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April 24, 2014

Posts in "Rules of the Game"

April 2, 2014

Will McCutcheon Ruling Boost Political Parties?

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Priebus voiced his excitement on the ruling Wednesday. (Bill Clark/CQ Roll Call File Photo)

Republican National Committee Chairman Reince Priebus could hardly contain his glee during a conference call with reporters shortly after the Supreme Court ruled to strike the aggregate limit on campaign contributions.

“We are excited about the outcome of this case,” exulted Priebus, noting that the RNC bankrolled the constitutional challenge brought by businessman Shaun McCutcheon from beginning to end. In McCutcheon v. FEC, the court ruled 5-4 to overturn the overall limit on what an individual may donate collectively to parties, candidates and PACs in one election cycle, which was capped at $123,200 total.

The ruling “allows us to go to our donors and say: Look instead of being able to give to only nine Senate candidates, you can now give to the 14 that are most in play,” Priebus told reporters. “And you can give to the Senate committee, the congressional committee and the RNC, and you can max out to all three.”

Priebus wasn’t the only party official rejoicing in the wake of the high court’s Wednesday ruling. One Democratic campaign committee operative confided that he was “happy as a pig in shit.” While advocates of campaign finance limits on and off Capitol Hill assailed the ruling as an invitation to corruption and campaign finance abuses, party officials welcomed the decision. Full story

Supreme Court Rejects Aggregate Contribution Limits

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Campaign finance reform advocate Fred Wertheimer speaks at the Supreme Court after McCutcheon v. Federal Election Commission arguments last year. (Bill Clark/CQ Roll Call)

Updated, 11:45 a.m. | In a long-awaited ruling in the case known as McCutcheon v. Federal Election Commission, the Supreme Court today struck the aggregate limit on campaign contributions as an unconstitutional infringement on free speech.

Significantly, the high court left in place the base limit on how much individuals and political action committees may give to candidates and political parties. But today’s ruling makes a challenge to that direct contribution limit, which stands at $2,600 per election for an individual, all but inevitable in the near future.

What the court overturned today was the overall limit on the amount that one individual may give to candidates, parties and PACs in a two-year election cycle, a cap that now stands at $123,000. Republican businessman Shaun McCutcheon had challenged the aggregate limit on the grounds that giving the same amount to a larger number of candidates would not invite corruption. Full story

April 1, 2014

Christie’s Contractors: Backers Barred From Donating Found Loophole

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(Bill Clark/CQ Roll Call File Photo)

New Jersey Gov. Chris Christie may manage to put the George Washington Bridge scandal behind him, but even if he does, his ethics troubles won’t be over.

Christie’s complicated relationship with campaign contributors and state contractors, in particular, will draw scrutiny as he continues to mull a 2016 presidential bid. Christie’s donors have a history of gravitating to secretive and little-regulated political groups to promote the GOP governor and his agenda.

These include tax-exempt organizations that spent millions on Christie’s gubernatorial election and re-election campaigns, and that operate outside the disclosure rules. Political activity by nonprofits has become commonplace these days, and Christie’s opponents run their own non-disclosing tax exempt groups.

But Christie’s big backers, who have bankrolled several pro-Christie operations, stand out because many of them are state contractors otherwise barred from contributing to his campaign. New Jersey “pay-to-play” laws, considered the strictest in the nation, bar large state contractors, utilities and financial services firms that manage state pension funds from donating to state candidates.

Yet a long list of New Jersey contractors and pension fund managers have given generously to groups that either back or are closely linked with Christie. Such contributions have repeatedly raised questions as to whether Christie supporters are skirting the state’s pay-to-play laws — a suggestion that the state Treasury Department, which enforces those statutes, has rejected.

Full story

March 25, 2014

Democrats’ Anti-Koch Attacks Have a Familiar Ring

There is an oddly familiar ring to Democrats’ escalating attacks on the conservative billionaire Koch brothers.

In 2010, then-White House adviser David Axelrod decried the undisclosed, unrestricted money bankrolling outside conservative groups as “a threat to our democracy.” This year, Senate Majority Leader Harry Reid has been blasting the Kochs as “un-American” and accusing them of “trying to buy America.”

The comparison bodes poorly for Democrats now dumping millions into their campaign to demonize the Kochs in what appears to be a central piece of their midterm elections strategy. In 2010, unrestricted conservative outside groups funded by industrialists Charles and David Koch helped knock House Democrats out of power in a historic GOP upset. This time around, the Koch-funded Americans for Prosperity has already spent some $27 million attacking Democrats, focusing squarely on the party’s most vulnerable Senate incumbents.

But it’s unclear how much Democrats have learned from the last midterms. Yes, Democrats have established their own network of unrestricted super PACs, casting off any pretense of taking the political-money high road. This election’s top-spending super PAC so far is the pro-Democrat Senate Majority PAC, according to the Center for Responsive Politics, and liberal super PACs have spent almost double that of their conservative counterparts.

The anti-Koch attacks are now the subject of a $3 million Senate Majority PAC ad campaign — essentially a retread of liberal assaults on big money in 2010. In those elections, the first to follow the Supreme Court’s ruling in early 2010 to lift all limits on independent political spending, Democratic National Committee spokesman Brad Woodhouse bemoaned the “growing and pernicious effects of secret, special interest money being used to determine the outcome of our elections.”

This time, the Democrats’ attacks on big money are being leveled more personally at the Kochs and their Koch Industries Inc. conglomerate. The Democratic Senatorial Campaign Committee portrays Republicans as “addicted to Koch.” A Web ad by American Bridge 21st Century, the Democratic super PAC and tracking organization, calls the Koch agenda “bad for the middle class.”

Officials for Koch Industries have criticized the attacks as an intimidation campaign designed to deflect attention from Democrats’ own agenda. Organizers for Americans for Prosperity, a social welfare group that operates outside the disclosure rules, maintain that their objective is to repeal the Affordable Care Act.

But the group’s ads hammer on vulnerable Democrats in states such as Arkansas, Louisiana and North Carolina, and they are expanding into campaign-style organizing, door-knocking and voter mobilization. Some speculate that the anti-Koch attacks leveled by Reid and his allies are a distress signal to liberal donors.

Democrats say their complaints against the Kochs are rooted in their policy differences with Republicans. The anti-Koch campaign hammers on populist themes such as economic equity and entitlements for seniors, and portrays Republicans as the party of moneyed interests.

As American Bridge spokeswoman Gwen Rocco put it: “The real reason the Kochs have already spent tens of millions on attacks this cycle is to undermine voters’ confidence in government and drive their conservative agenda that enriches the wealthiest Americans at the expense of the middle and working class.”

In Arkansas, where GOP Rep. Tom Cotton is challenging incumbent Democratic Sen. Mark Pryor, Pryor campaign officials estimate that Americans for Prosperity has spent $2.2 million on ads opposing the senator. Total outside spending against Pryor tops $5 million. Pryor accuses Cotton of being in the pocket of wealthy interests and argues that the representative’s votes against the farm bill and the Violence Against Women Act, for example, put him and the conservative groups that back him out of step with Arkansas voters.

“Obviously the outside money from these Republican groups is going to be large, and it’s likely that we will be outspent on TV,” Arkansas Democratic Party spokesman Patrick Burgwinkle said. “But what’s important for us is getting the message across that Congressman Cotton and these outside groups are just too reckless for Arkansas.”

In North Carolina, Democratic Sen. Kay Hagan has launched a digital media campaign showing her GOP opponent, state House Speaker Thom Tillis, as aligned with the Kochs’ “bad-for-the-middle-class” policies. Americans for Prosperity has spent $8.3 million on ads opposing Hagan, according to numbers released by Hagan’s campaign.

Republicans dismiss the anti-Koch attacks as a sign of Democratic desperation. In 2010, voters largely ignored Democrats’ assaults on secret, unrestricted campaign money and delivered the House to Republicans in a 68-seat sweep. Democrats’ recent anti-Koch assaults are more rooted in substantive differences with Republicans on issues such as Medicare and the minimum wage. Still, it remains to be seen whether their campaign against moneyed interests will resonate any better with voters in the 2014 midterm elections than it did four years ago.

February 18, 2014

Firewall Between Candidates and Super PACs Breaking Down | Rules of the Game

When the Supreme Court deregulated independent political spending four years ago, the court reasoned that unrestricted money posed no corruption risk because a firewall separates candidates from their outside benefactors.

As Justice Anthony M. Kennedy wrote for the majority in Citizens United v. Federal Election Commission: “By definition, an independent expenditure is political speech presented to the electorate that is not in coordination with a candidate.” Such expenditures, the court concluded, “including those made by corporations, do not give rise to corruption or the appearance of corruption.”

Four years after that ruling, the supposed barrier between candidates and unrestricted super PACs is flimsier than ever. As midterm elections approach, complaints are rolling into the FEC from both parties about super PACs that share vendors, fundraisers and video footage with the politicians they support.

Not that anyone expects much response from the FEC. The agency has been fighting in court for years to defend its definition of illegal coordination, which watchdogs allege is too narrow and contradicts campaign finance law. Indeed, FEC rules explicitly permit quite an array of candidate-super-PAC interactions.

Politicians may raise money for super PACs and even appear at their events, for example, as long as they never ask for checks larger than the amounts donors may write directly to their campaigns — $5,000 for a political action committee and $2,600 for an individual per election.

Super PACs launched by the close advisers and top aides of the candidates they end up backing do not necessarily run afoul of the law. Nor does the candidate’s sharing of consultants, fundraisers or media buyers with the PAC.

Even under these anything-goes rules, however, politicians and their backers are inviting fresh coordination allegations. Last month the Arizona Republican Party complained to the FEC that an ad paid for by House Majority PAC violated coordination rules because the Democratic super PAC had captured and broadcast video footage first posted by Rep. Ann Kirkpatrick, D-Ariz.

The state GOP accused Democrats of “stepping over the legal line to try to sway voters” for Kirkpatrick. A House Majority PAC spokesman called the complaint “absolutely, 100 percent without merit” and noted that the FEC closed the books without action on two previous complaints that ran along the same lines.

Several other Democrats have posted conveniently placed video footage on their websites, including House member and Senate candidate Bruce Braley of Iowa and Sens. Kay Hagan of North Carolina and Mark Begich of Alaska. Last year, several House Democrats sang the praises of House Majority PAC in a video testimonial aimed at donors.

Sen. Mark Pryor, D-Ark., recently created a website that features scripted attacks on his GOP challenger, Rep. Tom Cotton, some of which resurfaced close to verbatim in an anti-Cotton ad run by the Democrat-friendly outside group Patriot Majority USA.

In the meantime, Democrats in Michigan have called on the FEC to investigate GOP Senate candidate Terri Lynn Land’s apparent acknowledgment that her campaign had communicated with super PACs. Land reportedly said at a public forum that her campaign “had talked to a lot of those folks. They’re committed to Michigan.” A Land aide has denied any coordination.

Sharing video footage between candidates and super PACs may not violate the FEC’s coordination rules, said Paul Ryan, senior counsel at the Campaign Legal Center, but it runs afoul of another FEC law — one that treats dissemination of campaign materials as an in-kind political contribution. Such contributions are illegal for super PACs, Ryan noted.

“I think that political players are likely emboldened by the lack of enforcement action by the FEC in recent years,” said Ryan. The super PAC American Crossroads explicitly asked the FEC in 2011 for permission to work directly with candidates to produce issue ads, but the agency deadlocked and took no action.

The Campaign Legal Center has yet to hear back from the FEC following its complaint in 2012 that the super PAC backing Mitt Romney illegally coordinated with the GOP nominee when it rebroadcast an entire ad produced by the Romney campaign in 2007, during his previous presidential run.

The challenge for those lodging coordination complaints, said former Republican FEC Chairman Bradley Smith, is that they are tough to prove unless super PAC organizers and candidates engage in direct or face-to-face communications — the kind that could facilitate quid pro quo corruption. Telling super PACs they can’t pick up b-roll footage from candidate websites is both questionable and futile, he argued.

“I just don’t see how you are going to realistically tell people that you can’t use material that’s out there that everybody knows about,” said Smith, currently the chairman of the pro-deregulation Center for Competitive Politics. “It creates inherent line-drawing problems.”

Eliza Newlin Carney is a senior staff writer covering political money and election law for CQ Roll Call.

January 28, 2014

Will McCutcheon Replay Citizens United? | Rules of the Game

Four years after the Supreme Court deregulated independent campaign spending in Citizens United v. Federal Election Commission, the high court is poised to yet again turn American elections upside down.

The court is expected to rule any day now on McCutcheon v. FEC, another potentially landmark constitutional challenge that could shake up campaign financing as dramatically as Citizens United did in 2010. While no one can predict how the court will rule, oral arguments in October suggest that conservatives in the majority remain as eager as ever to dismantle money limits.

At issue in McCutcheon is the constitutionality of existing overall limits on how much a contributor may give to candidates and political parties in a single election cycle. Alabama businessman Shaun McCutcheon, who brought the challenge, argues that the $123,200 cap on total contributions per cycle violates his First Amendment rights.

The limit’s defenders say that tossing it out will bring back the “soft money” days when donors freely wrote large, unrestricted checks to the political parties. That soft money, banned by the 2002 law known as McCain-Feingold, was raised by the elected officials who ran the parties — and wrote the bills that the big donors lobbied for and against. It was an invitation to abuse, a parade of lawmakers and donors told the court when it took up McConnell v. FEC, the constitutional challenge that upheld the soft money ban in 2003.

But the Supreme Court has partially changed hands since then, and today’s right-leaning justices appear to have forgotten that unrestricted, multimillion-dollar contributions to the political parties ever drew fire. In Citizens United, the high court concluded that unlimited campaign spending by unions and corporations (including incorporated nonprofits) can’t corrupt anybody when the spending is independent — not coordinated with candidates or parties.

Now some on the court argue that big money should be legal for political parties as well. As Justice Antonin Scalia told Solicitor General Donald B. Verrilli Jr., during the McCutcheon oral arguments: “It seems to me fanciful to think that the sense of gratitude that an individual Senator or Congressman is going to feel because of a substantial contribution to the Republican National Committee or Democratic National Committee is any greater than the sense of gratitude that that Senator or Congressman will feel to a PAC which is spending enormous amounts of money in his district or in his state for his election.”

Never mind that this argument undercuts the court’s own conclusion in Citizens United: that independent spending poses no corruption risk because politicians are not involved. A ruling in McCutcheon’s favor might well free up elected officials to collect unrestricted soft money for the political parties once again. That’s because without the aggregate limits, politicians in charge of joint fundraising committees could ask donors to write checks of as much as $2.5 million or more at a pop, advocates of campaign restrictions argue.

A ruling for McCutcheon would also weaken the “base” contribution limit, a cornerstone of the remaining campaign finance rules. That limit bars an individual, for example, from giving a candidate more than $2,600 per election. Historically, the court has held that limits on contributions are less of a First Amendment burden than restrictions on spending. The McCutcheon challenge argues, in part, that contribution and spending limits should be treated as equally onerous. If the court agrees, a successful challenge to the base limits could be next.

“This case not only threatens to have a broad impact on laws limiting aggregate contributions, but could also, depending on the scope of the ruling, jeopardize even the longstanding ‘base’ limits on contributions to candidates and political parties at every level of government — municipal, state and federal,” warns a background memo circulated by the Campaign Legal Center.

The center is one of several watchdog groups bracing for a McCutcheon ruling that may well deal another blow to campaign finance restrictions. Public Citizen has also released a two-part “prebuttal” to the pending McCutcheon ruling titled: “Beware of a Naïve Perspective.”

When Justice Anthony M. Kennedy wrote the majority opinion in Citizens United four years ago, he asserted blithely that the Internet age would ensure enough “prompt disclosure” to hold corporations and politicians accountable. Nonprofits exempt from the disclosure rules, such as social welfare and trade groups, went on to spend more than $300 million on the 2012 elections, all without disclosing a single donor.

The question now is whether the high court, having freed outside groups to spend record sums of unrestricted soft money in campaigns, will also extend that invitation to political parties — and the politicians who run them.

December 18, 2013

The Year in Political Money: Less Transparency, More Deregulation | Rules of the Game

Campaign spending trends were not as sensational this year as in 2012, when super PACs and other outside groups pumped more than $1 billion into politics, three times what they spent in the previous presidential election cycle.

Still, 2013 marked several important political money milestones that signal where campaigns are headed next. Perhaps invariably, elections continue to march toward less transparency and more deregulation, and lawmakers and federal agencies remain too paralyzed by discord to respond.

It was a bad year for disclosure, both on the legislative and regulatory fronts. Congressional Democrats lost no time reintroducing the transparency bill known as the DISCLOSE Act, which had come close to passing in the previous Congress. But the bill was quickly overwhelmed on Capitol Hill by politically charged disputes over immigration, health care and the federal budget.

Advocates of campaign finance limits managed to generate more than 600,000 public comments urging the Securities and Exchange Commission to require corporations to more fully report their political spending. Both the SEC plan and the DISCLOSE Act had set out to shed light on unreported political spending in the wake of the Supreme Court’s 2010 Citizens United v. Federal Election Commission ruling, which deregulated independent campaign spending, including by social welfare and trade groups exempt from disclosure rules.

But the SEC backed away from its public disclosure agenda, omitting from its to-do list for 2014 any mention of a corporate disclosure rule that the agency had once flagged as a priority for this year.

Disclosure fared somewhat better in the states, where legislators and election officials in California, New York and elsewhere moved to pull back the curtain on politically active tax-exempt groups, which as a whole spent more than $300 million in the previous election. California’s Fair Political Practices Commission slapped a record $1 million fine on two Arizona nonprofits with ties to the billionaire conservative donors Charles and David Koch for failing to disclose the donors behind a multimillion-dollar ballot initiative campaign.

At the same time, more than a half-dozen states where unrestricted super PACs have flourished moved to relax limits on contribution to candidates, in part to put them on a more level playing field with outside groups.  Advocates of easing the campaign finance rules also continued their push for federal deregulation, mounting a constitutional challenge to the overall limit on what one individual may give to political parties and candidates in a single election cycle.

Known as McCutcheon v. FEC, the challenge received a receptive audience at the Supreme Court during oral arguments in October. The court’s conservative justices, who continue to hold the majority, cast the aggregate limit as a burden on donors, and some argued that political parties should not face stricter limits than outside groups. If the high court rules that aggregate contribution limits are unconstitutional, watchdogs warn that it would weaken the current ban on unrestricted “soft” money donations to the political parties, and set the stage for yet another challenge to the limits on contributions made directly to candidates.

Politically active nonprofits dominated the headlines in 2013, both because of the scandal over the Internal Revenue Service’s targeting of tea-party-affiliated groups, and because tax documents filed in November shed long-overdue light on how such groups moved money around last year. Three congressional committees launched IRS investigations this year, which are still ongoing, and several top tax agency officials were ousted or left under pressure.

The agency responded with draft rules aimed at more consistently regulating political activity by tax-exempt groups, but these just dragged the IRS further into controversy. Advocacy groups on both the left and right argue that the IRS restrictions will squelch constitutionally protected voter mobilization and pre-election issue advertising campaigns. Democrats say the rules are long overdue and should probably go further.

The FEC, in the meantime, had another roller-coaster year. In April the agency, down one commissioner, earned a dubious distinction: All five of its remaining commissioners were serving expired terms. The Senate confirmed two new commissioners this fall, a Democrat and a Republican, who came in with pledges to work together and issue long-overdue FEC regulations for the post-Citizens United campaign world. But so far there’s no sign that FEC deadlocks or backlogs have disappeared.

It all sets the stage for yet another round of highly contentious campaign finance fights in 2014, which is already shaping up as a high-stakes midterm that will feature plenty of undisclosed, unrestricted money. If 2013 is any indication, the next wave of big money will draw plenty of headlines but little regulatory response.

November 19, 2013

Will the GOP’s Business Wing Pony Up? | Rules of the Game

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Donohue, center, has been cautious when talking about the chamber’s 2014 plans. (Tom Williams/CQ Roll Call File Photo)

For business-minded Republicans fed up with tea-party-led budget standoffs, the past few weeks have offered much to crow about.

A handful of business-backed challengers have taken on tea party incumbents in the House; the National Republican Senatorial Committee has pledged to fight in primaries and has cut ties with a tea-party-linked consulting firm; and the U.S. Chamber of Commerce spent heavily to help a Main Street Republican beat out his conservative opponent in Alabama’s 1st District GOP runoff.

The chamber’s $200,000 expenditure to help GOP lawyer Bradley Byrne narrowly beat tea-party-backed businessman Dean Young in Alabama was hailed as nothing less than “a turning point in American politics” by Forbes magazine, a sweeping assessment typical of reports on the race.

But it remains to be seen whether business groups will prove sufficiently bold, aggressive and well-funded to match the tea party activists they’re taking on. It’s far less risky to endorse the business-friendly candidate in an open-seat contest than to challenge an incumbent, as tea-party-aligned groups such as the Club for Growth, FreedomWorks and the Senate Conservatives Fund routinely do. Full story

October 22, 2013

Democratic Donors Surge Amid GOP Slump

It’s hard to say which should trouble Republican Party leaders the most right now: the sour mood among GOP donors, or the money suddenly swelling Democratic campaign and super PAC coffers.

Not only have the Democratic campaign committees that back House and Senate candidates outraised their GOP counterparts, but unrestricted super PACs that support Democrats have pulled in close to three times what GOP super PACs have so far, according to the Center for Responsive Politics.

That’s a dramatic reversal from 2012, when conservative super PACs spent roughly 70 percent of the non-party outside money in the elections. In the first six months of this cycle, Democratic super PACs raised $23.9 million, compared with $8.9 million for GOP super PACs, according to the CRP. That’s almost a mirror image of the same point in the previous election, when Republican super PAC receipts stood at $29.5 million, swamping the $7.7 million that Democrat-friendly super PACs had raised.

As if that weren’t enough to justify Republican alarm, the latest CNN/ORC poll found that 54 percent of respondents said it was “bad for the country” that Republicans are in charge of the House. Few analysts speculate that Republicans, who as a whole represent strongly GOP districts, are in jeopardy of losing the House — yet. But while money cannot predict election outcomes, it can signal voter enthusiasm. And right now, Democratic donors are in a giving mood.

The Democratic Congressional Campaign Committee, for one, raised more than $2 million from 99,000 contributors during a six-day period on the eve of the government shutdown, a DCCC aide said. Overall, the DCCC collected $8.4 million during September, compared with $5.3 million raised by the National Republican Congressional Committee. Overall, receipts at both the DCCC and the Democratic Senatorial Campaign Committee outstrip those at the GOP House and Senate party committees to date.

On the flip side, the Republican National Committee has outraised the Democratic National Committee so far, netting $53.9 million to the DNC’s $41.3 million, data from the CRP show. And Democratic super PAC organizers note that much conservative money is going to politically active tax-exempt groups that don’t report to the Federal Election Commission. Tea party super PACs and lawmakers, moreover, continue to raise money at a rapid clip.

Still, even Republican loyalists acknowledge that the GOP party committees are going through a tough time. One former Republican Party official who tried to organize a Washington, D.C.-area fundraiser for the NRCC on the eve of the government shutdown said it was like “pulling teeth” to get participants to write checks. The message he heard from guests, he said, was: “Why should I give to these guys? They’re going to shut down the government.”

During the shutdown itself, many lawmakers and party officials canceled fundraising events, and they are now struggling to catch up. The NRCC canceled its annual fall fundraising dinner, one party official confirmed, rescheduling the event for mid-November. The DCCC also canceled at least two events. More ominous for Republicans, however, is the public grousing from donors.

“I know a lot of people in New York who are just not going to give again,” said Thomas Scully, who served in the George W. Bush administration and is now both a partner with the private equity firm of Welsh, Carson, Anderson & Stowe, and a senior counsel with Alston & Bird. Donors to the NRSC were particularly frustrated after 2012, Scully said, when Republicans failed to regain the Senate after conservatives who won primaries went on to lose the general election.

“It’s frustrating to give money to people when you know they’re not going to win,” Scully said. Business leaders fed up over the shutdown have pledged to become more active in primaries, with an eye to backing candidates more in tune with their philosophy of stability and good governance. Some Republicans fret that business donors will also defect to Democrats.

“We should be worried,” said John Feehery, a former GOP leadership aide and president of the lobbying and PR shop of QGA Public Affairs. “I think the biggest worry for Republicans is the fratricide. When it’s Republican-on-Republican violence, the business community will look at Democrats and say: ‘At least these guys are sane.’”

Republican Party officials say their fundraising is on track. At the NRCC, officials said receipts exceeded expectations last month, which was the committee’s best off-year September fundraising since 1994.

“Here at the NRCC, we continue to exceed our internal goals and beat our own records, thanks to the hard work our dedicated members are putting into growing the Republican majority,” said committee spokesman Daniel Scarpinato.

But over at House Majority PAC, a super PAC that works to elect House Democrats, receipts shot up 600 percent over the past month, which encompassed the shutdown and its aftermath.

With $3.4 million in receipts through June 30, House Majority PAC is now the fourth-largest-grossing super PAC in the 2014 election cycle, Political MoneyLine data show. The PAC just unveiled a two-week, $70,000 ad buy assailing vulnerable GOP Rep. Steve Southerland II of Florida for voting against the bill that reopened the government. Said super PAC spokesman Andy Stone: “House Majority PAC donors and potential donors are energized.”

October 7, 2013

McCutcheon Super PAC Already Busts Limits | Rules of the Game

An Alabama businessman whose challenge to campaign contribution limits goes before the Supreme Court on Tuesday has already spent well beyond the current limit through an unrestricted super PAC, public records show.

Shaun McCutcheon, a conservative activist who runs an Alabama electrical engineering firm, argues in McCutcheon v. Federal Election Commission that the $123,200 limit on how much he may give to candidates, political action committees and parties per election cycle stifles his free speech and does nothing to curb corruption.

But in the 2012 elections, McCutcheon spent close to three times that limit — about $300,000 — supporting his favorite candidates through his personal PAC. McCutcheon set up the Conservative Action Fund PAC in 2010 as “a good way to do political advertising” and “a way to raise money from other donors,” he said.

McCutcheon’s ability to spend hundreds of thousands beyond the aggregate contribution limit, even under the current rules, illustrates how wide-open the campaign finance system has already become. The question now is whether the high court will deregulate elections even further.

For McCutcheon’s personal PAC, raising that money turned out to be harder than expected, he has acknowledged. So the vast majority of the $354,023 that the PAC spent in the 2012 election cycle came from McCutcheon’s own pocket, according to the Center for Responsive Politics.

There’s nothing illegal about the Conservative Action Fund, which is technically a “hybrid” PAC that operates both a conventional PAC and an unrestricted super PAC out of separate accounts. In this case, virtually all the Conservative Action Fund’s receipts and expenditures flow in and out of its unrestricted super PAC arm.

But McCutcheon’s big spending in the 2012 election underscores just how easy it is for any individual to spend hundreds of thousands (or even millions) on campaigns, notwithstanding the overall cap that limits donors to giving no more than $48,600 to all candidates and $74,600 to all PACs and parties in any two-year cycle.

While the Supreme Court’s landmark Buckley v. Valeo ruling in 1976 upheld the cap on direct contributions to candidates, which now stands at $2,600 per election, it struck limits on how much an individual may spend independently from a candidate. In 2010, the high court in Citizens United v. FEC made it even easier to spend unlimited sums on campaigns, reversing the long-standing ban on independent corporate and union spending.

“If the question is: Does the aggregate limit [on contributions] to candidates and party committees stop someone from spending all the money they want on politics? The answer is clearly no,” said David Mason, a former chairman of the Federal Election Commission and senior vice president at the political software and compliance firm Aristotle.

But that’s not the question before the court, Mason said. The justices must instead decide whether they agree with McCutcheon that the aggregate contribution limit poses no corruption risk to candidates or parties. McCutcheon, who’s been joined by the Republican National Committee in his challenge, argues it’s no more corrupting for him to give the maximum $2,600 to 17 candidates than, say, 18 candidates.

Senate Minority Leader Mitch McConnell, R-Ky., who has been granted the chance to present his case to the court on Tuesday, argues in his brief that contribution limits should be held to the same strict standard of scrutiny as campaign expenditures. Should the high court concur with McConnell, it could make the “base” limit on direct donations to candidates vulnerable to a constitutional challenge, dramatically reordering the campaign finance system.

McCutcheon’s brief to the Supreme Court portrays him as hamstrung in his efforts to give as much money as he wants to candidates. The brief states that when he filed the complaint in the case as of mid-June 2012, he had given a total of $33,088 to 15 challengers. McCutcheon wanted to support another dozen candidates, but doing so “would have violated the aggregate candidate contribution limit of $48,600 per election cycle,” the brief states.

In the end, McCutcheon fell well shy of that limit in any case, giving about $45,000 to both federal candidates and party committees, CRP data show; he also donated at least $10,000 to the Alabama Republican Party. But McCutcheon gave close to $300,000 to the unrestricted account of his Conservative Action Fund PAC and another $31,500 to an unrelated super PAC called America Get Up.

The Conservative Action Fund spent money on direct mail, robocalls and online ads in a bid to “promote conservative candidates” and “bring new voters into the conservative mindset,” said GOP election lawyer Dan Backer, the PAC’s treasurer. Backer is also the person who persuaded McCutcheon to challenge the aggregate contributions in court.

“As a practical matter and as a matter of law, these are very different modes of speech,” Backer said. The PAC made tens of thousands of dollars worth of independent campaign expenditures in nine congressional races in 2012, according to the CRP. That included $26,828 to oppose Rep. Spencer Bachus, R-Ala., who won anyway, and $21,966 to oppose Florida Republican Fred Costello, who lost his primary. The PAC achieved its desired result in five of the nine races it invested in.

The Conservative Action Fund has received several letters from the FEC citing reporting irregularities, including $24,000 in activity “that does not appear to correspond with any itemized transaction(s).” Backer described these as “minor bookkeeping issues.” Data from the CRP also suggest that McCutcheon gave over the maximum $10,000 to the Alabama Republican Party in 2012, as reported by the Center for Public Integrity. Backer told CPI the Alabama GOP would be asked to redirect or refund any excess contributions.

None of this is likely to draw much notice from the Supreme Court, which will be looking at broader questions involving corruption and the First Amendment.

September 24, 2013

The End of Contribution Limits? | Rules of the Game

Alabama businessman Shaun McCutcheon and his GOP allies insist their Supreme Court challenge to a cap on overall campaign contributions in one election cycle doesn’t dispute the constitutionality of the “base” limit on how much an individual can give to a single candidate in a single election.

“This case is not about base limits; they make sense,” said McCutcheon, whose challenge in McCutcheon v. Federal Election Commission is scheduled for oral argument before the Supreme Court on Oct. 8. “The corruption argument on base limits is pretty solid. If you were running for Congress and I gave you $1 million, wouldn’t you owe me?”

The Republican National Committee has joined McCutcheon in arguing that the aggregate limits muzzle free speech. Indiana lawyer James Bopp Jr., who is representing the RNC in the case, also stresses: “We’re not challenging base limits in this case.”

The case is shaping up as a key test of how far this high court is willing to deregulate the campaign finance system. Full story

September 12, 2013

Bachmann Hires ‘Fixer’ for Campaign Money Troubles

bachmann091213 445x296 Bachmann Hires Fixer for Campaign Money Troubles

(Bill Clark/CQ Roll Call)

Rep. Michele Bachmann, R-Minn., has brought in a new treasurer for her congressional campaign and leadership political action committee in the wake of a federal grand jury probe, a potential House Ethics investigation and a possible inquiry from the Federal Election Commission.

Nancy Watkins, a well-known campaign finance treasurer in GOP circles, submitted paperwork a few weeks ago naming her the new treasurer of both campaign accounts for the Minnesota Republican. Watkins is still the treasurer for Bachmann’s failed 2011 presidential bid, and despite allegations of impropriety surrounding that campaign, Watkins’ stewardship of that account has not been questioned.

Full story

July 23, 2013

Blame the IRS or Fix It? | Rules of the Game

When Rep. Darrell Issa, R-Calif., launched his hearings into improper IRS targeting of tea party groups, some voiced hope that the probe would shed light not just on what went wrong at the IRS but on how to fix it.

So far, things haven’t turned out that way. Issa’s Oversight and Government Reform panel has largely overlooked the problem at the root of the targeting scandal: convoluted and subjective regulations governing politically active tax-exempt groups. Full story

June 18, 2013

Senators Touting Transparency Should Look in the Mirror | Rules of the Game

Senators on both sides of the aisle have demanded transparency lately from a growing list of government agencies: the State Department, the Justice Department, the IRS, the National Security Agency.

Yet when it comes to their own dealings, most notably their campaign fundraising and spending, senators don’t look so keen on transparency after all. Unlike virtually all other political players, senators file their campaign finance reports on paper instead of filing them electronically. This perpetuates a costly, cumbersome and increasingly ludicrous tradition that hampers full disclosure. Full story

April 5, 2013

Rules of the Game: Lame-Duck FEC Invites Scofflaws

Already short one officer, the Federal Election Commission will soon have a dubious distinction: As of April 30, all five of its remaining commissioners will be serving expired terms.

By now President Barack Obama’s failure to fully staff the dysfunctional agency barely even riles government watchdogs. In theory composed of three Republicans and three Democrats, the FEC has been deadlocked for so long that, some argue, the agency could hardly grind to more of a halt. Full story

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