The Story of Stupid Campaign Finance Laws: A Tale of Sanders’ Donors

On February 11, the Federal Election Commission (FEC) sent a “preliminary review” to Bernie Sanders’ campaign detailing the many ways the campaign had failed to properly dot its’ i’s and cross its’ t’s. Such letters are routine in political campaigns; it is essentially impossible to follow the FEC’s reporting requirements to the letter of the law, and even more difficult to make sure that donors don’t accidentally violate federal contribution limits in their zeal to support their preferred candidate. So the regulators at the FEC send letters to warn campaigns that if they don’t fix their paperwork, the Commission is going to audit and fine them.

These violations, in relation to Sanders, whose candidacy has been propelled by the passion of hundreds of thousands of small donors, provide a window into how ridiculous our campaign finance regulatory regime, particularly our strict campaign contribution limits, have become. None of these contributions are corrupting. None of these contributions are somehow unfairly influencing Bernie Sanders. These contributions are nothing more than the expression of an individual saying, “Hey, I like Bernie Sanders – I think I’ll donate to help his campaign.”

And yet all of the following campaign contributions are violations of the law. If these actions are illegal, then I submit that the laws are stupid.

Don’t believe me? Let’s check out these campaign finance violators, and consider what nefarious actions they’re up to that supposedly require these laws in the first place.[1]

Martin Anixter: Dr. Anixter, an anesthesiologist from Pittsburgh, donated $3,000 to the Sanders campaign on December 17, 2015. Since the maximum amount an individual can give to a candidate per election is $2,700, the FEC flagged this donation for exceeding the limit an individual can give for a primary campaign. Why is $3,000 of support illegal and $2,700 legal? For no reason other than that $2,700 is the arbitrary threshold at which the feds have determined a contribution becomes “corrupting.” Ironically, Dr. Anixter’s donation would have been perfectly legal if the Sanders campaign had done more thorough paperwork. If the campaign had requested that Dr. Anixter write in the memo line of his check, “$2,700 of the donation for primary, put the rest toward the general,” then, by the magic of accounting, Dr. Anixter’s donation would no longer be considered to corrupt the campaign. As it stands, Sanders’ campaign lawyers have to contact Dr. Anixter and make him sign additional paperwork stating the obvious – that his contribution can be used by the campaign for the general election too.

James Bartlett: In all likelihood, Bernie Sanders has received contributions from two men named James Bartlett – and the FEC has dinged the campaign for not making it explicitly clear that these are different people. One Mr. Bartlett – since there are hundreds of James Bartlett’s in the U.S., let’s say this one is a lawyer from Houston – is a big Sanders fan and has given his allowed $2,700 in 54 separate donations ranging from $5 to $414. In fact, Houston J.B. actually gave too much, and the Sanders campaign refunded him $38 in impermissible donations on December 31. So why does the FEC still think Houston J.B. is a campaign finance violator? Because on December 3, another James Bartlett – let’s say this James Bartlett is an art director from Philadelphia – gave the Sanders campaign $23.78. The campaign can differentiate these two individuals (hence the refund for only $38, instead of $38 +$23.78), but the legal reporting requirements cannot. So the FEC believes that James Bartlett gave $2,723.78 – and, therefore, has corrupted Bernie Sanders with an extra $23.78.

Kirstin Carel: Dr. Carel is in a similar situation to Mr. Bartlett. The FEC believes that Dr. Carel, a pediatric immunologist from Aurora, Colorado, has violated the law by giving $2,751.65 to the Sanders campaign. Dr. Carel gave $250 to the campaign five times, and on December 31 maxed out with another $1,450 donation. But Dr. Carel also gave $51.65 on August 29. Let’s for the sake of argument assume that these donations are, in fact, from one person. What does Dr. Carel’s $51.65 donation mean? A steadfast supporter of Bernie Sanders, the doctor was suddenly moved in late August to break her regular schedule and donate $60 via credit card ($51.65 minus the processing fee). Perhaps she was inspired by a particular statement from the campaign, or incensed by some action of the Republicans in Congress, or some news account about Hillary Clinton. As a busy doctor, the only avenue for Dr. Carel to express her political opinion was via a quick donation. Perhaps, because her expression was in the form of a credit card and not a check, the Sanders campaign missed it when Dr. Carel asked how much more she could donate. The net result? Instead of incentivizing spontaneous speech from citizens, we have made Dr. Carel’s support for Sanders a violation of federal law.

Patton Oswalt: Mr. Oswalt, the famed actor and comedian, has run afoul of the FEC for giving two $2,700 donations to the Sanders campaign – one on July 11 and one more than five months later on December 22. Mr. Oswalt could have simply attributed one of the donations to the general election and prevented any violation, but let’s assume, for the sake of argument, that Mr. Oswalt purposefully wanted to support Sanders exclusively in the primary election. If so, why max out twice? One possibility is that Mr. Oswalt, who has 24 acting credits to his name in 2015-2016 alone (not counting any stand-up comedy gigs) simply forgot he had given to Sanders already. Sadly, that doesn’t matter. Congress has drawn a bright line at $2,700 (including automatic inflation adjustments), and Mr. Oswalt has unknowingly engaged in an act of corruption by donating to Senator Sanders’ campaign twice.

John Rabinowitz: Mr. Rabinowitz, a New York City small business owner, can’t help himself. Every time he sees a Sanders fundraising email, he feels it’s his duty to support the candidate he believes in. Between May and September, Mr. Rabinowitz gave 39 times, each time either $100 or $200. Doing so caused him to far exceed the $2,700 limit, but think about it from the donor’s perspective. If the campaign keeps asking for money, isn’t it reasonable to assume they a) still need it and b) can legally accept it? This is not how our campaign finance system actually works. On October 10, the Sanders campaign refunded Mr. Rabinowitz his $1,300 in illegal donations. But on December 18, Mr. Rabinowitz “felt the Bern” again, and gave another $250, which the FEC flagged. The question we should be asking is how that $250 could possibly be corrupting if the campaign has already told Mr. Rabinowitz, “we don’t want more money.” Instead, the Sanders campaign has to explain to the FEC why they did not refund the $250 more quickly.

Elyse Yeager: Elyse Yeager, a professor of mathematics at the University of British Columbia, gave $50 to the Sanders campaign on December 14. Despite being a U.S. citizen (a quick Google search reveals that Ms. Yeager previously studied at the University of Illinois, and worked for two years in the Peace Corps – a position only available to U.S. citizens), Ms. Yeager’s foreign address flagged her donation as possibly illicit. (Foreign nationals are prohibited from donating any funds to campaigns). Evidently Ms. Yeager (and presumably every other living U.S. citizen ) was unaware of 11 CFR § 110.20(a)(7), and failed to send along a copy of her Passport with her small donation. Sander’s campaign staff and lawyers must now spend time (in an amount surely greater than $50) to confirm Ms. Yeager’s citizenship, or refund Ms. Yeager’s legitimate expression of political support.

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What can we learn from Martin Anixter, James Bartlett, Kirstin Carel, Patton Oswalt, John Rabinowitz, Elyse Yeager, and the hundreds of others names on the FEC’s list of improper donors to Senator Sanders’ campaign?

We learn that the real effect of our current, byzantine campaign finance regulatory regime is a waste of everyone’s time and money. The Sanders campaign now needs a team of attorneys to comb through, donation by donation, this 43-page FEC report and ensure each contribution is properly reattributed, redesignated, or refunded. The FEC compliance officers are spending untold amounts of time poring over these reports to confirm that every disclosure, every reporting requirement, and every contribution complies with the 375,000 words comprising our federal campaign finance regulations.

And the individuals who wanted nothing more than to support a candidate they believe in? They receive demands for additional paperwork, certified statements of interest, and signed documentation. That’s how our campaign finance laws reward people for participating in politics.

You know what we failed to learn? Anything useful for choosing a candidate for office or preventing corruption. Arguments in favor of campaign finance regulations emphasize the informational value to voters of disclosure, and the important anti-corruption interests of contribution limits, but when you get into the trenches of actually applying the law, none of that seems to come to fruition.

Instead, you get a bunch of inane rules hindering basic political participation that no one has any reasonable objection to. While Bernie Sanders’ campaign no doubt has the resources to deal with this pure drudgery, imagine how a campaign manager trying to elect an upstart challenger in a longshot House race feels when the FEC tells them that they’ve made hundreds of paperwork mistakes, and you have a month to get it right, or they’re going to fine the campaign. Imagine how they feel when trivial errors by the campaign and its supporters are reported in the media and exploited by political opponents to portray the candidate as somehow untrustworthy or corrupt.

If you really want to reform campaign finance, start here. Raise the arbitrary contribution limits, simplify reporting requirements, and lessen the disclosure burdens. Stop punishing citizens who decide to get involved. Americans should be able to give relatively small contributions without facing this bureaucratic monstrosity.

[1] The biographic information is based on a simple Internet search. It is meant to paint a picture of how the regulations affect individuals generally, and not to identify any specific individual and why his or her name has been flagged by the Commission.

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