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Monthly Archives: August 2011

In July, the Progressive Change Campaign Committee (PCCC) asked ActBlue to set up a draft fund for Elizabeth Warren. By mid-August the PCCC had shattered all records for the largest and fastest growing draft fund in our history, raising over $102,000 from around 7,000 supporters even before Elizabeth Warren formed an exploratory committee for a Massachusetts Senate run.

Today, their unprecedented success is the reason we're sending her committee a six-figure check.

The PCCC's landmark efforts are not only impressive, they tell us something important about the way politics is changing in response to the digital age. In 2009, the PCCC was a brand new organization. Today, the PCCC has a played a central role in a number of key battles over the last two years — from the fight for the public option and the push to keep Keith Olbermann on the air, to this year's Wisconsin recall elections and the Draft Warren fund. With the help of a large and active donor community, the PCCC has raised millions even though their average donation size is just under $15. In short, they've become a major political player at a speed and donation size that would've been unthinkable five years ago.

Much the same can be said of ActBlue. Seven years after our founding in 2004, we've become the single largest source of political funds in the United States. Our mission was (and is) to give voice to the voiceless, and bring attention to those donors and communities that are often ignored or overlooked. We call it "Democratizing Power," and this is how it works:

ActBlue raises up small donors, who raise up the PCCC, which raises up Elizabeth Warren. 

It's an organic, bottom-up process that's based on shifting the incentives that politicians face in a direction that's a win for everybody involved and the political system at large. By using ActBlue, the PCCC can demonstrate to everyone who cares to look that they can have a major impact on campaigns, and their donors can see exactly how powerful they are when they work together. Politicians learn that grassroots donors can be counted on to produce major results when it matters. And over time we get a political system that's responsive to the needs of folks who contribute $25, not just those who can afford $2500 donations.

Our architecture and their work–which has already raised another $7,000+ for Warren–improves your government. It's a good thing, man.

Restore Our Future, a so-called super PAC formed to support the presidential bid of Mitt Romney, recently reported receiving a one million dollar contribution from a company, which has caused a stir. It’s not the size of the contribution that caught everyone’s attention since super PACs can legally accept unlimited contributions even from corporate contributors as a result 2010 court decisions. Rather, campaign finance reformers are crying foul based on the lack of disclosure of exactly who was behind the contribution. They’re just crying to the wrong agency.

W Spann, LLC, the company that made the contribution, was formed in Delaware in March and then dissolved in July. A Boston lawyer specializing in wealth management handled the paperwork, but otherwise the person(s) responsible for the company — and the resulting contribution — is entirely unknown. A consensus has emerged that W Spann probably violated the law because making the contribution caused it to become a political committee, and W Spann failed to register with or report to the FEC. Even opponents of campaign finance laws agree that this is the case. In response, reformers have called on the FEC to investigate.

But the FEC will do nothing. There are a number of reasons for this, perhaps principally among them the fact that the FEC has been largely unable to act in its current configuration of commissioners. Even if the FEC were to act, however, it’s not clear that the consensus presents a sound legal argument. A political committee is defined as a group of people who make contributions together; a single person cannot constitute a political committee. If W Spann was established by a single person, therefore, the complaint will fail. And there are additional complications of line-drawing (should any company that makes a contribution be forced to register? if the company made charitable contributions in addition to its political contributions?) that the Republican commissioners will almost certainly balk at, making any action even more unlikely.

The complaint overlooks the real issue in this case: disclosure, not whether the company is a political committee. And there is a better way to force W Spann to disclose who was behind this major contribution. All organizations or companies whose primary purpose is to make political contributions are required to report those contributions and the original source of the funds to the IRS. Everyone has to register with the IRS, and line drawing is the essence of the IRS’s day-to-day operations, so they are much more likley to exercise jursdiction over W Spann than is the FEC.

If it is the case that the primary purpose of this shell corporation was to make this contribution, regarless of how many people were behind it, then W Spann broke the law by not reporting the source of the contribution to the IRS. Setting a precedent by forcing the disclosure of anonymous donors to the IRS rather than the FEC (which has demonstrated itself to be a poor watchdog) would be just as effective a means of getting large donors to think twice before laundering their millions through shell companies. Unfortunately, instead we’re likely to end up with nothing from the FEC.

In yesterday's Washington Post, T.W. Farnam apparently thought it would be illuminating to compare grassroots donors to addicts. The article is the other half of a classic D.C. lose-lose attack on the grassroots: if you don't give, you're a feckless mass who can't be trusted to come through for candidates, and if you do give you're rubes at mercy of canny political operatives.

Unconsidered in the article is the apparently outlandish possibility that grassroots donors are making their own decisions about who to support–that they aren't just money pinatas to be beaten by enterprising staffers when cash gets low. Crazy, I know. 

Beyond the condescending frame and patronizing tone, the article still has a huge problem: what's the alternative? Over the past two years we've seen a marked erosion of campaign finance law, always to the benefit of monied interests. If grassroots donors don't step up to provide a counterweight to that ever-increasing concentration of power, the end result will be the total capture of our electoral system by those interests. Voters will just be the people who show up on election day to ratify a choice that was made long before ballots were printed.

And that's the real reason why grassroots giving matters: by engaging in the fundraising process, grassroots donors are taking ownership of their political future. To use a well-worn GOP chestnut, they have "skin in the game." Grassroots donors raised over half a million dollars for Kathy Hochul (D-NY) and helped her pull out an unlikely win in NY-26. That kind of participation fulfills the promise of American democracy, and shouldn't be treated like some kind of hideous affliction brought on by the digital age. 

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