How David Vitter Shattered Another Campaign Finance Rule

Creative lawyering finds a way to use $1 million Louisiana had locked away, creating a new model for candidates to copy across the country.

WASHINGTON, DC - SEPTEMBER 30: Sen. David Vitter (R-LA) joins other Republican members of Congress while they hold a press conference on the Vitter Amendment as the U.S. legislative body remains gridlocked over legislation to continue funding the federal government September 30, 2013 in Washington, DC. Senate Majority leader Harry Reid has said the Senate would not vote on any legislation passed by the House to continue funding the federal government unless the legislation was free of Republican added amendments. Also pictured is Sen. Ron Johnson (R-WI) (R).
National Journal
Shane Goldmacher
June 1, 2014, 7:08 a.m.

Dav­id Vit­ter had a $1 mil­lion prob­lem. Back in Janu­ary, by the time the Louisi­ana sen­at­or an­nounced his long-rumored run for gov­ernor, Vit­ter had already lined up sup­port­ers and de­veloped a cam­paign battle plan. Still, one ma­jor hurdle re­mained: State law barred him from us­ing the sev­en-fig­ure sum he had amassed in Sen­ate cam­paign funds.

But through a su­per PAC and some cre­at­ive law­yer­ing, Vit­ter and his al­lies ap­pear to have found a way to re­dir­ect all of that money to sup­port his gubernat­ori­al cam­paign. And in do­ing so, they’ve pi­on­eered a new meth­od for politi­cians na­tion­wide to get around old pro­hib­i­tions on spend­ing fed­er­al money on state races, and vice versa.

Along the way, Vit­ter has be­come per­haps the first politi­cian in the coun­try to be the largest fun­der of his own su­per PAC.

At the cen­ter of Vit­ter’s scheme is Charlie Spies, the same GOP law­yer who helped launch Mitt Rom­ney’s biggest su­per PAC. In early 2013, Spies cre­ated the Fund for Louisi­ana’s Fu­ture and re­gistered the su­per PAC both fed­er­ally and in Louisi­ana “to be able to sup­port Sen­at­or Vit­ter wheth­er he ran for U.S. Sen­ate reelec­tion or for gov­ernor,” Spies told Na­tion­al Journ­al.

Vit­ter has be­come per­haps the first politi­cian in the coun­try to be the largest fun­der of his own su­per PAC.

It was only weeks after Vit­ter an­nounced he would run for gov­ernor that a $100,000 check ar­rived, on Valentine’s Day, to be pre­cise, from Vit­ter’s Sen­ate ac­count to the Spies-run su­per PAC.

It was a strange trans­ac­tion, at first blush. As a rule, politi­cians al­ways want to keep con­trol of their cam­paign funds. Yet here was Vit­ter send­ing his hard-raised cash to a group he leg­ally could not con­trol or even com­mu­nic­ate with about strategy.

In­deed, his dona­tion to the su­per PAC only makes sense when seen as a means to skirt the Louisi­ana law for­bid­ding Vit­ter from trans­fer­ring his fed­er­al cam­paign cash to his gubernat­ori­al cam­paign.

“Ab­sent that law, there’s zero reas­on that a can­did­ate would do it,” said Paul S. Ry­an, seni­or coun­sel to the Cam­paign Leg­al Cen­ter, a non­par­tis­an watch­dog group that ad­voc­ates for cam­paign fin­ance re­form.

Larry Norton, a former gen­er­al coun­sel for the Fed­er­al Elec­tion Com­mis­sion, said Vit­ter fund­ing his own su­per PAC “strikes me as rais­ing the ques­tion­able­ness of the sep­ar­a­tion of the su­per PACs and the cam­paign to a new level.”

The whole no­tion of a su­per PAC’s in­de­pend­ence from the cam­paign “rests on the idea that they’re not com­mu­nic­at­ing about strategy or plans, or pro­jects,” Norton said, not­ing that he’d nev­er heard of a can­did­ate do­ing this be­fore. “But guess what — the can­did­ate is go­ing to fund the su­per PAC? You sort of won­der at what point the ar­gu­ment col­lapses un­der its own weight.”

Vit­ter’s cam­paign did not re­turn calls for com­ment.

WHO WILL THIS BE­NE­FIT?

The Vit­ter-Spies ar­range­ment sets a pre­ced­ent well bey­ond the bay­ou.

Cur­rently, politi­cians must nav­ig­ate state laws on cam­paign-cash trans­fers. Some states al­low money to move between fed­er­al and state cam­paigns. Oth­ers ex­pressly for­bid it. In Pennsylvania, for in­stance, Rep. Allyson Schwartz, who re­cently lost her bid for the Demo­crat­ic nom­in­a­tion for gov­ernor, was al­lowed to trans­fer more than $3 mil­lion from her con­gres­sion­al ac­count to that race. But in Arkan­sas, Re­pub­lic­an Rep. Tim Griffin, who is run­ning for lieu­ten­ant gov­ernor, can’t tap his con­gres­sion­al funds. In­stead, he’s re­fun­ded his fed­er­al donors more than $223,000 — and now he can only hope they’ll send the money back to his state cam­paign.

The ar­range­ment could work also for state of­fi­cials run­ning for fed­er­al of­fice. The im­pact could be es­pe­cially acute in Cali­for­nia, where politi­cians of­ten raise big money for state races only to have it lan­guish idle and in­eligible for fed­er­al cam­paigns.

For in­stance, in the primary to suc­ceed re­tir­ing Rep. Henry Wax­man, which will be held on Tues­day, state Sen. Ted Lieu has more than $750,000 sit­ting un­used in a state ac­count. Un­der the Vit­ter ar­range­ment, Lieu would have needed only a trus­ted friend to open a su­per PAC and pub­licly an­nounced it was ded­ic­ated to elect­ing Lieu; he then could have trans­ferred his money there.

In the­ory, a po­ten­tial pres­id­en­tial can­did­ate, serving as gov­ernor of a state with loose dona­tion lim­its, could raise money in chunks far lar­ger than the cur­rent pres­id­en­tial lim­its and then use the pro­ceeds to seed a sup­port­ive su­per PAC.

Back in Louisi­ana, Spies and Vit­ter wer­en’t done yet. There was a reas­on Vit­ter’s ini­tial check was for only $100,000 and not the full nearly $1.1 mil­lion in his ac­count at the end of 2013. Un­der Louisi­ana law, $100,000 was the leg­al max­im­um any en­tity could con­trib­ute to a PAC. (Among the oth­er $100,000 donors to the Vit­ter su­per PAC, which has raised $1.6 mil­lion, are the Amer­ic­an Chem­istry Coun­cil and Bollinger Shipyards.)

But, with the Su­preme Court throw­ing out such lim­its on out­side groups in the Cit­izens United de­cision, Spies pe­ti­tioned the Louisi­ana Board of Eth­ics to toss its lim­its, too. The board re­jec­ted Spies’s chal­lenge but he was more suc­cess­ful in fed­er­al court. In early May, a fed­er­al judge axed Louisi­ana’s $100,000 lim­it. Now Vit­ter can trans­fer all his Sen­ate cash to the Spies su­per PAC.

“We were, of course, pleased that the fed­er­al court in Louisi­ana ruled fa­vor­ably in our ar­gu­ment,” Spies said. He de­clined to say if he ex­pec­ted Vit­ter to shift the rest of his fed­er­al cash to his su­per PAC. “We don’t com­ment on spe­cif­ic donors and that would in­clude money giv­en by oth­er cam­paigns. There’s no reas­on to tele­graph strategy or up­set donors by talk­ing about spe­cif­ics.”

The unique ar­range­ment could still face fur­ther leg­al chal­lenges. Louisi­ana law bars a fed­er­al can­did­ate from trans­fer­ring fed­er­al money to his own state com­mit­tee but also “to any oth­er polit­ic­al com­mit­tee which sup­ports the can­did­ate.” Since its cre­ation, Spies has been open about the fact that the Fund for Louisi­ana’s Fu­ture ex­ists to back Vit­ter.

HOW CLOSE IS TOO CLOSE?

In ad­di­tion, there is ex­tens­ive over­lap between Vit­ter’s polit­ic­al team and the Fund for Louisi­ana’s Fu­ture.

Last Septem­ber, Vit­ter was the star guest at an al­ligator hunt in south Louisi­ana that be­nefited the su­per PAC. The con­tact per­son for po­ten­tial donors was Court­ney Guas­tella, a fun­draiser on the payroll of both Vit­ter’s Sen­ate com­mit­tee and his gubernat­ori­al su­per PAC. Guas­tella has been paid $55,476 by Vit­ter’s Sen­ate com­mit­tee since the be­gin­ning of 2013 and $97,273 by the su­per PAC.

She’s not the only one. The fun­drais­ing firm of Lisa Spies, Charlie’s wife, was paid $9,726 by the su­per PAC since the start of 2013 and $59,546 by Vit­ter’s Sen­ate com­mit­tee. Spies’s law firm it­self, Clark Hill, has also done work for both Vit­ter and the su­per PAC.

The Cam­paign Leg­al Cen­ter filed a Fed­er­al Elec­tion Com­mis­sion com­plaint earli­er this year al­leging Vit­ter’s over­lap­ping fun­draisers vi­ol­ated the law by so­li­cit­ing out­sized dona­tions for the su­per PAC.

Spies in­sisted the Fund for Louisi­ana’s Fu­ture is leg­ally in­de­pend­ent. “We fully com­ply with all Fed­er­al Elec­tion Com­mis­sion and Louisi­ana rules re­gard­ing co­ordin­a­tion,” he said. “The su­per PAC is an in­de­pend­ent en­tity and all spend­ing de­cisions by the su­per PAC will be made in­de­pend­ent of Sen­at­or Vit­ter and his cam­paign.”

WHO WILL THIS BENEFIT?

The Vit­ter-Spies ar­range­ment sets a pre­ced­ent well bey­ond the bay­ou.

Cur­rently, politi­cians must nav­ig­ate state laws on cam­paign-cash trans­fers. Some states al­low money to move between fed­er­al and state cam­paigns. Oth­ers ex­pressly for­bid it. In Pennsylvania, for in­stance, Rep. Allyson Schwartz, who re­cently lost her bid for the Demo­crat­ic nom­in­a­tion for gov­ernor, was al­lowed to trans­fer more than $3 mil­lion from her con­gres­sion­al ac­count to that race. But in Arkan­sas, Re­pub­lic­an Rep. Tim Griffin, who is run­ning for lieu­ten­ant gov­ernor, can’t tap his con­gres­sion­al funds. In­stead, he’s re­fun­ded his fed­er­al donors more than $223,000 — and now he can only hope they’ll send the money back to his state cam­paign.

The ar­range­ment could work also for state of­fi­cials run­ning for fed­er­al of­fice. The im­pact could be es­pe­cially acute in Cali­for­nia, where politi­cians of­ten raise big money for state races only to have it lan­guish idle and in­eligible for fed­er­al cam­paigns.

For in­stance, in the primary to suc­ceed re­tir­ing Rep. Henry Wax­man, which will be held on Tues­day, state Sen. Ted Lieu has more than $750,000 sit­ting un­used in a state ac­count. Un­der the Vit­ter ar­range­ment, Lieu would have needed only a trus­ted friend to open a su­per PAC and pub­licly an­nounced it was ded­ic­ated to elect­ing Lieu; he then could have trans­ferred his money there.

In the­ory, a po­ten­tial pres­id­en­tial can­did­ate, serving as gov­ernor of a state with loose dona­tion lim­its, could raise money in chunks far lar­ger than the cur­rent pres­id­en­tial lim­its and then use the pro­ceeds to seed a sup­port­ive su­per PAC.

Back in Louisi­ana, Spies and Vit­ter wer­en’t done yet. There was a reas­on Vit­ter’s ini­tial check was for only $100,000 and not the full nearly $1.1 mil­lion in his ac­count at the end of 2013. Un­der Louisi­ana law, $100,000 was the leg­al max­im­um any en­tity could con­trib­ute to a PAC. (Among the oth­er $100,000 donors to the Vit­ter su­per PAC, which has raised $1.6 mil­lion, are the Amer­ic­an Chem­istry Coun­cil and Bollinger Shipyards.)

But, with the Su­preme Court throw­ing out such lim­its on out­side groups in the Cit­izens United de­cision, Spies pe­ti­tioned the Louisi­ana Board of Eth­ics to toss its lim­its, too. The board re­jec­ted Spies’s chal­lenge but he was more suc­cess­ful in fed­er­al court. In early May, a fed­er­al judge axed Louisi­ana’s $100,000 lim­it. Now Vit­ter can trans­fer all his Sen­ate cash to the Spies su­per PAC.

“We were, of course, pleased that the fed­er­al court in Louisi­ana ruled fa­vor­ably in our ar­gu­ment,” Spies said. He de­clined to say if he ex­pec­ted Vit­ter to shift the rest of his fed­er­al cash to his su­per PAC. “We don’t com­ment on spe­cif­ic donors and that would in­clude money giv­en by oth­er cam­paigns. There’s no reas­on to tele­graph strategy or up­set donors by talk­ing about spe­cif­ics.”

The unique ar­range­ment could still face fur­ther leg­al chal­lenges. Louisi­ana law bars a fed­er­al can­did­ate from trans­fer­ring fed­er­al money to his own state com­mit­tee but also “to any oth­er polit­ic­al com­mit­tee which sup­ports the can­did­ate.” Since its cre­ation, Spies has been open about the fact that the Fund for Louisi­ana’s Fu­ture ex­ists to back Vit­ter.

HOW CLOSE IS TOO CLOSE?

In ad­di­tion, there is ex­tens­ive over­lap between Vit­ter’s polit­ic­al team and the Fund for Louisi­ana’s Fu­ture.

Last Septem­ber, Vit­ter was the star guest at an al­ligator hunt in south Louisi­ana that be­nefited the su­per PAC. The con­tact per­son for po­ten­tial donors was Court­ney Guas­tella, a fun­draiser on the payroll of both Vit­ter’s Sen­ate com­mit­tee and his gubernat­ori­al su­per PAC. Guas­tella has been paid $55,476 by Vit­ter’s Sen­ate com­mit­tee since the be­gin­ning of 2013 and $97,273 by the su­per PAC.

She’s not the only one. The fun­drais­ing firm of Lisa Spies, Charlie’s wife, was paid $9,726 by the su­per PAC since the start of 2013 and $59,546 by Vit­ter’s Sen­ate com­mit­tee. Spies’s law firm it­self, Clark Hill, has also done work for both Vit­ter and the su­per PAC.

The Cam­paign Leg­al Cen­ter filed a Fed­er­al Elec­tion Com­mis­sion com­plaint earli­er this year al­leging Vit­ter’s over­lap­ping fun­draisers vi­ol­ated the law by so­li­cit­ing out­sized dona­tions for the su­per PAC.

Spies in­sisted the Fund for Louisi­ana’s Fu­ture is leg­ally in­de­pend­ent. “We fully com­ply with all Fed­er­al Elec­tion Com­mis­sion and Louisi­ana rules re­gard­ing co­ordin­a­tion,” he said. “The su­per PAC is an in­de­pend­ent en­tity and all spend­ing de­cisions by the su­per PAC will be made in­de­pend­ent of Sen­at­or Vit­ter and his cam­paign.”

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