Inauguration Panels Must Reveal Donors
Foreign Nationals’ Gifts Banned
Presidential inaugural committees — one of the last depositories for anonymous political donations — will have to disclose the names of all donors giving at least $200 beginning next year under new regulations being implemented by the Federal Election Commission.
Another substantial change will be that the organizations will now be barred from accepting money from foreign nationals.
Thanks to the efforts of Sen. Jeff Bingaman (D-N.M.), the new requirements, some of the lesser-publicized reforms contained in Bipartisan Campaign Reform Act of 2002, will lift the veil of secrecy on the until-now unregulated entities.
While inaugural committees are still permitted to accept soft money — unlimited contributions from wealthy individuals, corporations, labor unions or trade groups — Larry Noble, executive director for the Center for Responsive Politics, said the new requirement is a step forward.
“There have been for a long time a number of dark areas in campaign finance,” remarked Noble, the former general counsel for the Federal Election Commission. “Inaugural committees are one of them. There were presidential libraries — these are all ways for donors to get money to federal officeholders, or former federal officials, and ingratiate themselves with political parties and not have it disclosed. Often the givers don’t care where the money goes as long as they get credit for giving it.”
The new law, which the FEC is in the process of implementing, strictly prohibits an inaugural committee from accepting a donation from a foreign national.
Moreover, inaugural committees will be required the file a report with the FEC naming all of its $200-plus donors within 90 days of the inaugural ceremony.
In new draft rules, the FEC is proposing that such reports be made in a similar fashion to candidate reports and should include the name and address of each person making a donation to an inaugural committee that is equal to or greater than $200, as well as the date that the donation was received.
In recent years, under pressure from campaign watchdog groups, presidents-elect have frequently chosen to voluntarily disclose financial supporters of their inaugural festivities — but on occasion, the sources of those funds have stirred considerable controversy.
After winning the White House, President Bush set a self-imposed $100,000 cap on donations to his Presidential Inaugural Committee and disclosed the identity of his contributors on a special Web site. He ultimately raised $40 million in private contributions, some of which raised eyebrows.
Among these was a $100,000 donation by Nijad Fares, the son of a Lebanon’s deputy prime minister, who is not a U.S. citizen but is a permanent resident of the United States residing in Houston. The Bush inaugural committee said the contribution had come from the younger Fares’ company’s coffers, but he had listed his father’s name along with the donation so his dad would get credit for the contribution.
Bush’s inaugural committee returned $100,000 it received from Vincent Zenga, a Florida lawyer who turned over his inaugural invitation to a Pavel Borodin, a Russian official who at the time was wanted by Switzerland for allegedly taking millions of dollars in kickbacks from Swiss companies.
For his first inauguration in 1993, President Bill Clinton raised money in $100,000 chunks from numerous corporations, labor unions and trade groups — funds that were interest-free loans later repaid with money raised from the sale of tickets to inaugural parties, memorabilia and other items and activities.
The Arkansas Democrat’s Presidential Inaugural Foundation, which helped finance public events including a two-day festival on the National Mall, voluntarily disclosed its donors, but not the amounts they gave.
The foreign money scandal that erupted after the 1996 elections ensnared at least two of the Democrat’s inaugural donors — Indonesian businessman James Riady, and associate John Huang, who gave $100,000 to Clinton’s inaugural committee.
For his second inauguration in 1997, Clinton capped his donations at $100, but was criticized for failing to disclose the backers in a timely fashion.
While the FEC and Congress have not placed contribution limits on inaugural committees, based on the reasoning that they are not election-related, Noble questioned whether the new prohibition on donations from foreign nationals could indicate a rethinking of that reasoning.
“It’s kind of dipping your toe in the water,” Noble said, to treat the inaugural committees like federal political committees with regard to banning money from foreign sources.
“I think the inaugural committees are a problem because they really are a way for wealthy individuals and contributors to get cozy with the administration in office,” Noble added.