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03/09/98- Updated 02:04 AM ET

'Issue-advocacy' groups: The new power

Dick Dresner laid it on the line for his fellow political consultants: For any wealthy American who wants to buy a congressional election, there now is a legal way to attempt it.

Through an elaborate network of shell organizations, trusts and bank accounts, these donors can pump unlimited money into campaigns, hire consultants, choose issues and design ads, all behind a cloak of anonymity, Dresner said.

Key campaign finance terms

Issue advocacy: Any communication to the public aimed at promoting a particular policy or idea. The ads cannot call for the election or defeat of a candidate, but experts say they often are designed to convey that message between the lines. Election laws place no limits on spending for issue ads, and the spending is not disclosed.

Independent expenditures: Campaigns that call for election or defeat of a candidate. Though they are not limited by law, the expenditures must be disclosed through the Federal Election Commission and cannot be coordinated with the candidate.

“Hard” money: Cash raised and spent by candidates or parties under a 1974 law that limits contributions. Candidates use hard dollars to pay campaign expenses.

“Soft” money: Money donated by corporations, labor unions and individuals to political parties. Soft money is not limited but must be disclosed. Originally used to pay for party overhead expenses or for get-out-the-vote efforts, soft dollars now are routinely used for TV spots that serve as campaign ads.

That message, delivered at a Jan. 27 San Francisco conference, horrified some of the political veterans gathered in a hotel meeting room.

"It's a way to circumvent the law," said consultant Ray Strother. "Personally I don't approve. . . . It was bitter in my mouth."

Traditionally, political campaigns have been waged by candidates who raise money, choose the issues they will emphasize and produce ads. The law strictly limits the money they can raise from any one source and requires that it be disclosed to the public.

But the rise of "issue advocacy" means the donor controls the message and has no obligation to disclose amounts or sources of money. While the ads don't call directly for election or defeat of a particular candidate, analysts say they often are designed to do precisely that.

The practice has been discovered by wealthy individuals like those Dresner described, as well as by growing numbers of special-interest groups, from the U.S. Chamber of Commerce and the Sierra Club to term-limits advocates and groups on both sides of the abortion issue - as well as the political parties themselves.

Fall preview

In a preview of the fall's congressional and gubernatorial campaigns, this free spending is going on now in California. A routine special election for a House seat there has drawn groups for and against abortion, in favor of term limits, for smaller government and for gun rights.

And looking ahead to the November elections, a political arms race already has begun in earnest. The Business Roundtable, an organization of CEOs of some of the nation's largest corporations, has tripled its annual dues to raise $27 million that it can plow into issue advertising. Organized labor has a starting budget of $15 million, and that figure is likely to grow. The Sierra Club, which spent $7 million two years ago, hopes to repeat that in 1998. Americans for Limited Terms is spending at least $3 million.

Charles Mack, president of the Business-Industry Political Action Committee, says that's just the beginning. "By the year 2000, more money will be spent on issue advocacy than the candidates are spending themselves," he predicts. "Without regulation and without limits, where can it go but straight up?"

In an interview, Dresner said he isn't promoting stealth campaigning but is simply doing what his conservative clients want. "You've got some extremely wealthy people out there who want a particular kind of government" and "who stand to gain based on the makeup of Congress," he said.

$135 million spent

In 1996, at least $135 million flowed into advocacy campaigns, according to a study by the Annenberg Public Policy Center at the University of Pennsylvania. The spending, topped by organized labor's $35 million investment and $78 million from the two major parties, affected dozens of House and Senate races.

"Unfortunately, I think we're going to see a great deal of the same kind of thing again this year," said Rep. Nick Lampson, D-Texas, whose own 1996 campaign was flooded with an estimated $1.2 million in outside money. The AFL-CIO, the Democratic party and environmental groups weighed in on Lampson's behalf. Pro-gun, anti-abortion and business groups spent heavily against him, along with a mysterious organization called Citizens for the Republic Education Fund.

The consultant behind the enigmatic group? Dick Dresner.

Lampson won a runoff by a bare 6,000 votes. "People here were used to campaigns run with yard signs and spaghetti dinners," Lampson aide Jonathan Brown said. "All the money has left people jaded."

That election was one of at least 15 congressional races across the country in 1996 in which a torrent of outside money threatened to drown out the voices of the candidates themselves, according to a new study due out soon from the Annenberg center. In several cases, voters said they thought they were choosing between organized labor and big business instead of between two candidates for office.

"I think in 1998 we are going to see an increase in races in which the dominant voice is not a candidate's voice," said Kathleen Hall Jamieson, the center's director. "We're not hearing the people we're electing anymore."

Trying to influence elections is nothing new. An 1852 painting by George Caleb Bingham shows a voter being rewarded with whiskey outside a frontier polling place. Under the spoils system, lawmakers hired supporters for government posts, and they in turn donated part of their pay to help re-elect their patrons. Great industries such as railroads, oil companies and banks put up their own candidates for office.

The growing role of business money in campaigns brought pressure for reform, and in 1907 Congress barred banks and corporations from contributing to federal candidates. Other reform attempts, including disclosure rules, followed. The law that now controls how federal campaign money is raised and spent is a tattered remnant of a 1974 reform bill passed in the aftermath of the Watergate scandal.

After revelations that President Nixon's re-election committee had channeled large contributions to a secret fund to pay for political dirty tricks, Congress placed new limits on how much money individuals could give. Lawmakers also created the Federal Election Commission to police the world of political money.

But over the years, the system has been dismantled by incremental court decisions and regulatory rulings. "It is the Wild West in American politics right now," said Stuart Rothenberg, publisher of a political newslette. "You can get away with almost anything."

"What we have here is a new phenomenon, never contemplated or adopted into law by the Congress," former senator and Democratic presidential candidate Walter Mondale said.

The latest example has occurred in California, where a special election Tuesday pits Democrat Lois Capps, seeking to hold the House seat of her late husband, against Republican Tom Bordonaro. Bordonaro won the GOP nomination after the socially conservative Campaign for Working Families spent $100,000 on ads criticizing his opponent, Brooks Firestone, on the issue of the procedure that opponents call partial-birth abortion.

Groups pushing term limits, abortion rights and a business agenda have weighed in, along with the Christian Coalition.

Firestone, the loser in the January primary, calls the system "intolerable."

"Any organization advocating a position can join the campaign and run outrageous advertisements without any accountability," Firestone says. "There is an element of power politics in this."

Going nowhere

An effort in Congress to reassert control over the political money chase appears to be going nowhere. Last month, the Senate deadlocked over a proposal to end the raising of unlimited, unregulated "soft money" by political parties and to curtail and require greater disclosure of issue advertising. The House may take up the issue this month, but its debate will be largely symbolic.

Stymied in Washington, reformers are taking their case to the states. Nine states have passed campaign reforms since 1994, and similar measures are pending on the ballot or in legislatures in 30 states.

If the 1996 elections saw the dawn of a new era in political spending, voters should brace for a dramatic upsurge in the coming months.

Spokesmen for some of the most active groups say they plan to continue or increase their spending this year, and they expect to be joined by many other groups who are afraid they otherwise will be left out of the action.

New groups already are adding their voices to the din. Americans for Job Security, a pro-business group started with seed money from the American Insurance Association, hopes to spend $15 million. A Texas-based group pushing to eliminate the income tax, Americans for Fair Taxation, already has spent $6 million on research and advertising.

"This is going to be a very noisy November," said Eric O'Keefe of the term-limits group.

But won't voters ultimately come to resent big-money interests as outsiders meddling in an election that rightfully belongs in local hands?

"That's what I thought," said Firestone, the defeated GOP House candidate. "And I am going back to private life."

By Jim Drinkard, USA TODAY

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