By the Dawn's Early Light
By Robert A. Hahn Posted in Breaking News — Comments (9) / Email this page » / Leave a comment »
Kudos to Michelle Malkin for being among the first to see the potential for mischief in a little-noticed (at the time)
ruling by the Clinton-era FEC. It seems that the august commissioners ruled in 2000 that while Indian tribes were "persons" subject to individual limits on contributions to candidates, parties, and political action committees, they were not "individuals" subject to the $25,000 limit on the annual total of contributions. As Malkin notes in this column from April, 2001:
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The ruling "enables an Indian tribe to become a political cash register that can gulp 'soft money' from any source and disgorge it as 'hard money' contributions or expenditures," explains Ed Zuckerman, editor of the PACs and Lobbies newsletter. Zuckerman concluded that the FEC gave tribes "a unique opportunity to earn transaction fees and commissions by utilizing their tribal accounts to launder soft money into a new form of hard money that might be called 'political wampum.'
"It is 'quite possible, very possible' that this cozy little laundromat arrangement could pick up business dramatically if McCain-Feingold becomes the law of the land."
And so it did. And so that did. But wait... it gets better...
More below...
As the so-called "Abramoff scandal" becomes the media's cause du jour, Democrats are becoming quite fond of telling us that 65% of the money went to Republicans. One reasonable question is whether this indicates that Republicans are more corrupt than Democrats, or that Indian tribes adjust their giving according to who is in power. The answer, once again, is provided by Malkin in her column from 2001:
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In the 1996 election cycle, a Center for Responsive Politics report notes, Indian gaming interests gave over $1.5 million in soft money to national party committees. According to National Journal, six of the top 10 soft money donors among interest groups nationwide in 1999-2000 were Native American tribes. The No. 3-ranked Seminole Tribe of Florida donated $325,000, 85 percent of which went to the Democrats. After making the donations, the Seminoles gained approval for electronic gambling machines. The No. 5-ranked Mashantucket Pequot Tribe, operators of the gargantuan Foxwoods Casino in Connecticut, donated $319,000, 83 percent to the Democrats.
But that's not the best part. There was one Republican on whom the tribes lavished great attention:
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Final tallies are not in yet, but analysts say the top individual recipient of Indian gaming money during election 2000 was none other than anti-soft money crusader Sen. John McCain, R-Ariz., who sits on the Senate Committee of Indian Affairs.
No doubt, as the current scandal continues to unfold, the Arizona Crimebuster will be at the head of the column proposing "reforms." When that happens, let's remember how his last reform is turning out.
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By the Dawn's Early Light 9 Comments (0 topical, 9 editorial, 0 hidden) Post a comment »
that the initial ruling happened under Clinton as literally everything (see the coal mine stories) that has happened in government since January 2001 has been blamed on "the Bush Administration". If you count the recession, the blame actually goes back even farther.
The interpretation that tribes are persons is, I think, unassailable. Congress wrote the law to define "person" broadly, then applied specific prohibitions on subsets of this category - namely corporations, unions and foreign nationals. Tribes are NOT corporations, unions, or foreign nationals. So they are "persons" whose contributions are subject to the same per-donation limits as contributions from you or me. Except they are not subject to the aggregate limits applied to "individuals" - because they aren't individuals either! Trusts, by the way, fall into a similar gap - they are "persons" and they are not "individuals."
Which is a long way of saying that you shouldn't "blame" the FEC for rendering a fair reading of the law. If you want tribes treated like corporations - it may be that there are similar policy justifications for doing so - or as individuals with an aggregate limit, I believe the Act itself needs to be amended.
Is Indian casino gambling, says Fergus M. Bordewich in a fine WSJ op-ed on January 6. (Subscription required)
From the point of view of gaming's beleaguered opponents, however, tribal casinos represent a legal monstrosity that subverts the nation's constitutional order and breeds corruption. "Lobbyists, legislators and inside-the-Beltway lawyers are the real stakeholders in Indian gambling," says Alexis Johnson, a lawyer based in Arizona, who has served as an adviser to campaigns against the legalization of tribal gambling in several states. "Abramoff is just the tip of the iceberg." Mr. Johnson likens casinos to the infected goods that the British distributed to Indians during the colonial period. "This is the new smallpox blanket," he says. "But everyone is enamored of it because it has got dollar signs all over it."And tribes have powerful friends. Nationally, between 1990 and 2004, tribal political contributions to federal candidates alone have ballooned from less than $2,000 to more than $7 million. In California, Native Americans have become the largest contributor to political campaigns: They spent $70 million on the successful 1998 campaign to require the governor to approve any tribal casino proposal (the requirement was struck down by the state courts a year later). Native Americans also contributed another $30 million in a similar and also successful campaign in 2000. And nearly one-fifth of all the money that was spent in the 2003 gubernatorial recall campaign came from Native Americans.
Perhaps the op-ed will be posted on the free Opinion Journal site this weekend. I'll check back and link, if so.
I'll just add on that this was a unanimous opinion, and if Scott Thomas and Brad Smith both thought it was right, it's probably right.
I think the point is that followers of this sort of thing were able to correctly foresee that the then-relatively-harmless FEC ruling would become a monster in the presence of McCain-Feingold.
If the consultants could see that, then it is reasonable to assume that McCain and Feingold could see it, along with the rest of the critters. A lot of people were opposed to McCain-Feingold, and their lobbyists would have been making sure that the "Indian money" issue was well-understood by the Members on the committees.
This means that the "Indian loophole" was not viewed by the Critters as a problem, but rather as an opportunity, as in, "Oh good, I can vote for this thing knowing there's a way around it." That points to a certain charlatanism in the passage of "Campaign Finance Reform," along with some advance knowledge that from now on their hard money would be arriving from the Indian tribes instead of being delivered in a plain brown wrapper by a brown-shoed intern in the dead of night.
... that Sen. McCain is far and away the greatest beneficiary of from the "Indian loophole"? I'm not suggesting it was an intentional outcome of McCain-Feingold, but the irony here is just beyond stunning.
The Reformer and the Loophole.
Has a ring to it.
Sheesh.
"I know you weren't trying to pin this on President Clinton."
The flip-side of the blame Bush coin is that we have to point out every time Bush wasn't the president, no matter how far back in history you go. Otherwise the pat answer will be "Bush's fault". For example, I refer to the Civil War era as the "PreBush Civil War Era" now. I also call Ancient Rome "Ceasar-Era Italy".
I know you weren't trying to imply that Nick was trying to blame Clinton. And I know you aren't denying that it was, in fact, the Clinton-era FEC.

You say "Clinton-era FEC", but as you know, the FEC is comprised of six commissioners, three from each party. I know you weren't trying to pin this on President Clinton.
The AO itself is here.