The so-called “cromnibus” legislation, that will prevent the federal government from shutting down on Thursday, contains a provision that will allow a single donor to give hundreds of thousands of dollars to their political party, in addition to other donations that will still be legal under federal law. The bill (on pages 1599–1601) permits party committees to create three “separate, segregated account[s]” that fund their presidential nominating convention, their headquarters buildings, and to pay for recounts and “other legal proceedings.” Donors will be permitted to give $97,200 to each fund per year.
Compared to other recent incursions on campaign finance law, the most significant of which were spearheaded by Republicans on the Supreme Court, the cromnibus’ new campaign finance rules are likely to have only a marginal effect. Current law already permits donors to give up to $32,400 per year to an election recount fund, in addition to other donations authorized by law, and the three funds described by the cromnibus are earmarked for very specific purposes.
Nevertheless, money is fungible. If the two parties can pay for the cost of maintaining their headquarters out of earmarked funds, for example, rather than doing so out of their general funds, then they will have more general funds left over to pay for other expenses — such as ads seeking to elect their candidates to office. So, while many donors may appear to be donating carefully earmarked funds, the practical effect of their donations will be more money spent on elections.
Additionally, the significance of the cromibus’ campaign finance provisions may only seem marginal because the Supreme Court has done so much more in recent years to inject large amounts of money into elections. Although the Court held in the 1970s that lawmakers may regulate campaign finance “to limit the actuality and appearance of corruption resulting from large individual financial contributions,” in Citizens United v. FEC, however, the Roberts Court gave a very narrow definition to the word “corruption.” The fact that donors “may have influence over or access to elected officials does not mean that these officials are corrupt,” according to Citizens United.
As a leading textbook on election law explains, spending skyrocketed in the wake of Citizens United. Between 2008, the last presidential election year before Citizens United, and 2012, the first presidential election after the decision, spending by non-campaign groups rose 245 percent in the presidential election, by 662 percent in House races, and by 1,338 percent in Senate races.
A few years after Citizens United, the Supreme Court effectively legalized various forms of money laundering that could enable wealthy donors to funnel huge sums of funds to candidates. Prior to the Court’s decision in McCutcheon v. FEC, federal law capped the total amount of money donors may give to all federal candidates ($48,600) and to all political committees ($74,600). In McCutcheon, the Court’s five Republicans declared those caps unconstitutional.
In his dissenting opinion in McCutcheon, Justice Stephen Breyer explained several money laundering schemes that were likely to emerge without the caps in place. A party, for example, might set up a “Joint Party Committee” consisting of all three of their national party committees and a state party committee from each of the 50 states. Under McCutcheon, a single donor could give as much as $1.2 million to this joint committee, which could then be redistributed in order to influence a specific race or races.
So the Supreme Court has already carved so many holes in American campaign finance law that another hole can only allow but so much more money to leak out. Nevertheless, the provisions in the cromnibus could prove quite significant if one of the Court’s five Republicans are replaced by President Obama or another president skeptical of Citizens United. In that circumstance, the Court would likely overrule decisions like Citizens United and McCutcheon, but repealing the cromnibus’ changes to campaign finance law would take another act of Congress.