Wednesday, January 6, 2016
Campaign finance transfers that Justice Alito called a "wild hypothetical" at oral arguments in McCutcheon v. FEC are the reality in today's presidential race, writes Paul Blumenthal at HuffPo. That means that a candidate's joint fundraising committee (which raises money for candidates and state and national parties) can bring in over a million dollars per donor in the 2016 election cycle. This is the maximum amount a donor can contribute to the candidate and the parties within base contribution limits. State parties can redistribute their take to benefit the candidate, circumventing the base limits.
Justice Alito called this a "wild hypothetical" at oral arguments in McCutcheon, at least as regards congressional elections. But Blumenthal says it's reality, and cites the Clinton campaign as an example. He describes it this way:
Donors are limited by how much they can give to campaign committees, national party committees and state party committees. A single donor can give $5,400 to a candidate's campaign to cover both a primary and general election, $33,400 annually to a national party committee's general fund and $10,000 annually to each state party. These limits are known as "base" contribution limits. (Additionally, donors can give $100,200 annually to each of the national party committee's convention, building and legal funds . . . .)
Since the Hillary Victory Fund links the Clinton campaign, the DNC and 33 state parties, the total amount a donor could give is $669,400 per year. Technically, a maximum contribution to the fund would include $330,000 to be split amount the 33 state parties. Since party committees are allowed to make unlimited transfers between each other, that money can easily be sent to the state parties most advantageous to the candidate's raising the money--in a swing state, for example. Or, as is happening with the Hillary Victory Fund, that money can be sent to the DNC, which redistributes it as they see fit.
Why does this matter? Well, the Court in McCutcheon said that aggregate contribution limits (designed to complement base limits and avoid corruption by effectively restricting the amount of money candidates could transfer between each other) violated the First Amendment. The Court said this in part because the FEC's rules on earmarking contributions and limits on transfers between candidates effectively prevented these kinds of shenanigans. In other words, the Court said that aggregate limits weren't necessary to avoid corruption, because other features of the regulatory scheme prevented donors from circumventing base limits and corrupting politicians.
But those features don't limit state political party transfers. So a joint fundraising committee can send donations to state parties, which can then strategically funnel those donations to other state parties or to the national party, directly benefiting the candidate. That's exactly what SG Verrilli raised--and what Justice Alito dismissed as a "wild hypothetical" in the context of congressional elections--at oral argument in McCutcheon. It's also what seems to be happening in the 2016 presidential election.