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Pelosi's PAC Stirs Questions
Roll Call ^ | 10/24/02 | Ethan Wallison

Posted on 10/24/2002 9:34:47 AM PDT by NormsRevenge

On Drudge as Creative Nancy: Legality Of Pelosi's Double PAC Fundraising Questioned...


October 24, 2002

Pelosi's PAC Stirs Questions

By Ethan Wallison


Campaign finance experts and watchdogs are questioning the legality of twin leadership PACs that have enabled Minority Whip Nancy Pelosi (D-Calif.) to double up on hard-dollar contributions she has given and received this election cycle.

The experts suggest that the use of the two committees, PAC to the Future and Team Majority, amounts to a probable violation of laws intended to prevent lawmakers from multiplying their leadership political action committees in order to defy contribution limits. The treasurer for the two committees, former California Lt. Gov. Leo McCarthy (D), acknowledges that the PACs are identical in all but name.

"They've got a real problem here," said Trevor Potter, a former commissioner at the Federal Election Commission, citing "affiliation rules" that are intended to ensure that PACs observe the $5,000 limits on gifts.

"It sounds like a circumvention scheme to double the contribution limits. The law doesn't allow that," said Potter, who based his assessment on a verbal description of the PACs. "They're over the limits for everyone they've given money to. They're probably going to have to ask for that money back."

The so-called affiliation rules deal with PACs that are not connected to political party committees. By law, if a PAC is judged to be "affiliated" with another committee, they would be required to share a joint contribution limit of $5,000.

For instance, the PACs might raise $2,500 each from one contributor or give $2,500 apiece to a candidate.

Pelosi's second PAC, Team Majority, came on line Oct. 16, but has been collecting money and making contributions since April. As of Sept. 30, the committee had made $1,000 contributions to five key House Democratic challengers: Martha Fuller Clark (N.H.), Lincoln Davis (Tenn.), Dutch Ruppersberger (Md.), Joe Turnham (Ala.) and Dan Wofford (Pa.), as well as one Senate challenger, Chellie Pingree (Maine).

"The main reason for the creation of the second PAC, frankly, was to give twice as much hard dollars" to candidates, McCarthy said in an interview this week.

McCarthy acknowledged that he did not seek legal advice before starting Team Majority. Rather, he said he checked with the FEC and said he was assured there was "no impediment of any kind" to creating a second PAC that would mimic the first.

The FEC, however, adamantly maintains that McCarthy could not have been given a green light from the commission without making a formal inquiry, in writing.

"No one [at the FEC] is empowered to provide anyone with an advisory opinion over the phone," said FEC spokesman Ian Stirton. "People here are specifically advised they are not to do that."

McCarthy was equally adamant that he had received an unambiguous go-ahead from the FEC. "If it's a problem, we'll act on it," he said, insisting that the Pelosi operation wants to be "totally in compliance" with the campaign finance laws.

But he added, "At this juncture, I'm counting on the FEC staff with whom I spoke and who gave me guidance on this."

McCarthy was unable to recall the FEC official with whom he spoke about opening Team Majority. But McCarthy said he informed the official that he was already the treasurer of PAC to the Future.

"That FEC staffer was the one who told me that many PACs have the same treasurer or share the same address," McCarthy said.

Pelosi did not respond to a request for comment made with her press secretary.

A top Democratic campaign finance expert, who spoke on condition of anonymity, suggested the rules on affiliation are far murkier than they might look at first blush.

The expert noted, for instance, that donor networks often give to a range of different PACs, knowing that the contributions will wind up in the hands of the same candidates. Nevertheless, the various committees are not considered to be "affiliated" in the eyes of the FEC.

"To me, [giving to a second Pelosi PAC] is not that much different than giving money to Nancy Pelosi's campaign committee, knowing full well she doesn't have a real race, or giving money to the [Democratic Congressional Campaign Committee], knowing they'll give it to the same candidates," the Democratic expert said.

According to the FEC's guidelines, affiliation between two PACs "results when they are established, financed, maintained or controlled by the same persons or organization."

The rules also lay out various circumstances where one committee might be judged to be affiliated with another. Among these criteria is that one committee has an "active or significant role" in creating the other, or that the two PACs have "common or overlapping officers or employees."

Most campaign finance experts point out that without the affiliation rules, political committees could theoretically clone themselves endlessly in an effort to rake in additional hard dollars from donors, or to make greater contributions to candidates. Even the Democratic expert was unable to suggest a mechanism that would prevent such a proliferation in the absence of strong enforcement of the affiliation rules.

Potter said lawmakers recognized this potential when they wrote the original campaign finance law and "specifically forbade it" in 1974. "The affiliation rules are pretty clear," he said. "And those laws have been around for a long time."

Potter said he has never seen an instance where a lawmaker has started a second leadership PAC in order to raise and spend hard dollars.

It is nevertheless common for Members to maintain soft money committees alongside the PACs they use to collect regulated hard dollars. However, a ban on soft money will go into effect the day after the Nov. 5 elections.

Paul Sanford of the Center for Responsive Politics said PACs "would multiply like rabbits" if the affiliation rules weren't enforced. (McCarthy indicated that Pelosi's organization would limit itself to just the two PACs.)

Sanford, a former FEC official, said the commission has not been particularly aggressive in enforcing the affiliation rules, in part because it lacks the resources that would be needed to focus on the issue. But he also suggested the commission might find it hard to overlook a leadership PAC that is essentially a duplicate of another committee.

He cited the common treasurer of the two PACs. "That's a biggie," Sanford said. "I would hope that [dynamic] would be enough to get the FEC's attention."

In fact, Team Majority has already been on the commission's radar. After originally naming it "Team Pelosi," organizers of the committee were admonished by the FEC, which reminded them that PACs could not bear the name of a federal candidate.

Relying in large measure on San Francisco's substantial liberal donor base, Pelosi has long been among the Democratic Party's top fundraisers, even as she has declined to raise soft money and, to some extent, PAC dollars.

Pelosi, who is expected to run for party leader if and when Minority Leader Richard Gephardt (Mo.) vacates the post, has also long been a leading advocate among Democrats for campaign finance reform.

Pelosi's efforts to restrict avenues of fundraising have provided the sharpest point of contrast between the California lawmaker and her likely opponent in a contest for leader, Caucus Chairman Martin Frost (Texas), whose enthusiasm for reform has been lukewarm at best.

Of the contributions Team Majority reported to the FEC in the last quarter, five of them - for $5,000 each - came from donors who had already contributed the maximum to PAC to the Future. Those donors included close Pelosi allies William Hambrecht and his wife, Sally, as well as George Zimmer, the CEO of The Men's Wearhouse.


TOPICS: Crime/Corruption; Extended News; Government; Politics/Elections; US: California
KEYWORDS: pac; pelosi; questions; trouble

1 posted on 10/24/2002 9:34:49 AM PDT by NormsRevenge
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"Team Pelosi"

I'd Love to see Nancy get Black Flagged! ;-)
2 posted on 10/24/2002 9:36:07 AM PDT by NormsRevenge
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To: NormsRevenge
Jail time would be nice.
3 posted on 10/24/2002 10:48:01 AM PDT by CPT Clay
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To: NormsRevenge
"They're over the limits for everyone they've given money to. They're probably going to have to ask for that money back."

Yes, but after the election, when the damage will already have been done. This is SOP for the criminal Democrats during the Clinton era.

4 posted on 10/24/2002 11:18:27 AM PDT by Major Matt Mason
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To: Major Matt Mason
Bump! I hope the FEC goes after this hypocritical witch!
5 posted on 10/24/2002 12:55:11 PM PDT by Wait4Truth
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To: NormsRevenge
"We're Democrats! Laws are for other people!"
6 posted on 10/24/2002 1:11:33 PM PDT by Chairman Fred
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To: NormsRevenge
Do these people ever do ANYTHING on the level??

This is becomming tiresome! Everytime you turn around, one of them is trying to circumvent some law somewhere.
7 posted on 10/24/2002 10:21:17 PM PDT by CyberAnt
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To: NormsRevenge
BTTT!!!
8 posted on 11/08/2002 3:23:36 PM PST by evolved_rage
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To: evolved_rage
Thanks!! I was looking for this little bugger ;-)

TuPAC "2PAC" Pelosi
9 posted on 11/08/2002 7:11:23 PM PST by NormsRevenge
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To: NormsRevenge
BTTT! Lets bump this bad hag. You know it would be international headlines if it was a Pubbie.
10 posted on 11/08/2002 10:22:40 PM PST by evolved_rage
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To: evolved_rage
bump
11 posted on 11/08/2002 10:25:26 PM PST by timestax
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To: NormsRevenge
BTW, Did you add that to the Hannity search for Pelosi Nickname thread

http://www.freerepublic.com/focus/news/785370/posts
12 posted on 11/08/2002 10:29:47 PM PST by evolved_rage
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To: Major Matt Mason
Nancy started her career as a fundraiser. She has built her base in the House by raising $$ and distributing it to candidates who then owe her votes. The best thing that could happen to the Bush White HOuse is to have some hack like Nancy Pelosi in charge of the Demos. She is not too smart; just $$ hungry in the Clinton tradition. Bush and the GOP have an agenda and skills and she will just marginalize her party even more.

I would not be surprised if the brilliant Karl Rove approached Rep. Frost and cut a deal for him to withdraw. They are both Texans with hat and cattle.

What sank the Demos is the smug fat cat complacency that enclosed them with Clinton. There was no need for a philosophy of government or an agenda--as long as they heard Ka-ching ka-ching.

That attitude doesn't cut it with a public who saw the angel in the whirlwind with GWB and Guiliani after 9/11.
13 posted on 11/08/2002 10:40:00 PM PST by Pinetop
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To: NormsRevenge
You know, I was wondering "why" her name seemed to come up so quickly for the minority position...

Seems she has been buying her way, like Hillary has been buying her support in the Senate by "giving" HILLARY campaign contributions to OTHER CANDIDATES.....

Who then owe Hillary their loyalty, and fiefdom.

Of coursem you've got to wonder about those who donated their money to support Hillary's campaign, not somebody's else's campaign.

14 posted on 11/08/2002 10:48:01 PM PST by Robert A. Cook, PE
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To: Robert A. Cook, PE
Didn't Hillary have a "fund raiser" at her house for Nancy?
15 posted on 11/08/2002 10:52:00 PM PST by Howlin
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To: NormsRevenge
BTTT
16 posted on 11/15/2002 6:29:42 PM PST by evolved_rage
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To: NormsRevenge
"2PAC" Pelosi

I love it. Let's go with it.

17 posted on 11/15/2002 6:34:22 PM PST by jackbill
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To: NormsRevenge
I thought we just had campaign finance reform! This isn't supposed to be happening. Thanks Sen. McCain, you sure cleaned up the system didn't you.
18 posted on 11/15/2002 6:35:37 PM PST by blastdad51
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To: NormsRevenge

19 posted on 11/15/2002 6:35:59 PM PST by ChadGore
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To: NormsRevenge
Update and linking threads re: "2PAC" Pelosi

Pelosi Facing Federal Probe of PAC Fundraising

Pelosi Gets a Makeover, and a Face Lift!
20 posted on 11/16/2002 9:00:23 AM PST by NormsRevenge
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To: NormsRevenge
Pelosi is the perfect fresh new face to lead the Democrats into the majority. With her unabashed liberalism--tempered only by her conservative Catholic nature--she stands ready to take back the House in 2004. Years from now, 2004 will be known as "Payback Tuesday" </sarcasm>
21 posted on 11/16/2002 9:02:26 AM PST by xm177e2
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