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.

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.”

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