not in
    program because it was not money they had to raise.

    All candidates should be allowed to receive and spend no more than $5,000
    per campaign year to support their campaign* or an amount equal to that of
    their opponent, if less than $5, 000.

    I limited my campaign expenditures to $5,000 and dedicated my efforts to
    the less- costly, door- to- door campaign.

    The provisions of the law that made corporate contributions illegal and
    reduced the maximum contributions from individuals were good.

    Allowing matching funds for little effort by a public financed candidate
    does not make sense. An example is the Green Party candidate in the 2002
    gubernatorial race. Consistently unable to get votes from Maine voters, he
    will probably get over $1 million of taxpayer money and may become a
    *spoiler.*

    I feel that the public financing program decreased the amount of money
    spent in my race.

    Publicly financed campaigns helped me to be more responsible with my
    finances. I made a conscious effort to be more thrifty so as not to
    deplete the public coffer.

    Maine*s public financing program has removed a lot of *big money* from
    legislative races.

    I take exception to the fact that candidates who participated in the
    public funding program were still able to be associated with PACs.

    If you are a *clean election candidate,* you should not be allowed to form
    a PAC for a leadership position. A candidate should be allowed to spend
    only the allotted amount of money* with no other financing, such as PACs.
    Unfortunately, pressure to raise

    money for the party caucuses will continue to affect voting within the
    parties at the state level.

    More funds should be available to challengers than to incumbents, who have
    the advantage of receiving extra press coverage and using their office
    newsletters and materials from previous elections.

    Appendix VI: Comments Received in Our Survey of Candidates for Office in
    Maine*s and Arizona*s 2000 Elections

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    Topic Nonparticipating candidate comments Participating candidate comments

    Lots of public money goes to the participating candidates, who spend about
    four times the amounts they would spend if taxpayer funds were not being
    used.

    The public funds are too easily spent* overkill on signs and junk* a big
    waste. Many candidates who use public funds know it is a joke; but, it is
    easy money.

    The amount of money needed to finance a House of Representatives race in
    rural Maine is not the same as that needed for urban areas. If the Maine
    Clean Election Act is retained, the initial dollars to be distributed to a
    participating candidate should be recalculated based on the particular
    district*s record. Having an opponent who was publicly

    funded forced me to more than double my funding and expenditures in 2002
    compared to 2000.

    Because public funding amounts are based on average expenditures in
    previous cycles, the program pours money into non- competitive races and
    provides insufficient funds for competitive districts. Public funding is
    more important in Senate races than House races because of geography and
    the need for more campaign dollars.

    In early 2002, thousands of dollars were given out in public financing for
    a special election to fill a vacated legislative seat. These sums led to a
    spending spree for a seat to be filled for only a few weeks. Participation
    in the public financing program makes a candidate think

    before spending. The program is a step in the right direction and is good
    for cleaner elections.

    In 2000, inadequate funding was available for Senate races. As an
    incumbent, I had a huge advantage over my publicly funded opponent. In
    2002, I faced a traditionally funded opponent. Loopholes allowed him to
    raise money in an uncontested primary* money that never will be matched
    and gave him an unfair advantage.

    In 2000, I had no opposition in my race for the state legislature.
    However, because I am so passionate about public financing, I ran as a
    clean elections candidate. In 2002, I am running again with public funds.
    I have a Republican opponent and feel that I have more than enough money
    to win again.

    Program scope All candidates should be on an equal playing field. Either
    all candidates or none should be publicly financed.

    The program is flawed because it is not mandatory and universal. Public
    financing should be for all candidates or none. As it stands now, the
    program is a farce.

    For this system to work, it must become a requirement across the board. I
    sincerely hope this will happen, because it then will accomplish what I
    would like to believe was the original purpose* to elect representatives
    unencumbered by obligation to select populations.

    The program should apply only to candidates for the state legislature and
    not to gubernatorial candidates.

    I believe that public financing should not be granted to incumbents. The
    program*s purpose should be to encourage newcomers and not to perpetuate
    career politicians.

    Appendix VI: Comments Received in Our Survey of Candidates for Office in
    Maine*s and Arizona*s 2000 Elections

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    Topic Nonparticipating candidate comments Participating candidate comments
    Program administration The Maine Governmental Ethics and Election
    Practices Commission is

    run by the majority party. Thus, one party is *off the hook,* and the
    other party*s members are harassed.

    The reporting procedures are a burden and unreliable. Sections of Maine*s
    law regarding reporting are problematic. What happens when a non-
    participant goes over time frames and limits for outside expenditures?

    The reporting forms and information requirements are worse than those for
    tax purposes.

    The idea of publicly financed campaigns is good. It is my perception,
    however, that Maine*s program adds to the time spent on filling out and
    filing forms. One of my greatest fears is that I may make a mistake on a
    form, or fail to submit a report on time, and be held up to criticism as
    an incompetent or a criminal. The system should be simplified if it is to
    be effective.

    The requirement for $5 contributions should be dropped; people do not
    understand it.

    The use of money orders for the $5 contributions should be banned. Anyone
    can generate money orders to get credit for the required number of
    contributors.

    I do not believe the public in general knows a great deal about the public
    funding process, unless they know a particular candidate who is running in
    the program.

    I did not run with public funds because I did not want to deal with the
    requirements. But, even though I got no public money, I ended up having to
    deal with the program*s requirements anyway because my

    opponent participated. So, in the future, I think that I will run with
    public funds if my opponent does.

    Another bureaucracy will expand, more forms will be created, and the
    bureaucracy in general will begin to influence who runs for public office
    and how. Eventually, the state will be making more rules in how people

    should run. The possibility of abuse should be

    studied so as to avoid candidates taking advantage of the process. Greater
    clarity needs to be brought to the process. A candidate was able to spend
    $385 for a dinner for four people, while I was not allowed to purchase a
    copy machine that cost less.

    My local jurisdiction consistently violated my civil rights and made it
    almost impossible for me to comply with the new law in a timely fashion.

    To be useful, matching funds based on last- minute expenditures by a non-
    participating candidate should be sent out earlier than the last week of
    the campaign. Also, collection of the $5 contributions should be allowed
    in cash if the donees sign

    the appropriate form. There are lots of issues dealing with the timing of
    funds. My opponent *hid* his expenses until the last minute. So, my
    matching funds came too late to be helpful.

    Planned expenditures (with the knowledge of the candidate) timed just
    before the election must be controlled. The matching funds arrive

    so late they have to be returned because it would be a waste to run a
    responding ad for the election. When the $5 contributions are

    received, the routing numbers on the checks should remain private for
    their protection. Also, the law needs to be more specific about whether
    more than one check is needed for contributions from family members.

    Other than the last- minute expenditures of funds on behalf of Republican
    and Democratic candidates* expenditures made so late (although no doubt
    planned much earlier) that the matching funds could not be intelligently
    spent* I

    Appendix VI: Comments Received in Our Survey of Candidates for Office in
    Maine*s and Arizona*s 2000 Elections

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    Topic Nonparticipating candidate comments Participating candidate comments

    believe that the public financing program worked well and was fairly
    implemented by the state officials.

    One loophole involves bank accounts opened by a candidate*s family members
    and used to promote the candidate.

    I ran against an incumbent who was able to send out a flyer at state
    expense describing her accomplishments as a state senator, and she had
    weekly articles in the press. None of this counted as campaign expenses.
    The limitations

    of Maine*s Act prevented me from countering this. I could afford only one
    flyer and just one or two small newspaper advertisements. Our press
    releases on issues were not considered newsworthy, while an incumbent
    senator*s activities were. GAO*s survey did not explore the effect that
    incumbency has on campaigning.

    There remain loopholes to be closed, such as last- minute expenditures
    that might incur a small *penalty* but would result in an election
    victory.

    Other At the outset, the system seemed complicated. But, once tried, the
    participants showed that it could be almost fun, politically speaking.
    Candidates had an additional chance for face- to- face contact with
    potential constituents, and the candidates boasted about how well they
    were able to do.

    I did not use public funding because I did not have time during the busy
    legislative session.

    The public program is ridiculous. Repeal this program or remove the holes
    left for money to still flow in. In its current form, the program is a
    sham.

    The name of the program should be changed to *Maine*s TaxpayerFunded
    Elections Law.*

    In the 2000 election, I came in on the deadline and was unable to qualify
    for public funding; the funds would have assisted me greatly. In the 2002
    election, I did qualify and find that I can better use my time talking
    with and listening to people in the district. I support the Maine Clean
    Election Act.

    In Maine, the essential reality is that you are at a competitive
    disadvantage if you do not run as a participating candidate.

    My opponent and I both used public funds. We treated each other with
    respect, and we encouraged our supporters not to use dirty tricks. We
    cooperated in trying to show that a clean campaign was better for all,
    even though we disagreed remarkably on the issues.

    Term limits must be repealed. Limits are needed only on the number of
    years in committee chair and leadership positions. State agencies and
    lobbyists are becoming more and more powerful because of term limits.

    Appendix VI: Comments Received in Our Survey of Candidates for Office in
    Maine*s and Arizona*s 2000 Elections

    Page 129 GAO- 03- 453 Public Funding of Political Campaigns

    Topic Nonparticipating candidate comments Participating candidate comments

    No one wants to run for office. The biggest problem is low pay and the
    amount of time spent in the state capital. You have to be retired or a
    secondary wage earner in order to take the time needed.

    I am pleased to be running as a publicly funded candidate in my second
    campaign (2002); it proved to be simpler to manage.

    More time is needed to evaluate the program. For every hour of effort that
    goes into drafting a law, three are spend trying to skirt it.

    In 2000, my publicly financed opponent found numerous ways to get around
    the regulations. It made a mockery of the intent of the law. The program
    gave her free assistance, which was worth a great deal financially.
    Whatever one person invents, another person will find a way to circumvent.

    Influential parties and organizations are already trying to sway public
    opinion against public financing.

    The law had no effect on number of votes cast. The program is a wasted
    effort..

    In 2000, I decided to run for office because of term limits. Because I was
    new to politics, the Democratic chair thought I should go with public
    funding. It was right for me at the time.

    The state legislature wanted to make many changes in the public funding
    program after the first election cycle.

    Small tweaking is okay; but, in my opinion, there should be no real big
    changes until after one or two more election cycles. Source: Response to
    question 25 of GAO*s survey of candidates for office in Maine*s 2000
    elections (see app. IV). Note: Each sentence (or paragraph) entry under a
    given topic in the table is a comment uniquely

    attributable to one candidate. That is, under each topic, each entry is a
    comment from a separate person. Some candidates provided comments that
    covered more than one topic. In these instances, the table presents the
    applicable portion of the comments under the appropriate topic.

    We received written comments from 86 respondents to our survey of
    candidates for office in Arizona*s 2000 elections. In reference to the
    state*s public financing program, the 86 respondents consisted of 66
    nonparticipating candidates and 20 participating candidates. Table 26
    presents the comments of the responding candidates. Comments Provided

    by Arizona Candidates

    Appendix VI: Comments Received in Our Survey of Candidates for Office in
    Maine*s and Arizona*s 2000 Elections

    Page 130 GAO- 03- 453 Public Funding of Political Campaigns

    Table 26: Comments Received in Our Survey of Candidates for Office in
    Arizona*s 2000 Elections Topic Nonparticipating candidate comments
    Participating candidate comments Use of public funds The public financing
    program should be judged unconstitutional.

    Arizona laws already restrict campaign fundraising and provide for full
    disclosure. The public funding program is an issue of the Democrats, was
    given a catchy name on the ballot, and is supported by the liberal media.
    The program*s purpose is to gain advantage over Republicans. The public
    was hoodwinked to approve this initiative (by a margin

    of less than 1 percent) with ads stating the initiative would *get dirty
    money out of politics.*

    The public financing program should be available for all city, state, and
    federal elections.

    Since the number of participating candidates increased significantly from
    2000 to 2002, many candidates must feel that public financing is a good
    program. I surely do. In 2000, there was too much uncertainty about the
    law to use it in a competitive district. I spent only $7, 000 and lost by
    180 votes out of 12,000. My opponent spent $40,000 or nearly $200 for each
    of the 180 votes.

    Although it would have saved me time and money, I do not believe it is the
    government*s role to finance campaigns. Taxes are too high, and these
    dollars should be used on beneficial programs. Public financing is
    campaign welfare. The program wastes public funds, infringes on free
    speech rights, goes against the founding principles of our country, and
    increases fraud.

    Arizona is in dire financial need. These funds should be spent on existing
    programs now being cut or eliminated. Candidates, staff, and precinct
    committeemen start looking like beggars trying to achieve their quotas of
    $5 contributions.

    The program is a socialist scam. Public funding is a terrible program and
    will destroy the democratic elections process if continued.

    Most candidates, including me, have little faith in the ability of the new
    public financing program to work. The program is tyrannical, punitive, and
    anti- American. It is lazy man*s financing.

    All candidates should raise their own money. If you cannot raise money* i.
    e., you do not have support* you should not be given tax

    Public financing is a very good thing but definitely is not a panacea for
    our money- dominated political system.

    The program is costing taxpayers a lot of money that could be going to
    more worthwhile uses for the state.

    The program is an excellent example of campaign finance reform. All states
    should have it.

    Having run as a participating candidate, I am convinced of the value of
    public financing of elections. Candidates have more time to spend with
    voters, adequate funds are provided for message delivery, and participants
    must demonstrate that they possess the bona fides of a serious candidate.

    Appendix VI: Comments Received in Our Survey of Candidates for Office in
    Maine*s and Arizona*s 2000 Elections

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    Topic Nonparticipating candidate comments Participating candidate comments

    dollars. Yes, reform is needed, but funding everyone with public money is
    not the answer.

    The law is a disaster and is designed to benefit the state*s Democratic
    Party.

    Arizona*s law is a moral outrage, suppresses free speech, and violates
    political and civil rights. The public financing program fails in its
    objective to *take the money out of politics.* The program simply creates
    a new political game with new rules and with money

    still playing a key role. The public funding program is bad policy, forces
    people to support candidates they do not agree with, and is
    unconstitutional.

    The public funding program is unconstitutional. The program is the worst
    concept to be proposed for elections. The government should not be buying
    elected officials.

    Public funding is a terrible program that should be discontinued. It is a
    sham by liberals to obtain money to get elected.

    Because I believe in true freedom of speech not hampered or helped through
    government, I do not support public financing of private campaigns.
    Further, the implementation of Arizona*s Act has all but eliminated free,
    fair, and democratic elections in the state.

    Number of candidates and electoral competition

    There may be more candidates this year, but there is less debate about
    even fewer ideas. The hot issue in the Republican gubernatorial and
    Attorney General campaigns this year (2002), was cash versus accrual
    accounting and punctuality in campaign paper work. A vigorous campaign
    about education, taxes, and

    health care was lost because a government agency charged with regulating
    finance for traditional candidates could not decide what the rules were
    before the contest began and dictated the terms of the public dialogue by
    distracting the media and the public with press conferences, egregious
    fines, and threats to disqualify legitimate candidates from the ballot.
    Arizona gained candidates, but we lost debate on the issues that matter.

    Clean elections money allowed some good candidates to be able to run.

    I think it is a great way to get more people to run for office in Arizona.
    Had I known more, I would have run as a participating candidate in 2000.

    Why should taxpayers fund fringe candidates? What publicly funded
    candidate ran and won who would not have won with the traditional method
    of raising money?

    While I fully support the public financing program, the court challenges
    reduced its efficacy in both 2000 and 2002.

    The program increased the number of candidates running; most are not
    qualified.

    Public financing is the only way that concerned, qualified, working
    individuals can become directly involved in the electoral and

    governing process. It provides for a more direct form of participation in
    our republican form of government.

    Clean elections open the door to the American dream of running for office.
    Now, not just the rich and those *in bed* with lobbyists can run.
    Qualified people can run and strengthen our democracy. I can only hope
    more states adopt public financing to clean

    Appendix VI: Comments Received in Our Survey of Candidates for Office in
    Maine*s and Arizona*s 2000 Elections

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    Topic Nonparticipating candidate comments Participating candidate comments

    It is very difficult to assess the Arizona system from the 2000 cycle. The
    system was in legal limbo for a significant time, and fewer candidates
    participated for that reason. The 2002 cycle has many more participating
    candidates and will be a more realistic test run. Hopefully, the system
    will fulfill its promises. There were no new people elected because of
    public funding. Term

    limits are the reason for new faces. The program is great. It increased
    the competition dramatically in 2002, and the effect should be huge by
    2004.

    Public funding is insufficient to offset a well- heeled opponent. Pubic
    financing has opened up the political process to individuals who, in the
    past, either could not self- finance their campaign or had little or no
    access to contributors.

    The program increases the number of unqualified candidates. The program
    helps to bring in more candidates. Some changes are needed in the law, but
    it should not be repealed.

    Under the program, some not very bright people are getting elected, not
    because of their views or abilities but because they can make a bigger
    splash with signs and advertising. The balance now is too far in favor of
    publicly financed candidates.

    Under the public funding program, fringe candidates with no support run
    and waste resources. *Clean elections* is a bad law that favors incumbents
    with established name recognition. Public funding helped many new
    candidates run in 2000, especially

    in Tucson. The program was a significant boost to the Pima County Green
    Party, which ran candidates in most races. Many of these candidates made
    respectable showings at the polls. The program is very positive and should
    be continued.

    Too many candidates are running (prompted by term limits, redistricting,
    and government funding), and confusing elections are resulting. Candidates
    lacking viability are being encouraged (rather than discouraged) from
    running. The traditional funding system is an excellent way to separate
    the wheat from the chaff early on, before the public is forced to confront
    a herd of candidates on the ballot.

    up politics. More candidates are able to run for office.

    I ran for statewide office in 2002. Without public funding, I would not
    have run.

    Since 2000 was the first election under the public financing program,
    participation was not as great as it is this year (2002).

    Interest Group Influence Special interests can hide behind the collection
    of the $5 qualifying contributions. Under normal campaign limits, a
    special interest

    could at best raise 10 to 20 percent of a traditional candidate*s money.
    With clean elections, a special interest can be responsible for collecting
    all of a participating candidate*s $5 qualifying In 1996, I had to raise
    my own money. In 2000, it was wonderful not

    having to raise money and not having to jump through hoops to get
    endorsements to obtain money.

    Appendix VI: Comments Received in Our Survey of Candidates for Office in
    Maine*s and Arizona*s 2000 Elections

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    Topic Nonparticipating candidate comments Participating candidate comments

    contributions. In reality, under clean elections, special interest
    involvement can be hidden or cloaked from disclosure.

    In Arizona, the publicly funded candidates accepted seed money from
    special interests at the same rate that I did as a nonparticipating
    candidate. If anyone believes that I can be influenced by $270, then they
    do not want me.

    Special interest groups and lobbyists have had, do have, and will always
    have a significant influence on the process.

    A candidate should serve his or her constituency instead of special
    interest groups.

    The public funding program does help to reduce the impact of lobbyists.

    The program does remove a lot of special interest money from the process,
    which results in better public policy. Having candidates interface with $5
    contributors to get funding is

    much better than obtaining money from special interest contributors.

    The worst thing I disliked was that spokespersons for the Citizens Clean
    Elections Commission constantly referred to traditional candidates as bad
    apples. However, I felt that my integrity and honesty were intact.

    Any candidate still needs groups of people for support, whether it is for
    financial support or the vote. So, a participating candidate can still be
    lobbied. The public funding program does not make a participating
    candidate any less biased.

    Well- organized candidates were able to raise the $5 qualifying
    contributions with the assistance of organizations, unions, and special
    interest groups. I would have had to do it all on my own, with individual
    contributions. That was not possible for me; I did not have a campaign
    organization to help.

    In 2000, I ran with traditional funding. But, in 2002, because of an
    extremely wealthy candidate in my race, I chose to try the public
    financing program. It has been a disaster, and I would never do it again.
    It was easier to obtain sufficient money through fundraisers than to
    collect the $5 contributions. Labor unions collected most of the $5
    contributions for Democratic candidates; there was not much work done by
    the candidates.

    The cash nature of the $5 contributions makes bundling and illegal
    activity in collection significant and not trackable. Under the public
    funding program, lobbyists are able to continue

    To me, it was wonderful not having to go to individual committees to
    grovel for money. I felt more powerful and independent. It was a better
    feeling than when I ran in 1998.

    Public financing takes special interest money out of government. This
    approach is the only way that elections should be run, at both the state
    level and nationally.

    With public financing, my interaction with traditional lobbyists changed;
    they had to pursue me. Some PACs seemed to automatically oppose me, even
    though I might have supported their issues. These entities seemed to
    respect only those candidates whom they could support financially.
    Arizonans seem well aware that the link between special interest money and
    special interest laws is strong and want to change it. Arizona and Maine
    are leading the way in the nation. Let*s hope a federal clean elections
    law is passed.

    Lobbyists will have less influence on candidates and legislators.

    Appendix VI: Comments Received in Our Survey of Candidates for Office in
    Maine*s and Arizona*s 2000 Elections

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    Topic Nonparticipating candidate comments Participating candidate comments

    their influence by simply *volunteering* to collect $5 contributions for
    participating candidates.

    Public funding does not produce *clean* campaigns or any real fairness.
    Political influence of special interests remains undiminished. Influence
    is gained by arranging for qualifying contributions.

    Special interests continue to exert tremendous influence on both privately
    and publicly funded candidates. The only difference is that the influence
    on privately funded candidates is fully disclosed and reported, while the
    influence on *clean* candidates is not disclosed anywhere.

    Campaign spending Clean elections allowed many people to just waste and
    spend money to run.

    I object to the fact that a participating candidate can get public money
    to match or equal the amount of money provided by supporters of a
    traditional candidate. Clean elections is a bad law.

    In my first two elections, I spent about $18,000, whereas my opposition
    spent $42,000. So, money did not buy the election; the message did. The
    program is unfair to non- participating candidates. Participating
    candidates get more money than non- participating candidates, which raises
    the cost of campaigns from being kitchen- table campaigns to high- priced,
    complex campaigns. Some candidates spend money on non- campaign
    activities. The money should not go directly to candidates.

    I feel strongly that there should be spending limits on all candidates.

    Public financing has greatly increased the cost of campaigns. The program
    has fueled the campaign services industry, allowing more money to go to
    owners of printing shops and yard sign makers. Public financing had little
    effect on the outcome of

    elections in 2000. Voters may be disappointed to know that tax dollars had
    this end result.

    The 2002 election is the most costly I have ever witnessed. We received
    more full color mailings than has ever been the case. In the 2000
    election, at least one candidate took public money, hired family, and
    never appeared anywhere. Incumbents with campaign money from previous
    years still have an advantage. The limitations

    on campaign contributions to non- participating candidates are arbitrary
    and unfair.

    Except for gubernatorial candidates, the amounts of public funding are
    significantly insufficient.

    The proliferation of campaign materials direct mailed in the 2002 primary
    has become disgusting.

    Appendix VI: Comments Received in Our Survey of Candidates for Office in
    Maine*s and Arizona*s 2000 Elections

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    Topic Nonparticipating candidate comments Participating candidate comments

    Rural candidates are disadvantaged because of the huge, disproportionate
    cost of travel. Public funds are not available in time to meet the
    logistics of traveling to a sign printer and then distributing signs over
    vast areas and multiple communities. The 2002 election cycle has pointed
    out some glaring problems

    with Arizona*s Act, including a possible inadequacy of funding and
    problems with interpretation of the law.

    It was disappointing to see how tax dollars were spent by the
    participating candidates* computers and other equipment kept for personal
    use after the election, travel expenses, dinners out, and parties. It was
    a disgrace.

    In the primary election, the program does not provide enough money for a
    new candidate to complete against an incumbent or to compete in a
    redistricted area. Also, late in campaigns, nonparticipating candidates
    have a great advantage in planning and controlling expenses.

    Public funding can be used as an unfair weapon. In one primary in 2000, my
    publicly funded opponent obtained matching money and spent the entire
    amount on a smear campaign directed at me. The goal seemed not so much to
    win but to destroy my credibility in order to improve the chances of
    another competing candidate who had a similar political philosophy.
    Receiving six negative campaign flyers in the mail at one time* flyers
    that were publicly financed*

    was objectionable. Participating candidates were allowed a higher level of
    spending than me. As soon as I raised more than they were allowed in the
    primary, they received more funds. I should have been allowed to raise and
    spend as much as they were allowed in the primary and general elections.

    Public funding sounds good in theory but fails miserably in terms of
    producing positive results. Campaigns are more expensive. Statewide
    candidates spend a great amount of time begging for $5 contributions. A
    traditional candidate actually has much more time to meet constituents,
    talk to them about issues, and get to know their concerns. There is no
    level playing field. Those accepting taxpayer financing

    enjoy a tremendous advantage over those who raise money from friends and
    family in terms of actual cash available for campaigning, as well as
    advantages in reporting requirements, disclosure of campaign strategy, and
    the burden of horrendous IRS- style audits. My publicly funded opponent
    was given funds to communicate with voters to match money that I spent to
    pay taxes, fund official legislative business, and raise funds. A
    taxpayerfinanced candidate will generally enjoy a 25- percent cash
    advantage over a traditionally funded one.

    Appendix VI: Comments Received in Our Survey of Candidates for Office in
    Maine*s and Arizona*s 2000 Elections

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    Topic Nonparticipating candidate comments Participating candidate comments
    Program scope I believe all candidates should get public funds and that
    the $5

    contributions requirement should be dropped. I dislike asking people for
    money, whether it*s the public or special interests. I*d rather pay my own
    way or have each candidate get an equal amount. I would not participate in
    the public funding program unless all candidates received the funds,
    without the $5

    contribution requirement. If you want a system for financially challenged
    candidates, establish a welfare program to provide seed money for
    individuals who can prove financial need. Program administration The
    Citizens Clean Elections Commission does not have clear

    rules; it is very easy to make mistakes in filings, which can result in
    severe sanctions or penalties. This is discouraging possible new
    candidates from considering the public financing route. The absolute power
    of the Commission is scary.

    The reporting is not fair and equal for both types of candidates.
    Traditional candidates have to report more often than candidates who use
    public money. Clean elections changed the rules many times during the
    campaign.

    A non- participating candidate has to go through all the ridiculous
    reporting requirements. A participating candidate does not need to use
    funds to raise money; but, a non- participating candidate does, and it
    gets counted towards what a participating candidate gets from the public.
    This is totally unfair.

    There are too many reports. The reporting obligations are significant and
    time consuming, but the system is well thought- out.

    Our system is draconian in its reporting requirements. The Citizens Clean
    Elections Commission struggles with interpretation of the law and is often
    challenged. The law places unfair limits on contributions to non-
    participants. In short, it is a terrible law and should be repealed.

    The Citizens Clean Elections Commission is just another government agency
    gone amuck.

    Even when running unopposed, non- participating candidates still have to
    do all the time- consuming reporting.

    The program puts unreasonable reporting demands on nonparticipating
    candidates, which detracts from the campaigning process.

    The Citizens Clean Elections Commission needs to be more professionally
    trained to give accurate answers. Information given out is often wrong or
    it changes without notification. Also, the

    Public funding needs to be available early in order for the recipient to
    plan his or her campaign advertising effectively. All printers and
    advertisers require payment in advance.

    The pamphlets (covering all candidates) distributed to every registered
    voter were very informative. Plus, the pamphlets included a vote- by- mail
    request form, which should help voter turnout.

    I complained to the Secretary of the State and the Attorney General about
    an opponent who inappropriately received additional financing. Nothing was
    done about it; I never even received an answer.

    The Citizens Clean Elections Commission tells you what you can say, whom
    you can say it to, when you can say it, and how you say it. This is a
    grotesque violation of our First Amendment rights.

    I went to all of the available training programs but still was fined at
    the end of my campaign for not properly closing my committee. The
    Secretary of State*s office took over a month to notify me, and the fine
    was $10 per day. Since I had spent all of my public money, the fine ($
    270) was mine to pay. My opponent tried to get the Commission to fine me
    for accepting an in- kind contribution of sign poles. To defend myself
    required much time and effort. Clearer rules would be helpful.

    Appendix VI: Comments Received in Our Survey of Candidates for Office in
    Maine*s and Arizona*s 2000 Elections

    Page 137 GAO- 03- 453 Public Funding of Political Campaigns

    Topic Nonparticipating candidate comments Participating candidate comments

    Commission needs to be able to skim finance reports and act on violations.
    Enforcement is weak.

    Arizona*s Act places different standards on participating and
    nonparticipating candidates in direct violation of the Fourteenth
    Amendment equal protection clause. Upon some perceived violation, an
    unelected board can remove a candidate*s name from the ballot without any
    recourse for the state*s citizens.

    A nonparticipating candidate has to go through all the ridiculous
    reporting requirements. Also, a participating candidate does not need to
    use funds to raise money, whereas the fund- raising expenditures made by a
    nonparticipating candidate are counted toward what a participating
    candidate gets in public funds. This is totally unfair.

    The Citizens Clean Elections Commission is the fourth branch of government
    and is accountable to no one. The Commission makes its own rules for all
    candidates.

    The Commission should have spent some time and money on public information
    ads. My district has many rural areas, and many people had not heard of
    the clean elections program. I spent most of my time trying to explain the
    law rather than discussing important education, health, and environment
    issues. Therefore, I was not able to get the qualifying signatures needed
    to obtain public funding.

    Under the public financing program, reporting is overly burdensome, and
    the Commission is not accountable to anyone. Before the program, Arizona
    already had a good system of limited contributions and open reporting
    requirements.

    As the rules change, candidates and their finance managers become confused
    about requirements.

    The additional requirements for both participating and nonparticipating
    candidates have become a political tool to bludgeon opponents with. The
    candidate debates and forums were not advertised sufficiently,

    and turnout was poor at best. Arizona*s law has served only to get
    candidates in trouble due to the capricious, ad hoc nature of the Citizens
    Clean Elections Commission and its unfair, confusing campaign finance
    rulings and procedures.

    The Commission has gotten politically involved and hurt several campaigns.

    Not all bugs were worked out during the first year (2000). Some candidates
    nearly lost their seats trying to do the process. Things tended to operate
    much better this year (2002).

    There should be stiffer penalties for participating and nonparticipating
    candidates who break the law.

    Appendix VI: Comments Received in Our Survey of Candidates for Office in
    Maine*s and Arizona*s 2000 Elections

    Page 138 GAO- 03- 453 Public Funding of Political Campaigns

    Topic Nonparticipating candidate comments Participating candidate comments

    To assure compliance with reporting requirements necessitated having a
    full- time person, which resulted in less time for campaign issues.

    The Commission*s red tape and subjective rulemaking are barriers to
    involvement. Constituents think the paperwork is ridiculous and a waste of
    time and would prefer to give me a $100 check rather than mess with a $5
    contribution and paperwork. I stopped trying to qualify for public funds
    because I was taking 15 to 20 minutes to explain the program to voters
    rather than discussing issues. Also, the timeline for qualifying is
    absurd; funding can occur as late as 1 week before the election, which
    penalizes a participating candidate. The Commission has become an advocacy
    group that shoots from the hip publicly and has unclear rules and onerous
    obligations. The Commission has no accountability for its actions and is
    attempting to influence the outcomes of elections rather than simply
    reviewing the process.

    The current funding program uses processes that are very similar to the
    way the Soviet Union mismanaged its economy.

    Arizona*s Act requires traditional candidates to disclose to their
    opponents on a daily basis their every campaign activity during the heat
    of the campaign. This is information that the *clean* candidates keep
    secret until after the election. Think about filing your taxes every day,
    itemizing every expenditure, and making it available on the Internet for
    all to see. It*s practically the same for candidates who refuse government
    funds, but not for those who accept them. The cost of compliance is
    immense, and the advantage given your opponent is insurmountable. Also,
    this year (2002), the Commission decided to randomly audit 10 traditional
    candidates during the campaign, even though there were no allegations of
    impropriety. This served only as a means for the

    government to distract the candidates from their campaigns in order to
    give yet another advantage to the preferred *clean* candidates. Also, the
    Commission zealously audited every candidate against whom a *clean*
    candidate complained, regardless of whether the complaint had validity or
    not. This just another *service* the Commission provides to the candidates
    it prefers.

    The computer software was not compatible with a MAC.

    Other Most candidates, myself included, had little faith in the ability of
    the new public financing program to work.

    Public funding would be fine if our law did not punish people who fund
    privately. As it is now, the law is very unfair.

    Public funding, the Redistricting Commission, and term limits have *dumbed
    down* the legislature.

    Several publicly funded candidates with less than creditable backgrounds
    are now running for legislative seats. The public

    Appendix VI: Comments Received in Our Survey of Candidates for Office in
    Maine*s and Arizona*s 2000 Elections

    Page 139 GAO- 03- 453 Public Funding of Political Campaigns

    Topic Nonparticipating candidate comments Participating candidate comments

    funding program gives the candidates the power to run without much
    personal financial loss or scrutiny of past transgressions.

    I entered the 2000 campaign late in the process. I would have used public
    financing if my decision to run had not occurred 2 weeks before submittal
    of petitions.

    Individual contribution limits should be lowered from $5 to $1. The
    program has resulted in more public debate and media coverage.

    Public funding laws in Arizona need to be improved by making them less
    complex and more consistent internally. The grossly misnamed law (* clean
    elections*) violates the First Amendment. Source: Response to question 23
    of GAO*s survey of candidates for office in Arizona*s 2000 elections (see
    app. V).

    Note: Each sentence (or paragraph) entry under a given topic in the table
    is a comment uniquely attributable to one candidate. That is, under each
    topic, each entry is a comment from a separate person. Some candidates
    provided comments that covered more than one topic. In these instances,
    the table presents the applicable portion of the comments under the
    appropriate topic.

    Appendix VII: GAO Contacts and Acknowledgments

    Page 140 GAO- 03- 453 Public Funding of Political Campaigns

    Norman J. Rabkin, (202) 512- 8777 Danny R. Burton, (214) 777- 5600

    In addition to the above, staff who made key contributions to this report
    were David P. Alexander, Leo M. Barbour, Lindy Coe- Juell, Glenn Dubin,
    Ann H. Finley, Marco F. Gomez, Nancy K. Kawahara, John W. Mingus, Jan B.
    Montgomery, Demian T. Moore, Terry L. Richardson, and Wendy Turenne.

    We gratefully acknowledge the time and cooperation of state agency
    officials, political party and interest group representatives, and other
    knowledgeable individuals in Maine and Arizona who assisted us in this
    study. Further, we thank the political candidates who responded to our
    survey questionnaires regarding the 2000 elections in Maine and Arizona.
    Appendix VII: GAO Contacts and

    Acknowledgments GAO Contacts Staff Acknowledgments

    Other Acknowledgments

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