Individual Contribution Limit in U.S. Elections Raised to $4.9 Million

December 26, 2014

TRNN reporter Thomas Hedges takes a look at two new provisions in the 2015 spending bill that drastically increase individual limits and prohibit President Obama from using executive action to shed light on dark money in campaigns.

TRNN reporter Thomas Hedges takes a look at two new provisions in the 2015 spending bill that drastically increase individual limits and prohibit President Obama from using executive action to shed light on dark money in campaigns.



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Story Transcript

THOMAS HEDGES, TRNN PRODUCER: On December 16, President Obama signed the omnibus spending bill for 2015 into law, representatives immediately decried key provisions within the bill, including one provision that serves as an insurance policy for Wall Street derivatives trading.

ELIZABETH WARREN, U.S. SENATOR (D-MA): The original bill that is being incorporated into the House’s spending legislation today was literally written by Citigroup lobbyists, who, quote, redrafted the legislation.

HEDGES: But one measure that didn’t get as much attention was a change to individual campaign financing rules.

JAY RIESTENBERG, RESEARCH ANALYST, COMMON CAUSE: It’s supposed to be in confusing, and it’s inherently confusing, so people don’t understand it. And that’s why it was tucked away in the fourth of the last page of the sixteen hundred bill, and it was done in the middle of the night in what some people are calling a cigar-filled bathroom. And it took a while for anyone to own up to who actually wrote it, and we still actually don’t know.

HEDGES: Jay Riestenberg is a research analyst at Common Cause, which is a nonpartisan government watchdog organization. It used to be that individual contributions to party organizations in any given election cycle were limited to $259,000. Now that amount is 500 percent more, standing at $1.5 million.

RIESTENBERG: What the new provision in this spending bill does is it creates essentially two new categories that a party can raise money for buildings and it can raise money for legal fees and recount fees in addition to conventions and general support.

HEDGES: The media often cite the individual limit as $32,000 a year per political party. But Riestenberg says that can be misleading, because that figure applies not to the entire party, but to just one branch or earmarked effort within that committee, of which there are many. There are a total of six main party committees, three on the Democratic side and three on the Republican side. Those three organizations are as follows: the umbrella national party organization, like the DNC or RNC, then a separate senatorial committee, and lastly a House committee.

Technically and confusingly, however, there are two branches within the umbrella committee. There’s a fund for general support, and another one for conventions. That adds up to four funds for each party, totaling eight among both the DNC and the RNC. If you multiply the number of branches by the $32,400 contribution limit, you end up with $259,200. That’s how much individual donors could actually contribute under previous rules.

But in the 2015 spending bill, Congress has included three additional branches within these four subsections of each party organization. They’ve included conventions, buildings, and legal fees. They’ve also increased the contribution limit to one of these entities from $32,000 to $97,000, rocketing the old limit from about $259,000 to the current $1.5 million.

RIESTENBERG: Meaning it would benefit maybe 100 individuals, maybe 200 individuals that have that kind of cash to contribute. It would only allow a few people to get more, but affects everyone. It affects everyone by big wealthy donors being able to give more money and control more of our political system when our government should be and our campaign finance law should be based on small donor contributions. This exacerbates the problem that we’re already facing.

HEDGES: But there’s yet another category of funds that individuals can contribute to called joint fundraising committees. They’re funds that were bolstered in the recent Supreme Court McCutcheon v. FEC decision. These committees are not official party committees like the DNC or RNC; they’re instead formed by groups of candidates who want to circumvent the FEC rule that limits direct donations to candidates to $5,000. Individuals can instead write a check for $50,000, say, claiming that it’s meant for a committee with ten member politicians. Having a joint committee meets the donor needs to write only one check. Also, every member who benefits from that contribution knows who wrote the check, so that the donor has leverage not just with one member, but with the entire group.

RIESTENBERG: The amount an individual donor can give to the three political campaign committees after McCutcheon, after the McCutcheon ruling, is $3.6 million. And then, when you add in–and that includes the current $259,000 that I talked about earlier. And so, when you add in the new amounts minus the $259,000, it’s $1.5 million. To be honest, it took us about a day and a half to figure out these numbers, even though campaign finance is one of our key issues. Even the experts had to wrap their head around this.

HEDGES: So with these new changes to official party committees and joint fundraising committee campaign finance rules, an individual can now contribute up to $4.9 million.

A second provision within the 2015 spending bill targets President Obama’s authority to force corporations with federal contracts to disclose their contributions. The executive action could have shed at least some light on the larger portion of what’s called dark money in politics, a pool that grew significantly after the 2010 Citizens United case.

RIESTENBERG: Now, the contributions to candidates and to parties are required to be disclosed under the FEC. The contributions to nonprofits like, say, Americans for Prosperity are not required to be disclosed. In fact, it’s a huge loophole we have, that those groups are able to block out who their donors are.

But we know, because of–things have been released like Mitch McConnell going in a back room and fundraising at Koch summits. We know that these candidates know who these donors are that are helping them through independent–quote-unquote independent groups, third-party groups. So we know that it’s just one way to move money with it being anonymous, and we know the candidates know who these people are, by and large.

So this is one way. And it’s not just a campaign-finance issue. This is a pay-to-play issue. This is contractors and huge corporations buying a government contract through political contributions that no one knows about through third-party groups.

The omnibus bill, funny enough, has language in there saying that Obama cannot issue this executive order, which is a huge blow, because it’s one of the few things at the federal level we could do to really shore up the dark money in our political system.

HEDGES: An overwhelming majority of Americans agree that there’s too much money in politics. According to polls conducted by Public Citizen, 61 percent of Americans oppose the Supreme Court’s Citizens United decision to allow corporations and unions to spend unlimited amounts of money on campaigns. Democrats, Republicans, and independents also strongly agree that money in politics had to be reduced. And 60 percent of voters said they wanted to see major or complete campaign finance law overhauls.

RIESTENBERG: You know, I think you can look at poll after poll, study after study. The overwhelming majority of the people in this country are fed up with the amount of money in politics. They’re fed up with the amount of power the 1 percent and the largest corporations have over our elected officials. And most surprisingly, it’s not a Democrat or Republican thing. There is bipartisan support and bipartisan opposition to this issue. You actually can even look through the news and see that a lot of the Tea Party members in Congress had a huge problem with the campaign finance limit provision in the [communist (?)] bill ’cause it gave more power to the central party versus the activists on the ground.

HEDGES: Riestenberg understands why many Americans might be discouraged by corporate influence in Washington, but he argues that in the meantime the public should focus on ways to keep corporate money from disappearing into these dark pools.

RIESTENBERG: It’s going to take a long time to build a bigger populist movement that can take this country back from kind of the special interests and the 1 percent that kind of have a grip on our Congress. It will take a long time. And we’re very realistic about it.

But in the meantime, there are things we can do. We can pass more public financing laws both in Congress and in the state level that empower small donors. We can pass disclosure laws so we see who these guys really are, ’cause more and more money is running through dark money groups and in secret, because these wealthy individuals and these corporate interests, they don’t want their name out there. They want to do this behind closed doors and in secret. So we can do that. And we can kind of expose them, show that this isn’t your government. You need to take it back.

HEDGES: For The Real News, Thomas Hedges, Washington.

End

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