In a letter sent today to Attorney General Loretta Lynch, Democracy 21, joined by the Campaign Legal Center, cited the recent formal appointment of Mike Murphy to head the Rise to Rise Super PAC as further evidence of the need for a Justice Department investigation into the Bush Super PAC scheme. 

The two groups previously sent letters on May 27 and June 11, 2015 to the Attorney General that called for the Justice Department to appoint an independent Special Counsel to investigate whether Republican presidential candidate Jeb Bush and the Right to Rise Super PAC were engaged in knowing and willful violations of the federal campaign finance laws. 

According to Democracy 21 President Fred Wertheimer: 

The appointment of Jeb Bush’s “political alter ego,” Mike Murphy, to head the Right to Rise Super PAC is powerful evidence that Bush at a minimum is “indirectly” controlling the Super PAC.  This “indirect control” is prohibited by the Bipartisan Campaign Reform Act of 2002. 

In these circumstances, it is a mistake to focus on the law’s coordination restrictions and whether there is a wall between the Bush campaign and the Right to Rise Super PAC to prevent coordination. A separate and different provision found in the 2002 campaign finance law applies to the Bush Super PAC scheme and prohibits the Super PAC from making expenditures to support the Bush campaign. 

The Right to Rise Super PAC is a vehicle for Jeb Bush and his donors to circumvent the candidate contribution limits enacted by Congress and upheld by the Supreme Court to prevent corruption and the appearance of corruption. 

The 2002 campaign finance law was enacted to prevent precisely the kind of campaign finance activities that are being engaged in by the Right to Rise Super PAC. It is incumbent on the Justice Department to investigate the Bush Super PAC scheme.

The request by Democracy 21 and the Campaign Legal Center for a Justice Department investigation centers on a provision of the Bipartisan Reform Act of 2002 (BCRA) that prohibits a federal candidate from “directly or indirectly” establishing, financing, maintaining or controlling an entity that raises or spends funds not subject to federal contribution limits and prohibitions (such as a Super PAC). 

The BCRA provision is separate from and unrelated to the coordination provisions in the campaign finance law.  The coordination rules, enacted in 1976, address the question of whether an “expenditure” supporting a candidate by an outside group is also to be treated as a “contribution” to that candidate because of that candidate’s involvement in the decisions regarding the expenditure.   

The BCRA provision, however, enacted in 2002 as part of the prohibition on soft money, prohibits a federal candidate from raising or spending non-federal funds and from doing indirectly—through an entity the candidate establishes, finances, maintains or controls—what the candidate cannot do directly. 

According to the letter from the two groups:

Murphy has been described as “Bush’s political alter ego.” (E. O’Keefe and R. Costa, “How Jeb Bush’s campaign ran off course before it even began,” The Washington Post (June 10, 2015).)  As we have previously noted, press reports state that Murphy is “Bush’s longtime strategist who has been helping the former Florida governor staff up his political operation and shape his economic opportunity message.” (P. Rucker and M. Gold, “Top Republican strategists in talks to join Jeb Bush’s super PAC,” The Washington Post (Mar. 17, 2015).)  Another report states that Murphy “has played a critical role in getting out Jeb Bush’s message and rolling out his all-but-certain presidential run,” and that Murphy and Bush have “a close relationship.” (M. Haberman, “Bush Adviser May Skip Campaign to Work for ‘Super PAC,’” The New York Times (Feb. 18, 2015).)  

The letter states that “Murphy has for months been actively working with and for Bush, both on setting up the Bush campaign and on setting up the Super PAC operation, formulating strategy for it, and planning the division of labor between the campaign and the Super PAC.”  

According to the letter to the Attorney General:  

Prior to assuming leadership of the Super PAC, Murphy convened “regular senior staff meetings” that included discussions “about how to divvy up money and resources between Bush’s allied super PAC and his official campaign.” (E. O’Keefe and R. Costa, “How Jeb Bush’s campaign ran off course before it even began,” The Washington Post (June 10, 2015).) According to press reports, Murphy was a key player in selecting the current campaign manager for the Bush campaign, which recently engaged in a staff shake-up.  

The Washington Post reported that “[Sally] Bradshaw and Murphy moved with the candidate’s blessing to push [former “de facto campaign manager” David] Kochel into a lesser role and ensure they alone had final say about the allocation of funds.” (E. O’Keefe and R. Costa, “How Jeb Bush’s campaign ran off course before it even began,” The Washington Post (June 10, 2015).)  According to another report, “The arrangement comes after a rough period and tense discussions among Bush loyalists, and conversations between two of his closest advisers, Sally Bradshaw and Mike Murphy, about the campaign setup, according to people familiar with Bush.” (E. O’Keefe and R. Costa, “How Jeb Bush’s campaign ran off course before it even began,” The Washington Post (June 10, 2015).) 

The letter stated: 

As we have previously described, the Bush campaign’s planning for the Super PAC has allocated campaign roles and spending priorities between the official campaign and the Super PAC.  And it contemplates a major role for the Super PAC in paying for the Bush campaign.  According to one report, “Right to Rise Super PAC will do TV commercials, but it also will take on tasks such as targeted online ads and get-out-the-vote efforts that traditionally have been done by candidate campaigns.  

Further, many of the staff working to elect Bush would be on the payroll of the super PAC, not the campaign, the sources said.” (S.V. Date, “Jeb Bush’s History of Outsourcing His Campaign So He Can Raise Big Money,” National Journal (May 29, 2015).)  Another report notes that the Bush campaign itself may raise and spend “less than its super PAC counterpart.  In April, several donors and Bush strategists described to AP his plan to have the super PAC produce the bulk of television advertising and direct mailers to voters supporting his candidacy.”( J. Bykowicz & S. Peoples, “Bush fundraising machine preparing for campaign’s launch, Associated Press (June 8, 2015) (emphasis added).) 

The letter further stated: 

Indeed, Murphy is quoted as giving credit to Bush for setting up—i.e., establishing—this scheme, and for being an “innovator” in using the Super PAC as the vehicle to “tell his story.” 

According to a published report about a telephone conference call Murphy recently held with donors to the Super PAC: 

“One of the neat things about Right to Rise, and one of the new ideas that, you know, the governor had—he’s such an innovator—is we’re going to be the first super PAC to really be able to do just positive advertising, to tell his story, which is the missing ingredient right now,” Murphy said. (A. Kaczynski & I. Ben-Meir, “We Crashed Jeb Bush’s Super PAC’s Donor Call, And Here’s What They Said,” Buzzfeed (June 18, 2015) (emphasis added).) 

This description by Murphy makes plain that Bush personally has been involved in formulating the Super PAC scheme, and thus (in the words of the statute) in “establishing” and “maintaining” the Super PAC.

 According to the letter: 

And as we have previously noted, published reports make clear that Bush has also been personally involved in “financing” the Super PAC.  Indeed, “Jeb Bush and his allies announced … that they had amassed more than $114 million in campaign cash over the last six months…” (N. Confessore, “Jeb Bush Outstrips Rivals in Fund-raising as ‘Super PACs’ Swell Candidates’ Coffers,” The New York Times (July 9, 2015).) Of this total, the authorized campaign committee reported raising $11.4 million and the balance of about $103 million was raised by the Super PAC—more than nine times the amount raised by the Bush campaign committee. 

According to a report in The New York Times

Mr. Bush, a former Florida governor, personally raised money for the super PAC—often in increments of $1 million per donor—at dozens of events during the winter and spring, operating under the assumption that he was free to do so because he was not yet a declared candidate. (N. Confessore, “Jeb Bush Outstrips Rivals in Fund-raising as ‘Super PACs’ Swell Candidates’ Coffers,” The New York Times (July 9, 2015).) 

The letter rejected, as the groups’ previous letters did, the argument made by Bush advisers that he was not a candidate until he formally announced. The letter stated: 

The apparent premise of the Bush campaign—that Bush was “free” to solicit contributions to the Super PAC during the winter and spring because “he was not yet a declared candidate”—is wrong for two reasons.  First, whether “declared” or not, Bush met the legal definition of being a “candidate,” 11 C.F.R. § 100.3, during the time he was engaged in these fundraising solicitations.  It has never been the law that a “candidate” can avoid the legal obligations that attach to “candidate” status simply by choosing to delay his declaration of candidacy (or even purporting to act in a testing-the-waters capacity).  

Second, the facial definition of § 30125(e)(1) applies to the Right to Rise Super PAC—it is an entity that has been “established, financed, maintained or controlled” by a person who is now a candidate, even if some activities relating to some elements of that standard occurred before Bush’s formal declaration of candidacy.  In any event, Bush now is a declared “candidate,” and he is “controlling” the activities of the Super PAC, at least “indirectly,” through the appointment of his “political alter ego,” (E. O’Keefe and R. Costa, “How Jeb Bush’s campaign ran off course before it even began,” The Washington Post (June 10, 2015).)  Mike Murphy, as the person who is running the Super PAC.  And the Super PAC is certainly an entity which is now “acting on behalf of” a candidate within the meaning of § 30125(e)(1). 

The letter concluded: 

As we have urged previously, the Department should investigate whether Bush and the Right to Rise Super PAC are engaged in violations of § 30125(e).  Bush is doing precisely what the 2002 law prohibits: establishing and, through his agents, directly or indirectly controlling an entity that is raising and spending non-federal funds.  This scheme goes to the heart of what the BCRA soft money provisions were enacted to prohibit.  

The public position taken by the Bush campaign that it is not “coordinating” with the Super PAC on its spending, even if it were correct, is irrelevant and a distraction from the real issue here, which is the scheme to violate the BCRA soft money provisions.  Because this scheme involves knowing and willful violations of the law, the Department has an obligation to investigate it and take appropriate action.

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