• Lawyers allege that Sen. Ted Stevens received additional gifts outside of the over $250,000 in labor and renovations to his chalet. These gifts included a $2,695 massage chair, a $1,000 sled dog, and a $3,200 “hand-designed” stained glass window.
• Rep. Charles Rangel will recommend that the House Ethics Committee look into his personal finances after reports from the New York Post and New York Times revealed that Rangel failed to properly report income from a Dominican vacation home on both his personal financial disclosures and his income taxes.
• However, an Ethics Committee investigation may take time as the committee does not have a chairman at this time following the tragic death of Rep. Stephanie Tubbs Jones. Rep. Gene Green is the likely temporary replacement, although Speaker Nancy Pelosi won’t appoint Green until after a Sept. 10 memorial service for Tubbs Jones.
• The Federal Election Commission will hold a hearing on Sept. 17 on proposed rules for the disclosure of contributions bundled by registered lobbyists.

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Three makes a trend, right? Today, there are three news stories on presidential bundlers - campaign contributors who solicit money from other contributors and bundle it together - and their activities. All of these stories highlight the need for bundling disclosure rules from the Federal Election Commission. But two of these stories pinpoint the potential for abuse in the bundling system.

The Washington Post looks at the odd practices of one Harry Sargent III, the owner of an oil trading company with billion dollar defense contracts. Sargent has raised over $50,000 for Sen. John McCain’s presidential bid from a collection of Arab-Americans who refuse to discuss why they gave money to the Republican’s campaign: (more…)

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Earlier today, the Campaign Finance Institute (CFI) and Public Citizen released an extensive study that found the majority of the bundlers and other fundraisers raising cash for the various 2008 presidential campaigns, over 2,000 individuals, come from only three segments of the U.S. economy: lawyers and law firms, three finance industries, and real estate. Among those industries, Republicans hold an edge in raising money from the real estate and lobbying industries. Democrats are receiving more funds from lawyers and law firms, as well as the entertainment industries. Democratic and Republican fundraisers appear to be doing a comparable job of raising cash from the securities and investment industry.

The two organizations are quick to point out that it is impossible to really know how much money each industry has given since the campaigns are not disclosing the precise amounts their fundraisers are raising. Each campaign is disclosing partial information, and each has different disclosure procedures. "The sporadic and incomplete reporting by campaigns of their designated fundraisers points to the need for legislation on this matter," the report says.

"Disclosure is important because these prodigious fundraisers are some of the people who will get their phone calls returned by the White House and will get chances at prestigious positions," Lisa Zagaroli with McClatchy Newspapers reported last month. Bundled contributions are among the most insidious sources of campaign money because they give a single donor the opportunity to get credit for raising contributions that are often hundreds of times greater than the legal limits applied to individuals.

As we discussed earlier this month, among the potentially meaningful and important changes to campaign finance law in the Honest Leadership and Open Government Act is a provision that requires candidates for federal office to report the bundled contributions they receive from lobbyists.

At Sunlight, we believe bundled contributions from any party-CEOs, non-lobbyist lawyers and law firms-should be publicly disclosed. But, the new law limits such disclosure to registered lobbyists, which at least begins to get to the heart of the problem. The Federal Election Commission has the responsibility of crafting regulations that carry out the intent of the new law, and is expected to have its final regulations completed by March. As this great report from CFI and Public Citizen highlights so thoroughly, we hope the FEC’s regulations support more transparency rather than helping to conceal who’s funding the candidates.

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Among the potentially meaningful and important changes to the law in the Honest Leadership and Open Government Act is a provision that requires candidates for federal office to report the bundled contributions they receive from lobbyists. Bundled contributions are among the most insidious sources of campaign money because they give a single donor the opportunity to get credit for raising contributions that are often hundreds of times greater than the legal limits applied to individuals. The massive contributions no doubt result in greater access to elected officials. At Sunlight, we believe bundled contributions from any party-CEOs, non-lobbyist lawyers and law firms-should be publicly disclosed. But, the new law limits such disclosure to registered lobbyists, which at least begins to get to the heart of the problem.

The key to this well-intended provision is to ensure that when it is applied, it is not so full of loopholes that any lobbyist worth her $500 an hour fee finds a way to avoid reporting the bundled contributions she forwards to candidates. The Federal Election Commission has the responsibility of crafting regulations that carry out the intent of the new law. The FEC asked for public comment on its proposed rules, and made those comments available yesterday. The comments came from three Members of Congress, groups that champion ethics reform, and others who, for reasons of their own (or their clients) seem to want to keep bundled contributions hidden in the shadows.

To focus on the positive, we applaud Sen. Feingold and Sen. Obama and Representative Van Hollen for their joint comments reminding the FEC that it has a statutory duty to provide "the broadest possible disclosure" of bundled contributions. This group’s comments make clear that they will oppose narrow reporting requirements that would allow bundlers to easily skirt disclosure. For example, when an individual who is not registered as a lobbyist bundles contributions from, say, a group of employees of a corporation that lobbies, the comments submitted by the Members of Congress make clear that those bundled contributions must be disclosed if the corporation’s lobbyist gets credit from the campaign for bringing them in. Comments that were submitted by lawyers for candidates argue that the bundling reporting requirements should apply only when registered lobbyists bundle. They claim the law was not intended to cover people who are clearly acting as the lobbyists’ agents. It doesn’t take a rocket scientist to see that such a limitation would provide a foolproof way for lobbyists to skirt the disclosure provisions of the law.

Another recommendation proffered by a representative of business interests would similarly provide an instant loophole to the disclosure provisions. The argument is that when lobbyists hold fundraisers, the total amount raised should be pro-rated among the number of hosts. Again, it’s not a stretch to imagine that enough lobbyist "hosts" could be added to every fundraiser so that, when the total amount raised is divided among the hosts, the $15,000 disclosure threshold would never be met. We agree with Senators Feingold, Obama and Congressman Van Hollen that the total amounts raised should be attributed to each host. A disclosure form could easily be crafted to ensure there is no risk of over-reporting the actual total amount brought in at each fundraiser.

On one final issue, we would again urge the FEC to listen to the drafters of the legislation rather than the lawyers looking to game the system. Politicians have multiple ways of knowing whom to credit for delivering bundled contributions, not the least of which is when the chief fundraiser says to the candidate, "Lester Lobbyist brought in $50,000 last week." This type of credit is not documented, nor does it need to be, as when Lester wants to make an appointment with the Senator, the Senator will surely remember the bundled contributions. The authors of the legislation recognize that "campaigns could easily avoid [disclosure] by simply forgoing documentation, and the goal of shining a public spotlight on fundraising by lobbyists would be foiled." Granted, we at Sunlight have a hard time seeing how this particular provision will be enforced, but at the very least the rule should be crafted in a way that recognizes the reality of how bundled contributions work.

The FEC expects to have its final regulations completed by March. We hope they take their advice from the parties who have long demonstrated a commitment to improving disclosure rather than those who have everything to gain by keeping bundled contributions in the dark.

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Lisa Zagaroli, writing for McClatchy Newspapers, reports on the growing importance of bundlers in presidential campaign fundraising. These "mega-fundraisers" are very skilled at using their business and personal contacts to raise large amounts of campaign cash for a specific candidate. Only a few presidential candidates have released any information on who is doing the bundling but we know that the bundlers usually have super access to the candidates. No presidential campaign has released both the names of their bundlers and the amount each individual fundraiser has raised. Each campaign has adopted varying degrees of disclosure on who is raising their big bucks.

On October 30, Congressional Quarterly reported that Federal Election Commission is working on new bundling rules. One proposal, which came out of the Congress, is to only disclose the bundlers who are federal lobbyists. The McClatchy report indicates that the FEC is interested in going beyond this.

McClatchy highlights Public Citizen’s Congress Watch and its site as the place to go to find out who some of the bundlers are. They also have a very good proposal on bundling openness and transparency.

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Competition among bundlers is getting so competitive that fundraisers are getting their children to chip in. These aren’t grown children by the way; these are toddlers, babies, and prepubescent children without incomes - unless of course they’re working as cockney bootblacks (“Straight shine’s a nickel; super buff’s a dime!”). The Washington Post reported yesterday on this effort by bundling donors using their children and nieces and nephews as ways of funneling ever more money into the coffers of their favored candidate.

Such campaign donations from young children would almost certainly run afoul of campaign finance regulations, several campaign lawyers said. But as bundlers seek to raise higher and higher sums for presidential contenders this year, the number who are turning to checks from underage givers appears to be on the rise.

"It’s not difficult for a banker or a trial lawyer or a hedge fund manager to come up with $2,300, and they’re often left wanting to do more," said Massie Ritsch, a spokesman for the Center for Responsive Politics. "That’s when they look across the dinner table at their children and see an opportunity."

These children can be as young as two years old as is this Toddler for Obama:

Elrick Williams’s toddler niece Carlyn may be one of the youngest contributors to this year’s presidential campaign. The 2-year-old gave $2,300 to Sen. Barack Obama (D-Ill.).

So did her sister and brother, Imara, 13, and Ishmael, 9, and her cousins Chan and Alexis, both 13. Altogether, according to newly released campaign finance reports, the extended family of Williams, a wealthy Chicago financier, handed over nearly a dozen checks in March for the maximum allowed under federal law to Obama.

The Federal Election Commission does not explicitly set an age limit on donors however these donations will likely have to be returned. Obama’s campaign has already stated their intent to return the contributions from these children. Other campaigns will similarly have to figure out what to do with money donated from little kids.

The real problem here may lie with the parents who are going to have to explain to their kids that they gave their Christmas present to Barack Obama or Rudy Guiliani. For the non-voting under-10 population $2,300 could be used in much more useful ways, like buying this:

These kids are going to be unhappy to find out that not only did they miss out on this awesome cotton candy machine but that their Easter present is an audit from the FEC.

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Mike McIntire’s front page story in the Times this morning put a little more meat on the bones of the Wall Street Journal story that outing Norman Hsu as a problematic political fundraiser (forget, for the moment, the fugitive on the lam piece of this tale.)

Here are some of the telling details:

The records show that Components Ltd., a company controlled by Mr. Hsu that has no obvious business purpose and appears to exist only on paper, has paid a total of more than $100,000 to at least nine people who made campaign contributions to Mrs. Clinton and others through Mr. Hsu….

The records make clear that the group was more than just a loose collection of friends, family and co-workers that bundlers typically rely on when raising money for a candidate. Rather, each person had a direct financial relationship with Mr. Hsu, either receiving money from his company or paying into it, even though many of them appear to have other jobs or businesses independent of him….

The records show that during that one-month period, Components Ltd. took in close to $600,000, about a third of it wired to the company’s account by two people in California and New York who also were part of Mr. Hsu’s circle of campaign contributors. At the same time, the company issued checks and wire transfers totaling $660,000, much of it to the same group of people, including two checks for more than $100,000 apiece that bounced because of insufficient funds….

And here’s what, in major part, has made figuring all this out so difficult. Its a great summary of a political money tracker’s nightmare.

On campaign finance disclosure forms, he listed his employer as one of a half-dozen companies, some of them with names that seemed to change with each retelling. On some forms, the company was Components Limited or Next Components or Next Consultants. Other times it was Next Limited or Consultants Limited. And his title was different from one form to the next, sometimes appearing as president or managing director, other times as consultant, supplier or partner.

 

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