A massive expansion of party fundraising slipped into a congressional budget deal this week would fundamentally alter how money flows into political campaigns, providing parties with new muscle to try to wrest power back from independent groups.
The provision — one of the most significant changes to the campaign finance system since the landmark McCain-Feingold measure — was written behind closed doors with no public debate. Instead, it surfaced at the last minute in the final pages of a 1,603-page spending bill, which Congress is rushing to pass to keep government operations from shutting down.
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 — more than triple the current limit.
The move was heralded by party supporters, who said it would replenish the official Democratic and Republican organizations, which were left weakened by a 2002 ban on soft money and the subsequent rise of super PACs and other outside groups.
“A lot of us would like to get the parties back in the game,” said Richard Hohlt, a Republican lobbyist and veteran fundraiser. “This language would strengthen the parties and provides some transparency and oversight over an uncontrollable, Wild West fundraising atmosphere.”
But public interest groups seeking to lessen the impact of wealthy donors on politics decried the maneuver, saying it would carve out wide new channels for huge sums to flow into the parties.
Fred Wertheimer, a longtime advocate for stricter regulation of political money, said the fundraising expansion would be “the most destructive and corrupting campaign provisions ever enacted by Congress.”
“They will create the opportunity for the wealthiest Americans to buy — and federal officeholders to sell — government influence and decisions,” he said.
He and others called on President Obama, who has not yet said whether he would sign the bill, to veto it.
Sen. John McCain (R-Ariz.), whose 2002 Bipartisan Campaign Reform Act would be undermined by the provision, told The Washington Post, “No, nobody came to talk to me about anything. I don’t even know who originated it.”
The impetus for the measure appears to have been driven by the Republican National Committee, which has aggressively sought ways to shake off its fundraising limitations. The Democratic National Committee was also closely consulted, said GOP congressional aides familiar with the negotiations.
DNC spokesman Michael Czin denied that, however. “No one at the DNC or working on our behalf were involved or consulted at all in this process,” he said.
A spokeswoman for the RNC declined to comment, noting that the bill had not yet passed.
House Democratic leaders knew that budget negotiators were considering lifting party contribution caps, but the final limits ended up much higher than anticipated, said Rep. Steve Israel (D-N.Y.). When House Democrats saw the final text early Wednesday, “it caused considerable consternation,” he said.
Democratic leaders in the House warned they may try to block passage of the spending bill unless there are changes to the fundraising language and other provisions.
“At this point, if the speaker can’t resolve these issues, my guess is we don’t know how long the government will be open after Thursday night,” Israel said.
The language expanding party fundraising would undercut one of the last remaining provisions of the landmark campaign finance legislation authored by McCain and former senator Russ Feingold (D-Wis.).
One aim of that complex 2002 law was to end “soft money” contributions to political parties — large donations given for general “party building” activities such as building renovations, computer purchases and nonelection voter outreach. The huge contributions ballooned the treasuries of the national parties, spurring a race for support from wealthy financiers.
The system led to a series of scandals involving soft money during the Clinton administration after corporate and foreign donors were entertained at exclusive White House events. The public reaction to the courting of such donors led Clinton to call for a soft-money ban in the final years of his presidency.
The new proposed fundraising rules would not permit the same kind of unregulated donations to parties. For example, the parties would still be unable to collect unlimited donations or contributions from unions or corporations.
Tony Herman, a former general counsel for the Federal Election Commission, noted that all the donations permitted by the bill would be publicly disclosed. That is unlike money that goes to tax-exempt advocacy groups, which have become prominent political players since a 2010 Supreme Court decision that allowed corporations to spend money directly on politics.
“It will thus help recalibrate the balance away from secret contributions and from unaccountable super PACs and toward open contributions to the parties,” Herman said.
But critics said the measure would drastically expand how much money the parties could raise without any public debate about the merits of such a policy change.
Each party has three main accounts, which can raise $32,400 each from an individual donor per calendar year. The new provision would allow triple that amount to seven other committees on each side — meaning that an individual could dole out a total of $777,600 to various party accounts each year.
Political action committees, which can give $15,000 a year to the main party accounts, would also be able to donate $45,000 per year to each of the additional party accounts.
The secondary accounts covered by the provision would collect money for three purposes: to finance presidential conventions, to pay for building improvements and for legal proceedings such as recounts. But the donations would inevitably lift the parties as a whole, election law experts said.
“Money is fungible in American politics,” said Michael Toner, a Republican election-law attorney and former FEC commissioner. “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.”
Some of the language in the bill could also give the parties broad leeway in how to use the new funds, depending on how the FEC interprets the measure.
The bill says that donations to recount committees could be used for “other legal proceedings,” a generic phrase that could encompass many activities. The creation of separate building-fund committees could give parties an opportunity to spend contributions on a variety of infrastructure-related purposes, as they did before McCain-Feingold.
“It’s likely there will be some debate about what, exactly, the parties can use their new building funds for,” Washington campaign finance lawyer Robert Kelner said.
The changes would also put intense pressure on top party donors and bundlers, who could see their fundraising goals skyrocket.
“The cost of an ambassadorship just went up,” said Kenneth Gross, a former FEC associate general counsel. “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.”
Longtime Democratic donor Richard Harpootlian, the former chairman of the South Carolina Democratic Party, balked at the prospect of the parties soliciting $3.1 million in checks.
“Many of us, on both sides, have contributor fatigue,” he said. “What do we get for it? We’re not getting a better government.”
The attempt to amp up the parties’ fundraising abilities comes as party officials have sought ways to bring in more funds to compete with deep-pocketed independent groups. Those efforts laid the groundwork for the new fundraising proposals slipped into the budget deal.
Earlier this year, the Supreme Court knocked out a cap on how many campaign and party committees an individual donor can support in a single year. The case, McCutcheon v. Federal Election Commission, was brought by an Alabama businessman and the RNC.
In October, the RNC and DNC jointly obtained approval from the FEC to raise money for their convention committees without having those donations count against the annual contribution cap to national parties.
The parties argued that they needed a new avenue to raise funds for the events after a federal law eliminated public funding for the conventions.
Election-law attorneys said it was hard to predict how many donors would take advantage of the chance to give millions of dollars to the parties.
“But the opportunity is there for the national political parties to raise significantly more money,” Toner said. “I think this could be a real shot in the arm.”
Paul Kane, Ed O’Keefe and Lori Montgomery contributed to this report.