Campaign Fund Raising: Who's Worse?

Campaign Fund Raising: Who's Worse?

Campaign Fund Raising: Who's Worse?

A cheat sheet for the news.
Feb. 2 1997 3:30 AM

Campaign Fund Raising: Who's Worse?

By Franklin Foer

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Republicans have been making hay over revelations about Democratic fund raising. President Clinton asserts that the Republicans have no right to talk. "They raise more money. They raise more foreign money. They raise more money in big contributions. And we take all the heat. It's a free ride." Does he have a case?

Franklin Foer Franklin Foer

Franklin Foer is a Slate contributing editor and the author of World Without Mind.

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The national Republican Party (the Republican National Committee, the Republican Senate Campaign Committee, and the Republican Congressional Campaign Committee) does out-raise its Democratic counterparts. In every two-year campaign cycle since 1976, Republicans have brought in more total money. During the last cycle (through Nov. 25, 1996), the Republican Party pulled in $548.7 million to the Democrats' $332.3 million.

Campaign-finance laws break these contributions into two categories.

1) Hard money: donations that can be spent directly on candidates. Under the Federal Election Campaign Act of 1974, there are strict limits on how much hard money individuals and political-action committees can give. Corporate and union hard-money gifts are banned. Here, the Republicans have their biggest advantage. Last campaign, they out-raised the Democrats $407.5 million to $210 million.

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2) Soft money: The parties can accept unlimited contributions to pay for activities ambiguously called "party building." In 1979 legislation that authorized soft money, party building referred literally to the cost of building and maintaining a party headquarters, as well as general promotional activities for the party. But recent court decisions and creative interpretations by the parties themselves have led to a much broader definition. Parties now spend the soft money on funding TV ads, voter-registration drives, and get-out-the-vote campaigns. Few distinctions remain between the application of hard and soft money. The soft money can't be transferred directly into candidates' coffers, and the ads can't explicitly promote or denigrate a candidate, which in practice just means no use of the words "vote for" or "vote against." In the last campaign, the Democratic Party received $122.4 million in soft dollars and the Republicans received $141.2 million.

The Republicans' edge in soft money reflects their greater success in raising big contributions. Soft money is donated primarily by corporations, and by individuals and PACs already maxed out on hard money. According to the New York Times, last year the Democrats had 45 soft-money contributions over $250,000, while the Republicans had at least 75.

However, good-government groups, like Common Cause and the Center for Public Integrity, emphasize that these figures, based on reports filed with the Federal Election Commission, are deceptive. They exclude donations to state parties that are transferred to both federal and nonfederal candidates. These donations can be substantial. Last week the Washington Post reported that the former Democratic National Committee fund-raiser John Huang raised $482,000 through various state parties; and Rupert Murdoch donated $1 million to the California Republican Party.

Union Money. Republicans argue that if you count the AFL-CIO's spending on behalf of Democratic candidates, the Democrats' fund-raising total surpasses its own. Unions gave $4.7 million in soft money to the Democrats, and just $800,000 to the Republicans. But that is reflected in the soft-money totals. What isn't reflected is so-called "independent expenditures" on behalf of Democratic candidates. Under a 1976 Supreme Court ruling, the First Amendment forbids any legal limits on such spending, as long as it is truly independent of the candidates and the parties.

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Independent expenditures are not reported to the FEC. Republicans say that organized labor spent $200 million to $500 million promoting Democratic candidates last year. They cite AFL-CIO officials who claim the organization spent $35 million on a radio-and-television ad campaign alone. In addition, the unions sponsored voter guides and a get-out-the-vote campaign. AFL-CIO officials deny spending anything close to the figures that Republicans estimate.

Similar independent expenditures benefited Republican candidates. The U.S. Chamber of Commerce spent $7 million on advertising in support of GOP candidates; the Christian Coalition spent $1.4 million on voter guides promoting conservative candidates; and the National Rifle Association put up another $1.5 million that mostly helped Republicans.

Foreign money travels two routes into party coffers: 1) direct contributions by foreign companies and individuals, which are flatly illegal; and 2) soft-money contributions by American subsidiaries of foreign companies. Last week, the DNC announced that it would no longer accept either type of foreign money. However, there are currently no federal laws prohibiting the second category.

But what does Clinton mean when he says the Republicans "raise more foreign money"? If the statement refers to illegal foreign money, then his claim lacks evidence. In the last campaign cycle, Democrats returned $1.5 million in contributions because they may have come illegally from foreigners. Republicans have only returned a single check for $15,000.

As for legal donations by American subsidiaries, Republicans lead in this category, as in all corporate receipts. But the data are incomplete. A study by Common Cause of contributions through Oct. 18 showed that the Republicans received $2.4 million from American subsidiaries of foreign companies, and the Democrats took in $532,000. The Democrats' new prohibition on such contributions is a definitional nightmare. Is MCI, now owned by British Telecommunications, forbidden to give? Is Honda of America, which has 12,000 employees in Ohio, allowed?

Republicans argue that even though they receive more big contributions, the Democrats are more egregious about special favors for contributors. The Clinton White House has offered big givers tennis matches with the president, at least one coffee with a federal regulator (Clinton has admitted that this one was wrong) and, most notoriously, overnight stays in the Lincoln Bedroom.

However, Republicans also "sold" social engagements with the president when they controlled the White House, and have made a variety of explicit and implicit promises of access to policy-makers. For instance, during the Bush years, the RNC enticed donors by offering them rides on Air Force One with the president and Baseball Hall of Famers Joe DiMaggio and Ted Williams. Also, the New York Times recently reported on a fund-raising letter sent out by the GOP last January, guaranteeing $250,000-level donors access to Speaker Gingrich and Republican presidential candidates.

One party or the other may have a niche where it excels or is especially trouble-prone, but neither party can claim clear moral superiority.