Bloomberg Transfer

Bloomberg broke his promise to set up a vast independent-expenditure operation to help Democrats in the fall.  But he is going to give a lot of money to DNC.  How does this transfer not violate the limits that we discussed earlier?  Read on...

Michael Scherer and Michelle Ye Hee Lee at The Washington Post:

Former New York mayor Mike Bloomberg has decided to donate significant components of his shuttered presidential campaign to the Democratic Party, a historic bequest that includes an $18 million cash infusion to organize for the general election in swing states.

The decision, which exploits a provision in campaign finance law available only to federal candidates, amounts to a shift in strategy for the billionaire political activist, who had previously promised to personally fund ground staff and offices in six states through an independent expenditure effort.

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To accomplish the goal, Bloomberg will transfer cash remaining in his presidential campaign account, which he donated, to the Democratic National Committee’s Battleground Build-Up 2020 effort for use in the general election. The money will allow the party to hire hundreds of additional organizers, party officials say. Bloomberg also will transfer the long-term leases he has signed on some offices in some swing states to state Democratic parties.

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Under normal circumstances, federal rules allow individuals to give a maximum of $355,000 per year to the DNC. The party has set up a Democratic Grassroots Victory Fund, a joint fundraising committee with state parties, that allows wealthy individuals to give $865,000 in one year. Bloomberg has already donated the maximum allowed to this account.

But the new shift of resources means he is able to give more than 20 times the maximum a donor can give to the national party in one year, because of provisions that allow federal candidates to donate unlimited amounts of leftover money to national and state parties as they wind down their campaigns. This has effectively given Bloomberg a super-donor status because he self-funded his White House bid.

Campaign finance experts said such a mass transfer of personal money was uncharted territory.

“This has never, to my knowledge, been an issue before, because anybody other than somebody worth multiple billions would want their money back even if they self-funded,” said Charlie Spies, a campaign finance lawyer who served as counsel for Mitt Romney’s 2008 presidential campaign.

If someone mounted a self-funded bid solely to evade the individual contribution limit and donate leftover campaign funds to the party, that would be considered a straw donation scheme, experts said.

But Bloomberg is shuttering a real campaign effort, and his decisions point to a loophole in the federal law that wealthy self-funded candidates can exploit, experts said.
“I think it’d be absolutely wrong to suggest that it’s a ploy to get around the limits. . . . But it does suggest you could do that,” said Beth Kingsley, a campaign finance lawyer at Harmon, Curran, Spielberg and Eisenberg. “It does seem that there ought to be limits the same way there’s an individual [contribution] limit.”

The Federal Election Commission does not have a voting quorum currently and cannot conduct official business, such as providing guidance on this matter.