Late fundraising for No on 77 may violate FEC ruling

California’s special election may have ended four months ago, but money
continues to pour into the campaign to stop redistricting reform. Congress’
top Democrat, Rep. Nancy Pelosi of San Francisco, is spearheading the
fundraising for one anti-redistricting committee, which has raised more than
$1.6 million since Election Day.

The post-election money, more than $300,000 of which has come from
California’s Democratic congressional delegation, is going to pay back a $4
million loan from Democratic donor and Hollywood producer Stephen Bing.

But money solicited by sitting members of Congress in 2006 may violate the
2002 McCain-Feingold federal campaign finance law. Last year, the Federal
Elections Commission issued an advisory opinion that granted federal
officials, like Pelosi, the right to raise unlimited sums to oppose
Proposition 77. But as the calendar turned from 2005 to 2006, campaign
finance watchdogs say, that right may have expired.

The No on 77 committee has raised $1.39 million since the beginning of 2006,
in an effort led by House Minority leader Nancy Pelosi.

“Leader Pelosi is still fundraising for the No on 77 campaign,” said Pelosi
spokeswoman Jennifer Crider.

But some campaign finance advocates see the fundraising activity as a
potential violation of last year’s FEC ruling.

“I think it is fair to say the [FEC] advisory opinion doesn’t cover
fundraising [by federal officeholders] going into an election year,” said
Larry Noble, executive director of the Washington D.C.-based Center for
Responsive Politics.

In the ruling last August, five of the six FEC commissioners said that
federal officials could raise unlimited funds to oppose the California
initiative. But two of those commissioners argued in a letter that the
ruling was “fairly narrow in scope” and applied only to ballot campaigns in
off-years with no federal officials on the ballot, and the fundraising was
limited to committees not controlled by federal officeholders.

The complication is this: While there is still no limit on donations to the
No on 77 committee, it is unclear whether last year’s FEC decision permits
federal officials to solicit contributions of more than $5,000 in an
election year.

Pelosi’s office referred questions to campaign finance experts, but
spokeswoman Crider said, “It is fundraising for the last year. Just like if
a member has to retire their debt, they continue fundraising and it is
considered for the that cycle. The FEC works in cycles.”

Ned Wigglesworth, an analyst with TheRestofUs.org, a campaign finance
watchdog group, said he believes Pelosi’s activity violates last year’s
ruling.

“If they are raising money in 2006 in amounts over the federal limits, we
will file a complaint with the FEC investigating whether these members of
Congress are violating the law,” said Wigglesworth.

Congressional Democrats continue to be committed to paying off the campaign
debt. Rep. Zoe Lofgren of San Jose, who herself gave $35,000 to the
anti-redistricting committee, said that though she has not worked to solicit
donations, “I would certainly do my part until the debt is paid off.”
Many of the 2006 donors to the No on 77 committee have previously given
money to Democratic causes, and Pelosi in particular.

Of the 18 individual donors that have given to the No on 77 campaign this
year, 13 have previously given donations directly to Pelosi, her political
action committee, or the Democratic Congressional Campaign Committee since
Pelosi became minority leader in 2002.

Sixteen of the individual donations in 2006 are above the legal $5,000 limit
for contributions a federal official may solicit for a political action
committee.

The biggest donation in 2006 has been from the American Federation of State
and Municipal Employees, which contributed $500,000 on January 19th. Eleni
Tsakopoulos-Kounalakis, the daughter of Sacramento developer Angelo
Tsakopoulos, and Dinakar Singh of New York each gave $100,000 in January.
According to Daniel Lowenstein, a UCLA law professor who served as chair of
the No on 77 effort, the campaign continues to raise money to pay off its
debts.
“There was a very large loan from Steve Bing and it was given on the
condition that the members [of Congress], especially Nancy Pelosi, would be
raising money to pay it back,” said Lowenstein.

The issue of allowing members of Congress to raise unlimited funds to fight
the initiative was first brought before the FEC by the unlikely duo of
liberal Democrat Rep. Howard Berman of the San Fernando Valley and
conservative Republican Rep. John Doolittle of Roseville. Though ideological
opposites, both opposed Gov. Schwarzenegger’s redistricting proposal and
successfully petitioned the FEC to grant them the right to raise unlimited
funds to battle the measure.

If a complaint is filed with the FEC against federal officials soliciting
donations in an election year, elections law experts are divided on how the
commission might rule.

Joe Birkenstock, former chief counsel to the Democratic National Committee
and a Washington D.C. election law attorney, says there was no “common
rationale” in last year’s FEC ruling and that “it’s hard to tell where the
FEC would come out on this,” though he expected the commission would
“probably give it the green light.”

Making matters even more complicated, says Joe Sandler, another Democratic
campaign finance attorney, is that since last August’s decision, half the
commissioners on the FEC have been replaced.

Beyond the legal wrangling, some Republicans have criticized the
post-election donations from Democratic members of Congress as playing
politics.

“It’s a real testimony to their courage,” said GOP consultant Wayne Johnson,
who worked on the Yes on 77 campaign. “They don’t want to face the voters to
begin with and they don’t want to stand up to the scrutiny of their
contributions.”

But Lofgren said such charges are “ridiculous.”

“We all donated before the election too, and I don’t think $10,000 is
peanuts and all of us publicly oppose [the measure],” said Lofgren, who
chairs of the California Democratic Congressional Delegation.

In fact, only two California representatives, Bob Filner and Jim Costa, have
donated exclusively after the election, though twenty-two California
congressional Democrats have contributed since Election Day. Of the 33
members of California’s Democratic congressional delegation, 28 donated to
the Pelosi-backed No on 77 campaign. Pelosi herself chipped in $49,999.

“We felt we ought to do our part if we opposed it,” said Lofgren. “We should
put our money where our mouth was.”

Donations have poured in from out-of-state, as well.

Fifty different Democratic members of Congress from outside California and
one congressional delegate from the Virgin Islands have donated to the No on
77 account all before the election. Each of those donations were for $1,000,
though a few members, including Rep. Jack Murtha, D-PA, who recently vaulted
into the national limelight after calling for withdrawal from Iraq, gave
$2,000.

Rep. John Doolittle is the only Republican congressman to donate to the
committee, giving more than $8,000, a week before the election.