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TODAY

02/03/98- Updated 11:34 PM ET

FEC lawyers suggest soft money ban

WASHINGTON - In a move that could change how political campaigns are financed, Federal Election Commission lawyers have recommended a ban on "soft money," the huge unregulated contributions at the heart of last year's fund-raising investigations.

Soft money is one of the fastest-growing methods of raising political funds, accounting for a record $262 million for Democrats and Republicans in 1996.

Under the FEC proposal, national committees of both parties could no longer take five- and six-figure checks from rich businessmen, wealthy patrons, corporations and labor unions, cutting off millions of dollars that they now use to pay for television ads, voter drives and administrative expenses.

"It's a surprising and dramatic possible move," said Kent Cooper, executive director of the Center for Responsive Politics, a nonpartisan research group that studies the role of money in politics.

President Clinton and several lawmakers petitioned the FEC last summer to prohibit soft money as a bipartisan campaign finance bill banning soft money languished in Congress. The 52-page proposal, released Jan. 26, is the agency's first stab at responding to the requests and comes as the Senate is scheduled to vote on the bill in early March.

Clinton applauded the lawyers' proposal Tuesday and urged the FEC to approve it.

"I am very pleased that the agency's general counsel has proposed a new rule prohibiting national parties from raising soft money," said Clinton. Though he opposes soft money, the president has helped the Democratic Party raise millions of the donations, saying the party must compete with Republican fund raising.

"I ask the members of the commission to step up to their responsibility and act, within their legal authority, to end the soft-money system," the president said.

It's far from certain that the commission will do so - or even has authority to do so.

The FEC will decide Feb. 12 whether to put the proposal out for public comment. The agency could also decide that it should be changed or studied further.

Either way, it could take months before the FEC issues new rules. And any regulations banning soft money would likely draw legal challenges from many camps.

"They don't have the authority and it would be unconstitutional," said Cliff May, spokesman for the Republican National Committee, which opposes a ban.

But campaign finance experts said the proposal is a significant first step toward dealing with the question of whether soft money, viewed by critics as a way special interest groups influence politics, should be allowed to continue.

FEC lawyers proposed that political parties pay all their expenses with money raised from donors whose contributions are regulated by federal law. Individuals are allowed to give up to $25,000 a year to parties and up to $2,000 to candidates each election cycle.

Such donations, known as "hard money," are limited to $25,000 per person for parties and $2,000 per person for candidates during an election cycle. There are no limits on soft-money donations.

FEC lawyers would not comment on the proposal, said spokesman Ron Harris.

Soft-money contributions were a focus of an investigation into Democratic fund-raising practices during the election. The party returned $3 million in contributions when questions were raised about whether the money came from foreign donors - a violation of election laws. Two-thirds of the returned funds were soft-money donations.

In their memorandum to the FEC's five-member board of commissioners, the lawyers said a soft-money ban was the most effective way to stop the improper use of the contributions.

Election laws permit soft money to be used for party-building activities that foster grass-roots participation in politics, such as local get-out-the-vote drives and voter registration programs. It can't be used to pay for campaigns or to influence federal elections.

But FEC lawyers said that national party committees have employed various techniques and exploited loopholes in the agency's own rules to use soft money to help federal candidates, a view long held by advocates of a ban.

For instance, in the 1996 presidential election the parties transferred millions of dollars in soft money to local party committees in states where their federal candidates lagged in the polls or where there are closely contested races for federal offices.

The evidence suggests that national party committees "were directing their soft money to states in which it would have the most impact on federal elections," the FEC memo said.

By The Associated Press



Copyright 1998 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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