Reframing the Discussion on Money in Politics

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Congressional ethics expert urges regulating lobbying, campaign finance, and gifts simultaneously.

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The U.S. is “officially on high alert for the next significant political corruption scandal,” according to the Deputy Chief Counsel of the Office of Congressional Ethics, Kedric Payne. A scandal occurs about once every ten years, says Payne, and the last major scandal with Jack Abramoff occurred in 2004.

In anticipation of such reform, Payne advocates that reformers shift the conversation on regulating money in politics. In a forthcoming article in the University of Pennsylvania Journal of Law and Social Change, Payne insists that reformers move away from focusing on campaign finance reform and expand their approach to “political law reform,” which addresses the three tools that lobbyists use to influence lawmakers: campaign finance, lobbying, and gifts. By regulating all three tools simultaneously, he argues, reformers can better mitigate the influence of money in politics.

To illustrate his point, Payne proposes a “pay to play” rule, which would: (i) broaden the requirements triggering registration as a lobbyist; and (ii) prohibit members of Congress from receiving otherwise excepted gifts from a lobbyist or lobbyist employer within two years of receiving a campaign contribution from that entity.

Lobbying, campaign finance, and gifts are interdependent tools. Lobbyists seek to educate and influence legislators, activities that require access to lawmakers. Campaign contributions enable lobbyists to access lawmakers. Once a lobbyist has that access, giving gifts to lawmakers establishes goodwill with the lawmaker, which enhances the lobbyist’s ability to have his voice heard.

Without the others, one tool will not be effective in influencing legislators, Payne explains. For example, if a lobbyist obtains a meeting with a lawmaker because he has given significant campaign contributions, but the lawmaker and lobbyist do not have a good relationship, then the lobbying and campaign contributions are ineffective. These three tools are also linked, says Payne, because “lawmakers have come to crave information, campaign contributions, and entertainment, all three of which the seasoned lobbyist provides.”

Payne explains how sophisticated lobbyists use all three tools effectively by taking advantage of their respective regulations.

The first tool is lobbying. Under the Lobbying Disclosure Act, a lobbyist is defined, among others things, as an individual who spends 20% or more of his paid time on lobbying activities for a client during a three-month period. Those whose activities satisfy the definition must register as a lobbyist, which triggers certain disclosure requirements under the Act. According to Payne, many people avoid registration as a lobbyist by lobbying just under 20% of their time for a client.

The federal legislation of the second tool, campaign finance, includes campaign contribution disclosure requirements, limits, and bans, which vary based on the donor and recipient. For instance, a corporation cannot use its funds to donate directly to a federal candidate’s campaign. Yet a corporation can set up a political action committee (PAC), through which it can donate up to $2,600 per candidate per election. Corporations and other regulated entities circumvent these limits by donating to Super PACs. Super PACs are independent expenditure committees, meaning they do not make donations in coordination with candidates or national parties. In 2010, the Supreme Court upheld corporations’ independent expenditures to candidates through Super PACs in Citizens United.

House and Senate rules regulate the third tool, gifts to members of Congress. The rules impose limits on gifts received from non-lobbyists to $50 per occasion and less than $100 per year. The rules also ban gifts from lobbyists and lobbyist employers, as defined by the Lobbying Disclosure Act. Yet more than twenty exceptions apply to the lobbyist gift ban, the most prevalent being exceptions for campaign contribution fundraisers, receptions, and widely attended events. Members of Congress do not need to disclose excepted gifts, and such gifts impose no limits on the amount of food and drinks that can be provided. Consequently, Payne explains, the rules prohibit an inexpensive gift, such as buying lunch for a Senator, but permit a widely attended event, such as a weekend ski trip. In this way, the rules establish a monetary threshold for gifts that only the elite can afford.

Thus, despite potential campaign finance reform, Payne argues that the lobbying and gift rules still enable those who decline to register as lobbyists, as well privileged lobbyists who benefit from the gift ban exceptions, to gain excess access to lawmakers.

To limit this excessive access, Payne proposes a partial solution that incorporates the three tools. First, Congress should remove the twenty percent threshold required to register as a lobbyist. A lobbyist would then be defined as: (i) an individual who has two or more lobbying contacts (an oral or written communication to a “covered official“); and (ii) an individual who receives or spends a certain amount of money on lobbying activities each quarter. Second, a member of Congress should be prohibited from receiving excepted gifts from a lobbyist or lobbyist employer (i.e. a client) within two years after receiving a contribution from that specific entity. A contribution from a lobbyist would not trigger the rule for the lobbyist’s employer and vice versa; each are treated independently.

One of the proposal’s benefits, explains Payne, is that it would likely survive a First Amendment challenge, since the First Amendment does not protect the giving or receiving of gifts. Additionally, the proposal requires minimal changes to federal law and greater changes to the House and Senate Gift rules, which are easier to amend (and revoke should the amendment prove ineffective).

This piece describes Kedric Payne’s forthcoming article, “How to Survive the Next Scandal: Replace Obsolete Campaign Finance Reform with Political Law Reform?,” which will appear in the University of Pennsylvania Journal of Law and Social Change, Issue 17.3.