Republicans on FEC want firms to be able to raise money for candidates

February 17, 2011

The fallout from the Supreme Court's decision in Citizens United v. Federal Election Commission keeps coming.

The case loosened restrictions on corporations that do political campaigning with the proviso that they do it without working with candidates. But in a little-noticed document, three FEC commissioners have said they think corporations should be allowed to raise money directly for candidates.

As it is now, corporations are prohibited from helping candidates raise money. The furthest they can go is allowing a candidate to hold fundraisers on their property, and even then, the campaign must pay for the space in advance. But the three commissioners, all Republicans, said those prohibitions are "at best suspect" in light of Citizens United's protection of free speech for corporations.

The commissioners' statement, while not a change in the law or regulations, indicates how far they are willing to take the court's decision when policing the rules for money in politics.

"The idea that corporations could finance and underwrite fundraising for candidates without limit is something that would fully open the spigot," said Larry Norton, a lawyer with Womble Carlyle and a former general counsel for the FEC. "If a corporation can host a major fundraising event with entertainment, with food, with everything else that goes into a top-flight event and it can use corporate funds to do so, that's a big change from where we are now."

It's unlikely that major corporations would jump into the fray, given that the rules prohibiting such activity are still on the books. Any change would require one of the commission's three Democrats to join in a repeal, and the chances of that happening are low.

Indeed, it's going to be hard enough for the panel to rewrite the rules that were directly affected by the case. Late last month, it was unable to get past the first step in that process - notifying the public and seeking comments. The commission deadlocked in a 3-3 vote on the scope of the changes that need to be made.

"They leave corporations and nonprofits in a very uncertain posture heading into the 2012 elections," Norton said.

New use for recount funds

Who says bipartisanship is dead? Both major parties have joined forces to ask the Federal Election Commission for permission to wiggle out of some of the strict regulations on their money imposed by the McCain-Feingold campaign finance law.

The request highlights a little-noticed change resulting from the protracted recount fight after the 2008 Senate race in Minnesota. As a part of that court battle, the FEC said parties and candidates could create a special fund to pay for recounts.

That is giving the parties a way to wring more money from their biggest donors, because contributions to the recount funds are not subject to some of the standard fundraising limits. Five of the six national party committees responded to a request for comment or a request for figures on how much money they had raised for their recount coffers. The Republican House-race arm declined to comment. A Washington Post analysis of disclosure reports shows that there is at least $2 million for Republicans and Democrats.

Now, five of the six national party committees are asking to use some of the money to pay legal fees resulting from a lawsuit filed by the receiver of the estate of tycoon R. Allen Stanford, who the government says was running an $8 billion Ponzi scheme. The receiver is charged with recovering money that Stanford spent - including campaign contributions he made to the parties - so it can be returned to defrauded investors.

The request shows how eager the parties are to tap into a source of funds outside the limits that are a part of McCain-Feingold, which bans the six- and seven-figure contributions to the parties known as "soft money."

The money at stake in the lawsuit is significant: $1.2 million for Democrats and $370,000 for Republicans.

Feingold fights back

Former senator Russell Feingold (D-Wis.), who lost his reelection bid last year, said Wednesday that he is forming an organization called Progressives United to "curtail corporate influence on politics." In an online video announcement, he said the group will try to fight the influence of corporations that were emboldened to get involved in politics after the Citizens United court decision struck down restrictions on political spending - restrictions that he helped pass in the Senate.

Potato baron charged

One of the nation's largest potato growers was arraigned on Wednesday on charges of funneling campaign contributions to California candidates through his friends and relatives, circumventing the state's limits on contributions. Records show that Larry Minor, 70, has also given federal candidates and parties at least $29,000 since the 2000 election cycle, including Reps. John Garamendi (D), Mary Bono Mack (R) and Ken Calvert (R).

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