A Natural Progression


If you really want to track the money in American politics, you have to start by realizing that what you’re pursuing is a moving target.

In fact, one of the oldest arguments made by opponents of campaign finance reform over the years has been is that money, like water, seeks the easiest route. If you try to dam it up in one place – through reform rules outlawing soft money, for instance – it will just change course and gush out somewhere else.

There’s an undeniable logic in that argument, though I don’t agree that it’s a good reason to scrap all reform. Rather, you’ve got to keep pursuing those natural watercourses, bending close to the ground and looking for new spots that might be bubbling up.

Over the years that I’ve been tracking money in politics, the progression has gone something like this: First the PACs emerged as the most favored vehicle for delivering serious money. Then came soft money and so-called 527 committees. And now, the real action is taking place in the world of c4s – committees set up as 501(c)(4) non-profits under the tax laws, careful to keep their distance from the parties and the candidates, but nonetheless working in concert with them for the same political goals.

A story today by Michael Forsythe and Kristin Jensen of Bloomberg News Service provides revealing details into how the battle of the c4’s is shaping up this year. The Democrats have one set of closely-orbiting groups, the Republicans have theirs. What’s particularly interesting – and troubling – about following these committees is that unlike PACs, unlike the old soft money donors, unlike the 527s, their donors are completely undisclosed.

[Full disclosure: The Sunlight Foundation has a c4 of its own – the Sunlight Network. Its funding comes primarily from Washington businessman and lawyer Michael Klein, who also funds the Sunlight Foundation.]

Two main factors motivate the rise in the increasing use of c4s to channel political money. One is that there are no contribution limits. Running political campaigns is so much more difficult when you’ve got to raise the money a thousand dollars at a time. With a c4, as with soft money, a single wealthy donor – like George Soros, to take one example – can give millions. Very efficient indeed.

The other great factor is anonymity. If you give money to a 501(c)(4) it’s just between you, the committee, and the IRS. No public disclosure is necessary. No pesky FEC will be looking over your shoulder, let alone any pesky reporters or troublesome websites like OpenSecrets.org.

As long as money wins elections, people who run campaigns will always search for the next big thing that will provide those two gold-plated features – anonymity and an absence of limits. It’s as natural as water flowing downhill.

And if you’ll allow me to extend that metaphor for just one final paragraph, it’s every bit as erosive. It may start out as a bubbling creek, but it quickly builds, tumbles and crashes its way through the countryside, gathering force as it goes. And before you know it, a new Grand Canyon has been carved out of the political landscape. In Washington, we hear a lot of talk about “loopholes so big you could drive a truck through them.” This one’s so big, you could organize helicopter tours.