July 28, 2015

Mega Donors Using New Campaign Rules to Cut Six-Figure Checks to Lawmakers

By Matt Corley

Changes to campaign finance law slipped into last year’s omnibus spending legislation are now allowing wealthy donors to hand six-figure checks directly to lawmakers, providing a new way for donors to exert influence and for lawmakers to serve as rainmakers for political parties.  Even though the lawmakers don’t end up keeping all of the money, the donors get credit for giving it, and the lawmakers benefit too as they get credit for funding the party’s infrastructure. 

On May 30, 2015, for example, Ken Griffin, a hedge fund billionaire and major political donor, wrote a check for $244,200 to one of Rep. Paul Ryan (R-WI)’s fundraising committees. Griffin’s contribution went to a joint-fundraising committee (JFC) set up by Rep. Ryan’s political operation, yet most of Griffin’s cash did not actually end up in Rep. Ryan’s campaign coffers. Instead, the lion’s share of the money landed in a trio of accounts controlled by the National Republican Congressional Committee (NRCC). 

This new avenue for donors to curry favor with lawmakers was made possible by a provision placed into must-pass spending legislation in December 2014 to allow political parties to raise significantly more money from individuals and PACs. The new rules allow national political party committees to collect money for separate accounts dedicated to presidential conventions, building expenses and recounts in addition to their main accounts. With the new law, individuals can contribute a combined total of $777,600 per year to national political party committees, up from $97,200. For the NRCC, this means that individuals can contribute $226,800 per year, split across the main account, the building account, and the recount fund.

It didn’t take long for mega donors to start utilizing the new accounts. In February 2014, Griffin became the first donor to max out to a national party committee, giving a combined $324,000 to the Republican National Committee and its building, recount, and convention funds. Generally, the increased giving has come in the form of contributions made directly to the party accounts. Some donors, however, choose to use a lawmaker’s JFC as an intermediary.

Between January 1, 2015 and June 30, 2015, 13 donors each contributed more than $100,000 to JFCs aligned with individual members of Congress, according to a review of Federal Election Commission records by Citizens for Responsibility and Ethics in Washington. As with Griffin’s contributions to Rep. Ryan’s JFC, most of the money ended up in the coffers of the NRCC’s general, building, and recount funds. CREW found seven lawmakers, all Republicans, who received six-figure checks thanks to the new campaign finance rules, accounting for nearly $2 million in money raised.

Rep. Bill Huizenga’s (R-MI) fundraising best represents how the new fundraising rules allow big contributors to ingratiate themselves with members of Congress like never before. Rep. Huizenga’s JFC, the Huizenga Victory Fund, was organized on June 24, 2015. Six days later, the JFC raised $150,000, all from a single check written by Amway chairman Stephen Van Andel. The money was distributed on the same day with $5,394.76 going to Rep. Huizenga’s campaign committee, $3,995.14 going to his PAC, the Upper Hand Fund, and the rest -- $139,464.41 – being distributed among the NRCC’s three accounts. Van Andel could have given the money directly to the NRCC. Instead, Rep. Huizenga’s JFC acted as a conduit, allowing Van Andel to score points with the congressman and the congressman to score points with the party.

Most of the lawmakers who drew six-figure checks, however, are members of the House Republican leadership. Speaker of the House John Boehner (R-OH), for instance, received $110,600 from hedge fund billionaire Paul Singer and $100,000 from former pro wrestling executive Linda McMahon. House Majority Leader Kevin McCarthy’s (R-CA) McCarthy Victory Fund received $244,200 from a real estate executive while House Majority Whip Steve Scalise’s (R-LA) JFC raised $589,800 from five donors who each gave more than $100,000.  Republican Conference Chairwoman Cathy McMorris Rodgers (R-WA) took in two $150,000 checks. Rep. Darrell Issa (R-CA)’s JFC also received a $100,200 contribution.

The lawmakers receiving these checks may soon have more say in how the parties spend some of the money after they pass it on. Last Wednesday, Roll Call’s Tamar Hallerman reported that Senate appropriators have quietly placed a provision into a draft spending bill that would allow for more coordination on campaign spending between candidates and political parties. Welcome to the new world of high dollar fundraising.

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