How Not To Get Money Out Of Politics
/An oft-repeated mantra of the last several decades is that "we need to get money out of politics." I'm told that that mantra polls well among the public even today. The proposed solution has been our campaign finance laws, which got started in a big way in the 70s and have been added to since. Those laws restrict the amount of money that any donor can contribute to a political campaign, and often have also attempted to restrict how much a donor can contribute to a political party or an independent group, and even how much a campaign can spend in the aggregate. Violate any of the restrictions, and you have committed a criminal act.
Many, but far from all, of the restrictions have been ruled unconstitutional by the Supreme Court. In brief summary, the position of the Court has been that independent political expenditures are a form of speech protected under the First Amendment, and therefore cannot be restricted. However, the Supreme Court has also ruled that contributions directly to a candidate's campaign might be a disguised form of bribery, thereby posing a threat of corruption, and therefore subject to restriction. There is currently a limit of $2600 for contributions by any one individual to the federal campaign of any one candidate; a married couple can contribute double that, or $5200. More is a crime. Many states have their own restrictions, generally of similar form, but subject to the same limitations coming from the Supreme Court case law.
With that background, I will now give the facts of three actual situations that are playing out even today, and your task is to guess which one has been the subject of a criminal investigation:
Scenario A. Governor Scott Walker of Wisconsin faced a recall election in 2012. No single donor gave the campaign more than allowed under the contribution limits of the state's campaign finance law. However, some large independent groups (Americans for Prosperity, Club for Growth, Republican Party of Wisconsin) ran many TV ads during the campaign that, without directly supporting Walker, took Walker's side of certain issues. Allegations were made that these expenditures were "coordinated" with the Walker campaign, although the independent groups paid for the ads with their own money and none of the money went to Walker or his campaign. (From the Milwaukee Journal Sentinel of June 19: Beginning in March 2011, there were "open and express discussions" of the need to coordinate the activities of entities like Americans for Prosperity, Wisconsin Club for Growth, the Republican Party of Wisconsin [and others].) Some of the money may have come from the much-vilified Koch brothers. Walker won the recall election.
Scenario B. After winning election as Mayor of New York City in November 2013, Bill de Blasio pushed forward a signature initiative of universal pre-k education in the public schools. A not-for-profit called Campaign for One New York was formed by de Blasio and his aides to advance this initiative, and after de Blasio was elected it began running television commercials aimed at building political momentum for the initiative. A July 15 article from Crain's New York Business describes the next steps. As of April 8 de Blasio was planning $1 million of television advertising through April in support of the the plan, but had only $100,000 on hand after having spent only about half of the planned amount. On April 9, the City's teachers union, the American Federation of Teachers, contributed $350,000 to Campaign for One New York, thereby enabling it to complete the advertising blitz. Then in early May the long-running labor dispute between the City and the teachers union was settled through the efforts of de Blasio, with a contract containing increases over the previous contract calculated at $9 billion, of which some $4 billion consists of retroactive raises that previous mayor Mike Bloomberg had said were unaffordable. Meanwhile the adoption of public-school pre-k will result in the hiring of several thousand more unionized teachers, and thus several million dollars more per year of taxpayer revenue going to the teachers union.
Scenario C. Hillary Clinton is considered the presumptive nominee of the Democratic Party for President in 2016. But she has not yet officially launched a campaign. Meanwhile, she makes frequent speeches, many on university campuses, and charges reputed "speaking fees" of approximately $250,000 per speech. According to this Washington Post article, during the last several months she has given at least eight speeches at colleges and universities, for fees totaling some $1.8 million for just those eight. When criticized by students for spending their tuition money on such high speaking fees for one speech, several of the universities have defended themselves by saying that they did not use tuition money, but rather took money from some kind of speakers fund that had been raised from one or more donors to the university. For example, the Post article reports that Hillary's speech at Colgate was funded by a senior financial executive named Edward Kerschner; at UConn, her fee was underwritten by New Haven-based developer Edmund Fusco. In other words, those guys (and others) have managed to send close to 100 times the campaign contribution limit to Hillary; but because they have arranged to characterize the payment as a "speaking fee" and to have a university as an intermediary, they claim to be outside the campaign finance system and even take a tax deduction for the contribution.
One of these three scenarios has been the subject of a long-running and expensive criminal investigation. Can you guess which one? Of course it is Scenario A, involving Republican Scott Walker. The theory behind the investigation is that the Walker campaign "coordinated" with the independent groups on the timing and themes of the ads, thereby making the ads a sort of in-kind contribution to the campaign itself, and making the groups subject to registration under Wisconsin campaign law. The investigation is under the auspices of Democrat Milwaukee County District Attorney John Chisholm. Two judges, one state and one federal, have weighed in, and both have been severely critical of the investigation. The federal judge got involved when Club for Growth brought a lawsuit seeking to stop the investigation, and a ruling in that case appears to have shut the investigation down for now. But the Journal Sentinel provides quotes from the complaint in that case that give an idea of the investigation's scope and tactics:
[T]he judge who originally presided over the investigation authorized as many as 100 subpoenas "of breathtaking scope" and ordered raids "related to at least 29 organizations." . . . "School-age children were home in at least two residences and school buses passed their houses during the course of the raids, which lasted over two and a half hours," O'Keefe's complaint said. "The searches were conducted by six armed sheriff's deputies with flak vests, bright lights were aimed at the houses, and multiple vehicles were parked on the lots, police lights ablaze."
I don't know how you may react to the three scenarios, but of the three I find the Walker situation to involve by far the least taste of corruption. Yet I haven't heard or seen any hint of an investigation as to the situations involving either de Blasio or Clinton. The biggest part of that could simply be that all the relevant prosecutorial offices in the federal government, New York, and Connecticut are currently headed by Democrats, who are just not going to go after their own. Meanwhile, Walker is a Republican being pursued by Democrats.
The other piece may be that de Blasio and Clinton are just a little cleverer in how they structure their transactions. Still, in the face of a $2600 campaign contribution limit, could it really be that giving $250,000 legally to Hillary (and getting a tax deduction for it no less) is as simple as laundering the money through a university and calling it a "speaking fee"? If so, what possible function is served by these campaign finance laws, other than as a device to torture your adversaries when your side happens to control the prosecutorial offices at a particular moment?