Jeb Bush exploits non-candidate status to rewrite campaign finance playbook

Jeb Bush says he’s  merely ex-ploring a run for president.
Jeb Bush says he’s merely ex-ploring a run for president.
Published Dec. 15, 2015

WASHINGTON — As Jeb Bush continues a torrid fundraising schedule across the country, he is pushing new boundaries of campaign finance law, exploiting his status as a noncandidate to avoid contribution limits and amass a cash pile already in the tens of millions.

The effort, which supporters call "shock and awe," is designed to assert Bush's dominance in the 2016 Republican presidential field, but it also represents a new chapter in the era of unlimited money in politics and raises numerous questions, beginning with the most basic:

How can Bush, who acts and sounds every inch the candidate for president, not be a candidate?

The former Florida governor says he is merely exploring the idea of possibly running for president. He drops disclaimer after disclaimer — If I decide . . .

That may seem laughable given Bush's actions — including campaign-style speeches and visits to Iowa, New Hampshire and South Carolina, courting the wealthiest donors and best political talent in the country, and resigning from corporate boards that pose potential conflicts of interest — but it is part of a carefully planned strategy.

It also underscores campaign finance regulations awash in loopholes and lax enforcement in the fast-evolving world of Super PACs unleashed by the U.S. Supreme Court's 2010 Citizens United decision.

As an actual candidate, Bush's direct source of funds would be limited to $2,700 per person per election. But because he's not officially running, his legal advisers contend he can chase unlimited amounts for his Right to Rise Super PAC.

"At the moment, it looks like a brilliant strategic move," said Dan Tokaji, an election law expert at Ohio State University.

Watchdog groups are alarmed, saying Bush's actions are highly questionable, if not a direct violation of law, and could lead others to do the same, threatening to upend what is left of campaign finance law.

"It's one of the great charades of American politics," said Fred Wertheimer of Washington-based Democracy 21. "It's simply thumbing your nose at the American people and saying, 'We're shrewd, we're going to circumvent these laws and you have to live by it.' "

Paul S. Ryan of the Campaign Legal Center said: "The Supreme Court has recognized that a check above $2,700 directly to someone who admits they are a candidate could corrupt them and therefore can be limited. But we're to believe that the corruptive potential is miraculously washed from a $100,000 contribution handed to Jeb Bush for his Super PAC. It's absurd."

• • •

Ryan recently published a paper that points out that most of the probable presidential candidates seem to be skirting a provision of election law known as "testing the waters."

It is defined as activity "to determine whether the individual should become a candidate," and mandates it be paid for with contributions of no more than $2,700 per person. It also cannot include corporate or union money, which nonetheless is flowing into an array of committees that would-be candidates, including Sen. Marco Rubio of Florida, are using to fuel travel to key states, hire staff, conduct fundraising and even establish field offices.

"We are fully complying with the law in all activities Governor Bush is engaging in on the political front," spokeswoman Kristy Campbell said in a statement. "If Governor Bush engages in any testing the waters activities, they will be paid for appropriately under the law and reported at the required time."

When it comes to Bush's involvement with the Super PAC, the candidate appears to acknowledge he is in uncharted territory:

• Though advisers say he could directly ask for money at the Super PAC events, Bush is not doing so. (Then again, does he have to? Anyone showing up for an event requiring $100,000 to get past the door needs no instruction.)

• The website for Bush's conventional Right to Rise PAC, ostensibly set up to help other Republican candidates and limited to $5,000 individual donations, features Bush's picture and his political message. But the website for the Right to Rise Super PAC contains no mention of Bush.

"Supporters of Gov. Bush wanted to make sure there would be resources available should he decide to move forward with a run," Campbell said. "We are taking a conservative approach to all of Gov. Bush's activities."

• • •

On Dec. 16, Bush startled the political world by declaring that he would "actively explore the possibility of running for president." The announcement came weeks, if not months, earlier than anyone thought.

The careful wording allowed Bush to transmit his intentions without taking a more formal step. That has given him freedom to interact with the Super PAC. He intends to raise $50 million to $100 million in the first three months of this year.

Bush could formally enter the race around that time, though there's no deadline and the advantages of the noncandidate candidate posture may be alluring. Precise numbers, and donor names, won't come until the twin Right to Rise committees are required to file reports in July.

Already news reports from Bush's fundraisers around the country have carried eye-popping headlines: $4.2 million in a single day in Chicago; $4 million in Manhattan. A Miami fundraiser has vowed to draw in $5 million next week.

At a $1,000-per-person reception at the Grand Hyatt Tampa Bay on Tuesday, some fundraisers said they had heard some donors question why they had to write checks to a political committee rather than directly to Bush's campaign. But there was no such confusion when Bush attended a cozy dinner at the St. Petersburg condo of developer Mel Sembler last month that raised several million dollars for Right to Rise.

Election law restricts coordination between a campaign and a Super PAC, but Bush gets around that by maintaining he is not yet a candidate.

The millions he pulls in could not be transferred to a Bush for president committee, but that's irrelevant. The Super PAC would run so-called independent expenditure ads in support of Bush, and it could attack other candidates.

There's no worry the Super PAC would go off message, which has been the concern of some past committees backing candidates. Until Bush becomes an official candidate, advisers working for his two committees can coordinate all they want, building the apparatus he would need to run a national campaign.

Employees of the Super PAC could also jump to the campaign with no harm to Bush — but not vice versa. Under federal rules, if campaign staffers went to the Super PAC, a 120-day cooling off period would kick in, stunting its activity.

"Abbott and Costello could do a very good comedy routine about this," Wertheimer said.

• • •

Thanks to his family's vast political network, Bush has always enjoyed huge financial advantages over rivals.

In his first run for governor, Bush's fundraising swamped far more established Republican rivals. But he still went on to narrowly lose that 1994 general election to Lawton Chiles in part due to a critical miscalculation on Florida campaign finance laws. By busting the designated spending cap, Bush inadvertently ensured that the state's public campaign financing system pumped more than $4 million into the Chiles campaign in the final weeks of the race.

After that painful loss, Bush and the Florida GOP he had come to dominate took two controversial steps that in many respects parallel what he is doing today gearing up for the presidential race.

First, in 1995, Bush established the Foundation for Florida's Future. Ostensibly it was a nonprofit policy think tank. In practice it served as a political vehicle that enabled Bush to keep in the public eye without being in public office and to retain key campaign staff on the foundation's payroll until he was ready to formally kick off another gubernatorial bid.

The second big step came in 1997, when the Republican-controlled Florida Legislature carved a couple of gaping loopholes into restrictions on campaign spending by state parties. The first change allowed state parties to fund candidate TV ads — the biggest expense of any campaign — so long as the ad made a token mention of two other candidates. The second change allowed the state parties to pay for staff and other overhead expenses of a campaign.

It added up to a sea change in how Florida financed statewide campaigns, making the $500 cap on contributions to state candidates all but meaningless, much as the current federal campaign donation of $2,700 is all but meaningless in the Super PAC era. Instead, unlimited "soft money" donations flowed into the state GOP to cover most of the expenses for Bush's 1998 campaign.

That cycle, the state GOP spent about $27 million, mostly focused on Bush, and the Bush campaign spent about $5.7 million to comfortably beat Democrat Buddy MacKay, whose spending included about $5.6 million from his campaign and $3 million from the state Democratic Party.

Now Bush is pioneering a new phase.

"Campaign finance and money in politics is constantly changing," said Tokaji, the election law expert at Ohio State University. "There's an incentive to innovate and the law has been a moving target over the last several years.

"We can thank the Supreme Court for this," he added, "and it's not just Citizens United. By saying there can't be limits on spending by these outside groups, they've opened the floodgates and it becomes very difficult to regulate."

• • •

Bush's team believes he is on firm legal ground, and says the Super PAC is a distinct legal entity from Bush's other committee.

Critics disagree but concede there's not much hope for tightening up regulations. The Federal Election Commission is deadlocked with three Democratic appointees and three Republicans, the latter of which generally think too much regulation infringes on free speech rights.

Bradley A. Smith, a former FEC commissioner and Republican appointed by President Bill Clinton, agreed a situation like Bush's is dicey. But, he added, how do you define who is a candidate?

"What kind of a test would you use to separate Jeb Bush from, say, Mike Pence or John Kasich?" he asked, referring to the governors of Indiana and Ohio, who are potential contenders but not nearly as visible. "That's always a problem with campaign finance law, coming up with a line-drawing test."

If the restrictions do not apply to Bush, it creates a dangerous blueprint for others to rake in unlimited cash, argued Ryan of the Campaign Legal Center.

"The person can then step away and say, 'I wasn't a candidate when I set this thing up and bankrolled it and now this Super PAC is independent of me. Voila! This practice would eviscerate the candidate contribution limits."

Sen. John McCain, author of the sweeping McCain-Feingold campaign finance reform law, bemoaned the 2010 Supreme Court decision for unleashing the Super PAC era.

"The day the Citizens United decision came down, I knew that we were on a downhill slide," McCain said in an interview last week with the Tampa Bay Times. "It will continue … until there is a national scandal."

Yet McCain does not fault Bush for playing the game.

"You have to if you want to win," he said. "You're going to give your opponent the ability to raise all kinds of (unlimited) money and you're not going to? That's insane."

Contact Alex Leary at Follow @learyreports. Contact Adam C. Smith at Follow @adamsmithtimes.