Jun. 24, 2002
Phipps Writes Another Page in Campaign Finance Failure
By J. Barlow Herget
RALEIGH - The dance and dazzle of the State Fair almost equal the exciting recent political show here featuring State Agriculture Commissioner Meg Scott Phipps.
Commissioner Phipps has received her share of condemnation, and I don’t intend to add to it. But as one who has run for and held elective office, I found her story a familiar chapter in the running immorality play of modern campaigning.
Money, money, money. It is the constant theme running through today’s increasingly expensive elections.
The decline of newspaper and especially television news coverage of politics is a challenge for candidates, one that forces them toward money, money, money.
Additionally, there is the growing credibility of campaign reporting and regulations. Bungle or ignore these rules and you will pay, one way or another. The State Board of Elections’ hearings into Phipps’ campaign underscores that reporting rules and contribution regulations are serious parts of today’s campaigns.
With Phipps, the lesson started with her choice of office. If you run for a North Carolina Council of State position, you must accept that you will become the political equivalent of third understudy to Julia Roberts. Council of State races attract little news coverage and dwindling public interest.
Media neglect does not mean insignificant campaign costs. Indeed, because you draw minimal newspaper space and television news time, you must buy advertising to tell the 8 million people now in our state who you are and what you want to do.
For Agriculture Commissioner, you aren’t going to spend $11 million, which is what Gov. Mike Easley spent in his 2000 campaign. But you will spend hundreds of thousands of dollars. Phipps actually spent about $1 million for her "downticket" race, according campaign records, $500,000 of which came in the form of a personal loan.
As an illustration of escalating campaign costs, her father, former Gov. Bob Scott, spent only $844,328 (in today’s dollars), to win the 1968 governor’s race, according to Thad Beyle, a professor of political science at UNC-CH.
Unless you are personally wealthy and are willing to spend your own money (or your name is Jim Graham), you must depend on others to finance your campaign. Which brings you to the unseemly challenge facing all candidates in low profile contests.
Typically, you raise most of your money from a narrow list of interests. A computer salesman, for instance, isn’t likely to be very concerned about who is running for Agriculture Commissioner or State Auditor.
The people who are interested in the campaigns for Agriculture Commissioner, Secretary of State, Insurance Commissioner, appellate judgeships, etc., mostly are people affected by those offices.
(The most worrisome recent example of such campaign financing is the practice of lawyers bankrolling judicial campaigns. It’s like a baseball player paying the umpire’s salary, and the public doesn’t like it. The N.C. Center for Voter Education reported in a May survey that 84 percent of likely voters are concerned about how judges raise money to finance their elections.)
The Agriculture Commissioner operates and oversees the NC State Fair. The event brings in millions of dollars, and the Commissioner selects the private company that operates all the rides and shows. So, it is not surprising that some of the most generous contributors in the campaigns for Agriculture Commissioner are show operators.
Phipps reported $243,000 in out-of-state contributions from such vendors. And it was one of these vendors, Amusements of America of New Jersey, that made a $75,000 "backdoor" contribution that has raised the ugliest questions about Phipps’ campaign. The same New Jersey company was later selected to operate the State Fair.
Ferrel Guillory, director of the Program on Southern Politics, Media and Public Life at UNC-CH, observes: "You either have to raise money or you lose. There are few sources for that kind of money except for people who have an interest in the Agriculture Department. She [Phipps] got caught in this vice. It’s a cautionary tale for candidates and the North Carolina electorate."
It’s also another fresh argument for campaign finance reform, in the form of public financing or free air time or some combination of the two.
The final chapter in Phipps’ story is not written. She must pay the state $107,000 in illegal donations and $23,000 for the Board of Elections’ investigation. Criminal charges may follow. And her campaign’s ignorance of the rules has crushed her credibility. It has been an expensive lesson.
Barlow Herget is a businessmen and former member of the Raleigh City Council.
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