Mo. candidates benefit from loophole

Campaign finance limits are bypassed if funding goes to some committees.
Monday, July 5, 2004 | 12:00 a.m. CDT; updated 12:34 p.m. CDT, Tuesday, July 1, 2008

JEFFERSON CITY — Democrats and Republicans alike have found a clever way to get around Missouri’s campaign contribution limits. And as the 2004 campaigns heat up, the practice appears to becoming more popular.

Democratic Gov. Bob Holden has benefited. So has his Republican challenger, Secretary of State Matt Blunt. And Democratic gubernatorial challenger, State Auditor Claire McCaskill, a beneficiary to a lesser extent, is complaining about the practice to the Missouri Ethics Commission.

Here’s how it works:

n State law limits individuals, businesses and political action committees to giving a total of $1,200 per election to a statewide candidate, such as someone running for governor. Smaller limits apply to other races, such as Senate or House contests.

n But state law allows political party committees to give 20 times that amount — $12,000 in cash for a gubernatorial candidate, plus $12,000 in in-kind contributions, such as staff help or printed campaign materials.

n Recognizing the loophole, people can give a maximum amount to a candidate’s campaign, then write additional checks to various political committees, which pass the extra money on to the candidate.

The practice apparently is legal.

In January 2001, the Missouri Ethics Commission cleared Democratic Lt. Gov. Joe Maxwell of wrongdoing after a 2000 primary opponent complained he had accepted thousands of dollars from various Democratic Party committees, which had collected the money from donors who had already given the maximum to Maxwell’s campaign.

Since then, the number of political party committees has grown by nearly two-thirds.

At the end of 2000, there were 176 political party committees registered with the state Ethics Commission. That grew to 221 in 2001, 249 in 2002 and 274 in 2003. Halfway through the current year, there are now 290 political party committees, said Robert F. Connor, executive director of the Ethics Commission.

“Every day we’re getting some in,” Connor said. The reason: “I think it’s the ability to get contributions. It’s money, when you think about it.”

A sampling of campaign finance reports for the period of Jan. 1 through March 31, the latest date for which fund-raising figures are available, demonstrates such sidestepping of contribution limits. The New York law firm of Bernstein Liebhard and Lifshitz gave the maximum $1,200 to Holden’s campaign on March 31. In about a week’s time, six other individuals associated with the firm also gave the maximum $1,200 to Holden.

Plus, Bernstein Liebhard and Lifshitz gave $7,500 to 138th Legislative District Democratic Committee on March 30, which the next day contributed $7,400 to Holden’s campaign. The law firm also gave $7,500 to the 4th Congressional District Democratic Committee, which promptly gave $7,000 to Holden. And the law firm gave $5,000 to the 24th Senatorial Committee, which combined the cash with other sources to give $8,000 to Holden.

Rather than settle for $1,200 contribution limit, the New York law firm found a way to get $27,800 to Holden’s campaign.

The Missouri Republican Party contributed $6,250 of in-kind aid to Blunt’s campaign on March 10. But it managed to get much more than that to Blunt.

The state party gave $12,000 to the 19th Senatorial District Republican Committee on March 25, which over the next four days gave the same amount to Blunt. The state party also gave $12,000 to the 8th Congressional District Republican Political Action Committee on March 24, which passed along $11,500 to Blunt the same day. And the state GOP gave $12,000 to the 9th Congressional District Republican Committee on March 23, which over the next week gave the same amount to Blunt.

The total of those examples alone comes to $41,750 for Blunt’s campaign. No similar political party contributions to McCaskill were found during the three-month period. But Holden’s campaign pointed out that McCaskill received $11,750 from the 52nd Legislative Democratic Committee on Dec. 9, four days after the Kansas City Law Offices of Tim Dollar gave $7,500 to the committee. Dollar, of Blue Springs, had donated $1,175 to McCaskill earlier 2003.

Last week, a McCaskill supporter filed an ethics complaint against Holden’s campaign. It cited a fund-raising letter sent by a Holden supporter noting people could make unlimited donations to the Greene County Democratic Committee and the money would be forwarded to Holden.

Although not endorsing the letter, a Holden campaign spokesman acknowledged the governor has received contributions passed through political party committees.

“It is what the law allows,” said Holden spokesman Caleb Weaver.

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