Roger Sollenberger for the Daily Beast:
Months after the Federal Election Commission notified several GOP state parties of major gaps in their 2020 fundraising and spending reports, the committees are correcting their numbers—but they still can’t explain why the discrepancies occurred.
The issue has raised new questions about possible abuse of a longstanding campaign finance loophole that allows wealthy megadonors to cut massive checks. Last year a number of Republican state parties failed to disclose transfers in the hundreds of thousands, sometimes millions, of dollars, which violates reporting requirements.
There are layers of problems here, but the basic question is whether the state parties complied with federal disclosure requirements,” Paul Ryan, vice president of policy and litigation at election reform advocacy group Common Cause, told The Daily Beast.
It appears systemic. The FEC has so far sent notices to 10 of those 46 state parties that failed to report high-dollar same-day transfers from joint fundraising committees and to the RNC. So far, all but one have responded.
But their explanations have been incomplete or nonexistent. For example, the Rhode Island Republican Party seemed only to acknowledge the error occurred but did not address how or why. “The $251,771.78 for the Post General report was missed on the original 30 Day Post General report that was filed so an amended report was filed to include that.” The party later filed another amendment disclosing more than $455,500 in transfers from Trump Victory, but did not offer an explanation in that letter either.
The problem stems from joint fundraising agreements—teams of political committees that join together to increase their party’s fundraising power and reach. The arrangements are legal, but it appears the GOP has used them to secretly pass millions of dollars from Trump Victory to the RNC through apparently oblivious state committees….
Joint fundraising arrangements are complicated, but carry major financial benefits. Here’s how it works.
Joint fundraising committees open a back door, allowing national parties to raise more money from megadonors than the law otherwise permits. Because Trump Victory has 48 members, one person can cut a single check equal to the combined contribution limits of all four dozen committees. Trump Victory then distributes that money to the other committees.
For example, two donors gave Trump Victory $817,800 in 2020: Pharma exec Richard Roberts, and Nicole Luckey, wife of billionaire tech pioneer Palmer Luckey, in September and October, respectively.
The arrangement has a second benefit. While a donor can only give $10,000 to a state party, state committees can transfer unlimited sums to the national party—the RNC. This means the RNC can effectively claw back all Trump Victory contributions from the states, including from donors who already gave the RNC the maximum amount.
The strategy traces back to 2016, when then-candidate Hillary Clinton became the first to take advantage of the 2014 Supreme Court decision that opened the joint fundraising floodgates. That helped the Democratic National Committee build a machine that pulled in $80 million for the DNC—about three times more than Trump’s own machine that year.
The system has been widely criticized by election reform advocates for skewing the playing field in favor of an elite group of megadonors.