When Money and Leadership Don't Mix Leadership PACs Have Let Members of Congress and Special Interest Groups Skirt Donation Limits and Campaign Finance Reform

Article excerpt

REP. Bill McCollum (R) of Florida and Rep. Tom DeLay (R) of Texas both want to be House minority whip. They're assuming the position will become vacant this fall if Rep. Newt Gingrich (R) of Georgia moves over to the position of House minority leader after Rep. Bob Michel (R) of Illinois retires.

It is no coincidence that Representatives McCollum and DeLay set up leadership political-action committees earlier this year. Says Christina Collins, executive director of McCollum's new PAC, Countdown to Majority, "All members who want to show leadership need to be able to raise money and help others raise money."

If showing leadership means raising money, then the record on these PACs reveals an amazing explosion of leadership. Over the past 10 years, 69 leadership PACs took in over $111 million in contributions, according to data from the National Library on Money and Politics, analyzed by Public Citizen.

"Leadership PAC" is an inside-the-beltway term for PACs associated with members of Congress or other politicians. Like other PACs, leadership PACs are allowed to give out contributions to political candidates - up to $5,000 per calendar year. They may also receive contributions of up to $5,000 a year. Politicians use them as an additional source of fundraising separate from their personal campaign committees and as a way of building influence with others. Leadership PACs are not always easy to identify, since there is not always a formal connection between a politician and a PAC. Public Citizen's analysis is based on leadership PACs identified as such by the National Library on Money and Politics, the Almanac on Federal PACs, and other published sources.

The Senate and the House banned leadership PACs in the 1992 campaign finance reform bill vetoed by President Bush. In this session's reform offering, however, only the Senate banned leadership PACs. As the House and Senate meet to reconcile their two bills, the ban on leadership PACs may get knocked out. If that happens, leadership PACs won't just survive, they'll flourish. The aggregate limits on PAC donations contained in this year's campaign finance bill will make leadership PACs an even more tempting way of soliciting money from special interest groups. In fact, the "leadership" in leadership PAC will become practically meaningless as 535 members of Congress scramble to form their own leadership PACs.

Analysis of receipts and spending patterns by leadership PACs over the past 10 years shows why it is necessary to clean up the campaign finance system:

* If money speaks, then leadership PACs allow special interests and the wealthy to speak louder and more often. Campaign donation limits are meant to prevent those with money from corrupting elections. Yet it's common to skirt PAC limits - and earn a politician's good will - by giving to a member's personal campaign fund and to his or her leadership PAC. In 1991-92, Anthony Kurtz, president of the New Jersey-based company Ku-Lite Semiconductor, gave the maximum allowed - $2,000 - to Gephardt in Congress, the personal campaign fund of House Majority Leader Richard Gephardt (D) of Missouri. During that same period, Mr. Kurtz gave $5,000 to Mr. Gephardt's leadership PAC, the Effective Government Committee. That is $5,000 that he would have been prohibited from donating to Gephardt's campaign committee.

Fundraisers take full advantage of this trick. Campaign America, the leadership PAC of Sen. Bob Dole (R) of Kansas, has regularly solicited Barnett People for Better Government. Brian Babcock, director of the Florida-based PAC for Barnett Banks, says the PAC has given $5,000 annually to Campaign America, the maximum allowed, "mainly because of his position in the leadership." The Barnett PAC also gave $7,500 in 1991-92 to Mr. …