Parties Adapt to Finance Reform While High Court Mulls Fate

The national political parties have quickly adapted to new methods of fund-raising since campaign finance reforms (search) became law last year, capitalizing on aggressive targeting of donors even as the U.S. Supreme Court gets ready to hear whether the law is constitutional.

In the first six months of 2003, Republican Party committees raised $139 million, or 109 percent more than the same period in the 1999-2000 presidential cycle. Democratic Party committees raised $56.4 million, a 48 percent increase since this time in the last presidential campaign.

Some experts say that the new law -- designed to take the emphasis of money out of politics -- has merely re-oriented the money race.

“There is a tougher, harder, shift of focus on raising hard dollars,” said Bradley Smith, a Republican member of the Federal Election Commission (search). “[The parties] are putting the squeeze on donors to see who can make the most money first. It’s part of a new aggressiveness to raise funds.”

Still, some of the nation's top attorneys are scheduled to give oral arguments to the high court on Monday in the case of McConnell v. the Federal Elections Commission -- the challenge to the Bipartisan Campaign Reform Act of 2002.

BCRA, which emerged from congressional campaign finance reform bills sponsored by Sens. John McCain (search), R-Ariz., and Russ Feingold, D-Wis., in the Senate, and Reps. Christopher Shays, R-Conn., and Marty Meehan, D-Mass., in the House, went into effect on Nov. 6, 2002, the day after last year's congressional election.

BCRA states that political parties may no longer raise and spend unregulated soft money, money donated by big spenders and special interest groups that goes into general accounts and can be used for a variety of political activities. The new law increases limits for individual hard money donations to candidates to $2,000 from $1,000. Individuals can donate up to an additional $57,000 per election cycle to party and political action committees.

The law also prevents independent organizations from spending soft money on radio and television ads mentioning candidates 60 days before a general election and 30 days before a primary.

Proponents of the law say the soft money ban will cut down the gross amount of money flooding the political system and reduce the level of influence big-moneyed interests have wielded in recent federal campaigns.

Along with the lead plaintiff, Sen. Mitch McConnell, R-Ky., over 90 individuals and organizations are challenging the law, saying it restricts political speech, violates the First Amendment and forces federal law on the states since federal law would be imposed on state party activities any time federal and state elections occur on the same day -- which is almost every Election Day.

Among the plaintiffs joining McConnell are a wide range of special interest groups like the American Civil Liberties Union, the National Rifle Association and a number of prominent labor unions, all of which help raise soft money and put out issue ads during election time.

Plaintiffs to the Supreme Court case say they feel their participation in the political process is being too restricted by the new law's many provisions.

“The law is so up in the air and subject to so much interpretation that we fear running ads for being in violation of the law,” said Jeff Mazzella, executive director for the Center for Individual Freedom, one of the plaintiffs in the case.

He said the group has been holding back on running ads regarding their opposition to the recent judicial filibusters in the Senate. “The confusion has effectively silenced us,” he said.

“Nobody will hand out a press release until a FEC lawyer gets a look at it,” said Rich Galen, a strategist with the Republican Leadership Council. “It’s very strict stuff, and there’s great anxiety.”

Given the upcoming 2004 presidential election, legal experts expect the Supreme Court to rule on the challenge before year’s end.

In the meantime, both parties have been pursuing more creative ways of corralling individual donations.

According to officials, Republicans and Democrats have focused on building huge donor databases that can be targeted for specific campaigns and used in massive direct mail and phone solicitations. But they are also counting on the big guns -- political action committees, high-powered individuals and independent organizations -- doing much of the yeoman fund-raising for them.

One of the new methods of fund-raising is called "bundling" -- engaging high-profile individuals and groups to get as many donors to write checks for a party or candidate as possible.

“We’ve seen a ton of that,” said Smith. “[Bundlers] are gaining added importance because they are really good at raising the hard money.”

For example, President Bush has his “Rangers” -- corporate titans who raise up to $200,000 each for his campaign. On the Democratic side, “America Votes,” which counts a host of prominent liberal organizations like the Sierra Club and Emily’s List as key solicitors, is building a political war chest.

Not everyone thinks bundling is a positive outgrowth of BCRA, however.

Simon called increased bundling a “negative effect” that could also have a corrupting influence on campaigns. “There may be a need for Congress to look at that in the future.”

Galen said whichever way the court rules, there is sure to be a scramble as to how to manipulate the law to the greatest advantage for the 2004 elections.

“I would be willing to bet that both sides have armies of lawyers literally war-gaming this thing,” he said.