The Independent View: WA Campaign Finance Law Targets Gray Money PACs

Conscience of the Progressives is Funded by Conservatives and last year sent Election Mailers to aid Republicans in Swing-District Legislative Races.

It is Funded almost wholly by another PAC named Send A Message, whose Prime Donor is Peter Zieve, an Aerospace Entrepreneur who gave $1 Million to support Trump in 2016 and who has drawn Scrutiny for expressing Anti-Muslim Sentiments.

Thus, an Election Ad by Conscience of the Progressives last year showed Send A Message PAC as the only Top Donor.

On the other side, New Direction PAC supports Progressive Candidates. In 2018, Three of its Top Five Donors were PACs, according to Washington State Campaign-Finance Records, including Two Democratic Party Spending Groups.

And the Third PAC? Almost all of its Funding came from those Two same Democratic Spending Groups.

It’s a Tactic called “Gray Money” and it’s a Popular Strategy in Washington and around the Nation for Shielding the Flow of Money.

Through a Series of “Nesting Doll” PACs, Campaigns or Political Parties can Cloak Donations by Individuals, Corporations, Industry Associations, or Labor Unions.

House Bill 1379, sponsored by Rep. Mike Pellicciotti (D-30th District, Federal Way), and Signed by Gov. Jay Inslee (D). It will take effect July 2019, in time for this Fall’s Local, State, and Judicial Elections, including Seattle City Council Races.

The Law takes its own “Nesting Doll” approach to Transparency. If the Top Five Contributors Listed on a PAC’s Advertisement include another PAC, the Top Three Donors to any of those Committees must be Revealed, provided they Meet a certain Dollar Threshold.

- The New Law would Cap the Amount an Individual can give to a Candidate at $500 for each Election, down from the Current maximum of $1,000.

- Local Candidates would only be able to Collect Political Contributions during an Election’s Calendar year, and city Bargaining Units giving to Campaigns would have to Disclose their Contributions.

- Private Companies that have Signed Contracts with the City worth more than $50,000 would be Barred from Giving to a Local Candidate.

- Violations would result in a $261 Fine per Incident, and Enforcement would Fall to a City Employee currently tasked with Investigating Violations of the City’s Sick and Safe Leave Policy, which will Revert to State Enforcement at the Beginning of next year.

If any of those Donors are PACs, those Top Three Qualifying Contributors must be Named. And so forth, until Three Root Contributors or Organizations have been Named.

“The new law is an important step forward to make sure that voters know who’s funding mailers and TV ads during election season,” said Pellicciotti, who Announced his Intention to Run for State Treasurer in 2020.

The Bill Passed Along Party Lines in the Senate, with Democrats in favor. But State House Lawmakers Approved the Final Version by a Unanimous Vote.

The Building Industry Association of Washington (BIAW), whose PAC is a Major Contributor to Conservative Causes, said it believes the Law won’t increase Transparency. That’s because of that Existing threshold to Exclude Small-Dollar Donors, meaning those Contributors don’t get Named. In an Email, Jennifer Spall of the Association said that would allow PACs made up of only Small Donors to Not Appear at All in Disclosures.

Spall said that could include BIAW’s PAC, known as the Washington Affordable Housing Council. In 2018, that PAC got Donations from a Range of Smaller Member PACs, such as Regional Builder Associations in Spokane, Olympia, the Tri-Cities and Whatcom County. “Any member or employee-based organization made up of hundreds or even thousands of small contributions will not be disclosed at all,” she wrote.

The New Law also Directs the State Public Disclosure Commission, which oversees Campaign-Finance Issues, to develop Rules to make sure PACs Can’t circumvent Disclosure Requirements.
But because the Law takes effect during the Election Cycle, the Commission can’t make Rules during Election Season, according to Spokeswoman Kim Bradford. So that will have to Wait until after the Election.