Candidate Committee Contributions a Growing Form of “Legal Laundering”

Candidate-to-Candidate Giving Up More Than 300% Since ’96

October 17, 2000

Madison - Campaign contributions among candidate committees are skyrocketing and are being used by legislative candidates to launder special interest money and fuel the spiraling cost of campaigns, according to a report issued today by the Wisconsin Democracy Campaign.

A WDC analysis of contributions from the start of each election cycle through the preprimary reporting period in each cycle shows that contributions between legislative candidate committees totaled more than $125,000 in the 2000 election cycle. That is a 77 percent increase over the $70,692 in inter-candidate committee contributions for the same period in the 1998 cycle and a 306 percent increase over the $30,813 in these contributions in 1996.

The report also shows that legislative candidates who make no-PAC pledges to portray themselves as free from special interest influence are being disingenuous with voters when they turn around and accept candidate committee contributions. At least three legislative candidates - two Republicans and a Democrat - have made such pledges and then accepted thousands of dollars from candidate committees peppered with PAC contributions.

"This is yet another way candidates are thwarting effective disclosure," WDC executive director Mike McCabe said. "Candidates who have no qualms about taking special interest donations collect the money and then pass some along to candidates who are queasy about such contributions, removing the stain of special interest influence and allowing candidates who’ve taken no-PAC pledges to claim to be squeaky clean. It’s money laundering, pure and simple."

In addition to concealing the spread of special interest money, this trend should be of concern to constituents because the money they contribute in support of their candidate is being redistributed to other candidates who they may not know or would not support.

"I’m sure most people don’t realize when they make a contribution to a local politician that their money might wind up in the account of some candidate on the other side of the state," McCabe said.

The report shows two dozen candidates - mostly incumbents in safe districts or those with only token opposition - and former legislators contributed $2,000 or more to other legislative candidate committees between January 1, 1999 and August 28, 2000. Most of the money went to open seat candidates or challengers as well as incumbents in targeted districts.

"Legislators make these contributions to their colleagues to buy loyalty," McCabe said, noting most of the contributions are made during the election season, although curiously the leading contributor to other candidates - Democratic Senator Rodney Moen - made most of his donations last year when the 1999-2001 state budget was being crafted.

Last year, the Democracy Campaign issued a report calling attention to how leadership-run legislative campaign committees launder special interest money and make rank-and-file legislators beholden to legislative leaders.

The WDC has joined with over 20 public interest groups to propose a new campaign reform initiative called "Voters First." Among its many provisions, the proposal prohibits contributions from candidate committees to other candidate committees. It also abolishes legislative campaign committees.

Legal Laundering Part IILegal Laundering Part I