* The Illinois Campaign for Political Reform has studied campaign finance disclosures for the 2011 campaign cycle and discovered that over 500 large campaign contributions to over 190 campaigns and party committees totaling more than $500,000 escaped public disclosure before election day. Campaigns avoided the disclosure laws by receiving multiple checks from donors at just below the $1,000 level which requires public disclosure within 5 days From the group…
State law requires candidates to reveal donations of $1,000 or more within 5 days on a rolling, year-round basis (two days if it’s within 30- days of an election the candidate is in). ICPR has identified nearly $500,000 in donations during the municipal elections that came from donors who gave $1,000 or more but which were not disclosed until after the elections.
The vast majority of these funds were received by candidates in the municipal elections, though some statewide officials and legislators also received donations from donors who gave more than $1,000 but which were not disclosed.
The problem is that single donations of amounts under $1,000 are not required to be disclosed. Many donors and candidates appear to have structured their donations to ensure that their giving would be under the $1,000 disclosure threshold. Indeed, one candidate has acknowledged structuring his own giving to his campaign in this way, and to counseling his supporters to give in amounts under $1,000 so that he would not have to disclose the donations.
* Gov. Pat Quinn and Chicago Mayor-elect Rahm Emanuel both appeared to deliberately solicit fundraising checks below the disclosure limit…
Twenty-one candidate and party committees reported getting two or more donations on the same day from the same donor that were each under the disclosure threshold but would have been subject to disclosure if the money came in a single check. These include Gov. Pat Quinn, Lt. Gov. Sheila Simon, the Senate Democratic Victory Fund, House Republican Leader Tom Cross, and the campaign fund of Chicago Mayor-elect Rahm Emanuel.
Chicago for Rahm, the campaign fund of Rahm Emanuel, shielded the most donations with the loophole. He avoided disclosure of $26,000 until after the February 22 election, including $15,375 received from eight donors each of whom gave multiple checks on the same day. […]
Gov. Pat Quinn reported six donations from three different donors, all of them lawyers or law firms, on January 31. Each donor wrote two checks, each for $500. Because the money came in two checks rather than one, Quinn did not need to report the receipts for another two and a half months. [Emphasis added.]
* How this egregious loophole was created…
The loophole was placed into state regulations at the last minute by the Joint Committee on Administrative Rules (JCAR), which reviews all regulations before they become effective. The State Board of Elections proposed rules that would have required political committees to aggregate donations for the purpose of supplemental disclosure. JCAR objected, instead reading the statute to require disclosure only of individual checks that were over the threshold. Faced with the prospect of having no regulations in place during the 2011 municipal elections if it insisted on their initial proposed regulations, the State Board of Elections agreed to the change.
* The full analysis is here. A spreadsheet is here.
* Springfield aldermanic candidate Joe McMenamin recently admitted that he deliberately used this loophole to hide contributions from the public…
It turns out that McMenamin brought in $4,500 from the federal campaign fund he used when he made an unsuccessful run for the Democratic nomination for the U.S. House in the 19th Congressional District in 2008. But as a commenter on SJ-R.com pointed out under a story Monday about aldermanic fundraising, McMenamin took the cash in $900 increments. And because new campaign finance reforms have been interpreted to no longer require quick reporting of big donations in their aggregate amount, the public never got word until later. […]
“I didn’t want our opponents to know what sources of funding and what amounts might be there at the outset because that could encourage them to ramp up their own campaigns to a greater extent,” McMenamin said.
He volunteered that the $6,920 he and his wife, LYNN, combined to loan the campaign also came in the same way. Each of them provided two $900 loans, one of $700 and another of $960. He also said that as part of “respecting donors,” he told some contributors they could give in less than $1,000 amounts to avoid quick reporting.
McMenamin said part of the reason for incremental donations was because it was uncertain how much the campaign would cost. He also said filing fewer reports is less complex, and “part of being a good manager is to avoid complexity.”
Thoughts?
- Yellow Dog Democrat - Thursday, May 5, 11 @ 2:39 pm:
I’ve said it before and I’ll say it again: public financing is the only way you’re ever going to get clean elections.
Any even bigger loophole is the run-off loophole.
Run-off elections in the aldermanic elections were April 5th, and A-1 reporting started 30 days beforehand.
However, the initial elections were Feb. 22nd. That created a ten day window for special interests to dump unlimited amounts of cash into races without having to report anything.
- Newsclown - Thursday, May 5, 11 @ 2:44 pm:
It’s legal.
That’s all Board of Elections cares about.
It still gets reported, just not as fast.
- Coach - Thursday, May 5, 11 @ 2:51 pm:
I can’t blame a candidate for getting creative within the confines of the law. Frankly, that’s what they should do. If they’re actually violating the law, that’s another story.
If the group formerly run by Canary has a problem with the law, they can go Springfield and lobby legislators to change it. They can also go cry to the Tribune editorial board, which of course they’ll do anyway.
- where is the old pat quinn? - Thursday, May 5, 11 @ 2:52 pm:
Hard to believe that a lifelong reformer and advocate for campaign transparency would engage in these kinds of shady behaviors. So disappointing. “It’s legal” is a pretty low standard of behavior. I expected better from Pat Quinn.
- Rich Miller - Thursday, May 5, 11 @ 2:54 pm:
This loophole is new and unexpected. Defense of what JCAR did here and what the campaigns have done really kinda appalls me.
- Small Town Liberal - Thursday, May 5, 11 @ 2:59 pm:
- Hard to believe that a lifelong reformer and advocate for campaign transparency would engage in these kinds of shady behaviors. -
I’m kind of doubting Quinn personally intervened and made sure these 3 donors weren’t disclosed before the election. More likely it was either a foolish or lazy fundraiser. Three thousand dollars out of millions doesn’t exactly suggest a trend either.
That said, I don’t understand what’s so hard about this, all campaign donations should be disclosed before the election no matter the size.
Also, the numbers on the spreadsheet aren’t adding up for me (can’t get $500,000 out of the amounts meeting this criteria, also can’t seem to find Quinn), is this a complete list?
- TJ - Thursday, May 5, 11 @ 3:10 pm:
Certainly shady, but legal so nothing really shocking. If there’s a loophole in anything, and I mean anything, people are going to exploit it.
Kind of curious why Emanuel would go that route, though. Not like he was strapped for cash or anything like that. I mean, it sort of makes sense for Quinn, as he was in a tight race, but Emanuel was head and shoulders above the rest of the so-called ankle biters (to use a phrase that Quinn likes) in the polls and in cash. 26 grand was a drop in the massive bucket for him.
- Steve Brown - Thursday, May 5, 11 @ 3:12 pm:
Can’t speak for all the campaigns, but once again the reformer criticism seems to confirm the concerns everyone in IL should have when the people who have never made or sought campaign funding think they should make and/or interpet the rules.
It seems a little like having a colonoscopy performed by the Roto Router Man
- Coach - Thursday, May 5, 11 @ 3:12 pm:
= lifelong reformer =
You run on “change” until you win, and then you run on “experience” - once you’re in power, you do what’s necessary to preserve your power.
Quinn lost the reformer mantle years ago when he teamed up with Rod as a means to advance his own career, and then subsequently defended him and/or kept his mouth shut as Rod tried his best to take the Statehouse down in flames.
- Anonymous - Thursday, May 5, 11 @ 3:19 pm:
Meet the new boss. Same as the old Boss.
- Montecore - Thursday, May 5, 11 @ 3:26 pm:
A federal law requires all financial institutions to report transactions of $10,000 or more in cash to the IRS. People have been indicted for money laundering who make a transaction for say $9,000 and then a few weeks later for a few more thousand, putting them over the $10,000 threshold.
What is happening now is campaign contribution laundering–a scheme or conspiracy to violate the law.
Two five hundred dollar checks on the same day is a $1,000 contribution, no matter that it came in two cute checks.
These campaign and contributors ought to be prosecuted for conspiracy to violate campaign finance laws.
A cute interpretation of a federal law against Internet gambling was that the law only barred using credit cards to be used for Internet gambling. So all these schemes of wiring money to a gambling account and other methods were seemingly used with impunity UNTIL the feds arrested all involved for simply violating the law with their cute, literal interpretation of the law.
What is happening in Illinois now and especially with McMenamin, Emanuel, and Quinn is deliberate actions to launder money to skirt a law. It is racketeering. First, the G.A. needs to clarify the law, but until then a prosecutor ought to test the legality of these brazen methods. Two checks on the same day is active conspiracy to violate a law.
- amalia - Thursday, May 5, 11 @ 3:27 pm:
ooh, icky outsiders, how dare they tell us insiders what the limits should be, she types glaring with sarcasm. gack.
- MikeMacD - Thursday, May 5, 11 @ 3:29 pm:
The fewer A-1’s to report the less chance of making a mistake. Since there is a penalty for not reporting in accordance with the rules, it makes sense to me. Why take more risk than you need to? I have a difficult time believing it was for hiding anything.
As for the comments on Gov. Quinn, these new rules started this year and didn’t apply to his election last November.
The information must have been gleaned from the new quarterly report which supplants the old semi-annual ones, so we’re getting more timely information with which to connect the dots, or alternatively fabricate connections.
- Yellow Dog Democrat - Thursday, May 5, 11 @ 3:35 pm:
@Steve Brown -
That was the most polite “I told you so” ever.
This, to me, is the operational passage in the ICPR Report:
“ICPR urges the legislature to restore the aggregation rule to campaign finance disclosure. A simple change to statute is all that is needed to clarify that disclosure of donations from sources that give multiple donations that total over the threshold should be disclosed to the public, and that neither donors nor political committees can evade disclosure by structuring their giving in increments below $1,000. Failure to restore the aggregation rule prior to the 2012 primary election undermines the very essence of timely disclosure.”
I’m a big fan of campaign finance reform, having been on both the giving and the receiving end. But it has to be done properly and with care. I’d like to see the actual language, but apparently even ICPR admits this measure wasn’t properly drafted.
YDD
- Coach - Thursday, May 5, 11 @ 3:44 pm:
Montecore,
Conspiracy? Money laundering? Racketeering? Really?
Please, come to grips with yourself already. If you read Rich’s post before bloviating all over this page you would have seen that JCAR insisted on “reading the statute to require disclosure only of individual checks that were over the threshold.” So, the candidates did in fact appear to have complied with the statute as interpreted by JCAR.
Uh-oh, better get the feds here pronto to investigate the members of JCAR - all elected members of the General Assembly - for conspiracy to entice candidates to creatively compete within the confines of the law.
- sal-says - Thursday, May 5, 11 @ 3:49 pm:
If ya gotta hide it; it’s a problem.
- CLJ - Thursday, May 5, 11 @ 4:14 pm:
You have to love Toni Foulkes receiving over $11k from SEIU on the same day bundled in 151 checks. You really have to sort the list by date to get the full effect. Clearly the service unions love this tactic.
- Tom - Thursday, May 5, 11 @ 4:19 pm:
My comment: A big WHO CARES! It still get reported. Anyone else tired of the reforms always moaning?
- Jim Bray - Thursday, May 5, 11 @ 5:06 pm:
= the concerns everyone in IL should have when the people who have never made or sought campaign funding think they should make and/or interpet the rules. =
I disagree with that premise, but I’ll also point out that the reformers aren’t the ones writing or interpreting the rules. When it comes to the actual writing of campaign finance laws in Illinois, it’s still largely the majority staff in each chamber writing the bill language with LRB.
Whether or not the bill required aggregation was not crystal clear to everyone. In the Senate floor debate, Sen. Harmon said aggregation did not apply. In the House floor debate, Rep. David Miller asked Speaker Michael Madigan, the bill sponsor, about aggregation. In response, the Speaker said the State Board of Election rules in effect at that time required aggregation; that the bill did not require aggregation; and that JCAR would make rules on the new law. Miller did not ask the Speaker whether he thought the aggregation rules should be changed.
The Miller-Madigan conversation starts on page 165 of the Oct. 29, 2009, transcript (http://www.ilga.gov/house/transcripts/htrans96/09600081.pdf)
When campaign finance or other issues are negotiated, often both sides accept something they don’t like. That happened in this one, but I don’t think it’s fair to equate the Speaker’s bill drafting with “having a colonoscopy performed by the Roto Router Man”
- Bubs - Thursday, May 5, 11 @ 5:09 pm:
Obviously, “Reformer Rahm” is all about “transparency” - except when it applies to him.
- Park - Thursday, May 5, 11 @ 5:10 pm:
First Sentence of first YDD comment sez it all.
But….Sir Pat the clean continues to dissapoint in the ethics department.
Rahm’s participation surprisith not.
- Vote Quimby! - Thursday, May 5, 11 @ 5:23 pm:
Nobody learned from Pete Rose?
- SangamoGOP - Thursday, May 5, 11 @ 5:30 pm:
This is a non-story. When the reportable limit was $150, people wrote checks for $149 so that it didn’t get reported. If we truly want transparency, get rid of all of the limits and other rules that get in the way and require a 24 hour reporting requirement for every dime. And, then slap civil & criminal penalties on those candidates and office holders who don’t abide.
It’ll never happen. But for Canary and the other “reformers” to report and whine is a waste of time and breath. For every finger they put in the dike, another hole will form and the money will find a way. These folks all reported as the statute requires and all of the contributions were eventually discovered. Besides we are talking about $500,000 in a cycle where how much was raised and spent? Exactly.
- Frost - Thursday, May 5, 11 @ 5:47 pm:
Wow. If it was just a few contributions that slipped through the cracks, that’d be one thing. BUt this is half a million bucks, folks!
Why wouldnt the legislature just change this? As a campaign person, I’d like to know what my opponent is bringing in.
I’m always so amused by the comments on here who get mad at the “goo-goos.” Ok, so you dis-agree. That’s cool.
But at least they’re out there working for what they think is a better system, not just posting anonymous comments (LIke me) on CapFax.
- wordslinger - Thursday, May 5, 11 @ 6:52 pm:
Steve Brown and Jim Bray in the house. That roto-rooter must have struck a nerve where the moon don’t shine.
- muni candi - Thursday, May 5, 11 @ 7:56 pm:
I was told by an SBE staffer this year that aggregate donations in excess of $1000 in a calendar must be reported on an A-1, as a 1,000+ contribution.
However, their software only does it automatically when it is a single contribution. If you report two $500 contributions the ISBE software will not automatically report that as an A-1.
So their software must be JCAR approved as well. Seems like a loophole that needs closing, regardless of who is to blame.
- steve schnorf - Thursday, May 5, 11 @ 8:43 pm:
I’m shuddering at the thought of the corruption being wrought by these guys. Imagine the planning and work, the extent they went to to hide these bundles of corrupt dollars from the people. The destiny of the Western world, life as we know it, has surely been altered, and is at risk until this monumental problem is dealt with instantly.
Jesus!
- one day at a time - Thursday, May 5, 11 @ 10:16 pm:
- steve schnorf - Thursday, May 5, 11 @ 8:43 pm:
I’m shuddering at the thought of the corruption being wrought by these guys. Imagine the planning and work, the extent they went to to hide these bundles of corrupt dollars from the people. The destiny of the Western world, life as we know it, has surely been altered, and is at risk until this monumental problem is dealt with instantly.
Jesus!
Amen…Our wonderful political support system at its finest!