Donors use loopholes
to support candidates
I
Source: Federal Election Commission
publican State Central Committee, $346,974
went to the Nebraska Democratic Party.
As a small state, Sittig said, Nebraska is
going to see more targeting of soft money dol
lars and independent expenditures in the fu
ture.
He said the money was better spent here,
where there is a good chance of picking up a
seat than in large-population states like New
York or California.
“We’re going to get more attention like that
in the future,” he said.
While none of the soft money came back
directly to the major candidates, tens of thou
sands of dollars went to lesser candidates —
public defenders, state senators and public ser
vice commissioners.
Soft money was a key part in distinguish
ing large individual donors from the rainmak
ers.
An example is Watanabe of Omaha. The
owner of the Oriental Trading Co. gave more
than a quarter of a million dollars in soft money
alone, all to the Democrats.
“He’s a good Democrat,” Bruning said. “He
is one of the few Democrats that can support
the party.
“Of course Terry Watanabe is an important
donor. But as important as they are, our lower
donors... are just as important and, in fact, fund
the state party in nonelection years.”
Big donors write big checks, Bruning said,
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“Those large $250,000 donors are impor
tant,” she said, “but those who keep the lights
on in our building and pay the bills ... are the
smaller donors.”
Those writing big checks often don’t write
them from the same account. Several of the top
donors used soft money and PACs to expand
donations.
PACs, like individuals, also are limited, but
PACs are held to $10,000 per candidate in an
election season by the federal government.
An example is Con Agra in Omaha, which
was the largest soft money donor from Nebraska
and whose PAC was generous to both parties,
especially to the Republicans.
In the 1996 elections, Con Agra donated
more than $35,000 through its PAC—the Con
Agra Good Government Association. But with
soft money, Con Agra increased its donations
by more than $310,000, the vast majority of it
going to the Republicans.
Sittig said if the reservoir wealthy donors
were dumping into were expanded by many
more smaller donations, they wouldn’t have as
much impact.
“I don’t see how we are going to keep the
wealthy from doing what they do,” he said.
The American catch-22
is dangerous business. If anyone had the an
swers to the criticisms of the current system,
they would take on a mystical status.
“If I knew the answer to that I could walk
on water,” Bruning said.
Researchers know the realities — that the
wealthy few give the most. But there is pre
cious little consensus on a way to equalize the
system.
“I’m kind of not surprised at the result (of
the Daily Nebraskan analysis),” Sittig said. “If
that is unacceptable, then we need to find a
I
Aaron Steckelbkrg/DN
better way to fund campaigns.
“It’s really easy to complain about others
giving the where-with-all to campaign.”
Some extreme solutions involve everyone
donating modest amounts to public financing
of federal elections, Sittig said. Other solutions
have proposed increasing the limit of individual
donations.
Makinson said that theory wouldn’t jibe
among working people.
“The idea that someone would complain that
they could only give a thousand dollars is ab
solutely incomprehensible to those on the
street,” he said.
Makinson, like Sittig, said more people
should give, but Makinson said he favored lim
iting donations to very small amounts — like
$5. He said that way, the wealthy could not
make influential donations and more people
would be interested.
Now, Makinson said, one half of 1 percent
of the population gives half of the money used
in politics.
“There is no coincidence that the people at
the top of the pyramid in giving are doing well
for themselves,” he said.
But Makinson said people in the system are
human and some behavior is going to be ap
parent.
“The way the system works, the system can
be corrupt without individual members of Con
gress being corrupt,” he said. “All they have to
be is human.”
Makinson said politicians are like everyone
—they are going to help those who help them.
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hearing, he said.
“They are not going to abandon support
ers.”
But no matter how large the donation, poli
ticians will probably not change opinions on
large issues they campaigned on, he said. That’s
not where the money is.
“Where it counts is the whole galaxy «f is
sues that (politicians) do not talk about but are
hit with in Washington,” Makinson said.
An example is energy deregulation, he said.
Billions of dollars are at stake, and millions in
campaign donations are flowing into Washing
ton.
But for now, donors will give, and politi
cians will take. And when the next federal elec
tions roll around, the same donors will be called
upon again.
“They will be getting letters from the DNC
(Democratic National Committee) and the RNC
(Republican National Committee) until their
dying day,” Makinson said. “There is some
price to pay for making that first contribution
and the pice is that they are not going to let
you alone.”
Bruning said the big—and little—donors
are targeted. The big dollar donors are on a
first-name basis with the fund-raisers, she said.
During the campaign seasons, donor recruit
ing is a “survival tactic,” die said.
But Bruning insists that money does not
necessarily mean the large donor is more in
fluential than the small donor. Small donors
have just as much voice at state conventions
and platform hearings as large donors, she said.
“And they vote,” she said. “There may be
100 people that donate $15 and one person that
donates a thousand.
“And politicians love money, but they need
the votes. It takes money to run campaigns, but
the bottom line is they need the voters.”
FINANCE from page 1
him at a tie for the 135th largest donor in the
country.
■ Anne Batchelder, the owner of the Ameri
can Checkbook Co. in Omaha. Batchelder and
her husband were both generous in individual
donations and were the sixth largest soft money
givers.
■ The Kizer family of Omaha. Family mem
bers, most of whom work for the Central States
Health and Life Insurance company, gave a to
tal of $19,250 to Ben Nelson and Chuck Hagel
in the senate races.
■ Employees of the Willke, Farr and
Gallagher law firm in New York. The large
firm, which has offices all over the country and
donates to many races nationwide, gave Rep.
Jon Christensen’s campaign $16,000 in two
chunks.
How these donors — and many others in
Nebraska—reached these numbers is a lesson
in the nuances of modem campaign finance.
Nothing they did was illegal. They merely
used two loopholes in campaign finance laws
that have become as much a part of campaign
finance as the limits themselves.
Both loopholes—bundling and soft money
— are part of a system that few seem to think
works.
On one hand, there is the group that thinks
that, considering the population of the United
States, people are not giving enough. And then
there are the others who say that the system is
benefitting those who can afford to give.
In Nebraska, wealthy families and compa
nies are the primary users of the system, and
researchers and professors interviewed said they
foresee no changes.
All in the family
Looking at Nebraska donations on paper,
housewives should be the target of political
fundraisers in both parties.
Housewives, homemakers and variants —
one woman called herself a domestic engineer
—were the largest single group of occupations
in die donations list.
Nationally, retirees outpaced homemakers
this year for the first time, said Larry Makinson,
the research director for the non-partisan Cen
ter for Responsive Politics in Washington.
Makinson said, however, the reason for that
was donors knew that groups like Makinson’s
center were analyzing the donations and didn’t
want to look like they were bundling.
Recruiting family members to donate to
political races is the most popular loophole in
politics, he said.
“The campaign finance laws are definitely
pro-family,” Makinson said. “The larger fam
ily you have, the more you can give.”
Individuals can only donate a maximum of
$2,000 to a federal candidate — $1,000 in the
primary and $1,000 in the general election.
Those limits were set by the government in the
1970s.
But for every law, there is a loophole.
Wealthy donors have found that donors can
increase their dollar power by giving in blocks
— a check for themselves, their spouses, their
children, etc. Whole lamilies of parents, broth
ers and sisters, spouses and children have do
nated in races all across the country, he said.
Of the $3.8 million donated by people giv
ing $200 or more, $1.1 million came from hus
bands, wives and families in blocks, a Daily
Nebraskan analysis of federal donation records
found.
“The ‘thousand-dollar housewife* has been
a part of the political scene as long as I have
been around,” said Makinson, who has been
researching campaign finance for more than
20 years.
Homemakers as a group donated $564,764
to Nebraska political candidates. Students
chipped in another $22,000.
But those numbers are almost assuredly low.
Any records that could not be tied together were
thrown out. With split marriages, divorcees
writing checks for their estranged spouses and
couples with different last names, dozens of
bundled donations were overlooked for the sake
of accuracy.
Some examples of bundling families are the
Kizers, who as a group, gave $19,250; the
Vopnfords of Blair who gave $10,900; and the
Werners of Omaha, who gave $8,150.
“Every state has got people like that,”
Makinson said. “That’s a one family political
powerhouse if they can deliver that kind of
money.
“Every politician in the state knows their
66-—
It’s very hard to say no to
someone who has
participated in a major
way to get you elected.”
LarehtMakinson
research director for the Center for Responsive
Politics
name.”
Robert Sittig, a UNL political science pro
fessor, said the value of the $ 1,000-donation
the government allowed more than 20 years ago
has now been chewed up by inflation.
So, for wealthy donors to make an influen
tial donation, they have to bundle several do
nations from several people together, he said.
The result, Sittig said, is a small group of
wealthy donors filling in a vacuum created by
the majority of people not donating to cam
paigns. He said at the most, one in 10 Ameri
cans thinks about giving to campaigns.
“Most of us wash our hands of having to
pay for this,” he said. “In the vacuum, wealthy
people rush in to fill void.
“We’ve got kind of an inpossible situation.”
The situation, Sittig said, is a system of cam
paign funding that most people ignore. And
when campaigns cost millions of dollars, thou
sands of donors must give or the wealthy have
to fill the void by giving through loopholes.
“There’s a basic systemic flaw,” he said.
“There are way too many Americans that think
someone else should pay the price for cam
paigns.”
Another form of bundling is groups of em
ployees giving as individuals at the same time.
In last fall’s second congressional district
race, the Willke, Farr and Gallagher law firm
in New York did it twice: once on April 17,
1995, when they poured $8,500 into Rep. Jon
Christensen’s campaign fund, and again on
Sept. 11,1996, when they gave $7,500.
Makinson said bundled donations don’t always
mean the politician is going to sway to his or
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tions come in handy when they need a favor.
“It’s very hard to say no to someone who
has participated in a major way to get you
elected,” he said.
THcia Bruning, at the Nebraska Democratic
Party, said parties do not seek out bundled do
nations because the donations could potentially
be illegal if (me person is writing all die checks.
Bruning said in cases of housewives donat
ing, it was her opinion that the donors had equal
control over the family money. With students
giving $22,000 as a group, she said she remem
bers students in college who had enough dis
posable income to donate to campaigns.
Bruning specifically denied any wrong-do
ing was going on in Nebraska fundraising.
“It doesn’t happen here and it’s against the
law,” she said. “People think we use all the loop
holes we have, but when it is stated that it is
expressly against the law we don’t mess with
that.
“We don’t mess around with the FEC.”
Soft money, hard currency
Soft money—despite being mired in par
tisan finger-pointing in Washington over
Democratic fhndraising efforts — is a legal
loophole that allows companies to participate
in political donations.
Federal election laws ban direct contribu
tions from corporations to candidates. They
must do it through a political action commit
tee. But federal law does not ban contributions
to parties.
More than $708,000 in soft money left Ne
braska last fall, with the bulk of it going to more
than a half-dozen different Republican federal
accounts.
But the money didn’t stay in Washington
—it came back. Because Nebraska was a battle
ground state for a vacated Senate seat and a
House seat was targeted by a labor union inde
pendent expenditure campaign, the money
came back in spades.
Not counting all the individual politicians
who received soft money from the national
party, the state parties took in slightly less than
$1 million: $637,288 went to the Nebraska Re
The Rain Makers
The following five are some of the top donors across elections and funding mechanisms.
Name Individual Soft Money PAC Total
Donation Donation Donation
S MHWM!
Terrance Watanabe $6,000.00
mmm t n&mm
Mutual of Omaha NA
wipp • mmm ■
* with family members
The major donors in Nebraska Con Agra Inc.
politics also made up the bulk of
the soft money donors. Soft money
donations are made to the
national party.
All Others
Gupta, Mutual of
Omaha, Crete Carrier,
Peter Kiewit Sons
Inc., Batchelder Watanabe