The chairman of the North Carolina Republican Party faces criticism for comments he made at a recent campaign fundraiser, where some say he misrepresented campaign finance laws and possibly forecast his intentions to break them.
Robin Hayes, chairman of the NC GOP, spoke at the fundraiser for U.S. Rep. David Rouzer at the Figure 8 Yacht Club in Wilmington on Aug. 10 when he asked attendees to donate to the party organization to help Rouzer. A Democrat who attended the fundraiser recorded part of Hayes’ speech and gave it to The News & Observer.
“This is an envelope. You have heard things that should inspire you to dig deep tonight. But federal law says you can only give, you and your wife, $5,200 to David Rouzer,” Hayes says in the recording. Rouzer then corrects him to say the individual federal spending limit is $5,400 per year.
“But you can take this envelope, put money in here and give it to your friend and citizen, Robin Hayes, who happens to be party chair and I can take unlimited money and put it to his campaign, legally,” Hayes said.
Hayes’ comments raise questions about his plans for the money and whether he intentionally misled potential donors.
Federal campaign finance laws prohibit state organizations from earmarking general donations for specific candidates and do, in fact, limit the amount of money that individuals can donate to the state party. Party organizations are also limited to $5,000 per candidate per election.
So Hayes’ comment about taking unlimited money is inaccurate, says Daniel Weiner, senior counsel to the Brennan Center for Justice’s democracy program.
“First of all, Hayes cannot take unlimited money to spend on federal elections,” Weiner said in a phone interview, referring to the Bipartisan Campaign Reform Act, also known as the McCain-Feingold Act.
“His statement is not an accurate reflection of the law,” he said. “You can’t just raise unlimited funds for federal elections if you’re a party chair. That’s pretty basic. They’re also prohibited from soliciting unlimited funds.”
Dallas Woodhouse, the NC GOP executive director, responded by email to an inquiry from The N&O. Woodhouse said the party strictly follows all campaign laws and doesn’t accept “directed” contributions to its campaign committees for federal or state campaigns.
A forthcoming committee?
But Hayes wasn’t soliciting funds for either of those committees, Woodhouse said. Hayes was asking for donations to a campaign committee that doesn’t exist yet, according to Woodhouse.
“Chairman Hayes was soliciting funds for a yet to be created Federal Joint Fundraising account. We can solicit for that for our work in (Rouzer’s) race in coordination with him,” Woodhouse wrote.
“While we are limited to $5,000 in direct candidate support, the party may spend unlimited funds collected under the limits from its (joint committee) on a Congressional Race. The funds would not be sent directly to the candidate,” the Woodhouse email says.
Woodhouse is right about how the funds in a joint fundraising account could be used, according to David Kolker, counsel for the Campaign Legal Center, a nonprofit that promotes transparent government and fair campaign practices.
However, the GOP likely erred by soliciting funds for a joint fundraising committee that hasn’t been created with the U.S. Federal Election Commission, Kolker said in a phone interview.
“You have to set it all up ahead of time. They have to create a committee, register it with the FEC and say how they’ll divvy (the money) up,” Kolker said, referring to FEC regulations.
Woodhouse, for his part, suggested no violation had taken place because — despite Hayes’ request for money at Rouzer’s event — he didn’t raise any money for the yet-to-be-created joint committee.
“No funds on that project have been received, and we don’t open the account until we have pledges to those accounts. Mr. Hayes received no funds at that event,” Woodhouse said in an email.
Woodhouse’s explanation aside, Kolker said he interpreted Hayes’ comments “to mean he’s going to coordinate with the campaign when he spends it, and that’s a huge red flag.”
Kolker on Monday clarified that the GOP’s federal account can use its hard money to coordinate expenditures.
“But there are limits on how much money they can spend on coordinated expenditures, all of those coordinated expenditures need to be paid for with hard money, and they can’t accept unlimited funds from contributors for that account,” he said. “Not a dime can be used from their soft money account -- i.e., the account that can raise unlimited funds -- to make coordinated expenditures to support a federal candidate.” Hard money refers to more heavily regulated contributions.
He suspects the GOP, with its explanation, is “sloppily trying to reinvent history to comply with the law.”
Whether or not the FEC, which enforces election laws, would come down on Hayes or the NC GOP is unclear and experts say unlikely.
The FEC “cannot comment on the activity of specific candidates or committees or speculate on the legality of any specific or potential set of circumstances,” spokeswoman Judith Ingram told The N&O in an email.
On whether Hayes acted inappropriately by soliciting funds for a joint committee that doesn’t exist, she referred the N&O to regulations that say: “Before conducting a joint fundraiser, all participants must enter into a written agreement that identifies the fundraising representative and states the allocation formula — the percentages or amounts used to allocate joint fundraising proceeds and expenses among participants. The fundraising representative must retain a copy of the written agreement for three years and make it available to the FEC upon request.”
Will anything happen?
The NC Democratic Party is likely to file a complaint, according to spokesman Robert Howard.
“These comments clearly show that the Republican Party is earmarking funds for specific candidates, a serious violation that should be fully investigated,” Howard said in an email.
“Facing a groundswell of voters frustrated by Republican efforts to undermine protections for pre-existing conditions and to rig our economy at the expense of working families, Republicans are resorting to breaking election law to get their wealthy donors to save them,” he continued. “It won’t work.”
Jessica Levinson, a professor at Loyola University Law School, interpreted Hayes’ comments the same way Kolker did.
“He’s pushing the line. He’s basically like ‘here’s how we could funnel money’,” Levinson said. “You can’t use your ability to donate to the party as a pure loophole around direct contribution limits.”
But she doesn’t think the FEC will act.
“You don’t just need a smoking gun. You need a smoking gun and a Molotov cocktail,” she said, referring to the crude improvised explosive device often made with glass bottles and burning rags. “My guess is, without more, nothing really happens.”