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December 19, 2014

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October 29, 2014

Billionaires Dominate Campaign Spending, Analysis Shows

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A small subset of elite donors are dominating midterm spending, including former New York City Mayor Michael Bloomberg. (CQ Roll Call File Photo)

This midterm’s price tag will hit $3.7 billion, according to the latest projection from the Center for Responsive Politics, with outside groups and billionaires playing a larger role than ever while small contributors dwindle in number.

Despite costing only slightly more than the previous midterms in 2010, according to a CRP analysis released Wednesday, this year’s elections will feature more outside spending; a bigger role for large donors; less candidate spending and fewer contributions from small donors. In 2010 total spending hit $3.63 billion, compared with the $3.67 billion that CRP predicts for 2014.

The increasingly dominant outside players “take an already elite group” of political donors “and distill it even further,” said CRP Executive Director Sheila Krumholz on releasing the center’s latest projections. The center calculates that only .02 percent of the nation’s estimated 310 million Americans make political contributions of $2,600 or more.

An even smaller subset of elite donors are dominating the midterms, CRP’s analysis shows, with such billionaires as environmentalist Tom Steyer and former New York City Mayor Michael Bloomberg shoveling tens of millions into unrestricted super PACs. Steyer has given $73.7 million, much of it to his Democrat-friendly environmental super PAC NextGen Climate Action, and Bloomberg has given $20 million to gun safety and other groups. Just the top 20 individual donors to outside groups have shelled out a combined $168.6 million in this cycle, CRP found.

Though Democrat-friendly donors such as Steyer and Bloomerg top this year’s billionaire contributor list, and the pro-Democrat Senate Majority PAC is the biggest-spending super PAC so far, Republicans will still spend more money than Democrats overall, CRP projects. Republican candidates, party committees and outside groups will spend $1.75 billion, while their Democratic counterparts will spend $1.64 billion. The top conservative donor to outside groups this year is Paul Singer of the Elliott Management hedge fund, who has given $9.3 million.

Republicans will also spend far more undisclosed money than Democrats, according to CRP. Among outside groups that do not disclose their donors, including politically active tax-exempt advocacy groups and trade associations, Republican-friendly organizations will outspend pro-Democratic players by $111.7 million to $29.7 million, CRP projects.

“The big difference is secrecy. Team ‘red’ prefers it,” Krumholz said.

Together, CRP projects outside groups will spend $689.3 million in this election, with $329 million of it coming from Republican-aligned organizations and $314.6 million from Democrat-focused groups. These projections, moreover, do not even include “issue” advertisements that fall completely outside the disclosure rules, which CRP estimates will add well more than $100 million to overall spending. The tens of millions spent by such conservative advocacy groups as Americans for Prosperity, underwritten by the billionaire industrialists Charles and David Koch and their allies, fall into this category.

Other highlights from the CRP projections include:

  • ŸDisclosed outside spending already totals $480 million, or 13 percent of this cycle’s total. That’s a 66 percent increase over the 2010 elections, when outside spending hit $309 million, or 8.5 percent of the total.
  • ŸWall Street continues to dominate, with financial services donors giving $100.8 million, more than any other industry. Most of the candidate money — 62 percent — goes to Republicans, with just 38 percent to Democrats and another share going to outside groups. Lawyers and and law firms are the top industry giving to Democrats.
  • In 32 races, outside groups have spent more than candidates. The North Carolina Senate contest between incumbent Democrat Kay Hagan and her GOP challenger Thom Tillis has drawn the most outside money, with $58 million spent, even more than the previous record of $52.4 million outside money in the 2012 Virginia Senate race.
  • The number of individual donors giving more than $200 in “hard money” to candidates or party committees subject to contribution limits is shrinking. In every midterm election cycle until the previous one, the pool of individual donors has grown, topping out at 817,464 in 2010. This time only 666,773 individuals have made campaign contributions, a number that is expected to increase between now and Election Day, but that still may not match the 2010 total.

“This latest research again shows further compression of the process,” concluded CRP senior fellow Bob Biersack. “More and more of the relevant participation is happening among fewer and fewer actors, both people and organizations.”

Roll Call Election Map: Race Ratings for Every Seat

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October 28, 2014

Republicans Join Attacks on Big Money | Rules of the Game

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Sullivan is calling for an end to outside spending. (Tom Williams/CQ Roll Call File Photo)

The Senate candidate warned that voters’ voices are being “drowned out” by “third-party special interest groups with unlimited spending capability,” and called on his opponent to help him bar big outside spenders from the race.

Another Democrat parroting Senate Majority Leader Harry Reid’s attacks on secret campaign spending? Actually, the Senate hopeful railing against political money was Republican Dan Sullivan of Alaska, who sought — without success — to convince incumbent Democrat Mark Begich to sign a pledge to stop the outside money flooding in.

Sullivan is one of more than half a dozen Republican congressional candidates who have made assaults on big money in politics an important campaign theme. Until now, the issue was almost exclusively a Democratic talking point.

It’s a curious twist that reflects growing voter focus on political money, which has drawn news coverage as midterm spending approaches a record $4 billion, and fresh GOP interest in populist anti-corruption messages that resonate with the tea party.

Leading the way has been none other than GOP Senate Leader Mitch McConnell, of Kentucky, who asserted that “no one in the history of American politics has ever won or lost a campaign on the subject of campaign finance reform.”

McConnell’s campaign has leveled a long list money- and ethics-related attacks against Democrat Alison Lundergan Grimes. These include her invitation to “Obama billionaire” Warren Buffett to join a campaign fundraising event via conference call; her attendance at a “luxurious fundraiser” with Democratic Senator Elizabeth Warren of Massachusetts at the home of a controversial Kentucky businessman, and her alleged “sweetheart deal” to rent a campaign bus at less than market value.

“By his actions, he is recognizing that money in politics is a powerful issue to win elections,” said David Donnelly, president of Every Voice, an advocacy group with an affiliated super PAC that promotes political money limits.

Democrats have rejected these attacks and hammered on unrestricted secret GOP spending, as they did in 2010, with a special focus this time on the billionaire industrialists Charles and David Koch. In the previous midterm, voters collectively shrugged and handed the House majority to Republicans. In this election, polls suggest voters have trouble even identifying the Koch brothers.

But Republicans are now leveling their own assaults on billionaires, special interests and lobbyists. In addition to Sullivan, Republican House candidates Mark Greenberg, who’s challenging incumbent Elizabeth Esty in Connecticut’s 5th District, and Evan Jenkins, running against Rep. Nick J. Rahall II in West Virginia’s 3rd District, have called on their Democratic opponents to sign a “people’s pledge” to discourage outside spending. Not surprisingly, given the success of Democratic super PACs in these midterms, Esty, Rahall and other Democrats presented with such pledges have largely declined.

Republicans have leveled their attacks in fundraising appeals, ads and during debates. In North Carolina, Republican Thom Tillis charged in target=”_blank”>an ad that Senate Democrat Kay Hagan missed an Armed Services Committee hearing “while ISIS grew” because “she prioritized a cocktail party to benefit her campaign.”

In Iowa’s Senate contest, Republican Joni Ernst accused Democratic Rep. Bruce Braley of “being supported by [a] California billionaire extreme environmentalist who opposes the Keystone pipeline,” a reference to billionaire environmentalist Tom Steyer and his multi-million dollar super PAC, NextGen Climate Action.

The Republican-friendly super PAC American Crossroads also attacked Braley over Steyer’s high-dollar backing. In one target=”_blank”>Crossroads ad, spiced up with images of hundred-dollar bills, a narrator intones: “Bruce Braley; he’s on the side of billionaire special interests, not Iowa workers.”

Republican House hopeful Richard Tisei charged in a recent debate that 6th district incumbent Democrat Seth Moulton has “raised more money in New York City on Wall Street than he has in the congressional district.” In New York’s 18th district, Republican Nan Hayworth, who is seeking to recapture her House seat from Democrat Sean Patrick Maloney, charged that biomass executive Jim Taylor has “lined the congressman’s pockets” with at least $100,000 in bundled contributions.

Even GOP Sen. Ted Cruz, the conservative Texan who’s railed against campaign finance limits almost as vigorously as McConnell, recently proposed in his list of GOP priorities for 2015 “a lifetime ban on members of Congress becoming lobbyists” as one way to “stop the Washington corruption.”

Similarly, Republican National Committee Chairman Reince Priebus suggested in this month in his “Principles for American Renewal” that “bureaucrats, lobbyists and out-of-touch politicians need to get out of the way, and give American workers and businesses the freedom to create jobs.”

“They know that the role of money in politics is part and parcel of why Washington isn’t working,” said Donnelly, of the GOP messaging. Donnelly’s Every Voice super PAC, and another even better-funded super PAC dubbed MayDay PAC, are spending their own unrestricted money to back candidates that support campaign restrictions, helping move the issue front and center.

It’s an open question whether attacks on big money will resonate with voters in the end. The only Republican so far to make the issue central to his campaign — Senate hopeful Jim Rubens, in New Hampshire — lost his primary bid to former Massachusetts Sen. Scott Brown, despite backing from MayDay PAC, which remains more than $1 million shy of its $12 million fundraising goal.

With few exceptions, Republicans remain as staunchly opposed as ever to campaign finance limits. Still, Republicans are developing an appetite for big money as a campaign issue. As Tillis put it in a recent fundraising appeal: “It looks like money may be the deciding factor in this campaign, just as the pundits predicted.”

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October 24, 2014

Koch Lobbying Nears $10 Million, Donation Transparency Increases

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(Bill Clark/CQ Roll Call File Photo)

Charles and David Koch are best known for their big political spending, but public records show the billionaire industrialists have also invested close to $10 million on lobbying Congress this year, targeting such issues as carbon taxes, renewable fuel standards, greenhouse gas restrictions and campaign financing.

The Koch Industries legal, lobbying and public affairs arm, known as Koch Companies Public Sectors, spent $4 million on lobbying between July 1 and Sept. 30, according to its third-quarter lobbying report, more than in any quarter this year or in 2013. The multinational corporation deployed half a dozen lobbyists largely to push back against federal taxes and environmental mandates, and to monitor legislation in such areas as oil and gas, trade and transportation.

That brings Koch lobbying to $9.4 million through the first three quarters of this year, putting Koch Companies Public Sector on pace to top the $10.4 million it spent on lobbying in 2013. Four of the six lobbyists identified on the company’s most recent disclosure report also helped underwrite the Koch Industries PAC, which has raised $3.2 million and is also on track to top its 2012 expenditures of $3.1 million.

Though under fire from Democrats for what Senate Majority Leader Harry Reid decries as their “shadowy influence,” the Koch brothers and their companies have substantially stepped up their publicly reported advocacy and campaign spending this year. Full story

September 18, 2014

Conservation Group to Spend Record $25 Million on Midterms

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The LCV will spend money on the Senate race in Colorado, where Udall is seeking re-election this cycle. (Tom Williams/CQ Roll Call File Photo)

The League of Conservation Voters will spend a record $25 million this cycle, organizers announced Thursday, five times what the environmental group spent on the 2010 midterms.

“We are poised to spend by far the most money we have ever spent in an election cycle,” President Gene Karpinski said in a conference call with reporters.

Most of the money, approximately $20 million, will be targeted to help Democrats running for Senate in Colorado, Iowa, Michigan and New Hampshire. The league’s Alaska affiliate is also backing incumbent Democrat Mark Begich there. Another $5 million will go to assist pro-environment gubernatorial and legislative candidates in tandem with the league’s state affiliates. Full story

September 8, 2014

Constitutional Amendment Debate Roils ACLU | Rules of the Game

The emotional debate over free speech versus free political spending, which erupted onto the Senate floor this week, exposes a deep rift on Capitol Hill and at the nation’s leading civil rights group, the American Civil Liberties Union.

“There is a very, very significant divide within the ACLU on this,” said New York University law professor Burt Neuborne, one of six prominent former ACLU officials who wrote to members of the Senate Judiciary Committee on Sept. 4 to publicly denounce the national ACLU’s campaign finance position. The letter was released as the Senate prepared to take up a resolution authored by New Mexico Democrat Tom Udall to amend the Constitution to permit political spending limits, something the Supreme Court has ruled violates the First Amendment.

“While, as present and former leaders at the ACLU, we take no position in this letter on whether a constitutional amendment is the most appropriate way to pursue campaign finance reform, we believe that the current leadership of the national ACLU has endorsed a deeply contested and incorrect reading of the First Amendment as a rigid deregulatory straitjacket that threatens the integrity of American democracy,” read the letter, which was signed by Neuborne, the ACLU’s former national legal director, and by its former executive director, Aryeh Neier, and its onetime general counsel, Norman Dorsen, among others.

In an interview with CQ Roll Call, Neuborne said he spearheaded the letter in response both to a June ACLU letter to the Judiciary panel strongly opposing a constitutional amendment, and to conservative leaders’ tendency to invoke the ACLU in denouncing the amendment. Full story

September 2, 2014

Moelis CEO Donated Thousands to Cantor Before Hiring Him

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(Tom Williams/CQ Roll Call File Photo)

The head of the investment bank that just hired Republican Eric Cantor for more than $1 million a year has been a loyal political supporter of the former House majority leader from Virginia.

Ken Moelis, chairman and CEO of Moelis & Co., gave $5,000 to Cantor’s leadership political action committee, Every Republican is Crucial, just 12 weeks before he reportedly opened talks with Cantor about joining the bank. Moelis also personally gave the maximum $5,200 in this election cycle to Cantor’s campaign committee. Cantor’s new gig as vice chairman and managing director for the bank will earn him $400,000 this year, with a $400,000 signing bonus and $1 million worth of stock.

The Cantor donations were among $100,000 that Moelis gave to Republican candidates and party committees in the 2012 and 2014 election cycles, according to Federal Election Commission data tallied by the Center for Responsive Politics. Full story

July 16, 2014

Who Has Time for Legislating Anyway? | K Street Files

Jeb Hensarling, chairman of the House Financial Services panel, was in a rush to recess a lengthy markup so he and the other lawmakers could make it across the street to the Capitol for evening floor votes.

But Rep. David Scott, D-Ga., pleaded for a few seconds to squeeze in his comments before the gavel.

Even though Hensarling reconvened the markup just after those votes, Scott had somewhere else to be. “Thank you, because I have a fundraiser I’ve got to get to right after,” Scott said in a moment of candor that sent the room into surprised laughter.

Scott’s spokesman Michael Andel noted in an email that members are in town about 2.5 days per week. “That’s not a lot of time to do much of anything,” Andel said.

The episode on June 10 offered a rare glimpse into the reality that members of Congress of both parties face, especially in an election year: the constant tension between raising money to keep their jobs and actually doing their jobs.

The dash for cash is nothing new to elective office, but with the increasing costs of campaigns and the ever-bigger potential threats of outside money flooding into races, lawmakers over schedule their short work weeks in D.C. to hit up stakeholders and lobbyists from dawn until dark.

“There are only so many hours in a day, and when you have to spend an increasing amount of those asking people for cash, something has to give,” said Adam Smith, spokesman for Public Campaign, which advocates for public financing of elections. “And what gives, I think, is the job you’re elected to do.”

The Bipartisan Policy Center’s Commission on Political Reform recently released a report that seemed to conclude much the same. Led by ex-lawmakers-turned-K-Steeters such as Tom Daschle and Trent Lott, the commission’s June 24 report found members “spend too much time fundraising, which crowds out the time for legislating.”

“The commission decries the inordinate amount of time that members of Congress spend raising money and worry about the effects of such fundraising on the legislative process,” the report stated. “In particular, we fear that the need to raise ever-increasing amounts of campaign funds is crowding out the time that members have to engage in legislating and government oversight, the job they were sent to Washington to perform.”

The bipartisan group recommended Congress set up a task force styled after the 9/11 commission to make policy suggestions, and urged Congress to pass legislation requiring more disclosure of outside political money. The group also suggested Congress impose new restrictions on leadership political action committees, including limiting the funds to political, not personal, activities.

As much as lawmakers may complain, many of them privately, about the crush of pressure to raise money and the need to fork over donations to colleagues to help them advance in party or committee leadership in a sort of pay-to-play process, Congress seems to have little appetite to revamp the system — at least for now.

But the current way makes for a grueling schedule. House Republicans alone, for example, have 10 fundraisers scheduled on Wednesday, while House Democrats have at least five on the docket, according to party committee lists emailed among lobbyists. Senators also have several events on the docket.

That day, lobbyists and lawmakers can start things off with a breakfast at Bullfeathers benefiting Rep. Chris Gibson, R-N.Y. And they could end the day in a bipartisan way with a reception for Rep. Richard E. Neal, D-Mass., at Legal Seafoods in D.C.

To say nothing of the legislative work taking place on the Capitol campus.

Of course, the overbooked lawmakers and unpredictable congressional calendar can make life plenty difficult for lobbyists, too, who are trying to oblige members’ requests to hold fundraisers.

“Many of these events are scheduled weeks or months in advance, and you just don’t know what the voting or committee schedule will be like,” said Michael Herson, who runs American Defense International and hosts fundraisers. If an event is on the Hill, lawmakers usually can pop in, even briefly, between votes or committee meetings. But when the event is across town, the guest of honor may not make it at all.

But even the best of plans could be easily waylaid. “Votes could blow up the entire event,” Herson said.

Kate Ackley is a staff writer at CQ Roll Call who keeps tabs on the influence industry.

July 2, 2014

Hobby Lobby Ruling Fuels Amendment Push

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(Tom Williams/CQ Roll Call File Photo)

In its recent ruling to confer religious liberties on closely held corporations, the Supreme Court makes no mention of its 2010 Citizens United v. Federal Election Commission ruling.

Yet the high court’s Burwell v. Hobby Lobby Stores ruling grows directly out of its Citizens United decision to reject limits on independent corporate political spending. And the 5-4 Hobby Lobby ruling deepens the rift on Capitol Hill between liberals agitating for limits on corporate power and conservatives railing against government intrusions on free speech.

Senate Democrats have already scheduled a vote on a constitutional amendment that would give Congress and the states the power to restrict political spending. Such an amendment directly challenges both Citizens United and the court’s landmark Buckley v. Valeo ruling, which in 1976 upheld limits on campaign contributions but found caps on political spending unconstitutional.

The Hobby Lobby ruling has stoked liberal anger over the court’s expanding “corporate personhood” doctrine, which critics on the left argue threatens a host of environmental, civil rights and consumer safety laws. Now some Democrats on Capitol Hill are considering additional amendments that go beyond campaign financing to more explicitly spell out that corporations are not people. Full story

June 24, 2014

Democrats Reintroduce DISCLOSE Act

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From left, Blumenthal, Warren and Whitehouse confer before a news conference Tuesday in the Capitol to reintroduce the DISCLOSE Act. (Tom Williams/CQ Roll Call)

Senate Democrats broadened their assault on unrestricted political money Tuesday, introducing a campaign finance disclosure bill that its authors said will be voted on this year.

Senate Majority Leader Harry Reid had already promised a vote on a constitutional amendment that would let Congress and the states curb political spending. Democrats now plan to also vote on the disclosure bill known as the DISCLOSE Act, which Republicans blocked via filibuster in 2010 and 2012.

“Since the Supreme Court’s disastrous Citizens United decision, a torrent of dark money has swept through our political system, giving corporations and billionaires the ability to buy and sell elections,” said Sen. Sheldon Whitehouse, D-R.I., at a Capitol Hill news conference. Whitehouse was joined by Senate Rules Chairman Charles E. Schumer, D-N.Y., and by Democratic Sens. Michael Bennet of Colorado, Richard Blumenthal of Connecticut and Elizabeth Warren of Massachusetts.

Whitehouse’s reintroduction of the DISCLOSE Act coincides with a multi-pronged push by Democrats and their allies off Capitol Hill to score political points by attacking unrestricted, “secret” political money. Reid levels assaults virtually daily on the billionaire industrialists Charles and David Koch, who have helped underwrite tens of millions in political spending by conservative tax-exempt groups that don’t publicly report their donors.

Senate Democrats are also holding a series of hearings on undisclosed political money and on New Mexico Sen. Tom Udall’s proposal for a constitutional amendment, which would challenge a string of Supreme Court rulings, including the 2010 Citizens United v. FEC ruling to overturn limits on independent political spending.

Republicans have rejected Democrats’ proposed constitutional amendment as a blatant free speech violation, and have launched their own public relations campaign to equate campaign finance disclosure with political intimidation. Asked about allegations that disclosure invites harassment, Whitehouse scoffed that “someone who has the capacity to spend tens of millions of dollars in an election to get their way” need not be “worried about being taunted.”

But Democrats’ first version of the DISCLOSE Act, introduced in 2010, drew fire not just from conservatives but from liberal activists who complained that it would curb constitutionally protected lobbying activities. Democrats narrowed the bill considerably in 2012, and that more-limited version of the DISCLOSE Act was the one reintroduced today.

Asked about Democrats’ own unrestricted political spending Tuesday, Whitehouse said “everyone should follow as much transparency as possible,” but that Democrats can’t “unilaterally disarm.” He added that liberal outside spending might actually help spur GOP support for disclosure.

Democrats at the news conference displayed on a poster board a list of Republican senators who have endorsed disclosure in the past, including Sens. Lamar Alexander of Tennessee; John McCain of Arizona; Mitch McConnell of Kentucky, the Senate GOP leader; Lisa Murkowski of Alaska; and Jeff Sessions of Alabama. Whitehouse also quoted aloud several pro-transparency comments from Republicans, including McConnell.

But the likelihood that Democrats will win GOP support for either their constitutional amendment or the recently-reintroduced DISCLOSE Act remain virtually nil. Tuesday’s press conference came on the heels of yet another politically charged hearing in the GOP controlled House, at which Republicans continued their attacks on IRS officials for mishandling IRS attempts to curb political activities by non-disclosing tax-exempt groups.

June 3, 2014

McConnell, Reid Spar Over Campaign Financing

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McConnell, left, and Reid testify during the Senate Judiciary Committee hearing on “Examining a Constitutional Amendment to Restore Democracy to the American People,” focusing on campaign finance. (Bill Clark/CQ Roll Call)

The Senate’s Majority Leader, Harry Reid, and its GOP leader, Mitch McConnell, delivered sharply clashing views of the campaign finance system Tuesday, at a Senate hearing on a proposed constitutional amendment to allow Congress to restrict political money.

“I am here because the flood of dark money into our nation’s political system poses the greatest threat to our democracy that I have witnessed during my tenure in public service,” Reid said during testimony before the Senate Judiciary Committee. “The decisions by the Supreme Court have left the American people with a status quo in which one side’s billionaires are pitted against the other side’s billionaires.”

McConnell, a staunch and longtime opponent of campaign finance restrictions, countered that the Senate resolution on the table is “embarrassingly bad.” Amending the Constitution as proposed would not only “allow the government to favor certain speakers over others, it would guarantee such preferential treatment,” McConnell told the panel. “It contains a provision, not found in prior proposals, which expressly provides that Congress cannot ‘abridge the freedom of the press.’ That’s really great if you’re a corporation that owns a newspaper. It is not so great for everyone else. The media wins and everyone else loses.” Full story

May 28, 2014

Costly Midterms Fuel Hundreds of Joint Fundraising Committees

House and Senate candidates are stockpiling campaign cash for the costliest midterms on record by making good use of the multi-politician war chests known as joint fundraising committees.

Since the Supreme Court’s April 2 McCutcheon v. Federal Election Commission ruling to overturn aggregate campaign contribution limits, 37 federal candidates have set up joint committees to raise campaign cash. The total number of joint fundraising accounts registered with the FEC now tops 450, according to the Center for Responsive Politics.

More specifically:

  • Amid a $12 million ad blitz leveled by GOP outside groups, Sen. Kay Hagan, D-N.C., has helped launch no fewer than 17 joint committees that have collectively netted more than $1 million.
  • Senate Minority Leader Mitch McConnell of Kentucky, whose race could attract as much as $100 million in spending, has a hand in four joint campaign accounts that have raised $3.4 million between them.
  • More recently, Republicans created a new joint committee that will raise money collectively for 10 GOP House challengers and the National Republican Congressional Committee.

Full story

May 20, 2014

Campaign Bitcoins Proliferate, but FEC Rules Unclear

Candidates testing the waters of bitcoin fundraising are following different sets of rules as they go along, a function of both the freewheeling culture of the digital currency world and of mixed signals from the Federal Election Commission.

The FEC approved bitcoin fundraising in a unanimous advisory opinion on May 8, but the agency’s six commissioners immediately began a public dispute over what that decision actually means. At issue is whether digital currency contributions must be capped at $100 per election per donor, or whether candidates, political action committees and parties may accept the virtual currency in larger amounts.

The commission’s three Democrats maintain that they approved of bitcoin fundraising only to the $100 cap, and in a statement cited “serious concerns” about the potential difficulty verifying virtual transactions.

But the commission’s GOP chairman, Lee E. Goodman, countered in his own statement that bitcoins are in-kind donations, and must therefore be capped only at existing contribution limits — $2,600 for a candidate and $5,000 for a PAC per election. “Innovation and technology should not and will not stand idly by while the commission dithers,” he declared.

The upshot is that some political players say they’ll collect large, even unlimited, virtual contributions, and others will be capping bitcoins at $100. The political action committee known as Bit PAC, for one, will take donations well over $100, said its treasurer, GOP election lawyer Dan Backer. Bit PAC operates both a conventional PAC and an unrestricted super PAC, and will therefore take bitcoins donations up to $5,000 in one account, and unlimited virtual donations in another.

“The whole purpose of Bit PAC is to push the envelope” and “to move the ball on the full normalization of bitcoins in campaign finance,” Backer said in an interview with CQ Roll Call. Backer was the first to ask the FEC about bitcoin fundraising last fall. At that time, the commission deadlocked 3-3 and took no action.

By contrast, GOP House candidate Paul Dietzel, a technology entrepreneur running for an open seat in Louisiana’s 6th District, will cap his bitcoin contributions at $100, “just to stay safe.” Dietzel, a free market conservative, posted a neon yellow “Donate Now With Bitcoins!” banner on his website as soon as the FEC issued its May 8 opinion — even though, as Dietzel put it, “it’s still slightly unclear” exactly how bitcoin fundraising will play out.

Rep. Jared Polis, D-Colo., also lost no time collecting bitcoins, and like Dietzel, he will be capping contributions at $100. Other federal candidates accepting bitcoins include Libertarian Jim Fulner, who’s running for Senate in Michigan, and Blaine Richardson, who’s running as an independent in Maine’s 2nd District.

Rep. Steve Stockman, R-Texas, who lost his primary challenge to Sen. John Cornyn in March, was one of several candidates who accepted bitcoins prior to the FEC’s approval. Other bitcoin pioneers include the national Libertarian Party; Darryl W. Perry, a fringe presidential candidate from Alabama; and eight state legislative candidates in California, Maine, Michigan, New Hampshire and Texas.

“The doors are opening instead of closing for the use of bitcoin in order to support candidates,” said Sinclair Skinner, treasurer of the 1911 United Political Action Committee, the first super PAC to accept bitcoins. Skinner called the FEC’s move a “positive step forward in using crypto currency in America.”

“The important thing here is that the FEC actually agreed on the process,” concurred David Mitrani, an associate at Sandler Reiff Lamb Rosenstein and Birkenstock. But Mitrani acknowledged that the FEC’s frequent internal disputes can leave things hazy for political players: “When the commission votes 3-3, what does it mean?”

Goodman downplayed the FEC’s clash over bitcoins, saying it was “like a lot of other areas where there appears to be some philosophical disagreement, or policy disagreement among commissioners.” But Democratic Commissioner Ellen L. Weintraub didn’t mince words: “I think our ability to provide clear guidance is undermined when commissioners take an advisory opinion and say it means something other than what it does.”

Election law blogger Rick Hasen, who teaches law at the University of California, Irvine, summed it up on the day the dispute erupted: “You can bet your bottom bitcoin that Democratic and Republican Commissioners will continue to clash on just about anything controversial coming before the Commission.”

May 8, 2014

FEC Clears Campaigns to Solicit Bitcoins

The Federal Election Commission has unanimously ruled to permit the use of bitcoins for political contributions, a move that lends legitimacy to the virtual currency but leaves unclear how valuable or useful bitcoins will prove to be in elections.

The commission approved bitcoin campaign contributions 6-0 Thursday in response to an advisory opinion request from the Make Your Laws PAC, which promotes direct citizen participation in the legislative process. The FEC had deadlocked on a previous, similar request submitted last year. Full story

April 30, 2014

Senator Questions Hatch Act Violation at FEC

Federal Election Commission Vice Chairwoman Ann Ravel went to Capitol Hill on Wednesday to testify about undisclosed political money in California, but she ended up answering questions about an FEC employee’s violation of the Hatch Act.

Shortly before the Senate Rules Committee’s hearing Wednesday morning on campaign finance disclosure problems, the federal Office of Special Counsel announced that an unnamed FEC lawyer had resigned after admitting to Hatch Act violations. The Hatch Act bars federal employees from political activity in the government workplace.

Sen. Pat Roberts of Kansas, the Rules panel’s ranking Republican, zeroed in on the resignation following Ravel’s testimony. Ravel attended the hearing not in her capacity as an FEC commissioner, but as the former chairwoman of California’s Fair Political Practices Commission, which last year fined two tax-exempt groups a record $1 million for violating that state’s public disclosure laws. Full story

April 29, 2014

Can Congress Fix the McCutcheon Ruling?

In the Supreme Court’s recent McCutcheon v. Federal Election Commission ruling to strike aggregate campaign contribution limits, Chief Justice John G. Roberts Jr. took the unusual step of proscribing how Congress might react.

Congress has “multiple alternatives available” to prevent unlimited contributions from making their way directly to candidates, Roberts wrote in his plurality opinion. These include “targeted restrictions on transfers among candidates and political committees,” the chief justice suggested helpfully, or creating “separate, nontransferable accounts” spent “only by their recipients.”

No one actually expects this polarized Congress, which can barely agree on a federal budget, to suddenly wade back into the thorny thicket of campaign finance changes. But the McCutcheon ruling may dramatically impact political fundraising and invites several basic legislative fixes, concludes a recent Congressional Research Service report. Full story

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