FEC passes draft bundling regulations

FEC commissioners passed draft  final rules on reporting bundling by lobbyists Thursday. Pro-regulation groups promptly went ballistic with outrage, as the FEC reasonably and narrowly interpreted the law, creating rules that apply to credit for bundling that is actually given in political fundraising.

The bundling rules implement provisions in the noble-sounding but ultimately misguided Honest Government and Open Leadership Act of 2007, which requires disclosure of contributions "bundled" by federally registered lobbyists over $15,000.

The supporters of the law designed it to take an incremental step toward anti-free speech restrictions on all bundled contributions. As a practical matter, this paper tiger bundle of regulations will have only a limited effect beyond adding another byzantine layer of regulations for lobbyists and campaign committees.

Disclosure of bundling is unnecessary and serves no justifiable public good (despite misguided harping by the pro-regulation community that bundlers are quid-pro-quo seeking and inherently corrupting). Bundling is a legal, efficient and effective way for campaigns to fundraise. It’s not only used by lobbyists; it’s also a way for community activists, nonprofit heads, passionate business leaders, union officials and others to gather donations and streamline the challenging task of seeking out contributions of $2,300 or lower.

It’s important to note that bundling is really only necessary to cope with arbitrary contribution limits. Instead of allowing like-minded individuals the unlimited ability to support politicians of their choosing, donors are restricted to contributing $2,300 per election cycle (soon to be adjusted slightly upward for inflation). Thus volunteers with quality Rolodexes help politicians to spend less time fundraising (supposedly one of the goals of "reformers"), reach more potential donors and raise enough money to wage a competitive campaign.

The disclosure rules do not apply equally to all bundlers. The legislation (and hence the rules) singles out federally registered lobbyists. While this may be a populist feel-good slap at lobbyists by members of Congress (and both 2008 presidential candidates), there’s no practical reason to single out and punish lobbyists, whose work on behalf of clients is protected by the First Amendment.

The United States is a republic, not a direct democracy. Every single issue group, individual with a cause, business or union can’t spend their time in Washington pleading their case with their elected officials. Lobbyists, often policy experts, serve an important function by arguing their clients’ cases before federal officials. The First Amendment explicitly protects the ability of citizens – and lobbyists – "to petition the Government for a redress of grievances."

Complying with these bundling regulations will enrich some large law and lobbying firms, who host compliance sessions costing thousands of dollars. At the same time the new rules will squeeze smaller lobbying outfits, who will need to beef up their administrative staffs to ensure compliance with more cumbersome federal regulations.

The Campaign Legal Center and Democracy21, among others, are livid with the FEC’s draft rule (which passed unanimously, 6-0),  because they’re upset the FEC followed reasonable, workable guidelines in implementing their regulation rather than buying into the pro-regulation community’s excessive hype about the nonexistent "problem" of bundling.

All told, we’d of course prefer this bit of nonsense had never passed. But the FEC did a good job in keeping the scope of the regulations narrow and limited, and we have to give them credit for recognizing that overly-broad regulation was not needed.

Click here to listen to a portion of the FEC meeting during which commissioners discussed the bundling regulation

The Center for Competitive Politics is now the Institute for Free Speech.