Missouri donors say effort to limit money in politics failed

JEFFERSON CITY, Mo. -- Although Missourians have voted to end the state's policy of unlimited political giving, mega-donors said the effort to limit the role of money in politics won't work and might increase the clout of wealthy donors inadvertently.

At issue is a constitutional amendment that caps donations to candidates at $2,600 and political parties at $25,000 per election.

The measure, which also imposes restrictions on campaign committees in an attempt to increase transparency, passed with 70 percent of the vote Tuesday.

Todd Jones, an attorney who drafted the amendment, said it is a step toward "returning government to the people."

"This is the time that we start cleaning up Jeff City," he said. "The wealthy elites will no longer have a stranglehold on the politicians."

But in practice, Missouri has opened a Pandora's Box for so-called dark money and hasn't addressed concerns with money in politics, according to a spokesman for Rex Sinquefield, one of Missouri's most prominent donors.

"It won't change large- donor fundraising at all," spokesman Travis H. Brown said. "It actually will probably make it more powerful."

That's because while gifts directly to candidates and parties are capped, donors still can give unlimited amounts to other obscure committees that can finance their own ads.

One option is to use not-for-profit social-welfare organizations to raise unlimited amounts from anonymous donors. Those committees then give the money to super PACs, which spend directly on ads on behalf of a candidate or cause.

Supporters of governor- elect Eric Greitens used the method to raise money from mysterious sources and buy their own ads. A not-for-profit called Freedom Frontier gave $4.4 million to LG PAC, which used the money to run ads against one of Greitens' biggest Republican rivals during a contentious primary.

Greitens later received $2 million from the federal political action committee SEALs for Truth, which got the money from a mysterious not-for-profit called American Policy Coalition.

Under the new amendment, SEALs for Truth could give only $2,600 to a candidate. But the committee, as well as LG PAC, could continue to raise money and spend unlimited amounts on advertising as long as the groups don't coordinate with candidates.

Donors could wield more power because they'd be able to coordinate directly how their money is spent, Brown said, rather than passing it to candidates. He said to expect a "massive proliferation of dark money" from not-for-profits and unions.

"It won't change big donors' activities at all, except you just won't be able to track them," Brown said. He called it a "SEALs for Truth environment."

But there are other options for donors who want to funnel money directly to candidates, he said.

Wealthy contributors can create an unlimited number of political action committees that each can give the maximum donations to candidates and parties. So while a supporter can cut a check to a candidate for only $2,600, that donor could set up 100 PACs that in turn funnel $260,000 to that candidate.

Sinquefield used a similar approach when Missouri had contribution limits. In October 2007, he created 100 political-action committees and gave each $2,500; 78 of those PACs then each gave the maximum $1,275 allowed at the time to Democrat Chris Koster, who was running for attorney general. The structure allowed Sinquefield to channel about $100,000 to Koster while staying within the state's campaign contribution limits.

The Missouri Ethics Commission took no action against the maneuver, but Jones said a similar move could be challenged under the new amendment as "trying to conceal the source" of donations.

Joplin businessman and wealthy donor David C. Humphreys said in an email he hasn't considered those options but said more issue- based political giving is likely. Humphreys, president and CEO of TAMKO Building Products, also said funding for initiative petitions, which still is unlimited, could increase.

Jones said it's up to the Ethics Commission to enforce the new rules, and not doing so would violate the Missouri Constitution.

"This isn't something that you play around with," Jones said. "If there is an issue and for whatever reason it's not taken up, then perhaps there's a lawsuit in the making."