A Bungled Start For Bundling Rule

Posted April 2, 2008 at 6:44pm

Last year, wrangling over disclosure of bundled campaign checks nearly derailed the Democratic effort to overhaul lobbying and ethics rules.

The provision survived, helping earn the broader package praise from government reform advocates who called it the most significant in a generation.

It appears they spoke too soon.

The provision, aimed at shedding new light on how lobbyists curry favor with lawmakers by collecting huge sums of political cash, has been shelved by the meltdown of the Federal Election Commission.

With four seats vacant, the enforcement agency for election laws lacks the quorum necessary to take any official action, including the final rule-making on the bundling provision.

The agency has already missed the deadline, set out in the law, to finish the rule in time to provide for July reports covering the first half of the year.

Agency observers said there is little reason to believe the partisan Senate logjam holding up confirmation of the missing commissioners will be broken, and that the election cycle is likely to close with no new transparency on bundlers.

“This is a shadowy practice that will apparently remain in the shadows a little longer,” said Meredith McGehee of the Campaign Legal Center.

The delay has implications from the presidential campaigns to House races.

All three presidential candidates have voluntarily disclosed the names of their top fundraisers, but those lists have been incomplete and offer limited information about how much each bundler is raising, said Taylor Lincoln, a research director for Public Citizen.

Sen. John McCain (Ariz.), the presumptive GOP nominee, has disclosed the names of his campaign co-chairmen, but it is not clear what each is responsible for gathering, Lincoln said. Sen. Hillary Rodham Clinton (D-N.Y.) lists those raising at least $100,000, while Sen. Barack Obama (D-Ill.) breaks down his bundlers into ranges: those raising at least $50,000, $100,000 and $250,000.

The bundling rule only covers registered federal lobbyists — a fraction of those gathering cash for the presidential candidates (Obama, who has sworn off lobbyists’ contributions, gets help from 14 former lobbyists, including four registered as recently as 2006, according to Public Citizen’s tally).

Nevertheless, Lincoln said, the delay in implementing the rule is depriving the public of important information. “It’s best the public knows as much as it can,” he said. “We’d rather have disclosure of all the bundlers, but lobbyists are the best place to start. By definition, they’re in business to ask the government for favors, so their contributions should be looked at the most skeptically.”

Likewise, Congressional candidates nervous about appearances if they have to report their lobbyist-bundlers have been granted a reprieve.

“Members are going to be sensitive from the standpoint of not wanting names on there. If they have to report it, it plays beautifully into a 30-second spot,” one Democratic fundraiser said.

Added McGehee: “There’s a suspicious part of me that says there are some people that are happy about this.”

The FEC has been effectively shuttered since December, when the recess appointments of three commissioners expired. Senate Democrats refused to put the commissioners up for a vote as a package, because they oppose the nomination of Republican Hans von Spakovsky.

Republicans, in turn, have objected to individual, up-or-down votes on the nominees without a guarantee from Democrats that all will get through.

Rep. Chris Van Hollen (D-Md.), who led the effort to craft the bundling provision in the House, joined reform advocates in blaming the holdup on the White House and Senate Minority Leader Mitch McConnell (R-Ky.).

“The circumstance is incredibly convenient for Sen. McConnell, who opposed bundling disclosure from the outset,” Van Hollen said.

McConnell spokesman Don Stewart disputed the idea that the Kentucky Republican had opposed the bundling measure. He said McConnell stands ready to help fill the FEC vacancies if all the nominees are confirmed, a strategy he said would ensure an even partisan split at the agency.

With neither side apparently willing to budge, candidates and lobbyists are adjusting to life in limbo.

Republican fundraiser Monica Notzon said she is now keeping records as if the bundling rule were in force. “For every event we have, where we can in fact trace the origination of a check, we keep clean and clear records of that,” she said.

But the task is complicated by the fact that tricky questions about how precisely to interpret the law were left unresolved by the FEC when it suspended development of the bundling rule.

For example, the law requires campaigns to report any lobbyist who bundles more than $15,000 over a six-month period.

Contributions by a lobbyist’s spouse don’t count, according to the agency’s preliminary rule-making on the subject, but it was undecided about those from a lobbyist’s employees. Co-hosting a fundraising event counts toward the threshold, but the agency was unclear about how to assign credit: Divide the total sum among the co-hosts, or give each credit for the entire haul?

Former FEC Chairman Robert Lenhard, a Democrat whose renomination is among those pending, is hosting an April 21 audioconference to educate campaigns and lobbyists about the rule. An e-mail invite for the event carried the subject line: “URGENT: Bundling Hazards for PACs & Lobbyists.”

Lenhard said that while the rule is not yet in force, the law providing for it is on the books, so he is advising political professionals to get compliance programs together now.

“That’s the smart thing to do,” he said.