Proposed bill aims at more honest disclosure

~ However, it doesn't appear as if the bill eliminating campaign contribution caps will be passed by the House of Representatives.

A bill passed in March by the Missouri Senate would abolish caps on campaign donations and make candidates report their funding sources more frequently, creating what supporters contend would be a more honest system for funding elections.

Under the current system donors are limited to a maximum $1,275 contribution to a candidate for statewide office. Critics contend that cap, as well as donation limits for other offices has pushed money into back channels.

By the time a campaign dollar reached a candidate's treasury in 2004, it may have moved through as many as five bank accounts. A detailed analysis by the Southeast Missourian of hundreds of campaign reports shows Democrats and Republicans alike benefited as millions of dollars moved through multiple layers of political action committees and political party committees.

Some donors contributed large sums at each layer in the process, making their total spending difficult to calculate. And some large donors never appeared on any candidate's list of contributors because their money went through party committees or PACs.

The resulting fog obscuring the origin of any particular dollar stems from the campaign finance changes enacted in 1994. Limits were placed on donations to candidates, but contributors were allowed to make donations of any size to political parties or PACs.

"I want to get us back to a system where the candidates are dominant," said Sen. Charlie Shields, R-St. Joseph. Shields led 27 senators, both Republicans and Democrats, in sponsoring a bill that takes the caps off donations to candidates and severely limits party committees.

"Over a period of time it has come to the point where it is difficult for people to look in from the outside and track and follow where contributions come from and where they are going," Shields said.

Other changes mandated by Shields' bill would require monthly reporting of campaign donations instead of the current system of reporting donations quarterly. For the final 21 days before an election, campaigns would make daily reports of their contributions and spending.

The bill would take effect after this year's elections, Shields said.

Shields' bill, despite overwhelming support in the Senate, hasn't been scheduled for debate in the Missouri House. Lawmakers have two weeks left to finish work on new laws.

The current limits on campaign donations took effect in 1994. The lawmaker with control of Shields' bill, House Elections Committee chairman Bob May, R-Rolla, said he's not sure its time to abandon the caps. The committee began discussing whether to send the bill to the floor for debate last Tuesday, and plans additional debate this Tuesday.

"Transparency of actions and transactions is a big thing, but as far as the caps are concerned, that is a pretty bold step right now and I personally doubt we are going to see that happen," May said.

And May said he's doesn't understand what would be accomplished by ending the manipulations of campaign finance laws that direct contributions through local party committees. The practice of moving money through local party committees, called "legal money laundering" by Senate President pro-tem Michael Gibbons, hasn't generated any major concerns among House members, May said.

"I can understand where the senator is coming from, but wherever we try to constrain things or be more realistic about things, there will always be a way of avoiding them," May said.

Under the 1994 election finance law, every local party committee became the equal of the state party committee in its power to contribute to candidates. That meant local political groups used to handling a few hundred dollars each election year began passing out large checks, up to $12,100 in 2004 for statewide candidates.

The Southeast Missourian has sought to unravel the trail from donors to candidates through a study of campaign documents on file with the Missouri Ethics Commission. Political party leaders claim everything being done is legal, without a central boss directing traffic through the pipelines. But local party treasurers say they often receive suggestions or directions for using the money, followed by anxious calls from party headquarters making sure the money has been sent on.

If a local committee makes an independent decision on how to use money it receives, its actions are legal. When the money chain is used deliberately to mask the true source of a donation or to evade the limits on donations, it is illegal, according to campaign regulators at the Missouri Ethics Commission.

Political leaders in both the Democratic and Republican parties want to change the system and agree that the source of much political money is hidden from view.

Every state has different campaign donation laws. Federal law prohibits corporations from making direct donations to candidates and political parties. Some states do the same. Missouri does not. What Missouri does have -- limits on direct donations to candidates -- pushes money to other avenues.

A few states have experimented with public financing of campaigns, but the idea hasn't caught fire with the public in most of the nation. The Missouri Democratic Party chairman, former governor Roger Wilson, said he supports either public financing or a complete abandonment of donation limits.

"We either have to go to public financing or take the gloves off," Wilson said. "Then anyone could contribute in any amount, but it has to be absolutely transparent disclosure. Those are the conclusions I have reached."

In 2004, the 10 statewide candidates for the Democrats and Republicans in Missouri received nearly $6 million of the $30 million they raised from local party committees. A repetitious rhythm set in as those donations moved. A check arrived from state party headquarters matching the amount the local committee could give to a candidate. Within a few days -- sometimes a few hours -- the local committee sent a candidate a donation matching the previous check.

"I would rather see it aboveboard and let the parties distribute the money" directly to candidates in unlimited amounts, said Rick Hardy, professor of political science at the University of Missouri. Hardy, a Republican, has been a leader in ethics reform movements in Missouri and ran for Congress on a platform of refusing PAC money.

"The money would be flowing from the parties to the candidates rather than this subterfuge, these behind-the-scenes manipulations that give the appearance they are doing something wrong," he said.

John Hancock, a Republican consultant and former state party director, said the system encourages obscurity. "It is the finance law that is driving this system, and it would be an error to say that the people working in the system are doing something wrong," he said. "The people working in the system are complying with the law."

Under Shields' bill, candidates would have to report monthly during campaign years and daily during the final 21 days of a campaign. "Full, complete, open and honest disclosure is the public's best hope to understanding who is funding campaigns," Hancock said. "Then, if money is taking a circuitous route to get to a campaign, then you will know that something is up."

Following the 2004 elections, a conservative research firm, the Center for Ethics and the Free Market, analyzed campaign fund-raising by the statewide political party committees.

The center is led by three leading Missouri Republicans -- Woody Cozad, former state Republican chairman; Rich McClure, chief of staff during John Ashcroft's term as governor; and John Prentis, the last publisher of the St. Louis Globe-Democrat.

"The recommendations we make about campaign finance is that, overwhelmingly, everything should be transparent," Cozad said. "And we don't believe in the caps. That is a restriction on free speech."

The multiple layering of campaign donations occurred in both parties. Trial attorneys were an enormous source of money for Democrats in 2004, aligned with Democrats because that party traditionally opposes efforts to cap jury awards in lawsuits.

The Missouri Association of Trial Attorneys PAC -- MATA-PAC -- raised $1.3 million in 2004. It gave large donations to four spin-off PACs, including one called Safer Families for Missouri. The Safer Families PAC received $422,000 from MATA, raised another $564,000 -- much of it in large donations from lawyers and law firms -- and gave $835,000 to the 90th Legislative District Democratic Committee.

The 90th District committee raised another $300,000 and became one of the state Democratic Party's biggest donors. In addition to the state party, the 90th District committee gave $160,000 to other local committees.

"The system is not supposed to work by us saying, 'We don't want the trial lawyers to give money,'" Cozad said. "We want people to know that is going on. We want it to be transparent."

In the Republican Party, tracing money can also be difficult. The top five donors to the Republican State Committee were either GOP PACs or other party committees. The reports of the committees making the donations show that a large portion of their donations also came from PACs or other party committees. Money goes out in large sums to local party committees, leaving anyone looking at the state party's disclosure reports very little information about the final destination of the cash.

Casinos helped provide a lot of those GOP dollars. The Center for Ethics and the Free Market report notes that casinos were the No. 5 donor category for the Republican State Committee and the No. 2 donor category for both the Senate Majority Fund and the House Republican Campaign Committee. Those two committees are used to maintain the Republican majority in the Missouri Legislature.

Casinos want legislation to eliminate the loss limit on Missouri riverboats. A bill to do away with the loss limit was filed this year in the Missouri House but never received a committee hearing.

The Senate Majority Fund and the House Republican Campaign Committee, in turn, were the No. 2 and No. 3 largest donors to the Republican State Committee.

"What you want to be able to do is see what money given by who goes to which candidate," Shields said. "When you flow through a legislative committee, you lose the ability to do that. At that point it is almost impossible to trace the pedigree on that money."

The best place to raise campaign cash, Hardy believes, is with hometown constituents. He proposes eliminating all political action committees "and all these other fronts and bring about accountability."

Only people who could vote for a candidate should be able to donate to their campaign, Hardy said. "Make each candidate responsible to their constituency rather than money or outside influence."

The regulators at the Missouri Ethics Commission want to increase the amount of information available online and make the data more friendly to users. Many candidates file electronic reports and more should be doing so soon, said Robert Connor, executive director of the commission.

But in the final analysis, he said eliminating the caps on campaign donations may be the only solution to unraveling the money trail.

"I can see benefits to it from seeing the amount of money that has been given to legislative district committees," Connor said. "If I want to give somebody $30,000 and they want to take it, that is their business, and it is up to the voters to determine if somebody wants to buy an election or not."