With Republicans staring down a blue wave in the fall, House Speaker Paul Ryan recently road-tripped to Las Vegas for an audience with billionaire GOP donor Sheldon Adelson.
There, without technically asking, Ryan helped secure from the casino magnate a $30 million donation to a Republican-aligned super PAC. And the best – that is, most cringe-inducing – part? It was all totally legal – a jarring reminder of how things continue to work in the “swamp” nearly 16 months after President Donald Trump was scheduled to begin drainage.
To start, the Federal Election Commission remains understaffed at the highest levels. Two of six commissioner seats remain unfilled, while the four still occupied are all held by commissioners working on despite their terms’ having expired.
Dysfunction at the FEC matters because it makes the enforcement and, crucially, interpretation of campaign finance law that much more difficult, if not impossible. And in a country with an excruciatingly (and increasingly) complicated campaign finance rulebook, the absence of a full roster of referees means it’s become even easier to, if not break the law, then openly defy its spirit, although the real scandal may be that feints like Ryan’s are apparently perfectly acceptable.
Here are just a few ways candidates, elected officials, their allies and outside groups make a joke of the current disclosure laws, as spelled out to CNN by Brendan Fischer, director of federal and FEC reform programs at the nonpartisan, nonprofit Campaign Legal Center.
Super PACs and campaigns are not allowed to coordinate. And yet.
A pair of court rulings in 2010, headlined by the Supreme Court’s Citizens United decision, ushered in the era of the super PAC.
These relatively new groups have become a mainstay of presidential campaigns and both parties’ efforts to maintain or take back congressional majorities. Super PACs can raise and spend as much cash as they want, with one major caveat: they’re not allowed to coordinate with or donate to the candidates and campaigns they’re supporting.
But as it plays out in the real world, those dividing lines have become so blurry as to render them punchlines – literally, in some cases. In the run-up to the 2016 GOP presidential primary, Wisconsin Gov. Scott Walker, an early but still formally undeclared favorite, was asked at a conservative gathering how a Walker White House might operate.
“We want to have the government out of the way. We want to make it as easy and accessible as possible and that’s what we’re going to do in any decisions going forward, should we choose…” he said, a grin forming on his face, “My lawyers love when I say, ‘As we’re exploring a campaign.’”
That “love” stemmed from the fact that, according to campaign finance law, Walker as a nearly, but not-quite candidate had much wider latitude to raise money for the outside groups that would support his (brief) campaign.
The rules don’t become clearer after a candidate formally enters a race, they just reset to something new and equally difficult to discern. Direct communication and coordination is banned, but candidates from both parties are always finding new and creative ways to keep close, some of them blessed by the FEC.
“The FEC has said it is OK for a candidate to raise money for a super PAC that is supporting them as long as they don’t explicitly ask for contributions above what are called the hard money limits – the federal limits,” Fischer said. “A traditional PAC can only accept $5,000, so a candidate can’t ask for more than $5,000 for a super PAC, even though the super PAC can legally accept unlimited amounts of money from any source.”
And that, as we learned on Thursday, is part of the legal logic that allows – totally within the bounds of law – for Ryan to talk up the importance of keeping the House in GOP hands during his meeting with Adelson, then walk out of the room so his allies can formally ask for a donation. (Adelson ultimately agreed to give $30 million to the Congressional Leadership Fund.)
Other anti-coordination rules, like one that requires a “cooling off period” of 120 days before a staffer moves from a campaign to an outside group. Like the rest, it’s proven to be pretty easy to circumvent.
Two members of the Trump campaign tested the rule during the 2016 election. According to Fischer, they “were hired by the campaign, worked there for a few weeks, then left and within two weeks had started a super PAC called Rebuilding America Now, which was exclusively dedicated to supporting Donald Trump.”
The Campaign Legal Center recently filed a complaint about the move, which was justified in the eyes of the former Trump staffers by the fact that they had never been paid by the campaign and so, were not bound by the rule. Fischer’s argument here is that there is “no volunteer exemption” and, in any case, the spirit of the rule is pretty clearly broken when “somebody can join the campaign for just long enough to learn about its strategies and needs and then use that strategic information to make sure a super PAC’s ads are going to be of the maximum benefit to the campaign.”
This isn’t just a Republican problem. Democrats work just as hard to seize advantages where they see them.
Hillary Clinton’s 2016 campaign was also called out for allegedly trying to side-step the rules when it claimed the right to coordinate with David Brock’s super PAC, Correct the Record, because the group was not making independent expenditures, like running television ads.
The basis for their argument, Fischer said, was a “narrow exception” meant to “allow bloggers to talk with candidates and do interviews with campaigns.” (You can read more on the campaign’s logic here, in a breakdown of relevant hacked emails made public by Wikileaks.)
The upshot, Fischer said, is that coordination with Correct the Record allowed the campaign “to spin off its digital and opposition research arm into a super PAC that could accept unlimited and corporate donations.”
Super PACs are supposed to make public their donors. There’s a way around that.
Super PACs, unlike some other categories of outside groups, are required to make public their donors and how much money they’re taking in. But even then, there are ways around making the disclosures at politically inconvenient moments.
Consider the recent primary elections in West Virginia. Fischer cited a pair of super PACs, one appearing to be associated with Democrats, another with Republicans, who changed their reporting schedules to avoid being required to share potentially damaging information right before the vote.
The process here is arcane but the effect is most definitely not.
In short, super PACs are required to file reports either quarterly or monthly. If they choose to do it quarterly, they also have to make an additional pre-election filing a little less than two weeks before the polls open. If they file monthly, there’s no pre-election requirement. You’ve been reporting a lot, the logic goes, so it’s unnecessary. The public is sufficiently informed.
The groups focused on West Virginia, though, were relatively new and saw a loophole.
“Both filed a quarterly report. That period ended on March 31, the primary was May 8. Just after that quarterly reporting period ended, they switched to monthly reporting,” Fischer said. “So because they had just formed, the only quarterly reports they filed didn’t show any fundraising and didn’t tell you who their donors were, then they switched to monthly reporting, so they could evade the pre-election report.”
The information won’t stay hidden forever. New reports are due on May 20 – nearly two weeks after the vote. By then (if they haven’t already), people will have moved on and, like Fischer said, “If they do still care, it can’t really affect their vote.”
The Federal Election Commission is supposed to clarify and enforce the law. But…
Which brings us back to the agency meant to keep everyone on the level, to interpret the law, establish clear rules of the road and, when those get broken or bent too hard, step up and take action.
Alas, it rarely happens.
The FEC is supposed to have six sitting commissioners, with no more than three from each major political party. But that balance requirement also has the effect of creating stagnation and deadlocks between the two sides.
“The FEC commissioners that have been appointed in the past decade or so, maybe past 15 years, the Republicans in particular, have been opposed to the mission of the agency,” Fischer said.
This has become a familiar story, especially in the Trump era, with cabinet level officials often being placed in charge of institutions whose existence they fundamentally oppose.
“It’s not partisan in the sense of Democrats only want to enforce the law against Republicans and Republicans only want to enforce the law against Democrats,” Fischer added. It’s more that the Republicans who’ve been nominated and confirmed to the commission have been ideologically opposed to the mission of the agency.”
Trump has the power to break the stagnation here and, potentially, do a little to drain the proverbial swamp.
There are, as noted above, only four commissioners currently serving. Because each is on an expired appointment, they could all be replaced by presidential appointment, of which there’s been one, and Senate confirmation, of which there’s been none. Democrats, too, would likely go along, or at least keep an open mind, because the balance requirement means Trump couldn’t stack the deck with Republicans.
Still, the GOP is more recently in the business of breaking down, not building up, regulatory agencies. Set your expectations appropriately.
Campaign funds are for… well, it depends.
Another delightful quirk of the campaign finance system is rooted in a recurring question over what candidates (and office holders) can and can’t use donor money to pay for – like legal fees.
“Campaign funds can be used to pay legal fees that arise out of the campaign or one’s duty as an officeholder,” Fischer explained. “If the legal fees rise from something else, it would be impermissible to use campaign funds to pay them.”
So, as an example, if a candidate gets pulled over driving drunk and issued a DUI, he can’t raid the campaign war chest to pay his legal team for their aid. That has to come from his personal funds. But – and here’s the weird part – the candidate would be within his rights to use campaign cash to compensate the lawyers who review or help draft the campaign’s press release addressing the incident.
This rule is being tested, in a way, in connection with the Mueller investigation into the Trump campaign and Russia election meddling. It could also apply down the road to the probe into Trump lawyer Michael Cohen’s alleged (and confirmed) activities before and after the 2016 campaign.
“To the extent that the Mueller investigation pertains to personal matters, I think there’s an argument that they should not be using campaign funds to pay for that aspect of the legal fees,” Fischer said. “But there’s also an argument that the Mueller investigation wouldn’t exist at all if it weren’t for the campaign and if it weren’t for Trump’s duties as an officeholder, or his acts as an officeholder.”
Though there is still lots to be sorted, and surely more information not yet publicly available, the Campaign Legal Center has done some poking around. They filed a complaint centered on Donald Trump Jr.’s June 2016 meeting with a Russian lawyer, whom he thought might have damaging information about Clinton.
“We were wondering whether they would try and argue that Trump Jr. wasn’t acting on behalf of the campaign when he took that meeting,” Fischer said. “But once we saw that the campaign was paying his legal fees, that was effectively an admission that he was, indeed, acting on behalf of the campaign.”
Might it have been the wiser route, with regard to the Mueller probe, to claim Trump Jr. was “acting in his personal capacity or freelancing”?
Perhaps. But that would mean the Trump campaign’s riches were, by law, off-limits and what’s sure to be a hefty legal bill would fall directly on Trump Jr.
What makes a lobbyist and what was Michael Cohen doing, if not lobbying, after the election?
To start, someone like Cohen is considered to be a lobbyist under the law if he spends 20% of his time lobbying.
But as we learned from a Washington Post report published on Thursday night, his deal with AT&T was not that, as the company reportedly paid him $600,000 for “legislative” and “regulatory policy development.”
Whatever that means exactly, it didn’t require or ask Cohen to directly engage lawmakers or the administration’s on the telecom giant’s behalf.
(Important to note here: AT&T at that time was seeking government approval for its acquisition of Time Warner, CNN’s parent company. The administration eventually moved to block the deal, sending the dispute to court. A ruling is expected in the next month.)
What’s most remarkable, really – according to what we know right now – is that both Cohen and the companies paying for his suddenly precious insights appear to have been acting well within the bounds of the law.
Was it ethical? That’s a more difficult question – one AT&T CEO Randall Stephenson addressed on Friday.
“There is no other way to say it – AT&T hiring Michael Cohen as a political consultant was a big mistake,” he offered in a statement. “To be clear, everything we did was done according to the law and entirely legitimate. But the fact is, our past association with Cohen was a serious misjudgment.”
That apology (of sorts) was, pretty clearly, a response to the bad PR that followed the disclosure – via media reports, not any legal requirement – of their deal. As Fischer pointed out (in a conversation shortly before the Washington Post story was published), the arrangement was likely to be very, well, normal.
“Companies will typically pay (former members of Congress or former high-level agency officials) not as lobbyists but as consultants, to provide insight into who they should be talking to, what messages they should be using – inside information on how their lobbying can be more effective,” he said. “According to these companies, that’s what Cohen was being paid for and it is a unreported, dark means of influence peddling.”
Until, that is, they get caught.