Posted on 09/02/2003 6:44:45 PM PDT by nickcarraway
Democrats are poised to reap the benefits of soft-money contributions next year, even though the new campaign finance law bans candidates for federal office from raising such unlimited money directly.
Republicans, who have dominated other aspects of fundraising so far in this election cycle, have seen one of their highly touted soft-money fundraising operations bog down in controversy and, as a result, unable to collect any donations.
Internal Revenue Service records show that allies of the Democratic Party have set up a significantly greater number of large soft-money funds than have comparable GOP allies. As a result, such traditional Democratic allies as unions, environmental groups and pro-abortion-rights groups have utilized soft-money entities to raise two and a half times as much money as pro-Republican groups, such as the fiscally conservative Club for Growth.
Although the political-money climate has changed significantly as a result of last year’s landmark legislation, it remains to be seen whether the Supreme Court will uphold the law, require revisions or void it. A ruling by the high court is expected before the end of the year.
A survey of groups that have raised at least $50,000 for this election cycle showed that pro-Democratic forces have set up 28 soft-money funds and raised close to $12 million through them. By contrast, Republican allies set up 18 such groups and raised less than $5 million.
Those soft-money funds are known as “527 groups,” after a section of the federal tax code.
In perhaps the biggest surprise, the Leadership Forum, which GOP strategists had billed as the House Republicans’ “go to” soft-money operation, failed to collect any money during the first half of the year. The IRS received the Leadership Forum’s fundraising report last month.
The fund is headed by House Majority Leader Tom DeLay’s (R-Texas) former chief of staff, Susan Hirschmann. The arrangement was supposed to attract donors by lending the group the imprimatur of the House GOP leadership. Hirschmann is also close to House Speaker J. Dennis Hastert (R-Ill.) and Majority Whip Roy Blunt (R-Mo.). However, Hastert, DeLay and Blunt are not formally affiliated with the Forum.
Demonstrating the high hopes House leaders once had for the group, the National Republican Congressional Committee gave it $1 million after last year’s election. But the donation sparked a controversy and prompted four government-watchdog groups to slap the Forum with a Federal Election Commission (FEC) complaint.
The FEC dismissed the charges earlier this year, but the controversy apparently has spooked donors, who are leery of being tainted by even a whiff of scandal.
Hirschmann declined to comment on the group’s fundraising situation. But a source at the Forum, referring to the FEC complaint, said, “Donors were spooked, but now it’s been resolved.” The Forum had not tried to raise money while the complaint was outstanding but has now begun raising money, the source added.
Although federal candidates have been prohibited by law from raising soft money since last year under the terms of the so-called McCain-Feingold legislation, the Democratic and Republican parties continue to raise soft money through spin-off groups.
Thus, the Democratic Governors Association, which Democratic Party leaders separated from the Democratic National Committee last year to raise soft money, has collected $3.7 million with the help of unlimited contributions. And the association collected a $25,000 donation from the American Federation of Teachers.
The Republican Governors Association, a group similarly spun off from the Republican National Committee, raised $1.1 million. Another group formerly under the RNC, the Republican State Leadership Committee, raised $1.4 million, including $25,000 from Anheuser-Busch.
RNC spokeswoman Christine Iverson said the groups have been separate from the national committee for at least a year.
However, the governors associations and the GOP state leadership committee must follow several new rules when funding voter-mobilization efforts that would affect a federal candidate. For example, the groups can spend only $10,000 of any soft-money contribution on such get-out-the vote activities and a third of the cost of those activities must be paid for by regulated hard-money contributions.
In the labor community, an account created by the American Federation of State, County and Municipal Employees raised $1.6 million, and Partnership for America’s Families, a fund headed by former AFL-CIO political director Steve Rosenthal raised $1.3 million.
EMILY’s List, a group that supports female candidates who support abortion rights, raised $869,000 through its soft-money fund.
Groups that don’t have to disclose their fundraising activities, such as the Sierra Club or the National Rifle Association, will also spend much soft money. (Such groups are known as 501(c)4s.) However, they are not ideal as pure soft-money conduits because they must use at least half the money they raise on non-election activities.
On the hard-money front, Republicans, who control the White House and both houses of Congress, continue to dominate. Federal Election Commission records show that the Republican national-party committees have $42.6 million in the bank after the first six months of the year. The Democratic national-party committees have $22.2 million.
Why am I not surprised?
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