September 22, 2008
Congressional Shell GamesBy Richard A. Viguerie and Mark Fitzgibbons
If, like many Americans, you are fed up with "fat cats" using political contributions to buy influence with members of Congress, here's something you should know:
Many of those fat cats are the members of Congress themselves.
Worse, the money that some congressmen use to buy influence over other congressmen isn't even theirs. Unlike regular fat cats - some of whom, at least, get their money from honest work - congressmen buy influence using other people's money, i.e., their contributors, and often without the contributors' knowledge and consent.
Sometimes the money goes through a congressman's campaign account, and sometimes through a PAC (political action committee) that the congressman created.
In the case of campaign account pass-alongs, incumbents take money that was raised ostensibly for their own re-election campaigns and contribute it to their colleagues' accounts or to their national party committees. Incumbents, especially those without serious re-election challenges, pass along as much as 50 percent of the money they have raised. (Senators have exempted their own campaigns from certain spending disclosures, so it's hard to know who's received what from re-election campaign pass-alongs.) There is no requirement that the original contributor be informed that his or her money isn't going for the purpose for which it was intended.
In the case of a contribution from a congressman's PAC, the pass-along amounts to "legalized" money-laundering. It's a way to get around the lower limit on the size of contributions. (PACs may raise more money from individual donors - $5,000 per person - than the $2,300 per person that personal re-election campaign committees may raise.) And it's a way to avoid full disclosure. In effect, the pass-along negates the laws intended to limit the influence of individual contributors, and it negates the laws intended to ensure that the public knows who is financing campaigns.
Either way, the pass-along increases the pernicious effect of the seniority system, which gives greater power to members of Congress who have been in Washington the longest, and, thus, as a general rule, least share the values and interests of their constituents.
Here's how that happens: The members with the longest tenure and, as a result, the choicest committee assignments get the most money from special interests, and usually have the safest seats (that's how they stick around long enough to get seniority). So they have the most money in their campaign accounts and the least need to spend that money on their own campaigns.
Members with less seniority, and less power to attract special-interest cash, usually have the greater need; they haven't established themselves as well with the folks back home, and they tend to face the toughest opponents. Their relationship to the senior members who are flush with cash is like the relationship of a homeless teenager, just off the bus in the big city, to the friendly fellow who offers food and a warm bed.
One of the master politicians of the 20th Century, Lyndon Johnson, achieved great power in large measure by funneling Texas oil money into the campaign coffers of (selected) Democratic politicians. He controlled who got the money, and members learned quickly to pledge allegiance to LBJ. His successors learned from his example. In fact, today's congressional barons have even more power, because limits on individual contributions make it harder for most congressmen to raise money directly, and increase the relative value of the barons' pass-alongs.
Consider the case of Senator Ted Stevens (R-Alaska). Stevens has the most seniority of any senate Republican, and long ago established himself, along with the senior Democrat, Robert Byrd (D-West Virginia), as a King of Pork. It was bad enough that Stevens could reward or punish his colleagues by granting or denying them special-interest projects in their home districts.
Stevens also controlled something called the Northern Lights PAC (political action committee), which has dispensed some $300,000 per recent election cycles to other members of Congress. In the 2006 election cycle, Stevens also took $200,000 from his re-election campaign fund and gave it to the National Republican Senatorial Committee, which distributed the money to other Senate candidates.
In the wake of his recent indictment, some of the recipients of Stevens's money passed it along to charities. Somehow, even though everybody in Washington knew that Stevens was, as they say, ethically challenged, nobody thought until after he was indicted that it was wrong to take his money.
Like Stevens before his indictment, Representative Barney Frank (D-Massachusetts) has plenty of money with which to buy influence. The chairman of the powerful Financial Services Committee, Frank faces a weak opponent in this election and, according to the New York Observer's "Politicker" report, spent only about $173,000 on campaign operating expenses last quarter while passing along nearly $200,000 to other entities, including $100,000 to the Democratic Congressional Campaign Committee (money that went directly or indirectly to other Democratic congressional candidates).
Frank made direct contributions to the Massachusetts Democratic State Committee and to candidates running in Missouri, New York, Florida, Louisiana, and Massachusetts. Politicker noted: "Frank reported ending the quarter with $817,102 cash on hand, after beginning the quarter with $804,004. He raised $383,086 in the quarter, bringing his fundraising haul to $1,627,256 for the cycle." Over a third of Frank's recent fundraising was from PACs.
Try figuring out who gave money to whom under those circumstances. PACs and individuals contributed to Frank's campaign, and a lot of that money went to the DCCC, which sent it on other candidates. And did any of those recipients pass the money along to someone else?
The practice of incumbents' sprinkling their fundraising proceeds around to their colleagues needs to be banned for several reasons.
For one thing, it's a deceptive practice. Incumbents ask donors to contribute to their own campaigns, but turn around and dish out as much as half, or more, to their colleagues. Many donors give money to candidates not because of selfish interests or party loyalty but because they support the candidates' positions on the issues. Yet, when pass-alongs are involved, the money often ends up in the coffers of candidates who hold contrary views. Indeed, pass-alongs are one way that incumbents cement relationships with their ideological opponents within the same party. Money given to elect conservatives ends up helping elect liberals, and vice versa. That's just wrong.
But sometimes the donors know exactly what's going on. They're taking advantage of one of the many flaws in McCain-Feingold, a loophole that works like this:
Wealthy donors and special interests that have "maxed out" to some incumbents in tight races may instead contribute to multiple candidates in safe races. With a wink and a nod, the safe candidates pass the money along to other candidates, either directly or through party committee.
The McCain-Feingold campaign finance "reform" law banned unlimited contributions ("soft" money) to the national political parties and their subcommittees such as the National Republican Senatorial Committee and its Democratic and House counterparts. But incumbents may make unlimited contributions to those national party committees, which in turn disburse money to other races.
It is through that loophole that politicians have come to replace industries, labor unions, and special interests as the big soft money contributors.
On the House side, the top 20 contributors to both the Democratic and Republican congressional campaign committees are incumbents who have "laundered" an average of about 30 percent of the money they raised for their own campaigns. The average donation for these top 40 incumbents was $430,000 to the House campaign committees during the 2006 election cycle.
While mere citizens may contribute only $28,500 to national party committees per cycle, Representative Charlie Rangel (D-New York), one of Congress' largest recipients of real estate developer money, contributed an average of $450,000 per cycle to the Democratic Congressional Campaign Committee since the ban on soft money. Under recent "reforms," Rangel and those like him are the new fat cats.
With Rangel's recent well-publicized ethics and legal problems, only now are congressional recipients of his "largesse" being pressed to return his money. But we outside this shell game can't tell which of Rangel's colleagues got his money funneled through the DCCC.
The stated purpose of campaign finance laws is to limit the corrupting influence of money on elections, yet those laws have helped make politicians themselves into corrupting influences. Members of Congress who want to "show some love" to their colleagues should be required to write personal checks instead of laundering other people's money.
Maybe this should be one of the first changes in Washington ushered in the by the next Congress and new President.
Richard A. Viguerie has been called ‘one of the creators of the modern conservative movement' (The Nation magazine), and his pioneering of political direct mail was named one of the 100 defining political moments of the 20th Century by the late John F. Kennedy Jr.'s magazine, George. Mark Fitzgibbons, Esq. is President of Corporate and Legal Affairs at American Target Advertising, Inc., Manassas, VA.