3/06/2011

One of the most brazen circumventions of campaign finance laws

Democrats have come up with some pretty amazing ways to get around campaign finance laws.

In one of the most brazen schemes in Nevada history, gubernatorial candidate Rory Reid’s campaign formed 91 shell political action committees that were used to funnel three quarters of a million dollars into his campaign, circumventing contribution limits and violating at least the spirit – and maybe the letter – of the laws governing elections.

Reid, who was fully aware of what was done, essentially received more than $750,000 from one PAC – 75 times the legal limit -- after his team created dozens of smaller PACS that had no other purpose other than to serve as conduits from a larger entity that the candidate funded by asking large donors for money. Indeed, the shell PACs were formed in the fall and dissolved on Dec. 31, after they had served their short-term function, which was to help the candidate evade campaign contribution laws. . . .




UPDATE: The Las Vegas Sun slams Reid here:

. . . This was a transparent attempt to find a loophole in the campaign contribution laws by a gubernatorial candidate apparently desperate for money to try to revive his moribund campaign. And it was specifically designed to be opaque — a master PAC created with a name that belied its true purpose and 91 phony entities with names concocted to mislead. . . .

But this was nothing short of a conspiracy to commit the equivalent of money laundering in a political campaign, where Reid solicited contributions in large amounts for a PAC ($850,000 during one reporting period) and then the money was washed through sham entities in smaller amounts ($10,000 increments) to appear in the candidate’s war chest.

Reid was abetted in this task by at least three people — his campaign manager, David Cohen, now a top aide to state Senate Majority Leader Steven Horsford, who put his name on the umbrella PAC; Joanna Paul, who was on his campaign finance staff (in charge of compliance!) and whose name is on the phony PACs and whose home address was used for all 91; and Paul Larsen, his law partner who advised the candidate his scheme was legal.

Reid’s reaction to the scandal was the height of chutzpah, not only insisting on the transparency of the ploy, but to declare, “If this is a statement on anything, it is a statement on the failures of the campaign laws … If someone thinks it’s inappropriate, change the law.” . . .

Reid the Younger’s either real or practiced denial of responsibility for this highly dubious tactic reflects what was going on last summer in his campaign, a quixotic effort that never had much chance. Despite polls showing he was losing to Brian Sandoval by double-digit margins, Reid was confident he could win. His internal polls showed he was within single digits.

But he had a problem. Despite his prolific fundraising — he eventually would raise $2 million more than Sandoval — Reid knew he would need more for the home stretch. . . .

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