Soft Money Hard Law: A Guide to the New Campaign Finance Law
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©2005 Perkins Coie LLP

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by eLawMarketing

The Anonymous Donor
Posted: 8/7/06

      As been noted here before, disclosure is a mostly unquestioned virtue deserving to be questioned. The New York Sun reports a story, about the New York State Republican party, which takes the question still a step further:  what if an organization accepts money but without knowledge of its source?  Jacob Gershman, "State GOP Receives Big Donation, but From Whom?" New York Sun (Aug. 7, 2006).  The party received a large PAC contribution, when it needed it badly, but it is so far unclear who stands behind the PAC, the Empire State Leadership PAC, or either provided or authorized the money.  In the past, the PAC has been funded with large contributions from other committees, including one controlled by current National Republican Congressional Campaign Committee Chair Tom Reynolds.  Now the source of funds is not known.  What we have here, in effect, is a "mystery giver," and an intriguing policy question, too.

      Bruce Ackerman has argued that there is merit to anonymity.  Candidates (and for these purposes here, parties, too) are better off without certain knowledge of the source of their funds.  The New York case is not the best one, of course:  the committee possessed some knowledge, since a PAC was the reported donor.  Of all worlds in which either some information is available or none at all, this is maybe the worst, since it entails giving meaningless information but, perversely, in the name of disclosure.  Once a disclosure scheme is established, the rules have been set and full, meaningful disclosure is the order of the day.  For this reason, the federal law prohibits the acceptance of anonymous contributions over $50.  In the regulated system in place, political committees are supposed to know and report, not seize the chance or accept the good fortune of unidentified money.

      Without the decisive bias of a pro-disclosure regime, anonymous contributions, received in a fully deregulated system, would have to be evaluated as good, bad or indifferent, on their own terms.  If the Empire State Leadership PAC or some such committee did not know the source of money, we have to have some reason for caring, other than the wish, simply, to know (because, in this hypothetical, we have surrendered the right to know, in a system without disclosure requirements.)

      The corruption argument is present but in enfeebled form.  A committee that accepts the anonymous contributions risks hearing, later, from the donor, who can insist that she earned something with the money and present, for the first time, her demands.  It not clear that this after-the-fact attempt, to enforce a deal never made, is a fruitful way to corrupt politicians or parties.  Since the money was given at the time of donation without strings attached, the donor has nothing to yank on.  The recipient can politely decline, having escaped the burden of any real obligation:  it was able to take the money and run, there having been no deal.

     As a fall back position, the now-revealed donor can appeal to the recipient’s fairness—I did you a favor, and so now you owe me one—but this is a weak ploy, because the candidate can easily deny that the money was understood to be a "favor."  Of course, the donor has given the candidate a taste of money and can suggest that more is available but, this time, at a price; but this is no different than any other bribe, and now that the donor is no longer anonymous, it is no longer the same case.

     What the anonymous contribution does accomplish is the degrading of any true political element or significance in the relationship of donor to recipient-committee (or candidate).  The contributor, by not communicating her identity, is not sharing any useful information with the recipient.  If, as the Supreme Court has suggested, a contribution represents "speech by proxy," with the candidate or party speaking for the donor, little useful "speech" can expected if the candidate does not know on whose behalf he is speaking.  Even a name and address, if that is all the donor offers, is some politically productive information, providing the candidate with something of significance, and it also makes possible some contact or communication in the future.  Many donors, of course, have more to say:  they give, in part, because the wish to say it, and it is the confusion at the heart of campaign finance regulation that this is taken to be the making of "corruption."

     Of course, none of this is helpful to the New York Republican Party.  New York State has chosen a regulated system, structured to compel some true disclosure, and the GOP there has not supplied it.

Bob Bauer