Election commission ruling encourages money laundering

THE ISSUE The Federal Election Commission has cleared the Democratic Party in Hawaii and two other states of allegations of money laundering.

WINKS and nudges used to launder political campaign contributions have received the blessing of the Federal Election Commission in a ruling that exonerated the Democratic Party in Hawaii and two other states for their shenanigans in last year's election. The decision sends a disturbing message that could lead to massive funneling of money among state parties to bypass federal contribution limits.

Desperate for money in his campaign for the U.S. Senate, Rhode Island Secretary of State Matt Brown already had received the $4,200 limit in direct contributions from each of four major donors. At the Brown campaign's request, Hawaii's Democratic Party gave $5,000 to the Brown campaign, while Massachusetts and Maine gave $10,000 each.

Brown's field director maintained that he told party officials that he would try to help them raise at least as much as they would give to Brown's campaign. He performed well: The three out-of-state parties received $28,000 from the quartet who had been maxed out from the Brown candidate.

Federal law prohibits contributions to candidates to be funneled through a third entity, such as a political party, to evade limits on individual contributions. However, Ira Rohter, a University of Hawaii political science professor, says such transfers are "standard operating procedure." The commission's ruling makes them accepted procedure, if performed coyly.

Jane Sugimura, the Hawaii Democratic Party treasurer, initially told the Associated Press she understood that the party gave a donation to the Brown campaign in exchange for the money to be received from the Brown supporters, then denied explicit illegality. "We didn't do anything wrong," she insisted.

The Hawaii Republican Party lodged a complaint with the Federal Election Commission. The commission accepted Sugimura's revised explanation, writing that there was no evidence of an explicit arrangement between the state parties and the Brown campaign.

"Though it may be reasonable to infer that the individual donors solicited by Brown gave to the state parties under the assumption that some portion of their contribution might then be donated to the Brown Committee, such an inference alone is insufficient," according to the hook-line-and-sinker ruling.

Brown was defeated in his bid for the party's Senate nomination. The hanky-panky appears to have led to the resignation of Maine Democratic Party Chairman Patrick Colwell on the day that the party adopted a rule preventing future out-of-state donations. The Hawaii Democratic Party has adopted a similar ban, said Chairman Mike McCartney.

The Election Commission had an opportunity to prevent future money laundering across state lines. Instead, it has tempted candidates and political parties to circumvent the law as long as they can keep from leaving behind forensic evidence.