September 25, 2004
CAMPAIGN FINANCENew Pet Cause for the Very Rich: Swaying the Election
By GLEN JUSTICE
ASHINGTON, Sept. 24 - For years, Susie Tompkins Buell, the multimillionaire co-founder of Esprit clothing, dipped into her personal fortune to support Democrats. She gave tens of thousands to candidates, and hundreds of thousands to the party.
But this year, she added a zero to her check. After hearing a presentation from an advocacy group about its plans to topple President Bush, she agreed to donate far more than she had planned: $1 million.
"It was rather impulsive, but when you are passionate, that's what happens,'' Ms. Buell said. "You listen to your gut and you go for it.''
Ms. Buell is one of the new stars of political giving this election year. A new campaign finance law was written to curb the influence of big money in American politics, but wealthy partisan contributors, driven by ideology, have nonetheless emerged as a pre-eminent force in campaigns. Their contributions to so-called 527 advocacy groups have far outstripped corporate money as a primary source of financing for the most active of these groups in the presidential race.
An examination of the nine most active 527 committees shows that they are overwhelmingly financed by individual donations. And many of the checks are huge. More than two dozen people have contributed $1 million or more to the 527 committees, according to PoliticalMoneyLine, which tracks campaign finance. The money is helping to shift the mix of major donors away from the companies and labor unions that once provided hundreds of millions of dollars in unlimited soft money to the Republican and Democratic Parties.
The change is rooted in the McCain-Feingold campaign finance law, passed in 2002, which banned corporations and unions from giving soft money contributions to the political parties, a time-tested practice that often provided access to lawmakers. Companies now have little incentive to give to the 527 committees, which are still able to collect six- and seven-figure checks. The groups are surrounded by legal challenges and controversy and provide little access to those who set policy. But people with strong partisan leanings have been inclined to contribute even if the money no longer gains them the kind of access it once did.
"The new big money to outside groups is more ideologically driven,'' said Michael Lux, a Democratic consultant. "Ideological donors are very highly motivated and very high profile. Some have really stepped up this year in a substantial way.''
Grover Norquist, an influential Republican strategist who started a 527 group called American Resolve, calls these donors "the true believers.''
"These are the guys who really, really care,'' Mr. Norquist said.
While these donors are both Democratic and Republican, Democrats got an early start financing 527 groups, named for the section of the tax code that created them, as a way to compete against the vast fortune amassed by the Bush operation in the early days of the campaign. More recently, Republicans have pushed to counteract the Democratic money, courting top donors of their own.
Ms. Buell said she had already raised more than $1 million for the Kerry campaign and the Democratic Party, in addition to her own contribution. Her pledge to donate to the Joint Victory Campaign 2004, which finances the Democratic groups America Coming Together and the Media Fund, took place at a dinner at her home after she heard a presentation from the group.
"I knew I had to commit myself," she said. "I feel desperate about what is at stake here.''
Though not entirely happy with how the campaign finance system is emerging, Ms. Buell said there were few alternatives for those who wanted to influence the election. "I get worked up and ask, 'What can I do?' and the first answer is always to give money,'' said Ms. Buell, who lives in Bolinas, Calif.
Agnes Varis of New York, who with her husband, Karl Leichtman, gave $1.5 million to the Joint Victory Campaign, said it was simply a way to back her political beliefs with more than talk.
"I don't look at it like it will do anything for me,'' she said. "I'm not going to get a Halliburton contract."
The recent Republican push comes after the party failed to choke off the flow of money to Democratic 527 organizations through legal challenges.
Established organizations like the Club for Growth have been joined by newer groups like Swift Boat Veterans for Truth and the Progress for America Voter Fund, which is emerging atop the list of Republican 527's when it comes to raising money. The Progress for America Voter Fund has tapped Alex G. Spanos, owner of the San Diego Chargers football team, and Dawn E. Arnall, a chairwoman of the Ameriquest Capital Corporation, for $5 million each, according to PoliticalMoneyLine. Both are also listed by the Bush campaign as Ranger fund-raisers, meaning they brought in at least $200,000 each from various donors.
Richard M. DeVos Sr. and Jay Van Andel of Michigan, the co-founders of the Amway Corporation, each contributed $2 million to the Progress for America Voter Fund.
T. Boone Pickens, a Texas oilman who gained fame as a corporate takeover artist, has contributed $2.5 million to the Progress for America Voter Fund and $500,000 to Swift Boat Veterans for Truth.
"In the beginning, we thought we would have a mix 50-50 of individual and corporate donors,'' said Brian McCabe, president of the Progress for America Voter Fund. "It became clear pretty early that individual donors would be the key to our success. That's definitely a change.''
Democrats have no shortage of their own big donors.
Few are better known than George Soros, the philanthropist and financier who has so far contributed more than $15 million to Democratic groups, said Michael Vachon, a spokesman for Mr. Soros. Peter B. Lewis, chairman of the Progressive Corporation insurance company, has donated about the same amount, an aide said.
Stephen Bing, a Hollywood producer, has donated almost $7 million to Joint Victory Campaign 2004 and more than $970,000 to the MoveOn .org Voter Fund, according to PoliticalMoneyLine. Mr. Bing and his company have given more than any other contributor to Senator John Edwards of North Carolina, Mr. Kerry's running mate - more than $900,000 over the course of his public career, according to a study by the Center for Public Integrity.
For 527 committees, money from individual donors is the most useful. The McCain-Feingold law prevents groups from running commercials that mention candidates within 60 days of the general election if the commercials are financed with corporate or labor money. Groups using personal contributions to finance these commercials have more flexibility.
Corporations and labor unions have not disappeared from political fund-raising, but instead are using their money in different ways, campaign finance experts say. Companies are less involved with 527's, but are working through political action committees, trade associations and executives who raise and donate money themselves. "Corporations are still moving plenty of money into the system,'' Mr. Lux, the Democratic consultant, said.
Unions are still extremely active financing their own programs, and they have also given millions to 527 committees. Among the most active groups, union money has been eclipsed by individual donations, but that could change as it gets closer to the election. For example, officials at America Coming Together, which registers voters in swing states, expect that the Service Employees International Union will be its largest contributor by Election Day.
Fund-raisers say that gathering money for advocacy groups is different than for the parties and that it relies more on promotion than attraction.
"It's not access money, it's movement money,'' Mr. Norquist said. "They are not writing checks to sit down with congressmen.''
Though some groups have done well with Internet and mail solicitations, major donors are almost always cultivated face to face. Fund-raisers travel the country, meeting with contributors in person to introduce their organizations and lay out elaborate plans to register voters or run advertisements.
"We raise money on our plan and our ability to carry that out,'' said Ellen Malcolm, who has jetted from city to city to help raise tens of millions for America Coming Together and the Media Fund.
For many organizations, the pitch is tailored to attract hard-core partisans. Democrats trade on opposition to the war in Iraq or Mr. Bush's vast war chest. Republicans point to the importance of national security or the large amounts of money being raised by left-leaning groups. Mention of Mr. Soros is a particularly strong motivator.
The conservative Club for Growth sent a letter to donors last month saying that "a vast left-wing conspiracy led by a single billionaire is spending millions of dollars distorting President Bush's agenda for economic growth.''
The letter asks for money to run a campaign of "hard-hitting TV ads,'' saying, "It's time to take the gloves off.''
Stephen Moore, the group's president and author of the letter, said the country's polarized electorate and the strong feelings about Mr. Bush and Mr. Kerry among partisans were all good for fund-raising.
"It has created a hospitable climate for raising money in large chunks,'' Mr. Moore said, adding that "fear and hatred are powerful motivators.''