Hoyer did not break law, finance experts say

Report follows accusations that congressman exploited campaign law

March 23, 2007|By PATRICIA M.MURRET | PATRICIA M.MURRET,Capital News Service

Rep. Steny H. Hoyer followed the law and common practice when he accepted "bundled" checks through his political action committee last election season and sent the money nationwide, campaign finance experts said this week.

The analysts were responding to a report from the Center for Public Integrity issued last Friday that said Hoyer, D-Maryland, "exploited a legal campaign cash loophole" to gain political power for his party, which took over the House. Hoyer was elected majority leader.

"That's like saying somebody who deducts mortgage interest on their taxes is exploiting a tax loophole," said Nathaniel Persily, a campaign finance expert and University of Pennsylvania Law School professor. "What exactly is the problem?"

"Bundling is very common," said Steve Weisman, of the George Washington University's Campaign Finance Institute.

What Hoyer, a lawyer, did was perfectly legal, the Federal Election Commission said. In fact, his insistence on detailed reporting made tracking the funds easier.

But CPI researcher Sandy Bergo said in her report, "Passing the Bucks," that Hoyer "exploited a legal campaign cash loophole" by using his leadership political action committee, AmeriPAC, as a conduit to collect nearly $1 million for congressional candidates nationwide in 2006 through "bundles" of earmarked checks from individuals, and from business and union interests hoping to gain political clout.

Contributions to leadership PACs are subject to the same contribution limits in place if the contributions were sent directly to the campaign, the FEC said.

This year, for example, an individual can contribute $2,300 per election to a candidate or $5,000 to a political action committee, FEC spokesman George Smaragdis said, whether he or she sends that money to the candidate directly or through a PAC.

"Leadership PACs are essentially what we call nonconnected committees . . . not established by any corporation or unions," Smaragdis said. "One of the things that these PACs can do is to collect and forward earmarked contributions."

However, PACs may not accept more than $5,000 from any single source, nor can they give more than $10,000 to any other candidate each year.

The center's report said the strategy Hoyer employed, called "bundling" is designed to "sidestep" those campaign finance restrictions. The report found that unions and other donors dropped off bundles of checks to Hoyer's staff to help fund the Democrats' takeover of the House.

The checks were earmarked by their donors for a particular Democratic congressional candidate, which Hoyer's staff listed in FEC disclosure forms, Bergo said.

Hoyer then handed over the designated checks to the congressional candidates' campaign committees. In one case, Hoyer's AmeriPAC funneled as much as $86,000 to one congressional race, the report found. Groups like the United Transportation Union, a railroad workers' union, gave AmeriPAC 38 checks ranging from $1,000 to $5,000 that totaled up to $136,000, FEC disclosure forms showed.

Members of Congress typically use a leadership PAC to further their party's stature, the report said. Hoyer's tactics not only helped Democrats win a majority last year, but it may have also helped the congressman gain power in the political race of his life -last year's run for House majority leader against Rep. John Murtha, D-Pa., who was backed by House Speaker Nancy Pelosi.

Hoyer distributed close to $1 million to 53 congressional candidates in congressional races and gave an additional quarter-million dollars to the Democratic Congressional Campaign Committee, the report said. Bergo said that Hoyer was among "six or eight" political candidates who used a leadership PAC to bundle and distribute funds and that Hoyer's fund tallies were the highest.

She noted that AmeriPAC's 2005-2006 bundled earmark contributions were considerably higher than in the last election cycle.

Hoyer's concerted efforts to be scrupulous in campaign finance disclosures have brought him under fire, Hoyer's office said this week.

"It's unfortunate that the Center for Public Integrity would use Congressman Hoyer's efforts to be more transparent to attack him," said spokesman Stephanie Lundgren.

Rep. Chris Van Hollen, Jr. D-Maryland, is pushing legislation to require lobbyists to disclose the amount of contributions they collect or arrange for federal candidates, leadership PACs and party committees - the "bundled" contributions.

While Hoyer followed the law, all agree, it is the appearance of influence that is the problem with the technique.

"It would seem that in the case where you have a leadership PAC associated with a congressman, that the bundling has more danger of corruption, or the appearance of corruption," Weisman said. "Why? Because a leadership PAC is a congressman . . . and in a bundling operation the congressman is grateful for the checks that he's passing on to other candidates . . .

"Unlike other PACs, the congressman can do something for the people who gave him $100,000 to $200,000."

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