Monday, January 12, 2009 2:42 PM

FEC Controversies Carry Into 2009

Just when it seemed the embattled Federal Election Commission couldn't get any less popular, the agency has come under renewed attack for a string of controversial stalemates and rulings, National Journal's Eliza Newlin Carney writes in her column "Rules of the Game."

Carney looks at problems with the FEC's political make up and how a recent agency action may invite fresh abuse by 527 groups. Critics are also unhappy with the agency's mid-December interpretation of lobbyist bundler rules.

The rules require lawmakers' campaigns to report the names of lobbyists who round up, or bundle, contributions on their behalf, but only when it has a formal tracking system for doing so, which critics say could allow campaigns to evade bundling rules. Further, the FEC rules allow campaigns to count individual lobbyist contributions at an event they are co-hosting with other lobbyists, rather than making them responsible for the entire amount raised.

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This flies in the face of the intent of the legislation that was co-sponsored by then-Sen. Barack Obama, D-Ill., and Sen. Russ Feingold, D-Wis. The two specifically discussed on the Senate floor that individual lobbyists should be made responsible for the entire amount raised at an event they co-host. For example, if lobbyists collectively raised $20,000 at an event, even if their own personal donation is $500, Feingold and Obama had wanted each lobbyist to be named for raising the entire $20,000.

Lobbyists have had mixed reactions to the bundling rules. One lobbyist, who didn't want to be named, said she would no longer bundle because she is worried that she might report one number and the campaign would report another, and then she could wind up in trouble. "I just said forget it, it's too much hassle," she said. Another lobbyist said she is worried the bundler rule will be used by the media as a way to report "gotcha" stories. Still that won't stop her from bundling donations.

William Minor, partner at DLA Piper, said he was pleased that the FEC "didn't adopt the broadest possible approach" with regard to the bundling rules, particularly in regard to how lobbyist donations are counted when it comes to co-hosting fundraisers.

"The point [of the rules] was to disclose those lobbyists who raise funds through bundling and it will still do that to the extent it is tracked or recognized by the campaigns," Minor said.

Brett Kappel, of counsel with Vorys, Sater, Seymour and Pease, said the rules will have a bigger impact on presidential fundraising. Presidential campaigns, he said, developed formal and organized tracking systems for bundlers, but he said few congressional campaigns have done so.

"There has been plenty of bundling but it hasn't' been as formal because it's a smaller number of people" who bundle for congressional candidates, Kappel said.

                                                                                                                     --Bara Vaida