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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As Ellen wrote previously here, former Bush administration Justice Department official Hans Von Spakovsky’s nomination to the Federal Election Commission was highly controversial due to concerns about stands he took on voting rights while in the Justice Department. These concerns led some Democrats to block his nomination. The President and congressional Republicans refused to hold a vote on any other commissioners without support for Von Spakosky, effectively freezing the Commission. The Commission is currently short on commissioners and is unable to issue rulings on a variety of issues including the filing of disclosure reports for bundled contributions from lobbyists. Moments ago, Von Spakovsky pulled his name from nomination all but clearing the way to a fully operational Federal Election Commission. His letter to President Bush is below the fold:

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We’ve written fairly often about unbelievable situation over the Federal Election Commission. Always regarded as a toothless watchdog even in the best of days, since there’s been a partisan stalemate over new appointments, it’s been totally neutered. 

Now, Paul Kiel reports that the Bush Administration has offered a so-called compromise. The most controverisal nominee — Spakovsky –  remains a nominee, and an administration spokesperson told the The New York Times that they would accept a separate vote on him. In the meantime, the administration has submitted a new nominee to replace FEC Chair David Mason, one of the two setting commissioners.

But here’s the rub: Mason has opposed a move by Sen. John McCain to pull his presidential campaign out of the public finance system. McCain had earlier joined the system and accepted the $54 million spending limit. Mason’s position is that the FEC would have to approve his request to leave the system, and that he couldn’t just opt out. Meanwhile, the McCain campaign is spending away and has long surpassed the spending limit. Bush’s solution…Good bye Chairman Mason.

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Yesterday’s decision by the Federal Election Commission to hold the line on spending rules for interest groups – essentially a vote not to open a new loophole allowing the kinds of unrestricted ad budgets we’ve seen in the past – was revealing in a couple of different ways.

First I should define the word “decision” in this case. Like so many FEC rulings, it was really a non-decision – the result of a 3-3 split between Democrats and Republicans on the six-member commission.

The first thing it tells us is those days of 3-3 split decisions are still with us – as in fact they have been throughout the history of the FEC in many of its most important cases. That’s a sign right there that something’s wrong – that the commission that’s supposed to be the arbiter of federal election laws was set up not over the election process, like a panel of disinterested judges, but as a part of it.

Critics have long argued that this federal agency was set up to fail from the beginning. For one thing, if you want tough decisions, why create an even-numbered panel? And why stock it – as it’s been reliably stocked over the years – with three Democrats and three Republicans – a guarantee that on most substantive issues a 3-3 deadlock is the most likely outcome?

Secondly it tells us that the interest groups – on both the right and left, I should add – have still not really accepted the McCain-Feingold campaign finance reforms passed by Congress in 2002. That law eliminated not only unlimited “soft money” contributions to the national parties, but last-minute “issue ads” funded by soft money that claimed to be all about issues but in fact were all about electing and defeating candidates.

The law was challenged in the courts almost the instant it was passed by Congress, and even after being upheld by the Supreme Court, it’s still being challenged in a friendlier venue – the FEC – where repeated attempts have been made to wedge open new loopholes.

Yesterday’s attempt failed. But don’t think for a minute this will be the last stab at gutting the law. Interest groups with millions to spend – and billions at stake in decisions made by Congress – will never stop pushing the envelope of campaign finance laws, testing here, probing there, fashioning new loopholes – even taking chances with questionable actions and hoping for lax enforcement after the election is over.

That’s because in politics, as in football, winning isn’t everything, it’s the only thing. Any rules restricting the power of deep-pocketed interest groups to blast away with everything they’ve got are going to be resisted with all their might.

It’s a sobering thought, but like it or not the FEC is the nation’s last line of defense for some semblance of fairness on the political playing field. Yesterday they held the line. Tomorrow… well, cross your fingers.

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I began this day with an IM conversation with Larry Makinson about trying to get our hands on the most recently campaign contribution reports for the Lieberman-Lamont race. It dawned on us that the records could be pretty interesting. My thought had been to simply to direct our readers to the reports that were on line and let them search around. I guess we should have known it wouldn’t be that easy. Our dialogue is instructive. Imagine if two novices were trying to find this information.

Ellen (9:00:14 AM):  Got a blog idea for you this morning!

Larry (9:00:26 AM): You don’t mean Rep. Bob Ney, I presume.

Ellen (9:00:29 AM): Nope. He’s finished. That story is all about the fact that his relationship with Jack Abramoff became transparent to the people in his district. And apparently the folks there didn’t much like the notion that their Congressman seemed to be doing more for casinos and Indian tribes at the best of Washington super sleazy lawyer Jack Abramoff, than for the people he represents. Today’s story is the late money in the Lieberman-Lamont race. We need to look at the so-called 48 hour reports in that race. Are they avail on line?

Larry (9:04:59 AM): To do a story on Lieberman’s money would take a lot more time than we have. Even if the records are online, they’d be in PDF form - we’d have to create a database by hand-inputting them, then coding, etc. That could take several days.

Ellen (9:17:42 AM):  How often do the candidates have to file at this point in the campaign?

Larry (9:18:26 AM): If the candidates are filing a 48-hour report, that is the final stage. Let me check the details on the FEC site. The 48-hour notice looks like the last one until the post-election report, which comes I think 7 days after the election. It (the 48-hour report) covers contributions received between 7/20 and 8/5. (That’s the Connecticut time frame — it’s different for each state).

Ellen (9:25:01 AM): There’s nothing more recent than 8/5 required to be filed? You gotta’ be kidding!

Larry (9:26:58 AM): Here’s what the FEC site says on the 48-hour reports: "48-Hour Notices are required if the campaign committee receives contributions (including in-kind gifts or advances of goods or services; loans from the candidate or other non-bank sources; and guarantees or endorsements of bank loans to the candidate or committee) of $1,000 or more, during the applicable period."

Larry (9:27:42 AM): And the "applicable period" for the Connecticut senate race is the one I gave you earlier. I must say I’m surprised to see that myself. I’d have thought 48-hour reports are last-minute contributions only.

Larry (9:34:51 AM): Aha. The 24-hour and 48-hour reports that really do cover last-minute money are only required to be filed by people doing independent expenditures. The candidate is only required to do the one 48-hour report, which runs only as late (in Connecticut) as August 5.

Larry (10:07:36 AM): THE BAD NEWS: 165 pages of PDFs on line in 14 different reports, all of which say they’re 48-hour reports. They were filed between July 24 and August 3. The FEC says there are no later reports than that.

Ellen (10:08:30 AM): Aaargh. What to do?

Larry (10:08:50 AM): I’ll download them and look through them. Here’s the link

http://images.nictusa.com/cgi-bin/fecimg/?C00235515. That’s all we can do.

Ellen (10:10:26 AM): OK

Larry (10:23:52 AM): FYI, I just looked at the last of those 14 Lieberman PDFs. They’re not even typewritten - they’re HANDWRITTEN and not exactly neat penmanship either. They must have been writing quickly, with all those checks coming in…I’m printing them all out. As long as the ink in my printer holds out, I should be able to handle this okay from here.  By the way, Lieberman’s contribution limit is now $12,600 per donor - thanks to the millionaire amendment and Lamont’s self-spending. 

 
Stay tuned. Larry’s report in a little while.

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Today the FEC announced that it is fining Senate Majority Leader [sw: Bill Frist] (R-TN) $11,000 for failing to properly report a $1.44 million loan that he took out for his 2000 re-election campaign.

In June 2000, Senator Frist took $1 million of the money that had been contributed to his 2000 Senate campaign and invested it in the stock market, where it promptly began losing money. In November 2000, Senator Frist sought to collect $1.2 million he had lent his 1994 Senate campaign committee. As a result of the stock market losses, however, Frist 2000, Inc. did not have enough money to repay the loan. Senator Frist solved this problem by having the 1994 and the 2000 campaign committees jointly take out a $1.44 million bank loan at a cost of $10,000 a month interest. Frist 2000, Inc. did not report this debt on its FEC disclosure forms.

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The AFL-CIO, the Chamber of Commerce, and other groups are asking the FEC to write new guidelines for political activity by outside groups in the months immediately preceding elections, according to the Washington Times. In January, Wisconsin Right to Life challenged the 30- to 60-day prohibition on outside groups that take corporate or union money from running advocacy ads that mention a candidate’s name. The Supreme Court ruled that “grass-roots groups have ways to lobby and mention the name of a federal candidate without being seen as actively campaigning.” The groups petitioning the FEC are asking for guidelines on what they can or cannot do in time for the 2006 elections.

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The state Republican Party has filed a complaint with the FEC charging that the Montana Democratic Party did not fully disclose their finances to the Federal Election Commission. According to the Associated Press, the state GOP is arguing that, “Democrats should have been filing monthly reports for being engaged in campaigning against Sen. Conrad Burns, a federal candidate under FEC rules.” The Democratic Party claims that it filed a six-month disclosure and does not need to file monthly, but did not elaborate.

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