SUBSCRIBE to Capitol Fax      Advertise Here      Mobile Version     Exclusive Subscriber Content     Updated Posts    Contact
To subscribe to Capitol Fax, click here.
Huge loophole in campaign finance law

Monday, Oct 31, 2011

* My weekly syndicated newspaper column is about an unknown, but very big campaign finance loophole. I told subscribers about this last week, but as yet nobody else has picked it up. So, here it is

An apparent legislative drafting error has created a massive loophole in the state’s new campaign contribution limit law, and ComEd and its parent company Exelon have been aggressively exploiting it since early this year.

State campaign finance reform laws that capped campaign contributions went into effect this past January 1st. One provision of the new law set a $50,000 cap on what political action committees could receive from other political action committees during a calendar year.

Yet, despite that cap, Exelon’s federal PAC has transferred over $189,000 this year to a state PAC controlled by its subsidiary ComEd. Those transfers appear to be almost four times higher than the law allows.

ComEd has, in turn, taken that Exelon PAC money, pooled it with its own cash and given large numbers of contributions to state legislators as it worked to pass a so-called “Smart Grid” bill, then override Gov. Pat Quinn’s veto of that legislation. The company succeeded at both those tasks last week. Gov. Quinn claimed campaign contributions were behind the company’s legislative success.

So, how did Exelon and ComEd get around the contribution cap law?

Well, ComEd officials insist that what they did was completely within state law. But the Illinois Campaign for Political Reform says otherwise.

“ICPR believes that these transactions are in violation of the Election Code,” said David Morrison, the group’s deputy director. “Only political parties are allowed to make these kinds of transfers, by our reading of the statute.”

ComEd officials claim they cleared these contributions with the Illinois State Board of Elections. The Board’s executive director, Rupert Borgsmiller, said he wasn’t aware of any specific contacts with ComEd, but said the statute in question “hasn’t been fully tested.” He also said the statute has been discussed quite a bit.

“By the plain reading of it, I would say that ComEd has a very good point,” Director Borgsmiller said.

Indeed, the company does have a decent point.

What I’m about to tell you may look technical and complicated, but it’s really not. Stay with me here.

The new campaign caps were outlined in Section 9-8.5 of Illinois law. Paragraph “c” of that section deals with limits on what can be given to state political party committees. Also in that same paragraph is this language: “Nothing in this Section shall limit the amounts that may be transferred between a State political committee and federal political committee.” That language is then followed by more limitations on political parties.

A spokesman for House Speaker Michael Madigan said the intent of the law was to allow state political parties, and only state political parties, to transfer unlimited money from their federal PACs. The law, he said, was absolutely not designed to give companies like ComEd a way to skirt the PAC caps.

But the sentence that ComEd relies on clearly says: “Nothing in this Section.” The “Section” deals with campaign caps of every kind, not just political party caps. If it had said “Nothing in this Paragraph,” then ComEd and Exelon wouldn’t be able to use that sentence to their advantage.

This was a very dangerous mistake by the people who wrote the law. Left unchanged, this loophole could be used to get around all state caps.

Why? Well, under the ComEd/Exelon reading of the law federal PACs do not have to abide by any of the state’s new caps. They can give as much as they want to any candidate, political party, legislative leader, whomever. And, of course, state PACs could form federal PACs to get around all of Illinois’ campaign cap laws.

Neither Exelon nor ComEd have done any of that beyond transferring that money to the ComEd PAC, at least so far, according to an ICPR analysis.

But this is, without a doubt, a truly gigantic loophole that could easily be exploited unless the General Assembly closes it soon.

Director Borgsmiller said his office has been contacted numerous times about the cap rules. A Board of Elections’ task force recently recommended that the loophole be closed during the spring session. It ought to come even sooner.

Madigan’s spokesman said last week no decision had been made about whether to proceed with legislation. He suggested that the Board ought to just enforce the law the way it was intended. But the Board is so far interpreting the laws the way they are written.


* Related…

* Jones says Legislature, not governor, looked out for consumers on ’smart grid’

* Lawmakers deny contributions affected their ’smart grid’ votes: State Rep. Wayne Rosenthal, R-Morrisonville, and state Sen. Sam McCann, R-Carlinville, each in their first legislative terms, received $2,000 apiece from the utility during their 2010 campaigns. McCann and Rosenthal voted against overriding the governor. McCann voted against the follow-up legislation, while Rosenthal voted for it.

* Editorial: Illinois utilities use ’smart grid’ to bypass regulators

- Posted by Rich Miller        

  1. - just sayin' - Monday, Oct 31, 11 @ 8:17 am:

    Thanks for getting this out Rich.

    It’s a huge disgusting scandal.

    In the old days those company executives and their lawmaker stooges who did their bidding would be put in stocks in the town square and we would at least get to throw some rotten produce at their greedy faces.

    Would no doubt need super-sized stocks these days given the bloated nature of most of those worthless tubs of goo.

  2. - wordslinger - Monday, Oct 31, 11 @ 8:22 am:

    I hate when I make a drafting error and it results in more money in my pocket.

    Kudos to the good-government watchdogs at Exelon for taking advantage of an opportunity to participate more fully in Illinois democracy.

    –Madigan’s spokesman said last week no decision had been made about whether to proceed with legislation. He suggested that the Board ought to just enforce the law the way it was intended. But the Board is so far interpreting the laws the way they are written. –

    Considering ComEd’s legislation passed the House without any discussion last week, perhaps a cleanup bill on this could have gone through pretty easily, too, if it was a priority?

  3. - Cindy Lou - Monday, Oct 31, 11 @ 8:26 am:

    The bills need to be writen/worded as if meant for a rebellious teenager. Good intentions are all fine and dandy and all that…but when one is trying to rope in the rebellious kid one needs to write/speak in very specific non-debatable carefully chosen mannerisms. If the ‘kid’ can find the loophole and possibly deliberately misinterpret what one actually said/meant they will. In a heartbeat.

  4. - Anonymous - Monday, Oct 31, 11 @ 8:37 am:

    I hate to make this a theme, but given last week’s clean sweep for corporate interests in Springfield:

    Thank you sir, may I have another?

  5. - Dirt Digger - Monday, Oct 31, 11 @ 8:43 am:

    It might be a loophole but it’s not THAT big a deal. It’s not like there aren’t limits on federal campaign finances.

  6. - Rich Miller - Monday, Oct 31, 11 @ 9:16 am:

    There are limits on federal contributions, but now there are no limits whatsoever from federal PACs to state PACs. That, to me, is a pretty darned big loophole.

  7. - Anonymous - Monday, Oct 31, 11 @ 9:22 am:

    Given the speaker’s reputation for paying close attention to proposed legislation, it is hard to imagine this is a drafting error, especially since it involves campaign financing.

  8. - Rich Miller - Monday, Oct 31, 11 @ 9:25 am:

    Anon, the Speaker capped PACs to prevent anyone else from controlling the game except for him. Ergo, for this reason, talking to people who wrote the bill and the anger they expressed when I first disclosed this story, I believe this was an accident.

  9. - just sayin' - Monday, Oct 31, 11 @ 9:39 am:

    They’re far too busy raking in loot from ComEd and others to read carefully.

  10. - titan - Monday, Oct 31, 11 @ 9:45 am:

    Legislative drafting quality is rather spotty, varying from clear, tight and well-drafted to incomprehensible, vague and ill-fitting with regard to the existing law.
    I think the quality has slipped over the last couple decades

  11. - Yellow Dog Democrat - Monday, Oct 31, 11 @ 9:54 am:

    I’ve said it before and I’ll say it again: the only way to end the undo influence of special interest money on public policy-making is public financing.

    Incrementalism delays true reform and tilts the playing field even further toward the most powerful interests, because they can afford the best lawyers.

  12. - walkinfool - Monday, Oct 31, 11 @ 10:35 am:

    Rich — now THIS is how a good reporter actually helps our democracy. Thanks.

  13. - soccermom - Monday, Oct 31, 11 @ 11:37 am:

    Yeah, Word — If this was a mistake, let’s see ‘em fix it, before any more “mistaken” money winds up in their campaign chests.

  14. - Anonymous - Monday, Oct 31, 11 @ 2:06 pm:

    Madigan’s spokesperson speaks irony about the intention and the letter of the law. Was it the intention of the cutback amendment that we should have a speaker-for-life? I would say that such was not the intention, but the allows it. It apparently depends how beneficial the intention is to you.

    By the way, why is this loophole described ad massive, huge, and very big? Serious question.

  15. - Anonymous - Monday, Oct 31, 11 @ 2:18 pm:

    …but the law allows it. Sorry.

Sorry, comments for this post are now closed.

* AG Madigan wants federal civil rights probe of CPD
* Another one?
* *** LIVE COVERAGE *** Leaders' meeting
* Chicago GOP cries foul over Democratic interference
* *** UPDATED x1 *** Rauner rejects latest refugee offer
* "At some point, however, deadlock will take its toll"
* Question of the day - Golden Horseshoe Awards
* *** UPDATED x3 - Sneed: Gone *** Gone?
* *** UPDATED x1 *** Springfield's Rauner primaries
* Today's meeting primer
* Comptroller will make full December pension payment
* Caption contest!
* *** UPDATED x2 - Cable buy deets - Duckworth says Kirk acts "how enemies like ISIS want us to act" *** Mark Kirk uses Syrian refugee issue in new attack on Duckworth
* SUBSCRIBERS ONLY - Today's edition of Capitol Fax (use all CAPS in password)
* Yesterday's blog posts

Visit our advertisers...







Search This Blog...

Search the 98th General Assembly By Bill Number
(example: HB0001)

Search the 98th General Assembly By Keyword

* Samsung announces a web browser for virtual reality, complete with voice recognition and video support
* Industry sources says to expect the iPhone 6c for February
* Motorola running soak test for Marshmallow on the Moto X Pure Edition
* HTC, Under Armour partnership seemingly still alive as connected scale appears
* Apple’s Personal Pickup service expands in Europe
* WhatsApp reportedly blocking links to competing Telegram messaging app
* Windows Continuum: what it is (and isn’t)

* Alex Avila wants to play, and against the Tigers
* Avila eager to wage 'friendly' AL Central rivalry
* Non-tender deadline looks familiar for White Sox
* Detroit Tigers make AL Central's first big splash with Jordan Zimme...
* South Side Sox' SB Nation MLB Awards voting results
* Starting Pitcher Rankings: Chris Sale and Jose Quintana maintain st...
* Scouting profile: Adam Engel


Main Menu
Pundit rankings
Subscriber Content
Blagojevich Trial
Updated Posts

December 2015
November 2015
October 2015
September 2015
August 2015
July 2015
June 2015
May 2015
April 2015
March 2015
February 2015
January 2015
December 2014
November 2014
October 2014
September 2014
August 2014
July 2014
June 2014
May 2014
April 2014
March 2014
February 2014
January 2014
December 2013
November 2013
October 2013
September 2013
August 2013
July 2013
June 2013
May 2013
April 2013
March 2013
February 2013
January 2013
December 2012
November 2012
October 2012
September 2012
August 2012
July 2012
June 2012
May 2012
April 2012
March 2012
February 2012
January 2012
December 2011
November 2011
October 2011
September 2011
August 2011
July 2011
June 2011
May 2011
April 2011
March 2011
February 2011
January 2011
December 2010
November 2010
October 2010
September 2010
August 2010
July 2010
June 2010
May 2010
April 2010
March 2010
February 2010
January 2010
December 2009
November 2009
October 2009
September 2009
August 2009
July 2009
June 2009
May 2009
April 2009
March 2009
February 2009
January 2009
December 2008
November 2008
October 2008
September 2008
August 2008
July 2008
June 2008
May 2008
April 2008
March 2008
February 2008
January 2008
December 2007
November 2007
October 2007
September 2007
August 2007
July 2007
June 2007
May 2007
April 2007
March 2007
February 2007
January 2007
December 2006
November 2006
October 2006
September 2006
August 2006
July 2006
June 2006
May 2006
April 2006
March 2006
February 2006
January 2006
December 2005
April 2005
March 2005
February 2005
January 2005
December 2004
November 2004
October 2004

Blog*Spot Archives
November 2005
October 2005
September 2005
August 2005
July 2005
June 2005
May 2005


RSS Feed 2.0
Comments RSS 2.0


* Illinois budget meeting brings agreement betwee.....
* Rauner, legislative leaders agree to meet again.....
* Illinois governor, legislators hold rare meetin.....
* Illinois governor, legislators hold rare meetin.....
* Illinois governor, legislators hold rare meetin.....
* Illinois governor, legislators hold rare meetin.....
* Illinois governor, legislators hold rare meetin.....
* Gov. Rauner disagrees with House Speaker Michae.....
* Gov. Rauner disagrees with House Speaker Michae.....

* Rauner, Democrats hold 1st meeting in months on state budget
* The Latest: GOP leader criticizes Democrats' spending
* Man charged in library knife attack to get mental exam
* Mitsubishi plant in Normal ends production
* Interim chancellor: Illinois football needed stability
* 1st-term Belleville alderwoman Schmidt dies
* 2 candidates challenging US Sen. Mark Kirk in GOP primary
* Aurora rapist gets 6 years for failing to report new address
* EXCHANGE: Kids get peek at work of veterinary clinic
* Bionic thumb allows Illinois man to 'do fantastic things'

* Rauner, legislative leaders agree to meet again soon
* U of I index shows economic growth despite state budget deadlock
* Rauner, Democrats hold first meeting in months on state budget
* U of I index shows growth despite state budget deadlock
* Rauner, Democrats hope for best with budget summit
* Syrian refugees become issue in Illinois Senate race
* Cities, counties demand action amid Illinois budget mess
* Two file to run against Rodney Davis as candidates rush to beat Monday deadline
* Candidates rush to beat Monday filing deadline
* Judge orders Illinois to pay home health workers' insurance

* Vance Publishing to sell off business
* Iconic Lakeview store The Alley closing
* GE, MetLife back wind farm that will run Microsoft's Chicago data center
* D.C. deal would revive Ex-Im Bank
* Downstate Mitsubishi plant makes last vehicle

* WATCH: Patrick Kane whiffs on shot, scores anyway to extend point streak
* Patrick Kane extends point streak to 20 games
* Mihalopoulos: Murky CPD order on use of force could seal Van Dyke’s fate
* Brown: State budget summit lives up to build-up — unfortunately
* Sweet: Kirk unleashes attack ad on Duckworth
* Patrick Kane named NHL’s first star of the month
* Sneed: Garry McCarthy blindsided by firing
* History of Chicago top cops facing heat
* Rauner, leaders vow to negotiate, but stick to their talking points
* This Blackhawks player has more shorthanded goals than any active player

* River search ends for missing man but police now looking on land
* Emanuel dismisses top cop Garry McCarthy as pressure for change built
* Dash-cam video of another fatal shooting by Chicago police is sought
* West Englewood shooting wounds 1
* Man charged with U. of C. threat released to mother's custody
* Interim Chicago police superintendent is 29-year veteran of force
* Online threat made against Somonauk High School
* After McDonald killing, Emanuel tries to buy time with police task force
* Ventra app gets first big test among Metra commuters
* 'Water recovery operation' underway as search for missing McHenry man continues

* Rauner, legislative leaders agree to meet again soon
* U of I index shows economic growth despite state budget deadlock
* Syrian refugees become issue in Illinois Senate race
* Cities, counties demand action amid Illinois budget mess
* Kathleen Parker: The pathology of Trump-itis
* Two file to run against Rodney Davis as candidates rush to beat Monday deadline
* Judge orders Illinois to pay home health workers' insurance
* James Durkin: Compromise needed to restore Illinois' standing

* Woman not guilty by reason of insanity in plot to kill ex-boyfriend
* Judge orders continued treatment for woman acquitted in plot to kill ex-boyfriend
* SportsTalk 12-01-15
* PODCAST: Jim Hires, CEO of Eastern Illinois Foodbank
* Plea to hitting daughter brings prison
* Updated: Fire quickly extinguised at florist in Fisher
* No criminal charges in golf course damage
* 13-year-old believed to have started fire that destroyed Fisher building
* Mexico experts: Passageway may lead to Aztec ruler's tomb
* Danville police seek two in armed robbery of gas station

* Funding progress could bring fix for Union Station
* How McCarthy firing increases pressure on Alvarez
* Budget meeting brings drama, not solutions
* How Police Chief McCarthy's firing increases pressure on Alvarez
* Barrington student accused of carrying gun, drugs in school

* House lawmakers overcome hurdle on key tra...
* Rodney Davis talks funding with Bloomingto...
* The agency that fought Illiana gets a new ...
* Rep. Dold takes educational cruise down Ch...
* Lawmakers decry high turnover rate of VA h...
* CBD Oil, and politics
* Simon considering state Senate bid
* Killer Congressman Tom MacArthur trying to...
* Shutdown? State may not notice
* Rep. Bob Dold

* Senator Durbin Statement on Dismissal of C......
* Senator Durbin: House-Senate Transportatio......
* Dems to try to remove Planned Parenthood l......

* Kirk unleashes attack ad on Duckworth - Ch......
* 2 candidates file paperwork to challenge U......

* McCarthy Fired From Chicago Police Chief Post
* Op-Ed: Clean Water Can’t Wait
* Sunday posts, pics and tweets.
* CPS Proposes List Of School Closings, Consolidations As CTU Preps Strike Vote
* Pasqual on why Rahm has got to go.
* Officer In Laquan McDonald Shooting Released After Posting $1.5 Million Bail
* Democracy For America Calls On Emanuel, Alvarez To Resign; Madigan Wants Feds To Probe CPD
* Judge: State Must Make Payments For Home Health Care Worker Insurance
* Obama's State Of The Union Address Set For January 12
* Conservationists Push To Fund Illinois' Protected Lands

* Emergency Management Officials, National Weather Service Encourage Winter Preparedness - November is Winter Weather Preparedness Month in Illinois
* Keep Your Family Safe This Winter - November through February are leading months for carbon monoxide related incidents
* Governor Takes Bill Action
* Illinois Department of Labor Director Hugo Chaviano Awards Governor’s Award for Contributions in Health and Safety to the Illinois Refining Division of Marathon Petroleum Company LP
* State Regulator Elected Treasurer of Interstate Medical Licensure Compact

Hosted by MCS SUBSCRIBE to Capitol Fax Advertise Here Mobile Version Contact Rich Miller