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Senate Abandons Provision on Leadership PACs

The Senate GOP leadership removed a controversial provision from a must-pass spending bill earlier this week that could have greatly advanced the presidential ambitions of the chamber’s top Republican.

The move came after Democrats and a handful of Republicans made clear they would force a floor fight over the campaign finance rider, which would have allowed leadership political action committees the ability to transfer unlimited funds to the national party committees. The rider, inserted in committee, had the public support of the Republican leadership.

Minority Leader Harry Reid (D-Nev.) remarked on the floor Tuesday that Democrats were united in their opposition and had gathered enough Republicans to thwart the effort. Sen. John McCain (R-Ariz.) had previously secured a pledge from Senate Majority Leader Bill Frist (R-Tenn.), who had endorsed the measure to have an up-or-down vote on the provision when the Treasury-Transportation bill was considered by the full Senate.

“Through the efforts of Sens. [Russ] Feingold [D-Wis.] and McCain, we had the votes to strip this provision from the bill,” Reid said Tuesday. “Recognizing that, Republican leaders yesterday agreed to remove it from the bill.”

Asked how he secured the provision’s removal from the bill, McCain quipped that he simply “asked politely.”

“I asked politely about a thousand times,” he said. On more serious reflection, the Arizona Senator said he thought the leadership “recognized that it wasn’t appropriate to do it on an appropriations bill.”

Indeed, reform groups upset over the provision screamed loudest about the process under which it was being considered, infuriated that the Senate was on the brink of opening what they believed to be a significant loophole in campaign finance law without even a debate on the floor, or as Reid put it, “The provision should not pass quietly in the night.”

The provision would have allowed lawmakers’ leadership political action committees to give unlimited funds to the national party committees.

Like all other PACs, leadership PACs are currently subject to an annual limit of $15,000 on transfers to the national party committees. The proposed language would change current law to treat leadership PACs like candidates’ personal campaign committees when it comes to transfers to the national parties. The national parties could, in theory, turn around and spend those same funds on that lawmaker’s re-election, effectively subverting individual and PAC donor contribution limits.

In a “Dear Colleague” letter last month, McCain and Feingold were emphatic about one criticism, that the provision would have only benefited incumbent Members of Congress by allowing them to circumvent contribution limits by which their opponents are forced to abide.

The principal difference between a lawmaker’s personal campaign committee and that of his or her leadership PAC is that funds from the latter cannot be spent on direct mail, broadcast ads and other items that directly aid the candidate’s campaign. The money from leadership PACs is used primarily to fund lawmaker’s travel and as a way to gain chits with fellow lawmakers and candidates by making contributions to their campaigns.

A few years ago, such PACs were used primarily by a handful of Members with aspirations of serving in the House or Senate leadership, but recently the committees have become more common and are now used by rank-and-file and junior lawmakers as well.

The language also would have accomplished something seemingly technical but that nonetheless could profoundly impact campaign finance law: It would have codified for the first time the term “leadership PAC,” which up to now has been an informal term referring to political action committees informally linked to lawmakers used to further their leadership aspirations. Many campaign reform advocates already believe such PACs to have dubious standing under the law, at best, as they are used in practice as a vehicle for lawmakers to raise money outside of existing contribution limits.

The back-door approach wasn’t the only vehicle for accomplishing this feat, but it did seem the most likely to be enacted this year. Broader bills aimed at altering campaign finance laws in both chambers contain similar provisions, but both have stalled due to lack of consensus.

With its high-level support in the Senate — Majority Whip Mitch McConnell (R-Ky.) was also pushing the measure — and an ideologically aligned House, the provision had a much better shot of making it through conference committee than being enacted as part of a comprehensive campaign reform measure.

As of June 30, Frist almost $1.2 million left in his account. He’s already given the maximum donations to every GOP Senator running for re-election, leaving him to spread his money around to House campaigns. The since-pulled provision would have allowed Frist to dump large amounts of cash into the National Republican Senatorial Committee and the Republican National Committee.

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