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Close big-money loophole

Published July 17. 2014 4:00AM

Connecticut lawmakers have to do a better job of making sure the state does not again become a place where companies wanting to sustain state contracts court favoritism through campaign donations. Legal walls to block this "pay-for-play" approach - erected in 2005 after the scandal that drove Gov. John G. Rowland from office and into federal prison for a year - are eroding.

The 9-year-old state law continues to prohibit the owners and top executives of companies with sizeable state contracts - defined as a single contract of $50,000 or more or multiple contracts worth $100,000 or more - from donating to candidates for state office. The problem is that these companies can still donate to a political party's federal campaign fundraising account, theoretically to cover races for the U.S. Congress or U.S. Senate. Gov. Dannel P. Malloy has been particularly aggressive in using this legal opening to attract business dollars to the Connecticut Democratic State Central Committee's federal fund.

A recent Hartford Courant analysis of campaign donations determined that top company executives banned from donating to state campaigns have funneled about $175,000 to the Democratic Party's federal account. Include donations from non-executives of those companies and the number rises to $380,000. Overall donations to the Democrats' federal account for the current election cycle totaled $2.3 million through May 31, more than double the amount collected during the 2011-2012 campaign, The Courant found.

The Republican federal account has received about $65,000 from the employees and owners of state contractors. It is not surprising that businesses wanting to win favor would gravitate to the dominant party in the state - the Democrats.

Under Connecticut law, no donations to federal accounts that are prohibited under state rules can be directed to support state campaigns. Unfortunately, federal laws are looser, allowing some crossover of federal funds for use in state races. The result is that the money is not easy to follow and lines become blurred.

Generic TV ads paid with the federal account, attacking the other party generally, can certainly benefit state candidates. The aggressive effort by Democrats to raise more money for federal races is all the more curious because there is no U.S. Senate race in Connecticut this year.

Republican lawmakers have called for a ban on donations to the federal accounts, but given U.S. Supreme Court rulings that would be unlikely to stand up constitutionally. The realistic approach is improving transparency and building a stronger firewall between state and federal campaign donations and their use.

Under Connecticut's Citizens Election Program, candidates will receive an estimated $35 million in state funds to finance their campaigns this election season, ostensibly to prevent the corrupting influence of big campaign donations. It undermines that program if the system provides loopholes for the big money to slip in through other channels.

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