Local party committees are conduit of campaign donations

The Missouri Ethics Commission is the referee of state politics, watching over lobbying, political donations and campaign spending.

The commission's staff oversees millions of dollars spent by candidates, political parties and political action committees. The commission audits campaign reports and investigates complaints. It has imposed hundreds of thousands of dollars in penalties for mishandling campaign funds but faces two major hurdles to winning criminal convictions for violations: reluctance of local prosecutors to pursue charges, and a high burden of proof for showing that violations were intentional.

"We started going for criminal charges a lot when we got started" in the early 1990s, commission compliance director Mike Reid said. "We found that prosecutors would not prosecute."

The law sets a very high standard for proving criminal violations, Reid said.

"You have to be able to prove intent," Reid said. "You have to be able to prove they did it, they know they did it and in their heart they know they are doing wrong. It is a very high hurdle to meet."

Those difficulties have created a political atmosphere where practices that seem to circumvent the law have become common. Local political party committees, once a forgotten part of the state political scene, are being used more and more to funnel large donations from state parties and other donors to candidates as a way around contribution limits, a Southeast Missourian analysis of hundreds of campaign reports shows.

"This is a system that is obviously broken," said Jack Cardetti, spokesman for the Missouri Democratic Party. "The old saying in politics is that money is like water -- it will flow through every conceivable crack it can find." The most favorable crack for money to flow through right now is state legislative district committees, he said.

The Missouri Senate voted in March to abolish the use of local party committees as an avenue for large donations. At the same time, the proposed legislation would abolish limits on donations directly to candidates and require the donations to be reported much more frequently and be posted on the Internet with the contributor's name and the amount given. The bill has received a committee hearing in the Missouri House, but no date has been set for floor debate.

During the 2004 election, local party committees gave nearly $6 million to candidates for statewide office. They gave hundreds of thousands more to legislative candidates, often in districts far from the area represented by the committee. And Gov. Matt Blunt and Attorney General Jay Nixon have already raised tens of thousands of dollars from local party committees as they prepare for the 2008 battle for the governor's office.

Much of the money for those donations from local party committees came from the Democratic and Republican state committees. Other donors, however, make large donations to local party committees after giving the legal limit to their favorite candidates. That money quickly moves to candidate treasuries in the name of the local party committees, not in the name of the original donor.

State law bans money laundering in politics: "No contribution shall be made or accepted and no expenditure shall be made or incurred, directly or indirectly, in a fictitious name, in the name of another person, or by or through another person in such a manner as to conceal the identity of the actual source of the contribution or the actual recipient and purpose of the expenditure."

The legal line is crossed when the money is donated from one committee to another committee to hide the source of the original contribution, Reid said. "You cannot give contributions in the name of another person. You cannot give contributions specifically to try to hide or conceal the identity of the actual source of the contribution."

Examples of large donations to local party committees that are quickly sent on to candidates aren't hard to find. The law does not limit donations to political party committees, nor does it prohibit large donations to political action committees.

That means donors can give any amount they please to those entities, who then pass on the money either directly to candidates or to another political committee that can also receive unlimited donations.

By the time the money works through the various layers of committees, it is often hard to determine the original source of the funds.

Committees with ties to Southeast Missouri provide insights into how the system works.

In 2004, Cape Girardeau was the home of both major party candidates for the office of lieutenant governor -- then-state senator Peter Kinder, a Republican, and former secretary of state Bekki Cook, a Democrat.

Kinder's campaign accepted $301,580 in local party committee contributions, almost 20 percent of his campaign funding. Cook's campaign accepted $174,110 in local party contributions, or just over 10 percent of her total.

A large portion of the money contributed to Kinder and Cook by local party committees arrived at the local level from the statewide Republican and Democratic parties. Those local party committees also provided a conduit for contributions from political action committees.

The Communications Workers of America, for example, through its PAC gave $15,000 to the 156th Democratic Legislative Committee based in Marble Hill, Mo., on Oct. 6, 2004. Another $9,000 from the Democratic State Committee -- for a total of $24,000 -- allowed the 156th District committee to give Cook $12,000 on Oct. 8, 2004, and to send $12,000 -- for a total of $24,000 -- to a Washington, D.C., consulting firm on her behalf.

"Was it targeted directly? No," said Sharon Hopkins, treasurer of the 156th District committee. "Did they say, we are going to send so much money for Bekki Cook? That is not what they said. They were very specific to not say that.

"But we knew who it was for when the request came in from the campaign," Hopkins said. "It is a game. It is absolutely a game."

In Kinder's case, a PAC closely associated with the then-senator made four $12,000 donations to local party committees in the Cape Girardeau area and two $6,000 donations to local party committees in Audrain County. All of those committees made donations in exactly the same amounts to Kinder's campaign.

The receipt of the donation from the PAC and the subsequent gift to Kinder's campaign fund were the only transactions reported for all of 2004 by the 27th Senatorial District Republican Committee.

"There is no skullduggery here. The money was donated, and the committee decided to donate it" to Kinder, "and that was what was done," said committee treasurer Tom Cox of Cape Girardeau.

The ethics commission's role in monitoring such transactions runs on two tracks, Reid said. The commission acts on complaints, which often come from political parties or candidates, and it audits campaign reports.

In response to a complaint in July 2000, the commission issued an advisory opinion for the legal use of local political party committees.

"There is no prohibition on candidates raising money for political party committees, nor is there a general prohibition against a candidate requesting contributions from political party committees where the candidate has solicited contributions for the political party committee," the opinion states.

But because of the prohibition against money laundering, the commission wrote, "candidates cannot request contributions be made to political party committees with the express purpose of passing those contributions through the committee to the candidate."

The main thrust of enforcement efforts, Reid said, comes from complaints. "I don't have any independent jurisdiction. I just can't do anything until somebody files a complaint."

Complaints and audits take up a major portion of the commission's time, Reid said. "I can't remember a meeting where we don't take complaints and internal audits to the commission."

Because of the reluctance of local prosecutors to take on criminal actions against violators, cases that can't be settled through correspondence are referred to the attorney general's office. An assistant attorney general prepares a formal statement of charges and the commission hears the evidence, Reid said. "Many times during the hearing process, a settlement is reached."

The use of local party committees will continue, leaders of both parties said, until the practice is banned by the legislature or until specific instances are ruled to be violations of the current law.