There’s yet another Republican campaign finance scandal brewing in Washington state, one with the potential to lead to felony charges, and so I eagerly scanned the headlines this morning to see if our dailies had figured out the huge story that was falling into their laps.
As Josh first reported yesterday, Dave Reichert is getting his TV ads on credit, an arrangement that now appears to amount to at least a half a million dollars in illegal loans. And what is the headline the Seattle Times chooses to slap on the story? “Burner loans campaign $140,000 for ads.”
Really? That’s the big story here? Are the Times’ editors that dumb, or are they just incredibly dishonest?
See, Darcy’s short-term bridge loan is legal, and extremely common. It’s nothing but a cashflow maneuver that permits the campaign to continue spending money as fast as it’s raising it without drawing down reserves to zero. Darcy doesn’t have the personal wealth to fund her own campaign, and you can be damn sure she plans to pay herself back.
But Reichert’s media credit card, that’s a clear violation of FEC rules:
If you loan money to a candidate or political committee, you have made a contribution, even if you charge interest on the loan. The outstanding amount of the loan counts against the contribution limits. Loan repayments, therefore, decrease the amount of your contribution.
Nevertheless, if your loan exceeds the limits, it is an illegal contribution, even if it is later repaid in full. Endorsements and guarantees of bank loans are also considered contributions. Endorsers and guarantors are liable for equal portions of a loan unless the agreement states otherwise. You alone, therefore, may not endorse a $10,000 loan to a candidate committee. There must be four other individual endorsers so that each one is liable only for $2,300, the per election limit.
The point of these regulations is obvious; if Reichert can buy advertising on credit, with payment not due until after the election, that means he can pay off 2008 expenditures with money raised for the 2010 cycle… something apparently Reichert did to a much smaller extent last time around. Now Reichert going much deeper into the hole, booking ads worth hundreds of thousands of dollars more than he has cash on hand, or any expectation of raising between now and November. And whether it be from the TV stations or his media buyer, that constitutes a massive campaign contribution far in excess of federal limits.
This is clearly illegal, and the campaign must know it, but like other Republican campaigns in Washington state this year, Reichert has apparently determined that the inevitable fines after the fact are just a part of the cost of winning.
That our local media can’t (or won’t) see this scandal, is truly stunning.
To be fair to reporter Emily Heffter, she didn’t write the bullshit headline. And to be fair to the Times, at least they attempted to report on the story, even if they haven’t yet recognized its significance. Meanwhile, crickets from the P-I and the TNT.