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August 6, 1997

Despite Controversy, Money Continues to Pour Into Party Coffers

By LESLIE WAYNE

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  • Coverage of the Political Fund-Raising Debate

    WASHINGTON -- For all the talk about campaign finance reform, Republicans and Democrats alike have raised record amounts of donations in the first half of 1997, with fund-raisers saying that the financial scandals of the last election are apparently having little effect on the flow of money.

    A record $34 million in so-called soft money donations have been raised since January by both parties, according to a study released on Tuesday by Common Cause, a nonprofit group.

    Republican Party committees received $23 million in soft money donations during that period, out-raising the Democrats by a two-to-one margin. Democratic Party committees raised $11 million in soft money, which are donations to party committees and less regulated than contributions to individual candidates.

    The 1997 ammount far outpaces the amounts raised in comparable post-election periods. Following the 1992 presidential race, the two parties raised only $13 million in soft money donations and, after the 1994 congressional races, $30 million in soft money donations were raised by both parties.

    Typically, the post-election months are slow for fund-raising. But, like the parties, candidates also raised money at a record clip. House Speaker Newt Gingrich, who recently had to fend off a coup attempt within his own party and who is a prime target of Democrats, raised a record for him -- $1.8 million since the last election. He did it through an aggressive direct-mail campaign and has yet to hold a single fund-raiser in his Georgia district.

    Leading the Democratic congressional list is Rep. Charles Schumer, D-N.Y., who is seeking to unseat Sen. Alfonse D'Amato of New York in the 1998 Senate race. Schumer raised $1.8 million this year alone -- on top of the $6.5 million in cash he has on-hand. The race between D'Amato and Schumer may cost each candidate as much as $20 million.

    The House minority leader, Richard Gephardt, a potential presidential candidate in 2000, raised $1.4 million this year, topping the $1 million he raised at the same time in the previous election cycle. Rep. Joseph P. Kennedy II, D-Mass., has raised $1 million.

    All the donations came despite a campaign finance controversy that has drawn new attention -- and criticism -- to the amount of money flowing to candidates and parties. It has also put the spotlight on the role played by big-money donations from corporate donors and rich individuals.

    "These numbers really show there is no sense of shame," said Ann McBride, president of Common Cause. "This is a system out of control." She added, "Democrats and Republicans are out eagerly raising record amounts of huge, unregulated and corrupting soft money."

    Soft money donations can be made in unlimited amounts to party committees -- as opposed to individuals -- and are not restricted by the federal election law. Campaign finance reformists have called for a ban on soft money donations. Congressional candidates are limited by federal law to accepting only $2,000 during an election and a primary race from individuals and $10,000 from political action committees.

    Party fund-raisers say donors appear to have little skittishness as a result of the fund-raising controversy. Only the Democratic National Committee, now $16 million in debt from the last election and and from mounting legal expenses, has had trouble raising money. Democratic committees raising money for House and Senate candidates say they have been unaffected by suggestions that the Democratic National Committee may have received illegal foreign donations.

    "We've got a very aggressive fund-raising program going on for the 1998 elections," said Dan Sallick, communications director for the Democratic Congressional Campaign Committee, which has raised $1.8 million for 1998 House races. This is 30 percent above the comparable period in 1995.

    "With only an 11-seat difference between who controls Congress, both sides realize that the 1998 election will be close and everyone is gearing up early," added Sallick.

    Phillip Fremont-Smith, a spokesman for the National Republican Congressional Committee, which raised $3.4 million for Republican 1998 House races, said the campaign finance scandals have not extended outside the beltway and onto Main Street.

    "What we call scandals in Washington are often not on the front page in local newspapers," said Fremont-Smith. "I haven't seen any skittishness from donors. People want to be involved in politics. They want to add their voice."

    Republicans are outpacing Democrats in donations, in large part, because money traditionally flows to those in power in Congress. Republicans, with their stronger ties to big business and the wealthy, have out-raised the Democrats over the years. Some say the relationship between money and power is the reason Gingrich has been able to raise so much money -- despite efforts by some members of his own party to oust him from the speaker's post.

    "The Republicans are doing well because they control Congress and they are playing it to the hilt," said Larry Makinson, executive director of the Center for Responsive Politics, a nonprofit group. "As for Newt, he still holds the reins of power in Congress and money follows power."

    Makinson added that some big donors, as well as candidates, are concerned that the campaign finance rules may change -- making the giving of money in the future more difficult. As a result, many donors want to make sure that they give the kinds of donations that candidates notice while they still can.

    "Many are taking advantage of the current system as long as they possibly can," said Makinson.

    Currently, it is unclear whether there will be campaign finance reform or what shape it might take.

    Michael Shields, a spokesman for Gingrich, said the speaker's popularity among donors is now stronger than ever. "Many Republican activists recognize Newt as the only person able to articulate a Republican vision and message and they are showing it by signing on," said Shields.

    Gingrich is also a tireless fund-raiser for himself and his party and was credited in 1996 with raising more than $100 million for Republican candidates through his fund-raising appearances. He raised $6 million for his own race, making it the most expensive House race that year.

    Laura Nichols, press secretary for Gephardt, said the House minority leader, too, has found donations unaffected by the campaign scandal. "The House race is going to be so close, donors are really interested in getting it back into Democratic hands," said Ms. Nichols.

    On the Senate side, the top three fund-raisers are all Republicans: Sen. Kay Bailey Hutchinson of Texas ($1.9 million), Sen. Arlen Specter of Pennsylvania ($1.7 million) and Sen. Richard Shelby of Alabama ($1.5 million). The top Democratic fund-raiser is Senator Bob Graham of Florida ($1.2 million)




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