Sep 9, 2005 -- Legal Center Sends Letter to the Senate on Leadership PAC "Rider"

Enclosed for your information is a letter sent by the Campaign Legal Center to members of the U.S. Senate urging them to oppose a appropriations "rider" that would open a serious loophole in contribution limits that serve as the foundation of campaign finance law.

The measure, which would allow so-called "leadership PACs" to make unlimited transfers to the national political party committees, was attached by the Senate Appropriations Committee to the Transportation Appropriations bill for Fiscal Year 2006. The bill is expected to be brought to the floor for a vote as early as today.

Senators John McCain (R-AZ) and Russ Feingold (D-WI) plan to offer an amendment to strip the amendment from the bill.

According to the letter, "The leadership PAC rider is not only bad policy in its own right, but if allowed to remain in the appropriations bill, will set a dangerous precedent. The rider would allow donors to the leadership PAC to evade the contribution limits on what they can give to a member's campaign committee to be spent on the member's campaign. With the ability to transfer unlimited amounts from a leadership PAC to party committees, a Senator could then transfer the $30,000 ($5,000 over six years) from his leadership PAC to a party committee, which in turn could spend those funds on the Senator's own campaign. Thus, a $4,200 limit per individual becomes a $34,200 limit, in direct circumvention and evasion of the current contribution limits."


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September 9, 2005

Washington, DC 20510

Dear Senator:

The Campaign Legal Center strongly urges you to support efforts to strip out the leadership PAC rider when the FY 2006 appropriations funding measure for Transportation, Treasury, the Judiciary, and Housing and Urban Development is brought to the Senate floor. The rider would allow leadership PACs to transfer an unlimited amount of funds to the national party committees. This measure would seriously undermine the contribution limits that now form the very foundation of campaign finance rules.

With a leadership PAC, a federal candidate can raise "hard money" in addition to the money he or she can raise for their own campaign accounts. Currently, the hard money limits are $4,200 per candidate, per cycle for individual contributors and $10,000 per cycle for PACs. (The "soft money" banned by BCRA referred to the contributions from individuals in excess of the individual limit and contributions from the treasury funds of corporations and unions which have been banned in federal elections for more than 50 years. PAC money is made up of funds voluntarily given to a PAC by corporate employees or union members.) Currently, leadership PACs are subject to the same transfer limitations as all other PACs: a $15,000 a year maximum.

Leadership PAC funds may not be spent directly by a candidate's campaign committee. Such a restriction ensures that the leadership PAC funds are not used to circumvent the federal limits on contributions individuals can make to federal candidates. Candidate campaign committees may make unlimited transfers to the national parties, however. The rider would change the law so that leadership PACs would be treated like candidate campaign committees, and could therefore make unlimited transfers.

The leadership PAC rider is not only bad policy in its own right, but if allowed to remain in the appropriations bill, will set a dangerous precedent. The rider would allow donors to the leadership PAC to evade the contribution limits on what they can give to a member's campaign committee to be spent on the member's campaign. With the ability to transfer unlimited amounts from a leadership PAC to party committees, a Senator could then transfer the $30,000 ($5,000 over six years) from his leadership PAC to a party committee, which in turn could spend those funds on the Senator's own campaign.

Thus, a $4,200 limit per individual becomes a $34,200 limit, in direct circumvention and evasion of the current contribution limits. And this effort to undermine current contribution limits could lead to further weakening efforts during conference. Furthermore, this rider opens the way for more mischief in conference, particularly given that there is a bill awaiting floor action in the House and endorsed by the House leadership which seeks to eliminate the current aggregate contribution limits to federal party committees and candidates for one election cycle contained in the Federal Election Campaign Act (FECA).

The Subcommittee's ranking member, Senator Patty Murray (D-WA), has expressed concern about the rider as have Senators John McCain (R-AZ) and Russ Feingold (D-WI). It is expected that there will be an effort during Senate floor consideration to strip this provision from the bill. Again, we strongly urge you to support removing the Leadership PAC provisions from the FY '06 Transportation Appropriations measure.

Sincerely,

Trevor Potter

Meredith McGehee