With billions set to flood presidential race, campaign finance laws wilt

In the four weeks after Jeb Bush announced his run for president, his campaign raised more than $11 million in donations, an impressive haul.

That figure is dwarfed, however, by the eye-popping $108 million in unlimited contributions raised through his super PACs, which began soliciting donations five months before he officially entered the race. This novel precampaign fundraising strategy allowed him to ask donors personally for precisely the kinds of no-limit contributions that federal campaign finance laws forbid candidates from accepting.

“We have serious concern over Jeb Bush’s use of his super PAC, claiming he wasn’t a candidate while doing what everyone else saw as candidate activity,” said Larry Noble, the senior counsel for the Campaign Legal Center, a nonprofit that has asked the U.S. Department of Justice to investigate Bush’s super PAC fundraising. “The concept of contribution limits is being destroyed by these super PACs. Most of the big donors consider [a super PAC donation] the same as giving to the candidate.”

The focus on Bush’s use of super PACs — which circumvent campaign fund-raising rules by nominally not being allowed to coordinate with a candidate, campaign or party on how they spend money — has thrown a spotlight on the billions of dollars now flowing through the U.S. electoral system. Critics see super PACs, created in the wake of the Citizens United Supreme Court decision in 2010, as corrupting the political system by being able to raise almost unlimited sums of money in pursuit of their goals, which nearly always happen to coincide with an individual candidate’s.

But in the 2016 race, Bush is hardly alone in making creative use of super PACs. Sen. Ted Cruz, R-Texas, has no fewer than four super PACs aligned with his White House bid, allowing deep-pocketed donors to choose à la carte the groups whose tactics most closely align with how they would like their huge donations to be spent.

The results for the 2016 race for the White House have been staggering. Recent Federal Election Commission (FEC) filings show candidates have already raised $360 million combined. Of those contributions, nearly $250 million was raised by candidate-affiliated super PACs. And with the first primary still six months away, most expect the fundraising gap to widen between super PACs and the campaigns they support.

The allure of super PACs is obvious. Freed from the $2,700 per-election individual contribution limit for candidates’ campaigns, these outside organizations may raise unlimited sums from a single person, making them the preferred method of influence for wealthy donors. Among the few restrictions on super PACs is that they are forbidden to coordinate with a candidate’s campaign on spending all that money. They’re also required to periodically disclose the names of their donors.

Since the 2010 Citizens United decision and subsequent federal court rulings that eliminated spending restrictions by outside political groups, the role of super PACs and similar entities has greatly expanded. “Candidates, their advisers and lawyers have gotten used to these new vehicles,” said Lloyd Mayer, a law professor at the University of Notre Dame who specializes in election law. “They’ve seen them work in earlier campaigns. They understand how they can function.”

Critics of super PACs say they foster a climate of quid pro quo. “The issue here is the appearance of corruption … meaning the candidate feels beholden to the donor and actually does things specifically for the donor,” says Noble. “A $2,700 donation is presumed not to be enough to cause a officeholder to do something, but when you’re making a $1 million donation … the candidate may be more inclined to do the bidding of the donor when they’re in office.”

Opposition to super PACs can also be found among those who view political donations as free speech deserving of First Amendment protections. Jim Bopp, the lawyer who first represented Citizens United in the case that wound up in the Supreme Court, said that with the increased spending by outside groups, “we have a less transparent and less accountable system. You can’t vote against a super PAC.” 

He argues that the problem is actually too much regulation, which he likens to a game of whack-a-mole, with the closing of one funding source simply leading candidates to find murkier alternatives. “Money is being driven away from campaigns because of ridiculously low contribution limits,” he said. “Until we dramatically raise or eliminate those limits … there will be increased spending each election cycle by independent groups.”

Critics who argue for more effective oversight, however, point to failings of the agencies charged with interpreting statutes and enforcing regulations. “No one at the federal level, neither the FEC nor the IRS, is saying you can’t do what they’re doing,” said Paul Streckfus, a former nonprofit specialist at the IRS. While periodic legislation is proposed in Congress, like the Fair Elections Now Act, which seeks a public financing alternative to big-money donations in congressional races, there is little support in the Senate or the House to close the money spigot from ultrarich donors — not just for presidential super PACs but also for congressional ones. “Congress has shown no interest in efforts to curtail this activity. Right now it’s pretty much you can do whatever you want.”  

The FEC, whose six commissioners are evenly split between Republicans and Democrats, requires a majority vote simply to launch an investigation into any of the claims it receives. “The problem that we have is that the FEC has become notoriously deadlocked,” said its chairwoman, Ann Ravel. “We have been unable to go forward and investigate.” She minced no words about what this means for coming elections. “The result has been a notice to campaign finance lawyers and others that the FEC … won’t be investigating matters of import to the American public. I have had personal comments made to me by lawyers who represent committees and candidates saying they recognize that because of the 3-3 deadlocks … they can stretch the law because the potential of being penalized is so small.”

To date, there has been only a single conviction for violating the FEC prohibition against coordination between a super PAC and a campaign. It involved very blatant abuse. Tyler Harber, the campaign manager of a failed 2012 bid for a northern Virginia congressional seat created a super PAC for the candidate and controlled its funds. Critics note that Harber’s conviction came three years after the violations took place. “The FEC is dealing with outdated rules as well as disagreements about how the existing rules should be enforced,” said Mayer. “Investigations tend to happen after the election. The prize is winning the election. Fines, being shamed in the press — none of that really matters after the election.”

Many observers attribute FEC inaction not to partisan gamesmanship but to ideological disagreements between its commissioners over how much regulation is warranted. Politics is never far from the surface, however. At a May 21 public meeting of the FEC, Republican Commissioner Lee Goodman opposed a colleague’s proposal for speeding up the agency’s review of backlogged complaints, saying he tallied the cases and found that complaints submitted against conservative organizations outnumbered those against liberal groups. Reviewing the backlog would have what he termed a “disparate” impact on Republicans. He acknowledged he was therefore using his discretionary authority to hold off action on claims against conservative groups.

Goodman’s office declined to respond to multiple requests for an interview.

The IRS has similarly been unwilling to enforce regulations of 501(c)(4) organizations, which, like super PACs, may solicit unlimited donations but generally don’t have to disclose the identity of their donors. IRS rules place limits on the amount of political spending these groups are allowed, but backlash that the agency received in 2013 over what its critics said was improper targeting of tea-party-affiliated groups has made enforcement highly unlikely. “The IRS is in a defensive posture,” said Kenneth Gross, an election lawyer and a former FEC counsel. “Until they articulate clear rules, which won’t be until after the 2016 election, there’s a lot of room for being aggressive in the interpretation of what’s political and what’s not political.”

Campaign experts don’t see things getting better anytime soon — short of a widespread scandal like Watergate, which led to modern-day U.S. campaign laws. “The Supreme Court has cleared such a large path for outside activity that I’m not sure there’s much reining in that can be done under the current regulatory scheme,” said Gross.

As a result, said Noble, “this presidential campaign is going to be the most expensive, least regulated and most noncompliant with the law that we’ve seen.”