The strange case of W. Spann, LLC: Part II

And so the great mystery of W. Spann, LLC, is resolved. Regulars will recall that W. Spann, LLC was formed in March, made a contribution of $1 million to Restore a Future, an independent expenditure PAC organized to promote the election of Mitt Romney to the presidency, and then dissolved shortly thereafter, with no record of having undertaken any actual business activity.

The “reform” community, the always alarmist, yet credulous press, and of course all the Democratic Party talking point operations and some of Governor Romney’s GOP rivals were, well, alarmed. Who was behind this “shadowy,” “hazy,” “murky” organization. Well, it took all of 48 hours, barely enough time for the aforementioned chorus to crank out press releases, before the mysterious donor was revealed. Turns out it was… wait for it… a wealthy Mitt Romney supporter!

Phew! Miraculously, the Republic survived. Those of us who had assumed it was narcoterrorists, or an al-Qaeda sympathizer, were relieved – or maybe disappointed. The man who created W. Spann, LLC was merely Edward Conard, a former business partner of Mr. Romney and longtime financial supporter of the Governor’s political campaigns. Are you shocked? Does this affect your support or opposition to Mr. Romney? Are you one of the millions of Americans thinking, “Edward Conard?!! How can I support a candidate who is supported by Edward Conard?”

But the anti-climactic ending isn’t about to stop the caterwauling, and in that regard the Washington Post yesterday offered up a remarkably silly editorial. First, the Post claims that “[t]he Federal Election Commssion needs to overcome its current gridlock and make clear how the straw donor rules apply in the post-Citizens United environment of corporate contributions.” Well, actually, it doesn’t. It’s rules are pretty clear. See 11 C.F.R. 110.4(b). The Post is confusing “straw donors,” that is persons who make contributions in the name of someone else (possibly the case with Mr. Conard and W. Spann, LLC) with actual donors who surrender control of the funds, as when Y Company pays dues to its trade association, which then makes a political expenditure, or when Mr. X contributes to a union fund, which then makes political expenditures.

After this unpromising beginning, the Post goes completely off the rails. “If you don’t think that’s a danger, imagine a foreign government, or a narcoterrorist, or an al- Qaeda sympathizer funneling money to a favored candidate through a sham corporation.” Why, imagine. Al-Qaeda sympathizers and narco-terrorists funding the campaign of Mitt Romney. Hey, might as well imagine Kang and Kodos from the planet Rigel VII funding the campaigns of politicians. If this seems more than a little silly, it is because it is, well, more than a little silly. How exactly might this play out? Perhaps such a candidate, funded by al-Qaeda, would demand that we close Guatanamo, try terrorists in civilian courts in the United States, and pull out of Iraq and Afghanistan by a date certain, and the people, “deceived” by a blitz of advertising, would go for it. Oh wait, what’s that you say? It already happened, except the al-Qaeda part? Nevermind.

And the narco-terrorist funded candidate? He might oppose legalizing drugs, thus keeping his profits high and legal competitors out. Or he might support legalizing drugs, getting a highly regulated monopoly for himself. He might oppose more border security.  Or, well, we just know it would be terrible. Imagine, for example, a foreign government funding expenditures – why, it might even argue for a free trade agreement. And given that the media has to cover who is giving what to whom and who is participating in politics and how, rather than the merits of a free trade agreement, how would we know if such a policy would be beneficial? And how could we possibly judge the results? Economic growth and employment numbers? Nah, nobody would do that.

The Post asks us to “imagine” – you can hear the long “maaag” drip off the page – but they actually want you to recoil in zenophobic shock and then not imagine, because if you actually imagine that scenario, it becomes so improbably bizarre and irrelevant that the shock turns to laughter. E-maaag-ine, maybe even a friend and former business partner would decide to make expenditures! The idea that the voters are too frickin’ stupid to vote down the narco-terrorist or “foreign government” (maybe even French!) or al-Qaeda candidate indicates a lack of faith in democracy that calls into question the entire idea of elections.

The Post then gets a bit more real – maybe a “tobacco company” – a villain almost in the same class as narco-terrorists and al-Qaeda – would fund an independent expenditure through a shell corporation that gives to an independent expenditure PAC. And this would matter because… I guess because the candidate would become a shill for “big tobacco,” and we voters would be too dumb to know it. “Hey, the President wants to do away with warning labels on cigarette packages. Oh well, as long as he didn’t get any ‘big tobacco’ money, I guess its OK.”

The Post concludes with some more silly questions. “Did [Mr. Romney] know about Mr. Conard’s generosity? Did he play any role in soliciting the donation? What is his view of the corporate cutout?” Because if Governor Romney solicited the donation, that would be illegal, so surely Mr. Romney should come forward and state that he didn’t act illegally by asking a friend for support, right? Don’t we presume guilt until denied in this country? And if he knew about Mr. Conard’s generosity, that would matter because … well, because what? Because suddenly he would be beholden to his long-time friend, colleague, and (long known) major financial contributor? And we’re not even sure what the Post is talking about with the “corporate cutout.”

Meanwhile, poor Ed Conard – who is revealed by other disclosure reports to have already contributed $100,000 to various non-federal PACs supporting Romney, has people calling for a criminal investigation by the Department of Justice. Conard’s “crime,” of course, was to support a friend and colleague running for political office. When did it become a crime in the U.S. to support a candidate for office? When did it become a crime to do so without telling the government?

And consider this: Conard went to one of the most prestigious law firms in the country – Ropes and Gray – for advice. The problem was, apparently, that he worked with an attorney who is not an expert in the intricacies of campaign finance law. And of course, nobody should want to participate in politics without speaking to a lawyer well-versed in the intricacies of campaign finance law. (And why wouldn’t a lawyer not well versed in the intricacies of campaign finance law think it was all legal? For months the reform community and the credulous press has been incorrectly saying that “secret” contributions to “shadowy” groups are legal since the Supreme Court’s decision in Citizens United, “our Dred Scott.”). Conard said he made the contribution “after consulting prominent legal counsel regarding the transaction, and based on my understanding that the contribution would comply with applicable laws.” Well, remember that the next time you think about participating in politics. It’s not enough to confer with just any old lawyer at a prestigious firm – you need a lawyer who specializes in laws limiting your participation in politics and making sure the government is notified when you do participate. That oughta make folks think twice.

Anyway, Conard has now asked Restore Our Future to amend its filing, listing him as the donor. Not enough for the cutthroats watchdogs in the “reform” community. No, they want the criminal investigation to proceed. Put this man behind bars, for god’s sake, or at least give him “appropriate penalties to deter such conduct in the future.” 

Yes indeed, we must deter political activity and speech in the future. After all, how will the Republic survive if men like the scalawag Ed Conard are allowed to support their friends without the government, and the rest of us, knowing about it for 48 hours.




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