How political fundraising is like money laundering (but legal)

How the candidates are taking fundraising to new levels.

Hillary Clinton will be in town this week for what her campaign is calling her last fundraiser in the LA area before the general election. Clinton is coming off her biggest fundraising month so far. During September, she raised more than $154 million dollars for her campaign and the Democratic party.

Reporter Evan Halper is covering the presidential race for the LA Times. KCRW talked to him about how both Clinton and Donald Trump are stretching the boundaries of campaign financing in this year’s presidential race.

KCRW spoke with Halper to find out where all the money is coming from. 

Evan Halper: From all matter of sources, it’s coming very fast and in very big checks right now as we get to the end of the campaign. Hillary Clinton has been collecting from – as we know there are millions of dollars on Wall Street. When she goes to these fundraisers, Hollywood’s a big contributor and I’ve been to dinners she’s given, where she will collect millions of dollars within the course of an hour and half event.

KCRW: You said that Hillary Clinton is exploring the outer limits of fundraising like no presidential nominee ever has, but it seems like we hear that every election cycle at this point. Alarm bills went off back in 2008, when Barack Obama declined public funds, so that he could raise larger amounts from private donors. Isn’t this just really more the same?

EH:Yes. That is a very good observation. Each time the boundaries do get pushed further. But it’s true the rules get looser and looser and looser. We have a federal election commission that is dead locked and everything. They are just not doing much in the way of enforcing rules, and as that happens it creates all these loopholes if you will, for campaigns to just do things that they didn’t do the last election and collect bigger and bigger, more and more checks.

KCRW: Like what? Can you give us an example?

EH: For example there were some rules that were eased up in terms of how you can raise money. The Democratic Party can raise money for various things, and there is a particular account to raise money for like Democratic and the Republican Party conventions and suddenly a new avenue opened up for big donors to write these big checks for just the conventions. But those conventions were getting funding anyway and so the money just ends up moving around. But it allows these donors to contribute bigger and bigger [amounts]. You also see this here; here are these joint fundraising committees. These have been around, but they can use them and leverage them in [new] ways. The rules have been tweaked such that you can funnel money through these state committees. The Republicans are funneling all kinds of money through, I think it’s Alaska, I mean states where they aren’t really in play this season, but you write your check to a bunch of different state parties and then those checks make their way back to the national party and then it makes its way back to the campaign. So, there are all these new uses you can give more money for, but ultimately  it’s really kind of legal laundering – that money can make its way back to the same pot and get used the same way it’s been used in the past just in bigger amounts.

KCRW: Donald Trump has said the he’s bankrolling most of his own campaign and that he’s not beholden to donors. However he is fundraising, but not releasing the number of attendees who turn out for events, what the minimum donation is, the kind of information that Hillary Clinton provides, that traditionally  other candidates have provided. How significant is it that he’s not putting that information out there?

EH: Well the significance is that it’s always good for the public to know who’s doing these fundraisers, who your “bundlers” are, that is the people who raise big money for you and get their friends to give big money and collect lots of checks, because those are the people, arguably, you are going to owe favors to later. So what Hillary Clinton does is her campaign, you know it’s not very much information, but they at least send an email after each fundraiser and say ‘okay,  we were in so-so’s house and we had a fundraiser there and these many people attended and this is what it cost to attend.’ So at the very least, the press knows this happened.

KCRW: Are the candidates required to provide this information or is it more accepted procedure?

EH: They are not required and that gets back to the point about a very weak  federal election commission, I mean the rules are so loose in what you can do; how you can do it, that candidates are able to do much more under the radar then they have been in the past and they’ve gotten smarter about it. I mean, you used to be able to take a look at who was giving money and you could download a spreadsheet if you were an investigative reporter and see a bunch of checks come in around a certain time and some of them where particularly big – and that was probably the person who was hosting the fundraiser and you could kind of get an idea of who was there and get on the phone and make some calls. Now, the money may come in one month and the fundraisers may happen two months later, so actually trying to track these events and who’s at them and who a candidate is having dinner with or who they are meeting on the trail and collecting checks from along the way. It’s harder to sort of see the patterns in these groups of people and how they might be coming together.