In McCutcheon, U.S. Supreme Court May Inadvertently Subvert Limits on Contributions to Parties

Jan. 14, 2014

In McCutcheon, U.S. Supreme Court May Inadvertently Subvert Limits on Contributions to Parties

Public Citizen Report: Lifting Any Aggregate Restrictions Would Allow Individuals to Funnel Millions to Both Candidates and Parties Via Fundraising Committees

WASHINGTON, D.C. — Even if the U.S. Supreme Court maintains limits on contributions to parties and political action committees (PACs) when it rules in McCutcheon v. Federal Election Commission, a decision to strike down caps on aggregate contributions to candidates could effectively allow a single donor to give party committees more than $1.8 million, or more than 24 times the legal limit, Public Citizen concludes in the second of a two-part series on the potential implications of the case.

Eliminating aggregate contribution limits to candidates could cumulatively enable candidates to transfer a total of more than $74 million from large individual donors to the national party committees, according to the report, “Beware of a Naive Perspective: A Prebuttal to Possible U.S. Supreme Court Rulings in McCutcheon v. Federal Election Commission.”

The report demonstrates that a ruling that strikes down limits on total contributions to candidates but leaves aggregate limits on contributions to parties untouched still could erode the meaning of these limits because of the law’s vast permissions for candidates and committees to transfer money to one another.

“If the court were to strike down limits only on aggregate contributions to candidates, the decision would also diminish the effect of caps on contributions to parties,” said Adam Crowther, researcher with Public Citizen’s Congress Watch division and co-author of the report. “What we are going to end up seeing are candidates in non-competitive races transferring large sums to party committees. Those transfers would provide a means to evade limits on contributions to parties even if the justices sought to preserve the party limits.”

Under a scenario in which only limits on total contributions to candidates were struck down, party leaders and elected officials who administer joint fundraising committees could solicit checks of more than $2.5 million from major donors. The vast majority of these contributions would be distributed to candidates in increments of $5,200 per recipient (a limit that is indexed for inflation). However, because candidates can transfer unlimited amounts of money from their campaign accounts to national party committees, party leaders would likely pressure candidates in uncompetitive races to redirect that money to national party committees.

Using an estimate based on the proportion of candidates in uncompetitive races in recent elections, Public Citizen concludes that it would be realistic to expect that eliminating the aggregate limit on contributions to candidates would result in candidates transferring a total of more than $74 million from big donors to national party committees. For each donor who writes a $2.5 million check, the amount redirected back to party committees might equal $1.8 million, more than 24 times the legal limit of any donor’s maximum allowed contribution to a party.

“Recent news reports reveal the extraordinary sum already sloshing among campaign committees. The Supreme Court should understand that if it lifts limits on donations to candidates, it is de facto subverting limits on contributions to parties,” said Public Citizen President Robert Weissman. “It’s a virtual certainty that a huge chunk of increased donations to candidates will slosh back to the parties.”

Part 1 of the Public Citizen series of reports on McCutcheon analyzed the possible outcomes that could arise if the court were to strike down some or all of the aggregate contribution limits a donor may make to candidates, political parties and PACs – limits that are being challenged by GOP donor Shaun McCutcheon and the Republican National Committee.

Part 1 determined that eliminating some or all aggregate contribution limits would vastly expand the role of joint fundraising committees because they would be able to receive significantly larger contributions from a single donor than they currently may receive now. Complete elimination of these limits would allow a single donor to write a $5.9 million check to a joint fundraising committee, while partial elimination could allow donors to contribute more than $2.5 million to a joint fundraising committee.

See Part 1 and 2 of the report.

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