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FEC Should Develop Full Disclosure System for Campaign Bundling Activity

Nov. 30, 2007

FEC Should Develop Full Disclosure System for Campaign Bundling Activity

In Comments to Agency, Public Citizen Documents the Rise of ‘Bundling for Dollars’ by Campaigns

WASHINGTON, D.C. – The Federal Election Commission (FEC), which is devising rules for handling fundraisers who bundle large sums of money for candidates, should use the opportunity to create a full and well-developed disclosure system for all bundling activity, Public Citizen said in comments submitted today to the agency.

The comments, which document the growth and dangers of elite fundraisers who bundle huge amounts of cash for campaigns, were submitted in response to FEC rulemaking on how to implement the huge step forward represented by the bundling disclosure requirements of the new lobbying and ethics reform measure signed into law in September.

Bundling is the campaign fundraising tool of pooling together a large number of contributions from PACs and individuals to maximize the political influence of the bundlers and the interests they represent. Most often, bundlers are lobbyists or corporate executives who represent a particular business or industry and expect something in return for the fundraising efforts.

In the comments, Public Citizen praised the FEC for proposing a system of quarterly reporting of bundled contributions, aggregated on a semi-annual basis. The agency appropriately recognizes the need to create a new bundling filing form for candidates and committees. However, the agency should take some additional steps, Public Citizen said:

  • Agents of lobbyists, lobbying organizations and their PACs should be included under any bundling disclosure regime, as intended by the  principal congressional sponsors of the Federal Election Campaign Act of 1971;
  • The FEC should develop a separate “bundling schedule” and disclosure reports to clarify bundling activity for the public; and
  • The separate “bundling schedule” in the FEC filing and disclosure reports should include the categories of “bundled contributions during this quarterly period” and “aggregate bundled contributions in the semi-annual period” to avoid over-counting or under-counting of bundled contributions within the covered period.

In 2004, Bush’s re-election campaign raised $262 million in the primary elections, and about 30 percent of that – $76.5 million – came from only 548 bundlers. Public Citizen estimates that Bush’s bundlers raised closer to 40 percent of the total primary money. Presidential candidate John Kerry raised $248 million in the primaries, breaking all previous records for a Democrat. Between 17 and 21 percent of that came from 546 bundlers.

All indications are that bundling is on the rise. The number of registered lobbyists raising money for 2008 presidential candidates is already nearing the total for the entire 2004 campaign – despite the fact that most of the 2004 lobbyist-fundraisers are not yet involved. However, disclosure of bundling activity is very sketchy for most of the 2008 presidential candidates; none of the 2008 candidates has met the same voluntary disclosure standards of Bush and Kerry in 2004.

“Bundlers have overwhelmed campaigns with cash, breaking fundraising records each and every election,” said Laura MacCleery, director of Public Citizen’s Congress Watch program. “Bundlers can raise so much money for candidates that most of the presidential candidates in 2008 realize they can raise and spend more cash from bundlers than they could using the presidential public financing system. When wealthy individuals are permitted to be a wellspring for campaign cash, their influence will drown out the voices of ordinary voters.”

Bundlers and the businesses they represent tend to be treated very well by the lawmakers they enrich. For many bundlers, the purpose of bundling campaign contributions is to gain something for the particular business, special interest or industry. It could be as simple as getting a photo opportunity with the candidate. It could be more nefarious, such as Norman Hsu’s alleged scheme to acquire credibility among investors, or, worse yet, it could be used to obtain government contracts, tax breaks, earmarks or public policies.

The new lobbying and ethics reform law passed this summer requires for the first time candidates and party committees to disclose the identities and amounts raised from each of their bundlers who are registered lobbyists or lobbying organizations.

“Lobbyists are a key source of bundled contributions for lawmakers, and often the leading source for early fundraising long before an election year rolls around, when no one else – except the lawmakers – are dreaming of campaign cash,” said Craig Holman, lobbyist for Public Citizen. “Lobbyists want to curry favor with lawmakers, and what better way to do it than through money?”

The FEC is scheduled to develop its rule early next year. READ Public Citizen’s comments on the bundling rulemaking.