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Fundraising expansion slipped into spending deal could power financial bonanza for parties

(Credit: Ieva Geneviciene.)
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The national political parties, weakened by a ban on soft money and the rise of super PACs, could see a financial resurgence due to a last-minute provision buried in a congressional spending deal struck Tuesday.

The measure would increase the amount individuals could donate to national parties tenfold by allowing wealthy contributors to give additional sums to separate party arms for financing presidential conventions, building renovations and recounts and other legal proceedings. Those three committees could accept triple the amount individuals can give now to the national parties.

Under the language in the bill, a couple could give as much as $3.1 million to a party's various national committees in one election cycle.

(RELATED: Deal reached on $1.01 trillion spending bill)

While there would be some restrictions on how parties could use those donations, the creation of new, wider lanes for money to travel into the parties would be a major boon, campaign finance experts said. The expanded avenues for giving would dramatically undercut some of the last remaining provisions of the landmark McCain-Feingold Act, which curtailed the ability of parties to raise huge, unregulated sums.

“It’s always hard to predict how much more money will actually be raised when contribution limits are modified like this,” said Michael Toner, a Republican election law attorney and former Federal Election Commission member. “But the opportunity is there for the national political parties to raise significantly more money. I think this could be a real shot in the arm for the national parties and it would be a further chipping away of the McCain-Feingold law.”  ​

“Money is fungible in American politics,” Toner added. “Any change in the campaign finance law that allows additional funds to be raised by parties for specified purposes necessarily frees up funds to be spent electing candidates.”

The ability of parties to raise huge sums could help them retake power back from  super PACs and politically active nonprofits, which have emerged as major players in national politics in the wake of the Supreme Court's Citizens United decision in 2010.

Tony Herman, a former general counsel for the Federal Election Commission, noted that all the donations permitted by the bill would be publicly disclosed, unlike money that goes to tax-exempt advocacy groups.

"It will thus help recalibrate the balance away from secret contributions and from unaccountable super PACs and toward open contributions to the parties by opening the door to higher contributions to the parties from wealthy individuals," Herman said. "And for that reason, in the post-Citizens United world, champions of disclosure should applaud this legislation."

Under the language of the bill, the Democratic National Committee and the Republican National Committee would each be able to raise money into three additional accounts, while the congressional campaign committees would have two new accounts.

“That’s very good news for the parties, and it will help restore the balance of power between parties and outside groups like super PACs,” said Washington campaign finance lawyer Robert Kelner.

There are some limits on how the money could be spent. Donations to convention committees could only go to pay for the costs of putting on those events, with expenditures capped at $20 million, for example.

But some of the language of the bill leaves room for the parties to liberally interpret where they can direct the funds. Donations to recount committees could be used for “other legal proceedings,” a generic phrase that could encompass many activities. And the creation of separate building fund committees could give parties leeway to spend contributions directed there on a variety of infrastructure-related purposes, as they did before McCain-Feingold.

Back then, “both Democratic and Republican party committees used building funds for a wide variety of purposes,” Kelner noted. “It’s likely there will be some debate about what, exactly, the parties can use their new building funds for.”

Election law attorney Kenneth Gross, a former associate general counsel at the Federal Election Commission, expressed some doubt about how much use the parties could make of money raised into the restricted accounts. But he noted that the change would dramatically increase the demands put on top party donors.

“The cost of an ambassadorship just went up,” Gross said. “The new limits, coupled with additional possible giving to other committees through joint fundraising, make the limits out of reach for virtually all Americans. Just a handful of people will give at these levels.”

Under the measure, a donor who gave the maximum $32,400 this year to the DNC or RNC would be able to donate another $291,600 on top of that to the party’s additional arms — a total of $324,000, ten times the current limit.

On top of that, a donor could give an additional $453,600 a year to a party's various congressional campaign committees.

The late addition of the language in the spending deal stunned and dismayed advocates for tighter campaign finance rules, who noted that prospect of such an expansion of party fundraising had not been publicly discussed before it was slipped into the final pages of the 1,603-page bill.

“This backroom deal represents everything Americans detest about Washington and about Congress,” said Meredith McGehee, policy director at the Campaign Legal Center. “Rather than pass legislation to fix the corrupt existing campaign finance system, this Congress that couldn't pass a bill to simply increase transparency for campaign contributions decided to raise the price for its attentions. The price for seat at the table in Washington just went up again and even further out of reach for all but the very richest of Americans. Both parties are complicit this dirty deal that was made based on incumbents' fears of money from outside groups.”

Tom Hamburger contributed to this report.