Swallow the Money, Part 1 of 3

by Joe Fitzgerald

When a governor was accepting gifts and amenities from a supporter some years back, the surprise for many Virginians came when it was time to indict him. The Feds had to do it, because he probably hadn’t broken any state laws, and eventually, after trials and appeals, he didn’t stand convicted of breaking any federal laws either.

The big surprise, the dirty little secret, the obscure fact about campaign finance is that very little is illegal. This is in part because the people who would have to make things illegal are the same people who might be doing the potentially illegal things. Stated another way, a delegate or senator is not going to find fault with a fundraising system they’re going to need next year. Any action they vote to ban might be one they’ve used themselves. A state senator asked to outlaw a particular type of fundraising might instead think it’s worth trying in the next campaign.

The Virginia system is that a candidate can raise as much money as he or she wants so long as it’s all reported. There’s a 69-page document on the state elections website on what needs to be reported and how. There’s a slightly shorter version for a Political Action Committee, a PAC. I’ve read both. Neither is complicated.

But what is complicated is the process to read the reports. CFReports is the state site where anybody on the web can read about any donation to Virginia races from school board to governor, if they know what to look for. VPAP, the Virginia Public Access Project, presents these reports in a more general and more readable form than CFReports, but neither offers any interpretation of the numbers. Is a donation larger than usual? Smaller? Did a major donor give more this year than last?

VPAP’s interpretation of the data shows up in many helpful charts, tables, and graphics, but doesn’t necessarily track a personal donation to a PAC, a PAC donation to a campaign committee, and a campaign committee’s donation of leftover funds to a charity. In theory, money given to a gun control lobby could wind up with the NRA, unless the person donating it has enough time and inclination to follow it.

Does it sound like there’s a lot of room for error or manipulation? There’s a reason it sounds that way.

Enforcement of campaign finance laws is a lot like enforcement of Virginia’s Freedom of Information Act. Nobody is specifically looking for infractions, and the biggest penalty for a violation is the public embarrassment.

Consider the candidate for local office who runs not because he wants to do the job but because he wants to ban books. Maybe he has his wife be his treasurer, because the campaign is not big enough to hire the finance director and compliance officer that a larger campaign would have. And maybe the campaign finance reports wind up riddled with errors.

What happens next? If those errors are pointed out, whose job is it to confront the candidate? Registrar? Commonwealth’s Attorney? Their political opponent? Is the registrar assessing a fine for missing information required by tradition or ethics to go back and check everybody else’s reports for the same omissions? In short, a violation happens. What happens next?

More on this candidate later, in Part 2, scheduled for Wednesday..

Going back to that PAC donation from earlier, the same reporting requirements placed on the school board candidate can leave things just as unclear. A PAC is sometimes formed to buy friendship. An attorney general or legislative leader forms a PAC for people to donate to as an expression of their faith in that leader, or in case they want something. The leader then hires an executive director to parcel that money out to other candidates. A PAC is sometimes formed to promote a particular issue. A gun control lobby forms a PAC to raise money and donate it to candidates who support gun control. Realistically, nobody is drawing a line from the PAC’s donors to the people it supports.

The qualification on the “nobody” in that last sentence is that some people are drawing that line. But there might be a few hundred people in the state who really know how, and they have to have a reason to, and that’s not all they’re doing. Those few hundred who can read a finance report are probably not its largest donors. A candidate might tell a donor that the candidate has raised several thousand dollars and invite the donor to get on the bandwagon. Few donors will look closely at the prior donations. These might be money, or they might be the nebulous “in-kind” donation. A rusted filing cabinet may become an in-kind donation of several hundred dollars’ worth of used office equipment. A friend building a website may be listed at the multi-thousand dollar cost if that person charged for it. The goal is that anything given to a campaign should be reported, but in-kind donations can be grossly inflated to show momentum.

A PAC or a candidate also has to report how funds are spent, but the requirements are not strict. Several thousand may be paid to a company with a vague name, Adjective Noun, LLC. I use that name because the first two ridiculous names I made up turned out to be actual companies. The money to AN, LLC, is reported as being for data analysis, but the report doesn’t have to say what the data is or how it’s analyzed. Half a million may go to Money Laundering, Inc., for salary distribution, but there’s no requirement to report who the salary is paid to.

More on salary distribution later, in Part 3, scheduled for later this week.

I’ve been reading and filing these reports for roughly half my life, as a reporter, editor, candidate, and party official. I know they’re rife with honest error. (I have the $100 fine to prove it.) I know they can be used to hide or exaggerate information. (That rusty filing cabinet was mine.) This series has two more parts, over the next couple of days, about local examples of how money is donated, distributed, and reported.

Joe Fitzgerald is a former mayor of Harrisonburg. Republished with permission from Still Not Sleeping.