Published February 13, 2004
WASHINGTON – Big donations known as soft money found a fresh channel into politics in the months after a new law broadly banned them, flowing to political groups that raised more than $100 million likely to influence this year's elections.
Top recipients include new groups such as America Coming Together (search) and the MoveOn.org Voter Fund (search), which want to help Democrats win back the White House, and the Republican State Leadership Committee, which is focused on state and local races.
Such tax-exempt political groups began cropping up in larger numbers after the new law took effect in November 2002 banning political parties from accepting soft money — corporate, union and unlimited contributions. Their biggest donors include people and companies who used to write huge checks to political parties.
Democratic giver and billionaire financier George Soros (search) gave ACT $5 million. Hollywood producer Steve Bing gave millions to the Democratic Party in 2002; last year he donated nearly $1 million to MoveOn.org and $2 million to be split between ACT and a like-minded group. Citigroup gave $65,000 to the Republican State Leadership Committee, along with $217,580 to the Republican Governors Association and $100,000 to its Democratic counterpart.
The law, upheld by the Supreme Court in December, left such tax-exempt groups as the primary repository for big political donations.
"The soft money — your corporate and labor union money that used to be going to the national parties — is now starting to crop up in these nonparty groups," said Kent Cooper, co-founder of Political Money Line. The nonpartisan campaign finance tracking service compiled the total by reviewing the tax-exempt political groups' IRS filings.
So far, most have been started by Democratic activists, whose party was more reliant on soft money than the GOP. The Republican Party collects millions of dollars more in the limited "hard money" donations from individuals that the parties can still raise.
The law also broadly bans outside groups such as these, known as "527s," from using soft money for federal election activity. But exactly what that means is under debate. The Federal Election Commission is expected to issue its first key opinion on the issue next week.
Several of the top 10 soft money-raising groups last year are liberal groups that have said their top priority is helping win election of a Democratic president in November.
One of them, America Coming Together, raised $12.51 million last year, second only to the Republican Governors Association's $12.53 million in soft money.
ACT is focused on get-out-the-vote activities, and is raising both soft money and the limited hard money. How it will spend soft money to try to influence the presidential race within the law's confines remains to be seen; its 2004 election activity is yet to come.
ACT attorney Laurence E. Gold said it plans to pay for its activities with a mix of soft and hard money, adding that the FEC has long allowed such groups to do so. Its purpose is winning "election of progressive candidates at all levels of government," not just defeating President Bush, Gold said.
Other top soft money raisers last year include the Democratic Governors' Association, with $9.3 million; the Democratic-leaning American Federation of State, County and Municipal Employees Special Account, $6.2 million; the pro-Democratic MoveOn.org Voter Fund, $4.8 million; and the Republican State Leadership Committee, $3.7 million.
Cooper said that despite the $102 million tally so far, the political groups haven't reached their full soft money-raising potential. He believes uncertainty about the law's fate during the more than yearlong court fight and jockeying among new groups to become the go-to organization for big donors have slowed their activities.
Cooper also noted that the report on 527s, the political groups, doesn't show all the soft money. Organizations that report to the IRS as lobbying groups also spend in elections. Many, such as the Republican-leaning National Rifle Association, raise tens of millions of dollars each year. They do not have to report as much about their activities as the 527s do, making them more difficult to track.
At a Glance
Partisan groups raising the most soft money — corporate, union and unlimited donations — in 2003, according to year-end reports filed so far with the Internal Revenue Service:
Republican Governors Association: $12,537,847
America Coming Together, pro-Democrat: $12,515,000
Democratic Governors' Association: $9,333,077
American Federation of State, County and Municipal Employees Special Account, Democratic-leaning: $6,243,858
MoveOn.org Voter Fund, pro-Democrat: $4,799,433
Republican State Leadership Committee: $3,739,474
The Partnership for America's Families, pro-Democrat: $3,071,211
Media Fund, pro-Democrat: $3,000,000
New Democrat Network: $2,701,018
The Club for Growth, pro-Republican: $2,662,154
EMILY's List, pro-Democratic women: $2,581,443
Democratic Legislative Campaign Committee: $1,938,467
Sierra Club Voter Education Fund, Democratic-leaning: $1,790,982
League of Conservation Voters, Democratic-leaning: $1,388,000
America Votes, pro-Democrat: $1,182,036
Source: Reports filed with the IRS and compiled by the nonpartisan Political Money Line campaign finance tracking service.