By Kevin Bogardus, The Hill, May 22, 2009
22 May 2009 // A pharmaceutical company that collected campaign contributions for Rep. Henry Waxman is the only bundler disclosed under a new ethics rule that took effect earlier this year.
The political action committee for Gilead Sciences, Inc. has collected $17,500 in campaign contributions for LA PAC, a leadership political action committee affiliated with Waxman (D-Calif.), the chairman of the House Energy and Commerce Committee.
Waxman’s panel is an important crossroads for healthcare reform legislation, and the California lawmaker recently visited the White House to discuss the issue with President Obama and other lawmakers.
The names of lobbyists and companies that collect contributions for lawmakers must be disclosed under an ethics law approved by Congress in 2007 that was championed by then-Sen. Barack Obama (D-Ill.). Ethics groups charge there would be more disclosures if the Federal Election Commission (FEC) had not watered down the measure during its rulemaking process.
“The FEC eviscerated the legislation and the statute. The loopholes they created ate the law,” said Meredith McGehee, policy director for the Campaign Legal Center. “It is hard enough to get good-faith compliance when you have a well-constructed law in campaign finance.”
Wednesday was the deadline for political committees to fill out monthly reports for April, and the first for which the lobbyist bundler rule took effect. The disclosure of Gilead as a bundler for Waxman is the first under the new law.
Julia Queen, an FEC spokeswoman, confirmed that the report by Waxman’s leadership PAC disclosing Gilead as a bundler is the only one the agency has received so far.
As of Wednesday evening, 1,001 committees had filed reports disclosing campaign contributions and expenditures for the month of April, Queen said. The six committees under the two main national parties that help fund campaigns for congressional candidates and cover costs for the national parties’ operations reported no bundlers.
Under the new rule, political committees or candidates have to report the names of lobbyists who bundled contributions of $16,000 or more for them.
They also must report any political action committees affiliated with firms registered to lobby that bundled contributions for them.
McGehee said two significant changes made during the FEC’s rulemaking process allows candidates and lobbyists to avoid disclosing bundlers.
First, the rule allows the sum raised from a fundraising event to be split evenly among the co-hosts, instead of attributing the sum to each. By adding several people as co-hosts to an event, a lobbyist could avoid disclosure as a bundler if he or she did not reach the $16,000 threshold.
Obama and Sen. Russ Feingold (D-Wis.) had warned about this as a possible problem in August 2007 remarks.
“In a situation where a fundraising event is co-hosted by a number of different lobbyists, I am concerned that some might want to avoid reporting bundled contributions by dividing up the total receipts of a fundraising event among many sponsors or co-hosts of the event. Certainly, that was not our intention,” Obama said.
Secondly, the FEC said that for bundlers to be disclosed, they must receive recognition from the campaign. This means fundraisers receiving autographed photos or books from the candidate, or some other tangible benefit, would have to be disclosed. Big fundraisers, designated as “Rangers” for President George W. Bush, or “Hillraisers” for former Sen. Hillary Rodham Clinton (D-N.Y.), would also have to be disclosed.
McGehee said the FEC made the rule too narrow, and too easy for campaigns to avoid disclosing by not giving gifts or designating special status to large fundraisers.
“You have to receive a tangible benefit. If the campaign simply avoids doing that, then it is not considered bundling,” McGehee said. “They purposefully misconstrued the intent of the law and blatantly misinterpreted the letter of the law.”
Sources on K Street said lobbyists are trying to avoid being disclosed as bundlers. Disclosure only raises questions about the relationship between the lobbyist and the lawmaker and whether special favors were accorded either way.
“Personally, I am not going to bundle. It would be doing me and my friends a disservice,” said a Republican lobbyist.
Campaign aides also have been telling lobbyists to avoid bundling and stay under the $16,000 cap.
“Notice: No one is listed. I’m not surprised,” said the lobbyist.
Queen said it is possible that the FEC could receive late filings for the monthly reports. The next potential disclosure of lobbyist bundlers will be on June 20 for reports that cover the month of May. Candidates filing quarterly reports will have to disclose their lobbyist bundlers for the first time on July 15.
Messages left for aides to Waxman were not returned before press time.