Sunday, November 29, 2009

Limits on Political Contributions Coming From General Assembly?

Democrats are bragging that U.S. Representative Baron Hill, the lone Democratic candidate reported as receiving money from Indianapolis businessman Timothy Durham, only took a few thousand in contributions. They gleefully contrast that to the hundreds of thousands in contributions taken by Republican candidates such as Marion County Prosecutor Carl Brizzi and Governor Mitch Daniels.

The misguided implication is that Rep. Hill was executing self-restraint in taking contributions from Durham. The fact though is federal candidates operate under much tighter contribution limits than do state and local candidates in Indiana. While, under federal law, Durham could only contribute a few thousand to federal candidates like Hill, there is no limit on how much he gives to state and local candidates. As a result, while Durham could legally only contribute a few thousand to Rep. Hill, he was able to contribute $150,000 to Marion County Prosecutor Carl Brizzi.

Under Indiana law the only limits on contributions to candidates are limits placed on corporations and labor unions. Indiana state and local candidates are not capped on how much they can receive from individuals, and non corporate business entities, as well political action committees. Even the limits on corporations and labor unions under Indiana law are problematic. Those limits are aggregate in nature. For example, corporations and labor unions can only give $5,000 total for all state-wide candidates and $2,000 to all candidates for members of the General Assembly. (See IC 3-9-2-4). These aggregate limits are often extremely difficult to enforce. For example, ascertaining whether a corporation has exceeded the $2,000 limit to General Assembly candidates, would require individually reviewing multiple finance reports from more than 200 candidate committees.

The system is also dated. LLCs are now as common if not a more common business entity than corporations, even for large businesses. Yet LLCs are treated differently from corporations under the law. Contractors doing business with Indianapolis that choose to form as an LLC can contribute as much as they want to Mayor Ballard. If those same businesses form as corporations, however, the company's contributions to ALL candidates for local offices would be capped at $2,000.

The system doesn't make much sense. Even worse though, in situations like those involving Durham, it leads to the appearance of impropriety, namely that Durham's $150,000 political contributions bought Marion County Prosecutor Carl Brizzi's cooperation in, at the very least, looking the other way.

Hopefully the Durham fiasco will shed light on a the problems with Indiana's political contribution law and will encourage the legislature to make needed changes.

1 comment:

Cato said...


The problem with a freedom being exercised improperly is not to limit the freedom.

"There ought to be a law" is almost always the wrong impulse.