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Avoid softmoney ban { November 2 2002 } Original Source Link: (May no longer be active)
http://www.nytimes.com/2002/11/02/politics/campaigns/02MONE.htmlhttp://www.nytimes.com/2002/11/02/politics/campaigns/02MONE.html
November 2, 2002
Parties Create Ways to Avoid Soft Money Ban
By DON VAN NATTA Jr. and RICHARD A. OPPEL Jr.
WASHINGTON, Nov. 1 — The Republican and Democratic Parties have established fund-raising vehicles for unlimited campaign checks to thwart a new federal law banning "soft money" contributions that goes into effect after the election on Tuesday.
According to party officials and fund-raisers, both national political parties have set up state organizations and other groups that will continue to collect and spend the large unlimited campaign checks after they are barred to the national political parties by the McCain-Feingold campaign finance law on Nov. 6.
At a meeting two weeks ago, the chairman of Democratic National Committee, Terry McAuliffe, told a group of 40 of the party's most prolific fund-raisers that he expected a newly created spinoff organization, the Democratic State Party Organization, to raise approximately $40 million in soft money before the 2004 presidential election, two party fund-raisers said.
Under the McCain-Feingold bill, passed earlier this year, the national political parties cannot directly solicit or spend soft money after Election Day, but state political parties may continue to accept some unlimited donations. Independent political groups and nonprofit organizations closely allied with the political parties can also continue to raise and spend soft money.
A longtime Democratic fund-raiser who attended a secret party conclave at the Mayflower Hotel here described Mr. McAuliffe's message as boiling down to "this campaign finance reform stuff is nothing but junk." The fund-raiser, who insisted on not being named, explained: "Terry said, `This is the last time we'll be asking you for money — after Nov. 5, we can't do it anymore. But get out there next year and in 2004 and continue to raise all this soft money.' "
Mr. McAuliffe did not return several phone calls seeking comment over the past several days. Maria Cardona, a spokeswoman for the Democratic National Committee, disputed that Mr. McAuliffe set a dollar goal. "No one ever remembers this goal that you are talking about," Ms. Cardona said. "Terry did not say it."
Marc Racicot, the chairman of the Republican National Committee, said that while "there certainly have been some abstract discussions about what the law will allow," the committee has not set up a group to raise and spend soft money.
Of the Democratic committee's plans, Mr. Racicot added, "It appears somewhat odd that on the one hand you allegedly support campaign-finance reform, and on the other hand you set about to create, in a completely inconsistent way, an organization that undermines the very principles you are espousing."
Joe Carmichael, the president of the Democratic State Party Organization, said he recalled Mr. McAuliffe telling the donors and fund-raisers to assist the newly created party group. "When Joe calls, I want you to take his phone call," Mr. Carmichael recalled Mr. McAuliffe saying.
Some Republicans have moved to keep the soft money checks flowing after the ban takes effect on Wednesday. A Republican group, headed by the former chief of staff to the House Republican whip, Tom DeLay, will be "the House go-to operation," said Scott Reed, a prominent party strategist who ran Bob Dole's 1996 presidential campaign.
Because it is independent from other national Republican Party organizations, the group, the Leadership Forum, can solicit and accept soft money from the same donors who once wrote the largest checks to the formal party committees. "This is the way politics and campaigns will be run under the new law," Mr. Reed said.
As the ban on soft money approaches, officials of both parties have been scrambling to insure that soft money will continue to play a major role in future presidential elections through these new groups, which began to spring up during the summer. The parties raised a record total of $495 million in soft money before the 2000 election, and it was spent on get-out-the-vote programs and television commercials that appeared to be issue advertisements but were actually used to assist candidates. This election cycle, with the ban looming, soft money fund-raising by the two parties has already totaled more than $420 million and is likely to eclipse the 2000 record.
Senator John McCain, the Arizona Republican who was a co-author of the bill banning soft money donations, said today that he found the jockeying by the political parties to raise soft money "disgusting."
"We're going to fight them," Mr. McCain said in an interview from his home in Arizona. "We didn't fight for seven years to get this law passed in order to see people emasculate it. We'll fight them, and we'll fight them in the courts, and we'll fight them on the floors of Congress. And we'll do everything we can to make sure we have meaningful campaign finance reform in this country."
Larry Noble, the former general counsel of the Federal Election Commission and now executive director of the Center for Responsive Politics, said that both parties were preparing to violate "the spirit of the McCain-Feingold bill."
"There's going to be a very thin line between these so-called independent groups and the party committees," Mr. Noble said. "It's what everybody feared. Neither party wasted any time looking for ways to get around the soft-money ban. These groups are going to have to be watched closely."
Mr. Carmichael said that his organization intended to spend the large checks it receives on get-out-the-vote efforts and party registration programs in states where such spending is legal. He also disputed that Mr. McAuliffe set a specific fund-raising goal for his group.
Republican fund-raisers say that senior party officials have made it clear that the Republican Governors Association will be another primary avenue for raising soft money. To allow it to continue to be able to raise and spend soft money, the governors' group recently severed its ties with the Republican National Committee, said John G. Rowland, the Connecticut governor who is chairman of the group.
Mr. Rowland says he expects the association "to become more of a presence in the Republican Party." The group, which has raised and spent about $20 million for this election, "will try to raise as much as we can to be supportive of Republican candidates within the confines of the law." When asked if he had discussed future soft money fund-raising with Republican party leaders, Mr. Rowland responded, "Not really."
Similarly, the Democratic Governors Association, which has raised about $9 million for this election, also plans an expanded role raising soft money once the new law takes effect.
B. J. Thornberry, the executive director of the association, said, "Governors are the ones who can still legally raise these funds." She said she expected to see "a lot of competition for soft dollars" from the scores of independent groups now being created specifically to raise such money.
Democrats remain far more reliant on soft money than Republicans: Through Oct. 16, about 61 percent of money raised by the national Democratic Party committees was soft money, compared to 43.4 percent of the money raised by the Republican committees.
At the Mayflower Hotel meeting on Oct. 15, party officials handed out a nine-page document on the goals of the Democratic State Party Organization. A copy of the document was obtained by The New York Times.
"This organization is being created in order to comply with the new campaign finance law," the document says. It goes on to say that the organization "would have the same legal status as a state party" and it "would not be legally affiliated with, controlled or financed by the Democratic National Committee."
McCain-Feingold prohibits any group "established, financed, maintained or controlled" by a national party from raising or spending soft money. But in June, the Federal Election Commission approved a loophole so that only actions and activities occurring after the election would be used in determining violations of this provision. Groups set up before Election Day, therefore, may not be subject to sanctions. That ruling, and others by the commission, have been challenged in court by sponsors of the law.
"In my view, the activities being planned are blatantly illegal and represent a conspiracy by the D.N.C. and the new sham group being created to massively evade the new law banning soft money," said Fred Wertheimer, president of Democracy 21 and a leading proponent of the McCain-Feingold law. "We will explore bringing every possible legal challenge we can to stop either political party from breaking the new law."
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