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Gifts and Campaign Contributions: A Loophole Story
Sunday, March 21st, 2010
Robert Wechsler
When is a gift a campaign contribution? This issue has been raised in
the trial of a Manhattan surrogate court judge, according to an
article in yesterday's New York Times.
The facts appear to be as follows. The head of the judge's law firm deposited $250,000 into her personal account, intending that it be used for her campaign (he says that $150,000 of that was intended to be a loan). The judge then gave this money to her campaign committee, and it was reported not as a regular campaign contribution, but as a contribution from the candidate.
The judge and lawyer are arguing that once the money was placed in the judge's account, it was hers and, therefore, it was correctly identified by the campaign committee in its report.
But this is a technical issue that ignores the fact that the money was intended as a campaign contribution and loan, and was treated as a campaign contribution. The judge and lawyer are acting as if, in a government ethics context, it's okay to play games like this just so that you can make such technical, but completely disingenuous arguments when you're caught. Actually, what they did and are doing is more unethical than simply failing to report a contribution.
One solution to this problem is for all candidates who give money to their campaigns to report every aggregate gift during the past two years over a certain figure. Since one can't limit such gifts, because they only become relevant when candidates give money, the only thing to do beyond requiring disclosure would be to require all gifts over a certain figure to be returned when the candidate makes a sizeable contribution to his or her campaign. This would be an odd provision, but if even judges are willing to take advantage of ethics loopholes, then such loopholes have to be filled.
Another solution is to have a strict gift ban for judges, so that they cannot accept a gift from anyone who directly or indirectly (that is, through their law firm) might appear before them. This would, however, still allow, say, their family members to put large sums into a campaign without reporting them, but people wouldn't care as much about this. This would be seen as supporting family, rather than possibly buying a candidate via a clever scheme.
Robert Wechsler
Director of Research-Retired, City Ethics
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The facts appear to be as follows. The head of the judge's law firm deposited $250,000 into her personal account, intending that it be used for her campaign (he says that $150,000 of that was intended to be a loan). The judge then gave this money to her campaign committee, and it was reported not as a regular campaign contribution, but as a contribution from the candidate.
The judge and lawyer are arguing that once the money was placed in the judge's account, it was hers and, therefore, it was correctly identified by the campaign committee in its report.
But this is a technical issue that ignores the fact that the money was intended as a campaign contribution and loan, and was treated as a campaign contribution. The judge and lawyer are acting as if, in a government ethics context, it's okay to play games like this just so that you can make such technical, but completely disingenuous arguments when you're caught. Actually, what they did and are doing is more unethical than simply failing to report a contribution.
One solution to this problem is for all candidates who give money to their campaigns to report every aggregate gift during the past two years over a certain figure. Since one can't limit such gifts, because they only become relevant when candidates give money, the only thing to do beyond requiring disclosure would be to require all gifts over a certain figure to be returned when the candidate makes a sizeable contribution to his or her campaign. This would be an odd provision, but if even judges are willing to take advantage of ethics loopholes, then such loopholes have to be filled.
Another solution is to have a strict gift ban for judges, so that they cannot accept a gift from anyone who directly or indirectly (that is, through their law firm) might appear before them. This would, however, still allow, say, their family members to put large sums into a campaign without reporting them, but people wouldn't care as much about this. This would be seen as supporting family, rather than possibly buying a candidate via a clever scheme.
Robert Wechsler
Director of Research-Retired, City Ethics
---
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- Robert Wechsler's blog
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