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latimes.com: Election was decisive in arena of spending: Ever-higher sums

latimes.com WASHINGTON (Los Angeles Times) -- The 2000 elections will be remembered for more than the cliffhanger presidential race. This year's campaign also essentially buried federal limits on the role of money in American national elections.

Record-shattering sums--and new ways to get them into campaigns in large, unregulated amounts--have shredded restrictions imposed after the Watergate scandal.

On Thursday, the Democratic and Republican parties reported their first postelection finance totals, beginning to provide a comprehensive view of the 2000 campaign. Altogether, political donors, who four years ago anted up a record $2 billion for candidates for federal office, raised the stakes this year by an estimated $500 million.

Election winners and losers alike are expressing incredulity at the escalating money race and wondering what the future holds.

"It even staggers me, and I'm pretty hard-core," said Harold M. Ickes, the driving force behind the Democrats' no-holds-barred 1996 fund-raising and a top advisor this year for Hillary Rodham Clinton's successful New York Senate race.

Records fell left and right this year.

Six years after a California candidate spent $27.5 million of his own money in an attempt to win a U.S. Senate seat, a New Jersey investment banker proved that it could be done--with double that sum.

Bush refused federal funding

In the presidential race, the Republican nominee, George W. Bush, refused federal funding for the primaries because that would have forced him to accept spending limits. As a result, he waged the first privately financed $100-million campaign in U.S. history.

And independent interest groups, exploiting loopholes in campaign spending laws, pumped so much money into their own advertising campaigns in some congressional districts that the candidates themselves felt like bystanders.

"You had as much control over the system as a Londoner during the blitz," said a shellshocked Rep. Brian P. Bilbray, a San Diego Republican who was defeated last month.

More of the same is in prospect. With both the House and Senate evenly divided and the redrawing of House districts according to the new census expected to create more competitive House seats in 2002, a renewed race already looms.

Each election since Watergate has set new standards, and this one was no exception:

--In New Jersey, Democrat Jon S. Corzine poured $60 million into his successful Senate bid. This was twice as much as the previous record holder, Mike Huffington, spent of his own money in his 1994 Senate race in California.

--In New York, the candidates and parties lavished well over $80 million on the contest between Clinton and Republican Rick Lazio, another record.

--Democrat Adam Schiff of Burbank ousted Rep. James E. Rogan (R-Glendale) in the nation's first $10-million House race.

--Outside groups, led by the pharmaceutical industry, the AFL-CIO, the U.S. Chamber of Commerce and Planned Parenthood, spent more than $300 million--double the 1996 figure--to run their own advertising campaigns for and against candidates, the Annenberg Public Policy Center at the University of Pennsylvania found.

--Special-interest contributions to campaigns rose 80% from 1996 to $381 million, led by financial services ($66 million), manufacturing ($29 million) and labor unions ($24 million) as of Oct. 18, said the Campaign Study Group of Springfield, Va.

--The ranks of the $250,000-plus individual donors jumped fivefold--from 24 during the last presidential season to 133 in 2000.

Altogether, the Republican and Democratic national committees disclosed in their first postelection campaign reports that they raised $303 million and $231.5 million, respectively, for the two-year cycle. The Republicans virtually matched and the Democrats exceeded their unprecedented 1996 sums.

The campaign finance system adopted in 1974 limited contributions from individuals to $1,000 per candidate for a single election. Political action committees run by companies, unions and special-interest groups faced a $5,000 ceiling. The new laws provided presidential candidates with partial public funding during the primaries and total public financing in the general election.

Unlimited donations for 'party building'

The reforms were interpreted to allow unlimited individual, corporate and labor donations for "party-building" activities such as registering and turning out voters. They also permitted parties to pay for issue advertisements that did not support or oppose specific candidates. Funds donated and spent this way came to be known as "soft money."

In 1996, the two major parties became far more aggressive in featuring their presidential nominees, Bill Clinton and Bob Dole, in their "issue ads." Following the election, the Federal Election Commission, which enforces election laws, rejected a staff recommendation that it require Clinton and Dole to repay millions in federal funds for using soft money to sponsor ads to influence the election.

"The commission has, at least in some cases, turned out to be a way to weaken the laws and ensure non-enforcement," said Trevor Potter, a former FEC chairman. "There is no effective limit on what I can spend if I set my mind to it."

This year the emboldened parties for the first time spent more on television ads than the presidential candidates themselves, said the Brennan Center for Justice at New York University Law School.

Soft money, which only eight years ago represented less than one-fifth of the two major parties' total receipts, rose to nearly half of their $878 million in 2000. The Republicans took in $211 million and the Democrats $199 million as of Oct. 18--five times their 1992 tally. Complete postelection figures were not available Thursday.

One disparity emerged: The DNC raised $116.3 million in soft money, half its total, while the RNC's $109.8 million in soft money was just over one-third of its total.

And this year soft money moved to Senate races in a big way. Twelve Republican and 11 Democratic Senate candidates set up joint committees with their party's national Senate campaign committees. Donations to these joint committees were controlled by the national party, but, in a close contest, the money flowed back to the state of the candidate who raised it. In effect, corporations and unions could make unlimited contributions to individual candidates.

For instance, Hillary Rodham Clinton raised $20 million through the New York Senate 2000 committee; $16 million was channeled to her campaign by the Democratic Senatorial Campaign Committee.

Bush's decision not to accept federal funds for the presidential primaries--which allowed him to spend about $100 million--undercut a cornerstone of the system as well. He was the first front-runner to do this, and, since he paid no price with voters, others are likely to follow suit, analysts said.

How Gore spent $49.2 million

Democratic nominee Al Gore spent $49.2 million in the primaries: $33.7 million in private donations and $15.5 million in public funds. Each nominee received $67.6 million in federal money for the general election.

Setting yet another precedent, both presidential camps raised more money for the postelection Florida recount. And, with the outcome still in dispute, Bush has solicited additional sums for his transition effort.

The growing role of interest groups through television and radio ads and mailings poses a different challenge to candidates: They cannot control the messengers or the message.

By law, these groups cannot coordinate their efforts with election campaigns. And, unlike campaign donations, the sources of these funds do not have to be disclosed.

The Annenberg center, which tracks such issue advertising, estimates that these groups spent more than $300 million in 1999 and 2000.

The National Rifle Assn. laid out more than $20 million nationwide, including millions on television and radio ads. Its adversary, Handgun Control, spent $2.5 million on ads.

Citizens for Better Medicare, representing the nation's drug makers, invested about $50 million in television advertising to establish a high-profile presence in many battleground states. It advocated Medicare proposals similar to Bush's plan.

These voices were especially loud in coastal San Diego County. Outside groups unleashed a two-month televised fusillade in the contest there between Democratic state Assemblywoman Susan A. Davis and Bilbray, a three-term incumbent.

Despite her victory, Davis acknowledged, "it's frustrating because you feel like your own message dies out because of that. . . . It's harder to get through all the clutter."

Bilbray spent $1.7 million on his entire campaign and Davis nearly $1.9 million. Outside groups, including the political parties, spent more than $8 million, mostly for television ads, strategists for both campaigns estimated.

Hopes for rivival of finance reform

Campaign finance reform advocates said that the 2000 election strengthened their hand.

Sens. John McCain (R-Ariz.) and Russell D. Feingold (D-Wis.) said that the skyrocketing election spending and new Senate allies auger well for at least a ban on soft money, which they intend to pursue aggressively.

A House-approved ban was blocked in the Senate last year. But proponents said that Senate newcomers from Michigan, Delaware and Washington could help put campaign finance reform over the top.

Some donors would be happy to lose some of their clout with candidates in return for reducing their contributions.

Peter Buttenwieser, a Philadelphia heir to a family investment-banking fortune, gave $2.4 million to the Democratic Party and its candidates in the last two years. He said that he supports progressive Democrats. Among the causes he backs: a ban on soft money.

"I think the amount of money that's come in from a lot of special-interest groups has sapped American voters' faith in the system," he said. "They feel their own voices aren't heard as well."

Still, he said, until more limits are placed on the finance system, "I'm going to continue to do what I do."


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Friday, December 8, 2000

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