The Campaign Finance Institute (CFI) released figures today showing that the private donors to the two major party conventions have spent over $1.1 billion on lobbying the federal government since 2005. According to CFI’s latest tally, 146 organizations, nearly all business corporations, have spent on average $7.7 million per company in the past three years trying to influence Washington on legislation and regulations. As of today, CFI reports, 70 companies have given only to the Democratic host committee, while 39 have given only to the GOP committee.  So far, 37 corporations have given to both.

CFI released an earlier report last month that decries the fact that federal election law does not require timely disclosure of convention host committee fundraising records.  Current law only requires the host committees to report their contributions or expenditures 60 days after the nominating conventions are over.  Little good that does.

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On Tuesday just as the campaigns moved into the general election phase, the Campaign Finance Institute (CFI) released an analysis of the fundraising being conducted by the Democrats and Republicans for their presidential conventions in Denver and Minneapolis-St. Paul. CFI estimates that corporate funds will pay for 80 percent of the $112 million combined price tag of the two conventions. How is that possible?!

CFI found that both parties are using local “host committees” to raise unlimited corporate contributions to pay for the conventions and the FEC and IRS decided that it’s OK for “host committees” to spearhead the fundraising, This created a huge loophole allowing corporate money to flow to the parties.

Federal regulators perceive the local host committees as nonpartisan charities whose interest were promoting the city and state, not selling access. A contribution to these organizations, they (read “naively”) believed, would not “present an issue of potential political corruption or appearance of corruption,” according to their thinking. In practice, the state and local political parties are extensively tied to the host committees. Documents obtained by CFI show that both parties’ host committees approached the corporations promising extensive access to lawmakers and party leaders as a result of large contributions.

And most interesting, this report is not based on FEC data, but on Freedom of Information requests to Governors and Mayors in Colorado and Minnesota.

Jim Drinkard, writing today on Businessweek.com, recalls how five years ago then FEC Commissioner Bradley Smith made a prediction: corporate sponsorship of political conventions would eventually be as common as it is for football bowl games. “I look forward to the day, by 2008, when Americans can turn on their TVs and watch the Nokia Democratic Convention, or the AT&T Republican National Convention,” Smith joked.

“That day has pretty much arrived,” Drinkard writes. Oh, Dinkard reports another kick in the pants. All contributions to the host committees are tax deductible.

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The Forum, a political science journal published by Cal-Berkeley, just published an interesting article by Michael J. Malbin, executive director of The Campaign Finance Institute (CFI), titled "Rethinking the Campaign Finance Agenda."  The journal published Malbin’s article as part of their special issue entitled "Has the U.S. Campaign Finance System Collapsed."  In an email, Malbin wrote that the premise of the article stems from CFI’s Project on Participation: Strengthening Democracy through Volunteers and Small Donors. 

In the article Malbin argues that the focus of campaign finance laws should shift from attempting to check corruption by limiting contributions and certain expenditures to a more positive agenda of promoting competition and candidate emergence. He makes the case that limits have limits, and that CFI’s ongoing research on the promotion of equality through small donors and volunteers shows promise. It’s worth a read, even a skeptical one.

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Forgive me, but I couldn’t help but be startled by the above headline of the latest analysis by the Campaign Finance Institute. I mean, the much lauded campaign finance reform effort of a few years ago - the so-called McCain- Feingold bill was supposed to have banned soft money. In fact all the campaign finance reform groups — I don’t think there was a single exception — made a devil’s bargain. In order to get that much praised ban on soft money, the reform groups agreed to double the limits that individuals could give to campaigns. (Someone has yet to explain to me how allowing the less than one-tenth of one percent who give big money to give even more money was a reform.) McCain still carries the mantel of "reformer" because of his championing the legislation

This was a no brainer to predict even then: soft money is back in a big way.

What to do now? See this.

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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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