Times: Dems Skimmed $2 Million For Campaigns

WASHINGTON (AllPolitics, Sep. 10) -- The Democratic Party shifted $2 million in contributors' money from soft to hard-money accounts during the 1996 campaigns without consulting the donors, angering some of them and putting dozens in technical violation of campaign law.

News of the party's tactic surfaced in today's New York Times.

The highly regulated funds that can be spent directly by campaigns are known as "hard money." Contributors can give no more than $25,000 per year in hard money. "Soft money," which goes to build party organizations and issue advocacy, has no limits.

What the Democratic Party did, according to the Times, was skim a portion of at least 100 large soft-money gifts into the party's hard-money accounts. The party was supposed to ask permission to make such shifts, but failed to do so in many cases. Since some of those contributors also gave hard-money gifts directly to campaigns, their year-end totals were above the legal limit.

The transfers were not illegal, and the donors are unlikely to be pursued for civil fines, because by law they would have had to break the limits knowingly.

But some of them are very angry, and may not give so generously to the party again.

"I can't believe it," California electronics retailer Paul Goldenberg told the Times. "I never gave that kind of permission and no one asked. I'm certain if someone asked, 'Would you like to do this but it would put you over the legal limit?' I would have said, 'No, thank you, I'd rather obey the law.'"

Senators investigating alleged campaign-finance abuses took note of the report in their questions today to Democratic National Committee general counsel, Joseph E. Sandler.

Democratic Sen. John Glenn told Sandler, "That seems to me to be a giant loophole that would enable you to transfer an awfully large -- a terribly large -- amount of money off in the last two months of an election, both parties, when things are critical. I think we ought to correct that."

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Wednesday Sept. 10, 1997

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