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Democrats Losing The Battle Of The Bucks

By Bruce Jackson/CNN

WASHINGTON (AllPolitics, May 13) -- The Democrats are losing the battle of the bucks.

Two weeks ago, the Democratic National Committee claimed success at a Washington dinner, saying they raised $4 million.

That's not quite true. CNN has learned that of the $4 million promised at the Democratic fund-raising gala, only $1.8 million has actually been collected so far. Checks have been slow to arrive.

Republicans, meanwhile, are forecasting they will raise between $11 million and $12 million at the Republican National Committee's Washington fund-raising gala tonight.

The Asian fund-raising scandal hurt Democrats, turning off small donors and sending big ones scurrying for cover.

But Republicans say their donations are running 50 percent above the comparable period four years ago.

The GOP has troubles of its own, though. This week it gave back another $25,000 which a Hong Kong company had funneled illegally to the Florida state GOP. Last week Republicans refunded a total of $122,400 to the same company, Young Brothers Development.

And in another wrinkle, a source close to former party chairman Haley Barbour confirms that the Internal Revenue Service officially rejected tax-exempt status for the National Policy Forum, calling it too partisan.

Hong Kong money also flowed into Barbour's National Policy Forum group from the same company, in the form of a $2.2 million loan guarantee.

But Barbour said that was legal. "The National Policy Forum, as you know, like all 501(c) organizations, is allowed to take contributions from foreign companies, individuals," Barbour said, referring to the IRS regulation that governs tax-exempt groups.

Barbour is appealing rejection of the forum's tax-exempt status by the IRS.

But if the Federal Election Commission also concludes the policy forum was a political committee -- not just a think tank -- it could make that $2 million loan illegal, too.

Barbour's contention that the policy forum was just a "think tank" is similar to the position House Speaker Newt Gingrich took concerning his own multi-million-dollar operation -- GOPAC. The FEC challenged Gingrich. He won in court, but then lost before the House ethics committee.