Campaign Finance: An Overview by Sunlight Foundation's Bill Allison

Campaign Finance
An overview

Why is this stuff so important?
 Politicians do notice
campaign
contributors
 That doesn’t mean
it buys votes, but it
does buy access and
the opportunity to
persuade an elected
politician to see
things your way

How to get attention

“Top Verizon executives, including CEO Ivan Seidenberg
and President Dennis Strigl, wrote personal checks to
Rockefeller totaling $23,500 in March, 2007. Prior to that
apparently coordinated flurry of 29 donations, only one
of those executives had ever donated to Rockefeller (at
least while working for Verizon).”

Happens at state level…
 You may recall Gov. Rick
Perry

 Texas Tech fund
rewarded donors

 They gave in $32K-$310K
range

 They got millions back

…and at the local level
 Donors gave Kasim Reed
campaign contributions

 Insiders raised money for
Reed’s mayoral campaign

 Airport concessions
awarded to…
 Big donors to Reed’s
campaign
 Big fundraisers for
Reed’s campaign

Multiple means to exert influence
 Hire former staffers as
lobbyists

 Hire former lawmakers,
councilmen, etc.

 Contribute to inaugural events

 Give money to lawmaker
charities

 Give to super PACs

 Hire relatives of elected
officials

Politicians have lots of pockets
 Campaigns

 Parties

 Leadership PACs

 Nonprofits

 Businesses & investments

 Super PACs

 Family members

Businesses “pick the pocket”
 Lots of places to look

 We’ll suggest some
resources

 Not all this money can be
traced

 Sometimes, you need
sources

Two different perspectives on
this
 Money is inconsequential  Money is decisive
 Contributors give to  Presidential campaigns are
lawmakers because of the auctions; Congress is a big
member’s positions (Phil flea market with all sorts of
Gramm and NRA) bric-a-brac policies on sale

Truth is always somewhere along
the continuum between the two

“When elected officials solicit these
contributions from interests who almost
always have matters pending before the
Congress, [they] become at least
psychologically beholden to those who
contribute. It is inevitable and unavoidable.”
--William Brock, former Senator, former RNC
Chairman

That doesn’t mean…
 That all politicians are
bought and paid for
 Very few make up bribe
menus like the one to the
right
 But politicians tend to
grant more access to big
contributors than non
contributors, and their
views and actions
sometimes reflect this

 Bank of America increased
the interest rate on Bonnie
Rushing’s credit card from
8 percent to 23 percent.

 Sen. Thomas Carper: “But
let me just ask you -- put
yourself in the shoes of the
credit card company…”

 And how do the credit
card companies feel
about Sen. Tom Carper?
 Rushing’s monthly
interest bill went from
about $150 to $674
 Small change to a U.S.
Senator’s campaign
committee…

So before we go further into the
fun stuff, let’s look at the rules…
 Federal elections have one set of
rules (and multiple sets of
resources for following the
money)
 State elections have 50 separate
sets or rules (one for each state)
 Some local jurisdictions have
rules specific to them (sometimes
dependent on state law)

 In Colorado, corporate and labor donors are banned, except
when they aren’t
 Colorado Springs is the largest home rule municipality in
Colorado

Let’s focus on Federal rules.
Individuals can donate…
 (inflation adjusted)  (not inflation adjusted)
 Up to $2,500 per election  Up to $5,000 to a Political
to a candidate, that is, Action Committee per year
$2,500 for the primary,  $10,000 to state, district &
$2,500 for the general local party committee (for
 $30,800 to a national party use in federal elections,
committee (RNC, DCCC, that is) (combined limit)
etc.)  Unlimited amount to super
 Up to $117,000 every two PAC for eligible U.S. donors
years to PACs, parties,
candidates…

…but potentially a lot more if
they have a lot of friends
 Bundlers put together
networks of donors, all of
whom can write $500,
$1,000 or $2,500 checks
to campaigns
 They are much more
important to presidential
campaigns, but members
of Congress also rely on
them

Can also give unlimited amounts
to 527s, 501cs and super PACS
 All three have
separate rules
 501cs don’t disclose
 527s avoid some
activities
 Super PACs disclose
but have few
restrictions
 Candidates can raise
money for super PACs
 Most giving so far has
been individual

Big trend from 2008?
 Rise of the small
donor
 Contributions under
$200 don’t have to
be itemized
 Campaigns must still
keep donor lists for
small donors, subject
to FEC audit

Worth remembering…
 Unitemized=less than $200

 Obama’s totals very similar
to Bush ’04

 Congress relies more on big
donors

 Big money still decisive

Small donors get a raffle…
 $5 donors offered dinner
w/Obamas

 Good technique for
attracting small donors

 Did it in 2008 too

 But unlike the lottery…

Big donors get access
 Donors who give to
Obama & DNC get
access

 It’s not like spending
$35,000 on lottery
tickets

 Lotteries are more
honest…

Bigger trends from 2008?
 Bundlers are bigger than ever

 They operate at the
presidential, congressional
and state level (probably
local too…)

 No requirement that their
identities be disclosed,
except…

 As part of the Honest
Leadership and Open
Government Act of 2007
 Registered lobbyists must
disclose the bundling of
contributions they do for
federal candidates
 Applies to individuals
they bring to fundraisers,
PACs they control or
persuade to contribute
 All bundles over $16,200
are reported.

Easy to defeat disclosure
 We see tons of invites like
this one

 Hosts commit to raise money

 Vast majority don’t show up
as bundlers

 Even when they’re lobbyists

What a business can do

 Form (and pay
expenses of) a political
action committee
 PACs can contribute
$5,000 per election (i.e.,
primary, general) to a
candidate; $15,000 to a
national party
committee; $5,000 to
state, district or local
parties per year; $5,000
to other PACs per year
 Funds must be
“segregated” from other
corporate money

Note this language…

 Where are corporations like ExxonMobil and
Imperial Oil, and labor unions as well, making
contributions?

…to some state level parties

…and to Super PACs
 Mostly individual donors

 Few businesses show up

 But individuals run
companies

 Have interests before
gov’t

Hire lobbyists
 Lobbyists get access

 This page is beautiful

 Shows wining and dining

 Lobbyists are also
contributors

Donate to inaugural committees
 All states have different
rules

 Sometimes donors can
give more

 Enron gave lots to
Bush’s inaugural
committee

Pay for junkets
 Not always easy to
trace

 Disclosure for
Congress, Executive
Branch

 States, localities vary

Where do you get information?
 Federal
 State
 Primary
 Primary
 FEC.gov
 State election
 House Clerk
authorities
 Secretary of Senate
 State ethics commissions
 Secondary
 IRE has a resource for
 OpenSecrets.org finding them
 InfluenceExplorer.com  Secondary
 NICAR  Followthemoney.org
 NY Times  InfluenceExplorer.com
 ProPublica.org
 Wall St. Journal

www.FEC.gov
 Clunky

 Getting
better

 Still not
perfect

 Original
source of
data

Useful features

 Presidential election map  Congressional election
with zip coded map with downloadable
contributions files for every candidate

Other features
 Clunky search engine
 Ability to see raw
paper reports
 Download huge data
files
 Enforcement, press
releases, other data
 Explanations of
campaign finance law

Tons of data…
 Federal candidates
1987 to present
 Pacs 1997 to present
 Lobbying 1998 to
present
 Trips, financial
disclosure and much
more…
 You can buy custom
slices of data from
them

National Institute on Money in State
Politics
 Like CRP, they
industry code
contributions
 Covers all 50
states
 They always run
a bit behind
raw state
disclosures

Campaign Finance: An Overview by Sunlight Foundation's Bill Allison

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Editor's Notes