Wealthy Could Donate $6M+ Without State Limits

Just a handful of high-end donors could bury state and local elections in cash

April 30, 2014

Madison – Wealthy donors could have funneled more than $6 million each to candidates in the 2010 and 2012 state and local elections if the state’s $10,000 aggregate annual limit on campaign contributions had not existed, a Wisconsin Democracy Campaign analysis found.

The finding follows a recent U.S. Supreme Court decision – McCutcheon v. FEC – that struck down federal limits on the total amount of campaign contributions an individual can make to candidates, political parties and political action committees. The limit for total contributions to all federal candidates and committees was $123,300 for the 2013-14 election cycle.

The court’s decision also casts doubt on the fate of similar aggregate contribution limits used in several states to reduce the influence of wealthy special interests in elections. Wisconsin law allows an individual to make up to $10,000 a year in total campaign contributions to state and local candidates and political committees.

The Democracy Campaign found that if the $10,000 contribution limit had not existed in 2012 well-heeled donors could have given at least $6.8 million each to candidates in about 4,700 state and local elections, 386 PACs and 157 political party committees. That’s 680 times more than the current contribution limit.

In 2010, rich contributors could have given at least $6.1 million each to candidates in about 4,700 state and local races, 319 PACs and 164 political party committees if Wisconsin had no aggregate limit on total contributions. That’s 610 times more than the current contribution limit.

Needless to say, the ability to give millions of dollars beyond the state’s annual $10,000 individual contribution limit would benefit only an elite pool of powerful special interest donors.

There were only 299 individuals who gave $10,000 or more to state candidates in 2010 and 2012 – about five one-thousandths of one percent of the state’s 2012 population. These are millionaires and billionaires, including 173 who don’t even live in Wisconsin, who contributed to the governor and other elected policy makers to influence state policy and spending decisions on a wide array of issues including education, environment regulations, taxes and the ability of local governments to make their own public health, land use and other decisions.

The Democracy Campaign’s wealthy donor estimates are based on the maximum contribution an individual can give to local and state candidates which ranges from $250 for most local candidates to $10,000 to candidates for statewide office, such as governor.

These high-donor contribution estimates are actually conservative for several reasons.

First, the estimate applies only one maximum contribution per race. In reality contributors can give the maximum contribution to more than one candidate in a race, such as cases where a donor backs different candidates in the primary and general elections, or instances where a donor supports both the Democratic and Republican candidate in the same race. Some big donors contribute to both major party candidates for governor in order to hedge their bets and curry favor with whoever wins.

Second, the high-donor estimates for each election year are based on PACs and political party committees that reported campaign finance activity in 2010 and 2012 rather than the total number of PACs and party committees registered at the time with the Government Accountability Board. In addition, if Wisconsin’s aggregate annual limit is indeed invalidated, there almost certainly will be a proliferation of PACs and party committees.

Finally, without an aggregate annual limit wealthy contributors would also be allowed to give as much as they want to any or all local and state political party committees and special interest PACs because there is no specific contribution limit to political parties and PACs in state law. Wisconsin’s current aggregate contribution limit of $10,000 a year has served as the practical limit on donations to parties and PACs. In light of the McCutcheon decision and the likely invalidation of that limit, state lawmakers may wish to establish specific limits on contributions to party committees and PACs. For the purposes of estimating the potential impact of the McCutcheon decision on Wisconsin elections, the Democracy Campaign assumed a limit on contributions to parties and PACs equal to the maximum allowable candidate contribution of $10,000. If lawmakers do not set specific limits on contributions to parties and PACs in the absence of an aggregate annual limit on all donations, then wealthy donors would be able to give unlimited amounts to these committees.