A Bundle of Noise: The Overwrought Reaction to the FEC’s Bundling Rules

Pretty much like clockwork, if the FEC does something, it is criticized by so-called "reform" organizations for not being tough enough on the big money scoundrels without whom government, in defiance of all logic and political theory, would work smoothly and always in the "public interest."  Such is the predictable response of the "reform" lobby to the FEC’s new rules on bundling.  But that response tells us more about the ultimate interests and Kafkaesque rules the reform lobby would like to see in place than it does about the FEC’s rules or the ultimate interest of the public – such as it may be – in bundling regulation.  The new law requires disclosure of lobbyists who "bundle" in excess of $15,000 for a campaign.  The FEC, on a 6-0 bipartisan vote, has recently adopted regulations implementing the law.  The reform groups are in near hysteria.

Let’s start with a brief review of what "bundling" is.  If John gives to Candidate Jones, this is reported to the federal government and maintained on a government registry of political contributions.  If Mary gives to Candidate Jones, this is also reported to the federal government and maintained on the registry.  (The registry, by the way, is also available to anyone in the public who is nosy about their neighbors).  Bundling occurs when John calls Mary and asks her to give to Candidate Jones.  The goal of "bundling" disclosure is to have the fact that these conversations took place also disclosed to the government and maintained on the government registry of citizen political activity.  That’s all bundling is.  It is not some mysterious, unknown, nefarious activity.  It is citizens communicating with one another about supporting various politicians.  Scary stuff, we know.  Something the government needs to keep track of, apparently.  Why?

The alleged benefit of tracking bundlers is that bundlers may gain political influence.  That is, if John is very successful at getting people to support Candidate Jones, Candidate Jones might feel gratitude towards John, more than he would feel merely because John gave to his campaign.  In a worse case scenario, Officeholder Jones might ignore the desires of his constituents and what he thinks is good for the public at large simply to do John’s bidding.  More realistically, Jones might give John preferred "access," since an officeholder must have some means to allocate time and giving time to one’s ardent and most helpful supporters — be they high profile politicians or others who endorsed the Jones, union leaders who rallied union manpower, interest groups (maybe campaign finance reform organizations) who provided favorable coverage to Jones’ legislative priorities, campaign consultants who provided sound advice, or others. That seems like one logical factor to consider.  If people know the identity of bundlers, then presumably voters will have a cue that will help them decide who the candidate is most likely to listen to once in office, and maybe, in some vague way, a means to skeptically judge the officeholder’s actions.  (It is not clear that this is helpful. If voters presume that an officeholders actions can be explained by reference to who supported them, it is not clear how that helps the voter decide if the action was good or bad either for the public or for the individual voter.)

What is interesting about the typically overwrought "reform" lobby reaction is that their main problem seems to be that they don’t want the information going to the voters to be accurate.  Paul Ryan, of the Campaign Legal Center, and registered lobbyist Fred Wertheimer of Democracy 21 list two sources of irritation in the regs.  First, both complain that the regulations only call for disclosure if the campaign actually keeps track of amounts raised by bundlers, or gives them some honorific title.  Both Ryan and Wertheimer imagine a world in which the campaign isn’t keeping track of bundlers (which raises the question, if they campaign doesn’t care, why should we?), but a lobbyist bundler approaches the candidate and says (in Ryan’s specific example), "’I’ve raised $100,000 for you from friends at my country club. You’ll be seeing the checks in your mail any day now.’  And the Senator replies, ‘Thank you very much.  I really do appreciate it.’"

I’ll give you a couple seconds to absorb the horror of it all…

… OK, caught your breath?  Ready to resume?  Ryan and Wertheimer apparently want the campaign to report the lobbyist as a bundler.  But what if the candidate doesn’t believe the lobbyist?  What if the lobbyist really is lying, or exaggerating a little?  Or let’s take another measure: what if the lobbyist doesn’t approach the candidate, but rather, the candidate hears of the alleged bundling by the lobbyists from some other source (reliable… or maybe not so reliable)?  Or suppose the candidate deduces it? 

Campaign Finance Co-Chair: "We’ve been getting a lot of checks from the Acme corporation."

Candidate:  "Ah, it must be the work of my old pal, Abe Fatcat, President of Acme."

Must the candidate report the contributions as "bundled?"  What if the candidate looks for checks, and isn’t sure if they arrive or not?  The reform lobby seems less interested in the accuracy of any information than in reporting large amounts of bundled contributions, presumably so that they can rachet up the rhetoric about the evils of money and bundling.  Informing the public in a meaningful way, as is usually also the case with "reform" lobby press releases and activities, seems relatively low on the list of priorities. 

We also see here the "reform" lobby’s preference for loose, vague rules that place all operators in jeopardy.  If you can’t know when and what you have to report, then everybody has to run scared.  The reform lobby has long had a preference for "I know it when I see it" rules, that make it impossible for anyone to conform his conduct to the rules.  If reformers spot influence or corruption, they want a conviction, regardless of whether or not the candidate was complying with laws and regulations.  They way to make this work is to have rules that no one can quite use to figure out their legal obligations – such as a requirement that you report contributions as "bundled" merely because someone claims they did it.

The second complaint of the reform lobby is that if several lobbyists are among the co-hosts of a fundraiser, they can split up the amount raised for reporting purposes.  That is, if four lobbyists co-host a fundraiser that raises $50,000, each lobbyist can be listed as "bundling" $12,500.  That puts them below the $15,000 reporting threshold.  Wertheimer and Ryan apparently want each of the four co-host lobbyists to be listed as bundling the full $50,000.  This would seem to create a gross problem with overcounting of donation, except that, as Mr. Ryan explains with great confidence in the regulatory process and the detailed, accurate reporting of the press, the reporting forms should be, "designed in such a way as to prevent over-counting."  We’re pretty sure that this could be done, although it would make the information confusing, we suspect, to have to list separately every combination of hosts that team up for fundraisers.  Moreover, it is hardly clear why this helps the public, since the public would have no way of knowing who really did how much to help the candidate.   We could quite routinely have four lobbyists listed as raising the funds, when in fact two did most all the work.  How are we to judge this?  Is this more "accurate" or "informative" than simply understanding who is supporting whom, which is typically no secret in Washington or to reporters covering campaigns?

But frankly, we are also skeptical of the reformers motives here.  What we can predict is that this information will be used for multiple counting, just as, for years, reform organizations have reported individual contributions to candidates as "corporate" contributions, with only the fine print (a little less fine since we starting pointing out the deception) noting that these are really individual contributions by people who work for corporations. 

Let’s put the hysterics aside and ask a couple questions:  1) Is it reasonable to only require a campaign to report bundlers if the campaign itself is keeping track of bundlers?  and 2) is it reasonable to pro-rate the amounts raised by lobbyists in proportion to what they might actually do?  We think that the answers to these questions are a pretty easy, "yes."

Indeed, all of the reform outrage seems in some strange way to simply beggar belief.  Are we to believe that candidates cannot figure out who is supporting them even if the lobbyist is smart enough not to tell the candidate he has asked his friends to contribute $100,000?  Are we to believe that the public actually gains from this information more than simply knowing who contributes?  We’ve had, after all, disclosure of contributions for more than 30 years now, with no evidence whatsoever that more than the barest fraction of the public gives a damn about who donates, let alone who asked whom to donate.  We are now to believe it is vital to the health of our democracy that the government be informed, under penalty of law, not only who contributed to campaigns, but who talked to whom about contributing to campaigns? 

Meanwhile, Blagojevich, Stevens, Cunningham, Jefferson, Ney, Foley, Craig, give us a nice series of political scandals that simply don’t rely on bundling, don’t rely on contributions, and in some cases don’t even have anything to do with money in any way, shape or form.  This is what the public seems to really be concerned about.  As it ignores real scandal and the serious problems of government, the reform lobby seems increasingly irrelevant and indeed, ridiculous. 

The great ado about bundling is merely the latest example of reform hysteria. 


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