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Deep pockets use loophole for donations

The definition of an "individual" allows donors to go beyond the limit of $500 per contributor per candidate.

By ASJYLYN LODER
Published August 28, 2006


It's the Florida biennial two-step. Every election, candidates manage to dance around Florida's stringent caps on hard cash donations.

After all, a skimpy $500 - all an individual can give - doesn't buy much in the way of mailers, consultants and air time.

It's one of the strictest caps in the nation - and just about every candidate finds a way around it.

From county commission candidates to the marquee candidates for governor, the principle is the same. An individual can give only $500, but an "individual" can be any one of a number of corporate entities. Lobbyists, businesses and unions funnel hard-to-track cash through branches, divisions and partnerships run by the same people.

The loophole allows candidates to take thousands of dollars, sometimes more than $20,000 in a day, from what amounts to a single source.

"It's not illegal," said Sue O'Connell, spokeswoman for the National Institute on Money in State Politics, a nonpartisan research group based in Montana. "It's just that they've found a way around the law, which is what often happens with money in politics."

Many of the contributions are small. For example, John Thrumston, candidate for Citrus County Commission, took $500 apiece from Donald W. Shackelford and Donald W. Shackelford P.E. Inc., both at the same Miami address.

Former Hernando County Commissioner Rob Schenck, a contender in the GOP primary for state House District 44, owes more than 35 percent of his campaign coffers to similar donations. One Tampa health insurance firm gave him $7,500 on Aug. 3 by funneling the cash through 15 different corporate entities.

State Rep. Kim Berfield accepted more than $100,000 in similar donations for her Senate campaign. Her GOP primary opponent, State Rep. Frank Farkas, has taken more than $50,000.

"We're trying very much to stay within the spirit of the $500 cap, but it's definitely a loophole," Farkas said. He favored closing the loophole by banning corporate donations in state and local races.

Berfield said that subsidiaries of the same company have different concerns and priorities and should be afforded the same ability to contribute. "You don't want to impede someone's free speech. I wouldn't want to do it to a corporation any more than I'd want to a newspaper or an individual."

Tom Gallagher, a Republican candidate for governor, took $22,500 in a single day through 45 different partnerships and companies registered to the same Palm Beach Gardens address.

The contributor names aren't particularly illuminating, like FLA-PWH IV Ltd. Partnership, RMD Realty Holdings, and WRMC I Medical Equity Investors, to name a few. The occupations listed in the campaign finance records include "real estate," "mortgages," "investments," "health care," and "consulting."

It can be laborious to track down who's in charge of the companies. For example, Aries Acquisition LLC donated $500. Corporate records list its manager as Aries Land Holdings LLLP. It, in turn, lists Aries Land Equity Gp, LLC, which lists Aries Land Holdings LLC, which, finally, lists as its managing member Bruce Rendina, a commercial and medical real estate developer. Rendina, chairman, chief executive officer and president of Rendina Cos., comes up as managing member or president and CEO of most of the donors listed at that address.

At least eight of the partnerships that donated aren't traceable in Florida's Division of Corporations database, so it's unclear who controls them.

"It's a common practice all over the United States," said Susan MacManus, a political science professor at the University of South Florida. "It's one of the biggest frustrations of all to campaign finance reformers."

Often called "bundling," donors channel money through businesses controlled by the same people or individuals with a common interest, like union members or employees of a particular company. But the term "bundling" carries a sleazy connotation of a quid pro quo, suggesting that a donor handed over a pile of checks at once in return for a particular vote or favor. That, of course, is illegal.

Ben Wilcox, director of Common Cause Florida, said the loophole allows deep-pocket donors to buy access to politicians, and assure themselves of a sympathetic ear in Tallahassee.

"By bundling the contributions together, it basically gets around the spirit of the law," Wilcox said.

Berfield said deep-pocket donors don't get more access than her other supporters. "I don't know that you could say that they get any better access than a constituent would," she said.

Big donors often spread their money around, giving to both sides in a political fight. WellCare Health Plans Inc., a Tampa provider of government health care plans like Medicare and Medicaid, gives generously to Republicans and Democrats alike.

It has given $14,000 to the gubernatorial campaign of Democrat Jim Davis since last year, and another $19,500 to Charlie Crist, a Republican. WellCare donated $8,000 to Farkas, and $7,000 to Berfield, his primary opponent.

Campaign finance is a business, Wilcox said, and business expects a return on their investment, no matter who wins.

"These donors are business people, too, and they're looking at obviously having relationships with these people in the future," said Shawn Foster, who coordinates state legislative campaigns for the Florida GOP. "It's like putting $50 on red and $50 on black on the roulette table."

Asjylyn Loder can be reached at aloder@sptimes.com or 352 754-6127.

Are there any limits?

A candidate may not accept a contribution in excess of $500 from any one person per election. A "person" is an individual or a corporation, association, firm, partnership, joint venture, joint stock company, club, organization, estate, trust, business trust, syndicate or other combination of individuals having collective capacity. The term includes a political party, political committee or committee of continuous existence. Loans are considered contributions; however, loans made by a candidate to his own campaign are not subject to contribution limitations. In-kind contributions are subject to the same contribution limitations as money. An in-kind contribution is anything of value except money made for the purpose of influencing the results of an election.

Source: Florida Division of Elections Web site

[Last modified August 28, 2006, 01:51:21]


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