High-Dollar Fundraising Makes Comeback, Raising Concerns About Bribery
Thirteen years ago, following a string of scandals that included Lincoln Bedroom sleepovers to reward big donors, Congress banned lawmakers from raising the unlimited campaign checks known as soft money.
Now, soft money is back with a vengeance, just in a different guise.
Back then, elected officials scooped up hundreds of millions directly from corporate and labor titans for their parties, often in exchange for special access and legislative favors. Then- Sen. Russ Feingold, the Wisconsin Democrat who co-authored the soft-money ban with Arizona Republican John McCain, called it “legalized bribery.”
Today, lawmakers are once again raising six-figure checks for the political parties — this time for special new accounts that pay for conventions, recounts and buildings. In just the first three months of the year, close to $13 million flowed into this new funding stream — mostly for the GOP. Checks as big as $600,000 and $700,000 are coming in from the likes of hedge fund manager Paul E. Singer, investment banker Warren A. Stephens and casino magnate Sheldon Adelson.
Even bigger donations are fattening super PACs that ostensibly must keep candidates at arm’s length, but which increasingly operate as an appendage of politicians’ campaigns.
The upshot is a fundraising bonanza reminiscent of the soft-money era, and even of Watergate. It’s too early to say what rewards big donors will enjoy in exchange for the unrestricted money they’re lavishing on parties and super PACs. But to the authors of the soft-money ban best known as the McCain-Feingold law, the return of high-dollar fundraising by members of Congress spells trouble.
“I predict there will be a major scandal because there is too much money washing around,” McCain said at a Harvard University forum last year.
The new party rules allow a single donor who gives the maximum to every one of a given party’s special accounts to max out at a whopping $801,600 a year — or $1.6 million per election cycle. That’s a far cry from the individual contribution limits of $2,700 per election to a candidate and $33,400 annually to a party committee — caps that technically still stand but that look increasingly quaint.
The Supreme Court has relaxed limits all around. In 2010, the court’s Citizens United v. Federal Election Commission ruling overturned all limits on independent political spending. And last year, in McCutcheon v. FEC, the court struck aggregate limits on how much one donor could give to parties and candidates collectively in an election cycle.
The legal firewall between super PACs and the candidates they back is breaking down. By law, candidates may ask super PAC donors for $5,000 in so-called hard, or regulated, money. So White House hopefuls, including five sitting senators, are asking billionaire donors for $5,000 — but the super PACs that back the candidates are pocketing checks in the millions with a wink and a nod.
“The campaign finance laws prohibit federal office holders from soliciting or raising unlimited contributions,” said Fred Wertheimer, president of the watchdog group Democracy 21, which has asked the Justice Department to investigate. “And that is precisely what the federal office holders who are running for president now feel free to do.”
Back to the Future
First Amendment champions blame McCain-Feingold for weakening the political parties, and applaud Citizens United for enhancing competition. Party leaders, too, have chafed at the soft-money ban. That helps explain why, in a rare show of bipartisanship, Senate Democratic leader Harry Reid of Nevada and GOP leader Mitch McConnell of Kentucky tucked a measure that blew the lid off party fundraising limits into last year’s omnibus spending deal.
But Democrats have collected barely $800,000 for their new special party accounts, while Republicans pulled in a cool $12 million for them in the first six months of this year.
“It’s long been true that Democrats raise more money from low-dollar donors and the grass roots, and the GOP relies on wealthy millionaires and billionaires like the Kochs,” said Justin Barasky, spokesman for the Democratic Senatorial Campaign Committee. “I’ve seen nothing that shows that’s going to change any time soon.”
Party officials won’t say how they are filling these new coffers. But public records show that Republicans, at least, are relying in part on GOP leaders to solicit the money.
Speaker John A. Boehner of Ohio and his top two lieutenants — Majority Leader Kevin McCarthy of California and Majority Whip Steve Scalise of Louisiana — have collectively raised $7.3 million in the first quarter of this year for their respective joint fundraising committees from CEOs, lobbyists and financiers. Some of the money going into those joint committees, which divvy up their receipts between multiple accounts, has gone to the new political party funds.
“We don’t know enough yet about how the parties are raising money for these new accounts,” said Trevor Potter, a former Federal Election Commission chairman and general counsel to the nonpartisan Campaign Legal Center. “But people don’t just sit down and say: ‘Gosh, I think I’ve got to write a check to the convention account today.’ So who is asking for what? What is being promised? What are people gaining for giving this?”
Super PAC solicitations raise even bigger questions, said Potter, whose institute is also asking the Justice Department to investigate.
Sen. Marco Rubio, the Florida Republican and White House hopeful, ostensibly did not ask his pal Norman Braman, the billionaire car dealer, for more than $5,000. But Braman is expected to give as much as $10 million to the super PAC backing Rubio, known as Conservative Solutions.
Likewise Texas GOP Sen. Ted Cruz, another White House aspirant, has made no bones about meeting with donors eager to underwrite a network of four super PACs backing him with variations on the name Keep the Promise. The PACs are said to have received as much as $31 million from hedge fund magnate Robert Mercer, already a Cruz campaign donor. All told they’ve pulled in $37 million.
“We feel very confident that we are operating within the law and what we are allowed to do,” said Cruz campaign spokeswoman Catherine Frazier.
If unfettered campaign spending has rendered contribution limits all but meaningless, conservatives say the solution is to simply eliminate them.
“Our view is that they should take the contribution limits off altogether, and the candidates should be able to ask for money for their own campaigns,” said David Keating, president of the Center for Competitive Politics. “That’s publicly reported, they’re responsible for the messaging in the campaign and also being identified with the donors directly.”
Advocates of campaign restrictions have countered with a long list of bills that have gone nowhere on Capitol Hill. Feingold, who lost his 2010 re-election bid to Republican Ron Johnson but is seeking a rematch, all but admits the law he co-authored with McCain is no longer working.
“People tell me all the time that our politics in Washington are broken and that multimillionaires and big corporations are calling all the shots,” Feingold said in May as he announced his candidacy. “They say this especially about the U.S. Senate, and it’s hard not to agree.”