Give Us 'Change' in Congressional Fundraising Abuses reporter Amanda Carpenter writes about some new rules imposed by congressional Democrats.  Their vision of change for America apparently means entrenching their own power.  The new rules include a repeal of term limits on committee chairs passed as part of 1994 Republican reforms designed to limit the long-term concentration of power in the hands of just a few.

Explaining why term limits on committee chairs should be repealed, House Minority Leader Steny Hoyer (D-MD) is quoted by Carpenter as saying:

I understand that our Republican colleagues once wrote term limits into the rules in an effort against entrenched power, [b]ut it is now clear that that effort fell victim to what conservatives like to call the law of unintended consequences: With chairmanships up for grabs so frequently, fundraising ability became one of the most important job qualifications, and legislative skill was sacrificed to political considerations.

Like all Orwellian Washington-speak, Hoyer's rationale merits a translation:  congressional Democrats prefer repealing a good reform (committee chair term limits) rather than curbing congressional fundraising abuses.

The fundraising practice of which Rep. Hoyer speaks is what I've previously described as political money laundering.  It is a practice that could be easily prohibited, and may even be considered deceptive fundraising in too many cases.

Three kinds of political fundraising money laundering help keep congressional bulls in power.  One is direct colleague-to-colleague contributions, whereby one representative uses "hard" money donated to his campaign to make a hard money contribution to his colleagues.  "Hard" money contributions are capped by federal election law at $2,300 per recipient per election for the 2007-08 election cycle (soon to be adjusted for 2009-10), as shown on this Federal Election Commission chart.

A second, more egregious kind of political money laundering is in the form of a loophole left by the McCain-Feingold campaign finance law ban on "soft" money (unlimited contributions to national political committees such as the Democratic National Committee, the Republican National Committee, or the House and Senate committees of both Republican and Democratic parties). 

Most donors are now limited to contributing $28,500 to these national committees, which in turn help finance individual campaigns.  Members of Congress don't have that limit under the soft money loophole they left for themselves.  In the 2006 election cycle, for example, the top 40 congressional donors to the Democratic Congressional Campaign Committee and National Republican Congressional Committee averaged a whopping $430,000 apiece.  The committees even set the amounts Members should launder through their campaign fundraising.

Some politicians transfer over 50 percent of the money they raise for their own campaigns to other politicians, directly to other Members, or indirectly through the national committees.  Committee chairs are doled out based in part on how much money the Members spread around.

The biggest congressional fundraisers therefore "buy" power and influence among their colleagues.  Think Ted Stevens, Charles Rangel and others.

Politicians don't always disclose to their donors their intent to transfer fundraising proceeds to other politicians.  Might a pro-life donor be surprised that a portion of his or her donation to a staunchly pro-life candidate was passed through to another candidate who is not pro-life?  You betcha.

In one brief submitted to the U.S. Supreme Court in a case about whether certain nondisclosures in fundraising constitute fraud, the federal government argued:

The common law of fraud draws no distinction between one who intentionally misleads through explicit misrepresentations and one who does so through implicit misrepresentations or ambiguous representations calculated to produce misunderstanding. . . Common law fraud requires charitable solicitors like respondents to disclose information only when their own words-here, respondents' representations that contributions would be used for particular charitable programs-would otherwise mislead the listener, and where they intend or foresee that the listener will be misled.

The third kind of political money laundering is what are called leadership PACs, which are political action committees formed by Members for the express purpose of spreading money around to colleagues.

The practice of passing through campaign funds is also a way by which donors who have maxed out to one candidate may still gain political favor within the parties by contributing to other congressional bulls knowing full well that the congressman or senator has a safe seat.  That money trickles its way to politicians in tight races, even though the donor may have already met his contribution limit for those candidates.  This system is easily gamed.

The excuse used by Rep. Hoyer for Democrats to repeal committee chair terms limits (that "legislative skill was sacrificed to political considerations") is therefore the result of the fundraising abuses that Congress wrote, controls and can stop. 

To suggest that the repeal of committee chair term limits will somehow curb "unintended consequences" of these fundraising abuses is, of course, a ludicrous ruse to help Tass (pardon me, the Washington press corps) blame Republicans for this Democratic power grab.  Lengthier chair terms will merely concentrate more power and thus more fundraising strength in already powerful committee chairs. 

The 1994 reforms on Congress didn't go far enough to account for and fix abusive fundraising practices by Members of Congress, but that's no excuse to repeal good reforms that were made. 

We can already see where Democratic change is headed in this Congress.  Real reform would prohibit these fundraising abuses.  If Members want their own donors to send money to their colleagues, they should be required to say that so donors may knowingly send their contributions directly to those candidates or committees.