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Did Rory break the law playing PAC-Man?

The saddest, most outrageous thing about the campaign finance scandal that transformed Honest Rory Reid into PAC-Man, gobbling up $750,000 in campaign contributions during his 2010 run for governor, is that it might not even be illegal.

Secretary of State Ross Miller is investigating the details of Reid’s maneuverings, which saw him solicit donations to innocuously named political action committees, which in turn donated money in $10,000 increments to a series of smaller, semi-cleverly named PACs, which in turn donated that money right back to Reid’s campaign account.

In that way, Reid was able to thwart campaign contribution limits of $10,000 per person (or corporate entity) per election, collecting hundreds of thousands from unions, developers and others with relative ease.  

Asked whether the PAC-Man game is illegal, Miller frankly says he’s not sure. It depends on how the transactions were structured, how they were reported and whether a case could be made that they violate one of Nevada’s notoriously loose campaign finance statutes.

That answer tells you a lot about how the case may ultimately be resolved: If there’s enough grey area to require an investigation to determine whether a violation even occurred, it seems likely none of the ghosts in Nevada’s political machine will come close to touching PAC-Man.

Whether Reid was right or wrong legally — and he got the blessing of an election law expert at the firm where he works, Lionel, Sawyer & Collins — this case unmistakably demonstrates that there are no real campaign contribution limits in Nevada. Whether money is funneled through PACs, limited liability corporations or so-called 527 independent expenditure groups, the rules wouldn’t stop a junior class vice-presidential candidate, much less a savvy lawyer running for governor. (And let’s not forget Reid also was the victim of independent-expenditure spending during the campaign.)

So what do we do?

Nevada could try what some other states and the federal government have done, and ban direct corporate or union campaign contributions to candidates for office. (Corporations and unions could still spend unlimited amounts independently, under the U.S. Supreme Court’s 2010 decision in Citizens United v. Federal Election Commission.)

Or we could get serious about our already-generous $10,000-per-election limit and pass a law that says no person, business entity or skein of affiliated business entities may give more than $10,000 per election. And we could make violations of the law serious felonies with actual jail time, instead of probation-worthy offenses the way they are now.

Or we could institute publicly financed campaigns and ban contributions entirely. (That wouldn’t stop rich people from spending millions on their own campaigns, however.)

But because the people who are going to write, pass and sign any reforms are the same ones who will have to ask for money under them, we’ve got about as much chance of seeing real progress as we have of capturing a leprechaun and using his pot of gold to fill the state’s budget gap.

Or we could go in another direction entirely, erasing all contribution limits from the law and simply requiring candidates to fully and quickly disclose who gave them what. This wouldn’t cut down on undue influence over lawmakers, but at least we’d know who really owns whom.

What we can’t do any longer is pretend we have a real system of regulation when we don’t. It breeds cynicism and contempt for the process and those who participate. It provides a false sense of confidence with a semi-opaque transparency. Plus, it turns out laws one step removed from “the honor system” aren’t a really good way to regulate our politics, anyway.


Steve Sebelius is a Review-Journal political columnist and author of the blog SlashPolitics.com. His column appears Sunday, Tuesday, Wednesday and Friday. Reach him at (702) 387-5276 or at ssebelius@reviewjournal.com. 

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