Kansas Governmental Ethics Commission (GEC) enforces campaign financing laws in the state. After a local politician asked the GEC for guidance on the issue last week, its new Executive Director announced that bitcoin is “too secretive” to permit Kansas office holders, potential and incumbent, to accept the world’s most popular cryptocurrency.
Bitcoin Not in Kansas Anymore
Peter Hancock of Lawrence Journal-World reports “the digital currency known as [bitcoin is] simply too secretive and untraceable to be allowed as a form of campaign contributions in [Kansas’] state and local elections.”
The state’s new GEC Executive Director Mark Skoglund “received a request from a candidate who wanted to know whether it was legal to accept campaign contributions in bitcoins,” Mr. Hancock writes. In turn, Mr. Skoglund, who would not name the candidate, asked the GEC for guidance.
Director Skoglund explains bitcoin is “just alphanumeric characters that exist only online. It is not backed by any government.”
GEC Commissioner Jerome Hellmer fears with bitcoin donations “would be the strong probability of the influencing of local elections by totally unidentifiable lobbyists.” Mr. Hellmer explains, “If you think the Russians affected the presidential elections, just wait.”
Russians Haven’t Invaded Kansas, Yet
At press time, no Russians have infiltrated Kansas political operations.
Bitcoin “is traceable, but only if the campaign follows the strict instructions that were given by the commission,” remarked David Mitrani to the New York Times in the run-up for the 2016 presidential election, speaking of the Federal Election Commission (FEC). Mr. Mitrani is an attorney who represents politicians accepting cryptocurrency.
Back in early 2014, long before concern of Russian-meddling in Heartland electoral processes, the FEC issued an Advisory Opinion titled, Campaign may accept bitcoins as contributions. In it, the commission responded to a Political Action Committee (PAC), Make Your Laws PAC, Inc. (MYL), and its request to accept bitcoin.
Bitcoin “may be accepted as contributions under the [rubric of previous legislation]. The screening procedures described in MYL’s request adequately satisfy its obligation to examine all contributions and to determine the eligibility of its contributors,” the FEC clarified.
Furthermore, “MYL should report the initial receipt of bitcoins much like in-kind contributions; any usual and normal fees deducted by the bitcoin processor should not be deducted from the reported value of the contribution. Those fees should instead be reported as operating expenditures,” the commission stated.
Senator Rand Paul, son of Congressman Ron Paul (himself a presidential hopeful), was an early proponent of the digital currency. Though his 2016 campaign limited bitcoin to no more than 100 USD, doing so did set him apart from other candidates, at least on this issue.
In an interview with Fortune, Senator Paul considered bitcoin as a currency and not just a 2015 fad or curiosity. If he were “setting it up, I’d make it exchangeable for stock. And then it’d have real value. And I’d have it pegged […] because I’m sort of a believer in currency having value,” he said.
Bitcoiners might argue with his suggestion, but would most likely be appreciative of his efforts. There is also no substantive reporting on Mr. Paul’s Russian connections.
Meanwhile, a fifth teenager has announced plans to run for Governor of Kansas. “Joseph Tutera Jr., 16,” a local outlet reports, “has named a campaign treasurer – his father.” Officials presumably were too worried about Russians and bitcoin to bother with an age requirement for its highest office.
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