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Democrats Eased Way for GOP Mega-Donors

Jeanne Cummings writes on money, lobbying and politics. As political editor for Bloomberg News, she directed coverage of the 2012 and 2014 elections. The 2016 race marks her seventh presidential campaign.
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More than half of Senate Democrats voted with Republicans in December to increase fundraising limits for the political parties. The change was tucked in the 1,599th page of a 1,603-page budget deal. Given how aggressively Republicans are taking advantage of the new rules, and how little they seem to be benefiting Democrats, Senate Democratic leader Harry Reid may regret his support.

The Republican National Committee raised almost $26 million in the first quarter of 2015, $10 million more than the Democratic National Committee -- even though the DNC has President Barack Obama headlining fundraising events. The RNC owes its advantage to huge donations, which were formally prohibited.

More than two dozen Republican contributors have donated amounts in excess of the previous cap of $32,400 for each federal party committee -- the RNC, the National Republican Senatorial Committee and the National Republican Congressional Committee. Federal Election Commission reports show that from January through March, 26 big donors poured a combined $4.7 million into those three Republican Party committees.

The three comparable Democratic committees have only two such donors; each gave $50,000 to the Democratic Senatorial Campaign Committee. Their combined $100,000 in contributions equals less than a third of the $300,600 that coal billionaire Joseph Craft alone gave to the RNC in the same period, according to FEC records. Neither the DNC nor the Democratic Congressional Campaign Committee has a single individual donation above $33,400.

"This is by no means the first time that Democrats played a key role in opening a campaign finance loophole, only to see Republicans become the main beneficiaries of the corrupting loophole," said Fred Wertheimer, founder of Democracy 21, which advocates strict regulation of campaign contributions.

Under the new rules, donors can give $100,200 to each of seven accounts established by each party. The RNC and DNC each have three new accounts dedicated to financing the national conventions, legal fees and building operations respectively. Each party's Senate and House committees likewise have new accounts for headquarters operations and legal expenses. Reid, whose staff negotiated the fundraising changes with aides to Republican House Speaker John Boehner, reportedly sought a buildings fund to make it easier to pay off a new facility. 

In addition to funding new accounts dedicated to legal fees and the like, donors can still contribute $33,400 annually to the committees' general political accounts. The result: A wealthy backer can now give a maximum of $801,600 annually to a party's three federal political arms.

So far, at least, only one party seems to be benefiting from the dramatically relaxed rules for extremely wealthy donors.

"The DSCC has consistently outraised the NRSC thus far this year, but I don’t think it surprises anyone to know that Republicans have more super wealthy donors than Democrats," said Justin Barasky, the DSCC's communications director. In the first quarter of 2015, the DSCC raised $14 million compared with $11 million collected by the NRSC.

The Democrats' disadvantage among the super wealthy is compounded by ambivalence among Democratic donors and politicians toward huge contributions. Many opposed the fundraising changes attached to the $1.1 trillion "cromnibus" bill signed by Obama in December. House Speaker Nancy Pelosi called the provisions "destructive" to democracy and sought to have them stripped. Most House Democrats supported Pelosi, who voted against the bill. “The provision is bad public policy," said Drew Hammill, the California Democrat's spokesman.

Since January, the president has headlined five DNC fundraisers, according to Bloomberg News. The highest ticket price was $33,400. Neither the president nor the DNC made a public request for money designated to the party's new accounts. A spokesperson for the DNC declined to comment for this article.

The RNC's pursuit of large donors coincides with similar requests from more than a dozen prospective presidential candidates, and almost as many super-PACs formed to back presidential candidacies.

When I asked Sean Spicer, the RNC's communications director, if the competition for funds among Republicans made for a challenging environment, he laughed. "Given the amounts people are asking donors to give to a super-PAC, the RNC is like a tip," he said. For a donor contributing $1 million or more to a super-PAC or other independent group, "what's the proper tip?" Spicer asked. "Twenty percent?"  

This column does not necessarily reflect the opinion of Bloomberg View's editorial board or Bloomberg LP, its owners and investors.

To contact the editor on this story:
Francis Wilkinson at fwilkinson1@bloomberg.net