The Campaign Disclosure Law category has been the states’ best area of performance in each of the five Grading State Disclosure assessments. Just five states failed the law assessment in 2008, down from twelve in 2003. Forty-five states passed the law assessment in 2008, including Utah, which earned its first passing law grade this year. Seven states earned grades in the A range in 2008, and 16 Bs, 17 Cs, five Ds, and five Fs round out the law category grades.

Three states made changes to their campaign laws in 2007 that had a small impact on their grades or ranks in the 2008 assessment, which studied law changes made as of December 31, 2007. Utah improved from an F to a D- and West Virginia moved from a C to a C+ with new laws to improve disclosure. South Dakota, which passed legislation in 2007 to require independent expenditure disclosure and strengthen reporting and enforcement provisions, moved up in the law rankings but failed to earn a passing grade. Additionally, a handful of states’ grades in this category were revised after Project researchers re-evaluated disclosure law findings previously reported.

States with the strongest disclosure laws, in rank order from one to ten, are: California; Oregon; Washington; Virginia; Colorado, Hawaii and Missouri (tied for 5th); Georgia and New Jersey (tied for 8th); and Montana.

States with the weakest disclosure laws, in rank order from 41 to 50, and all earning Ds or Fs, are: Delaware; Kansas; New Mexico; Maryland and Utah (tied for 44th); South Dakota; Nevada; Wyoming; Alabama; and North Dakota.

Significant 2008 findings:

• 50 states require campaign contributions to be disclosed;
• 31 states require a contributor’s occupation and employer to be disclosed;
• 4 states require a contributor’s occupation, but not employer, to be disclosed;
• 1 state (Rhode Island) requires a contributor’s employer, but not occupation, to be disclosed;
• 14 states do not require disclosure of either occupation or employer;
• 49 states require campaign expenditures to be disclosed (North Dakota does not);
• 24 states require expenditures made by subvendors, such as credit card companies to be reported;
• 44 states require independent expenditures to be reported;
• 27 states require timely reporting of last-minute independent expenditures;
• 36 states require timely reporting of last-minute contributions;
• 33 states require either reviews of disclosure reports or field audits of campaign records; and
• 9 states require both reviews and field audits of campaign records.

Significant changes since 2007:

• 1 state added independent expenditure reporting requirements (South Dakota);
• 1 state added civil penalties for late contribution reporting (South Dakota);
• 1 state added loan reporting requirements (South Dakota);
• 1 state added a non-election year campaign finance disclosure filing (Utah);
• 1 state added subvendor reporting requirements (West Virginia); and
• 1 state removed the requirement to disclose a contributor’s employer information (South Dakota).

The Grading State Disclosure criteria evaluates states in three major areas of their disclosure laws: the amount of detail included in candidate campaign finance reports; the timelines for the report filing schedule; and the enforcement provisions in place to ensure compliance with the law.

Contributor Information

All 50 states require campaigns to disclose the names of their contributors at varying contribution thresholds, often with additional details disclosed for larger contributions. Thirty-two states require campaigns to disclose their contributors’ employers, and all but one of these states (Rhode Island) also require the disclosure of their contributors’ occupations. Four states (Florida, Indiana, Kansas, and New Mexico) require the disclosure of occupation but not employer data, though Kansas passed legislation in 2008 requiring that a contributor’s industry also be reported. Fourteen states do not require the disclosure of either occupation or employer data. South Dakota is among these states and is also the only state that does not require campaigns to report the date a contribution is received.

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The study also assesses whether the states require campaigns to report the cumulative amount donated by a contributor over the course of a year or an election cycle. Such cumulative data makes it easier for the public to identify the scope of a donor’s contributions to a specific candidate. Currently, 36 states require campaigns to report a contributor’s cumulative donations and 14 states do not.

In-Kind Contributions and Loans

All 50 states require campaigns to report in-kind (non-monetary goods or services) contributions. Loan disclosure is also common in the states, with 49 states requiring some amount of loan details to be reported (North Dakota does not). Of the states that require loan reporting, only South Dakota does not require disclosure of the date the loan was received. Just 16 states require the interest rate of a loan to a candidate to be disclosed, and 17 require the repayment schedule to be reported. Thirty-five states require candidates to disclose the guarantor of their loans.

Expenditures

Forty-nine states require that candidates disclose how they spend campaign funds. Only North Dakota’s law does not require campaign expenditure disclosure. Of the 49 states that require disclosure of campaign expenditures, Oklahoma and South Dakota do not require the name or identity of the recipient to be reported, Mississippi does not require the purpose for a campaign expense to be reported, and only California and South Dakota do not require the date of expenditures to be disclosed. Forty-three states require candidates to report accrued campaign debts and obligations. Itemized subvendor expenses allow the public to view the actual expenses made by campaigns, rather than the name of a credit card company, or a consultant hired to make purchases (media, polling, etc.) on behalf of the campaign. Itemization of subvendor expenses is mandatory in 24 states, including West Virginia, which added this provision in 2007.

Independent Expenditures

Independent expenditures can be a major source of spending in state elections. For example, a 2008 study by California’s Fair Political Practices Commission found that independent groups have spent $100 million since 2001, when the state’s campaign finance limits took effect. Such expenditures are made by individuals, corporations, unions, and others operating independently from candidates, sometimes in order to evade campaign contribution limits.

With legislation passed by South Dakota in 2007, 44 states now mandate the disclosure of independent expenditures, 38 of which require reports to specify which candidate is the subject of the expenditure. Independent expenditures made at the last minute are not as widely reported, with just 27 states requiring such disclosure. Alabama, Indiana, Maryland, New Mexico, North Dakota, and Wyoming do not require independent expenditure reporting.

Number of Reports Filed by Candidates

All states set reporting periods within which campaigns must account for their finances. This study assesses state requirements for pre-election reports, last-minute contribution reports, and non-election year reports. In election years, twelve states require one pre-election report, 21 states require two such reports, and 17 require three or more reports before an election. (Oregon is included among these 17 states as candidates file reports on an ongoing basis.) Pre-election reports are typically filed within a few weeks of Election Day, leaving the states to set additional requirements for contributions that are received by campaigns in the closing days of a campaign. Currently, 36 states require pre-election disclosure of last-minute contributions, while 14 states’ laws do not, thus depriving the public of knowing who a candidate’s last minute donors are until after the election.

In non-election years, 27 states require two or more disclosure reports to be filed. Twenty-three states require one campaign disclosure report to be filed, including Utah, which added this requirement in 2007.

Auditing and Enforcement

Accepting campaign finance reports and ensuring the accurate, timely filing of those reports is the role of state disclosure agencies. All 50 states have some form of penalty (civil, criminal, or both) triggered by a violation of campaign disclosure requirements. However, the ability to identify campaign finance violations varies widely from state to state. To ensure the greatest level of compliance, mandatory reviews of reports filed at the disclosure agency would be followed by field audits of campaigns’ records, though just nine states require such a dual program (California, Florida, Idaho, Kentucky, Louisiana, Minnesota, Nebraska, Oregon, and Tennessee). In total, 30 states require desk reviews and twelve require field audits, while 17 states do not require either.