Political parties are turning to raising money jointly with candidates for Congress in greater numbers than ever this year and the questionable practice has raised more than $13 million so far this election cycle.
WHAT IS ‘SOFT MONEY’? Soft money is the unlimited contributions from any labor, corporate, or individual donor received by a political party for ‘party-building expenses.’ WHAT IS ‘HARD MONEY’? Hard money is the limited individual contributions given to parties and federal candidates.
The effort stretches the intent of campaign-finance laws, as parties and candidates raise money intended for general party-building expenses— soft money — that is actually spent on advertising campaigns to help specific Senate and House candidates.
Joint fund-raising committees help parties and candidates combine their know-how about soliciting money and cut down the costs of raising cash. Meanwhile, the committees receive, in the most hotly contested congressional races, astounding amounts of soft and hard dollars.
“Federal candidates often help to raise these large contributions, and the money gets put into accounts that clearly are meant to help them,” said Anthony Corrado, co-chair of the new Campaign Finance Institute, a Washington, D.C., think tank. “This blurs the lines between candidate- and party fund raising. It makes the limits tougher to enforce, and raises questions about some of the distinctions in the current law.”
From California to Massachusetts, the Center for Public Integrity has documented 18 joint fund-raising committees this election cycle that have together received more than $13 million for the parties and candidates. The Center estimates that the 13 joint fund-raising committees established between specific congressional candidates or state parties and the national Democratic Party have raised more than $10 million. The five joint fund-raising committees created by the national Republican Party so far have pulled in more than $3 million.
With a single $100,000 check, Meyer A. Berman, president of an investment firm in Manhattan, maxed-out his $2,000 contribution limit to Hillary Rodham Clinton, and substantially added to the hard- and soft-money coffers of the national Democratic Party.
Berman isn’t the only one making contributions to the party committees and candidates that exceed the federal limit. Corporations, labor unions and individuals are donating extensively to these joint ventures, which have helped parties nearly double soft-money receipts when compared with the 1996 presidential campaign cycle.
Joint fund-raising committees have a complex way of dividing the loot. The candidate receives the first cut, limited to $2,000 ($1,000 per election, primary and general) per contributor. The rest of the hard-dollar contributions are split between the campaign and the party in a ratio agreed upon by both participants. The party can receive $20,000 from each individual as a hard-dollar contribution. The rest of the money goes to the party and is considered soft money. Parties will use their portions of the money to run issue ads benefiting federal candidates who face the toughest opposition.
Soft-money-funded issue ads
Soft money was originally created to help the party cover “party-building” expenses—building costs, infrastructure expenses, get-out-the-vote drives and advertising that would benefit the entire party ticket, from senator to comptroller. The majority of soft money raised today is not for these general party-building expenses, but for advertising campaigns about specific congressional candidates.
A study conducted by the Brennan Center for Justice at the New York University School of Law looked at issue ads aired by political parties during the 1998 campaign cycle in the nations 75 largest media markets. The Brennan Center found that political party issue ads identified specific candidates by name 99 percent of the time, while only 15 percent of the ads mentioned the party’s name. Such ads have already run in this election cycle. The Democratic Senatorial Campaign Committee and the New York State Democratic Committee ran an advertisement for a week in Buffalo, Rochester, Syracuse and Albany, one month after a $700,000 Manhattan fund-raiser for Hillary Rodham Clinton’s joint fund-raising committee. The ads, estimated to cost $100,000 to $300,000, were designed to introduce Clinton to New Yorkers. At no point in the ad was the Democratic Party or another candidate mentioned.
The Michigan Senate 2000 joint fund-raiser affiliated with the campaign of Rep. Debbie Stabenow, D-Mich., received $33,000 in soft money contributions in the first four months of this year. The medical industry was her major supporter, with contributions from Blue Cross Blue Shield, the Greater New York Hospital Association and Radius Health Care System, Inc. Stabenow is running against incumbent Sen. Spence Abraham, a Republican, in one of the nations most competitive Senate races.
Missouri 2000, associated with Missouri Gov. Mel Carnahan, a Democrat, has received $117,000 in soft money donations since its creation in late January. Its total receipts are nearly $700,000. Carnahan is running against incumbent Sen. John Ashcroft, R-Mo.
The Republicans Ashcroft Victory Committee in Missouri raised $1.3 million in hard dollars and $517,247 in soft money in the first three months of 2000. Contributions of $25,000 each came from the National Rifle Association, Emerson Electric, Anheuser-Bush Co., and Schering Corp.
The greatest joint-fund-raising machine is a committee set up between the DCCC and House Minority Leader Richard Gephardt, D-Mo. In 1999, Gephardt raised $2,021,598. He has added $73,555 to his fund this year. Gephardt held the largest fund-raiser of his career last summer, with a fund-raising goal of $1 million.
Common Cause, Democracy 21 file complaint
In early April, Common Cause and Democracy 21, two campaign finance reform watchdog groups, complained to the Federal Election Commission about joint fund-raising committees formed by Hillary Rodham Clinton and her former GOP opponent, New York Mayor Rudy Giuliani, in the New York U.S. Senate race. They complained that the National Republican Senatorial Committee and the Democratic Senatorial Campaign Committee were in violation of fund-raising laws because they were spending soft money targeted at specific federal candidates.
The Federal Election Commission, saying it is looking into the issue, would offer no comment. If the FEC acts, it could halt a major fund-raising mechanism, particularly for the Democrats, who in just the past two months have created four new joint fund-raising committees in Indiana, Pennsylvania, New Mexico and Delaware.
“The money is spent through the candidate’s party for the clear and direct benefit of the candidate, often on television ads, which name and promote the candidate, or name and attack the candidates opponent,” the complaint states. But the parties don’t seem too concerned about the appearance of illegality in raising soft money at events directly tied to federal candidates. The Republicans go so far as to call their joint fund-raising committees by specific candidates names—such as the Ashcroft, Campbell, or Santorum Victory committees. Any donor contributing to Campbell Victory 2000 or Ashcroft Victory 2000 is aware that the contribution will benefit that federal candidate beyond the federally limited contributions. David DiMartino, deputy communications director of the Democratic Senatorial Campaign Committee, called the complaint comical and a media stunt. “There is nothing illegal about the committees,” he told the Center.
Spending the bounty
DiMartino said the DSCC has probably created all the joint-fund raisers it will create this election cycle, and that they have been widely successful in raising money for the candidates and party. He also said that the party has made no decisions on how the money will be spent, but that “it would be fair to say that some will go to pay for issue ads.”
Following is a chart of all the joint fund-raising committees associated with each political party. Groups are being formed each month. Five are so new that the Federal Election Commission has no record of their activity.
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