FEC Holds Public Hearing To Define Bundling Rule

Posted September 17, 2008 at 6:43pm

The Federal Election Commission moved one step closer Wednesday to enacting a rule requiring campaign committees to disclose which federal lobbyists “bundle” or raise large amounts of money for their campaigns.

The FEC heard from two panels of ethics lawyers and watchdog groups at a public hearing in what at times became a heated debate on the bundling requirement.

The provision has been in limbo for nearly a year, including the first six months of 2008, when the commission was paralyzed for lack of a quorum.

The bundling requirement would unveil many of the lobbyists who hold fundraisers throughout the year for powerful lawmakers on Capitol Hill.

Based on the new ethics law, campaigns should have filed a list of bundlers at least once by now.

The bundling law, which is part of the 2007 Honest Leadership and Open Government Act, requires that campaign committees publicly disclose to the FEC lobbyists who bundle $15,000 or more in campaign contributions — not counting their own personal contributions or those of their spouse — during a six-month period.

The provision has resulted in the FEC trying to resolve several ambiguities in a new area of election law: when, precisely, should a campaign know that it has received bundled contributions from lobbyists and how should it then divvy up, or assign credit, for those bundled contributions when there are several lobbyists at the event.

While Sens. John McCain (R-Ariz.) and Barack Obama (D-Ill.) have publicly released the names of bundlers for their presidential campaigns who have raised $50,000 or more, there is not a uniform system for determining who those bundlers are or releasing that information. Obama does not allow federally registered lobbyists to donate to his campaign.

The commission reviewed several key points at the hearing that will have significant implications for lobbyists and companies that lobby.

In particular, the commission wrestled with the question of when a bundler should get “credit” for bringing checks into a campaign’s coffers; whether campaigns should disclose when chief executive officers and other high-level officials of companies that lobby, but who themselves are not lobbyists, bundle contributions; and how often campaigns should file disclosure reports.

Much of the discussion dealt with how campaigns credit lobbyists for campaign contributions and whether lobbyists and fundraisers would try to circumvent the law by increasing the number of lobbyists sponsoring an event — to ensure that the event would not trigger the $15,000 threshold.

Watchdog advocates Paul Ryan of the Campaign Legal Center, Don Simon of Democracy 21, and Craig Holman of Public Citizen argued strenuously before the commission for the broadest possible definition of assigning credit for lobbyist bundling.

Holman said the “entire disclosure regime” would be undermined by giving campaign committees discretion over whom they publicly report are their bundlers. “You can’t just leave everything up to what the candidate wants to report,” he said. “There needs to be as bright a line as possible.”

Yet the reformers’ tack drew the ire of other panelists, including Tim Jenkins of the Coalition for Tax Equality and ethics lawyer Marc Elias of Perkins Cole.

Both argued against simply splitting the total fundraising take by the number of lobbyists to figure the bundling credit, saying that would create false information. They were also wary of the option to give all lobbyists credit for the total amount raised.

Elias, who testified as an individual, represents the Democratic Senatorial Campaign Committee and several Members of Congress.

“I think I am actually the most reform-minded,” Elias said. “I want to know the real number. I find it odd because I’m advocating for more disclosure.”

Another ethics lawyer, Joe Sandler, brought up the concept of broadening the scope of registrants to include CEOs and high-level officials who don’t lobby but work at companies that employ lobbyists.

Sandler, of Sandler, Reiff & Young, has served as the Democratic National Committees general counsel, but he was testifying on behalf of himself.

“The intent of the law was that raising money by a CEO should be disclosed,” said Sandler, who said he believed the definition already included such individuals as members of the government relations department who themselves do not lobby.

Sandler’s interpretation went further than even some of the reform-minded groups like the Campaign Legal Center.

After the hearing, ethics lawyers and watchdog groups appeared to be optimistic about the FEC’s approach.

How quickly the commission will act is unknown. So far, it has kept the record open for a week to allow for additional comments.

Ethics lawyers say it is unlikely that the reporting requirement will be finished before the 2008 election cycle ends.