Shakedown Dues

[February 28th, 2007] State law makes it a felony to make a political contribution with somebody else's money.

And yet, political candidates in Oregon routinely solicit donations they then "pass through" their campaign accounts to other candidates or political causes, gaining influence and scoring chits with recipients.

"I think there's a lot of money that gets passed through, and I think it's more prevalent today than ever," says longtime Salem lobbyist Jim Markee, who represents several financial services and medical-industry clients.

Whether legislative candidates are breaking the law is unclear, but plenty of people in Salem are tired of the pass-through practice. Chief among the annoyed are contract lobbyists like Markee who say they get shaken down routinely for donations that end up getting passed on to other candidates and causes.

Markee says the client who provides the money often may not support the ultimate recipient. But lobbyists are reluctant to disappoint incumbents who solicit contributions and hold sway over their clients' interests.

Last year, an Oregon Law Commission panel that included Markee proposed a number of fixes to increase the Legislature's efficiency and sagging reputation. Ending so-called "pass-throughs" was high on that list. And there's a measure this session, House Bill 2597, that aims to shine a light on the practice by restricting candidates from spending on other races or issues unless they form a second committee for that purpose.

"If somebody is asked to contribute to a specific candidate's election, the money ought to be used for that purpose," Markee says.

Incumbents who face little or no competition often raise large sums and then dole out the money to other candidates and causes. In 2006, for instance, Sen. Kate Brown (D-Southeast Portland) was not up for re-election yet both raised—and distributed—hundreds of thousands of dollars to other candidates.

Brown did nothing illegal or unusual among party leaders. In 2004, according to Janice Thompson of the Money in Action Research Project, individual legislative candidates passed through at least $2.1 million of the money they raised for their primary political committees—the committees that exist ostensibly for the purpose of getting them re-elected.

(While breakdowns of 2006 spending on pass-throughs aren't yet available, Thompson's campaign spending watchdog group found that about one-third of the pass-through cash in 2004 went to other candidates; the balance went to caucus leadership funds and other committees. The $2.1 million represents about 3 percent of all the campaign money raised in 2004.)

There's also a flip side to donors' annoyance that their money is being rerouted to unintended recipients. Legislators and lobbyists say many donors use candidate and caucus funds intentionally to mask their donations.

In 2006, Republican Carol York, raised about $400,000, most of it from other candidates or caucuses, in her challenge to state Sen. Rick Metsger (D-Welches). Although Metsger says it would be hard to prove, he believes many contributors gave to York indirectly through other candidates' political action committees to protect themselves from Metsger's wrath in the event he kept his seat.

"Take somebody like the [Oregon] Automobile Dealers [Association]. They don't want to tick you off, but they want to beat you," Metsger says. "So they give you a little and funnel a whole lot to your opponent. Then if the opponent wins, they'll tell her, 'Hey, that was my money that helped you.'"

While Democrats have talked a lot about cleaning up unethical practices in Salem, many are skeptical that D's in either the House or Senate have any interest in a bill to end pass-throughs. Chuck Bennett, a lobbyist for school administrators, says the bill's chances of passage under Democratic leadership are "slim to none."

"Democrats have an absolute lack of appetite for real campaign-finance reform," Bennett says.

Russ Kelley, spokesman for House Speaker Jeff Merkley (D-East Portland), says his boss wants more transparency but that HB 2597 is a solution in search of a problem. "We're not supportive of this particular plan," Kelley says.