Late last week I noted that Sen. Ron Johnson (R-WI) received $10 million in deferred compensation from his plastics company, after an election that he used $9 million of his own money to win. The similarity between the figures and the fact that Johnson negotiated the deferred compensation with himself, the owner of the company, raised a few eyebrows.

Now critics are asking for a written deferred compensation agreement, dated before the election, showing the full arrangement between Johnson and Pacur, the plastics company. And Johnson hasn’t provided it, to the consternation of election law watchers.

Arent Fox’s Brett Kappel, an election law attorney, said evidence of a written agreement before Johnson ran for the Senate is critical to prove he did not rely on corporate funds for his campaign.

“It depends on whose money it was,” Kappel told TPM. “If there was a deferred compensation agreement before he ran for office, that would be a legitimate corporate payment [to him personally]. If there was no deferred compensation agreement at all, and the company is paying for his campaign, that would be a problem.”

The Supreme Court’s Citizens United ruling enables companies to spend unlimited funds on independent campaign expenditures benefiting candidates, but companies still cannot give directly from their corporate treasuries to federal candidates’ campaigns.

Great, now we’ve got our test case for unlimited corporate spending on individual candidates that the Roberts Court can use to decimate the last of all campaign finance restrictions!

More seriously, this does look to be a pretty serious violation of the letter and the spirit of the law. Ron Johnson loaned himself money to run a campaign, then received all of it back from his own company shortly thereafter. If that’s not corporate political spending, I don’t know what is. As a side benefit, it served as a tax avoidance scheme, the payback for several loans Johnson took from his own company at a sweetheart 0.69% interest rate. These below-market-rate loans, which also helped finance the campaign, would represent yet another campaign finance violation of an illegal corporate subsidy.

Pacur is a private company, and as the top corporate officer, Johnson himself could be targeted by the FEC as making an illegal campaign contribution. However, this assumes that the FEC exists as an actual regulatory agency, and not a broken shell of a campaign finance watchdog that does almost nothing of consequence.

David Dayen

David Dayen

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