Senator Michael Rohl has pre-filed a legislative measure that would close a legislative loophole which was abused in a most egregious manner earlier this year:
Senate Bill 12
Introduced by: Senator Rohl
An Act to limit the amount of money that may be loaned to a candidate or political committee.
Be it enacted by the Legislature of the State of South Dakota:
Section 1. That a NEW SECTION be added to chapter 12-27:
A candidate or political committee may not accept a loan from a person if the principal of which, or any combination of the principal and contributions made by the person, exceeds the limit to the amount of money that the candidate or political committee may accept as a contribution pursuant to §§ 12-27-7 to 12-27-10, inclusive. Any loan made by a person to a candidate or political committee must be counted toward the amount that the person may contribute, as an individual or entity, to a candidate or political committee pursuant to §§ 12-27-7 to 12-27-10, inclusive.
Read that here.
The “campaign loan loophole” has been used to varying degrees in the past in political campaigns, when someone has wanted to go far beyond South Dakota’s already loose campaign limits. Because there are NO limits for campaign loans.
Anyone can loan any amount to a campaign. And set any repayment terms that they feel like. Or they can write it off as a bad loan, never to be repaid. Consider this the ultimate campaign finance dodge.
But there’s always someone who has to show why you probably can’t have things like that.
This past year, one of the worst examples ever seen in modern state history occurred after Toby “dumpster fire” Doeden donated $100,000 to his political PAC. Which was a blatant violation of state campaign finance law which would have normally limited such a donation to $10,000.
Whoops! What do you do about something like that?
Given that in South Dakota campaign violations are allowed to be ‘fixed,’ the violation which was against the law instantly became termed “a loan” by a new filing.
Aberdeen businessman Toby Doeden, who established Dakota First Action after vowing to help conservative candidates in South Dakota, says a $100,000 contribution to his PAC was inadvertently reported as a donation, a violation of state campaign finance law. Instead, the six-figure check he cut was intended to be a loan, he said.
“I spoke with the folks from the finance team and they were already aware of this and working on filing the amended report,” Doeden said in a statement.
Read that here.
I’m suuuurrreee it was just a filing mistake. If you believe that, I’m sure there are several bridges along the Missouri river I can sell you. Nevertheless, it highlights the loophole in state campaign finance law where campaign finance limits can simply be ignored. By just calling it a loan.
What Senator Rohl’s legislation proposes is to count “loans” towards the total amounts that are already set in South Dakota state law for campaign donations, eliminating the unlimited donation loophole, where a $10,000 loan would be treated no differently than a $10,000 donation to a political action committee. And you would no longer be permitted to give a $100,000 loan to a candidate where your limit might normally be $1000.
Leaving it for legislators to consider in January whether everyone should be treated equally under the law. Or if people with the cash can just buy their way around it?