Individuals making small donations – the kind of donors candidates like to talk about at campaign events – changed the political landscape in 2020.
Small donors who gave a candidate $ 200 or less accounted for a whopping $ 1.8 billion in federal campaign contributions, according to a joint analysis by the Center for Responsive Politics and the National Institute of Money in the weeks leading up to last fall’s elections Politics.
That is more than three times the amount they donated in the 2016 cycle and accounted for 27% of total revenue from all sources. This does not include the flood of individual donations to parties and political action committees.
But how many of these contributors did due diligence before hitting the donate button to ensure that their hard-earned money was actually being used on legitimate campaign expenses?
After all, there are innumerable stories of the misuse of campaign funds by politicians and practically as old as politics itself.
Former MP Duncan Hunter, R-Calif., Is a prime example. The Marine Corps veteran was a great fundraiser, but a large portion of the money he raised did not go towards furthering the conservative causes he stood up for.
Instead, they approached everything from lavish vacations to shopping. And it helped Hunter pay for several extramarital affairs.
In 2019, Hunter and his estranged wife Margaret pleaded guilty to conspiring to steal more than $ 150,000 in campaign funds in what prosecutors described as “a deliberate, year-long violation of the law.”
Rep. Duncan Hunter is leaving San Diego federal court after pleading guilty to campaigning media abuse on December 3, 2019.
Mike Blake | Reuters
“In this case, it would be so easy to say that the victims were the campaigners who gave him money in the expectation that it would only be used for the campaign, but that’s only part of the story,” he said former US Assistant Attorney Phil Halpern CNBC’s “American Greed”. “The real victims include every single person he represents in San Diego and Riverside Counties.”
Last December, just weeks before Hunter was due to be sentenced to an 11-month prison sentence, then-President Donald Trump pardoned the ex-congressman and his wife. This allows Hunter to get on with his life, receive a Congressional pension, and possibly even run for office again. But there is no mechanism for donors who feel cheated to get some of their money back.
Robert Maguire, research director for the Citizens for Responsibility and Ethics watchdog group in Washington, said that while it is important for people to participate in the political process and support the candidate or party of their choice, the Hunter case is a cautionary story.
“Some of these campaigns and committees have gotten really good at making emotional appeals that match the donors’ pre-existing political beliefs,” Maguire told American Greed. “Sometimes that can short out the part of your brain that says, ‘Wait, I should do a little research before I give this money.'”
Federal campaign funding laws require candidates and campaign committees to provide detailed information about the money they raise and spend. All information is published online on the website of the Federal Electoral Commission.
“FEC data is generally pretty good,” said Maguire. “It can be intimidating to get involved in at first, but there is plenty of useful information for donors who want to hold the committees that make them accountable.”
When you click the Campaign Financials link, you can find not only who is contributing to your candidate, but also where the campaign is spending the money.
The raw FEC data can be cumbersome to process. So, you can also check out OpenSecrets.org, which is run by the Center for Responsive Politics. The site synthesizes the data and adds bipartisan context.
“Look for potentially self-serving expenses, high restaurant payments, or travel expenses that don’t make sense,” said Maguire.
Such payments are not necessarily illegal as long as they are reported to the FEC. For example, a candidate can donate campaign funds to charity as long as he or she does not benefit personally. The funds can be used to pay for gifts if the recipient is not a member of the candidate’s immediate family. Under certain conditions, the candidate can even collect a salary from his election campaign committee.
But just because the payments might technically be legal doesn’t mean you shouldn’t question them.
“Ask questions about it,” said Maguire. “You can also tag them for your local reporter in the candidate’s district and just say, ‘Hey, I don’t know much about this. This looks strange.’ And that can help you get to the bottom of it. “
Play the system
The Hunters extended the loopholes in campaign finance law beyond their borders, and even campaigned with credit cards that allowed them to tap campaign funds at will, with virtually no questions asked.
In December 2010 alone, a month after Hunter was easily re-elected for a second term, FEC records show nearly $ 2,500 of “travel, meals and lodging” billed to the campaign’s credit card.
“Almost immediately after receiving this campaign credit card, it was a license to steal,” said Halpern.
In other cases, high payments to consulting firms are a big red flag. Virtually all candidates use consultants, so the spending can be entirely legitimate. However, Maguire said consultant payments can also be a way to launder contributions for improper use by a candidate or committee. He said it was another loophole.
“There is no need to report subcontractors,” he said. “And so there could be these big, flat-rate payments to consulting firms or even things that look like letterbox companies or something that could be a hodgepodge for a large number of expenses.”
If you frequently see payments to a consultant or other outside entity in the FEC data, also try researching that company or asking the campaign about it, Maguire said.
“Is this just a way for them to raise a lot of money from people who are interested in a certain subject and then basically put it back in their pockets?”
Similar rules apply if you are considering making a donation to a political party or political action committee. Maguire said a committee’s website alone could provide some useful pointers.
“Does the site list real people? Is there contact information? Does this look like a company that actually employs people who come to work every day?”
If the website lists a physical address, google it to make sure it isn’t just mail.
“If it shows up as a UPS business, it’s kind of a red flag,” said Maguire.
Be the watchdog
The FEC, an independent agency that was at the heart of post-Watergate campaign finance reforms in the 1970s, never managed to live up to expectations.
“It’s an agency that just isn’t working right now,” said Maguire.
In recent years she has been hindered by lack of money. The agency, in its most recent request for a budget increase of 7% in FY 2022, notes that its Congress-allocated operating budget has been essentially unchanged since 2016.
More importantly, the Commission has occasionally suffered from a shortage of members. For much of the 2020 campaign season, the commission was unable to even meet due to the quorum due to resignations and a lack of presidential appointments.
Even when at full strength, the six-member commission – no more than three members can be from the same party – often falters and is unable to agree on enforcement measures.
“Some of the largest and most momentous cases are hampered by either malfunction or an inability to get commissioners to agree on facts,” said Maguire.
In many ways, it is up to you, the donor, to hold your candidate accountable.
“If you are thinking of donating to a campaign or political committee, you should do some homework first,” said Maguire.
See how a congressman and his wife used campaign money to fund their lavish lifestyle – and how they got away with it. Catch a BRAND NEW episode of “American Greed” only on CNBC on Monday, June 14th at 10pm ET / PT.