A Bunch of Money Trouble
The campaigns need bundlers—until they do something wrong
Sen. Hillary Clinton's recent return of $850,000 in campaign donations is shining a spotlight on the crucial and controversial new role played by so-called bundlers of contributions. The embarrassing episode is also raising questions about what campaigns are doing—and what's reasonable to expect from them—as they balance the intense pressure to raise money with the need to weed out tainted contributors.
Bundling took off after the passage of the 2002 bipartisan campaign finance law, which limited direct individual donations to $2,300. That modest ceiling sent campaigns in search of well-connected supporters who would persuade others to write campaign checks, package them together, and give them to the candidate.
Norman Hsu was such a donor, a charismatic and prodigious fundraiser. But then it came to light that Hsu pleaded no contest in 1992 to grand theft and was the subject of other legal scrutiny. Those revelations caused Clinton to announce on September 10 that she would return all the funds connected to him. Last week, federal prosecutors filed a criminal complaint that said Hsu violated federal election laws by reimbursing donors for campaign checks they wrote and forced others to make donations by threatening to cut their ties to a "massive Ponzi scheme" he allegedly ran.
But Hsu is hardly the first big fundraiser to create headaches for a candidate. Michigan lawyer Geoffrey Fieger, famous for representing doctor Jack Kevorkian in his trial for assisting suicides, was indicted in August on charges of conspiring to illegally reimburse his firm's employees for contributions made to the 2004 campaign of John Edwards. And disgraced lobbyist Jack Abramoff was among the "Pioneers" and "Rangers" who gathered $100,000 to $200,000 in campaign cash for President George W. Bush.
A new lobbying and ethics reform law signed on September 14 by President Bush requires lobbyists to disclose the amounts they raise for political candidates. But the law doesn't apply to any other bundlers. Sen. Barack Obama has introduced legislation that would require candidates to disclose their largest bundlers and has voluntarily released his own list, as has Democratic hopeful Edwards. Both have more than 100 bundlers. Most other presidential campaigns have not been as forthcoming, though they honor such big fundraisers with lofty titles. Some Clinton bundlers are called "Hill Raisers," while Republican hopeful Rudy Giuliani has branded his as "Sluggers" or "Team Captains."
Vetting. Ethics watchdogs say campaigns should do a more thorough vetting of their bundlers, especially high rollers like Hsu. On the heels of Hsu's troubles, the Clinton campaign has vowed to begin doing criminal background checks on all its bundlers, as has the Edwards campaign. Obama's campaign says it is as diligent as possible in vetting donors and bundlers but will not elaborate.
Regular investigative reviews of donors and bundlers could cost hundreds of thousands of dollars if a campaign hires outside investigators, says Kenneth Gross, a Washington lawyer who advises politicians on campaign finance. "But it is money well spent for a campaign," he says, "if it is to stay out of trouble, politically." Just ask Hillary Clinton.
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