In a small office tucked in the southwest corner of the state Capitol, five state employees are watchdogs over thousands of elected officials, lobbyists and political campaigns.
The mission of the Oklahoma Ethics Commission has been consistent since a decisive vote of the people in 1990 authorized and established the agency: Hold elected officials accountable. Reign in the influence of money in politics. Keep elections on a level playing field.
What changed in recent years is a flood of outside money pouring into state political races and a crunch for resources at the commission. While the agency recently settled a first-of-its-kind lawsuit against an out-of-state group that improperly targeted state legislative candidates in the 2018 election cycle, its executive director said similar violations may go unchecked because of funding constraints.
Spending by politically involved nonprofits and super PACs has accelerated following the U.S. Supreme Court’s 2010 decision in Citizens United vs. Federal Election Commission, when the court ruled that corporations, nonprofits and labor unions have a First Amendment right to support or oppose political candidates and causes using independent expenditures. Though their actions are legal as long as they don’t coordinate with a candidate, so-called dark money groups have drawn scrutiny for mounting exaggerated or untruthful attacks that are often difficult to trace to a single individual or organization. Additionally, there has been evidence in recent election cycles of some out-of-state groups dodging state-level reporting and registration requirements.
More than $75 million poured into state political races during the 2022 midterm election cycle, with independent expenditures making up nearly half of those contributions. Meanwhile, the Ethics Commission has operated on a budget just short of $688,000 in fiscal year 2023, less than it received amid a state budget shortfall in FY 2018.
In a presentation before a Senate appropriations subcommittee in January, Ethics Commission Executive Director Ashley Kemp requested nearly $400,000 in additional appropriations to hire two staff members and restore funding that was cut in 2016. In her pitch to lawmakers, Kemp said the agency has evidence of out-of-state groups injecting themselves into Oklahoma elections but often lacks the money and resources to prosecute them.
“I would encourage that to be considered if we want to take an approach, take a swing at dark money or least out-of-state money coming in and how we want to regulate that,” Kemp told the committee. “The commission has the ability to do it, and we have the cases to do it, and we’re ready to do it if the Legislature is ready to assist.”
One lawmaker, Sen. Darrell Weaver, R-Moore, said he was alarmed by the presentation and the growing influence of outside groups on state elections. But Kemp’s request was left of Republican lawmakers’ $12.9 billion budget proposal for FY 2024, which included a $2.2 billion increase in general appropriations over 2023.
Kemp said the flat allocation will hamper the Ethics Commission’s ability to investigate and prosecute possible violations in the first half of the 2024 presidential election cycle. Candidate filing for state offices begins in April, with a primary election set for the third Tuesday in June. Outside groups contributed nearly $10 million to state political races in the days and weeks leading up to last year’s primary election.
The $688,000 appropriation also keeps Oklahoma far behind comparable states such as Louisiana and Connecticut, Kemp said. Both allocated more than $1.5 million to their ethics agencies last year.
“Do we have the ability to meaningfully and consistently hold people accountable? I don’t think we do,” Kemp told Oklahoma Watch. “Can we take some swings? Yes, and we will do our best with the resources we have. But if you want meaningful enforcement, course correction and disclosure, we have to have the resources to consistently enforce the rules.”
Senate Minority Leader Kay Floyd, D-Oklahoma City, questioned the Ethics Commission’s flat allocation during budget hearings in late May. In response, Senate Appropriations Chairman Roger Thompson, R-Okemah, said there may be a relevant conversation about boosting appropriations to the commission but that extra money doesn’t always help people do their jobs.
“We will make sure the Ethics Commission is funded in such a way that they can do their day-to-day duties,” Thompson said.
Floyd agreed that boosting funding isn’t a Band-Aid solution to solve issues agencies are facing. But she noted the Ethics Commission has a highly educated and skilled workforce and has gone several years without a boost in funding despite soaring inflation.
“When you’re dealing with election finance, you need to have that reporting and recording of information done to keep the government transparent and accountable,” Floyd said in an interview with Oklahoma Watch. “Especially in an election year, when you’re seeing an increase in many states of outside sources coming in to try to persuade people on in-state issues, not just elections, but state questions themselves.”
The Ethics Commission doesn’t regulate the content of political advertisements but does attempt to bring transparency by requiring groups to disclose where they are and which candidates they’re supporting or opposing.
Some groups have tried to skirt those requirements in recent election cycles. In 2018, the Washington, D.C.-based Conservative Alliance PAC spent more than $150,000 targeting certain Oklahoma candidates while failing to list its out-of-state address on campaign ads. Last month the group agreed to pay the state $45,000, with $40,000 going to the state general fund and $5,000 going to the Ethics Commission, to settle a lawsuit brought by the commission over the violations.
Kemp said there is evidence of out-of-state groups using similar tactics in last year’s election cycle, but pursuing litigation stretches the commission’s limited time and resources.
“You have people coming in and spending a million dollars, which is more than our annual appropriation by a lot,” Kemp said. “To take a campaign finance case to trial would eat up a significant portion of our budget.”
Gary Jones, who served as state auditor under Gov. Mary Fallin and chairman of the Oklahoma Republican Party from 2003 to 2010, said he’s disappointed the Legislature hasn’t done more to combat dark money spending. A successful voter-led initiative petition could give additional enforcement power and independent funding to the Ethics Commission, Jones said, but getting a question on the ballot is expensive and difficult.
In the days leading up to last June’s primary election, Jones raised concerns about Steve McQuillen, a Republican candidate for state auditor who raised just $1,300 for his campaign but drew hundreds of thousands of dollars in independent expenditures supporting his candidacy or opposing his opponent Cindy Byrd. Jones called the rise in dark money spending a threat to Oklahoma elections.
“What’s crazy now with this dark money stuff, or so-called independent expenditures, is if someone wants to funnel money into an account and run attack ads supporting their candidate they can do it,” Jones said. “Back then [in the 2000s] you had to make it look like it was from straw donors. What ended up getting people convicted and sent to prison is basically being done legally today.”
Jones’s comment, referenced improper campaign donations that former state auditor Jeff McMahan received in the 2002 and 2006 election cycles. In 2009, McMahan was sentenced to eight years and one month in federal prison for accepting illegal contributions and bribes.
Ron Sharp, a former state senator from Shawnee and longtime critic of Epic Charter Schools, was ousted in the August 2020 Republican runoff after facing a barrage of attack ads from dark money organizations. Two of the outside groups, the Oklahoma Conservative Fund LLC and Freedom and Liberty Fund LLC, did not register with the Secretary of State’s Office or Ethics Commission before sending out mailers ahead of the June primary election. Phone numbers with Oklahoma area codes listed on mailers were not operational.
Sharp, who received a $500,000 settlement from Epic in June 2022 to settle a libel and slander lawsuit brought in 2019, said the Ethics Commission would likely have been able to crack down on those groups sooner if they had more resources available.
“It seems like they [the Legislature] are almost doing this on purpose to keep their own problems from being visible and transparent,” he said. “I’m very disappointed in them. This was a problem when I was a legislator for eight years, they did not fund it and they just keep it underfunded.”
Sharp said requiring outside groups to report their donors, a mandate Arizona voters overwhelmingly approved last November, would bring more transparency to Oklahoma elections and curtail the power of super PACs and politically involved 501(c)4 non-profits. But he said it appears unlikely such a change would gain traction under the current legislature.
With its enforcement power enshrined in the state constitution, Kemp said rules aren’t the issue when it comes to the commission’s authority to regulate dark money spending. But as outside spending in elections continues to rise, she said keeping out-of-state groups in check with Oklahoma reporting standards and voters informed of who is trying to influence them will continue to be an uphill battle.
“We’re kind of at the point where if those are the changes you want and you want that level of accountability, we need the funding to do it,” Kemp said. “The citizens assigned a mission to us and we’re just trying to do what we were sent here to do.”