It was Virginia’s costliest election ever — with contributions easily topping the $60 million mark.
Most contributors got identified, online and promptly.
But some of that money came from unknown donors, which is not supposed to happen.
Those anonymous donors dumped more than $2 million in Republican Bob McDonnell’s (barely) successful campaign for attorney general, taking advantage of a gaping loophole in the campaign disclosure laws.
And, as usual, an untold amount got spent by organized labor and various outside groups making undisclosed “independent expenditures” for or against a candidate.
And it was all perfectly legal.
As the Virginian-Pilot editorialized, “there appear to be more ways to launder donations than cycles on a state-of-the-art washing machine.”
Virginia’s campaign finance laws impose no contribution limits, no spending limits. But they are supposed to mandate timely and full disclosure.
After the ’05 elections, you can forget that idea — unless the ’06 legislature closes these loopholes.
Non-disclosure troubles did not start with the fall election.
At the national level, the 2002 McCain-Feingold law was supposed to force political money out into the open. But to almost nobody’s surprise, new organizations sprung up to avoid new federal spending limits. Those and similar organizations also spotted ways to get around Virginia’s disclosure rules.
In the last couple of years, Gov. Warner, ex-Gov. Gilmore and House Speaker Bill Howell all set up fund-raising arms that tapped unknown donors, using an IRS 501(c)(4) exemption for nonprofits.
Then along came nonprofits known as 527s, which only have to report their donors to the Internal Revenue Service on a biennial basis. Gifts from these nonprofits can be funneled into a campaign before Election Day, but the individual contributors get identified only after the election is long past.
So much for the idea that voters should know who’s bankrolling which candidate before they cast their ballots!
One of these 527s, the Republican State Leadership Committee, gave McDonnell the bulk of his funding. In the same way, the Republican Governors Association passed almost $3 million through a Virginia committee to the GOP’s unsuccessful candidate for governor, Jerry Kilgore. (Democratic attorneys general and governors’ associations also made 527 gifts, although in substantially smaller amounts.)
The RSLC followed the letter of law. The PAC registered in Virginia and filed quarterly reports. But the only listed PAC donors were lump-sum transfers from the parent organization in Washington.
McDonnell put the money to good use, buying television time in Northern Virginia. It helped him win the closest race in modern times, with a 323-vote margin out of nearly 2 million votes cast.
David Poole, founder of the Virginia Public Access Project, wrote, “The truth is that Virginia law is vague enough to allow parent groups to transfer money to affiliated PACS without listing individual donors. Labor unions and national groups may complain that tightening Virginia’s laws will burden them with additional disclosure requirements. But that should be the price of playing in Virginia.”
As the Virginian-Pilot said in an editorial titled “Clean up the stink,” until legislators find a way to inform Virginians of the real donors behind such substantial gifts, full disclosure is a travesty. We’ll have to rely on smell alone to judge the ingredients of campaigns. Phew.”
The Roanoke Times commented, “If the floodgates of political cash are to be left wide open and unrestricted in Virginia, the people of the state are, at the very least, entitled to know the source of the cash flow.”
Columnist Bob Gibson of the Charlottesville Daily Progress called the RSLC a “giant cash washing machine the Republican Party operates on K Street Northwest in Washington,” laundering tons of campaign cash for anonymous donors. And, as Gibson wrote, it was all contrary to the clear intent and tradition of Virginia’s campaign laws. (And, cynics would suggest, the Democrats would have done exactly the same thing if they’d built a better cash-washing machine of their own.)
The State Board of Elections said the Virginia arm of the RSLC should have disclosed an itemized list of contributors, but the SBE has no real enforcement authority.
In late fall, the elections board was said to be considering regulations requiring all 527 organizations operating in the state to set up state political action committees that would raise all money themselves. Out-of-state transfers from parent organizations would be prohibited.
State Sen. Jeannemarie Devolites Davis, R-Fairfax, planned to sponsor legislation aimed at closing the 527 loophole.
It should be the cornerstone of McDonnell’s legislative package, for he does not need any further editorial-page, no-holds-barred bashings such as he got before the election from the Washington Post: “If he approaches this law with a wink and a nod, why should he be trusted to enforce the others?”
— Frosty Landon