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Campaign Finance and the Cost of Doing Business

A few days ago, the Federal Election Commission made public a conciliation agreement it made with the John McCain 2008 presidential campaign (“McCain 2008”) in July. Often, when political campaigns and other groups violate federal campaign finance law, they enter into agreements like this with the FEC and pay a fine rather than go to court, since it’s far cheaper and gets far less attention.  

This is the irony of ironies in campaign finance law. Senator McCain was one of the lead sponsors on the Bipartisan Campaign Reform Act, also known as McCain-Feingold, more than a decade ago. McCain-Feingold added even more provisions to federal campaign finance law, but the violations by his presidential campaign run afoul of original provisions that date back to the 1970s. Nevertheless, McCain’s stalwart stance on the need for even more campaign finance “reform” in the wake of the Citizens United decision likely will not change with this penalty.

According to the FEC, McCain 2008 “accepted a total of $377,657 in contributions that exceeded the limits” under federal law, and additionally failed either to refund or otherwise legally use the monies within 60 days of receipt. The campaign resolved $301,895 on its own and the remaining $75,762 after the FEC notified the campaign of the violation. In a far more technical violation, McCain 2008 reported the millions of dollars it received from its joint fundraising groups (with names like “McCain Victory 2008,” “McCain Victory Kentucky,” etc.), but “did not correctly report the dates that the joint fundraisers received the contributions.”

For these violations, McCain 2008 will pay a fine of $80,000.

Of course, violations like this are all but inevitable. McCain 2008 raised $222 million from 1.4 million contributors. The $377,657 at issue amounts to about 0.1 percent of this funding. McCain 2008 had some outstanding accounting, considering the pressures and time constraints of a presidential campaign. Nevertheless, McCain 2008 paid $13,782,264 (about 6 percent) of its funds for campaign finance compliance – and still wound up paying a hefty fine for violating the law.

Individual and business compliance with environmental, tax, zoning, labor, customs and dozens of other sets of federal and state laws are simply referred to as part of “the cost of doing business.” As these costs continue to mount, one wonders when people will simply stop doing business. Although these laws are onerous, they do not often implicate specific constitutional rights, so they are entirely political questions.

But for those who wish to engage in the American politics, be it as a candidate or donor or vocal proponent, there should be as few costs and hurdles as possible. Even for a national presidential campaign like McCain 2008, it’s absurd that more than $13 million in contributions had to be routed to accountants and lawyers to comply with campaign finance laws, albeit unsuccessfully. If even well-paid professionals run afoul of the law, what does that mean for grassroots groups?

As we continue our lawsuit against one area of grassroots suppression by FEC regulations, this ironic misstep by McCain 2008 further indicates it is the law, or “reform,” that serves to shut people out of politics, not big-money boogeymen or private groups.

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Sunday, 20 August 2017
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