"Millionaires' Amendment" in play in 7th District primary

LANSING -- The six candidates vying for the Republican nomination in Michigan's Seventh Congressional District have collectively raised over $2.6 million through June 30, 2004. Of that amount, contributions from individuals accounted for 60 percent, one-third came from the candidates in the form of loans and PACs and federal candidate committees gave seven percent of the money. The candidates contributed another one percent.

Candidate Gene DeRossett had loaned his campaign $450,000 (56 percent of his total receipts) by March 31, 2004 and triggered what is familiarly known as the "Millionaires' Amendment." This is one of the less-publicized features of the Bipartisan Campaign Reform Act of 2002 (McCain-Feingold). Simply stated, if a candidate loans his campaign $350,000 more than any opponent has loaned to her campaign, the opponent can accept contributions from individuals that are three times the usual limit. For 2004, that means a "millionaire's" opponent can accept $6,000 from an individual for the primary, rather than the normal limit of $2,000. Candidates Clark Bisbee, Joe Schwarz, Brad Smith and Tim Walberg all qualified for the higher contribution level as a result of DeRossett's self-financing. Through June 30th, Smith received an extra $48,500 as a result of the higher limit. Schwarz and Walberg each received about $21,000, while Bisby took in an additional $8,500. Paul DeWeese does not qualify because he has loaned his campaign $240,000.

On July 1st, the Schwarz campaign filed a complaint with the Federal Election Commission (FEC) alleging that Smith was improperly collecting the larger contributions. The Club for Growth, a national organization that bundles checks from its members for approved candidates, started soliciting $6,000 contributions for Smith from its members in early June, according to its website. Although the FEC has not ruled yet on Schwarz's complaint, it appears that the Smith campaign repaid Mr. Smith $50,000 for a loan he had given previously to his campaign so the committee could qualify for the higher limit afforded millionaires' opponents. According to his 2nd Quarterly Report, filed July 15th, Smith received six checks for $6,000 each from out-of-state donors (two from one couple). One was received before Smith's notification to the FEC that he intended to invoke the provision for a millionaire's opponent.

Smith has raised the most from individuals giving $2,000 or more: $134,500, or 34 percent of his total contributions. Walberg has raised the largest percentage of total contributions from such contributors: 60 percent. Smith has raised the most in small contributions ($200, or less): about $80,000, or 22 percent of his total contributions. Walberg received the least in small contributions: less than $11,000, or eight percent of his total contributions. DeRossett has raised the largest amount from PACs and federal candidate committees: $63,295, or 18 percent of his total contributions. Walberg received no contributions from PACs or candidate committees and DeWeese very little.

Press Release 2004 News