Hardly have proposals for lobbying reform been put forward, even in a whisper, and there is spreading fear that loopholes have been planted in their midst.  Some meal, some beverage, may be served to a Member at the expense of a lobbyist, consumed without legal limit and at grave cost to the entire reform enterprise.

    The Washington Post today carries a story that this loophole will be found through the campaign laws.  Jeffrey H. Birnbaum, "Loophole in Lobby Bill Leaves Wiggle Room," Washington Post (Jan. 18, 2006) at A4.   According to the story, the meal and the beverage can be justified by the delivery, at the same time, of a campaign check: the lunch or the dinner becomes a fundraising event.

    This overstates the case: it understates the impact of the campaign finance laws in their current form.  Candidates—including incumbents—may take meals with their contributions, but there are limits under current rules, and they are not insignificant. 

    By and large, any expense of raising campaign funds must be accounted for somehow. The Commission, for example, has promulgated corporate "facilitation" rules that restrict corporate efforts to assist candidates with fundraising event. 11 C.F.R. § 114.2(f). Corporate executives and lobbyists can work with candidates to arrange these events, but the company cannot advance the costs.  Food, employee time, the use of vendor and customer lists, and space for the event must all be priced at full market value and paid by the candidate’s campaign in advance.  The candidate may dine splendidly at these events, but she will have paid for it. 

    Of course, an individual lobbyist, acting on her own time, might volunteer to help a candidate with fundraising.  Having collected a number of checks (on her own time, and without the use of corporate resources), she might arrange a meal with the candidate to deliver the checks.  If, however, this is a fundraising event—and the delivery of the checks would suggest that this is indeed what it is—the cost of the meal is a fundraising expense.  And either the candidate must pay this expense, or it must be assumed by the lobbyist as a limited and reportable "in-kind" contribution to the campaign.  So there are limits here, too.

     Then there is the PAC fundraising event, which may be underwritten by a corporation as a cost of PAC "administration." 11 C.F.R. § 114.1(a)(2)(iii).  The candidate may meet with PAC representatives, have a meal with them, and appeal for or, even  more likely, receive a contribution.  Limits are not escaped here: the amount of money a PAC can contribute  to any candidate is limited, which means that there is necessarily also a limit on the number of events, including meals served at the events, that the corporation can host for that candidate.

     A corporation (and its lobbyists) may also finance appearances by candidate at company events, before the class of company executives, to discuss her candidacy and to appeal for funds.  11 C.F.R. § 114.3(c)(2)(i),(ii). These appearances could feature meals; the candidate could make the case for money and, provided that corporate officers do not collect and deliver the checks at that time or thereafter, the event is a lawful one, and so, too, would be any meal served.  There need not be any delivery of the check at the time. The candidate does expect and hope to see the checks later.  But sooner or later, if the candidate has raised all the available contributions, there is nothing more to be done: no point to further meetings, or to the meals served at them.

     If there is a loophole allowing for the delivery of meals, this would be it:  a candidate, on the pretense of seeking funds, could arrange for meals at pointless meetings. But it is not clear how much of a threat it is to "lobbying reform."  Candidates who are truly looking for campaign funds will find that there are limits to the events arranged for that purpose: either the costs of the event have to be accounted for and paid within appropriate limits, or the candidates, having appealed for and received the available contributions, will wish to turn their attention elsewhere. 

     Those candidates who are prepared to conspire with lobbyists to arrange for free meals, under the pretense of seeking campaign funds, are not exploiting a loophole.  They are wasting their time, which few candidates, in the arduous search for campaign funds, wish to do.

     They are also running risks.  If candidates who are officeholders dine regularly at events held for no purpose other than to entertain them—with no intention or likelihood of collecting contributions—they will face the enforcement of other laws, very unforgiving ones, that have been much in the news of late.  This is a particularly effective limit on these kinds of meals.

Bob Bauer