SIOUX FALLS, S.D. (CN) — Billionaire Charles Koch has targeted for defeat a voter initiative in South Dakota that would allow public funding of elections and provide more information about big political donors.
Koch's group, Americans for Prosperity, seeks to defeat Initiated Measure 22, the South Dakota Government Accountability and Anti-Corruption Act, which will be on the ballot in November.
One feature of the initiative is the allocation of two "democracy credits," each worth $50, which voters can apply to the political campaign of their choice.
The initiative also limits donations from single donors, including political committees, requires a name and address with each donation, and forbids certain expenses, such as vacations and event admissions, to be recorded as "campaign expenditures."
The Defeat 22 coalition, which includes conservative family values groups, South Dakota retailers and some Republicans, and the South Dakota branch of Americans for Prosperity, decries the initiative as an attempt to "force" taxpayers to fund political campaigns.
"Measure 22 will allow big spending politicians to take millions of our taxpayer dollars and send it to political campaigns," the group warns on its website. It says the initiative will force voters to "fund political TV ads and intrusive automated calls," divert tax dollars "from funding roads, bridges, and schools," and subject donors to "harassment for making voluntary donations to charitable causes."
Proponents of the initiative say it will curtail government corruption in South Dakota, which the Center for Public Integrity in 2011 called the most corrupt state in the nation except for Georgia.
Since then, South Dakota has come under fire for scandals in its now-defunct EB-5 immigrant investor program, in 2015, and its mismanagement of federal education funds in its GEAR-UP program, this year.
"With the EB-5 scandal, and GEAR-UP, I think people are just embarrassed," Jeff Hanson, who is campaigning for the measure's adoption, said in an interview. "And you know, they've seen what not having oversight does, so I think as more about those stories comes to light over the next couple months, it will bring this issue to the forefront."
While the initiative would provide taxpayer funding of political campaigns, voters would decide where the money goes.
"We are not asking the state of South Dakota to directly support a campaign or to match funds, but rather we're asking the state to empower voters by giving them these certificates," Don Frankenfeld, a sponsor of the proposal, said in an interview last fall. "If it does what we hope it will do, it will lead to much broader political participation and limit the influence of special interest political action committees."
Frankenfeld, a Republican, is an economist and a former state senator. Rick Weiland, a Democratic U.S. Senate candidate, co-sponsored the proposal and hopes to introduce a similar bill in Washington if he is elected.
"Special-interest lobbyists oppose IM-22 because they benefit from a rigged political system and don't want it changed," the Yes 22 webpage says. "IM-22 puts voters in control. You control $100 of your own tax money: Use it to support candidates who best represent your beliefs and values or tell government not to spend it. It's that simple, and it's your choice."
Hanson said: "I think the whole thing [the measure's opponents] are after is, 'Wait a minute, you're upsetting our apple cart.' But when you have a third of your races throughout the state that don't have an opponent running, you have to take a look at that. We're obviously not surprised that the people who have been funding and managing and running the campaigns in the state are really nervous about IM-22, and I don't blame them. South Dakota deserves better."
The fund would have a limit of $12 million of taxpayer money that can be spent on political campaigns. Chairman of the Defeat22.com Ballot Committee Ben Lee said that in South Dakota politics, that's "big money."
"Twelve million is a lot of money, more than is typically spent in South Dakota election campaigns," Lee said in an interview. "This isn't going to help the little guy whose tax dollars used to come back to helping him and his community. Instead, there's going to be a lot of money in politics, and it's just going to be coming from tax dollars."
Lee said $12 million is more than the state can afford.
"Everyone is talking about how to pay teachers more," he said.
Until recently, South Dakota teachers were the lowest-paid in the nation.
"There is no extra money in the budget," Lee said. "It's as lean as it's going to get. So now we're talking about carving out $12 million for political campaigns, and we can't find money for something as noble as teacher pay. Someone is going to lose $12 million so that Measure 22 can take that money and funnel it to politicians' campaigns."
Last year, Americans for Prosperity blocked a bill in Georgia that would require advocacy groups to disclose the identities of their donors. Koch also supported a bill in the U.S. Senate that would bar the IRS from collecting the names of donors to most tax-exempt groups. Congress approved that bill in June.
Americans for Prosperity also won a legal battle in a California Federal Court this year to keep its own donors secret.
A similar "democracy voucher" program is already in place in Seattle, and is on the November ballot for statewide implementation in Washington.
Americans for Prosperity has not geared up to defeat Washington's Initiative 1464, which also includes transparency and anti-corruption measures.
Lee speculated that the increased attention on South Dakota is because it is being used as a "testing ground" for national groups, such as Represent Us out of Massachusetts, who want to push publicly funded elections.
"It is easy to get something on the ballot in South Dakota because of the smaller population and the lower number of signatures needed," Lee said. "They want to test it here, and if it wins they'll take their show on the road and try it in other states. They see S.D. as a low barrier to entry.
"They think ethics and low corruption is going to play really well," Lee added. "We think this is a smokescreen to get at taxpayer funded elections."
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