DNC Fundraising Committee Allows Large Contributions

Daily Report for Executives provides in-depth coverage of unfolding legislative, regulatory, and judicial news from the nation’s capital, the states, and around the world. This daily news service...

By Kenneth P. Doyle

A newly registered Democratic Party joint fundraising committee will be able to solicit annual contributions of more than $540,000 per individual donor, or about $1.1 million per year from a married couple, according to the nonprofit Issue One, which seeks to control the influence of money in politics.

Meredith McGehee, policy chief at Issue One, challenged the creation of the fundraising committee, called the Democratic Grassroots Victory Fund. A Federal Election Commission filing said it would solicit contributions to benefit the Democratic National Committee, as well as Democratic state parties in all 50 states and the District of Columbia.

“The Democratic Grassroots Victory Fund seems to be drawing a roadmap for how wealthy people can give more than half a million dollars a year in a single check to the political party of their choice,” McGehee said in a statement. “There’s a huge disconnect between this new fundraising organization’s name and what it does to eviscerate campaign contribution limits.”

‘Every Zip Code Counts’

Individual donors may contribute no more than $2,700 per federal candidate per election, no more than $10,000 per year to a state party committee, and no more than $33,900 per year to the general account of a national party committee such as the DNC or Republican National Committee. A joint fundraising committee may accept a single, larger check from a donor—and then split the money among the beneficiaries, with none exceeding the legal limits.

DNC spokesperson Xochitl Hinojosa said in an email statement that the new fundraising committee was created by the DNC to fund the Democrats’ new “Every Zip Code Counts” program—a plan for grassroots organizing through state parties and other core party building.

“Every Zip Code Counts, offers a first-of-its-kind $10 million competitive grant program to build capacity through investments in local Democratic organizing, specifically in the areas of Base, Rural, and Next Generation constituencies,” Hinojosa said. “The only way to win is to organize, and that’s exactly what we’re doing here.”

Special Accounts for Big Donors

The Issue One statement noted that contributors to the general accounts of the DNC and other national party committees can donate additional, large amounts to special accounts established under a 2014 law to fund party conventions, party headquarters, and legal accounts.

A contributor to the new DNC joint fundraising committee also could give the DNC’s three special accounts up to $101,700 each annually, for a total of $305,100. That contributor’s total annual contributions to the party committee thus could be more than $840,000.

Parties and candidates have used joint fundraising committees for years, but they’ve been able to raise far more money since the 2014 Supreme Court decision in McCutcheon v. FEC, which invalidated the so-called “aggregate” campaign contribution limits capping an individual donor’s contributions to all candidates and other regulated political committees.

Michael Beckel, Issue One’s research manager, said in the group’s statement: “The larger the joint fundraising committee, the larger the risk of corruption and the appearance of corruption.”

Beckel added that the risk of political corruption “is heightened if party leaders or members of Congress are soliciting six-figure or seven-figure checks from wealthy donors seeking access and influence.” He said the new DNC fundraising group “harkens back to the days of political ‘soft money’ when party leaders routinely asked donors for massive campaign contributions.”

RNC Fundraising Outpaces DNC

The new DNC joint fundraising committee was registered with the FEC Oct. 18 and hasn’t reported actually raising any money yet. Overall DNC fundraising has been running far behind the numbers posted by the committee’s GOP counterpart, the RNC, which has been boosted this year by President Donald Trump.

From the beginning of the year through Sept. 30, according to FEC disclosure reports, the RNC raised about $104 million—more than twice as much as the DNC’s total receipts of $51.1 million.

RNC fundraising has outpaced the DNC in both high-dollar and low-dollar contributions.

The special RNC accounts that can raise more than $100,000 per contributor have collected a total of more than $14.3 million this year, while the DNC’s special accounts have collected $4.6 million. Meanwhile, the RNC has taken in more than $43 million in “unitemized” contributions of less than $200 per contributor, while the DNC has raised a total of $26 million in such contributions.

The RNC ended last month with a total of nearly $44.1 million in cash on hand and no debts. The DNC had just over $7 million in cash and nearly $3.8 million in debts.

To contact the reporter on this story: Kenneth P. Doyle in Washington at kdoyle@bna.com

To contact the editor responsible for this story: Paul Hendrie at pHendrie@bna.com

Copyright © 2017 The Bureau of National Affairs, Inc. All Rights Reserved.

Try Daily Report for Executives