The Dark Money in Rhode Island’s Campaign Finance System
Most of us who make political donations do so by writing a check to a candidate, political party, or PAC (Political Action Committee). When we do this, we know exactly how much money we gave, and there is a paper trail of our donation. Our check is cashed soon after it is given, and the campaign (usually) reports the donation quickly and accurately in accordance with RI’s campaign finance laws, which add guardrails to this basic transaction, ensuring transparency and accountability.
When a labor union member decides to donate to their union’s political activities, they agree to a small deduction from every paycheck. This money goes to the union’s COPE (Committee on Political Education) account. The COPE account then, at some later date, transfers some percentage of the money given by the member to the union’s PAC, which is responsible for reporting the donations in accordance with RI’s campaign finance laws. It is within this process that likely campaign finance violations and murky sources of money lie.
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I noticed that a PAC managed by the SEIU District 1199 reported $50,000 in anonymous small-dollar campaign donations made by union members only once a year to the RI Board of Elections (BoE). I then saw that the Plumbers and Pipefitters union PAC reported anonymous small-dollar campaign donations made by their members every quarter for two years, in the same amount every time – $10,000.
Both unions mentioned above draw political deductions from their members’ paychecks each payroll period, so some amount of money is earmarked for those unions’ PACs with each payroll run. Why are those small-dollar campaign contributions made by union members not going directly to the PAC soon after they are made? What are the odds that union member donors to the Plumbers and Pipefitters union give exactly $10,000 in campaign donations every quarter? The answer is that it is not possible.
The union COPE account serves as an intermediary between union members making campaign donations and the PAC that receives them. RI campaign finance law (RI General Law § 17-25-10.1(k) ) defines the role of an intermediary, which is to do nothing that changes the nature of the transaction so that it appears that the donor is giving directly to the PAC. That is not happening in the scenarios discussed above.
These union COPE accounts have inserted themselves between the donor and the campaign, and they are exercising decision-making that campaign donors should make. They are not acting as a pass-through to the PAC. SEIU members who make a political contribution each paycheck are not told what percentage of their contribution will be for a campaign donation to the PAC. This means that the donor has no idea how much their campaign donation is, or even to whom it is being given. The SEIU COPE is making those determinations, thereby making the COPE the actual donor to the PAC (or anyone else). In this scenario, any PAC transfers by the COPE above $2,000 annually violate RI campaign finance laws.
It is important to remember that nothing prevents a union COPE from directing money to individual candidates as well as PACs. It is one thing for a union COPE to deliver $50,000 to a PAC, which can then donate only up to $2,000 to one candidate in a year, but quite another for that COPE to deliver $50,000 in anonymous campaign cash to a single candidate.
Union COPE accounts do not only handle campaign donation dollars from union members. These accounts can also hold funds for lobbying and voter registration drives, and can even send and receive unlimited transfers of money to or from any other COPE in the country. COPE accounts are political slush funds – the very opposite of what we need to have transparency and traceability in our campaign finance system.
Many hundreds of thousands of dollars in anonymous union campaign donations are made as a result of the process I just described above.
Also, while some unions share the reporting issues I described above, many others do not, reporting anonymous small-dollar campaign contributions every couple of weeks. These unions show that conforming to the spirit of RI’s campaign finance laws is not only possible, but doable.
The BoE has allowed labor unions to influence our elections in ways that are not transparent, may be very difficult for the BoE to oversee, and may invite the deposit of dark money (funds transferred to the COPE from other COPEs) into RI campaign finance accounts.
The fixes for this are straightforward, assuming that our politicians and the Board of Elections are willing to place constraints on politically powerful labor unions.
- Ensure that the COPE accounts that transfer union members’ campaign donations to a Rhode Island PAC are not slush funds. They must be dedicated to only those campaign donations that come directly from payroll. No lobbying or other expenditures. No transfers from other COPEs.
- Union members should know precisely how much in campaign donations they are making to a PAC and to which PAC.
- COPE accounts should be prohibited from donating to individual candidates, since union members play no role in determining to whom a campaign donation should be given.
- COPE accounts that transfer campaign donations to PACs should, by law, be specifically subject to BoE oversight. I say this because the oversight cannot be limited to the fact that a transfer occurred between the COPE and the PAC. How and where the monies came from in that transfer matter greatly!
- Require that unions, via their COPEs and PACs, adhere to RI General Law § 17-25-10.1(k), which requires that donations made to a campaign via an intermediary “shall be treated as contributions from such person [union member] to such candidate [PAC].” This means the donor should know exactly how much they are giving to the PAC, and the COPE should not hold these donations for extended periods.
- Require any RI campaign finance account that reports more than $10,000 in anonymous small-dollar donations over the course of a year to disclose those donors. Serious money in our campaign finance system should not remain anonymous.
Unions should be held to the same rules and regulations as everyone else under our campaign finance laws. Imagine if every candidate for office began raising money as the unions do, using unregulated slush funds as intermediaries between donors and the campaign account. It would be wrong, as it is for the unions.