U.S. House Majority Leader Exploited Campaign Finance 'Bundling' Loophole

by Steve Carpinelli

	Majority Leader Steny Hoyer.

WASHINGTON, D.C., March 19, 2007 - Majority Leader Steny Hoyer raised more than $1 million for congressional candidates in the Democrats' 2006 successful run at controlling the House by exploiting what experts call a legal loophole, an investigation by the Center for Public Integrity has found.

The Center of Public Integrity's investigation revealed how Hoyer took advantage of "bundling" loopholes, which allowed him to accept and funnel contributions to other members and heighten his political profile, all while legally circumventing conventional campaign finance limits.

According to campaign finance disclosure records examined by the Center, Hoyer's leadership Political Action Committee, AmeriPAC, has collected contributions from individuals and PACS representing businesses and unions and in turn doled out more than $1 million to House candidates and the Democratic Congressional Campaign Committee.

Used to help finance federal campaigns, "bundling" is the controversial, but legal, process of accepting political contributions from many small individual donors, such as company employees or union members, and combining donations into one large lump sum. These larger donations are then given to the candidates.

The fact that there are no limits to the amount of bundled contributions accepted and distributed by a member gives rise to ethical issues, according to the campaign finance and congressional ethics experts who spoke with the Center. Experts point out that not only can members of Congress collect and distribute bundled funds with a "sky's-the-limit" attitude, they are also more susceptible to the influence of special interest groups.

"I think the leadership PACs are a disgrace and a scandal just waiting to break open," said recently retired Colorado representative and former House ethics committee chairman Joel Hefley, who had sponsored legislation to eliminate leadership PACs. "This is one example, where you use this to get around the campaign finance laws. I think it's legal but I don't think it should be."

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About the author

Steve Carpinelli is a representative of the Center for Public Integrity.

The Center for Public Integrity is a nonprofit, nonpartisan Washington, D.C.-based organization that does investigative reporting and research on significant public issues. Since 1990, the Center has released more than 300 investigative reports and 15 books. It has received the prestigious George Polk Award and more than 20 other journalism awards and 16 finalist nominations from national organizations, including PEN USA and Investigative Reporters and Editors. In April 2006, the Society of Professional Journalists recognized the Center with a national award for excellence in online public service journalism for the fifth consecutive year. In October 2006, the Center also was honoured with the Online News Association's coveted General Excellence award.