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Krebs Flips Interpretation: ActBlue Not a PAC, Candidates Itemize Online Donations

The Secretary of State has reversed an interpretation of campaign finance law to align with an interpretation I offered in 2016.

When I ran for Legislature in 2016, I received over $5,000 in individual contributions through ActBlue, a remarkably effective Democratic online fundraising platform. The nonprofit PAC helps progressive candidates set up a secure online fundraising page and widgets, keeps track of all the necessary donor contact data, and sends out weekly checks lump-summing all donations minus the 3.95% processing fee.

So suppose Joe sent me $200 and Mary $250 through ActBlue. I planned to report Joe and Mary’s contributions as individuals and report ActBlue’s $17.78 as a campaign expense. However, Secretary Krebs’s office directed candidates to report ActBlue contributions as PAC contributions. Thus, I would report one $432.22 contribution from ActBlue, and ActBlue would report contributions of $200 from Joe and $250 from Mary, but you’d never know that Joe and Mary contributed to my campaign.

No one who clicked my ActBlue widget in 2016 was donating to ActBlue. Those friends of democracy were all donating to my campaign. ActBlue was simply a pass-through organization, a political PayPal, a vendor facilitating my fundraising. Yet the Secretary interpreted a law that, if applied to the 2014 U.S. Senate campaign by the FEC, would have meant Annette Bosworth could have reported a single (illegal!) $1.8-million contribution from direct-mail vendor Base Connect instead of providing an itemized list of all the vulnerable retirees in Florida, Arizona, and elsewhere whom Base Connect targeted with shrill anti-Obama letters.

Evidently ActBlue and Secretary Krebs discussed the inaptness of that interpretation, and the Secretary has come around. In a February 2, 2018, termination letter to ActBlue, state election coordinator Christine Lehrkamp lays out the new interpretation of ActBlue’s status as a business:

Per email exchanges between ActBlue and the Secretary of State’s office we have concluded that ActBlue South Dakota PAC is not a PAC per SD Codified Law. It is instead a business that offers a service of processing donations to committees in South Dakota

As a result, we will be terminating your committee.

We’ve agreed, ActBlue will direct the committees they collect contributions for to list contributions from the individual that contributed and not as if the contribution is coming from ActBlue. This recommendation will begin as of January 1, 2018. The Secretary of State’s office will also work with committees to make sure they are recording the contributions correctly [Christine Lehrkamp, state election coordinator, letter to ActBlue, 2018.02.02].

Disgraced former SOS office hack Pat Powers blogs that Senator Billie Sutton will have to revise his year-end campaign finance statement, which includes about $185,000 listed as ActBlue PAC contributions. He’s really just grouchy that he doesn’t get to inflate his anti-Democratic spin of ActBlue contributions as evil out-of-state PAC money and now will have to report an even higher percentage of Sutton’s support coming from grassroots individuals. In his dyspeptic chortlage, Powers fails to notice that Lehrkamp’s letter says the Secretary’s new interpretation (remember, the Legislature didn’t change campaign finance law; this is Shantel Krebs reading the law differently in 2018 from how she read it in 2016) is effective January 1, 2018. That tells me that the new interpretation does not apply to how any candidates conducted business in 2017. Senator Sutton did his bookkeeping in 2017 exactly the way the Secretary of State told him to in 2017. He will surely do his bookkeeping in 2018 exactly the new, different way the Secretary of State tells him to in 2018.

The Secretary’s new interpretation is correct and superior to her previous interpretation. Reporting ActBlue contributions as PAC contributions would have allowed a candidate to hide contributions from individuals that exceeded the caps on individual contributions. Treating ActBlue as a pass-through vendor and reporting every individual online contribution source makes for better campaign transparency, and Sutton and other Democrats will happily comply.

Tangentially Related: Speaking of compliance to statutory minutiae, Secretary Krebs has another state seal to fix before Rep. Sue Peterson’s great state seal bill kicks in:

SOS letterhead, 2018.02.02.
SOS letterhead, 2018.02.02.

No matter how hard I squint at that letterhead, I can’t make out the state motto on that state seal next to Shantel’s golden letters. Unless that seal is under an inch wide, Secretary Krebs will have to investigate herself and send herself a cease-and-desist letter for violating House Bill 1102, which passed the Senate unanimously Monday and is headed for the Governor’s desk.

4 Comments

  1. John Kennedy Claussen, Sr. 2018-02-08 15:01

    Exactly! Secretary Krebs’s interpretation, or ruling, has no bearing on 2017 filings. And DWC’s obsession with this issue, with its obvious intended bent against Senator Sutton, is just further proof of how Mr. Sutton’s candidacy scares the you know what out of the South Dakota GOP.

    My only questions are: Will the FEC ever take a new look at this as well, or have they already for federal candidates? And what implications could that have on future Democratic congressional fundraising efforts?

    You do have to give the GOP some credit though, this “trending” interpretation is just further proof that the Koch Brothers never sleep, but two can play this game. I say we take a new look at IM22 seeking injunctive relief through the State Supreme Court, that the repeal of IM22 has no legal standing because the law itself didn’t have legal standing to even exist at the time of the repeal….. If the Republicans want to go back in time with 2017 and ActBlue, how about with 2016 and the IM22 judicial and legislative shenanigans as well?

  2. Cory Allen Heidelberger Post author | 2018-02-08 16:08

    JKC, the FEC adopted this interpretation of ActBlue’s function before Krebs did. ActBlue tells users, “For federal campaigns, yes. Contributions made via ActBlue are just like contributions through other means (e.g. on a candidate’s web site, through the mail, at a fundraiser) and count towards individual contribution limits. ActBlue just helps process and deliver the contribution to your campaign.”

    This August 4, 2014, FEC advisory opinion treats donations split between candidates by donors on ActBlue as donations made by the original donor, not the intermediary ActBlue.

    But wow, don’t try dragging me into a new legal morass on IM22! See other thread….

  3. John Kennedy Claussen, Sr. 2018-02-08 16:27

    But who or how is it being policed at the federal level? It sounds like a mere honor system at best.

    Sorry about the “morass,” I’ll respond on the other thread…. (Unless you want to play three dimensional chess?…. ;-) )

  4. Cory Allen Heidelberger Post author | 2018-02-08 17:04

    The FEC oversees campaign finance more actively than the SDSOS. That doesn’t mean they catch many violators, but I don’t think SD has ever caught any violators.

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