Just passing through 

How some conservatives built political capital in 2012

On Sept. 14, 2012, the Stillwater County Republican Central Committee donated $800 to incumbent state Rep. David Howard, a Republican from Park City. That sum didn't remain in Howard's war chest for long. According to financial disclosure reports, Howard's campaign received the contribution on Sept. 17, and the very same day sent $100 contributions to eight other Republican legislative candidates. The cash may not have been the same, dollar for dollar, but the dates and amounts give the appearance of Howard's campaign acting as a conduit of sorts for more at-risk conservatives across the state.

The Stillwater committee contributed $8,400 to the campaigns of 12 conservative legislative candidates statewide last year, Howard included. The checks were sent between mid-September and mid-October in chunks of $600 or $800. Ten of those 12 recipients, again including Howard, each made a series of smaller contributions to other conservative campaigns within days, with those smaller contributions adding up to the full amount received by the Stillwater committee.

Of those 10 recipients, eight were running unopposed. One of them, Howard, is also the acting chairman of the Stillwater committee, according to the Montana Republican Party's county committee directory. Howard did not return repeated calls seeking comment for this story.

The apparent pattern in the Stillwater committee's donation activity in fall 2012 bears a striking resemblance to what campaign finance analysts call "pass-through contributions," or the act of funneling money through a middleman with the end goal of masking the source of the contribution. Pass-through contributions, while intentionally misleading, aren't explicitly illegal in Montana. Maryland has banned them. Lawmakers in Oregon have been trying for years to pass legislation cracking down on the practice.

But most of the recent concern nationwide over pass-through contributions has stemmed from how candidates and political action committees have abused the loophole to circumvent state and federal contribution limits. In 2011, the Las Vegas Sun ran a scathing article about Nevada gubernatorial candidate Rory Reid's role in a brash pass-through scheme. Reid's 2010 campaign covertly formed 91 shell PACs, the Sun wrote, and used them to funnel $750,000 from one PAC into Reid's campaign.

The passage of the Stillwater committee's contributions from one campaign to others seems far less sinister and far less costly in comparison. In fact, Edwin Bender, executive director of the Helena-based National Institute for Money in State Politics, doubts that the committee's actions were prompted by a desire to circumvent the state's contribution limits.

click to enlarge Last year, 10 conservative legislative candidates appear to have chopped up large contributions from the Stillwater County Republican Central Committee and redistributed them to other conservative campaigns across the state. - PHOTO BY CATHRINE L. WALTERS
  • Photo by Cathrine L. Walters
  • Last year, 10 conservative legislative candidates appear to have chopped up large contributions from the Stillwater County Republican Central Committee and redistributed them to other conservative campaigns across the state.

"Here's Rob Cook getting $800," Bender says, referring to a Stillwater contribution made to Rep. Rob Cook, who ran unopposed last year. "If he turned around and made donations to other people, technically he's moving money around, he's garnering himself some political capital."

Cook did. The same day Cook's campaign received $800 from the Stillwater committee, it made five $160 donations to Republican legislative candidates in Bozeman, Billings, Kalispell and elsewhere.

"It seems like an awful lot of work for a little bit of money," Bender says. "This isn't Illinois or Texas where you're talking millions of dollars."

Contribution limits have been the subject of significant chatter from both political parties in recent months regarding campaign finance reform in Montana. Last year, a coalition of businesses and Republican groups challenged the state's aggregate contribution limits for political parties in a lawsuit spearheaded by the controversial nonprofit American Tradition Partnership. The challenge was eventually denied by a U.S. District Court judge, but a slate of campaign finance reform proposals announced by Gov. Steve Bullock this month includes a measure to strike down some aggregate limits. State Rep. Scott Reichner, R-Bigfork, has sponsored House Bill 229, which similarly aims to revise contribution limits and passed its second reading on the House floor Feb. 25.

Bender feels the arguments made in favor of such a move are in some way weakened by what the Stillwater committee accomplished in 2012. The pass-through contributions proved there's already a workaround the state doesn't need, Bender says.

"They're looking at a solution—raising contribution limits—which ignores the facts," Bender says. "And the facts are real straightforward: The candidate that raised the most in small contributions won two-thirds of the time." Bender defines "small contributions" as those well under the $160 per-election limit on individual donations to legislative candidates. According to Bender's organization, individual donations accounted for 54.8 percent—or more than $7.4 million—of the money contributed to state and local races in 2012.

If political hopefuls want more money, Bender adds, going to political parties or outside institutions for additional funding isn't necessarily the answer.

"The candidates have all the money they need to run," Bender says. "We have very low-cost races...They could go back to people who have already given them a reportable donation, which is more than $35, and ask for more. If they don't, it means there's not the demand for money there."

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