Among the unintended beneficiaries of the ongoing debate over campaign finance reform could be the credit union lobby.
After all, the main aim of the reform effort is to reduce the influence of the fat-cat political donors on the political parties and the congressional leadership, and there really aren't any credit union donors who fit that bill. So broad-based lobbies, like the credit union movement, which depends on thousands of small donations to feed it, could gain from the reform effort.
CUNA's political director Richard Gose, who has helped build the credit union trade group into a major player in campaign finance, agreed. "We haven't taken a position on campaign finance reform. Whatever comes down, we're positioned well," said Gose, who helped more than double CUNA's political action committee (PAC) activity the last two elections cycle to $2-million. In fact, the $1.6-million CUNA contributed to individual candidates last elections puts it eighth among all trade associations in the country and among the top 25 of all PACs.
The campaign finance debate is aiming to curb numerous excesses that have arisen in recent years. The first is the explosion of so-called soft money, which allows corporations, labor unions and wealthy individuals to contribute directly to one of the two major parties. Soft money contributions soared to almost $500 million in the past election cycle. And even though the parties are supposed to limit the use of those funds to party-building activities, such as voter registration drives, they have been used for numerous unrelated activities, including ad campaigns either supporting or attacking specific candidates.
The huge caches of soft money have become virtually indistinguishable from hard money, which is limited to $1,000 per individual per election. So even though CUNA contributed the maximum allowable $180,000 to various organizations of the two parties (Senate, congressional campaigns), it was able to donate another $250,000 in soft money. No one really knows how those funds were divided by the various organizations.
Soft money is commonly used to circumvent the limits on donations to individual candidates, a hard cap of $10,000 per-election cycle. So even though CUNA and affiliates "maxed out" on HR 1151 champions Sens. Al D'Amato (R-NY), and Lauch Faircloth (R-NC), in the 1998 elections, it was able to funnel $45,000 to the Senate Republican Senatorial Campaign earmarked to help the ultimately fated ill D'Amato and Faircloth campaigns in the weeks before the election.
In the past elections, then-First Lady Hillary Rodham Clinton's soft money PAC, New York Senate Campaign 2000, raised a record $9.3-million in soft money, then sent it all to the Democratic Senate Campaign Committee, which used about half those funds to aid Clinton's successful Senate campaign. Federal Election Commission records show the largest single donor to the Clinton soft money PAC was Stan Lee Media, the company run by the Spiderman comics author, which gave the PAC $462,000.
Soft money has also helped fuel the credit union-backed campaign for bankruptcy reform. MBNA, the biggest credit card bank in the country, made more than $1.2-million in soft money contributions the last elections, and with a total of $3.6-million on contributions of all kinds, was the largest single campaign contributor. Citigroup, the nation's largest credit card issuer, gave $1.5-million in soft money last elections.
Soft money has become such an effective tool that some major interests have stopped making the smaller hard contributions to individual candidates through a PAC. Among them are secondary mortgage market giants Fannie Mae and Freddie Mac, which, partially through the contributions of $6.3-million in soft money the last two elections, have become campaign powerhouses in the capital. Which party or candidate will take on such a source of political largesse when push comes to shove?
Credit union entities last election made a total of $295,000 in soft money contributions, about five times what they gave in the previous elections (1997-98). Leading the way was CUNA, which made an estimated $250,000 in soft money contributions. Next was CUNA Mutual Group ($14,720); NAFCU ($9,000); Coastal FCU ($5,000); Community Choice CU ($5,000), and Patelco CU ($1,500). Though that may sound like a lot, the banks were able to give more than $7-million in soft money, widening the gap with credit unions over campaign funding.
Also Missing In Legislation
Another dodge that probably won't be addressed in the legislation is the emergence of so-called leadership PACs run by many of the congressional leaders in both parties. While campaign rules limit the amount a congressional candidate can accept from any one contributor to $10,000 per election cycle, the leadership PACs allow candidates to accept another $10,000 under the guise of a separate PAC. CUNA made contributions to several leadership PACs last elections for the first time, including those run by Sen. Majority Leader Trent Lott (R-MS), House Majority Leader Dick Armey (R-TX), House Speaker Dennis Hastert (R-IL), and Charles Rangel (D-NY), ranking Democrat on the Ways and Means Committee. But CUNA had vowed, for now, not to give more than a total of $10,000 to PACs run by a single candidate.
Credit Union Journal Washington Bureau Chief Ed Roberts can be reached at robertscuj aol.com.
