Big Donors Find Way Around Campaign Reform

Building, business lobbies led way, setting up 28 committees to run independent campaigns Business groups trying to elect Republicans to the Legislature created two dozen special political committees last fall that spent more than a half-million dollars on independent campaigns.

Critics call it a way around the state’s strict limits on campaign contributions, allowing big donors to hide contributions behind obscure organizations with innocuous-sounding names.

“It’s a great smoke screen,” said Thomas Barnard, who studies campaign reform issues for the Institute for Washington’s Future, a liberal Seattle think tank.

Supporters defend the committees and their independent campaigns as a legitimate counter to other loopholes in campaign finance laws used by labor unions.

“We use any avenue we can to forward the people that need our support,” said Susan Knapp of the Spokane Home-builders Association.

Independent campaigns - ads run by people or groups separate from a candidate’s own campaign - are legal. The U.S. Supreme Court has said they are constitutionally protected free speech that is not subject to contribution limits.

But such campaigns also give donors an extra way to influence elections. Even if they have contributed the maximum allowed to a candidate, and given more money to PACs that have donated directly to that office-seeker, donors can still mount independent campaigns with no spending limits.

This is not the kind of campaign reform voters thought they were getting in 1992 when they passed Initiative 134, Barnard said.

“It’s a mess,” said Chuck Sauvage of Washington Common Cause. “The money’s getting more difficult to track.”

Independent campaigns were waged last year by different interest groups for both Republicans and Democrats running for state offices.

The campaigns must remain completely separate from the candidate and his or her staff. Last week, the state Public Disclosure Commission revealed it was investigating whether one supposedly independent campaign supporting Democrat Gary Locke for governor had ties to the Locke campaign.

But no one used independent campaigns as extensively as the Building Industry Association of Washington and United for Washington, the state’s top business lobby.

Working together, the two organizations set up 28 committees from Aug. 27 to Oct. 15 to run independent campaigns, state records show.

Most had vague but positive-sounding names such as Citizens for a Better Legislature or Washingtonians in Action. Each had an employee of the building industry or United for Washington keeping the books, and all had the groups’ lobbyists listed among their principal officers.

One organization, the Inland Empire Committee, spent nearly $10,000 on a brochure to support Republicans Brad Benson and Duane Sommers for the state House of Representatives in Spokane’s 6th District.

Except for its name, state records show the committee’s financial ties to the Inland Empire were tenuous. Knapp, of the Spokane Homebuilders Association, said she was the group’s secretary. But neither she nor any other Spokane resident appears on reports filed with the Public Disclosure Commission - either as an officer or a contributor.

The group’s only tie to Spokane, state records say, was its mailing address, which is Knapp’s apartment just south of downtown.

West Side lobbyists Elliott Swaney of the building association and Bruce Boram of United For Washington ordered the campaign brochure mailed to Spokane voters.

The committee’s money came from United For Washington and the building association, either directly or transferred from two other independent expenditure committees the organizations operated.

Reports for other committees operated by the two business groups showed similar patterns. As the campaign progressed, money was transferred among committees to meet expenses.

Melissa Warheit, executive director of the Public Disclosure Commission, which monitors and enforces rules on campaign spending, said she has concerns about the growth in independent campaigns and the network of committees the two business groups set up.

Money is being moved around in ways that are difficult for the commission and the public to follow, she said.

“A committee raises money that it gives to another committee that gives it to another committee that makes the expenditure,” she said. “I don’t think it gives a fair picture of what’s going on.”

Swaney, the building industry’s lobbyist, said there was no attempt to hide who was contributing to different candidates.

“We don’t like doing it. The paperwork’s a nightmare,” he said.

Tom McCabe, executive vice president for the building industry association, blamed the disclosure commission for any confusion in tracking the funds.

The rules are so complicated, he said, that it was necessary to have professionals like Swaney and Boram in charge: “You need someone who works on this full time.”

Swaney and Boram said they had to set up several committees because other business groups disagreed on which candidates to support or when to enter the campaign. Each committee handled a different race, or a pair of races in the same legislative district.

“Different people have different priorities,” said Boram. “The business community is anything but monolithic.”

As election day neared, however, Boram and Swaney sometimes shifted money among the committees to meet expenses for various ads that supported GOP candidates or attacked Democrats.

After the election, committees that had money left over returned it to United for Washington or a PAC controlled by the building industry. In three instances, United for Washington reported a “refund” from an independent campaign that was larger than its contributions.

“That is not proper. It potentially violates the law,” said Warheit. The commission is considering whether to open a formal investigation into how the group accounted for its money.

United for Washington didn’t do anything improper and is working with the commission to clear up the confusion, Boram said.

The largest of the committees, the Washington State Taxpayers Committee, spent more than $350,000 on a campaign to elect Republicans in general to the Legislature.

Other committees spent from $5,000 to $20,000 to buy ads for specific legislative candidates.

McCabe, the building association vice president, argued the business groups “were pikers” compared to the multimillion dollar attacks on Republicans mounted by the national AFL-CIO. Labor ads attacking congressional Republicans for proposed changes in Medicare and other federal programs, had “a trickle-down effect” on legislative races, he contended.

Technically, however, those ads were different. Federal law classifies them as educational because they dealt with issues and didn’t advocate voting for or against a particular candidate.

The Washington State Labor Council, which operates one of the state’s largest PACs, gave directly to state candidates, as did many local unions.

The Labor Council did not mount independent campaigns, spokesman Dave Groves said. It did spend about $150,000 sending out 576,000 “voter guides” to its members telling them where various politicians stood on key issues.

The Christian Coalition used a similar campaign tactic, distributing its voter guides to an estimated 2 million people at member churches in Washington.

Because they were not distributed to the general public, neither guide is classified as an independent expenditure.

A few groups mounted independent campaigns primarily for Democrats. The International Association of Fire Fighters funded three such efforts, including more than $21,000 for ads to help George Orr’s unsuccessful Senate campaign in the Spokane Valley.

Planned Parenthood spent more than $15,000 on voter guides sent to voters in districts around the state. Washington Citizen Action League, an environmental group, reported a portion of its door-to-door canvassing as contributions in 10 legislative districts.

Critics argue the independent campaigns are thwarting the strict limits on campaign contributions, one of the key elements of the state’s campaign finance reform initiative passed in 1992.

Warheit, the disclosure commission’s executive director, said the initiative was designed to force candidates to expand their base of support by getting smaller contributions from more people.

“The little guy wouldn’t be overpowered by the big contributors,” said Warheit.

But U.S. Rep. Linda Smith, R-Wash., who helped draft the law when she was a state senator, said I-134 was designed primarily to cut the direct ties between big money interests and candidates.

“I wanted to find ways to not have large amounts of money dumped into the system,” she said.

Independent expenditures aren’t as big a concern if the donors stay separate from the candidates, she said. Because of Supreme Court rulings, she added, the state probably cannot limit independent spending.

It may be able to tighten the reporting rules, Smith said, by requiring money donated or spent late in the campaign to be reported within two days, similar to the rule now for direct contributions. Under current law, independent expenditures made late in the campaign aren’t reported until the election is over. The Public Disclosure Commission supported such a change, proposed by Democrats in this year’s Legislature, Warheit said. The bill died without a hearing.

State campaign financing law says a person or group can give no more than $550 to a candidate for an election. If the donor gives that amount before the primary, he or she may give another $550 for the general election.

“I wouldn’t be against having individuals give as much as they want to a campaign - or at least a different limit,” said Knapp, of the Spokane Homebuilders. “You can’t do anything with $550.”

Some of the state’s historic big contributors, including the building industry association and key donors of United for Washington, helped put the contribution limits in place by spending thousands of dollars to support I-134.

McCabe said the building industry association supported the initiative overall, but many members opposed the contribution limits. They were more supportive of other sections of the law, such as the one requiring union members to give their permission before a portion of their dues can be used for political campaigns.

Some candidates are leery of independent campaigns, saying they can do more harm than good.

“Those things are scary,” Spokane’s Rep. Sommers said of independent ad campaigns. “Because they can’t coordinate with you, you hope to heck their information is right.”

The Inland Empire brochure - which promised the two Republicans would cut government waste and regulations and help children achieve the American dream - apparently had little impact on the race. Neither Sommers nor Benson, nor their Democratic opponents, Jerry Hopkins and Judy Personett, could remember it when contacted recently.

It was just one of many ads that filled mailboxes as the campaign rolled to an end, all said.

Candidates will always prefer to have the money under their control, said McCabe. But that’s no longer possible because of I-134.

If the choice is independent campaigns or getting by with just direct donations under the legal limits, McCabe suspects most will prefer the former.

, DataTimes ILLUSTRATION: Graphic: Free speech or legal money laundering?