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Members’ Funds Freed

Change Restores Federal Money for State Bids

Without floor debate or a single hearing, Congress changed election laws last week to allow Members to transfer campaign funds raised for a federal race to a run for state or local office.

A four-paragraph provision taking up less than half a page in the 3,300-page omnibus appropriations measure struck a portion of the landmark campaign laws adopted in 2002 and once again freed Members to apply dollars raised for federal elections toward bids for governor, mayor or other offices.

The authors of the campaign finance bill, known as the Bipartisan Campaign Reform Act, were outraged that their work could be altered without any consultation, although they reserved judgment on the substance of the changes.

“Regardless of the merits of the provision allowing Members of Congress to use their federal campaign accounts for state campaigns, a few senior Members of Congress or their staffs should not be permitted to rewrite the campaign finance laws by slipping something into the omnibus appropriations bill,” said Sen. Russ Feingold (D-Wis.). “The American people deserve a legislative process in which laws are changed only after open debate and votes. This action is yet another demonstration that the appropriations process is broken.”

Aides said the provision was adopted at the behest of the Federal Election Commission, which earlier this year sent Congress a list of requests for legislative action, including the provision clearing up rules on federal dollars used for state races.

“It was one of the agency’s primary recommendations,” said FEC spokesman George Smaragdis.

Notably, however, the appropriators balked at one provision the FEC sought, asking Senate campaigns to file electronically with the commission in the same way House campaigns and all other federal political action committees have done for years. The Senate still requires workers in the chamber’s Office of Public Records to scan in thousands upon thousands of pages of election reports every quarter and then send them to the FEC.

The immediate beneficiaries of the change in law allowing for excess federal campaign funds to go into state races are Members considering bids for governor, particularly Sen. Kay Bailey Hutchison (R-Texas), who had almost $6.7 million sitting in her federal campaign account as of Sept. 30.

Hutchison is considering a bid for governor in 2006 instead of running for re-election, a move that would pit her against sitting Gov. Rick Perry (R) in a potentially bruising primary.

Other lawmakers considering leaving Congress for other office include Sen. Chris Dodd (D-Conn.), who is mulling a bid for governor and had $3 million in his account on Oct. 13, and Rep. Jim Nussle (R-Iowa), also considering a gubernatorial bid. Nussle had $410,000 in his account on Sept. 30.

Rep. Anthony Weiner (D) is seen as close to entering the New York mayoral race and was sitting on more than $1.5 million as of Oct. 13.

Also in New York, Sen. Charles Schumer (D) had been eyeing a possible run for the governor’s mansion and many expected his opening ante to be a massive transfer from his federal account into a gubernatorial campaign. He had more than $13.5 million on hand as of Oct. 13.

But before the rule change passed Congress and allowed for his war chest to go toward a governor’s race, Schumer decided to stay in the Senate, taking over the Democratic Senatorial Campaign Committee and assuming a precious seat on the Finance Committee.

Before BCRA was passed, leftover federal dollars from House or Senate campaigns could be transferred into state races as long as that particular state allowed it. But BCRA changed that, leaving out a critical phrase in campaign laws that had previously said leftover funds could be used “for any other lawful purpose.”

Without that phrase, FEC Chairman Bradley Smith authored a strict advisory opinion in March that made clear Members could not use the money for state races.

There has been some dispute regarding whether Congress intended to limit the transferring of campaign money into state races. Many GOP and Democratic lawyers believe it was an oversight, a mistake in the writing of the complicated law. Some reformers, however, including Trevor Potter, a former FEC chairman and the campaign lawyer for Sen. John McCain (R-Ariz.), contend it was intentional because McCain and others wanted to specifically stipulate that “federal dollars are for federal races.”

The FEC decided to clear matters up by asking Congress to change the law to revert back to the old language.

No hearings, however, were ever held on the FEC requests. A House aide said the Senate appropriators pushed for the campaign finance changes in the omnibus and the House side agreed only “because they were requested by the FEC.”

The omnibus measure also included a provision that allowed for Members’ campaign committees to give up to $2,000 per election to other campaigns, up from $1,000. That change keeps re-election committees at the same rate as individuals, whose contribution limits grew from $1,000 per election to $2,000 two years ago.

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