Wednesday, August 12, 2009

HB 7 in Detail: Defining when a committee "receives" a contribution

Today, ICPR continues its series on the problems with HB 7, beyond the astronomical dollar limits. Previous posts are here.

In revisions to the Election Code, HB 7 changes the definition of when a committee "receives" a contribution. The date of receipt determines when a committee must report a contribution, and is especially important during the A-1 reporting period: the final 30 days before an election, when committees are required to report contributions over $500 within two working days of receipt. The date of receipt also becomes a factor around the end of the regular reporting period, in determining when the public is told of a contribution.

Current law uses the word "receipt" but does not define it in statute, relying instead on the common sense of the word. The State Board of Elections has defined the word in regulation, relying again on the common sense meaning of the term.

HB 7 changes the definition to when the "candidate or campaign treasurer" has "actual personal physical possession of the contribution." This greatly narrows the definition in ways that are deeply problematic. When, for instance, would the candidate or treasurer have "actual personal physical possession" of an electronic funds transfer? An on-line contribution? An inter-bank exchange?

But there are deeper problems, and an example will illustrate: In 2006, Todd Stroger, then a candidate for Cook County Board President, missed statutory deadlines to make public reports of more than $250,000 in contributions received in the final weeks before the election. He later claimed that the contributions had been “received” by the committee but were being vetted, and so were not “received” by the officers of the committee. After much haggling, the State Board of Elections disagreed with Stroger's interpretation. Under current law, he was found to have violated the Election Code and was fined just over $25,000. This provision in HB 7 would validate his failure to disclose.

With this change, a committee could receive a contribution without triggering reporting requirements. Until the candidate or treasurer of the committee directed a staff person to hand the contribution to the treasurer or candidate, creating the necessary “actual personal physical possession,” there might be no obligation to report a contribution. There is nothing to require a committee to disclose once a staff person has told the candidate or treasurer of the receipt, so long as the staffer does not deliver "actual personal physical possession" of the contribution. The chair of the committee or other staff could have "actual personal physical possession" of a contribution indefinitely without ever triggering disclosure. Contributions received by the committee before Election Day could, under this proposal, be held until after the voting is over, then delivered to the treasurer, deposited, and used to pay debts incurred before Election Day. This could postpone disclosure for months, completely defeating the purpose of A1 reports.

This is a huge step backward, and one of several reasons why ICPR believes that HB 7 is worse than nothing.

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