Bundling rule doesn’t capture all the fundraising by lobbyists

Politicians are supposed to report to the Federal Election Commission (FEC) lobbyists who have bundled money for their campaigns. A bundler is an individual who collects contributions from others and then directs the money to a particular candidate.

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Many lobbyists do double duty as bundlers because of their ability to tap their Washington networks for fundraising.

On its Party Time! Database, the Sunlight Foundation, a watchdog group, lists dozens of fundraisers hosted by lobbyists. But political campaigns have not filed bundler reports to the FEC, which tracks campaign spending, for all of those invitations, according to an analysis by The Hill.

The new bundling disclosure rules are part of the lobbying and ethics law Congress passed two years ago in response to the Jack Abramoff scandal. But critics say the FEC weakened the disclosure requirements in its rulemaking process.

Some lobbyists are being reported as bundlers. For example, Tony Podesta of the Podesta Group — a lobbyist and Democratic Party donor — is listed as a bundler for four different campaigns. That is the most of any lobbyist. But the report still doesn’t capture all of Podesta’s fundraising activities.

According to invitations secured by Sunlight, Podesta hosted at least 10 fundraising events in the same time period covered by the FEC reports.

“I think, as with anything new, people are getting used to it and it is hard to know,” Podesta said, referring to the bundling rule. “We are proud bundlers and leave it to the candidates on how much money was raised and how many co-hosts there were.”

So far, 27 different campaigns have reported bundlers to the FEC. Eighty-four bundlers have been listed since the bundling rule went into effect in March. The bundlers have raised almost $3.6 million for candidates.

Lobbyists and campaign aides say the reason the new disclosure rule doesn’t appear to be capturing much activity is that only those bundlers who raise at least $16,000 in contributions over six months have to be reported.

Campaigns can also split the sum raised among co-hosts. So an event hosted by five lobbyists that raised $50,000 would not necessarily meet the disclosure requirements if the campaign decided to credit each host with bundling $10,000.

Podesta said he and his wife, fellow lobbyist Heather Podesta, have hosted several fundraisers at their Kalorama home this year but they often do not raise enough money for campaigns to report it to the FEC.

“It is not unusual that we will have three or four co-hosts, which means we need to raise a lot of money for the campaign to even consider whether we need to be listed as a bundler,” said Podesta, who has raised more than $92,000 for candidates so far, according to FEC reports.

In addition to Podesta, other prominent lobbyists like Steve Elmendorf of Elmendorf Strategies and Matt Gelman of Microsoft have shown up on the reports.

Other lobbyists say their fundraising activities do not always meet the reporting threshold.

Kenneth Kies, managing director of the Federal Policy Group, has bundled about $40,000 each for the National Republican Senatorial Committee and the National Republican Congressional Committee. And although no fundraiser invitations from Kies show up in Sunlight’s Party Time! database for this year, the lobbyist said he has hosted several small events in 2009.

“We have done lots of fundraisers for congressmen, but they are usually small dinners, so they don’t reach the threshold,” said Kies. “Not necessarily to get below, but that is because that is how they have turned out.”

Reform advocates say the loopholes mean the bundling disclosure accomplishes little of what lawmakers intended when Congress passed the ethics bill in 2007.

“This is going to be the dog that never barked,” said Paul Ryan, an attorney with the Campaign Legal Center, which advocates for campaign finance reform.

“It tells me one of two things, which is these fundraisers were not very successful or the public is not getting the lobbyist bundling disclosure it thought it would with this legislation.”

Several lobbyists say they are nervous they are meeting the requirements of the new bundling rule, with some even consulting legal counsel on what their obligations are. But it is the campaign’s responsibility, not the lobbyist’s, to report the amount of money that was bundled and the name of the bundler under the rule.

Campaign aides defended their disclosure of bundlers, saying that few lobbyists had raised enough money to trigger reporting.

Podesta hosted a fundraising dinner for freshman Sen. Michael Bennet (D-Colo.) in May this year. But the money raised at the gathering was less than $16,000.

“Give the amount raised, the legal requirement for bundling was not met,” said Craig Hughes, campaign manager for Bennet.

Reform advocates complain that the bundling rule has produced little disclosure so far because the FEC severely weakened the measure during its rulemaking process.

FEC Commissioner Ellen Weintraub told The Hill that the final rule was a compromise because it needed to be signed off on by commissioners from both parties.

“If I had my way, we wouldn’t just have disclosure of bundlers as lobbyists. We would have more,” said FEC Commissioner Ellen Weintraub. “It was a compromise. It was not perfect, but it was the best thing we could do.”

Nevertheless, the rule has accomplished some good by showing which lobbyists the campaigns are crediting with fundraising.

“The end result is there is more disclosure than there used to be,” Weintraub said.