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Texas politico rapidly rises to No. 1 overall donor, now No. 1 bundler

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What does the single largest donor in federal politics do when the maximum allowed by law just isn't enough? He collects contributions from others, becoming the single biggest bundler. What won't surprise you is that the person in question is a lobbyist. But what might surprise you is that he's based in Texas, and chances are good you've never heard of him.

Democratic supporter Ben Barnes, who is from faraway Austin, Texas, has quietly and rather suddenly become the premier political financier in America. He appeared on the Center for Responsive Politics' list of top 100 donors in 2006, ranking 87th, and shot up to 18th place the next cycle. Now, just two cycles after making the list, he is number one.

In addition to his individual contributions,.according to the latest bundling disclosures with the Federal Election Commission, he's raised more money than big Washington names such as Tony Podesta: a total of $630,450 for the Democratic Congressional Campaign Committee in the first half of last year alone. That means he singlehandedly collected more than twice as much for the DCCC as all of the bundlers for its Republican counterpart, the NRCC, combined.

With his wife, Barnes has personally donated more money at the federal level than any other person or couple this cycle, at $233,000. Federal election law limits the amount any individual can donate--$115,500 per person for the 2010 cycle--so he and his wife have maxed out early. Because the aggregate cap was lower in previous cycles, no one has donated as much money in one election cycle as Barnes has in just nine months--at least since the 2002 campaign finance overhaul.

In fact, his emergence as a poster boy for bundling is a direct result of that legislation, the crux of which was a cap on formerly unlimited donations from corporations, unions and wealthy individuals to party committees. On October 11, 2002, just days before McCain-Feingold went into effect, Barnes wrote a $100,000 check to the Democratic Senatorial Campaign Committee, his last opportunity to give directly at that magnitude. Now, he and other heavy hitters must turn to other methods to move as much money as possible to their parties of choice--one of several unanticipated, indirect effects of the act that have emerged in recent years.

The immediate fallout was a surge in spending by "527" groups, which crested after ideological groups--Swift Boat Veterans for Truth on the right and MoveOn.org on the left--exerted considerable influence in the next election cycle and were later fined by the Federal Election Commission. By the next election cycle, another side effect evident was the emergence of a massive fundraising consultancy industry, a result of the need for candidates who could no longer count on a steady stream of party funds to more aggressively target a wide range of individual contributors. Questions on political-related spending by corporations remain open as the Supreme Court considers Citizens United v. Federal Election Commission, and in the meantime, 2010 may be the Year of the Bundler, with Barnes Man of the Year.

Of the five DCCC bundlers listed in its October 20 report, Barnes is the only one based outside the Washington area, and his haul is more than ten times the $53,000 raised by the next highest bundler for the committee, Steve Elmendorf. (Some, like third-place Frederick Graefe, have lobbying firms literally steps from the Capitol.)

Who is Ben Barnes?

Barnes is far from a stranger among political circles, but he lacks the popular name recognition afforded to others with his political influence.

The 71-year old's political rise came early; at age 26 he became the youngest-ever speaker of Texas' House of Representatives, and later lieutenant governor and confidant of President Lyndon Johnson. His fall came hard, on the periphery of a bribery scandal for which he blames Richard Nixon. After the political careers of Barnes and governor John Connally stalled, the men started a real estate venture, but when the Texas building boom of the 1980s collapsed, the business followed and both men filed for bankruptcy. 

From 1992 to 1997, Barnes lobbied for GTECH, a company that manages lotteries for many states, including Texas, and personally received four percent of the firm's earnings from managing the Lone Star state's lottery, amounting to millions per year. After a GTECH employee was convicted of receiving kickbacks and the state lottery director launched an investigation into the company's political contributions, Barnes parted ways with an undisclosed buyout.

The state lottery director was then fired, and GTECH's contract unexpectedly extended.

Barnes emerged on the national stage in the heat of the 2004 presidential campaign, after the war record of Democratic nominee John Kerry came under criticism from Republicans, by claiming that he had helped George W. Bush avoid combat by getting into the National Guard. Barnes served as vice chairman of Kerry's campaign and bundled more than $100,000 for it.

Now, Barnes' lobby shop, the Ben Barnes Group, has offices in Washington, Austin and Chicago. At the federal level, it employs five lobbyists and has taken in $2.8 million in the first three quarters of 2009.

A consummate networker, Barnes has interacted with some colorful characters outside of the political world. His firm was paid half a million dollars by R. Allen Stanford to lobby the government to allow Cuba to send a cricket team to a tournament he was hosting; Stanford was later indicted for allegedly running a fraudulent, multibillion dollar investment scheme. He's also represented Ruth Parasol, a former adult entertainment entrepreneur who became one of the richest Americans earlier this decade as founder of PartyPoker.com, then lost much of her wealth in 2006 after anti-gambling legislation passed by Congress forced the company to withdraw from the US.

Now, Sunlight has found, the true-blue Democrat's lobbying shop is in an unlikely office-sharing arrangement with Washington defense attorney James E. Sharp, who famously was retained by Republican President George W. Bush in the wake of the exposure of undercover CIA agent Valerie Plame, and who has represented a Watergate burglar, Jeb Stuart Magruder; Richard Secord, who was convicted of involvement in the Reagan-era Iran-Contra scandal; and Ken Lay, the disgraced Enron CEO. On the other side of the aisle, he represented Daniel B. Brewster, a former Democratic senator accused of bribery. The unusual pair, who once consulted with Stanford together, share a secretary and have coordinated financial matters in the past, each purchasing rights to a mine in Nevada in October 2007.

A case study in bundling

In the past, bundlers who delivered more money to politicians than any individual could himself give were immune from disclosure, and the public had no clue whom politicians might owe favors to unless the campaign or committee chose to release the names.

Beginning last year, Federal Election Commission forms reveal the amounts collected by bundlers affiliated with lobbying firms or political action committees, but the specific individual donations aren't connected to the bundler on paper anywhere.

So it's still a murky process, and one that has seldom been dissected.

The maximum a person can donate to a single party committee is $30,400, meaning despite a total of well over half a million dollars bundled for the DCCC, Barnes could have successfully reached out to as few as 21 individualsor even ten couples and a bachelor.

Many of Barnes' personal contributions align with those made by employees and PACs of companies he represents. To what extent did Barnes coordinate his donations with those of his lobbying firm's clients?

His individual contributions are spread widely among state committees, and his national party bundling is directed, of course, to the House side. When it comes to candidates, however, he focuses with a marked singularity on those in the upper chamber, from powerful Senate chairmen to challengers in competitive districts. Since 2003, the Barneses have written 118 checks totalling $205,000 to Senate candidates' campaigns, compared with 11 checks totalling $20,000 to their House counterparts.

Individuals affiliated with Barnes' clients, largely big-name CEOs and their spouses, gave $213,000 to the DCCC so far this cycle--on track to easily surpass last year's total of $310,000--making up, at most, one-third of his bundled contributions.

Wayne and Dana Reaud of the plaintiff-oriented law firm Reaud, Morgan & Quinn, for example, gave $60,000 to the DCCCpart of some $320,000 they've given to Democrats since 2007.

While Barnes is clearly a true-blue Democrat, many of the wealthy and powerful who readily cough up tens of thousands of dollars to bundlers who ask do so more indiscriminately, or with motives more pragmatic than partisan.

The Huntsman Corp.'s Jon and Karen Huntsman, for example, each gave maximum contributions to the DSCCbut on the same day, they donated equal amounts to its Republican counterpart. (The couple's son, Jon Jr., served as Republican governor of Utah and bundled contributions for Sen. John McCain's presidential bid; he's now ambassador to China.)

James Hudgins, another DSCC donor and vice president of oil giant Weatherford International, another Barnes client, has given nearly $100,000 in recent years, largely to Republicans.

As for Barnes and other lobbyist-bundlers, the ever-adapting and seemingly unstoppable flow from those seeking to influence elections and lawmakers seems to indicate that despite the Bipartisan Campaign Finance Reform Act, big money will, like water in a leaky bucket, find a way to get to them.