Oregon Gov. Tina Kotek, center, speaks with Melanie Wagner, left, Estacada city manager, and John van Staveren, president of Pacific Habitat Services, at the Estacada Public Library during her tour of Clackamas County Dec. 7, 2023.

SALEM — Gov. Tina Kotek says campaign finance limits will not come up this legislative session, so voters will almost certainly decide the issue through a ballot measure in November.

“I just feel like we’re looking at the ballot at this point,” Kotek told The Oregonian/OregonLive Editorial Board last week.

Oregon voters will likely face two similar-looking measures, each of which would limit how much individuals and groups can donate to candidates. However, one of the proposed measures, backed by labor unions, contains several loopholes that would allow unions to continue pouring millions into Oregon campaigns.

Oregon good government groups have long advocated restrictions on money cascading into state and local campaigns. In the most recent governor’s race, supporters of the top three candidates gave them more than $70 million.

Oregon is one of only five states that does not limit how much money candidates can accept from individuals, political groups, corporations, unions or any other entities.

Oregonians have shown they are hungry for such limits, however. In November 2020, 78% of voters supported a statewide measure to allow campaign finance limits.

Earlier that year, the Oregon Supreme Court reversed its long-standing position that campaign contribution limits violate the state constitution’s free speech guarantees and upheld the constitutionality of Multnomah County’s voter-approved $500 per person contribution cap.

That ruling eventually led the labor coalition and a good government alliance, Honest Elections, to line up behind competing proposals they hope to get on the ballot this fall.

Neither proposed measure has yet secured the 120,413 valid signatures required to get it there. But both sides have big money lined up behind their drives: Honest Elections received nearly $200,000 worth of paid signature-gathering from a group that does not disclose its donors and says it champions environmental causes and government transparency. And labor unions and their allies, including the Oregon Education Association and Service Employees International Union Local 503, have kicked in $400,000 to promote their competing proposal.

Attorneys who organized Honest Elections said Kotek and the Legislature have been slow to act in the wake of the state Supreme Court decision legalizing campaign contribution limits and voters’ strong endorsement of them. When running for governor in 2022, Kotek promised to make such limits a priority. But lawmakers failed in 2023 to approve bills, including one introduced by Kotek, that would have imposed campaign funding restrictions.

“They just didn’t want to do it,” said Dan Meek, a leader of Honest Elections. “It’s the same reason it won’t happen in February either. (It’s the) same reason that the Oregon Legislature has not adopted contribution limits in its entire history. … They like the system the way it is now.”

In an email, Kotek spokesperson Elisabeth Shepard said the six-week walkout by Senate Republicans was responsible for the failure of the 2023 campaign finance bills. She said the governor “strongly maintains that campaign finance reform is needed in Oregon and was disappointed the Legislature was unable to move a policy forward last year.”

Initiative Petition 9

In July 2022, Honest Elections filed Initiative Petition 9, which would limit contributions from individuals to statewide campaigns to $2,000 and contributions from political parties to $50,000, among other restrictions based on the office scope and type of donor.

If voters approve it in November, Oregon would have some of the most stringent campaign finance laws in the country, said Jason Kafoury, a chief petitioner for the proposal. It is backed by other nonpartisan groups including the League of Women Voter of Oregon and Common Cause Oregon.

“I think IP 9, especially on the transparency stuff, will be the best model bill of any state in the country,” Kafoury said. Its disclosure requirements mean any group that spends more than $10,000 to support or oppose a candidate would have to reveal its main sources of funds and list its four biggest donors in advertisements.

But champions of the labor-union backed proposal say the Honest Election plan is too stringent and would diminish the power of the working class voters whom unions represent.

Union-backed proposal

A coalition of labor unions and their allies filed a competing ballot initiative that would introduce similar campaign finance restrictions – but with some major differences. Those could keep intact the political power of unions in Oregon and potentially allow other interest groups to continue giving large donations as well.

Oregon political candidates have long benefited from the financial support of the state’s largest unions as well as business groups, companies and wealthy individuals. Apart from the Democratic Governors Association, Kotek’s top donor in the 2022 election was SEIU, which gave her more than $3.1 million.

“Unions have become accustomed to a world where they can make unlimited donations and that gives them a lot of political power,” Kafoury said. “It’s hard for people that have gone from a regime of no rules to then accept change.”

The coalition of pro-labor petitioners, including Oregon AFSCME and farmworker union Pineros y Campesinos Unidos del Noroeste, filed Initiative Petition 42 last year. That filing copies much of the language and restrictions contained in Initiative Petition 9, with some exceptions that Meek characterized as “gigantic loopholes that anyone can drive a truck through.”

Advocates for the union’s measure deny their proposal contains loopholes. April Alvarez, field director for the farmworkers union and a chief petitioner of Initiative Proposal 42, said in an email, “We believe that Oregonians want more transparency and a level playing field above all else, and they want regular people to be able to meaningfully participate in our democracy, which is what IP 42 … will do.”

Honest Election’s proposal would prohibit committees made up of many small donors, such as a labor union, from giving more than $20,000 to a statewide candidate and more than $5,000 to candidates for local office. Those limits would apply first to the primary election cycle, then be imposed again for the general election. Small donor committees would be restricted to accepting no more than $250 from each of their donors per year.

The labor coalition’s proposed measure, titled Transparent Elections for Grassroots Engagement, would allow a small donor committee to contribute much more – up to $50 from each of its donors to any candidate per election cycle. That would allow a union with 10,000 contributing members to donate $500,000 to a candidate in both the primary and general election and a very large union, such as the 40,000-member teachers union, to give $4 million to a candidate over the primary and general election cycles.

“It’s important to note that small donor committees aren’t just for unions,” Alvarez said. “They are for all regular people to be able to voluntarily come together to pool contributions and make contributions to their candidates of choice.”

Neither proposed measure would limit contributions to campaigns for or against ballot measures.

Both proposed ballot measures would more strictly limit contributions to candidates from membership organizations, which they define as tax-exempt social welfare organizations or labor organizations with members who pay dues or donate money. Examples of such groups include the League of Conservation Voters and Oregon Right to Life.

Initiative Petition 9 would allow membership organizations to contribute up to $10,000 to any local or statewide candidate plus $10,000 worth of in-kind services such as door-knocking, phone banking and child care, excluding consulting, for each election cycle. Organizations would be banned from providing free consulting.

Initiative Petition 42, by contrast, would allow membership organizations to contribute up to $30,000 plus 36 months of paid work by any kind of campaign worker to any statewide candidate per election cycle. With those loose limits, a membership organization could in theory hire six full-time campaign consultants for a year, which could be worth $900,000, Meek said.

“Their membership organization provision is a gigantic loophole that makes their contribution limits entirely imaginary,” Meek said. “Anyone who wants to spend a lot of money will take two seconds to form a membership organization.”

The labor coalition’s proposed measure would override any local campaign contribution limits and disclosure requirements, including those approved by Multnomah County and Portland voters in 2016 and 2018. For example, the proposed measure would overrule a Multnomah County law that requires political ads to list their main sources of funding.

Alvarez, from the farmworkers group, said that is a plus because it would create consistency. “Having one set of rules across jurisdictions will dramatically simplify the political process and make it easier for voters to understand how to participate in our elections and see who is funding candidates,” she said.

Union arguments

Union representatives told The Oregonian/OregonLive that Initiative Petition 9 would take power away from working class voters by restricting support from unions.

“We believe we are leveling the playing field for everyday Oregonians and your everyday voter,” said Michele Ruffin, executive director of Our Oregon, a union-funded political group.

Ruffin said allowing voters to donate through member organizations gives them freedom to “exercise their voice in the political process. That is different than dropping a million dollar check to a candidate.”

Given Oregon’s permissive campaign contribution rules, more than 20 entities and individuals have dropped $1 million or more at a time into Oregon political campaigns since 2007, when electronic record keeping began. Notably, Nike co-founder Phil Knight has spent $1 million or more to support a candidate or cause seven times. Right behind him, however, is the Oregon teachers union, which has done so six times and been bolstered by its national affiliate, which did so three times.

In their race to limit those mammoth cash infusions into Oregon campaigns, the groups driving the competing proposals have received their own substantial financial backing.

Campaign filings show that Honest Elections has received roughly $188,000 worth of in-kind contributions from the Oregon Giving Back Fund, a nonprofit headed by Meek that has more than $1 million in assets and whose contributors are not publicly disclosed. Its lone donor, Meek said, was Harry Lonsdale, a millionaire entrepreneur who lived in Bend for decades before his death in 2014.

The coalition backing the competing ballot proposal raised $470,000 in 2023, mostly from the state’s biggest public employee unions. The group reported contributions of $200,000 from the Oregon Education Association, $100,000 from Oregon AFSCME and $150,000 from a political action committee chiefly funded by the Democratic Governors Association, SEIU and Kotek’s campaign fund.

Alvarez said the union-backed ballot initiative would ensure that “communities who have never had a seat at the table, such as BIPOC-led organizations, will for the first time be able to come together through the creation of small donor committees that can accept up to $250 dollars in donations to contribute to candidates.”

Meek pointed out that Initiative Petition 9 also allows for small donor committee contributions but sets much lower limits.

In the wake of the U.S. Supreme Court’s 2010 Citizens United decision, federal campaign finance laws do not restrict spending by independent, often secretive groups that support or oppose candidates but do not coordinate with a candidate’s campaign. Alvarez said Honest Election’s strict proposed measure would make “Oregon’s elections more like federal elections that are powered by dark money groups spending exorbitant amounts of money in independent expenditures.”

Meek said that isn’t true, because his group’s proposal would require any person or group making independent expenditures to disclose their top sources of funding in all ads. The labor coalition’s proposal does not contain any requirements for organizations to disclose their funding sources, he noted.

If both measures qualify for the ballot, voters will have the final say. If voters pass both, the one that gets more votes will take effect.

Kafoury said the labor-backed measure would be a step forward for Oregon, even though he insists his group’s is superior.

“Passing their measure would be a huge step forward from our current regime of no limits,” Kafoury said. “But … in terms of actually stopping big money from dominating our elections, … I think our measure is significantly better.”