Michael Bloomberg’s ill-fated presidential bid may be “suspended” (which means ended for all intents and purposes), but it’s still active in a way that’s exposing a glaring loophole in our campaign finance rules. Many campaigns end up in the hole when the candidate drops out of the race, leaving them scrambling to continue to raise funds to cover their debts. Not so with Bloomberg. He loaned his own campaign a bazillion dollars of his own money and he still had some left over when he finally dropped out of the race. And now, he’s dropping nearly twenty million on the DNC. This is not how the system was designed to work. (Free Beacon)
Michael Bloomberg announced he will transfer $18 million from his failed presidential campaign to the Democratic National Committee—a move experts say exploits a loophole in campaign finance laws…
Experts are assailing the move, which they say allows Bloomberg to bypass individual donor limits. “Incredible. Candidates may transfer leftover campaign funds to the party, but I don’t believe that loophole has ever been exploited in this way and to this degree,” said Brendan Fischer, program director at the Campaign Legal Center. “It guarantees that Bloomberg will retain enormous influence over the Democratic Party.”
Lee Goodman, former chairman of the Federal Election Commission, referred to the multimillion-dollar transfer as a “legal two-step.”
Normally, individual donors are limited to giving $35,500 to either the DNC or the RNC. They can also contribute a bit more than $100K to other projects such as convention costs and legal defense funds. But political campaigns are allowed to “transfer” their extra money to other committees with no limits on the amounts involved.
This usually isn’t a problem because the campaigns generally collect money from individuals who are all capped in how much they can give. In that sense, when a campaign conducts such a transfer, they’re basically just taking those smaller, individual donations, bundling them and shifting them over to the committee. But the Bloomberg campaign was rather unique in that regard. That was almost entirely Bloomberg’s own money and he’s now giving a huge shot in the arm to the DNC that normally wouldn’t have been possible.
This definitely opens the door to future abuse. What’s to stop Tom Steyer from doing the same thing, albeit probably in smaller amounts? For that matter, every billionaire in the country could just announce that they are running for some high office, form a campaign, flush massive amounts of money into it and then drop out of the race. Sure, it would be totally obvious what they were doing and the optics would be terrible, but it would still be legal.
There is a two-step solution to this nasty bit of business available if the concerned parties are willing to address it and they truly care about the spirt as well as the letter of the law. First of all, the rules clearly need to be changed. Either limit the amount that campaigns can transfer or mandate that they provide a list of the individual donors who contributed the money to show that nobody exceeded the limits.
Then – and this would be the truly stunning and impressive part – the DNC should announce that they’re not going to accept the money from Bloomberg and that they will be working across the aisle to reform the process so this doesn’t happen again in the future. I’m not holding my breath for that to happen, however. Given that the RNC has been outraising the DNC by a nearly three-to-one clip this cycle, the Democrats need every dime they can scrape up. It seems unlikely that they’d turn their nose up at a quick 18 million dollar score, no matter how bad it looks.