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12 December 2011

Beware of One Horrible Campaign Finance Rule Change

By Diana Hsieh

Yesterday, in reviewing the updated version of the proposed campaign finance rule changes, I noticed one horrible rule change concerning the reporting requirements that absolutely must be actively opposed at the hearing on Thursday. (See the PDF, pages 18-19.)

So... if you've not yet submitted written testimony, please make a note that you adamantly oppose the increased reporting requirements in Rules 10.1 and 10.2 in your testimony. If you've already submitted testimony -- thank you, thank you! -- but you might want to send an addendum saying that you oppose the changes in Rules 10.1 and 10.2. My apologies for not noticing this sooner, but 45 pages of legalese is not easy to digest.

To explain what Rules 10.1 and 10.2 are and why they're so bad, I need to explain the current rules. For issue committees, every contribution must be reported, but only contributions of $20 or more must be itemized, i.e. reported with the contributor's name and address. Any contribution over $100 must also include their occupation and employer. The rules don't say any more than that, and hence, a person can give you multiple donations of less than $20, and those donations are never itemized. The same applies to expenditures.

Rule 10.1 changes that: if the total contribution from a given source for a given reporting period is greater than $20, then it must be itemized on the report, even if the individual contributions by that source were always less than $20. (The same does not apply to the $100 threshold for occupation and employer, however.) Rule 10.2 does the same for expenditures.

Here's the language for contributions:

10.1.1 All contributions received of $20 or more during a reporting period shall be listed individually on the contribution and expenditure report, including names and addresses of the contributors. If a contributor gives $20 or more in the aggregate during the reporting period, the contributor must be listed individually on the report, regardless of the amount of each contribution.
Also, any contribution from an LLC must be itemized, regardless of size.

Now, I understand the goal of clarifying these rules. That's part of Scott Gessler's overall project, and I support that. I understand that this allowance of many donations under $20 from the same source without itemization seems like a "loophole" that should be closed. However, to close a "loophole" on rights-violating law means violating more rights, and that's what's going to happen here, if this rule is implemented.

Right now, an issue committee (like me, remember!) need only collect personal data about a contributor if their contribution is $20 or above. That's a ridiculously low threshold, but at least it's a bright line for data collection. With the new rule, however, I'd have to collect that personal data from everyone, even from someone who just hands me a $1 bill. After all, that person might give me 20 of those $1 bills over the course of a the reporting period, and I'd better make sure that I'm aggregating those properly in my records, so that I can report them if necessary. Plus, I'd have to inquire with every contribution to make sure that the contributor isn't an LLC, and if so, then I'd have to flag that in my records to report it, regardless of its size.

The burden imposed by this new rule on issue committees like me is huge. Moreover, it's an invasion of the privacy of contributors, who will now have to give their name and address with every contribution, and that information would likely become part of the public record with any lawsuit. Even small anonymous donations, in other words, would be impossible by this new rule.

Moreover, it doesn't require much imagination to see how this rule could be abused by slimy political opponents. Someone could make a few small contributions over the course of a reporting period, some of them with cash or otherwise anonymously. And then, when their name and address wasn't listed on the report, they could sue. Remember, "personhood" advocate Kristi Burton was dragged into court in 2008 because her group had the audacity to sell t-shirts at fairs for $25 without collecting the names and addresses or purchasers. The leftist who did it explicitly claimed that his goal was to silence them. Nothing is too slimy for these people.

So... please please please speak out against these increased reporting requirements in the proposed rule changes.

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