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July 28, 2006 -- Reform Groups Send Letter to Hill on Leadership PAC Proposal July 28, 2006
Dear Representative,
Published reports indicate that Republican congressional leaders are considering adding a loophole-opening leadership PAC provision to the lobbying legislation already passed by the House and Senate, if and when a conference is held on these bills.
Our organizations strongly oppose the leadership PAC provision and urge you to take all possible steps to ensure that any effort to enact this provision is defeated.
The groups include the Campaign Legal Center, Common Cause, Democracy 21, the League of Women Voters, Public Citizen and U.S. PIRG.
A Washington Post editorial (July 28, 2006) stated about this potential effort:
In the latest brazen twist, lawmakers are considering using the sham lobbying reform bill as a vehicle to open up a loophole in campaign finance laws that would tilt the playing field even more in favor of incumbents . . . .
It's a terrible idea. Doing it under the guise of lobbying reform would be the ultimate in congressional chutzpah.
This leadership PAC provision was introduced and then abandoned in the Senate last year, and has not been passed, or voted on, by the House or Senate in this Congress.
Yet, Republican leaders are now considering the use of an undemocratic, backdoor, abusive process, similar to the undemocratic, backdoor, abusive process often used to pass earmarks, to enact this provision that would eviscerate the limits on contributions to Members and open a massive loophole in the campaign finance laws.
At a time when the country is facing the worst congressional corruption scandals in decades, the last thing Congress should be doing is increasing by three-fold in the House, and eight-fold in the Senate, the maximum amount that a congressional incumbent can receive from an individual to support the incumbent's campaign.
That, however, in essence is what the leadership PAC provision would do.
Under existing laws, m embers of Congress are required to have a separate campaign committee to pay for their re-election activities and cannot legally spend any of their leadership PAC funds on their own campaigns.
This rule ensures that the limits on contributions to a Member's campaign cannot be circumvented by a donor giving the maximum amount to a Member's campaign committee and also giving additional contributions to the Member's leadership PAC, which are used to support the Member's campaign.
The loophole-opening leadership PAC provision being considered as an addition to the lobbying bill, however, would repeal the current $15,000 annual limit on the amount a leadership PAC can give to a national party committee, and thus allow leadership PACs to give an unlimited amount to national party committees. The party committees could then turn around and spend these leadership PAC funds on the Members' campaigns, either as coordinated or independent expenditures.
This would allow a Member's leadership PAC funds, in essence, to be laundered through a party committee and into the Member's campaign. The effect in practice would be that a Member would have two separate committees to raise funds for their election - a campaign committee and a leadership PAC - with two separate contribution limits. Donors could give the maximum contribution to both committees and all of the funds would be available to pay for the Member's campaign.
An individual, for example, could give the maximum allowable contribution to a Member's campaign committee ($4,200) and separately give the maximum allowable contribution to a Member's leadership PAC ($10,000 during a two-year House election cycle or $30,000 during a six-year Senate election cycle).
The Member would end up using both sets of contributions for the Member's campaign, thereby evading and circumventing the contribution limits. Instead of an individual donor being limited to contributions totaling $4,200 for a Member's campaign, the donor would be able to give a total of $14, 200 for a House Member's campaign and $34,200 for a Senator's campaign. Meanwhile, the Member's challenger would be operating with one contribution limit ($4,200) for the challenger's campaign.
The leadership PAC provision raised and abandoned in the Senate last year was explicitly drafted to be available only for members of Congress, thereby providing an enormous advantage for congressional incumbents over their challengers.
Even if the provision isn't written this way, however, as a practical matter it is congressional incumbents who will benefit from this massive loophole, and not their challengers. It is congressional incumbents who have leadership PACs and who also have the special interest donors to fund them.
Senators John McCain (R-AZ) and Russell Feingold (D-WI) opposed this loophole-opening leadership PAC provision when it was raised in the Senate last year. In a letter to Senators at that time, Senators McCain and Feingold stated:
This major change in campaign law would seriously undermine the effectiveness of longstanding contribution limits which serve as the foundation of the nation's campaign finance laws. These campaign finance laws and contribution limits have been enacted by Congress to protect citizens against corruption and the appearance of corruption. Let's be very clear on another point—this provision benefits no one but incumbent Members of Congress by allowing them to circumvent those same contribution limits by which their opponents will be forced to abide.
A Washington Post editorial last year ( September 15, 2005 ) also opposed the provision stating:
This ill-advised provision would increase the influence of deep-pocketed donors, make incumbents even less vulnerable and set a dangerous precedent for making fundamental changes in campaign finance law.
We strongly urge you to take all steps necessary to ensure that this destructive, loophole-opening leadership PAC provision is not enacted.
Campaign Legal Center
Common Cause
Democracy 21
League of Women Voters
Public Citizen
U.S. PIRG |
