How to Avoid Campaign-Contribution Pitfalls
Know the rules -- but don’t drop out
by Phil Tajitsu Nash

In the wake of the 1996 campaign finance scandal, many among us who had contributed to any political candidate or cause vowed we would never get out our checkbooks again. Why do so, we thought, only to be subjected to an insulting audit of our citizenship status or English-speaking ability -- or the even more humiliating prospect of having our check returned, of being told “thanks, but no thanks”?

For the majority of us who have never donated, moreover, the scandal seemed only proof that we shouldn’t consider the idea at all. Campaign donations has never been a big part of the Asian American tradition, anyway.

It ought to be, especially now.

Since 1996, dozens of viable candidates have emerged on the local, state and national fronts -- candidates who would not only bring us closer to demographic parity but also would further those causes most of us believe are important, like ensuring equality and nondiscrimination. To have a viable candidacy, you need money -- and the higher the office, the more that money plays a role.

To a lot of people, that stinks. Most political observers, in fact, would agree that campaign finance should be reformed in some way. Given the glacial pace of campaign finance reform, though, it’s unlikely that the system will change much before next year’s elections. So, do we sit back and be counted out or get back in the game? Instead of spending for cars,clothes and other trappings to make us feel like we are fitting in, more of us might consider investing at least some of that into our own political capital -- potential muscle that could influence policies on immigration, hate crimes and other issues now being debated on Capitol Hill.

Here is the real lesson of 1996: When you do something, do it right. Understand the Federal Election Commission’s rules before you contribute. Here are some general guidelines (This, however, is not legal advice.).

Under federal law, a citizen or permanent resident can give at most $25,000 per calendar year total to most campaign vehicles. (State laws vary.) Within that limit, the individual can give at most $1,000 per election to a federal candidate or his campaign committee. The federal limit holds only to each election, and applies separately to each election. Primaries, runoffs and general elections are each considered separate.

National party commissions can accept up to $20,000 from a person each year, though separate limits apply to a party’s national committee, House campaign committee and Senate campaign committee. Political action committees (PACs) or state party committees supporting federal candidates can accept up to $5,000 per person in each calendar year, according to federal law. Some PACs are sponsored by corporations, others by labor, others by neither. They use donations to make their own contributions to federal candidates or to fund other election-related activities.

Any political committee can take up to $100 in cash from any person; amounts over that must be made by check, money order or other written instrument.

Contributions may be in the form of money or other things. Under U.S. law, loans and loan backing, some services and merchandise may be considered things of value given to influence a federal election and thus would count as contributions. All the contributions you make, regardless of their form, count against the annual $25,000 limit.

Independent expenditures, however, may not. Such expenses, which include money spent for communications that advocate for the victory or defeat of federal candidates, are considered independent only if the individual making the expenditure does not coordinate or consult with the candidate or campaign who might benefit.

Because independent expenditures are not considered contributions, anyone can spend as much as he wants on ads that urge people to vote for or against any candidate, as long as he does not collaborate with the intended beneficiary. (Because the rules are complicated, though, those thinking of financing independent expenditures are especially encouraged to contact the commission.)

The ban against collaboration is why, for example, ads often note something like “paid for by John Doe and not authorized by any candidate’s committee.” In addition, the Federal Election Commission requires those with more than $250 in independent expenditures to file its Form 5 or a signed statement containing the same information as the form requires.

As the scandal made clear, not everyone is legally allowed to contribute. Outside of green-card holders, noncitizens cannot make contributions to any election on any level, and neither unions nor corporations can either. Any incorporated group, whether profit or nonprofit, large or small, counts -- even a small mom-and-pop shop, if incorporated, cannot use its business account for contributions. Corporate employees, though, can contribute through a nonrepayable corporate drawing account, through which they can draw from their salaries.

Contributors also must contribute as themselves, as opposed to in someone else’s name. Those who are “topped out” cannot give money to someone else to make the donation; similarly, corporations cannot give bonuses to their employees with the understanding that they are to be contributed.

Individual limits apply to each spouse, even if only one of them is working. Parents cannot contribute using their children’s names, nor can they funnel money through their kids. Children under 18, though, are legally allowed to give, providing that the decision and the money is theirs (for instance, in trust proceeds or savings accounts held under a child’s name).

It all sounds complicated, and even this explanation is only an overview. For more information, check out “Supporting Federal Candidates: A Guide for Citizens at http://www.fec.gov/pages/citnlist.htm or contact the commission.

Don’t, however, give up. Especially now.