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Democracy 21 Press Release: How a Member Could Raise $1 Million Contributions under Pence-Wynn How a Member of Congress Could Raise and Spend $1 Million Contributions under the Pence-Wynn Bill
The House of Representatives is expected to consider campaign finance legislation in July that was introduced by Representatives Mike Pence (R-IN) and Albert Wynn (D-MD) and reported out by the House Administration Committee last month.
The Pence-Wynn bill would repeal the aggregate limit of $61,400 on the total amount of money an individual can give to the committees of a political party in a two-year election cycle. It would also repeal the $76,600 limit on the amount a political party can spend in "coordination" with, and under the control of, a federal candidate.
As a result, under Pence-Wynn, a Member of Congress (or any other federal candidate) could solicit $1 million contributions from influence-seeking donors and directly control the spending of these contributions by his party on the Member's own campaign. An explanation of how this would easily be accomplished is set forth below.
The effect of the Pence-Wynn changes would be to eviscerate the existing $4,200 limit on the amount an individual can contribute to a federal candidate's campaign committee. A Member of Congress literally would be able to raise a $1 million contribution and spend it on his own campaign -- using the Member's political party as a conduit to render meaningless the $4,200 contribution limit.
A Member could do this, furthermore, with as many donors as are willing to make huge contributions -- whether $1 million, $500,000 or $100,000. While these huge contributions technically would be considered "hard money," they would nevertheless possess the same dangerous ability to corrupt federal officeholders that "soft money" contributions of the same size possessed, and because of which they were prohibited.
The Means for Accomplishing This Already Exist
The mechanics by which Members, under the Pence-Wynn bill, could solicit and control the spending of $1 million contributions already exist and can be easily adapted to accomplish this purpose. The mechanics include the use of joint fundraising committees, unlimited transfers among political party committees and party expenditures coordinated with candidates.
Here's how it would work:
Step 1. A Member, such as House Majority Leader Tom DeLay, solicits a $1 million contribution from an individual, such as a Washington lobbyist, and deposits the money in a joint fundraising account.
The joint fundraising account is authorized to receive contributions for DeLay's campaign committee and for the committees of the Republican Party, including the RNC, the NRSC, the NRCC and each of the 50 state party committees. Under existing law, "Political committees may engage in joint fundraising with other political committees" (11 CFR 102.17).
The single $1 million contribution to the joint fundraising account would consist of the sum of the contributions allowed to be made by an individual in a two-year election cycle to the various committees of the Republican Party -- once the existing $61,400 aggregate limit on party giving is repealed. (The actual total limit on the amount an individual would be able to give to a party in a two-year cycle is $1,160,200, including $20,000 to each of the 50 state parties and $53,400 each to the RNC, the NRSC and the NRCC.)
Step 2. The RNC, the NRSC and the 50 state party committees authorize their respective portions of the $1 million contribution to the DeLay joint fundraising account to be transferred to the NRCC.
Under existing law, unlimited transfers are permitted among party committees (11 CFR 110.3). As a result of the transfers by the various party committees to the NRCC, the $1 million contribution in the joint fundraising account belongs to the NRCC. The joint fundraising account transfers the $1 million to the NRCC.
Step 3. The NRCC gives Representative DeLay total control to spend the $1 million contribution on DeLay's own campaign. DeLay, working in "coordination" with the NRCC, decides how and where the $1 million should be spent to support his campaign and the NRCC simply signs the checks.
The Pence-Wynn repeal of the existing $76,600 limit on the total amount a House candidate can spend in "coordination" with the candidate's party would leave DeLay free to "coordinate," and thus to control, the spending of an unlimited amount by the NRCC on his own campaign, including the $1 million contribution.
The end result is a $1 million contribution solicited by DeLay from a Washington lobbyist and spent by DeLay on his own House campaign. The effect is to destroy the existing $4,200 limit on the amount a Washington lobbyist can contribute to DeLay's campaign committee for DeLay's campaign.
The Mechanics Are Easy to Implement
It is a simple proposition for a Member to set up a joint fundraising committee with the Member's party committees. In recent years, for example, Senators have set up joint fundraising accounts with their Senate party campaign committees. It would be easy for Members of Congress to do the same with all the various committees of the Members' party, instead of just their congressional party committees.
Similarly, it is a simple proposition for the various committees of a party to authorize contributions made to them to be transferred to a single party committee, such as the NRCC (or to the RNC or DNC for a presidential candidate). As noted earlier, such unlimited transfers among parties are permitted under existing law.
The 50 state parties already assign to their national party congressional committees the right of the state parties to spend two cents per voter in coordination with their candidates for Congress. Under existing law, "The national committee of a political party and a State committee of a political party...may assign its authority to make coordinated party expenditures...to another political party committee" (11 CFR 109.33).
It is a simple step for these state parties also to authorize the transfer of their shares of large contributions, deposited in a Member's joint fundraising account, to a national party congressional committee.
These arrangements would have to be made only once for each federal candidate. For example, a House Republican Member would establish a joint fundraising account with the various committees of the Republican Party. The various party committees would authorize their portions of the contributions made to the Member's joint fundraising account to be transferred to the NRCC. The joint fundraising account would authorize its funds to be transferred to the NRCC.
Once this system was set up, the transactions and transfers would take place automatically. The NRCC would simply keep a running total of the amount it received from a Member's joint fundraising account and allow the Member to control the spending of that money on the Member's campaign.
There is every reason to assume the state parties will cooperate with their federal candidates and national party committees in carrying out this fundraising scheme.
The state parties already cooperate in transferring their 2 cents per voter spending authority to the national party committees for expenditures to be made in "coordination" with their candidates for Congress. And the state parties would not otherwise receive the contributions raised by the federal candidates in this process, but for the understanding that the funds would be passed through to these candidates.
Thus, the state parties would not be giving up funds from their own coffers by participating in the fundraising scheme. They simply would be agreeing to serve as a conduit for huge contributions solicited by federal candidates for use in the candidates' own campaigns.
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Capital Bits & Pieces Vol. V, No. 17 | Released: Tuesday, July 12, 2005
Contact: Amanda Lewis
202-429-2008
alewis@democracy21.org |
