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#1
07-03-2008, 09:47 AM
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McCain Supporters Exploiting Campaign Finance Loopholes
Per an article in the Wall Street Journal this morning, McCain's supporters are exploiting campaign finance loopholes to raise far more money per individual than allowed by law. Given that the republican thug-ocracy is willing to skirt the campaign finance law that McCain himself co-sponsored, I'm kinda glad Obama turned down public finance.
McCain Allies Find Finance-Law Holes Governors' Fund Recruits Big Donors; Bid to Catch Obama By BRODY MULLINS and T.W. FARNAM July 3, 2008; Page A1 Allies of Sen. John McCain have found new loopholes in the campaign-finance law he helped write -- and they're using them to reel in huge contributions to help him compete with Sen. Barack Obama. In one method, a Republican Party fund aimed at electing governors has started marketing itself as a home for contributions of unlimited size to help Sen. McCain. His 2002 campaign law limits donations to presidential races to try to curtail the influence of wealth. The Republican Governors Association isn't subject to those limits, and has long gathered up large donations from individuals and companies. Now it is telling donors it can use their contributions to benefit Sen. McCain in some key battleground states. That makes the group "the best way to help McCain," says donor David Hanna, who gave $25,000 -- more than 10 times the legal cap of $2,300 for direct gifts to presidential candidates. Democrats question the legality, and even the McCain camp questions the accuracy of the group's pitch. In 2005 the Federal Election Commission banned such groups from soliciting donations by pledging help to a federal candidate, but campaign-finance experts disagree about how the law might be applied in this case. The 2008 campaign has featured numerous end runs around supposed donation and spending limits for the benefit of all the candidates during the primaries. In a first for a presidential candidate, Sen. Obama last month rejected taxpayer financing for his general-election campaign, allowing him to spend without limit after the primary season. Analysts now expect him to raise more than $200 million in private donations for the general election, following a record $287 million raised through May 30 for the primary campaign. Some recent innovations on Sen. McCain's behalf illustrate the acute pressure Republicans feel to close their general-election money gap with the Democratic standard-bearer. Sen. McCain has raised $119 million during the primary phase. Because he is going into the public-funding system, his campaign organization will be limited to $84.1 million for the general-election campaign, funded by taxpayers who checked off a $3 contribution on their annual tax forms. To try to keep up with Sen. Obama, the Republican party hopes to raise an additional $120 million on his behalf in a variety of ways. Those include a technique that allows donors to contribute more than $70,000 in a single check. The $2,300 limit on contributions to presidential candidates, set by the so-called McCain-Feingold Act of 2002, is the best-known cap on political donations, but it doesn't apply to all types of fund raising. National parties can accept up to $28,500 and state parties can collect up to $10,000 to spend on federal campaigns. Altogether, individuals can give $108,000 to federal campaigns within each two-year election cycle. Donors with deep pockets also can avoid limits completely by contributing to groups called 527 organizations, after a provision in the tax code. Those groups can collect uncapped donations from individuals -- and also collect from companies and unions, which have been prohibited from giving to parties or candidates since 2002. The 527 groups are barred from soliciting votes for or against federal candidates. Most are formed by independent interest groups, such as the Swift Boat Veterans for Truth that famously damaged Sen. John Kerry's 2004 campaign by running ads questioning his war record. Both Sens. Obama and McCain have publicly discouraged such groups from raising funds and working on their behalf, but many Swift Boat contributors also are among the top givers to the Republican Governors Association. The Republican governors group and its Democratic equivalent are a different breed of 527 organization, the only ones formed by the parties themselves. Because they aren't set up to contribute directly to presidential elections, they -- like other 527 groups -- aren't subject to the McCain-Feingold caps on donations. The Democrats say that should prevent them from influencing presidential campaigns. But the Republican group intends to use indirect methods to play a major role: "We are the equalizer in this campaign," says executive director Nick Ayers. Political Prodigy The Republican governors' fund-raising strategy was conceived by Mr. Ayers, a 25-year-old political prodigy. The contention of Mr. Ayers and the group's fund-raising head, former RNC Chairman Haley Barbour, is that helping Republican gubernatorial candidates in key states with advertising and voter outreach will help put the McCain campaign over the top in those states as well. Therefore, they are telling donors, unlimited donations they can give for state races will benefit Sen. McCain. That promise, in turn, helps raise more big donations for the group. Mr. Ayers, who dropped out of college at 19 to start working on political campaigns, tells donors that "all of the money will go toward winning gubernatorial races and that will inevitably help everyone on the ticket -- from top to bottom, from state legislators to John McCain." In an interview in his Washington headquarters, he said: "It's like planting a lot of food out in the field for one cow; it helps that one cow, but all the other cows appreciate it, too." To persuade skeptical donors, Mr. Ayers says he provides case studies of elections where money spent on behalf of gubernatorial candidates in the 1990s also helped elect Republican senators, and he says the same theory will work for the presidential race this year. Mr. Ayers says he has seen a "significant" increase in contributions from individual donors since he began mentioning the side effects for Sen. McCain's campaign. The group has doubled its take in the first six months of 2008 to $14 million, compared with the same point in the 2004 election cycle, according to figures to be announced as early as this week. That outpaces the Democratic Governors Association's total by $3 million. Mr. Ayers says his organization will target Missouri, a swing state, and also North Carolina and Indiana, two normally Republican states where the Obama campaign has said it will use its large war chest to try to compete. The states' own rules differ, but the RGA can donate unlimited sums of money to state parties in all three states, or run its own advertising campaign on behalf of the Republicans' gubernatorial candidate.
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'05 IP 5AT Coupe | 20s | Covenant Energy Blade | zH-Techs | Ings +1 | BBK | Chargespeed | NRG | Injen | Nismo | CarDomain | Props is a true thug's wife... 
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#2
07-03-2008, 09:49 AM
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Questions about the legality of the governors group's practice arise on both sides of the aisle. In 2005, the FEC banned political organizations from raising uncapped donations by saying the money would "support or oppose the election of a clearly identified federal candidate."
The governors association tells its donors their money will only indirectly support Sen. McCain, such as getting voters to the polls to pull the lever for Republican governor candidates, which can also boost Sen. McCain's totals -- and not for messages focused directly on the presidential election. The McCain campaign itself takes some issue with the group's stated strategy. "If it is in fact telling its donors their money will help elect McCain they are being inaccurate," said spokesman Brian Rogers, noting the group cannot legally attempt to sway a federal race. But he said that because he had not yet seen evidence the group is campaigning on Sen. McCain's behalf, "It's not an issue." A lawyer for the Democrats' group, Jim Lamb, said in an email that his Republican counterparts' pitch may stretch campaign-finance rules. He said donors should be "very leery" of being solicited to help the governors group aid a federal candidate, "explicitly or with a wink and a nod." Open to Interpretation A well-known campaign-finance lawyer for both Democrats and Republicans, Ken Gross with Skadden, Arps, Slate, Meagher & Flom LLP, says unless a written pitch clearly contradicts the law, the governors group's tactic is open to interpretation and may fall just inside legal lines, though "they may have chalk on their shoes." The FEC declined to comment. The governors group counts a number of large corporations among its donors, including WellPoint Inc. at $200,000, and Pfizer Inc., Bank of America Corp. and Travelers Cos. at $150,000 or more. But those are part of a much larger spread of donations by the firms; many gave the same amount to the Democratic Governors Association. "This is not something that is new, we give to both Republicans and Democrats across the country," says James Kappel, a spokesman for WellPoint, the largest Blue Cross Blue Shield member. Other firms declined to comment. Mr. Ayers's group doesn't aim the McCain-aid pitch primarily at companies, which fund-raisers say are generally cautious about creative approaches to campaign-financing rules. Rather, the pitch is aimed at individuals, including many top contributors to the controversial Swift Boat group that targeted Sen. Kerry. Texas developer Bob Perry, the largest financial backer of the Swift Boat group, also is the largest individual donor to the governors group, at $250,000. Carl Lindner, a retired insurance executive in Ohio and another top Swift Boat financier, has contributed $100,000 to the governors' fund. The campaign-finance lawyer for the Swift Boat group in 2004 now serves the same role for the governors association. The McCain campaign and the individual contributors all declined to comment on their involvement. Paul Folino, the executive chairman of Emulex Corp., a technology company based in Costa Mesa, Calif., recently donated $10,000 to the governors association. Mr. Folino also helped steer an additional $100,000 to Mr. Ayers from the New Majority California PAC, a fund-raising entity that backs Republicans with an "inclusive, mainstream approach toward politics," according to its Web site. "Anything we do to help Republican governors has a multiplier effect for McCain," Mr. Folino said in a telephone interview. In another Republican strategy, the McCain campaign itself last month began soliciting its biggest donations yet -- up to $70,100 per check. The technique is to establish a joint fund-raising account that brings together the legal maximum gifts for the candidate, the national party and four state parties with contests pivotal to the outcome. The combined maximum is the most that any presidential candidate has solicited since the 2002 McCain-Feingold reforms. The campaign raised $3 million for the fund in a matter of days during a string of fund-raisers last month. The joint-fund approach itself isn't new, but Sen. McCain is embracing it like no candidate in history. In 1999, George W. Bush set up a similar account for his presidential campaign and more than a dozen state parties. In 2004, Sen. Kerry established a joint fund-raising account with the Democratic National Committee. Last month, Sen. Obama founded his own joint account with the DNC that can collect $33,100 per person. Sen. McCain has another one with a similar maximum donation, of $30,800. But Sen. McCain's biggest account combines the candidate's $2,300 limit for direct contributions until the convention and another $2,300 for a fund publicly financed candidates can use to pay their legal and accounting expenses. The rest goes to the national party committee and the four state party funds for Colorado, Minnesota, New Mexico and Wisconsin, all states with among the closest contests in the past two presidential elections. FEC records say it's the first time a presidential candidate has combined national and state accounts this way. Separate Joint Accounts An overall cap on the donations to state and national parties restricts the overall total for the fund to $70,100. It also means adding more states to the same account wouldn't be effective. So the McCain campaign has separate joint accounts with individual state parties in four other pivotal states in the presidential race: California, Florida, Kentucky and Ohio. By the end of May, Sen. McCain's joint accounts combined had collected $22.4 million. The McCain campaign's Mr. Rogers said all the funds are designed "to help party committees raise funds for party activities for the whole party ticket." The rules for spending joint-account money are complicated. Donations to the state parties have to be used within those states. And the RNC and state parties can only spend a total of $19.2 million in coordination with the McCain campaign. Money spent beyond that cap cannot be coordinated with campaign officials, but both Sens. McCain and Obama have transferred top campaign aides to the RNC and DNC in order to oversee their spending on the fall campaign. The Wrong Fund The joint fund-raising accounts already have proved to be technically tricky for Sen. McCain and some donors. In March, a homemaker from Lawrence, N.Y., wrote a check for more than $61,000 to a McCain joint fund, apparently the largest presidential-election donation to that point since FEC records began in 1974. The check wasn't made out to the new high-maximum fund, but a fund with a $30,800 maximum, prompting a letter from the FEC to the McCain campaign saying the contribution was over the legal limit. The McCain campaign, in turn, contacted the donor, Rivki Rosenwald, whose husband is Lindsay Rosenwald, a physician and biotechnology investor who has donated more than $350,000 to Republican causes since 2002, according to the nonpartisan Center for Responsive Politics. "You want to support a party, a campaign or a senator and you write a check and then you hear from the lawyers that you made a mistake," said Dr. Rosenwald in a telephone interview. The two now have written separate checks for $30,800 each, the McCain campaign says.
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'05 IP 5AT Coupe | 20s | Covenant Energy Blade | zH-Techs | Ings +1 | BBK | Chargespeed | NRG | Injen | Nismo | CarDomain | Props is a true thug's wife...
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#4
07-07-2008, 03:18 PM
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Not surprised. My biggest curiosity is how much of his financial skeletons did he hide in his wife's name? Even now, McCain has refused to release her tax returns.
The non-issue finger pointing and political shenanigans are becoming more blatant and conspicuous to a delirious public over sensitized with the 24 hour news cycle. I can't even watch an hour of CNN, MSNBC, and not more than 10 minutes of Fox News without getting nauseated with the crap they report as political news.
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"The greatest tyrannies are always perpetrated in the name of the noblest causes." Thomas Paine
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