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
Page 101 GAO- 03- 453 Public Funding of Political Campaigns

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

Appendix IV: Survey of Candidates for Office in the Maine 2000 Elections
Page 102 GAO- 03- 453 Public Funding of Political Campaigns

Appendix IV: Survey of Candidates for Office in the Maine 2000 Elections
Page 103 GAO- 03- 453 Public Funding of Political Campaigns

Appendix IV: Survey of Candidates for Office in the Maine 2000 Elections
Page 104 GAO- 03- 453 Public Funding of Political Campaigns

Appendix IV: Survey of Candidates for Office in the Maine 2000 Elections
Page 105 GAO- 03- 453 Public Funding of Political Campaigns

Appendix IV: Survey of Candidates for Office in the Maine 2000 Elections
Page 106 GAO- 03- 453 Public Funding of Political Campaigns

Appendix IV: Survey of Candidates for Office in the Maine 2000 Elections
Page 107 GAO- 03- 453 Public Funding of Political Campaigns

Appendix IV: Survey of Candidates for Office in the Maine 2000 Elections
Page 108 GAO- 03- 453 Public Funding of Political Campaigns

Appendix V: Survey of Candidates for Office in the Arizona 2000 Elections
Page 109 GAO- 03- 453 Public Funding of Political Campaigns

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

Appendix V: Survey of Candidates for Office in the Arizona 2000 Elections
Page 110 GAO- 03- 453 Public Funding of Political Campaigns

Appendix V: Survey of Candidates for Office in the Arizona 2000 Elections
Page 111 GAO- 03- 453 Public Funding of Political Campaigns

Appendix V: Survey of Candidates for Office in the Arizona 2000 Elections
Page 112 GAO- 03- 453 Public Funding of Political Campaigns

Appendix V: Survey of Candidates for Office in the Arizona 2000 Elections
Page 113 GAO- 03- 453 Public Funding of Political Campaigns

Appendix V: Survey of Candidates for Office in the Arizona 2000 Elections
Page 114 GAO- 03- 453 Public Funding of Political Campaigns

Appendix V: Survey of Candidates for Office in the Arizona 2000 Elections
Page 115 GAO- 03- 453 Public Funding of Political Campaigns

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

Page 120 GAO- 03- 453 Public Funding of Political Campaigns

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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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
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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

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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

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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
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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

Page 132 GAO- 03- 453 Public Funding of Political Campaigns

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

Page 133 GAO- 03- 453 Public Funding of Political Campaigns

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

Page 134 GAO- 03- 453 Public Funding of Political Campaigns

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

Page 135 GAO- 03- 453 Public Funding of Political Campaigns

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

Page 136 GAO- 03- 453 Public Funding of Political Campaigns

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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