Loopholes for the little guy

Our view: 'Lump sum' donations can add up to big influence for political action committees and other special interest groups, and they need to be disclosed

May 16, 2011

Maryland law allows small political contributions to be bundled together and reported as "lump sums" in disclosure reports, and to hear defenders of the practice talk about it, the tactic is merely the campaign finance loophole for the little guy. The fat cats have their limited liability corporations, personal loans and political slates that allow them to funnel tens or hundreds of thousands of dollars into candidates' campaign accounts with no public disclosure whatsoever; the lump sum is just the same thing for the 50-50 raffle and bull roast crowd. What's the harm?

On the surface, it may not seem like allowing anonymous contributions of $51 or less does much to erode the integrity of our political system. One of the major reasons that transparency in campaign finance is crucial is that it allows voters to determine whether a candidate might be unduly influenced by contributions from special interests, and with big donors giving $4,000 legally (and sometimes much more through various machinations), the risk of a politician giving special treatment to someone who writes a $10 check seems small.

But the question looks different when, as The Sun's Julie Bykowicz reported on Sunday, some candidates are amassing tens of thousands of dollars from undisclosed donors through lump sums. Former Gov. Robert L. Ehrlich Jr., for example, reported nearly $72,000 in lump-sum donations from unspecified political clubs during the last election cycle. Del. Norman Conway, the chairman of the powerful House Appropriations Committee, raised more than $38,000 that way. And some candidates report that significant percentages of their total fundraising come in lump sums. One former St. Mary's County commissioner raised more than half of his money via lump sums, and Baltimore Clerk of the Courts and mayoral candidate Frank Conaway Sr. got 40 percent of his money that way, though he now says the reports he filed with the state must be in error.

Without disclosure, we simply have to take candidates at their word that the money came from hundreds of little-guy donations. Theoretically, the State Board of Elections or the state prosecutor's office could investigate whether the amounts candidates are reporting as lump sums are legitimate, but that does not appear to have happened in recent memory.

Even if the money is really coming in small sums from a large number of individuals, that doesn't mean it can't influence how a politician may behave in office. If a political club or group collects many small donations from its members and passes them on to a politician in one lump sum, that may provide it with far more influence than it could achieve by writing a $4,000 check, yet under the current system that influence is completely invisible.

Del. John A. Olszewski Jr. has sponsored legislation for the past two years that would limit the use of lump sum reporting to a total of $25,000 per election cycle per candidate. That's still far too large an amount to allow campaigns to collect without disclosure, but even so it has proved impossible for the legislature to accept; his bill has twice passed the House of Delegates but failed to advance in the Senate.

The maddening thing about the current lump-sum rules is that candidates are, theoretically, keeping track of all the donations as it is — they're just not sharing the information with the public. Del. Patrick L. McDonough, who raised about a quarter of his funds through lump sums, showed Ms. Bykowicz the notebooks in which he carefully tracks contributions from small donors so he can determine when they have reached the threshold for full disclosure. You can bet that all politicians who make use of lump sums are collecting at least as much information as the State Board of Elections requires for donors, because they will want to hit up the small contributors again for more money. It would be just as easy to report that information to the state.

But requiring that disclosure would not be enough to allow voters to get a true measure of a candidate's funding sources. Listing a slew of $50 donations from individuals doesn't mean the same as, for example, disclosing that those contributions were all by members of the Fraternal Order of Police. That's why it's important that this issue be taken up in a comprehensive effort to tighten Maryland's campaign finance system and make it more transparent.

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