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Political Money: The Rules Are Warped, Not Just Bent

This year more than ever, candidates get help from special-interest groups that s-t-r-e-t-c-h the rules

By Jeffrey H. Birnbaum/Washington

[TIME Magazine]

(TIME, October 21) -- Jerry Bruno knows all about his Congressman. He can't help it. The retired college professor who lives in Portland, Maine, is not a political junkie or even someone whose money and clout might be worth the attention. But all through the day, he is barraged with information about Republican James Longley. A stranger calls on the phone to praise Longley as a "friend of small business." A radio spot touts the lawmaker's "antigovernment" stands. A TV ad complains that Longley is the victim of "cheap shots" by "Big Labor bosses." Then there's the whole series of anti-Longley commercials, which charge that the Congressman has voted to trim student loans, reduce the security of pension funds and "cut Medicare [to] give new tax breaks to the wealthy." Says Bruno: "It's enough to make your head spin."

What's new about this media onslaught is that none of these pitches or disparagements were paid for by Longley or his Democratic opponent, Thomas Allen, or even their respective parties. The pro-Longley spots come courtesy of the National Federation of Independent Business, the National Restaurant Association and a coalition of corporations led by the U.S. Chamber of Commerce. The anti-Longley information was supplied by the AFL-CIO and, to a lesser extent, the American Association of Retired Persons. By taking advantage of a legal loophole in campaign-finance laws that permit so-called independent expenditures, special-interest groups are hogging the airwaves, phone lines and printshops in dozens of the most hotly contested congressional races around the country. In districts held by G.O.P. freshmen like Longley, outsider advocacy groups on both sides are routinely spending $500,000 to $1 million a race, amounts that often dwarf the efforts of the Democratic challengers.

Such spending skirts campaign-finance laws, which were meant to restrict the influence wealthy individuals and powerful groups could exert in an election. Contributors are not allowed to donate more than $2,000 a candidate, and political-action committees are restricted to $5,000. But there are no limits on what they can spend as long as they don't coordinate with the campaign or their message stops short of saying "Vote for Candidate X." The scandal in the latter case is that they come as close to saying it as they can get away with. They simply invite viewers to phone Candidate X's opponent and complain about his positions.

That's not the only trick that special-interest groups and rich people are using to stretch the laws intended to bind them. The result is an extravagantly expensive campaign season. While the amount that candidates for President and Congress will spend this year is estimated at $1.2 billion, the amount spent in other ways by the parties and special-interest groups may total $800 million more. There's no end in sight. Bill Clinton and Bob Dole both promised in their first debate that they would get serious about reforming campaign-finance laws, but they have studiously avoided the subject in the past 12 months; Congress has been stalled all year on the McCain-Feingold campaign-reform bill, its most comprehensive attempt to close the loopholes. And the absence of any serious enforcement of the existing laws by the Federal Election Commission is so well known that it continues to embolden Democrats and Republicans to pull their shenanigans.

Finding ways to be just barely legal has become an art form. For example, big donors can give unlimited amounts of so-called soft money to the major parties for the purpose of "party building" efforts, even if the definition of party building ends being, say, a biographical ad about the virtues of Dole. (The Republican Party did just that this summer.) It's this kind of legerdemain that prompted Common Cause last week to call for the appointment of an independent prosecutor to investigate both parties for $31 million worth of soft-money spending that, in that organization's judgment, came across clearly as straight-ahead electioneering. Ann McBride, president of the watchdog group, calls these kinds of activities "the most massive violations of campaign-finance laws since the Watergate scandal."

But there's more. Powerful constituents can also exceed the per-candidate spending limits through a type of earmarking called "tallying," which routes their big checks to the party and then back to their candidate of choice. The Washington Post found memos from the campaign of Senator Carl Levin, a Michigan Democrat, that openly asked donors to tally their extra contributions to benefit his campaign. One letter from Levin soliciting a tallied contribution from the Chrysler Corp.'s PAC in 1995 called it "crucial to my re-election effort next year."

Foreigners aren't supposed to contribute at all, but they do through cleverly designed U.S. subsidiaries. Last week the Wall Street Journal and columnist William Safire of the New York Times reported that the Democratic Party had collected hundreds of thousands of dollars from relatives and employees of the Riady family, which heads the $6 billion Lippo Group of Indonesia. Although the party and the donors denied violating the foreign-contributors ban, Republicans on Capitol Hill say they plan to hold hearings to examine any favors the Clinton Administration did for Lippo.

The most gaping new loophole in the campaign-finance laws is the one that allows independent expenditures. During the past two elections, both the left and the right discovered just how effectively these loopholes can be used. The conservatives did it first in 1994, when such Republican-leaning lobbies as the Christian Coalition, the National Rifle Association and the tobacco industry joined forces to defeat the late Mike Synar of Oklahoma, a Clinton friend, by spending more than $1 million on billboards, radio spots, phone appeals and "voter guides" handed out in church pews and in Wal-Mart parking lots. Similar tactics around the country were a key to producing the first Republican-controlled House in 40 years.

Two years later, liberal groups are imitating conservatives with a vengeance. Unionists, environmentalists and pro-choice activists rehearsed earlier this year in Oregon's special election; working in tandem, they put Democrat Ron Wyden into the Senate seat held for 26 years by Bob Packwood. Now liberal groups like these dominate the independent-expenditures game, directing their efforts against the House G.O.P.'s most vulnerable faction, its 73-member freshman class. Philadelphia's Annenberg School for Communication has cataloged 19 separate organizations that have taken to the airwaves this year; 60% of their messages have supported Democrats. "If the Democrats take control of the House," says congressional analyst Charles Cook, "a lot of credit will have to go to the AFL-CIO and these other groups on the left."

The AFL-CIO divided its record-shattering $35 million war chest into $20 million for radio and TV ads and $15 million for field operations. Most of the spending is focused on the few dozen districts where Republicans have the most tenuous hold on their seats. In the final weeks before the election, the union will broadcast a daunting $8 million barrage of attack ads disguised as video voter guides on issues like education and Medicare.

The environmental community has its own ambitious campaign of sneak attacks. The League of Conservation Voters has devoted its $1.5 million kitty to defeat just 12 lawmakers (11 Republicans and one Democrat) whom the organization has called "the Dirty Dozen." The Sierra Club has targeted 30 races with a million-dollar effort, including voter guides (on recycled paper) that list incumbent Republicans who allegedly have damaged the ecosystems of their own districts.

The Republican Party has reacted with alarm to the left's counterattack. It has sued the AFL-CIO to stop its ads, though nothing will be resolved until after the elections. It has unleashed millions of dollars' worth of its own commercials that accuse the unions of trying to buy control of the House. The G.O.P. hopes to create a backlash against what one of its ads derides as "Big Labor bosses, Big Money, big lies, big liberals." Freshmen are repeating the line like a mantra in their stump speeches.

But the response comes late and from a weakened army. One of the Republicans' chief allies, a Chamber of Commerce-led coalition, has struggled to raise the $4 million it has spent to help some of the most endangered freshmen Republicans. A separate effort by the same group to go after Democratic incumbents has been truncated for lack of funding. Grouses G.O.P. pollster Bill McInturff: "We're playing a game of poker with Congress: the other side has doubled its bet, and the business community is just walking away from the table."

Part of the problem is that some of the heroes of the 1994 Republican rout have been wounded. The Christian Coalition still plans to distribute 45 million voter guides in 100,000 churches. But a suit by the Federal Election Commission that accuses the coalition of working in cahoots with the G.O.P. has forced the coalition to make its flyers less obviously partisan.

Meanwhile, in Professor Bruno's hometown, the left seems to have the upper hand. The AFL-CIO has set up a phone bank in a union hall to mobilize hundreds of get-out-the-vote volunteers. Last week the organization suggested just how effective it can be. Of the 14,000 cheering Clintonites who attended a rally for the President at the Portland Sea Dogs' stadium last Monday night, 7,000 were recruited union members and their families. In 1994, Longley won his seat by about 9,900 votes.

TOOLS OF THE TRADE

There are at least four tricks that the wealthy and special interests use to get around funding limits:

  • Independent Expenditures
    Groups can mount their own "issue" campaigns as long as they stop short of saying "Vote for Candidate X."
  • Soft Money
    Donors can give unlimited amounts to "build" their parties, which often means running candidate-oriented ads.
  • Tallying
    Supporters can drop big checks on the party but discreetly "earmark" which candidates should benefit.
  • Foreign Contributions
    Foreigners are barred from contributing, but they do anyway through residents and U.S.-based subsidiaries.

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