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California Cracks Down on Shadow Campaigns

Some state-level election law enforcement is a glimmer of hope in an otherwise loosely regulated system.

October 5, 2015

This election has seen a steady drumbeat of stories detailing the many ways presidential candidates appear to be collaborating with outside groups to benefit from their unlimited cash.

A super PAC supporting Carly Fiorina gets the candidate’s schedule from her website and does advance work for her events, setting out its own swag festooned with the super PAC’s name: “CARLY for America.” Hillary Clinton and her campaign chairman have both raised funds for a supportive super PAC. John Kasich, Scott Walker, and others filmed ads with outside groups before officially declaring their candidacies. Jeb Bush’s campaign and the super PAC he helped raise $100 million for may have shared vendors with knowledge of campaign strategy; both have made payments to the same polling firm.

Federal law restricts how closely candidates can work with outside groups, which is necessary to make sure the unlimited money flowing through super PACs isn’t a way around contribution limits. But the rules are pretty toothless, and the chance to benefit from multimillion dollar contributions to “shadow campaigns” is a huge temptation for candidates limited to contributions of $2,700 in a primary election. Almost every major presidential candidate is backed by an outside group that can take donations of any size, and the vast majority of the hundreds of millions of dollars these committees have raised has gone to groups run by former staff of the candidate.

But it doesn’t have to be this way.

In California, the rules are stronger, and the state has made it much harder for candidates and their supporters to make an end-run around contribution limits. The Fair Political Practices Commission, California’s campaign finance enforcement agency, recently fined Assemblyman Joe Coto (D) and an outside group for violating the rule against coordination.

Two of Coto’s campaign staffers, who reportedly knew his strategy, went to work for the group, Vote Matters, months before the 2012 election. The connections were strong enough for the state to conclude that the group was not independent of the campaign and deem its $117,000 in expenditures a contribution to Coto, in violation of contribution limits.

It’s not the first time that Coto’s connections to Vote Matters have attracted attention. In 2008, days after a committee chaired by Coto approved a bill sought by the insurance industry, the trade group that sponsored the legislation reportedly received a solicitation of funds from Vote Matters. The trade group’s chief executive reportedly pointed out that Vote Matters supported the California Latino Caucus, which was chaired by Coto.

Election law enforcement in California proves the power of reasonable regulation to rein in big money’s influence. Other states similarly have strong coordination rules. For example, some presume that a group that employs former staff of the campaign isn’t truly independent. A rule like that at the federal level would block one of the most common opportunities for candidates and outside groups to collaborate.

The flow of big money through shadow campaigns is threatening to become the new normal, and the Federal Elections Commission is doing little to stop it. But the FEC’s shortcomings need not be the end of the story. Robust regulation in states like California — which also just improved transparency with new rules against keeping political donors secret — shows the way forward.

(Photo: Flickr/Money)