One doesn't even know where to begin...
 
Bradley A. Smith
Professor of Law
Capital University Law School
Columbus, OH
 

________________________________

From: owner-election-law_gl@majordomo.lls.edu on behalf of Holman@aol.com
Sent: Sat 6/10/2006 7:15 PM
To: election-law@majordomo.lls.edu
Subject: Re: bundling question


Let us not lose perspective on "is" versus "ought." Though the distinction between a partnership contribution and bundling contributions has been appropriately clarified on this listserv, let us not rest with the explanation of the current FEC rules as dealing with the problem of bundling. 
 
There is a problem, based in the fact that there is no disclosure requirement for the modern version of bundling activity.
 

While it is not illegal to bundle, FEC regulations require bundlers and campaigns to disclose the names of the bundler as well as all the sources of bundled contributions, if the bundler physically delivers the checks to the campaign. [11 CFR 110.6, implementing 2 USC 441a(a)(8)] This practice is known under FEC regulations as "earmarking" of campaign contributions through a "conduit" (i.e. bundler).

 

The 2004 election cycle, as documented by the WhiteHouseForSale.org project, has seen bundling of campaign contributions reach an all-time record, providing a significant new source of special interest money to replace some of the corporate and union soft money that has since been (again) banned by BCRA. 

 

Mandatory disclosure of bundled contributions is the very least we can do to address the new problem. This could be done by redefining conduit as:

 

"any person who receives and forwards an earmarked contribution, or who receives oral or written accreditation from a donor as being responsible for a donor's reportable contribution of $200 or more, to a candidate or candidate's authorized committee..."

 

Setting a threshold of reportable contributions of $200 or more would provide a sufficient allowance for such fundraising events as rock concerts as well as avoid hindering fundraising over the Internet or restricting the fundraising activities of small-donor PACs and groups.

 

In order to be an effective mandatory disclosure requirement, it will also be necessary to narrow the scope of exceptions to the definition of "conduit." The key exception subject to abuse is that a "fundraising representative" so designated by a campaign is exempt from the definition of conduit. This is a reasonable exception for genuine fundraising officers and outside fundraising firms employed by a campaign, but the current regulatory language allows a campaign to designate anyone as a fundraising representative (as Allison points out, even "Pioneers"). For the purposes of capturing bundlers under the disclosure requirements who are not formal fundraising officers or firms of a campaign, a fundraising representative of a campaign should be defined as 

 

"a person who is officially designated as a representative of the candidate by the campaign, and either (i) allocates at least 25% of a normal work-week on behalf of the campaign; or (ii) is retained at fair market value for fundraising."

 

The FEC has let us down on so many issues, but it does seem that disclosure is something that even the FEC should believe in. A very simple regulatory step could be taken by the agency to address this problem.

 


Craig Holman, Ph.D.
Public Citizen
215 Pennsylvania Ave., SE
Washington, D.C. 20003
TEL: 202-454-5182
FAX: 202-547-7392
Holman@aol.com