We’re Entering a New Era of Shady Campaign Finance

6 min read

You don’t become a billionaire without being clever with money, but Doug Burgum’s latest scheme is a head-scratcher: The North Dakota governor is offering $20 gift cards to people who donate one greenback dollar to his presidential campaign. His fellow candidate Vivek Ramaswamy is offering a 10 percent commission to anyone who brings in donations. A super PAC supporting Miami Mayor Francis Suarez is offering one donor a year of free college tuition.

Critics have long pointed out how big money distorts politics, but these fundraising stunts demonstrate how now even small money has come to warp campaigns. These GOP candidates are trying to reach a Republican National Committee threshold of 40,000 individual donors, including 200 each in 20 states or territories, to qualify for primary debates. The RNC has set a high bar to make sure that candidates have real support—and perhaps to downplay the influence of major donors. But the effect may be the opposite: enticing candidates to try novel tactics to create the illusion of real support, because they know that getting on the debate stage is essential for remaining viable and attracting those big donors. As the old saying goes, it takes money to make money.

These tactics are the product of a new focus in politics on small-dollar donors, which means that they have not been legally tested. “The whole time I was at the FEC I never saw anything like this,” Ann Ravel, a former chair of the Federal Election Commission, told me. Although she called the move “quite unseemly,” she said she doubted that they clearly broke existing statutes or regulations. But other experts believe that Burgum’s scheme may fall afoul of the law, even if the others are allowed.

An early forerunner of these plans came in 2020, when the Democratic presidential candidate Andrew Yang announced a plan to give away $120,000—$10,000 a month for one year to 10 families, drawn randomly from people who signed up on his website. The idea was to advertise Yang’s proposal for universal basic income for all Americans. (Ravel, for her part, wrote an op-ed at the time arguing that the plan was likely illegal.) This year’s schemes eschew such a connection to policy and, unlike Yang’s, require that citizens contribute money, not just enter their email.

Under Ramaswamy’s plan, anyone can gather donations and take a small cut. In a video, he called it a way to “democratize” the old system and break up the “oligopoly” of traditional fundraising. A better way to describe it would be as Uber, but for campaign finance. Candidates have long paid professional fundraisers to bring in cash. They have also relied on “bundlers,” who persuade friends and acquaintances to give, even though each donor is limited to $3,300 in individual federal donations this cycle. Ramaswamy is basically combining those and applying them to small donations.

Rather than letting anyone take a small cut, SOS America PAC is effectively holding a raffle for one big winner. They’re asking people to give to Suarez’s campaign, and they’ll give away a tuition gift to one contributor. You’ll have to shop around if you win, though: With a $15,000 limit, a Floridian could cover a full year at the University of Florida, Florida State, or Florida International (Suarez’s alma mater), but an out-of-state student would be able to cover only part of the cost. (That sum would barely reach a quarter of the cost at the University of Miami.)

Burgum’s approach is the most novel. Campaigns commonly offer swag for donations—write a check, get a bumper sticker—but handing out gift cards goes a step further. It sounds like it ought to somehow be illegal. But is it? Candidates aren’t permitted to buy votes, but giving a dollar doesn’t obligate anyone to actually vote for Burgum. They could just be involved in a neat arbitrage and vote for someone else. Federal law also bans “straw donations”: You can’t give money to your friend or spouse or employee and ask them to donate it. The ban serves two purposes. First, it prevents individuals from circumventing the individual contribution limit; second, it ensures compliance with donor-disclosure laws.

But Burgum isn’t subject to contribution limits, because candidates are allowed to give unlimited amounts to their own campaigns, and the scheme obviously doesn’t violate disclosure requirements. “The statute and regulations are not clear enough to indicate that there’s any real legal problem with this activity,” Ravel told me.

Other experts are not so sure. “I do not fault anyone for thinking creatively about legal ways to raise money,” Paul S. Ryan, a longtime campaign-finance lawyer, told me. Yet he believes that giving the gift cards and accepting the donations violates the plain language of the straw-donor law: “No person shall make a contribution in the name of another person or knowingly permit his name to be used to effect such a contribution, and no person shall knowingly accept a contribution made by one person in the name of another person.” He worries that if Burgum is allowed to use the scheme, it will set a “horrible precedent,” where a candidate might use the same method to solicit larger donations, or enlist a wealthy friend.

The RNC is arguably also a victim of the arrangement. “Burgum is trying to defraud the RNC,” Ryan said. “These aren’t unique individual donors; these are fake straw donors. If I were at the RNC I would not accept these donors, because they’re illegitimate.”

A Burgum spokesperson did not immediately respond to a request for comment, nor did an RNC spokesperson. The FEC doesn’t comment on specific cases, and in any event the body’s structure and partisan makeup mean that it has been deadlocked on the most important issues over the past few years. Ravel was skeptical that the body would enforce any violations even if they existed in these cases.

The argument for grassroots donors is not as simple as it might appear on the surface. As David Byler of The Washington Post has written, small-dollar contributions have driven polarization. But if the goal of donor requirements is to increase the power of small donors, a $20-for-$1 exchange actually does the opposite, increasing the power of one massively wealthy candidate to game the system.

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