Virginian-Pilot 10/18/2009
Campaign Loophole, South of Turnpike

http://hamptonroads.com/2009/10/campaign-loophole-south-turnpike

Virginian-Pilot Editorial

Virginia is infamous for its lax laws on campaign donations, but that doesn't stop the state from ratting out individuals and corporations trying to get around tougher rules in other states.

The three gubernatorial candidates in New Jersey are checking up on each other's finances by peeking at the Virginia Public Access Project Web site, which collects data on political money in this state.

A 2006 Virginia law requires political committees known as 527s to disclose all of their major donors if they spend $10,000 or more on state races in a calendar year, a relatively strict reporting requirement.

Under Virginia law, all donations must be reported at the time the groups give money to a candidate, so that means the information becomes public here long before it's released to the Internal Revenue Service, which requires only semiannual filings in years without a federal election.

A loophole in federal law permits tax-exempt political organizations to raise unlimited amounts of "soft money" and avoid federal limits. That federal loophole is a problem in places like New Jersey, which has otherwise strong state campaign finance laws, but not so much in Virginia, where sky-is-the limit is the norm.

But 527s also take advantage of IRS reporting schedules that permit the groups to dump tons of money into a race without reporting their donors until months later. That's what happened in 2004 when Swift Boat Veterans for Truth financed attack ads against presidential candidate John Kerry. Virginia lawmakers passed the 2006 disclosure law after 527s spent millions on state elections the previous fall.

Virginia and New Jersey are the only states with gubernatorial elections this year, so they're getting lots of attention and cash from national 527s, including the Democratic Governors Association and the Republican Governors Association. But those two groups are required to report their donors only in Virginia, hence the New Jersey scramble to check out Virginia's campaign finance data.

All of the donations to the national groups appear to be legal, but some contributors from New Jersey are giving to the 527s at levels that would not be permitted under that state's law if they had simply written a check directly to a candidate.

Before Virginians start patting themselves on the back for providing a public service to the voters of New Jersey, it's worthwhile to check and see how well this state is policing its own campaign finance laws.

While the DGA and RGA have complied with reporting requirements, at least eight 527 groups have given money to campaigns or other political organizations in Virginia but have yet to disclose their donors.

The American Federation of State, County and Municipal Employees has given more than $900,000 to Virginia Democratic candidate Creigh Deeds. The Service Employees International Union has given Deeds $200,000. The Presidential Coalition LLC gave Republican Bob McDonnell $10,000. SEIU officials say the union has received no donations of $5,000 or more this year. The other groups did not respond to questions about their donors.

The lesson here is that no campaign finance law is infallible, no matter how strict or how loose. A law worth passing is worth policing, and both New Jersey and Virginia could stand improvement.