What higher contribution limits mean for 2016

Written by Devin Mitchell on February 18, 2015


Thumbnail for the fundraising ban campaign

The CRomnibus appropriations bill that became law in December attracted attention for rolling back an element of the Dodd-Frank financial reform, but perhaps just as important were the changes to campaign finance law.

The cap on donations to political party committees from individual donors rose 500%. This comes after the 2014 McCutcheon v. FEC Supreme Court decision striking down the biennial aggregate limits on contributions and a Federal Election Commission ruling in October allowing parties to collect more money from donors for political conventions. All told, individuals will be able to donate up to $4,929,200 per election cycle moving forward compared to $259,200 per cycle previously.

Set aside for a moment the wisdom of making huge policy changes in must-pass legislation to keep the government open during the lame duck session. It’s worth exploring what the implications of this will be for the 2016 election cycle, the first to take place under the new rules and only the second presidential election since the Citizens United and SpeechNow court cases.

Wealthy donors are already taking advantage of the new rules, according to the Center for Public Integrity:

Public Storage founder B. Wayne Hughes Sr. gave the Republican National Committee $67,600 on Dec. 30, which the RNC labeled as a “convention fund contribution,” according to new federal campaign finance disclosures.

The Democratic Congressional Campaign Committee, meanwhile, reported receiving $38,392.06 on Dec. 31 from what appears to be a trust for the estate of Robert Bohna, a Sonoma, California, businessman who died five years ago. That contribution is labeled in a federal filing as a “building fund contribution.”

We should expect to see more of this. Donations to political parties were similarly unregulated prior to the 2002 Bipartisan Campaign Reform Act, often known as McCain-Feingold. The law cracked down on the proliferation of soft money, contributions to national parties that were not subject to federal limits.

The amount of soft money raised by the two major parties rose rapidly in the 1990’s, from around $105 million in the 1994 elections to $487 million in 2000 elections. It also resulted in big donors contributing to both political parties to gain access to prominent politicians and obtain desired policy outcomes, according to Public Citizen:

In his first term, President Clinton hosted 938 overnight guests, including hundreds of contributors, in the Lincoln Bedroom. The guests contributed more than $6 million to the DNC in soft money.

As part of a 1995 fundraising appeal, the Republican National Committee offered prospective givers a number of valuable perks in exchange for large soft money contributions including: (1) for $250,000, a designation as co-chair of the main G.O.P. fundraising dinner and lunch with House Speaker Newt Gingrich and Senate Majority Leader Bob Dole; (2) for $150,000, a vice chairmanship of the dinner and two Republican national convention tickets; (3) for $45,000, a deputy chairmanship and breakfast with Speaker Gingrich and (4) for $15,000, the opportunity to meet privately with Republican lawmakers.

In the 1996 election cycle, the Archer-Daniels-Midland company gave a total of $700,000 in soft money contributions to the Democratic and Republican parties. In August 1996, Congress voted to again extend the federal tax break for ethanol, which brings ADM an estimated $75 million in annual profits. ADM also benefits another $200 million yearly from the federal sugar support program, which keeps prices for corn syrup artificially high.

This is what happened the last time political party money was this unregulated.

Campaign finance law is in a different place than it was pre-2002. Corporations are now able to use money from their general treasuries to support or oppose candidates. The lifting of restrictions on independent expenditures means that donors don’t have to rely on political parties if they want to engage in political spending. The recent revelation that the Koch Brothers intend to spend $889 million during the 2016 election cycle tells us that much.

This is a step in the wrong direction that risks inviting more corporate money into the electoral process. With campaigns appearing more focused on courting donors than attracting voters, it’s the last thing the political system needs.

Office: Common Cause National

Issues: Money in Politics

Tags: Fighting Big Money

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