It’s been a big week for politicians refunding tainted campaign donations.
First, Manhattan District Attorney Cyrus Vance Jr. returned a $32,000 contribution from Donald Trump’s personal attorney Marc Kasowitz, who made the donation in 2013 after Vance decided not to pursue a fraud investigation against Ivanka Trump and Donald Trump Jr.
Now, at least a dozen Democrats have refunded or donated to charity contributions from media mogul Harvey Weinstein following a New York Times story alleging decades of sexual harassment.
Refunds of campaign contributions are not rare, and most are not particularly scandalous. Losing campaigns often give back their leftover funds, although they are not legally obligated to. Some campaigns offer to refund supporters who have a change of heart, as former Sen. Arlen Specter (D-Pa.) did for his irate Republican backers when he switched parties in 2009, but that’s not required, either.
Campaigns regularly issue refunds of contributions they can’t legally accept, such as donations from people who have already given the legal limit, an issue that plagued Marco Rubio’s presidential campaign. Some entities, such as federal contractors, are not permitted to make any contributions, which is why the pro-Hillary Clinton super PAC Priorities USA had to refund $200,000 to a construction company last June. Campaigns with millions of individual donors, such as Barack Obama’s or Bernie Sanders’, have to work hard to stay top of these issues and are in a constant state of back-and-forth with the Federal Election Commission.
Occasionally, legally dubious contributions are not simply innocent mistakes by donors but concerted efforts to hide the source. Last year, the OpenSecrets Blogpartnered with The Boston Globe‘s Spotlight team to uncover a scheme by a Boston law firm to reimburse partners for their political donations, primarily to Democrats. Thornton Law Firm claimed that the arrangement was legal, but Massachusetts regulators disagreed. At least 30 candidates, including Hillary Clinton, subsequently either refunded the donations or forwarded them to the U.S. Treasury.
The juiciest campaign finance scandals involve contributions from foreign nationals. In 1997, The Washington Post’s Bob Woodward and Brian Duffyrevealed that the Justice Department was investigating an effort by the People’s Republic of China to funnel contributions to President Bill Clinton’s reelection effort. Clinton had to return $640,000 (from his legal defense fund) that traced back to the head of a weapons company owned by the Chinese military, and the Democratic National Committee refunded $100,000 to a Chinese-American fundraiser who confessed to receiving the money from a lieutenant colonel in the People’s Liberation Army. Last year, the FEC prodded Donald Trump’s campaign to return several contributions from foreigners.
Contributions from fraudsters are another headache for campaigns and a major source of refunds.
When victims of financier Robert Allen Stanford’s Ponzi scheme tried to recover $1.6 million of his campaign contributions, they had to take five party committees to court to get them to cough it up. The refunds included about $1 million from the Democratic Senatorial Campaign Committee and about $260,000 from the National Republican Congressional Committee. However, many of Stanford’s contributions were too small to be worth suing over, including $4,600 given to Barack Obama, who never returned the money. Recipients of donations from an even more notorious source — Bernie Madoff — were quicker to donate to a victims’ fund. And in 2004, New Jersey Democrats gave to charity a fraction of the contributions they had received from real estate developer Charles Kushner, who had donated money in the names of his partnerships without authorization. Kushner subsequently served 14 months in prison but was a free man by 2015, when he and his wife made a $100,000 contribution to a super PAC supporting Donald Trump … the father-in-law of Kushner’s son Jared.
Campaigns that purport to uphold a higher standard end up needing to return more contributions than most. Barack Obama’s campaign, for example, made it a point of pride not to accept contributions from registered lobbyists; consequently, it had to issue refunds to five lobbyist donors following an OpenSecrets Blog investigation.
Finally, there are contributions, such as Weinstein’s, which are legal but politically toxic.
If a controversial donation comes to light, politicians have to weigh their need for money against the bad press they would suffer by keeping it. In 2015, for example, three Republican presidential candidates returned contributions from the president of a white supremacist organization that was cited in the manifesto of the perpetrator of the Charleston church shooting. In contrast, Missouri Gov. Eric Greitens (R) not only kept $1 million from a venture capitalist accused of sexual abuse but even gave him a seat on stage at his inauguration. The presidential campaign and super PAC of Ohio Gov. John Kasich (R), on the other hand, returned $250,000 to the same donor.
Sometimes the focus is on questionable contributions from committees rather than individuals. Whenever a member of congress is under investigation — for example, Robert Menendez (D-N.J.) — candidates who have received donations from the member’s leadership PAC face calls to return them. Companies involved in major scandal, such as Enron in 2001, also tend to see a flurry of contributions returned to their political action committees or forwarded to charity.
Last cycle, candidates returned over $100 million in precious individual contributions, and this cycle is shaping up the same way. While the $1.4 million that Weinstein’s family has donated since 1990 is sizable by any standard, he wasn’t among last cycle’s top 500 donors. The next time a scandal hits one of the true mega-donors, however, watch how willing politicians are to let go of the tainted cash.