Democrats mirror GOP in using targeted funding loophole

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BOSTON – Records show that a campaign finance loophole Massachusetts Democrats have accused Republicans like Gov. Charlie Baker of exploiting has worked out pretty well for them, too.

The loophole issue has been a target of Boston Globe reports and at least one editorial detailing the Baker administration’s role in “an elaborate scheme that shuffles money between federal and state committees in a way that sidesteps contribution limits and muddles the money trail.”

Common Cause Massachusetts, a nonprofit outfit that bills itself as nonpartisan and committed to promoting transparency in campaign finance, has proposed cracking down on the practice.

The group has outlined a legislative measure to take that step, noting that federal donation limits far surpass the state limit, which caps individual giving to a state party committee at $5,000 in a given year. Individual donations to state parties are pegged at $10,000 a year under federal rules and at $33,400 for gifts to national party committees, with separate limits for committees set up to promote congressional candidates, presidential candidates and other purposes.

Democrats may have reason to be wary of new GOP fundraising efforts. During the current election cycle, federal records show that the Massachusetts Republican Party is outdistancing the Massachusetts Democratic State Committee, $1.9 million to $1.4 million, in terms of fundraising.

The loophole that the Massachusetts Democratic Party has focused on, in a complaint to the state Office of Campaign and Political Finance, is the practice of donating $43,400 sums to the Massachusetts Victory Fund, a joint fundraising apparatus of the state Republican party and the Republican National Committee.

The Victory Fund, registered as a federal committee, then sends the maximum sum allowed ($10,000) out of each donation to the state GOP, according to Globe reports. The newspaper has said that while the remainder goes to the national committee, it is subsequently sent back to the state party in a series of disbursements.

Out of the $1.9 million raised since January 2015 by the state GOP, $755,000 has come from the Victory Fund, with another $523,000 courtesy of the Republican National Committee.

But the GOP isn’t the only state party benefitting from such an influx of cash. The Massachusetts Democratic Party, during the same time span, has received $108,000 from the Democratic National Committee and $64,000 from a federal Hillary Clinton Victory Fund.

State Democrats also have their own version of a victory operation, known as the Coordinated Campaign, launched all the way back in 1992.

“The Coordinated Campaign is a project of the Democratic State Committee” and is “designed to take advantage of federal election laws encouraging grassroots campaign activity,” according to the state party’s 2011 field manual. The manual describes it as “a vehicle for Democratic nominees to collaborate in a unified effort so that every Democrat wins in every district across the commonwealth.”

“The Coordinated Campaign can accomplish this because, under federal election law, state parties may combine federal and non-federal money for use in campaign activities for both federal and non-federal candidates to pay for printed material, staff, GOTV, and other activities related to GOTV or volunteer involvement,” the manual notes, referring to get-out-the-vote efforts. “These activities will be carried out primarily in areas targeted by the state party, with advice from the major candidates.”

The state party’s biggest source of donations has been ActBlue, a Somerville-based nonprofit political action committee which bills itself as a way for ordinary people to go online and donate to a specific candidate or cause. The website processes donations from anywhere in the U.S.

Federal records show that the Massachusetts Democratic Party has received $206,000 during the current two-year federal election cycle through ActBlue. The bulk of the party’s receipts have come directly from individuals.

None of the donors that accounted for the sums given to the parties Republican or Democrat are detailed in Federal Election Commission online records.

Despite the Democratic party’s long-standing practice of combining untrackable federal donations with state-level contributions, a blog entry posted on the party’s website demands Baker be “held accountable” for his electioneering. The party has also demanded that Baker disclose “the sources of his ‘shadowy dollars.’”

Common Cause found a sponsor for its proposal in state Sen. Jamie Eldridge (D-Acton). Eldridge had planned to introduce legislation modeled on it as a budget amendment during Wednesday’s Senate debate on the proposed spending plan but elected to withdraw it instead.

But Eldridge withdrew the proposal, “Transparency in Campaign Finance,” late Wednesday because it has yet to be given an airing in a public hearing, he said in an interview Thursday.

“There were concerns from some of the members that they really wanted to have a hearing for something that is seen as controversial as campaign finance reform,” Eldridge said. “We’re hopefully having a hearing soon and I’m hoping the Senate will take it up this session.”

Eldridge introduced the proposal earlier this month in the form of a Senate bill, which has since been referred to the Committee on Election Laws. But a companion measure has yet to be added to the legislative docket in the House of Representatives.

The state Democratic Party hasn’t seen an influx of federal dollars being used to influence state committee elections, Eldridge said Thursday. The Globe has reported heavily on the state GOP’s fundraising. According to reports, Baker raised more than $300,000 over the winter to back a slate of his preferred candidates for state committee seats, but has declined to reveal the donors.

In April, the state Office of Campaign and Political Finance ruled that is within the rules to use federal funds for state committee expenses, including work on campaigns, provided the staff spend at least some documented time working on federal elections.

Matt Fenlon, executive director of the state Democratic Party, said he couldn’t say whether it supports the Common Cause proposal.

“In order for the state party to take a formal position on legislation, a state committee member must make a motion for endorsement at a state committee meeting and the endorsement must pass,” Fenlon noted.

The next state committee meeting isn’t until Aug. 16, after the formal end of the legislative session.