In this episode, Megan Calcote discusses some of the tips Leslie Wayne, adjunct faculty at the Arthur L. Carter Journalism Institute at New York University, shared during Reynolds Week 2016. Wayne shared tips on covering campaign finance including the added complexities after the Citizens United supreme court decision. Wayne explains the differences between PACs, Super PACs, and Leadership PACs, and emphasizes the importance of looking for donor motivations and spending patterns. Wayne concludes by sharing some of the best places to start digging for campaign finance data.
Transcript
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Megan Calcote: How to Cover Money: Covering campaign finance.
Leslie Wayne: This is a different type of campaign coverage, and it’s a campaign coverage that I think is a really fascinating type of campaign coverage. I really enjoy it. I’ve gotten terrific stories out of it, and it’s a way that you can define a niche that’s different than everybody else on the campaign trail.
Calcote: Hello and welcome to another episode of the Reynolds Center podcast. We are coming to you from the Donald W. Reynolds National Center for Business Journalism based at the Walter Cronkite School of Journalism and Mass Communication at Arizona State University. I’m Megan Calcote, program coordinator for the Reynolds Center. Today we have tips for covering campaign finance from Leslie Wayne, adjunct faculty at the Arthur L. Carter Journalism Institute at New York University. Leslie was a speaker at Reynolds Week 2016 where she presented insights into covering the complicated world of campaign finance. One important aspect of covering political campaigns is the new funding landscape after the 2010 Citizens United decision.
Wayne: Technically, what Citizens United does is that, historically, corporations and unions could participate in political campaigns through political action committees. They could not take money out of the union treasury. They could not take money out of the corporate treasury to engage in politics in any manner whatsoever. You could set up a Microsoft PAC, a GM PAC, a Google PAC, name your company in which or the union, the Teamsters PAC, or the AFL CIO PAC, in which members or employees would donate to that PAC, and that PAC would then give directly to the candidates, but they were not allowed to take money out of the union treasury or out of the corporate treasury and engage in politics. The difference is that under Citizens United, corporations and unions can spend unlimited amounts of money from their treasury to vote for independent ads. They do not necessarily give directly to candidates. They can’t coordinate with candidates. They can’t give to candidates. They can only do these issue ads. What we’re seeing in this particular race and post-Citizens United is really the power of big money. And maybe this will change, but right now, the power of big money, and one of the stories in The Times that was interesting was 158 families have contributed over half of the money in the presidential race, the majority supporting Republicans.
Calcote: Aside from understanding the effects of Citizens United on political funding, you also need to understand the different types of political action committees, or PACs, and how they function.
Wayne: A PAC, political action committee takes money and limited amounts. There’s a limited amount that you can give to a PAC. There’s a lot of rules about the money that can go into a political action committee. The money that goes into political action committee is fully disclosed in the FEC filings. Let’s say you’d work for Microsoft, and you gave money to the Microsoft PAC. Your name would be in the FEC filings. Everybody would know that, and there’s a limitation on how much you can give to that PAC, but that PAC can make direct donations to candidates. So that PAC can give money to Ted Cruz, it can give money to Hillary Clinton. That pack can give money to whomever it wants. A Super PAC is a different animal, and a Super PAC cannot give directly to candidates. It can only engage in what’s called independent expenditures issue ads. So you would give money to your Super PAC, and the Super PAC cannot coordinate with the campaign, and it just puts up ads that say, “Hillary is great.” “Ted Cruz is wonderful.” “Hillary is terrible.” “Ted Cruz is terrible.” The rules get a little fuzzy under what circumstances Super PACs disclose, and there’s ways that they can route money through nonprofits that then it gets very complicated.
Calcote: So a PAC is able to donate directly to political parties or candidates, but there is a limit to the amount they can contribute. PACs can donate a maximum of $5,000 per election per candidate, and a maximum of $15,000 per year to a national party. Super PACs can accept unlimited contributions and spend unlimited amounts of money to support or oppose certain political candidates. Their biggest restriction is that they cannot donate directly to candidates or to national parties. Aside from PACs and super PACs, there’s another type of political action committee to be aware of, the Leadership PAC
Wayne: It’s basically that if you’re an incumbent senator from Arizona. You’re not up for re-election, but people are still writing you checks. You want to make sure that you get other Republicans elected, and you know that there’s a contested Senate race over there in New Mexico, or contested Senate race somewhere else, your Leadership PAC can go to put money into that race to get that Republican elected, or anybody else who, if you’re Republican, who you want to support. So that’s what a leadership PAC is.
Calcote: In addition to political action committees, other groups are involved in campaign finance.
Wayne: 527s, came into being in 2007-2008 and these are called issue groups. They’re tax exempt under the IRS rules, and they can raise unlimited amounts of money from corporations, from unions and from individuals to be used for issue ads. 501-C3s are nonprofits under the IRS code, and they can engage in a certain amount of political activity depending on the political activity, as long as it’s not the main thing that they do. And then it gets kind of fuzzy, because like the 501-C3s are charitable and religious organizations, and they can’t do politicking, but they can do voter registration and a certain amount of stuff. 501-C4s are social welfare, and they can engage in a certain amount of politics, as long as it’s not their primary thing. 501-C5s, are labor and agriculture. 501-C6s are business and chambers of commerce.
Calcote: Once you know the different funding groups to examine, it’s important to think about what kind of story you want to write.
Wayne: But I think that what you want to do is you want to look for stories on two ends. The first end is, who’s giving to the campaigns? Who are these people? What’s their motivation? What kind of money are they giving? Are they giving 501-C3s? You know, what is it? The other part is, you want to go, where is the money being spent? Who’s spending this money? Giving patterns, you want to look for where’s the money coming from, from industries, from regions, from issue groups, outliers and oddities. Is something not hanging together? Is there some unusual transfer of funds? I had done one story a million years ago about Alfons Stomata, when money that was coming into him with from Florida was being routed through here, through there. And then I called up some of the donors, and it turns out the money ended up in George Pataki’s campaign, and the donors thought they were donating to Alfons Stomata and the money ended up in George Pataki. It’s completely goofy. But if you start looking for outliers and oddities. Big donors versus small donors. Who are the people who are giving? What’s the motivation? What are some of the names you want to look at? Federal, state and local races? You know the whole enchilada. New techniques, colorful events, any lavish excess, lavish excess and color is always good in fundraising. And you want to check the periodic reports. Every couple months, there’s reports that come out about how much money has been raised by the candidate. So you want that. Spending, air war versus ground war. Air war is the media campaign, ground war is to get out the vote, polling, all that kind of stuff. Who’s getting rich? The consultants, the ad buyers, the pollsters, who are these folks? What states, which states are economically benefiting from this? Where are they spending the money, and when they spend the money, what does that indicate about their campaign strategy? And the burn rate, how quickly are they going through the money? McCain got into a lot of trouble, because his burn rate was really, really high and by I think it was New Hampshire, he was practically out of money.
Calcote: There are many sources you can use to find the information you need for your campaign finance stories. Leslie’s favorites include the Center for Responsive Politics, the FEC website, OpenSecrets and the Sunlight Foundation, as you’re about to hear, the Sunlight Foundation includes an interesting feature you might want to check out.
Wayne: What’s sort of interesting on them is they have one interesting tool that I particularly like, kind of fun. They have a thing called Party Time. So if you want to know, you know, if there’s like a fundraisers, you know for your stories, you want to get fundraisers. You want to check out the invitations, all the lavish excess. That’s where you find it under party time.
Calcote: After listening to how complicated campaign finance can be, you might ask yourself, why would I want to specialize in campaign finance coverage? As Leslie explains, it’s a rewarding experience that can give you a way to stand out from other political reporters.
Wayne: This is a different type of campaign coverage, and it’s a campaign coverage that I find it a really fascinating type of campaign coverage. I really enjoy it. I’ve gotten terrific stories out of it, and it’s a way that you can define a niche that’s different than everybody else on the campaign trail.
Calcote: Thank you, Leslie Wayne, for sharing your campaign finance experience during Reynolds Week earlier this year, and thank you listeners for tuning in to another episode of the How to Cover Money podcast. The Reynolds Center is partnering with Media Shift to present two upcoming webinars: Advanced social media analytics, presented by me Megan Calcote, and Multimedia and mobile tools presented by the director of the Cronkite News digital production bureau, Mike Riley. Visit businessjournalism.org to sign up, or if you happen to miss the webinars, they’re available online, on demand by visiting our website. If you’re in need of more business journalism training, the Reynolds Center can help. Visit businessjournalism.org to find articles and self-guided training, download our free eBook Guide to Business Beat Basics, or to sign up for our monthly newsletter. The newsletter will keep you up to date on training opportunities from the Reynolds Center year round. If you enjoy the How to Cover Money podcast, make sure to subscribe on iTunes Stitcher or SoundCloud, and while you’re there, leave us a rating or review to help make the podcast more visible to other business journalists. Support for the How to Cover Money podcast comes from the Donald W. Reynolds National Center for Business Journalism. Join us again in two weeks to receive an influx of story ideas from journalist, Jennifer Conlin.
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