My colleague Lindsay Young reports on what appears to be a unique fundraising strategy employed by Rep. Maxine Waters, D-Calif. Rather than raise the bulk of her campaign funds from political action committees and individual donors, Waters sells space on mailers to candidates and political causes she’s endorsed*, sometimes for as much as $45,000.
The endorsements show up on “slate mailers,” essentially campaign literature sent out by Waters to her constituents listing approved candidates and appropriate votes on ballot initiatives. A Federal Election Commission spokesman told us that selling endorsements is “exempt from the definition of ‘contribution’ and ‘expenditure’ under the Federal Election Campaign Act.” In other words, the bedrock principles of campaign rules that apply to candidates–limitations on the amount of donations and the kinds of contributors–don’t apply.
So Dave Jones, who’s running for insurance commissioner in California, paid Waters $25,000 for her endorsement. Under California election law, he can raise money directly from labor unions and businesses, as well as individuals. So the labor union AFSCME, for example, gave Jones $12,900. Roxborough, Pomerance, Nye and Adreani LLP, a law firm “dedicated solely to providing businesses with a broad range of legal services in all facets of civil litigation with a primary focus on business, insurance, employment, and wage and hour litigation,” donated $6,500. As did Kershaw, Cutter & Ratinoff LLP, a law firm specializing in personal injury suits. Those three donations more than cover Jones’ purchase of Waters endorsement, but all three would be impermissible at the federal level–neither law firms nor labor unions can donate directly to federal candidates. This is not to say that those three donations, out of the thousands that Jones received, went directly to Waters, only that all money is fungible, and Waters benefits by selling an endorsement to a committee that takes contributions that her own campaign can’t take directly.
What would stop a politician from selling an endorsement for $1 million?
*–Updated to fix a misleading wording. The process that Waters’ campaign uses in putting together slate mailers is described here (scroll down).