Today is President’s Day, long set aside to honor the men (all of them, alas) who have served as our nation’s chief executive. This year, though, it also marks a turning point in the primary election season. Today is the 29th day before the March election, and so there are some changes everyone should know about.
February 17, 2014
President’s Day: Turning Point in the March Primary
January 15, 2014
Non-profits, or Trojan Horses? What to Look for in the Campaign Finance Reports through the March Primary -- Part 3
Today is the deadline for campaigns to file disclosure reports for the fourth quarter of 2013. These are the last major disclosures to be filed before the March primary. The fourth quarter D2 filings will give a complete picture of each PAC’s financial resources: itemized receipts, non-itemized receipts, all expenditures, and any investments. From now until the end of March, PACs will have to disclose only large receipts (of $1,000 or more) and, in the final 30 days before the election, independent expenditures.
ICPR is looking at campaign finance issues to track in the March primary. Earlier this week we looked at SuperPACs and contribution limits. Today, we’l looking at politically active non-profits, and their affect on disclosure.
Illinois has long allows any one or any thing to give to PACs. While some other states prohibit unions or corporations from giving, Illinois lets PACs accept money from any and all sources. These include non-profit entities.
Non-profits gather donations of money from other sources and funnel it to their particular purpose. By their nature, non-profits do not generate money from their own activities, but instead rely on contributions to support their goals. There is a thin line between non-profits and Political Action Committees, which also collect money from others for their purposes, even thinner when non-profits use money for political purposes. But that distinction is enough to shield the source of non-profit funds from public scrutiny, even when that money is used to speak to voters about candidates.
In October, 2010, a non-profit formed called For a Better Chicago. The non-profit raised so much money that about two months later, in December, 2010, it spawned a Political Action Committee, and transferred $800K from the non-profit to the PAC.
How did the non-profit generate so much money that it could decide to put $800K into a PAC barely 60 days after it formed? It was managed by a political consulting firm, and its reason for forming, as stated on its incorporation papers, was “political.” The PAC, fortified almost entirely with money from the non-profit, went on to become the largest single source of money for candidates in the 2011 Chicago aldermanic campaign. But the non-profit never had to reveal the original source of the funds in the PAC.
Chicago voters never learned who wash putting so much money into their aldermanic campaigns.
Illinois law used to require non-profits that engaged in politicking to disclose the source of their funds. When contribution limits took effect, that law was repealed, on the thinking that no one would go to that much trouble to hide the small amounts of money that a donor could legally give. But now that SuperPACs are allowed to raise money without limits, politically active non-profits are back, along with other fundraising vehicles that can obscure the source of money, things like PACs that file with the FEC or in other states, and so don’t have to reveal the source of their funds until long after the polls close, if at all.
The bulk of funds raised by SuperPACs in the 2012 elections could not be traced back to original contributors, and the same game is afoot in 2014. Illinois should reinstate disclosure from politically active non-profits.
This week we’ve tried to cover some things that will be in the disclosure reports leading up to the primary (outsized contributions to candidates without well-funded opponents) and some things that won’t be in the reports (independent expenditures more than 30 days before the March primary, and the true source of funds raised through non-profits). There may be other issues that arise as well. Check back with ICPR for updates as the election progresses.
January 14, 2014
Limits, Lowered: What to Look for in the Campaign Finance Reports through the March Primary -- Part 2
During the run up to tomorrow’s quarterly D2 Day, ICPR is looking at issues that may be interesting in the disclosure reports, both the full reports that will be filed by tomorrow and the supplemental A-1 reports that will be filed between now and the March primary. Yesterday we looked at issues around SuperPACs. Today, we’re looking at the effect of contribution limits on the gubernatorial election, both in the primary and for the November general.
Contribution limits are intended to frustrate corruption, by limiting how much money one donor can give to one candidate. They were enacted after Gov. Rod Blagojevich raised enormous sums of money from people who had specific interests with his office, often within weeks or even days of getting something tangible from his office.
But while corruption is a regular and on-going concern, the law has two ways of removing limits, including self-funding by a candidate. Because Republican Bruce Rauner has put more than $250K of his own money into his campaign (to date, he has put $2.25M of his own money into his gubernatorial PAC), limits have come off of all candidates running for governor. Not just the four candidates seeking the Republican nomination, but also candidates seeking the Democratic nomination. As a result, Democrats can raise money without limits, even though no Democratic candidate has put enough money into his own PAC to remove limits.
Incumbent Pat Quinn has just one opponent on the ballot, although as of this writing it’s still unclear if Tio Hardiman will survive a petition challenge (Quinn’s petitions were not challenged). But even if Hardiman is on the ballot, he’s not much of a financial consideration. Quinn’s candidate PAC had almost $3M at the 2013 third quarter report and he’s reported $2M raised since then (not including contributions of less than $1K; those will be disclosed tomorrow). By comparison, Hardiman has reported raising less than $10K. Even if both are on the ballot, it seems unlikely that Quinn will need to break the bank to get his message across. Still, thanks to Bruce Rauner, Quinn can raise money from donors without regard to contribution limits.
Is there a risk of corruption from large donors? Of course. Corruption is not assured, but it’s always a risk. And since no candidate in the Democratic primary has self-funded, one might wonder why Quinn would need to raise such large amounts. It’s not like he’s countering a threat from a self-funding opponent in the primary. But the law allows it, and Quinn is taking advantage of that option.
Quinn can raise money without limits until the primary, spend what he needs, and keep the rest for the General Election. He’s well positioned to take advantage of the removal of limits. He has reported one contribution above the limits already and another is apparently in the mail. UA PAC, a federal labor union fund, has reported giving $100K to Quinn’s campaign. That’s nearly twice the limit, and, in one swoop, it is 10 times the grand total his opponent has reported raising. Quinn can keep it all, and whatever else he raises above limits, for the General, even if his Democratic opponent never raises another dime.
So here’s the kicker: It was Bruce Rauner’s self-funding that took limits off. If Bruce Rauner fails to win the Republican nomination, then limits will be restored on all candidates for the general election. By the time the votes are counted in the 2014 primary, if Rauner loses, then the victorious Republican, who ever that might be, will likely have spent much or most of what he raised (they’re all men, for governor), and will then have to start over on fundraising. But he’ll face contribution limits, where as Gov. Quinn will have raised a warchest without limits. The law should be changed, so that limits in a primary come off only if your partisan opponent hit the triggers. This election shows why this change is important.
But the law is what the law is, so if Rauner loses nomination (and who knows now if that will happen?) then look for the Republicans to do all they can to get limits lifted for the General Election. There are two ways to lift limits: Self-funding, and getting a SuperPAC to spend money in the race. If Rauner loses, how quickly do you think a Republican-leaning SuperPAC will get involved in Illinois’ gubernatorial contest?
Limits are intended to be a corruption-fighting tool. The law now has two ways to lift them, which turns campaign finance into a campaign tactic rather than a shield against corruption.