On October 16, 2013 a federal appeals court refused to allow Virginia Governor Bob McDonnell to shield e-mails from a grand jury subpoena. This decision was just one more step in the scandal which broke earlier this year.
Money in politics can take two forms: campaign funds and bribes after election. In many cases both occur — the McDonnell scandal is a good example. Governor McDonnell has always portrayed himself with a squeaky clean image, so it came as quite a surprise when allegations of corruption were reported.
In addition to the federal investigation, the state of Virginia launched its own investigation of Governor McDonnell. Attorney General of Virginia Ken Cuccinelli asked Attorney Michael Herring of the Richmond Commonwealth to investigate the McDonnells’ relationship with the nutrition company Star Scientific and its chief executive, Jonnie Williams (Cuccinelli did not investigate the case himself, because he had also accepted money from Williams, although he was cleared of wrongdoing). Allegedly, McDonnell and other members of his family had accepted gifts from Williams in exchange for favorable consideration from state programs. Continue reading
Posted in Money in Politics
Tagged "in-kind" donations, allegations of corruption, Anatabloc, Attorney Michael Herring, Governor Bob McDonnell, investigations of alleged bribery, Jonnie Williams, Ken Cuccinelli, McDonnell Scandal, Opportunity Virginia PAC, quid pro quo, Star Scientific
In case you didn’t know, there have been 5 states in 2013 that have passed resolutions calling on Congress to pass a constitutional amendment overturning the Citizens United decision. These 5 states are Delaware, Illinois, Maine, Oregon, and West Virginia. This makes a total of 16 states that have passed resolutions so far. That is close to one-third of all 50 states.
Prior to 2013, the state resolution effort was supported primarily by Democratic legislators. That is beginning to change. In the 5 states passing resolutions this year, there was significant Republican support. For example, the majority of Oregon’s Republican House members voted for the resolution.
The support garnered from Republican state lawmakers on this issue is reflective of the support two ballot initiatives received from Republican voters on Election Day 2012. Continue reading
Posted in Citizens United
Tagged "stand by your ad", 501c4 groups, amendment to overturn the Citizens United decision, dark money, disclosure of contributions, disclosure rules for outside spending, election money laundering, Follow the Money Act, Governor Rick Perry, political money launderers, Republican support grows against Citizens United, SB 346, Senator Kel Seliger
Stephen Spaulding, of Common Cause and the Hill’s Congress blog, recently addressed the latest threat to the fight to get money out of politics.
On Tuesday, October 8, 2013, the Supreme Court is slated to hear arguments in the case of McCutcheon v. FEC . Shaun McCutcheon, the lead plaintiff, is challenging the $123,200 limit on contributions a single donor may make to federal candidates and political party committees during any two-year election cycle… If McCutcheon prevails, he and similarly wealthy donors soon will be able to write campaign checks of up to $3.6 million a pop.
McCutcheon, in a July interview, said that he believes individuals should have “more influence” (What?! Is this a democracy or an oligarchy?). He also stated that there needs to be a “real, real good reason” to limit individuals’ ability to give to campaigns.
In fact, there is a very good reason, and it was identified by the Supreme Court in prior rulings: to avoid corruption or the appearance of corruption. In Austin v. Michigan Chamber of Commerce (1990), the Court concluded that large contributions do represent corruptions or at least the appearance of corruption. Earlier, the decisions in Buckley v. Valeo (1976) and First National Bank of Boston v. Bellotti (1978) presented the argument that even the appearance of corruption can be devastating, as citizens begin to lose faith in the democratic process.
All three of these precedents, however, have already been challenged by the current Court’s decision in Citizens United v. FEC (2010). The February blog post, Citizens United Ruling Part 3, detailed the arguments of each side. Will the Citizens United precedent stand, or will the Court go back to previous arguments to find a good reason to limit campaign contributions? The next few months will tell.
Before the Bipartisan Campaign Reform Act (BCRA) was passed in 2002, both political parties were diverting unlimited “soft money” donations into federal elections. This was in violation of the Federal Election Campaign Act (FECA) which stipulated that “soft money” be used for “party-building” activities and not on federal elections. Furthermore, FECA placed limits on the amount of money that could be given to political parties for use in federal elections. Since there were no limits on “soft money” donations from any source, this not only allowed individuals and any entity to circumvent the limits on political contributions but, in particular, allowed corporations and unions to circumvent the law and use their treasuries to fund federal elections. BCRA put an end to the abuse of “soft money” by political parties.
After BCRA was enacted, it didn’t take long before someone thought of a way to get around that law. Continue reading
Posted in 527 Groups, BCRA, Citizens United
Tagged Bipartisan Campaign Reform Act, campaign finance history, Federal Election Campaign Act, George Soros, Hillary The Movie, issue ads, MoveOn.org, Peter Lewis, soft money, Swift Boat Veterans for Truth, Wyly brothers of Texas
After the Supreme Court overturned several of the major campaign finance reforms that had been put into place by the Federal Election Campaign Act (FECA) and its amendments (see Part 1), another attempt was made to reform campaign finance in 2002. This time Senator John McCain and Senator Russ Feingold worked together to amend FECA once again with the passage of the Bipartisan Campaign Reform Act (BCRA), also known as McCain-Feingold. The two main issues that were addressed were the contributions of soft money to political parties and the proliferation of political ads that were disguised as issue advocacy ads. Continue reading
Posted in BCRA, Citizens United, FECA
Tagged campaign finance history, campaign finance reform, Davis v. FEC, electioneering communications, FEC v. Wisconsin Right to Life, issue ads, McCain-Feingold, McConnell v. FEC, McCutcheon v. FEC, millionaires amendment, soft money, SpeechNow.org v. FEC
Before the Federal Election Campaign Act (FECA) was passed in 1971, there were few laws to govern campaign finance at the federal level. The Tillman Act (1907) banned corporations from making political contributions to candidates in federal races. The Taft-Hartley Act (1947) barred unions from doing the same. Taft-Hartley also was the first law that prohibited both corporations and unions from making “independent expenditures” in support of or in opposition to candidates in federal elections. As will be shown in this post (Part 1) and the next (Part 2), whenever Congress would pass laws to reform campaign finance, the Supreme Court would strike down significant parts of each one of them. Continue reading
Posted in FECA, Supreme Court
Tagged 501(c)4, Austin v. Michigan Chamber of Commerce, Buckley v. Valeo, campaign finance history, Colorado Republican Federal Campaign Committee v. FEC, express advocacy, FEC v. Massachusetts Citizens for Life, First National Bank of Boston v. Bellotti, independent expenditures, QNC, Qualifed Nonprofit Corporation, Senator James Buckley, soft money
In an update to the previous post (Part 1), Representative Chris Van Hollen of Maryland filed a lawsuit last week on August 21 against the U.S. Treasury Department. This lawsuit would force the IRS to change its criteria for approval of organizations desiring 501(c)(4) status to what Congress had intended when it created that status and to enforce the law as written (click here for article). Specifically, an organization desiring 501(c)(4) status must be “operated exclusively for the promotion of public welfare.” Congress never intended section 501(c)(4) to be used by political groups to gain tax-exempt status.
After Congress decided to reform campaign finance in the early 1970′s with the passage of the Federal Election Campaign Act (FECA) and its amendments, Congress created section 527 of the IRS tax code to deal with political groups in 1975. This section of the code has its own set of rules in qualifying for tax-exempt status. Political committees (Republican National Committee, Democratic National Committee, and all the various Senate and House fund-raising committees), PACs and Super PACs fall into the 527 category. These groups are regulated by the Federal Election Commission (FEC) because their purpose is political. Continue reading
Posted in 501(c)4 groups, 527 Groups, Citizens United
Tagged 527 organizations, BCRA, Chris Van Hollen, electioneering communications, FEC, FECA, independent 527 entity, operated exclusively for the promotion of public welfare, soft money, stealth political action committees, tax-exempt status