The Federal Election Commission yesterday deferred for three weeks a landmark ruling on a controversial campaign finance proposal that critics said would make a mockery of the limits on federal campaign contributions by political action committees (PACs).
The commissioners asked for more information from their general counsel, who has recommended against the proposal. A major criticism is that PACs, which can directly contribute no more than $5,000 to each candidate, theoretically could pass along many times that to an individual candidate under the proposal.
The proposal, by the Life Underwriters Political Action Committee (LUPAC), is a form of "bundling," a way for a PAC to serve as a collecting point for its individual members' earmarked campaign contributions and send them on to the recipients. The candidate knows the PAC is passing along the money, even if the PAC itself is contributing only its legal contribution limit.
If approved, the plan would allow LUPAC to solicit contributions to specified federal candidates from 1,500 insurance underwriters who make up the Association for Advanced Life Underwriting (AALU), specialists in big corporate and group policies, without the contributions counting against LUPAC's $5,000-per-candidate limit.
In current earmarked "bundling" plans, the individual contributors decide which candidates they want to help and send their checks to their PAC. Such contributions are not counted against the PAC limit.
The AALU goes beyond this because it would endorse a group of candidates and try to raise approximately the same amount for each on a pro-rata basis, in which individual members would be asked to contribute to specific candidates. AALU members that contribute $1,000 to their designated candidates would become members of an honorary group.
Commissioner John W. McGarry cited legislative intent of the federal election laws and prior FEC rulings as reasons to disapprove the proposal.
"There is an inescapable, implied coercion involved in employe and employer transactions, and matching specific candidates with specific contributors goes over the line," he said. "For the employe to have control of his contribution there should be no way to determine who gave what to whom."
"This is a classic partisan standoff," said an official of the Democratic Senatorial Campaign Committee, which opposes the proposal. "For Republicans, the less regulation, the better."
"This is an attempt to make a terrible problem in congressional elections a disastrous one," said Fred Wertheimer, president of Common Cause. "There would be no limit to what PACs could give and they would play a far greater role than they do now."
LUPAC said its plan is encouragement of "spontaneous" political participation. "We've never had a bundling program in the past and have always operated our PAC on the up-and-up," said Jack Bobo, executive vice president of the National Association of Life Underwriters. "We were told that we could get away with this plan because there's no FEC ruling on it, but we won't do it unless we get a favorable opinion on it."