Leaders Pan Pence-Wynn Bill

Posted May 18, 2005 at 6:53pm

House Democratic leaders on Tuesday came out against the campaign finance legislation most likely to move through the chamber this year, indicating for the first time their intentions to make a concerted push against a bill tacitly endorsed by the GOP leadership.

That the Democratic leadership would take such an organized approach against bipartisan legislation was not a foregone conclusion. Although each of the four elected leaders voted to tighten restrictions on money in federal campaigns in 2002, it wasn’t clear even to campaign finance insiders whether the four would actively oppose the bill moving through the House to loosen some of those limits.

Sponsored by Reps. Mike Pence (R-Ind.) and Albert Wynn (D-Md.), the measure, among other things, would remove the aggregate limit on contributions that individuals can give to candidates and party committees each election cycle.

The House Administration Committee was scheduled to markup that legislation today, but the meeting was postponed until next Thursday.

In a letter to their fellow Democrats, Minority Leader Nancy Pelosi (Calif.), Minority Whip Steny Hoyer (Md.), Caucus Chairman Bob Menendez (N.J.) and Vice Chairman James Clyburn (S.C.) said they oppose Pence and Wynn’s bill on the grounds that it would “enable wealthy individuals and interests to pour unlimited amounts of hard money into federal elections.”

The Democratic leaders, along with a half-dozen liberal-leaning reform groups, believe the bill would reverse three decades worth of progress, limiting the amount of influence contributors have on the legislative process. The aggregate contribution limit, currently set at $101,400 to national parties and federal candidates a year, per individual, was originally enacted in 1974 as a response to the Watergate scandal.

“Democrats have stood proudly as the party of reform,” the leaders wrote. “We must continue to do so.”

For their part, Pence and Wynn held a news conference Wednesday attempting to eradicate what they believe is widespread misunderstanding about what their bill does and, more specifically, does not do.

The two insisted that their bill does not allow lawmakers to raise unlimited soft money, a key restriction in the 2002 Bipartisan Campaign Reform Act. Despite the title of their bill, the Bipartisan 527 Fairness Act, it does not affect 527 organizations.

Named after the section of the tax code under which they operate, 527s played a significant role in the 2004 elections and have become the target of companion bills in both chambers to subject the independent political groups to the same restrictions as other political entities. As it stands, 527s can raise and spend unlimited amounts of soft money.

Instead of bringing 527s in line with other organizations that seek to influence federal elections, Pence and Wynn said they want to empower the political parties.

“The 527 problem is a problem of inequity in the system,” Pence said. “Our desire is to level the playing field.”

Asked about the opposition from all of his party’s leadership, Wynn said he would “readily admit that as the minority party Democrats are wary.” He added that he planned to talk to the Congressional Black Caucus, which has not taken a position on the bill, this week.

Pence and Wynn blasted news organizations for reporting that their bill, by removing the aggregate contribution limits, would effectively allow a single individual to indirectly donate more than $3 million to a national political party in one cycle, compared with the current limit of $61,400. Wynn challenged the media to defend that number.

Originally provided by reform groups, the number was derived by multiplying the maximum per-cycle donation allowed to each state party committee, which totals $1 million.

Because there are no restrictions on transfers between state party committees and the national committees, that $1 million from one individual could then be transferred to the national party.

As it stands, individuals can also give only $40,000 per cycle to all federal candidates. Under Pence-Wynn, individuals would only be restrained by the $4,200 limit per cycle to each candidate. If someone gave the maximum to 535 candidates, the total would be $2.2 million.

Pence, Wynn and campaign finance experts who support their legislation say the reformers’ figure is completely detached from reality.

Cleta Mitchell, partner at Foley and Lardner LLP and outside counsel to the National Republican Senatorial Committee, maintains that the most practical effect of removing the aggregate limits is that a donor who wants to fully support his or her political party would be able to give the maximum to each of the three national party committees each year.

Individuals can give a maximum of $26,700 to a party committee per year. This is left unchanged in Pence-Wynn, but the current ceiling of $61,400 for all party committees would be removed, allowing individuals to donate a maximum of $160,200 to all three national committees in a two-year cycle.

That is the primary justification Wynn gives for his bill and the reason he hopes his fellow Democrats will support it.

But Fred Wertheimer, president of Democracy 21, said such statements are a ruse.

“The idea that Members of Congress and the parties would not take advantage of the ability to move this money around and have it wind up exactly where they wanted it is absurd,” he said.

“It’s happened before,” Wertheimer added, referring to the frequent transfer of soft money between the national political parties and the state parties before BCRA.

“But even leaving that aside, it is incontrovertible that a member of the House leadership under this bill could solicit a million dollars worth of contributions from a millionaire or Washington lobbyist for their party” at the state and federal level, Wertheimer said. “And that represents a million dollars worth to influence buying for the lobbyist regardless of where the money goes.”

Mitchell and others dispute that the kind of donors Wertheimer characterized even exist. She said it’s extremely unlikely that one person would give to all House and Senate candidates of a particular party affiliation, and even if that individual did, the contributions would be in hard money.

Wertheimer and like-minded reformers disagreed and said they are merely pointing out what would be allowable under Pence-Wynn. And, they added, the distinction between hard and soft money is meaningless if Members of Congress can solicit million-dollar contributions from a single contributor.