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Grosso, Cheh Introduce Bill To Close D.C.'s PAC Fundraising Loophole

Supporters of D.C. Mayor Muriel Bowser have established a political action committee to raise money to support her, but critics say it's a means to raise unlimited funds from entities that may have business pending with the city.
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Supporters of D.C. Mayor Muriel Bowser have established a political action committee to raise money to support her, but critics say it's a means to raise unlimited funds from entities that may have business pending with the city.

Two D.C. Council members — David Grosso (I-At Large) and Mary Cheh (D-Ward 3) — say they want to close a "loophole" that allows political action committees to raise unlimited funds during non-election years.

Grosso says the legislation would amend the law so that PACs are "in the same position as principal campaign committees, with reasonable limitations on the amount of money that any one individual or business can contribute."

The move comes after WAMU 88.5 first reported on FreshPAC, a committee organized by supporters of Mayor Muriel Bowser (D). The group has raised more than $300,000 from supporters, real estate developers and other companies seeking to do business with the city. The average donation to Fresh PAC was roughly $6,000 — three times what an individual could legally donate to a mayoral campaign.

FreshPAC treasurer Ben Soto told the Washington Post that it hopes to ultimately raise $1 million.

The PAC is prohibited from coordinating directly with Bowser or her campaign. The mayor has attended two fundraisers for the group. Soto says the organization's money could be used to help elect D.C. Council candidates that support the mayor's agenda in the upcoming 2016 elections. So far, it has only spent roughly $30,000 on a poll.

The mayor's office has not taken a position on Grosso and Cheh's bill.

"We have not reviewed the legislation that would change the rules for PACs — and presumably groups like state parties and organized labor — for the first time in years," says Bowser spokesperson Michael Czin. "However, we have and will always abide by the rules."

In 2013, the D.C. Council reformed the city's campaign finance laws following a series of scandals and resignations. The legislation closed the so-called "LLC Loophole", which, as WAMU 88.5 exposed in its investigative series "Deals For Developers", allowed real estate developers and others to skirt contribution limits through limited liability companies (LLCs) and affiliated businesses.

Grosso says that by closing one loophole, the city has now opened up another.

“It didn't occur to me that when we were doing this bill that would curb the maximum donations for LLCs, that the Board of Elections would think that it's a good idea to then open up a loophole for PACs to raise as much money as they want in off-years,” says Grosso. “It doesn't make any sense to me."

Seven council members — a majority of the 13-member body — have signed on as co-sponsors of the bill.

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