Nel's New Day

April 24, 2015

Campaign Donations – A Murky World

The media is filled with the almost two dozen potential GOP presidential candidates for 2016. Scott Walker is the Koch’s pick–no, they changed their mind and want Marco Rubio. Jeb Bush is leading–no, he’s two points behind Rubio. Hillary Clinton is guilty of fraud–or maybe not. And that’s just in the last few days.

In Clinton Cash: The Untold Story of How and Why Foreign Governments and Businesses Helped Make Bill and Hillary Rich, Peter Schweizer, a Republican researcher, reveals his personal perception of the  correlation between foreign government donations to the Clinton Foundation with favorable State Department decisions while Hillary Clinton was secretary. Although the book won’t be published until May 5, Schweizer has already confessed that he cannot prove his allegations because of his confusion between paid and unpaid appearances. He said that “the errors would be corrected” but didn’t say whether it would be before the publication. With a long history of sloppy research and reporting—even citing a hoax press release in the book—Schweizer admitted he cannot prove the allegations in the book.

“Short of someone involved coming forward to give sworn testimony, we don’t know what might or might not have been said in private conversations, the exact nature of the transition, or why people in power make the decision they do…. We cannot ultimately know what goes on in their minds and ultimately provide the links between the money they took and the benefits that subsequently accrued to themselves, their friends, and their associates.”

While the GOP pushes a possible scandal about Clinton, Jeb Bush’s financial arrangements are decimating the crumbling foundation of campaign limits. After collection tens of millions of dollars while “not-running” for president, he has announced that he will turn over his campaign’s primary functions to a super PAC that can have unlimited funding from unknown sources. The Right to Rise (interesting name!) PAC will not only provide advertising but also carry out duties usually from a campaign, including direct mail and get-out-the-vote drives.

At this time, contributions have three levels: beneficial donations to a candidate have legal caps; donations to a party may not reach the candidate that the donor desires; and super PACs cannot legally coordinate with specific candidates. In the past these PACs have sometimes run counter to the candidates’ wishes.

Jeb claims he can coordinate with his super PAC because he says he’s not even seriously considering a presidential run, using this time to plan future campaign strategy with the super PAC and participate in dozens of fundraisers. Jeb’s tactic may be found illegal. A provision of the Bipartisan Campaign Reform Act of 2002 states that if Jeb—or any other candidate—has a direct or indirect involvement in “establishing, financing, maintaining or controlling” an outside entity—such as a super PAC—that entity cannot receive or spend contributions that exceed the limit on contributions to a federal PAC of $5,000 per donor per year. The provision includes any candidate’s proxies “acting on behalf” of the candidate.

When Jeb announced his federal leadership PAC, the Right to Rise PAC, his “allies” announced the supporting super PAC, the Right to Rise Super PAC. They sound like twins, but they’re actually triplets with the Right to Rise Policy Solutions, formed by a Bush friend and former staffer, that lets Jeb’s supporters make anonymous contributions. The likely leader for the super PAC after Jeb actually declares is Mike Murphy, Jeb’s longtime political confidant.

Although Jeb’s campaign spokesperson stated that he is not really candidate, that claim has been disputed. A complaint filed with the Federal Election Commission at the end of March accused four presidential hopefuls of violating campaign-finance laws by building campaign infrastructure without formally “testing the waters” for a bid. The other three are GOP Rick Santorum, Scott Walker, and Democrat Martin O’Malley.

Senior counsel to Campaign Legal Center said:

“These 2016 presidential contenders must take the American people for fools — flying repeatedly to Iowa and New Hampshire to meet with party leaders and voters, hiring campaign staff and raising millions of dollars from deep-pocketed mega donors, all the while denying that they are even ‘testing the waters’ of a presidential campaign.”

The FEC has three categories: non-candidates, candidates who are “testing the waters,” and formally declared candidates. Those testing the waters can conduct polls, travel, and make calls about a potential run, but candidates who raise more than $5,000 or formally refer to themselves as candidates must register with the FEC and be subject to reporting and disclosure requirements.

Other candidates have strong connections with super PACs. One supporting Sen. Rand Paul (R-KY) is run by his former campaign manager who is married to Paul’s niece. Another for Gov. Scott Walker (R-WI) is run by his former chief of staff and campaign manager for his 2010 gubernatorial campaign who is assisted by the campaign manager who ran Walker’s 2014 re-election race. Supporting super PAC for Sen. Marco Rubio (R-FL) is led by the co-founder of a political consulting firm with another political operative leading Rubio’s federal leadership PAC.

Early this year, the first criminal conviction for illegal coordination between a congressional campaign and a super PAC came down from the Justice Department after a campaign manager in Virginia pleaded guilty to coordinated campaign contributions and false statements. The DoJ stated:

“The Department of Justice is fully committed to addressing the threat posed to the integrity of federal primary and general elections by coordinated campaign contributions, and will aggressively pursue coordination offenses at every appropriate opportunity.”

Jeb has a history of controlling donations. While Florida governor, he shifted $150 million of pension funds toward his cousin, George Herbert Walker IV, at Goldman Sachs and at least another $1.7 billion of state workers’ retirement money to higher-risk, higher-fee investments at the financial firms that donated over $5 million to the campaign of older brother, George W. Bush.  Jeb is now reaping donations for Walker and other financial firms that received state business from Jeb’s administration.

Even conservatives such as columnist Kathleen Parker have serious doubts about the power of super PACS. In a column on “our corrupt campaign finance system,” she wrote, “There’s nothing free about paid-for elections—unless everybody knows where the money came from.” She expressed two concerns about massive shadow funding that bodes poorly for the GOP. One is the recent trend of large numbers of GOP presidential candidates, each with his or her own billionaire, who stay in an unwinnable race while tearing down an opponent who might have a better chance without the controversy about him that it causes, what Parker describes as “death by a thousand insults.”

Another issue is the “withering” of political parties, dooming “political comity.” To succeed, political parties have to agree within themselves whereas super PACs, unaccountable to no one, “form around extreme ideas” with anonymous donors. Even worse to Parker, the current system takes campaign control from the candidates. (She may have written this before Jeb Bush figured out a way around the problem.)

Parker is right about the destructiveness within the GOP. Talk show host Mark Levin attacked Karl Rove’s super PACs because it’s attacking Rand Paul in favor of Jeb Bush. Levin claimed that they are distorting Citizens United by attacking conservatives. Fox’s allowing Karl Rove to use his position to “clear the field” for Jeb is another Levin gripe. Levin called people like Rove “pretend conservatives, who are really on there with an agenda, and so they sit there, they pretend they’re analyzing…that to me is dishonest, it’s flat out dishonest.” He added, “I am trashing the fools like Karl Rove, who are taking advantage of their positions, pretending on the one hand that they’re analysts and on the other hand, they’re trying to defeat every conservative and clear the field for their Bush family candidate.” (Does the word “irony” come to mind?)

The disastrous Supreme Court rulings in Citizens United and its worse follow-up, McCutcheon v. FEC, have permitted almost unlimited donations for candidates. The first decision opened the donation floodgates; the second one ruled that government may restrict political contributions only to target quid pro quo corruption. This corruption is far more difficult to prove that the former criteria of “the general gratitude a candidate may feel toward those who support him or his allies, or the political access such support may afford.” As a result, 25,000 people made 40 percent of the donations to 2016 campaign funds, compared to the 16 percent of the contributions that came from the elite in 1980. With the advantage of McCutcheon and the high stakes for the 2016 election, the percentage will most likely go beyond 50 percent, giving 25,000 people a greater voice than the other 125 million donors in the United States.

donations chartSheldon Adelson gave over $100 million to 2012 political campaigns. Jeb Bush could give Adelson an estimated $139.7 million tax break by eliminating the federal capital gains tax. Cruz could give him $144.1 million, and Rick Perry could give $141.9 million. Scott Walker would be far more generous in shifting tax liability from the rich to working families. The Koch brothers plan to donate at least $1 billion in the current round. The wealthy look at their donations at merely an investment in future fortunes.

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