Check-Bundling Cloaks Special Interest Sway

Large contributions through conduits jump 300 percent in 20 years

September 10, 2013

Madison – Large individual contributions funneled to legislators through check-bundling outfits that hide the real clout of special interest campaign contributions from the public hit a record $3.7 million in 2011 and 2012, a Wisconsin Democracy Campaign review found.

The check-bundling groups, known as conduits, are used by liberal and conservative ideological groups, business, real estate, medical professionals, transportation and other special interests to magnify the impact of individual contributors who use them to contribute to Democratic and Republican candidates for statewide office and the legislature.

Large individual contributions to sitting legislators through conduits have ballooned more than 300 percent over the past 20 years from nearly $900,000 in the 1993-94 election cycle to nearly $3.7 million in the 2011-12 election cycle (Table 1).

The chief problems with conduits are they effectively bypass individual and political action contribution limits, and they reduce the transparency of special interest donations.

Conduits used by corporations, professional associations, political parties and other special interests collect contributions from individuals, bundle them together and send one large check to the candidate. Accompanying the check is a letter that identifies the individual donors and the conduit’s name so the candidate knows the special interest that is trying to buy influence.

So a conduit check to a legislative candidate can be several thousand dollars, and the candidate can receive an unlimited amount of conduit checks. Meanwhile, state law limits individual and PAC contributions to $500 to an Assembly candidate every two years and $1,000 to a Senate candidate every four years. Assembly candidates may only receive a maximum $7,763 in PAC money every two years and Senate candidates may only get up to $15,525 every four years.

Finally, the fat checks issued by the conduits do not appear as an entry on candidate campaign finance reports. Candidates instead report the smaller donations from numerous individuals making it difficult for the public to see the full impact influential special interest contributors have on policymakers.

The Democracy Campaign also found that special interest contributions through conduits have sharply favored Republican legislators over Democratic legislators even though partisan control of the legislature was split much of the time during the past 20 years and even when Democrats briefly held control of the Assembly and the Senate during the 2009-10 legislative session (Bar Chart).

Bar Chart

Chart: Large Individual Contributions to Sitting Legislators Through Conduits

Large individual contributions to sitting Republican legislators through conduits more than tripled, from about $713,000 in 1993-94 to about $2.2 million in 2011-12. And while sitting Democratic legislators have received consistently less in large individual contributions through conduits than Republicans, Democrats have increased their take nearly 800 percent, from about $167,000 in 1993-94 to $1.45 million in 2011-12.

All told, Republican legislators have received more than twice the large individual contributions through conduits as Democratic legislators – $12.4 million versus $6 million – from 1993 through 2012.

The record amount of large individual conduit contributions to legislators in latest election cycle was largely due to 13 recall elections that targeted Republican and Democratic state senators for their support or opposition to GOP Governor Scott Walker’s successful plan in 2011 to slash public employee collective bargaining rights. Some of those races saw record-breaking amounts of money raised and spent.

Special interest conduit contributions helped many of the targeted incumbents in the 2011 and 2012 summer recall races keep their jobs. In addition special interests later helped Republicans regain control of the Senate in the 2012 general elections. In return, the GOP-led legislature recently approved a 2013-15 state budget that contained 94 mostly non-spending policy items as well as tax breaks, relaxed regulations and other perks that benefit many of these conduit contributors, including:

  • A $73 million spending increase and expansion statewide of school vouchers, a program that lets some families send their children to private and religious schools at state expense. In addition, $1 million in state funding for a controversial alternative teacher training program called Teach for America that is backed by school choice supporters. Wealthy school choice backers mostly from out-of-state and the Washington D.C.-based American Federation for Children spent more than $5 million in 2011-12 on negative electioneering activities and campaign contributions, including $102,400 in large donations to current legislators through the Fund for Parent Choice conduit;
  • Borrowing about $1 billion and transfer $445 million in taxpayer dollars and other funds to pay for major road projects and other transportation programs. Spending on roads traditionally draws support from an array of special interests that benefit from it, including business, construction, tourism and transportation, whose conduits contributed $868,010 to current legislators in 2011-12;
  • Paying Wisconsin hospitals up to $73.5 million to treat people who aren’t covered by Medicaid and cannot afford insurance because the state rejected $119 million in federal money to insure 85,000 more people on Medicaid. Large individual contributions in 2011-12 to current legislators through the hospital conduit totaled $159,811;
  • Providing breaks for business, manufacturing, construction and other special interests totaling nearly $150 million by creating a State Investment Fund, new sales or property tax exemptions for printers, contractors, biogas energy systems and the biotechnology industry, and a grant for a maritime museum: Increasing economic development credits, a sales tax exemption for junk mail and spending to clean up business-related pollution: Reducing business income and franchise taxes, business tax credit limits, business development and farm surcharges and a contractor registration fee: Relaxing tax rules on business operating losses.

Seven conduits funneled more than $100,000 in 2011-12 to current legislators on behalf of Republican and Democratic contributors, chiropractors, hospital, liquor, legal and school choice interests (Table 2). The far and away leader is a state conduit created by Act Blue, a Massachusetts-based national fundraising PAC created in 2004 that boasts raising more than $235 million for state and federal Democratic candidates across the country. The conduit passed $819,385 in large individual contributions in 2011-12 to Democratic legislators and two committees. A dozen committees got $10,000 or more through the conduit.

Among the top recipients of large individual contributions through Act Blue was the State Senate Democratic Committee at $368,469. The committee is one of four Democratic and Republican Senate and Assembly fundraising committees used by legislative leaders to shake down lobbyists and wealthy special interests for cash used at election time. This committee provided campaign resources to help Senate Democratic incumbents and challengers during the 2011 and 2012 recall races and the 2012 general election.

Rounding out the top two recipients of large individual contributions through Act Blue was Democratic Representative Sandy Pasch of Whitefish Bay at $62,518 and the Assembly Democratic Campaign Committee at $50,501. Pasch unsuccessfully challenged GOP Senator Alberta Darling of River Hills in one of the nine 2011 recall races. The Darling-Pasch race for the 8 th Senate District became the most expensive legislative election in state history at $10 million. The Assembly Democratic Campaign Committee is another of the four fundraising committees used by legislative leaders to raise money.

Behind Act Blue was the Majority GOP Conduit run by the state Republican Party. While Act Blue is a relatively new player in Wisconsin, the Majority GOP Conduit has been at or near the top of the list in conduit contributions for several years. The conduit funneled contributions of more than $10,000 to seven GOP committees in 2011-12. Topping the list was the Committee to Elect a Republican Senate at $136,860 – another of the four fundraising committees used by legislative leaders to raise money for election expenses. Like its Democratic counterpart, the Committee to Elect a Republican Senate played a key role helping GOP incumbents and challengers in the 2011 and 2012 recall races and the 2012 general elections.

Rounding out the Majority GOP’s top three recipients of large individual contributions was Senator Sheila Harsdorf of River Falls at $45,796 and Representative Mary Czaja of Irma at $42,275. Harsdorf successfully retained her 10 th Senate District seat in one of nine recall races in 2011. Czaja won the open 35 th District Assembly seat in the 2012 general elections.

The top recipients of large individual contributions from conduits in 2011-12 were the four legislative fundraising committees and candidates involved in the recall races and targeted and open seats in the 2012 general election (Table 3).

Ten candidates or committees accepted more than $100,000 in large individual conduit contributions, including the State Senate Democratic Committee at $432,246, the Committee to Elect a Republican Senate at $267,604, the Assembly Democratic Campaign Committee at $178,163, Republican Senate Majority Leader Scott Fitzgerald of Juneau who successfully retained his job in a 2012 recall election and the Republican Assembly Campaign Committee at $139,740.

Table 1
Large Individual Contributions To Legislators Through Conduits

Legislature Contribution
Period
Republican
Contributions
Democratic
Contributions
Total
Contributions
2013 Legislature 2011-12 $2,215,788 $1,454,220 $3,670,008
2011 Legislature 2009-10 $1,398,794 $1,035,141 $2,433,935
2009 Legislature 2007-08 $1,519,430 $1,315,441 $2,834,871
2007 Legislature 2005-06 $1,364,928 $600,571 $1,965,499
2005 Legislature 2003-04 $1,535,551 $350,372 $1,885,923
2003 Legislature 2001-02 $1,413,195 $233,610 $1,646,805
2001 Legislature 1999-00 $927,875 $452,069 $1,379,944
1999 Legislature 1997-98 $688,525 $206,874 $895,399
1997 Legislature 1995-96 $597,124 $195,849 $792,973
1995 Legislature 1993-94 $713,440 $167,128 $880,568

Table 2
Top* Large Individual Conduit Contributions To Current Legislators In 2011-12

Conduit Amount
Act Blue Wisconsin (supports Democrats) $819,385.00
Majority GOP Conduit (state Republican Party) $366,946.50
Chiropractic Health Information & Education $207,616.50
Healthy WI DGP/WI Hospitals DGP $159,810.75
WI Wholesale Beer Distributors $141,000.00
Justice Fund (WI Academy of Trial Lawyers) $133,528.00
Fund for Parent Choice (school choice) $102,400.00
Direct Givers of Waukesha County ( county Republican Party ) $80,290.00
Realtors Direct Givers Program $74,686.70
Alliance of Bankers for WI $73,150.49
WI HMOs Conduit $65,987.50
WDA Direct Giver Program (Dentists) $62,831.00
Dealers Direct Givers Fund (Car and truck dealers) $55,425.00
WICPA Legislative Involvement Fund (Accountants) $53,900.00
WI Friends of Time-Warner Cable $43,446.00
Childrens Great School Fund (WEAC) $40,592.50
WMC Conduit (WI Manufacturers & Commerce) $37,875.00
Tavern League Direct Givers $32,853.00
WI Energy Corp $31,774.25
Sentry Insurance $31,650.00
Friends of SCI Hunters (Safari Club International) $30,800.00
Friends of WI Bear Hunters $30,612.15
EMM Holdings Conduit $29,400.00
Madison Gas & Electric $28,475.00
Friends of WI Funeral Service $28,130.00
MMAC Conduit ( Milwaukee chamber of commerce) $27,400.00
Northwestern Mutual Life Insurance $27,100.00
American Transmission $26,125.00
Builders Direct Fund $25,928.50
Humana/Employers Health PIC $25,405.00
Funeral Service Alliance $25,300.00

*Table shows conduits whose large individual contributions to current legislators totaled $25,000 or more.

Table 3
Top** Legislative Recipients Of Large Individual Conduit Contributions In 2011-12

Legislator/Committee Office Party Amount
State Senate Democratic Committee S D $432,245.91
Committee to Elect a Republican Senate S R $267,603.77
Assembly Democratic Campaign Committee A D $178,162.98
Fitzgerald, Scott S13 R $167,508.50
Republican Assembly Campaign Committee A R $139,740.07
Gudex, Rick S18 R $128,750.00
Harsdorf, Sheila S10 R $113,932.50
Pasch, Sandy A10 D $108,150.13
Czaja, Mary A35 R $106,847.75
Darling, Alberta S08 R $103,930.78
Hansen, Dave S30 D $90,683.84
Olsen, Luther S14 R $89,457.50
Shilling, Jennifer S32 D $81,430.33
Suder, Scott A69 R $72,811.30
Krug, Scott S A72 R $71,341.50
Clark, Fred A81 D $70,269.36
Tiffany, Tom S12 R $65,023.75
Vos, Robin A63 R $57,897.20
Bernier, Kathy A68 R $51,337.00
Moulton, Terry S23 R $50,735.00

**Table shows legislators and committees that received $50,000 or more in conduit contributions.