Prospective officeholders increasingly seek to evade campaign finance laws by fundraising and campaigning before they publicly acknowledge their candidacy, while claiming that they are still testing the waters of a potential candidacy.
By taking advantage of the exploratory period intended for individuals looking into whether to run, these candidates are attempting to skirt important anticorruption regulations – including contribution limits and the ban on coordination with super PACs.
Candidates abusing the testing the waters rules can be traced as far back as Ronald Reagan’s 1980 presidential campaign.
Rather than redesignating his failed 1976 campaign committee for the 1980 election, Reagan repurposed the committee as a multicandidate PAC, which was subject to higher contribution limits, and used that PAC to kick off his 1980 presidential campaign — spending $1.6 million left over from the prior election cycle to bolster his electoral prospects.
In the decades that followed, Democratic and Republican candidates alike have used this strategy to raise and spend funds beyond what campaign finance law allows.
The testing the waters regulations became more complicated following the 2010 Supreme Court decision in Citizens United v. Federal Election Commission, which spurred the proliferation of outside spending and super PACs. Unlike campaign and party committees, super PACs can raise unlimited funds and accept corporate money.
To prevent corruption and the appearance thereof, candidates are prohibited from coordinating with super PACs. It didn’t take long for candidates to use the testing the waters exception as an end run around coordination rules.
This circumvention strategy was illustrated by Jeb Bush in the run up to his 2016 presidential campaign.
Months before registering as a presidential candidate, Bush toured the country holding $100,000-per-ticket fundraisers to raise mountains of cash for his leadership PAC, “Right to Rise PAC,” as well as for “Right to Rise USA,” a single-candidate super PAC — both of which had been expressly created to support his bid for the White House.
During this period, to maintain the charade of his “pre-candidacy candidacy,” Bush was usually careful in describing his activities and intention. In a note posted on Facebook in December 2014, Bush wrote: “I have decided to actively explore the possibility of running for President of the United States.”
But he slipped during a speech in May 2015 in Reno, Nevada, saying: “I’m running for president in 2016 and the focus is going to be about how we … ”. Bush corrected himself moments later, adding “if I run.”
Despite Bush’s verbal gymnastics, he was abusing the testing the waters rules to illegally evade the super PAC coordination prohibition, boosting his presidential ambitions by breaking the law.
Bush’s “pre-candidacy” fundraising efforts were wildly successful and blatantly illegal: in the first half of 2015 — before Bush eventually declared his candidacy on June 15, 2015 — Right to Rise USA, the super PAC, raised over $93 million of the $121 million that it raised for the 2016 election.
But throughout this period, it was clear that Bush was an undeclared federal candidate in that he had decided to run for president and was actively raising and spending money toward that end.
Bush directly helped raise over three quarters of the supposedly “independent” money that his super PAC collected to support his run for the presidency. Right to Rise USA eventually spent over $86 million supporting Bush’s bid for the White House.
Bush violated the law when he failed, for months, to abide by the campaign finance rules for candidates, which require the regular disclosure of all funds raised and spent to campaign for office, and forbid working with super PACs to raise corporate money and individual contributions above $5,000.
CLC and Democracy 21 filed complaints with the Federal Election Commission (FEC) over Bush’s actions, but the FEC neglected to act, and remarkably, the matter still remains pending before the agency seven years later.
Bush is far from the only candidate that has broken the law by taking advantage of the testing the waters rules to the public’s detriment. Because of the FEC’s failure to act, hopeful candidates in both parties continue to do this.
A political system that allows individuals seeking federal office to delay announcing their candidacies so that they can coordinate with super PACs unacceptably opens the door to corruption and its appearance.
It also undermines voters’ right to know which wealthy special interests are supporting certain candidates when prospective officeholders are allowed to evade crucial federal campaign finance laws by simply delaying their candidacy.
Testing the Waters Blog Series
Part 1 - Testing the Waters, Explained
Part 2 - How Have Candidates Taken Advantage of the Testing the Waters Rules? (You are here.)
Part 3 - How Candidates Use Election Spending Vehicles to Test the Waters