On May 13, I wrote up an analysis of campaign finance data that asked “Did almost 600 donors break campaign finance law in 2012?” Truth is, I wasn’t sure. The bulk data made it appear that way, but as I noted at the outset, “our most troubling finding may be just how difficult it is determine with legal certainty exactly how many campaign scofflaws there are, or how much over the limit they gave.”

In the past week, I have received one e-mail and one letter proving that point. Both came from some rather prominent individuals.

First the e-mail, which was sent on behalf of Charles G. Koch: “The analysis asserts that Charles Koch exceeded the 2011-2012 biennial overall contribution limits and the PAC and party contribution limits,” wrote Missy Cohlmia, Director, Corporate Communication, Koch Companies Public Sector, LLC. “We have checked our records at length and request that Sunlight Foundation take Mr. Koch off this list.”

It turned out she was right. A correction has been made.

But the reasons why she was right are worth examining in some detail. They provide some compelling examples of the limits of our campaign finance disclosure system. And they raise questions about whether the federal contribution limits have any meaning at all.

The name match problem

To calculate how many donors appeared to have given more than the $117,000 legal limit in individual contributions to candidates, parties, and campaigns in the 2012 cycle, I wrote some code to go through all the bulk campaign finance records that we receive from the Center for Responsive Politics (CRP). I summed totals by a unique ID that CRP adds to the raw Federal Election Commission (FEC) data for each contributor.

CRP, a respected nonpartisan nonprofit, creates these unique IDs because the FEC, which regulates campaign finance in the United States, does not. Not only does the FEC not assign a publicly-available unique ID to each campaign donor, the regulatory agency does not appear to have an internal unique ID or any way to reliably assign contributions to the individuals who gave them.

The case at hand illustrates why creating such unique identifiers is important. Contributor names show up in several permutations in FEC raw data. For example, Charles G. Koch is alternately listed in the filings made by candidates and other political committees as “Charles Koch,” “Mr. Charles Koch,” “Charles G. Koch,” and “Mr. Charles G. Koch.”

Because donors – and the recipients of their funds – aren’t required to accurately and reliably identify themselves in FEC records, it’s left to CRP to take on the daunting task. In the 2012 election, there were about 1.26 million unique donors, many with multiple name permutations. That’s a lot of name matching. Turns out that in this case CRP gave Charles Chase Koch the same unique ID as Charles G. Koch (probably because they have the same first and last name, and both live in Wichita, Kansas). Charles Chase Koch, vice president of Koch Fertilizer, is the son of Charles G. Koch.

Campaign finance records show that Charles Chase Koch made two $2,500 contributions to Richard E. Mourdock, the losing Republican Senate candidate in Indiana, in the 2012 cycle.

When I asked Ms. Cohlmia to confirm that Charles Chase Koch (and not Charles G. Koch) had in fact made these two contributions, she responded that one of the two $2,500 contributions did indeed come from Charles G. Koch, “but the Murdock campaign erroneously counted this as Charles Chase Koch’s contribution.” Hence, another problem: mis-reporting by a campaign.

Limits? What limits??

Our campaign finance records showed that Charles G. Koch also gave $81,600 to parties and committees in the 2012 cycle – $61,600 to the Republican National Committee, $10,000 to the Republican Senatorial Committee, and $10,000 to the Koch Industries Political Action Committee. The legal limit for individual aggregate contributions to parties and committees per cycle is $70,800.

This would, at first glance, appear to be in violation. There is, however, a loophole. Checks to recount funds do not count towards the aggregate limits. As I wrote in the original post:

Certain donations, such as those to recount campaigns, don’t count against the legal aggregate limit and, as they are reported in the same format as other contributions, are difficult to sort out. To assess whether or not the money went to recounts requires a line-by-line reading of actual contribution filings, since this is not translated into the electronic data.

That was a short-hand way of explaining things. The longer explanation is this: A variable in the FEC bulk data allows us to know whether the contribution was made in the primary or general election, or whether it falls into an ill-defined category of “other.” The category “other” can include recount funds. It also includes a motley mix of other contribution types, some of which should count towards the aggregate limits. Without the endless hours of labor it would take to hand-verify each of these “other” records, we can’t be sure which contributions should actually count.

It turns out that one of Charles G. Koch’s RNC contributions was, in fact, a recount contribution. I quote here from Missy Cohlmia’s e-mail to me:

Also, with respect to the PAC and party contributions, we can confirm all the ones listed, and again, the $30,800 contribution to the RNC made on 10/3/2011, should not be counted toward the aggregate PAC and party contribution limits because they are for the recount fund. See page 6 of 24 of FEC Advisory Opinion 2006-24, in which the FEC states that “the aggregate biennial contribution limits of 2 U.S.C. 441(a)(a)(3) do not apply to an individual’s donations to recount funds.”

Interesting date on that contribution: October 3, 2011. That is a month and a year before Election Day 2012 – in other words, well before any recounts were underway.

We also received a similar complaint from Robert K. Kelner, lawyer for Kenneth and Anne Griffin. Kenneth Griffin, CEO of Citadel Investment, gave $122,000 in hard money, all to Republicans candidates ($31,200) and Republican committees ($90,800). Anne Griffin, a portfolio manager at Aragon Global Management, gave $141,300, also all to Republican candidates ($40,700) and committees ($100,600). But again, both took advantage of the recount loophole. As their lawyer advised us in a letter, our totals were based on us “erroneously including the $30,800 contributions that they each made to the Republican National Committee’s recount fund on September 7, 2011.”

This continues to make us wonder: As a matter of policy, why are recount funds not counted against federal campaign contributions limits? As I wrote in the original post:

Whether or not contributions went to recount funds or general election funds strikes us as an arbitrary distinction. If the limits are designed to limit corruption or the appearance of corruption, it is unclear to us why recount funds would be different from general election funds. Is someone who writes a check to help with a recount battle not buying ingratiation?

Koch complications, pt. 3

But even that was not the complete story for Charles G. Koch. Cohlmia told me that there was another party contribution that did not show up in our campaign finance data: a $20,000 donation to the NRCC (National Republican Congressional Committee). If we included that contribution (but not the $30,800 recount contribution), Charles G. Koch’s countable contributions to party and PAC committees for the 2012 cycle would be at $70,800 – exactly the legal limit. (Why this contribution did not show up in our data is unclear, though there are any number of plausible explanations, including more mis-reporting by a committee.)

So, add back in the $35,000 in candidate contributions, and Charles G. Koch gave $105,800 in the 2011-2012 cycle, within the legal aggregate individual. So instead of being a six-figure individual donor who went just over the legal limit, it turns out he was a six-figure individual donor who came in just a little under the legal limit.

The Koch contributions we tallied above, of course, include just the money we know about. Possibly, he gave much more money to the Koch-funded 501(c)(4) Americans for Prosperity, which spent at least $33.5 million in the 2012 election against Barack Obama. Since 501(c)(4) organizations do not have to reveal their donors, we will never know. But since money given to politically active nonprofits doesn’t count against the FEC limits, whatever dollars Charles G. Koch might have sent in that direction wouldn’t impact the legal status of his individual aggregate contributions.

Likewise with the Griffins: Kenneth Griffin gave $1,000,000 to American Crossroads, and $1,550,000 million to Restore Our Future. We don’t know if he also gave money to a 501(c)(4). Anne Griffin also gave $30,000 to the super PAC “Campaign for Primary Accountability.”

The takeaway

The case of Charles G. Koch is a nice lesson in just how hard it is to determine who is breaking and who is abiding by campaign finance limits. It’s hard to make accurate tallies of individual aggregate campaign contributions when the Federal Elections Commission doesn’t require donors to have a unique ID, and when campaigns don’t always reliably report donor names. Given this, it is unclear how the FEC would even enforce its own aggregate limit rules. The FEC’s spokesperson told me that while the FEC welcomes complaints, it does not typically take enforcement initiative.

It’s also challenging because recount funds are exempted from aggregate individual donation limits, but the FEC doesn’t provide data in a form that makes it easy to separate out those contributions from ones that do count. The only way to effectively enforce the law is to spend endless hours hand-verifying individual FEC records. It’s almost as if the system were designed to make enforcement impossible.

Just because the byzantine structure of campaign finance data seems designed to obfuscate and thereby stymie enforcement doesn’t mean we shouldn’t give it our best shot. Aggregate limit rules exist for a reason: Because we’ve collectively decided we don’t want a particular group of individual donors who could afford to give $117,000 in 2011-2012 (more than twice the median annual family income in this country) disproportionate influence in determining who can and who cannot get elected in this country. We ought to know whether or not they are being enforced.