New study: Politicians have no problem evading campaign finance laws

A study by the Center for governmental Studies shows that finance laws aimed at taking the undemocratic influences of money out of elections have been circumvented by politicians who have been able to raise money far exceeding contribution limits. -DB

Center for Governmental Studies
Press Release
December 17, 2009

Loopholes, Tricks and End Runs: Evasions of Campaign Finance Laws, and a Model Law to Block Them, a new report issued today by the Center for Governmental Studies (CGS), concludes that while many campaign finance reforms have taken some of the negative influences of money out of electoral and governmental processes, they have been undermined by “loopholes” in existing laws that have allowed candidates and elected officials to raise money far in excess of existing contribution limits.

Loopholes, Tricks and End Runs describes “legal defense funds,” “charitable fundraising,” “political party fundraising,” “reimbursed travel,” “candidate-controlled ballot measure committees” and other devices that politicians use to collect large, and often undisclosed, payments from moneyed donors. The report recommends a comprehensive a model law to plug these loopholes and control the flow of money into politics.

Current campaign finance laws assume that these types of payments to candidates and elected officials are substantively different from the money politicians receive through regulated campaign committees, that they don’t unduly influence their recipients, and that they can be made in addition to the limits placed on normal campaign contributions. Loopholes, Tricks and End Runs describes recent examples of these payments made through non-campaign entities:

· California Governor Arnold Schwarzenegger has aggressively raised money through a candidate controlled ballot measure committee, “Schwarzenegger’s California Dream Team.” Although California’s campaign finance law limits the governor to raising no more than $25,900 in regulated contributions, per election, from a single contributor, Schwarzenegger, who will leave office in January 2011 and cannot run for office again, raised more than $6.5 million between January 1, 2009, and June 30, 2009. During this non-election year, his committee received 8 contributions that each exceeded $100,000, 15 contributions of $100,000, 16 contributions between $50,000 and $100,000, and 44 contributions between $25,000 and $50,000.

· In Georgia, the inaugural committee of Governor Perdue accepted $200,000 from AT&T in 2007, four times as much as any other donor and 20 times what the corporation could have donated directly to the governor’s reelection campaign. AT&T later joined with Bell South to lobby for the passage of legislation to make competition with cable providers easier by revamping the process of granting cable franchises in Georgia. Governor Perdue signed the “Georgia Consumer Choice for Television Act,” which became effective on January 1, 2008.

· In Alaska, post-election donations to Governor Palin’s inaugural committee came from four mining companies, including Northern Dynasty, a co-developer seeking to influence Palin to speak out against a state-wide measure that would have imposed costly environmental regulations on mining operations. The mining interests did not play a major fundraising role in the 2006 gubernatorial campaign. Alaska Inaugural Committee, Inc., the nonprofit corporation that raised funds for the events surrounding the inauguration, was not required to publicly disclose the amounts donated to it for inaugural balls and travel for the governor and her family.

The proposed model law, the “Political Contributions, Payments and Expenditures Transparency Act,” would consider all money raised by officeholders and candidates from any donor and through any entity, including campaign and non-campaign entities, to be raised for a political purpose, subject to contribution limits (with two exceptions), aggregation and full disclosure. This all-encompassing definition of “contribution” along with disclosure requirements will allow citizens to know who is funding elected officials and candidates.  The model law would: