Category Archives: campaign finance

“Giuliani associate Lev Parnas convicted in campaign finance fraud case”

WaPo:

It took the federal jury in U.S. District Court in Manhattan less than a day to find that Parnas committed fraud through donations to several state and federal candidates that were bankrolled by a Russian financier. Parnas was also found guilty on counts related to a $325,000 donation in 2018 to a joint fundraising committee that supported then-President Donald Trump.

Prosecutors told the jury that the illegal fundraising efforts documented in text messages and other trial evidence gave Parnas access to elected officials and candidates. They showed photos of Parnas with Trump and Giuliani, who was the president’s personal lawyer, schmoozing at high-end political fundraisers.

Prosecutors also said Parnas lied to the Federal Elections Commission about the source of the hefty 2018 donation, which he said in filings was from his start-up company Global Energy Producers. The company was in fact not profitable and not functioning as a real business, prosecutors argued. The donation was actually sourced through a mortgage refinance loan obtained by Parnas’s business partner, Igor Fruman, the jury found.

Fruman — whose alleged role in the events was regularly discussed in testimony at the trial — pleaded guilty last month to one count of soliciting foreign campaign contributions. He’s due to be sentenced early next year.

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“A Little-Noticed Supreme Court Ruling Could Help Build A Dam Against Foreign Money In American Elections”

Ciara Torres-Spelliscy for TPM:

Meanwhile, a little noticed case that came out during the height of the pandemic could have a big impact on whether and how foreign corporations play in American elections. The Supreme Court in United States Agency for International Development v. Alliance for Open Society International, Inc. (“Open Society II”), a case completely unrelated to elections, decided that “[i]n short, plaintiffs’ foreign affiliates are foreign organizations, and foreign organizations operating abroad have no First Amendment rights.”

Foreign nationals (the human kind) have long been barred from spending in U.S. elections under 52 U.S.C. § 30121. That is why election law experts had their hair on fire about the question of Russian interference the 2016 election. And even the Roberts Supreme Court in a case called Bluman v. FEC upheld the constitutionality of the ban on foreign nationals’ spending money in American elections.

But the law has been as clear as mud between 2010’s Citizens United and 2020’s Open Society II about whether that foreign ban naturally applied to foreign corporations as well as humans. In two cases, the state of California and the FEC took the position that the foreign ban did apply to foreign corporations. In the California case, a foreign pornographer spent in an LA election about mandated condom usage in porn. (He was against it.) He and his foreign company spent illegally in that LA election. California went after him and he had to pay a $61,500 fine. Then in the 2016 election a foreign company called American Pacific International Capital spent illegally $1.3 million in support of Jeb Bush’s failed effort to become president. The FEC issued a civil fine to the corporation of $550,000.

While Congress is going nowhere fast in passing elections reform, including ones that would keep foreign meddling in elections at bay, states and localities have been doing their best to keep foreign corporate money out of their elections. For example, under a Washington State law that went into effect in 2020 “[n]o contribution, expenditure, political advertising, or electioneering communication may be made or sponsored by a foreign national, financed in any part by a foreign national, or have a foreign national involved in the decision-making in any way.” Similar laws were passed in North Dakota and New Hampshire.

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“Pro-Trump PAC fined over foreign money offer”

Lachlan Markay for Axios:

A pro-Trump political group has agreed to pay $25,000 to settle allegations it illegally solicited $2 million from reporters posing as intermediaries for a Chinese national.

Why it matters: A key player in the scheme, a veteran Republican operative, is facing criminal charges over allegedly funneling tens of thousands of dollars in foreign cash to Trump’s re-election effort, making news of the fine the latest in an emerging pattern of conduct.

What’s new: Great America PAC, a hybrid super PAC, reached an agreement with the Federal Election Commission to resolve the more recent allegations in June, according to a copy of the conciliation agreement released this week….

Between the lines: Benton, a former senior aide to Senate Minority Leader Mitch McConnell, is also facing criminal charges over his alleged role in a scheme to funnel money from a Russian national to a Trump fundraising committee last year.

What they’re saying: “Benton’s conduct was dishonorable, unpatriotic, and clearly illegal,” three of the FEC’s six commissioners wrote in a joint statement on the Great America PAC settlement.

  • The commission nonetheless deadlocked on whether to investigate Benton’s conduct further.
  • “It is unfortunate, to put it mildly, that the Commission failed to follow through and hold Benton accountable for his actions,” the three commissioners wrote.
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Republican FEC Commissioners: Twitter Entitled to Press Exemption for Excluding NY Post Content on Hunter Biden

Dickerson/Trainor statement:

Moreover, the decision as to precisely which news to distribute is, in many ways, the sine qua non of “the business of producing…news stories, commentary,
and/or editorials.”27 The New York Times famously emblazons its masthead with the slogan “All The News That’s Fit To Print,” suggesting the paper’s published materials were carefully selected and contextualized to fit the Times’s subjective view of “news” that is “fit to print.” That is precisely what Twitter did here: it made the editorial judgment that links to the New York Post articles were not “fit to print”—or, restated, “fit to share.”


Under FECA, then, Twitter is likely a press entity.28 Even so, under the Act press entities only get the media exemption’s protections when they act in their “legitimate press function,” which we have historically viewed under a two-part analysis: “(1) whether the entity’s materials are available to the general public, and (2) whether they are comparable in form to those ordinarily issued by the entity.”29 Twitter’s platform is available to any American willing to access it via an app or web browser. And when Twitter chooses to limit the sharing of a news story, it does
not fundamentally change the appearance or underlying function of the platform itself. Indeed, Twitter argues that its content moderation policies are central to its users’ experience and a core part of its overall commercial product.30
Accordingly, Twitter’s activities fall within our press exemption. But this regulatory safe harbor operates as a floor, not a ceiling. As the Citizens United Court noted, the judicial branch has “consistently rejected the proposition that the institutional press has any constitutional privilege beyond that of other speakers.”31 So even if Twitter’s decision to limit distribution of the New York Post’s articles were not protected by the Act’s press exemption, it would likely be protected by the Constitution itself.

See also the Cooksey statement.

(h/t Shane Goldmacher)

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“Revised Democratic voting bill drops controversial provisions, tweaks others as pressure for action mounts”

WaPo:

A group of Democratic senators — including key centrist Joe Manchin III of West Virginia — introduced a pared-down voting rights, campaign finance and government ethics bill Tuesday in hopes of building momentum for its passage through a closely divided Senate.

The new Freedom to Vote Act retains significant portions of the For the People Act, Democrats’ marquee voting legislation that passed the House this year but was blocked by a Republican filibuster in June. Those include mandating national minimum standards for early voting and vote-by-mail, establishing Election Day as a national holiday, and creating new disclosure requirements for “dark money” groups that are not now required to disclose their donors.

But it also discards significant pieces and tweaks others, largely in an effort to placate Manchin and indulge his hopes of building enough Republican support to pass the bill. Overcoming a filibuster absent a rules change would require the support of 10 Republicans in addition to the 50 members of the Democratic caucus….

While the original bill mandated that states use nonpartisan commissions to draw congressional district lines in order to prevent gerrymandering, the revised bill does not require commissions. It instead creates federal criteria for mapmaking, gives courts the power to enforce them, and allows states to choose how to comply, whether by using a commission or another method.

The Freedom to Vote Act does not include one controversial proposal that Manchin floated in June — a national voter identification mandate. Instead, the bill would create a national standard for the states that choose to require voter ID, allowing them to accept a range of documents as proof of identification, without requiring it in other states.

The new legislation also adds provisions meant to override state-level efforts in GOP-controlled states that some are warning could allow officials to override election results. Sections aimed at so-called election subversion would create federal protections for elections officials and create standards for the handing of election equipment and records.

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“Trump Insiders Are Quietly Paying Teen Memers For Posts”

HuffPost:

In the fever swamps of Instagram, a network of right-wing meme accounts run by teenage boys and young men has erupted into an advertising powerhouse reaching millions. These memers — who regularly post far-right conspiracy theories, anti-vaccine propaganda and other incendiary clickbait — first caught the attention of obscure brands selling cheap MAGA merch, who started paying themto display ads to their rapidly growing conservative audiences. The money wasn’t great, as a few memers told HuffPost last summer, but it still felt like a big deal to watch their Instagram pages blossom into mini businesses.

Little did they know, members of Donald Trump’s inner circle would soon come knocking.

Since the 2020 election, these meme moguls have quietly collected payments to run ads for the Trump campaign’s “Election Defense Fund”; former senior Trump aide Jason Miller’s new social media network, GETTR; Trump confidant Mike Lindell’s bedding company, MyPillow; and, as recently as a few weeks ago, the National Republican Senatorial Committee. In a few cases, the memers have included high-schoolers as young as 14. Some of these discreet ad deals were brokered directly between teens and former members of the Trump White House, communications obtained by HuffPost reveal.

Most of the ads come in the form of memes with captions urging people to click customized links inserted into the memers’ Instagram bios, which lead to the promoted parties’ websites. The memers typically earn a small “conversion” fee for each person who uses their link, doled out by third-party marketing agencies working with big-name clients. Given the massive reach of several of these pages, often boosted by Instagram’s powerful recommendation algorithms, this can quickly add up. For the recent GETTR ad campaign, memers earned $0.85 per conversion with a cap of 25,000 conversions — or $21,250….

he services they provide are highly valuable: They’ve fostered relationships with huge niche communities and can launch hushed influence campaigns that are free from the kind of oversight and transparency mandates enforced through regulated advertising channels. This could open the door to dark-money campaigns and targeted, opaque disinformation operations reminiscent of when the Internet Research Agency, Russia’s Kremlin-linked troll farm, attempted to influence U.S. voters from the shadows via meme warfare in 2016.

Almost none of the dozens of meme ads that HuffPost has observed have been labeled as paid endorsements — a form of deceptive advertising known as “stealth shilling.” In certain cases, memers’ failure to disclose their compensation likely constitutes a violation of federal law for which they, the promoted parties and any intermediaries could be held liable. 

But the evidence doesn’t exist for long: Unlike an official ad placed through Instagram’s business platform, which would be stored in an online database and subject to public scrutiny, the memers tend to delete sponsored posts from their pages after just 24 to 72 hours. This is especially problematic when it comes to ads of a political nature, as it allows advertisers to target voters with virtually untraceable messaging.

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ELB Book Corner: Primo and Milyo (Post 4 of 4): The Road Ahead for Campaign Finance Reform

I am pleased to welcome to ELB Book Corner David Primo and Jeff Milyo, writing about their new book, Campaign Finance and American Democracy: What The Public Really Thinks and Why It Matters (U Chicago Press 2020). Here is their final of four posts:

ELB Book Corner

In the last of four blog posts about our new book Campaign Finance and American Democracy: What the Public Really Thinks and Why It Matters, we place our findings into perspective.

You can look at our book’s major finding—that campaign finance laws do not affect trust and confidence in government, contrary to the assumptions of courts and reformers—in one of two ways. For die-hard supporters of reform—we call them True Believers in our book, where we discuss them in much more detail—this may be depressing, cognitive-dissonance-inducing stuff. But their “romantic view” of democracy—that if we could just get money out of politics we could enact the “right” policies—has been at odds with the scientific research on collective decision making for some time. This is one more nail in the coffin for that naïve perspective.

But even many campaign finance experts seem to adopt the “romantic” perspective, at least to some degree. In chapters 1 and 7 of our book, we report the results of the first-ever published survey (far as we can tell) of campaign finance experts. Figure 1.1 of our book, reproduced below, compares experts’ responses to the responses of Americans on a set of questions about money in politics. Not surprisingly, experts better understand the realities of campaign finance—for instance, that elective offices are not for sale to the highest bidder. Yet nearly 70% of the experts who took our survey believe that “campaign finance reform is needed to restore the integrity of American democracy.”

For those of us who adopt a “politics without romance” perspective (a phrase coined by the economist James Buchanan) grounded in the traditions of public choice and political economy, these results are one more piece of evidence that democracy has its limits. The pathologies of collective decision making—manifested most elegantly by Arrow’s Theorem—are unrelated to campaign finance. It’s absolutely worth studying how campaign finance alters models of decision making, but we should not be surprised that the fundamental limits of democracy remain even after tinkering with how campaigns are funded.

So what is the path forward for campaign finance reform? While we disagree with him often, Rick Hasen’s focus on political equality and campaign finance moves the conversation in a productive direction—though as we discuss in our book, we are skeptical that political equality is a viable standard for assessing reform efforts. We’d rather see a debate about political equality, however, than a continued beating of the dead horses of trust in government and the appearance of corruption.

We also need better education about money in politics. The public, reporters, and even judges often learn about campaign finance from advocacy groups which have a very clear rhetorical script when it comes to campaign finance. Social scientists can contribute to the public discourse by better informing the American public, the media, policymakers, and others about the role of money in the US political system. We are not so Pollyannaish to think that this will lead to a sea change in how the public thinks about campaign finance. But, we are certain that allowing reform groups and politicians to frame the campaign finance debate will cause misunderstandings and misinformation to flourish.

Thank you for taking the time to read about our book, and thank you once more to Rick Hasen for this opportunity. There are many findings we didn’t have time to discuss in these blog posts, and we hope you will find our results interesting enough to merit getting a copy of our book to learn more.

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ELB Book Corner: Primo and Milyo (Post 3 of 4): Campaign Finance Laws Won’t “Fix” American Democracy


I am pleased to welcome to ELB Book Corner David Primo and Jeff Milyo, writing about their new book, Campaign Finance and American Democracy: What The Public Really Thinks and Why It Matters (U Chicago Press 2020). Here is their third of four posts:

ELB Book Corner

In our first two blog posts about our new book Campaign Finance and American Democracy: What the Public Really Thinks and Why It Matters, we explained that the American public is uninformed and misinformed about campaign finance and cynical about money in politics (and politics generally)—so cynical, in fact, that there is good reason to question whether reform can have any effect on confidence in government—a key pillar of campaign finance jurisprudence. In chapter 8 of our book, we put this question to the test.

The states provide a natural laboratory for studying the effects of campaign finance reform because regulations vary across states and change over time more frequently than at the federal level. In chapter 8, we focus on trust and confidence in state government rather than the appearance of corruption, for two reasons. First, there is the matter of data availability; trust in government is a fairly standard survey instrument, so we are able to obtain dozens of national polls over a long time period that ask similar questions about this concept. Second, there is a theoretical justification. Ultimately, the courts are concerned about the appearance of corruption because of its relationship to faith in government. In Buckley v. Valeo, the US Supreme Court explicitly tied the “appearance of corruption” standard to maintaining faith in government.

We construct the largest dataset to date of survey results asking Americans about trust and confidence in state government—nearly 60,000 individual-level observations in all. Our data spans several changes in state campaign finance laws, allowing us to leverage these changes to better estimate the effects of laws, as well as the Citizens United decision, on trust, giving us a unique window into that controversial decision’s effects on trust in government.

Our book goes into detail on the underlying statistical methodology, but the bottom line is this: we find there simply is no meaningful relationship between state-level trust in government and state campaign finance laws—including contribution limits and public financing—during this time period. We view this as the most important finding in our book, as it challenges 45 years of assumptions about the role campaign finance reform plays in maintaining confidence in government.

We also dispel the myth that Citizens United has destroyed Americans’ faith in government, finding no evidence that trust in state-level government was affected by the decision. Critics might argue that the null results are due to the fact that the effects of the ruling were felt nationwide, not just in states with corporate independent expenditure bans which became unconstitutional as a result of the decision. When we rerun our analysis looking at the ruling’s impact on trust in the federal government, we still find no effects. And sometimes a picture tells you as much, or more than, a regression can. Figure 1.2 of our book, reproduced below, depicts the percentage of Americans indicating that they trust the federal government to do what is right “just about always” or “most of the time.” One would be hard-pressed to look at this figure and discern any impact of Citizens United.

When we have presented these findings, we have been met with one of three reactions: This is obvious, this is wrong, or reformers don’t really mean it when they say that campaign finance reform will restore or maintain faith in government (and some critics hold all three reactions simultaneously!). In our fourth and final blog post, we will discuss the importance of our findings for the campaign finance debate.

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“Trump’s political operation paid more than $4.3 million to Jan. 6 organizers but questions remain about the full extent of its involvement”

Anna Massoglia for OpenSecrets:

Former President Donald Trump’s political operation reported paying more than $4.3 million to people and firms that organized the Jan. 6 rally since the start of the 2020 election. However, questions remain about the full extent of the Trump campaign’s involvement in the “Save America” rally on the day of the Capitol attack as a House select committee’s sweeping requests attempt to shine some light on that day’s events.

On Friday, the U.S. House Select Committee to Investigate the January 6th Attack on the United States Capitol sent letters requesting information from 15 social media companies. On Aug. 25, the select committee sent requests to federal agencies for records related to the riot. 

The letters ask agencies from the National Archives and Records Administration to the Federal Bureau of Investigation and the Department of Justice to expedite the gathering of the records, asking for information within two-weeks

The House subpoena names Caroline Wren, a veteran GOP fundraiser who received at least $170,000 from the Trump political operation as the campaign’s national finance consultant with the joint fundraising committee. Wren was listed as a “VIP Advisor” on the permit granted by the National Park Service for the Jan. 6 rally. 

Megan Powers, one of two operations managers listed on the rally permit, is not listed in the House request but was paid around $300,000 as the Trump campaign’s director of operations. And Make America Great Again PAC paid around $20,000 more to Powers for “recount administrative consulting” in 2021.

None of the other former Trump campaign officials listed on the permit for the rally on Jan. 6 are listed in the initial requests. 

The House select committee did request records related to Women for Trump initiative co-chair  Gina Loudon, who spoke at the rally. The committee also requested records related to Amy Kremer, who notably co-founded Women for America First, the 501(c)(4) nonprofit “dark money” group that submitted the rally’s permit records to the National Park Service….

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ELB Book Corner: Primo and Milyo (Post 2 of 4): The Cynical Public


I am pleased to welcome to ELB Book Corner David Primo and Jeff Milyo, writing about their new book, Campaign Finance and American Democracy: What The Public Really Thinks and Why It Matters (U Chicago Press 2020). Here is their second of four posts:

ELB Book Corner

In our first blog post about our new book Campaign Finance and American Democracy: What the Public Really Thinks and Why It Matters, we explained that the public is uninformed and misinformed about campaign finance. Today, we delve into what the public thinks about campaign finance.

Cynical is perhaps the best word to describe American attitudes toward money in politics—and politics generally. In our 2015 and 2016 surveys of the American public, 81% believe the campaign finance system is corrupt, and 89% believe there is too much money in politics. (Think about how hard it is to get that many Americans to agree on anything!)

These cynical attitudes may seem to create an open-and-shut case for campaign finance reform. But, as we document in chapter 5 of our book, Americans see corruption everywhere—so much so that it raises questions about how campaign finance reform could ever improve attitudes toward government. We asked respondents about nine factors that may affect a politician’s policy positions, such as personal financial advantage or wanting to secure favorable media coverage. Reassuringly, 84% of Americans think that it’s corrupt to adopt a policy position for personal financial advantage. Less reassuringly, nearly two-thirds of Americans think it’s corrupt to adopt policy positions under pressure from party leaders or to secure favorable media coverage—suggesting the term “corruption” has become a catchall for a broad distaste for politics.

Perceptions of corruption also have an ideological bias—what we call contingent cynicism. Chapter 5 of the book presents the results of some survey experiments in which we vary question wording in a random fashion to see whether views about corruption depend on the actors involved. For example, 47% of liberals believe that it is likely corrupt for an elected official to meet with a corporate lobbyist, but only 20% of liberals view a meeting with a union lobbyist as corrupt. Is a campaign contribution from the NRA or Planned Parenthood corrupt? The answer, it turns out, depends heavily on whether you support the NRA or Planned Parenthood’s policy positions.

As with many other policy issues, Americans are divided in their support for campaign finance reform, with disclosure being the most widely supported of the reforms we ask about. Yet, even as some reforms have majority support (masking a partisan divide we discuss in chapter 6 of the book), Americans don’t expect much to come of them. Perhaps sensing the futility of reform given their cynical state, Americans are skeptical that campaign finance reforms will make much of a difference in reducing corruption. On a scale from 1 to 7, with 1 being “the right package of reforms will greatly reduce corruption” and 7 being “reforms are ineffective and politics will always be corrupt,” only a third of Americans come down anywhere on the side of reforms having a positive impact.

These findings raise serious questions about the reform enterprise. If Americans see corruption everywhere, and especially when observing the behavior of political opponents, is there really hope for campaign finance reform to reduce the appearance of corruption? To put a finer point on it, does the Court’s famous “appearance of corruption” standard have any meaning in light of our findings?

Reformers, however, might reasonably point out that just because Americans say they don’t think reforms will work doesn’t mean that reforms are ineffective in addressing the appearance of corruption. In our next blog post, we’ll delve into whether public trust and confidence in government is improved by tightened restrictions on campaign contributions.

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ELB Book Corner: Primo and Milyo (Post 1 of 4): Ignorance About Campaign Finance Reform Is Not Bliss

I am pleased to welcome to ELB Book Corner David Primo and Jeff Milyo, writing about their new book, Campaign Finance and American Democracy: What The Public Really Thinks and Why It Matters (U Chicago Press 2020). Here is their first of four posts:

ELB Book Corner

We are grateful to Rick Hasen for inviting us to discuss our new University of Chicago Press book Campaign Finance and American Democracy: What the Public Really Thinks and Why It Matters. We have collaborated on campaign finance research for over twenty years. This book takes what we have learned during that time—as well as new survey data emerging from our participation in the Persily-Bauer-Ginsberg campaign finance task force—to construct the most comprehensive look at public opinion about campaign finance to date.

Why does public opinion about money in politics merit a book-length treatment? Since the US Supreme Court’s 1976 Buckley v. Valeo decision, the foundation of campaign finance law has largely rested on concerns about how campaign contributions lead to quid pro quo corruption or the “appearance” of such corruption. Concerns about appearances place public perceptions front-and-center in the campaign finance debate.

Campaign finance is sui generis among policy issues in that public opinion determines the constitutional permissibility of regulations that otherwise restrict political speech and participation. The Court, however, has been content to assume that campaign finance laws work in the ways reformers promise, reducing corruption and its appearance. While this may seem self-evident, science demands actual evidence—hence, the importance of the questions we ask in this book.

These questions can be boiled down to

  • What does the public know about money in politics?
  • What does it think about money in politics?
  • Do campaign finance laws influence these attitudes?
  • Why do the answers to the above matter for American politics?

In today’s post, we answer the first question. In 2015 and 2016, we surveyed Americans as part of the Cooperative Congressional Election Study (CCES) to understand their views on campaign finance. The first thing we learned is that the American public is woefully ignorant about money in politics. Americans do about as well in answering questions about the basics of campaign finance law as a blindfolded monkey throwing darts at possible answers.

Even worse, Americans also buy into false narratives about money in politics. More than three-quarters of respondents in 2015 and 2016 thought that super PACs accounted for over half of campaign spending in the most proximate election season—in reality, super PAC spending was 9% of total spending in 2014 and 15% in 2016. Supermajorities of Americans also believe that “elective offices are for sale to the highest bidder” and “campaign contributions are the equivalent of bribes.”

It’s no surprise that the public is uninformed and misinformed about money in politics, though the extent of the ignorance and misinformation is a bit jarring. What may be surprising, though, is that this ignorance has consequences for policy preferences. The less you know about campaign finance laws, the more likely you are to support stricter laws. Buying into the false narrative that super PACs are “flooding” the campaign finance system also leads to greater support for tougher campaign finance laws.

There are many more findings in chapter 3 of our book about public knowledge, or lack thereof, including how little the public knows about just how much of their personal information is publicly revealed after they make a campaign contribution.

Knowing little about campaign finance does not stop Americans from having opinions on the role of money in the American political system. In our next blog post, we’ll delve into what the public thinks about the campaign finance system and the prospects for reform.

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“No-party candidate in Miami election fraud case takes plea deal, apologizes to voters”

Miami Herald:

An auto parts salesman and acquaintance of a former Miami lawmaker accused of running a vote-siphoning scheme in a 2020 Florida Senate race pleaded guilty on Tuesday to charges that he accepted illegal donations and lied on sworn campaign documents, among other things.

Seated alongside his attorney in his downtown law office, Alexis Rodriguez heard the terms of his plea from circuit court Judge Andrea Ricker Wolfson, who is overseeing the case.

The point of Rodriguez’s candidacy, investigators said, was to “confuse voters and siphon votes from the incumbent.” GOP Sen. Ileana Garcia won the election by 32 votes out of 215,000 ballots cast. Rodriguez, who shares a surname with the incumbent Democrat, received more than 6,000 votes.

Rodriguez pleaded guilty to four felony charges related to campaign-finance violations. Those include conspiracy to make campaign contributions in excess of legal limits and accepting and making those excess campaign contributions.

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