Bundling money for influence still out of sight

The Federal Election Commission rarely fails to disappoint. The agency has proved ineffective once again, this time in its neglect of reporting and disclosure of “bundled” campaign contributions.

Bundling, a campaign finance technique that aggregates and credits campaign contributions from many individual donors to a single fundraiser, is a powerful means of influence-peddling for the bundler. It is a form of influence peddling that is used extensively — combing through its random collection of fundraising invitations, the Sunlight Foundation found that at least $17 million in bundled contributions could be credited to lobbyists since 2009 — but there is precious little in the way of systematic reporting and disclosure of bundling for influence.

{mosads}This is just the tip of the iceberg of campaign cash that isn’t getting the public disclosure it deserves from the FEC.

One of the great legislative achievements of the 2007 Honest Leadership and Open Government Act is to require transparency of bundling activity by lobbyists. Campaigns are required to report bundled contributions from lobbyists of more than $16,000 to the FEC, which in turn discloses bundling information to the public on its website. Cursory experience with the FEC database, however, makes obvious that it is far from transparent.

The most glaring omission in disclosure is its lack of searchability — you can’t search by individual bundlers. Instead, each disclosure report is posted in .pdf format and must be opened and manually examined for the names and contributions of individual lobbyists or lobbying entities.

Judging the total financial impact of any one lobbyist-bundler is similarly painstaking. Many of the most influential lobbyists raise money for more than one campaign in a given election cycle — Democratic lobbyist Anthony Podesta bundled for at least five campaign committees between 2009 and 2010, and Republican lobbyist Frederick “Tripp” Baird bundled for at least four committees in 2009 alone. Tying these bundlers and the companies they represent to their total monetary influence through bundling requires checking each individual .pdf disclosure report filed by every campaign to see which lobbyists are noted in the reports — in essence, an entirely new database must be created to begin tracking bundled contributions by specific lobbyists.

If the aim of public disclosure is to provide the public with easy and accessible information, this hardly qualifies as an adequate system of transparency. But transparency (or opacity) might be only half the problem. Consider the 2010 election cycle. In 2009, only 96 lobbyists were registered as bundlers; the number dropped to 76 in 2010. Due to loopholes in the reporting mechanism, bundling disclosures for the 2010 election cycle might have omitted hundreds of potential bundlers.

A blatant loophole in the FEC’s reporting system is bundlers’ ability to co-host fundraising events and divvy up the total pot raised among the number of co-hosts. By co-hosting, several lobbyists working together can raise a huge sum at an individual fundraiser and still avoid disclosure, provided each lobbyist-bundler is technically allotted responsibility for less than the $16,000 threshold.

{mosads}According to the Sunlight Foundation’s Party Time database of individual congressional fundraisers, at least 75 fundraising events were hosted in 2010 by 30 of the 76 lobbyist-bundlers who were registered with the FEC (fundraising events hosted by the other 46 were not available, and the 75 events were not exclusive). Not one of these events was hosted by an individual bundler; instead, fundraisers were co-hosted by anywhere between two to 54 hosts, the vast majority of them lobbyists.

The 30 registered lobbyist-bundlers in the Party Time database partnered with a total of 363 other lobbyists during their fundraising events in 2010. Those 363 lobbyists are nowhere to be found in the FEC database. This means that lobbyists with the same access to candidates and fundraising abilities as their FEC-reporting counterparts are probably raising money beneath the radar.

One of the largest fundraising events of 2010 in the Party Time database, a breakfast reception for Sen. Jeff Bingaman (D-N.M.), was hosted by 52 lobbyists. But the committee — A Lot of People Who Support Jeff Bingaman — doesn’t even appear in the FEC bundling database.

Further guaranteeing that the bundling disclosure database is wholly inadequate, any bundler who is not a registered lobbyist, such as a CEO of a major corporation, is not subject to the FEC’s bundling reporting requirements.

These loopholes mean that dozens of campaign committees and millions of dollars are likely falling through the cracks of the FEC’s bundling disclosure system.

Holman is a government affairs lobbyist at Public Citizen and JoAnna Suriani is a researcher at Public Citizen.