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In partisan era, bucks never stop

With few 'real' limits on campaign funding, a free-for-all is expectedon all sides.

After a year of intense focus on President Clinton's sex scandal and the ensuing impeachment trial, both Democrats and Republicans are setting their sights squarely on the future.

And in that future, one symbol looms large: the dollar sign.

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The November 2000 election presents an unusually fertile ground for political gain - control of each house of Congress as well as the White House are within reach of both major parties - and the feeding frenzy of political fund-raising is in high gear:

* Mr. Clinton has already agreed to appear at nine fund-raising events around the country for House and Senate Democrats.

* Presidential candidates are establishing political-action committees in states with loose or no regulations, allowing them to raise large, unrestricted donations from wealthy contributors and buy "issue ads" that are, in effect, veiled campaign ads for their own candidacies.

*The national party committees are taking in donations of all kinds - both regulated "hard" money as well as unregulated "soft" money - at a pace faster than anticipated.

Depending on how one views the role of money in elections, these are either frightening times or a time for applause, as the candidates and parties become increasingly skilled at getting around the fund-raising regulations put in place following Watergate.

"We're going into the next presidential election with essentially no rules," says Don Simon, executive vice president of Common Cause, which advocates greater restrictions in fund-raising. "As a practical matter, any kind of money from any kind of source and any kind of amount can be raised and spent by federal candidates."

"We will have a kind of law of the jungle that makes 1996 look tame," says Mr. Simon, who worries that the open floodgates of fund-raising will only increase the influence of wealthy contributors in policymaking.

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Roger Pilon of Washington's Cato Institute, which promotes a libertarian philosophy in government, couldn't disagree more.

"The more money the better," says Mr. Pilon, director of Cato's Center for Constitutional Studies. "As the Supreme Court has said, money is speech. So artificial limits on speech mean less speech, by definition."

In last fall's congressional elections, the use of unregulated "soft" money flourished, especially in tight races. Overall, in the 1997-98 election cycle, Democrats and Republicans raised more than $220 million in soft money, more than twice what they raised four years earlier in the last midterm election.

One expert on campaign finance believes that the Senate probe into the Democrats' fund-raising practices in 1996 has led to even greater use of the loopholes highlighted in the proceedings. "Congressional investigations of soft money in 1996, we think, had the ironic effect of only encouraging additional soft-money fund-raising for 1998," said David Magleby, a political scientist at Brigham Young University in Provo, Utah, earlier this month.

Professor Magleby recently released a report that showed how the two major parties funneled soft money into close congressional races, allowing the parties to bypass the normal limits on donations to federal campaigns.

Soft money, which doesn't have limits, is meant to be used for "party building" activities, such as voter registration and get-out-the-vote drives. But the parties can also legally use this money to pay for "issue ads" that don't directly endorse a candidate, but still have the effect of supporting a candidacy.

In presidential politics, the use of soft money is also getting a big boost. Candidates have discovered they can establish political-action committees (PACs) in states with few or no regulations and take in unlimited donations from contributors that can be spent on ads that indirectly support their candidacies.

Virginia is the No. 1 state for such PACs, earning it the nickname "the Cayman Islands of presidential fund-raising." By the end of 1998, six presidential hopefuls - including some who have already opted out of the 2000 sweepstakes - had set up such funds. Some of the money these funds have taken in is donated to local candidates, but most is spent outside the state.

It remains unclear whether the soft-money-raising by presidential candidates will siphon money away from the national party organizations. So far, the parties are boasting a banner year. "Our fund-raising is actually over budget for the first part of this year," says a Republican official. Between Jan. 1 and Jan. 28, 1999, the Republican National Committee took in $3.9 million through direct mail and telemarketing. Most of those donations, however, will fall under hard-money limits.

The Democratic National Committee had hoped to bring in $1 million during January, and ended up raising $2 million. Analysts attribute that boost to Clinton's impeachment, which was unpopular with the public - and with Democratic donors who viewed the scandal as a partisan witch hunt.

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