The Democrat fund raising "advantage"

Brody Mullins & Ianthe Jeanne Dugan:

When Hillary Rodham Clinton held an intimate fund-raising event at her Washington home in late March, Pamela Layton donated $4,600, the maximum allowed by law, to Mrs. Clinton's presidential campaign.

But the 37-year-old Ms. Layton says she and her husband were reimbursed by her husband's boss for the donations. "It wasn't personal money. It was all corporate money," Mrs. Layton said outside her home here. "I don't even like Hillary. I'm a Republican."

The boss is William Danielczyk, founder of a Washington-area private-equity firm and a major fund-raising "bundler" for Mrs. Clinton. Mrs. Layton's gift was one of more than a dozen donations that night from people with Republican ties or no history of political giving. Mr. Danielczyk and his family, employees and friends donated a total of $120,000 to Mrs. Clinton in the days around the fund-raiser.

In an interview, Mr. Danielczyk said he "did not and would not" reimburse employees or others for their political donations. Such reimbursement would be illegal. Mr. Danielczyk said he was a co-host for the event at Mrs. Clinton's home. "Everybody was asked to contribute," he said, "some said yes and some said no." He added, "No arm was twisted."

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Mrs. Clinton's campaign isn't the only one to be touched by suspicions about bundlers. The U.S. District Court for the Eastern District of Michigan last month indicted Geoffrey Fieger, a politically active attorney. Mr. Fieger is accused of laundering $127,000 in illegal campaign contributions through dozens of employees to the 2004 presidential campaign of Democrat John Edwards, the former senator from North Carolina, who is running again for president. Mr. Fieger denies wrongdoing and says he was set up by the Bush administration.

Asked about the donations bundled by Mr. Danielczyk, Mrs. Clinton's campaign said yesterday it would return the $9,200 donated by Mr. and Mrs. Layton.

Howard Wolfson, a spokesman for Mrs. Clinton, said: "These allegations are troubling and we will again ask each of the individuals solicited by Mr. Danielczyk to affirm that their contributions were given with their own funds." Mr. Wolfson said the campaign will return any contributions that didn't come from the donor's own money.

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The Justice Department says it has seen an increase in the number of prosecutions against individuals who seek to reimburse employees and others for political donations. The increase began after Congress approved changes to campaign-finance laws in 2002. The new laws barred individuals from donating six-figure amounts to political parties.

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About 100 people attended, though it's not clear how many of those were invited by Mr. Danielczyk, according to people there. Donors mingled in Mrs. Clinton's kitchen and outdoor patio and munched on simple appetizers. Mrs. Clinton made brief remarks, took pictures with donors and chatted for more than an hour, according to attendees. At a table, campaign aides collected donations.

One person at the event was a Washington-area investor who was considering putting some money in one of Mr. Danielczyk's ventures. The investor, a registered Republican, said he was invited by Mr. Danielczyk and a colleague who were wooing him to invest at least $125,000 in one of their companies.

The investor, who spoke on condition of anonymity, says he didn't donate any money to Mrs. Clinton. Campaign-finance records show that the investor contributed $4,600 on March 30 to Mrs. Clinton. The reason for the discrepancy isn't clear.

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Other Republican voters who contributed the maximum amount to Mrs. Clinton at this event included Mr. Danielczyk's mother, sister, personal assistant and a half-dozen employees or their spouses. Most of the donors had never made a political donation before contributing $4,600 to Mrs. Clinton, according to fund-raising records.

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These issues are not hard to run down. It usually involves looking at bank or investment account records of the donor and look to see whether amounts corresponding to the donation are deposited into the account or another account of the donor. The bundler's records can also be examined to see if there are any disbursements to the "donors."

It is something an FBI accountant should be able to spot pretty quickly unless more sophisticated ways of reimbursements are used. This appears to be a pattern with Mrs. Clinton's donors and at least two of John Edwards trial lawyer donors. These two good Wall Street Journal reporters appear to be working in a target rich environment. Who knows, maybe even the NY Times and Washington Post will notice the "coincidences" or pattern.

It also appears that campaign finance reform has lived down to the expectations of its opponents. Sham donors would not be needed if the limits were taken off an immediate disclosure was required. At least you would have a clearer picture of who was investing in the candidate.