Category Archives: campaign finance

“Scoop: DNC covered Biden legal bills in special counsel probe”

Axios:

President Biden used campaign donations to help pay his legal bills last year during the special counsel’s probe into his handling of classified documents, according to two people familiar with the matter and an Axios review of campaign finance records.

Why it matters: The payments, made through the Democratic National Committee, are at odds with the Biden campaign’s recent attacks on Donald Trump for spending his campaign funds on legal fees.

Driving the news: The DNC — which has been collecting the biggest donations to Biden’s re-election effort — paid more than $1.5 million to lawyers or firms representing Biden during the probe, according to the committee’s financial filings….

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“Super PACs keep testing the limits of campaign finance law”

Politico:

Super PACs keep pushing the boundaries of campaign finance law this cycle.

They’re using novel financial arrangements, like taking “bridge funding” in the form of undisclosed de facto loans from major donors or receiving ad revenue from a candidate’s podcast. They’re also continuing to take advantage of long standing loopholes in anti-coordination guidelines.

The willingness to push the boundaries suggests that U.S. politics has entered the Wild West campaign financing system that many observers predicted would come in the wake of the court’s weakening campaign finance laws.

It comes as super PACs are taking a more prominent role in campaigning. Total spending on independent expenditures so far this cycle is nearly 2.5 times what it was at this point in 2020. And because candidates are having more and more trouble with small-dollar fundraising, super PAC money could be even more important as the cycle continues.

“As long as super PACs remain relatively under regulated in the way that they have been, the consultants who work for them and for various campaigns are going to continue trying to push the envelope using them in creative ways,” said Saurav Ghosh, director for federal campaign finance reform at the nonprofit Campaign Legal Center. “Because there seems to be very little risk in pushing against the supposed legal limits.”

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“How Republicans texted and emailed their way into a money problem”

WaPo:

In the years after Donald Trump lost the presidency to Joe Biden, Trump sent so many emails and text messages asking for money that Republican consultants warned his mailing lists could become useless. The former president’s friends told him that they were being asked for too much, too often, and Trump himself ordered aides at one point to slow the solicitations. Some of his fans, pockets emptied, mailed handwritten letters apologizing for not being able to give more.

Now, as Trump and Biden prepare for a rematch, Trump’s vaunted small-dollar fundraising operation is not bringing in as much money as it once did.

In 2020, Trump and his fundraising committees raised a record $626.6 million from small-dollar donors, 35 percent more than Biden took in from that group.

But last year, Trump raised just $51 million from small donors, way down from the $119 million he registered in 2019 and only 18 percent more than Biden’s total. His small-dollar haul — which includes donations of $200 or less — was not nearly enough to offset Biden’s lead among major donors.

The Republican National Committee also raised much less money from small-dollar donors in 2023 than it had in 2019, contributing to budget problems for the party. Officials at the National Republican Senatorial Committee were shocked by the low returns on their investment in the strategy ahead of the last midterm elections.

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“How Trump Moved Money to Pay $100 Million in Legal Bills”

NYT:

Former President Donald J. Trump has spent more than $100 million since leaving office, on lawyers and other costs related to fending off various investigations, indictments and his coming criminal trials, according to a New York Times review of federal records.

The remarkable sum means that Mr. Trump has averaged more than $90,000 a day in legal-related costs for more than three years — none of it paid for with his own money.

Instead, the former president has relied almost entirely on donations made in an attempt to fight the results of the 2020 election.

Now, those accounts are nearly drained, and Mr. Trump faces a choice: begin to pay his own substantial legal fees or find another way to finance them….

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“Coordination in Plain Sight: The Breadth and Uses of ‘Redboxing’ in Congressional Elections”

Gabriel Foy-Sutherland and Saurav Ghosh have written this article for ELJ. Here is the abstract:

This article examines the campaign strategy known as “redboxing.” Redboxing refers to efforts by candidates and parties to bypass laws prohibiting them from coordinating campaign advertising with outside spending groups such as super PACs. This coordination takes place in plain sight—on official campaign websites and party “microsites”—with campaigns asking outside groups to fund specific campaign messages that target particular groups of voters on desired media channels. The instructions contained in a redbox typically employ coded or technical language intended to guide the resulting “independent” expenditures, and are often presented in a distinctive, red-bordered text box designed to be easily identifiable by super PAC operatives. Overall, we find that campaigns use redboxing for two purposes: to engage an allied outside group to amplify the campaign’s primary message to voters, or to delegate a given message to an allied group, often a negative or inflammatory attack on a political opponent. Complementing our legal analysis of this practice, we assess the prevalence of redboxing in the American political system, as well as the relationship between redboxing and independent expenditures in congressional races. Drawing on the first comprehensive dataset of redboxes in a single electoral cycle, we find that this strategy is far more widespread than previously understood. Over two hundred candidates for federal office employed redboxing during the 2022 electoral cycle, and these same candidates frequently benefitted from super PAC spending that was hundreds of times greater than candidates who did not redbox. We conclude by providing recommendations for legal reforms to bring redboxing under control, highlighting recent reform initiatives adopted in Philadelphia and Allegheny County, PA, to outline a workable rule that prohibits redboxing while not infringing on genuine, vital political speech.

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“Republicans Are Counting on Millionaires to Flip the Senate”

NYT:

Since his rise to the presidency, Donald J. Trump has claimed enormous wealth as proof that he is an anti-establishment ally of the working class, not beholden to corporate donors or special interests.

The Republican Party, eyeing control of the Senate next year, is trying to mimic his success with a cohort of candidates who in the past might have been attacked as a bunch of rich men but this year will be sold as successful outsiders in the Trump mold.

The decision by Ohio voters on Tuesday to nominate Bernie Moreno to take on Senator Sherrod Brown, a Democrat, is the capstone of a year that has crowned nominees — or anointed clear front-runners — with remarkable wealth in Pennsylvania, Wisconsin, West Virginia, Montana and now Ohio.

That might match the party’s presumptive nominee, Mr. Trump, but with backgrounds in banking and hedge funds, properties in Connecticut and Laguna Beach, Calif., and education credentials from Princeton and the Naval Academy, some in the 2024 class feel more like the days of Mitt Romney, worth around $174 million, and John McCain, a Naval Academy graduate who married into a beer-distributing empire, than the current moment when blue-collar credibility is the currency of the realm.

The intentional decision by Republicans in Washington, D.C., to get behind candidates with enormous personal fortunes will most likely give the party a boost as it struggles for campaign cash against the Democrats’ formidable grass-roots fund-raising operations. But the sheer affluence of the candidates — and how they made their money — is sure to be a factor in the fight for Senate control.

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“Cross-Border Influencers: Democracy and Externalities”

Saul Levmore has posted this draft on SSRN. Here is the abstract:

The United States does not allow foreigners to influence U.S. elections by giving money to political parties or candidates, but many other countries do allow cross-border influencing. Indeed, the variety of policies among countries is remarkable. Some countries, like the United States, that forbid financial contributions from outside the country, do permit cross-border contributions across domestic borders, such as those of states and cities. Meanwhile, Canadians cannot contribute to the campaigns of U.S. political candidates, and cannot even (lawfully) influence the American political process by purchasing campaign t-shirts or bumper stickers. This prohibition is in place even though, like constituents of neighboring jurisdictions within the U.S., Canadians are greatly affected by U.S. policies

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“How Trump Is Scrambling to Raise Cash”

NYT:

As many as three nights a week, Donald J. Trump has been hosting private dinners at Mar-a-Lago, schmoozing with some of the Republican Party’s biggest financiers as he races to address a sizable cash shortfall against President Biden.

There is no request for money from the attendees at these meals, which have included Larry Ellison, the billionaire co-founder of Oracle, and Pepe Fanjul, the sugar magnate, according to people familiar with the sessions. But advisers to Mr. Trump’s campaign and his super PACs hope the charm offensive will eventually pay political and financial dividends.

One of the most pressing issues facing Mr. Trump is the financial disparity he and allied groups now face with Mr. Biden and the Democratic Party. Democrats have boasted of entering February with $130 million. The Trump operation did not release a full total, but his campaign account and the Republican National Committee had around $40 million.

Mr. Trump enters the general election ahead of Mr. Biden in public polls. But Mr. Biden has taken full advantage of one of the benefits of incumbency, both socking away cash and building out a political operation earlier than his challenger.

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“Has Citizens United Undermined Democracy?”

WNYC “Open to Debate” podcast:

In a high-stakes presidential election year, in partnership with the Newt and Jo Minow Debate Series at the Northwestern Pritzker School of Law, Open to Debate is taking a look at more than a decade of the Citizens United Supreme Court case. The 2010 landmark decision that ruled the free speech clause of the First Amendment prohibits the government from restricting independent expenditures for political communications by corporations, including nonprofits, labor unions, and other associations, changed the landscape of political spending in the U.S. This gave rise to Super PACS and an increase in election campaign spending. Since then, there have been questions about whether the decision has harmed our democratic process. Those who support the decision argue it upholds free speech, allowing diverse voices in the political arena, and broadens the range of discourse by enabling groups to freely express their views and support candidates or policies. Those against it argue that it allows a disproportionate influence from corporations and special interest groups, and leaves the voices of ordinary citizens overshadowed by the financial resources of a few, eroding the principles of equality and fair representation.  With this context, we debate the question: Has Citizens United Undermined Democracy?     This debate is presented in partnership with the Northwestern Pritzker School of Law as part of the Newt and Jo Minow Debate Series. It will be recorded live in person on Wednesday, February 21, 2024, at the Thorne Auditorium at Northwestern University Pritzker School of Law in Chicago, Illinois. Arguing Yes: Francesca Procaccini, Assistant Professor of Law at Vanderbilt University Law School; Ciara Torres-Spelliscy, Professor of Law at Stetson University   Arguing No: Floyd Abrams, Senior Counsel at Cahill Gordon & Reindel; Eric Wang, Partner at The Gober Group, pro bono Senior Fellow at the Institute for Free Speech

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Andrew Albright: “Opportunities for IE Reform in California Law in a Post-Citizens United World”

The following is a guest post from Andrew Albright:

In Citizens United, as we all know, the Supreme Court held that independent expenditures (IEs) cannot be a source of quid pro quo corruption so long as the persons or entities publishing the IEs spend their dollars independent of, or absent coordination with, the candidates the IEs support. This logic leaves one primary form of IE regulation largely untouched, and possibly available for strengthening: coordination laws.

Coordination laws govern the relationships between, and put limitations on, candidates and third-party entities that make IEs in support of those candidates. States across the country, as well as the Federal Elections Commission, have enacted coordination laws of varying strength.

In a new report I have authored for California Common Cause, “All Hope Is Not Lost: Effectively Regulating Independent Expenditures in a Post-Citizens United World,” I document the amount and nature of IEs in California politics, and examine the legal doctrine and public policy around coordination laws, in California, other states, and federally. The report seeks to understand best-in-field practices, identify where California falls short, and propose improvements to California’s coordination laws. The report publishes today.

“All Hope Is Not Lost” finds that, contrary to the cynicism and defeatism that has quite naturally become the norm around IEs, there may actually be some room for progress. I recommend that California take three steps to strengthen its coordination laws. First, the state can broaden its definition of “communication” under the Political Reform Act. Today, political committees can avoid direct contribution limits by airing unlimited advertisements that do not expressly call for the candidate’s election or defeat but nevertheless indirectly advocate for the candidate. Broadening the definition of “communication” would extend California’s coordination laws to cover any and all political advertisements – including so-called “issue advocacy” – that mention or depict a candidate within sixty days of an election. Maine and New York State already apply some version of this approach.

Second, California can strengthen its definition of “coordination” and afford those accused of coordination fewer opportunities to make bad faith but ultimately successful rebuttals of clear evidence of coordination. Today, California uses a series of “rebuttable presumptions” that allow the Fair Political Practices Commission (FPPC) to presume that an IE was actually a coordinated expenditure. For example, where a candidate’s spouse works for a supporting political committee, the FPPC presumes coordination. But these presumptions allow a candidate to rebut the allegation; such rebuttals often go uninvestigated and have become a weakness that has undermined effective enforcement of California’s coordination laws. In states like New York, policymakers have taken rebuttable presumptions and turned them into per se coordination scenarios, thus barring candidates from rebutting the presumption of coordination. This approach would streamline California’s laws and make FPPC regulations significantly easier to enforce.

The final opportunity for reform lies slightly outside of coordination laws. California should consider barring “general purpose” and “primarily formed” committees from making IEs. The distinction between general purpose and primarily formed committees arguably serves an important purpose. Many general purpose committees are not focused on specific elections, and instead focus on issues. Thus, applying the more onerous filing and naming requirements of primarily formed committees to general purpose committees could deter some non-election speech.

At the same time, the distinction between general purpose and primarily formed committees creates loopholes that may undermine the State’s campaign finance regulations, which the report highlights in detail. For example, in 2020, a local Santa Rosa political committee raised $500,000 from a single donor and used it in opposition to a local ballot measure. But because it was registered as “general purpose,” despite operating as “primarily formed,” the committee did not have to disclose their funders in a timely manner. Indeed, the committee only disclosed its donors and refiled as a “primarily formed” committee after a concerned citizen filed a complaint with the FPPC.

Other problems exist with allowing the same committees to make both direct contributions and IEs. Under current California law, a political committee staffer could engage a campaign in detailed conversations regarding content and strategy around a specific communication, as long as the cost of that communication is below the limit for direct contributions. Then, a different staffer of the same committee could go on to make unlimited, “uncoordinated” independent expenditures on that campaign’s behalf. This is one of many opportunities for wink-and-nod coordination that California law currently permits.

In line with states like New York and Connecticut, California can prohibit general purpose and primarily formed committees from making IEs and instead create an “independent expenditure only” committee that can make IEs on behalf of candidates, but not direct contributions to them. The upshot of this approach is that, by treating all IEs the same, it removes incentives for political spenders to exploit arcane committee classification rules to engage in coordination and evade regulations. And it eliminates some of the most obvious opportunities for wink-and-nod coordination.

Though Citizens United took many excellent policies and reform off the table, from the perspective of good government reformers, states like California can still strengthen their coordination laws to ensure that politicians cannot use third-party organizations to artfully skirt direct contribution limits. Building a stronger wall between direct contributions and IEs will help California close loopholes and strengthen enforcement of its direct contribution limits. All hope is not lost.

Andrew Albright is a joint J.D. and Master of Public Policy Candidate at the University of California, Berkeley. After graduating in May of 2024, he will spend a year working as a law clerk at the United States District Court for the Northern District of California, followed by a year working as a law clerk at the United States Court of Appeals for the Ninth Circuit. Andrew completed this report on behalf of Common Cause as his Master’s capstone at the Goldman School of Public Policy.

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