Q3 Fundraising Totals

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At the end of the last three quarterly filing periods I ran the numbers and put together the fundraising totals for the General Assembly candidates, caucus committees, state parties and other relevant committees, for example here is last quarter’s.

For Q3 though I’m not going to do that for two reasons 1) money is moving so fast and so much of it has already moved since 10/1 that those figures are way out of date at this point so it would be trivia more than data and 2) so much money in those totals that looks like funds raised or funds spent was neither, it was just funds transferred from committee to committee which creates artificially large numbers. For example, the Governor transferred $20 million to the Illinois Republican Party who spent some of that and transferred the rest to the House Republican Organization and the Republican State Senate Campaign Committee who spent some of that and transferred the rest to their member committees. If you start adding all of that up it may look like $40 or $60 million raised and spent when it was the same $20 million moving around. The only way to correct for that is to pull up every expenditure for the quarter and go through them one by one to exclude the ones that were just transfers, a labor intensive and time consuming task that’s a poor use of time in mid-October of an election year.

I do plan to do that work after the Q4 filings are in so we can figure out a best estimate for what this whole process really cost, it just doesn’t make sense to do that now with so much financial activity still ongoing. It will take some effort but we’ll know in mid to late January next year.

 

How the Money Moves, Part 3

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In yesterday’s installment, How the Money Moves, Part 2, the last thing I wrote was “Also, it’s unlikely that this is our last unexpected development before the election. Stay tuned.” It took less than 20 minutes for that to come true.

Last night the Governor’s Independent Expenditure committee, Turnaround Illinois, filed a B-1 disclosing independent expenditures totaling $101,843.15 for radio ads supporting House Republican Leader Jim Durkin, who is unopposed this fall. When an IE committee makes independent expenditures supporting or opposing a candidate in a race in amounts greater than certain limits ($250,000 for a statewide race, $100,000 for all other races) the contribution limits are lifted for all candidates in that race. Section 5/9-8.5 (h-5) and (h-10) of the election code govern this process, neither specify that an opponent is necessary in order to lift the caps and I could find no other section of the election code that made an opponent a requirement to lift the caps. It appears that even though Leader Durkin is unopposed, this action will lift the caps in his race and his campaign committee will be able to raise unlimited funds for the rest of the year. As we’ve mentioned before in a general election candidate committees are allowed to make unlimited transfers to party committees who can then make unlimited transfers to candidate committees so leader Durkin will be able to transfer unlimited amounts to either the Illinois Republican Party or the House Republican Organization (HRO is registerd as a party committee) who can then spend or transfer that money in unlimited amounts on other legislative races as they wish.

Turnaround Illinois was created in April of 2015 by the Governor and his allies. Its chairperson is the CFO from the Governor’s campaign and its treasurer is his campaign’s chief legal counsel. Since inception the committee has raised $6.25 million, $4 million from former Chicago Tribune owner Sam Zell and $2.25 million from Bruce Rauner’s personal funds. The Governor spent the last few months touring the state in support of term limits which was accompanied by a television campaign, those TV ads were paid for by the Turnaround Illinois independent expenditure committee.

If the sole intention here was to lift the contribution limits for Leader Durkin they chose the more expensive of two available routes. The caps can be lifted either due to independent expenditure spending or self funding, Leader Durkin could have loaned his campaign $100,000 and then paid it back the very next day and those actions would have been sufficient to lift the caps in this race. However in this instance Turnaround Illinois spent $100,000 on radio ads supporting Leader Durkin, who is unopposed, so that $100,000 spent will likely have very little ancillary benefit.

This may be the most direct example to circumvent the contribution limits so far but it’s probably not the strangest. In the 2015 Chicago Mayor’s race William Kelly loaned himself $100,000 and filed a Notification of Self Funding which lifted the caps for the Mayor’s race, but then he never even filed the paperwork to run for Mayor so the caps were lifted for a race he didn’t even officially participate in.

If the contribution limits are lifted for Leader Durkin’s campaign committee his would be the only one of the four legislative leaders’ campaign committees that can raise unlimited funds, but this isn’t the first time that has happened either. During the 2016 Democratic primary Speaker Madigan had three opponents for his 22nd district House seat. Former 2004 Democratic US Senate candidate Blair Hull and some of his wealthy allies funded an IE committee Illinois United for Change and that committee eventually made more than $100,000 in independent expenditures opposing Mike Madigan or supporting Jason Gonzales (their preferred candidate) and for the final two weeks of the primary Speaker Madigan’s campaign committee, Friends of Michael J. Madigan, was legally allowed to accept unlimited contributions. The odd thing is that during those two weeks the Speaker did not receive any contributions that were above the standard contribution limits.

Update: The contribution limits for Leader Durkin have been officially lifted.

 

How the Money Moves, Part 2

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In the previous How the Money Moves I mentioned that it seemed likely Comptroller Leslie Munger would receive significant funding soon based upon how little financial activity her committee had shown up to that point. Since that time there were two key developments, neither unexpected: 1) Munger’s committee received a loan of $260,000, enough to lift the contribution limits for this race, and 2) late last week she received $2 million from Richard Uihlein and $3 million from Ken Griffin, two of the Governor’s wealthy allies.

Combined with the $280K Munger had on hand on 6/30 these new contributions gave her an estimated $5.5 million to spend in the homestretch of her campaign, much less than you’d typically see in a top ballot statewide race like Governor or US Senator but along the higher end for the other statewide constitutional offices. With her new ad on TV it was reasonable to assume that this money would be used to fund her fall budget.

However today there was an unexpected development, the Illinois Republican Party filed two A-1’s (here and here) for transfers totaling $3 million from Munger to the State Party. Here are a few possible explanations:

 

Possible Explanation #1

It’s possible that she is transferring this money to the State Party to fund a mail budget. State Parties pay a lower postage rate, that’s why you so often see General Assembly candidates file A-1’s with in-kind contributions for mail from the State Party. However in this case this seems somewhat unlikely, she’s already up on TV with her ad and $3 million seems like an awfully large mail budget. It’s very common for statewide campaigns to have mail in addition to TV, especially in those media markets where the candidate isn’t up on TV, but usually not at this level or at this proportion.

 

Possible Explanation #2

It’s possible that in order to keep staffing costs low she’s outsourcing some of her campaign activities to the State Party, where some of the Governor’s top political staffers are employed, and she’s transferring part of her budget to their control. If that’s the case this transfer would seem like an unnecessary step, her campaign and the State Party are allowed to fully coordinate strategy and tactics and her campaign committee could have easily paid any campaign expenditures that were needed.

 

Possible Explanation #3

Another very likely possibility is that her campaign committee is being used as an entryway to get unlimited contributions into the system where that money can then move freely around to be spent on other races. I discussed the need for entryways in my previous post. The House Dems have had a number of large donors, particularly in labor and legal, who are willing to contribute more than the maximum amount so they’ve had to break up those contributions into the amounts permitted by contribution limits and then contribute those amounts to as many Democratic affiliated committees as necessary to get all the money in the system. In a general election candidate committees can make unlimited transfers to party committees and party committees can make unlimited transfers to candidate committees so once that money is in the system the candidate committees with surplus funds can either transfer those funds to their fellow candidates up to the limited amount or they can make unlimited transfers to their party committee where the funds can then be redistributed in unlimited amounts to other candidates in need.

However in this case the contribution limits are off for the Comptroller’s race because of the $260,000 loan Munger received from her husband. Munger (and Mendoza) can accept contributions in unlimited amounts and if they so choose they can then make unlimited transfers to the party committee who can then spend or transfer unlimited amounts on other candidates, such as targeted general assembly races.

Prior to last week the Governor had been almost single-handedly funding the Republican legislative effort. The only other significant pool of money was in the Independent Expenditure committee Liberty Principles PAC which had raised $5 million since June, $2.5 million from Governor Rauner personally, $1.5 million from Richard Uihlein and $1 million from Ken Griffin. However the funds in the IE committee are somewhat walled off, independent expenditure committees are not allowed to transfer funds to candidate or party committees so if these donors wanted to use their money to help legislative candidates they could only do so by making expenditures independently. But now that the contribution limits have been lifted in the Comptroller’s race they can make direct unlimited contributions to Munger who can then transfer that money to the party as needed and it can be put to use elsewhere.

Just because Munger transferred $3 million to the State Party today doesn’t mean she won’t get additional financial support later to supplement her campaign budget, she may still very well spend $5.5 million on her fall effort if additional contributions are received. Also, it’s unlikely that this is our last unexpected development before the election. Stay tuned.