[EL] "Illegal contributions" from Ami Bera's father

Wed May 11 15:08:56 PDT 2016

Setting aside this particular case, and the “contributions in the name of another” statute, an open question is how McCutcheon may have affected Buckley’s original affirmance of the application of contribution limits to family members.

The Court in Buckley v. Valeo upheld the application of the contribution limits to family members in deference to Congress, while acknowledging that “the risk of improper influence is somewhat diminished …” 424 U.S. at 53 n.59. It could not “say that the danger is sufficiently reduced to bar Congress from subjecting family members to the same limitations as nonfamily contributors.” Id. But the Court noted that “the core problem of avoiding undisclosed and undue influence on candidates from outside interests has lesser application when the monies involved come from the candidate himself or from his immediate family.” Id. at 53.

In McCutcheon, the Court emphasized that there is “only one legitimate governmental interest for restricting campaign finances: preventing corruption or the appearance of corruption.” 134 S. Ct. at 1450. Current law creates an oddity that is hard to square with this standard. Under the Federal Election Campaign Act, as affirmed by Buckley, Daddy Warbucks may only give candidate Annie $2,700 per election. But under the Ethics in Government Act, Warbucks could give Senator Annie an unlimited gift that, unlike her campaign contribution, she could freely use for personal purposes: a house in the Bahamas, a vacation to Italy, a glass giraffe, a very large trust fund. Moreover, Senator Annie would not only be able to accept that gift, but would not even have to disclose it on her personal financial disclosure report. It is hard to reconcile these very different results. And one could argue that it is hard to sustain Buckley’s longstanding holding under the harsh light of McCutcheon’s articulation of the permissible state interest. At the very least, it is a good example of the muddled state of current law.

=B.

Brian Svoboda | Perkins Coie LLP
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From: law-election-bounces at department-lists.uci.edu [mailto:law-election-bounces at department-lists.uci.edu] On Behalf Of Trevor Potter
Sent: Wednesday, May 11, 2016 5:32 PM
To: Smith, Brad
Cc: law-election at uci.edu
Subject: Re: [EL] "Illegal contributions" from Ami Bera's father

But the point Mark raises is really broader-where should the line be drawn to prevent corruption and the appearance of corruption? And should an enforcement agency have discretion in deciding the line on an ad hoc basis?
Brad suggests that parents should be on the non- corrupt side of that line. How about siblings? Parents in law? Cousins? To what degree? Aunts, Uncles ? By blood or marriage or both?

All of those are questions that will arise when drawing the line between contribution limits for the public and unlimited contributions for " family". And if the family member owns a large industrial corporation and the relative is running for Congress or the Presidency, then the corruption rationale may not be so clearly irrelevant....

Trevor Potter
Sent from my iPhone

On May 11, 2016, at 5:17 PM, Smith, Brad <BSmith at law.capital.edu<mailto:BSmith at law.capital.edu<mailto:BSmith at law.capital.edu%3cmailto:BSmith at law.capital.edu>>> wrote:

No, I think a law that says parents aren’t likely to corrupt this kids is sensible, and doesn’t leave much discretion in the hands of bureaucrats. It’s not the agency we’re discussing, but the statute, and whether the constitution should protect that behavior.

For what’s it worth, I would also be comfortable with a law saying if a donor says, "I just wanted to give that candidate lots of money because I thought he was really attractive," then the contribution is legal. But that seems like a very different discussion with lots more room for disagreement.

Bradley A. Smith
Josiah H. Blackmore II/Shirley M. Nault
Professor of Law
Capital University Law School
303 East Broad Street
Columbus, OH 43215
(614) 236-6317
bsmith at law.capital.edu<mailto:bsmith at law.capital.edu<mailto:bsmith at law.capital.edu%3cmailto:bsmith at law.capital.edu>>
http://www.law.capital.edu/faculty/bios/bsmith.asp<https://urldefense.proofpoint.com/v2/url?u=http-3A__www.law.capital.edu_faculty_bios_bsmith.asp&d=CwMFaQ&c=XRWvQHnpdBDRh-yzrHjqLpXuHNC_9nanQc6pPG_SpT0&r=liAVgWK_6sjbUg6EC0f0khf6MyboEmFwaqEV2P3ukag&m=KW_bPJbis5o0w6VdHQcs6n9pmcynBJuyjAwAq_GWz2E&s=CVsuHWHSjPNT_HXRSWSy5umzafl_VG9NZ87DbUyO7dE&e=><http://www.law.capital.edu/faculty/bios/bsmith.asp<https://urldefense.proofpoint.com/v2/url?u=http-3A__www.law.capital.edu_faculty_bios_bsmith.asp&d=CwMFaQ&c=XRWvQHnpdBDRh-yzrHjqLpXuHNC_9nanQc6pPG_SpT0&r=liAVgWK_6sjbUg6EC0f0khf6MyboEmFwaqEV2P3ukag&m=KW_bPJbis5o0w6VdHQcs6n9pmcynBJuyjAwAq_GWz2E&s=CVsuHWHSjPNT_HXRSWSy5umzafl_VG9NZ87DbUyO7dE&e=>>

From: Mark Schmitt [mailto:schmitt.mark at gmail.com]
Sent: Wednesday, May 11, 2016 5:03 PM
To: Smith, Brad; law-election at uci.edu<mailto:law-election at uci.edu<mailto:law-election at uci.edu%3cmailto:law-election at uci.edu>>
Subject: Re: [EL] "Illegal contributions" from Ami Bera's father

I'm surprised that some of you who are on the more libertarian side of things would be comfortable with an agency selectively deciding which individuals' contributions might be likely to lead to corruption, and which would not. That's an awful lot of power to put in the hands of bureaucrats!

If you accept that *some* large contributions from *some* donors might have a potential for corruption, then wouldn't the cleanest, fairest law be one that simply limits contributions, regardless of the identity and interests of the donor? What if a donor says, "I just wanted to give that candidate lots of money because I thought he was really attractive." If that's really the motive for giving, there's probably less potential for corruption than if the donor says, "He's on the Financial Services Committee and I'm a banker." But I don't want some agency parsing that distinction.

Some of you may believe that there's no such thing as corruption or dependence corruption, and I've seen that argument. But if that's the case, then it doesn't matter that the donor is the candidate's father anyway.

Mark Schmitt
Director, Political Reform Program<http://www.newamerica.org/political-reform/>, New America<http://www.newamerica.org/>
202/246-2350
gchat or Skype: schmitt.mark
twitter: @mschmitt9

On Wed, May 11, 2016 at 12:13 PM, Smith, Brad <BSmith at law.capital.edu<mailto:BSmith at law.capital.edu<mailto:BSmith at law.capital.edu%3cmailto:BSmith at law.capital.edu>>> wrote:
Let’s try this link, then: http://www.myplainview.com/article_a9d1622d-8e2b-5cd4-b5a8-dc221c33a730.html<https://urldefense.proofpoint.com/v2/url?u=http-3A__www.myplainview.com_article-5Fa9d1622d-2D8e2b-2D5cd4-2Db5a8-2Ddc221c33a730.html&d=CwMFaQ&c=XRWvQHnpdBDRh-yzrHjqLpXuHNC_9nanQc6pPG_SpT0&r=liAVgWK_6sjbUg6EC0f0khf6MyboEmFwaqEV2P3ukag&m=KW_bPJbis5o0w6VdHQcs6n9pmcynBJuyjAwAq_GWz2E&s=KgMvyIPiFYI7Ec2hOmZKuUNd3XleitLFFxQmOnc6ojg&e=><http://www.myplainview.com/article_a9d1622d-8e2b-5cd4-b5a8-dc221c33a730.html<https://urldefense.proofpoint.com/v2/url?u=http-3A__www.myplainview.com_article-5Fa9d1622d-2D8e2b-2D5cd4-2Db5a8-2Ddc221c33a730.html&d=CwMFaQ&c=XRWvQHnpdBDRh-yzrHjqLpXuHNC_9nanQc6pPG_SpT0&r=liAVgWK_6sjbUg6EC0f0khf6MyboEmFwaqEV2P3ukag&m=KW_bPJbis5o0w6VdHQcs6n9pmcynBJuyjAwAq_GWz2E&s=KgMvyIPiFYI7Ec2hOmZKuUNd3XleitLFFxQmOnc6ojg&e=>>

The answer to your question is, “yes, the FEC has the authority to investigate parental gifts” if it believes that those gifts are being used to fund political campaigns in amounts in excess of the contribution limits of the Federal Election Campaign Act.” We did this several times during my time on the FEC, including the case linked to above.

You are correct that Mr. Bera could have formed a single candidate super PAC and then spent to his heart’s content (or at least his bank account’s capacity) independently of his son and the compaign. As Allen Dickerson points out, that he did not choose that option suggests that it may be a poor substitute for direct contributions. And of course, it still leaves us without an answer as to why the law should prohibit Bera from contributing directly to his son’s campaign, and why one wouldn’t think the Constitution should protect that right.

Bradley A. Smith
Josiah H. Blackmore II/Shirley M. Nault
Professor of Law
Capital University Law School
303 East Broad Street
Columbus, OH 43215
(614) 236-6317<tel:%28614%29%20236-6317>
bsmith at law.capital.edu<mailto:bsmith at law.capital.edu<mailto:bsmith at law.capital.edu%3cmailto:bsmith at law.capital.edu>>
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From: Gabriel Gopen [mailto:gabe.gopen at gmail.com<mailto:gabe.gopen at gmail.com><mailto:gabe.gopen at gmail.com%3cmailto:gabe.gopen at gmail.com%3e>]
Sent: Wednesday, May 11, 2016 10:29 AM
To: Smith, Brad
Cc: David A. Holtzman; Election Law

Subject: Re: [EL] "Illegal contributions" from Ami Bera's father

Mr. Smith, your link was on 527s. (Could be evergreen, FEC criticized for failure to act).

Without getting into a discussion about the rule governing intergenerational transfers of wealth, does the FEC have authority to investigate parental gifts? Who would even know to rip them of as happened here?

I suppose I could have said Bera Sr. could have set up a single candidate super Pac ("citizens for Elk Grove" Ceg) and a 501(c)(4) ("Elk Grove social club" EGSC). Then he could give unlimited contributions to EGSC, solicit unlimited contributions from relatives abroad for EGSC and dump it all into CEg to run ads in support of his son. I'd go on but Mr. Potter did this bit on Colbert already.

On May 11, 2016, at 9:57 AM, Smith, Brad <BSmith at law.capital.edu<mailto:BSmith at law.capital.edu<mailto:BSmith at law.capital.edu%3cmailto:BSmith at law.capital.edu>>> wrote:
If, as suggested below, Bera gave his son gifts, and the son then spent his own money on the campaign, the FEC would still consider that an illegal contribution in the name of another. See e.g. http://articles.latimes.com/2003/jun/14/nation/na-fec14<https://urldefense.proofpoint.com/v2/url?u=http-3A__articles.latimes.com_2003_jun_14_nation_na-2Dfec14&d=CwMFaQ&c=XRWvQHnpdBDRh-yzrHjqLpXuHNC_9nanQc6pPG_SpT0&r=liAVgWK_6sjbUg6EC0f0khf6MyboEmFwaqEV2P3ukag&m=KW_bPJbis5o0w6VdHQcs6n9pmcynBJuyjAwAq_GWz2E&s=HX9fDhXddNqQaWTLL1OSN58XtOwZ6loFhyHCxjEc4vU&e=>.<http://articles.latimes.com/2003/jun/14/nation/na-fec14<https://urldefense.proofpoint.com/v2/url?u=http-3A__articles.latimes.com_2003_jun_14_nation_na-2Dfec14&d=CwMFaQ&c=XRWvQHnpdBDRh-yzrHjqLpXuHNC_9nanQc6pPG_SpT0&r=liAVgWK_6sjbUg6EC0f0khf6MyboEmFwaqEV2P3ukag&m=KW_bPJbis5o0w6VdHQcs6n9pmcynBJuyjAwAq_GWz2E&s=HX9fDhXddNqQaWTLL1OSN58XtOwZ6loFhyHCxjEc4vU&e=>.> Mr. Gopen's proposed solution might satisfy the tax man, but it would not satisfy the FEC.

Nor does this change the fact that if "supporting your own child's political ambitions is laudable," we really ought to question why it is illegal. Any other law Bera violated stems from that illegality when combined with his laudable goal. I doubt our democracy would be poorly served if the Constitution had been properly interpreted to protect Mr. Bera's right to support his son's campaign without restrictions on the amount.

Bradley A. Smith

Josiah H. Blackmore II/Shirley M. Nault

Professor of Law

Capital University Law School

303 E. Broad St.

Columbus, OH 43215

614.236.6317<tel:614.236.6317>

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________________________________
From: law-election-bounces at department-lists.uci.edu<mailto:law-election-bounces at department-lists.uci.edu<mailto:law-election-bounces at department-lists.uci.edu%3cmailto:law-election-bounces at department-lists.uci.edu>> [law-election-bounces at department-lists.uci.edu<mailto:law-election-bounces at department-lists.uci.edu>] on behalf of Gabriel Gopen [gabe.gopen at gmail.com<mailto:gabe.gopen at gmail.com>]
Sent: Wednesday, May 11, 2016 9:35 AM
To: David A. Holtzman
Cc: Election Law
Subject: Re: [EL] "Illegal contributions" from Ami Bera's father
With the caveat that I did not see the original version of the article, Babual Bera's deceitful intent appears clear to me. As a max donor, he knew precisely the legal limit he could give to his son. He could also have given Ami cash gifts up to the limit of $14k ($28k if as a couple) per calendar year without a tax penalty. If he wanted to exceed that, he would have to pay the tax. Instead, the senior Bera found 90 other individuals to give maximum contribution which he reimbursed. To the public record, it looked as if candidate Bera had a wider array of supporters than he did.
I agree that supporting your own child's political ambitions is laudable. But unfortunately the method Babual Bera used to provide support was criminal.

On May 11, 2016, at 12:05 AM, David A. Holtzman <David at HoltzmanLaw.com<mailto:David at holtzmanlaw.com<mailto:David at HoltzmanLaw.com%3cmailto:David at holtzmanlaw.com>>> wrote:
Thomas, you may have seen an earlier version of the article. Note:
"UPDATES
. . .
2:37 p.m.: This article was updated with a quote and additional information from the U.S. attorney."
Without that I might have been baffled too.
The illegality was money laundering and fraud.
- dah

On 5/10/2016 7:05 PM, Thomas J. Cares wrote:
'I have, in fact, done the crime': Rep. Ami Bera's father admits illegal campaign contributions
http://lat.ms/1sbbYts<https://urldefense.proofpoint.com/v2/url?u=http-3A__lat.ms_1sbbYts&d=CwMFaQ&c=XRWvQHnpdBDRh-yzrHjqLpXuHNC_9nanQc6pPG_SpT0&r=liAVgWK_6sjbUg6EC0f0khf6MyboEmFwaqEV2P3ukag&m=KW_bPJbis5o0w6VdHQcs6n9pmcynBJuyjAwAq_GWz2E&s=zbMGArRyC81pY5zPreVHOX8fqrUbc4oGnb55aAGbddI&e=><http://lat.ms/1sbbYts<https://urldefense.proofpoint.com/v2/url?u=http-3A__lat.ms_1sbbYts&d=CwMFaQ&c=XRWvQHnpdBDRh-yzrHjqLpXuHNC_9nanQc6pPG_SpT0&r=liAVgWK_6sjbUg6EC0f0khf6MyboEmFwaqEV2P3ukag&m=KW_bPJbis5o0w6VdHQcs6n9pmcynBJuyjAwAq_GWz2E&s=zbMGArRyC81pY5zPreVHOX8fqrUbc4oGnb55aAGbddI&e=>>

I really would have thought constitutional rights to self fund would include the right of a very close relative, like a parent, to fund a campaign without restrictions. This feels very wrong. I don't see why such a restriction would survive any scrutiny - a large contribution from a parent is highly unlikely to create any conflict of interest that wouldn't already be there by virtue of them being your parent (especially if they are the kind of parent who would have made a large contribution, but for a law prohibiting it - (a parent who has surely otherwise been a supportive figure to the candidate)).

I am incredibly baffled by the contents of that LA Times story.

Also, I think it's kind of great if a candidate is so lucky to have a parent to fund them (I was a candidate once, but don't have parents with those kinds of resources). Much better for society to have candidates funded by parents than candidates funded by executives whose companies have business before Congress, albeit in smaller aggregated amounts. (Baffled).

Tom Cares

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