For GOP, money to burn; for Democrats, debts to pay
If the GOP is a rich entrepreneur hoping its wealth will help it to the top, then the national Democratic Party is a consumer hard pressed to keep up with its MasterCard bills.
The two parties' August financial reports tell the story. Both are folders about an inch thick, on file at the Federal Election Commission. The Republican National Committee's (RNC) has page after page of expenditures - everything from
The Democratic National Committee, by contrast, lists page upon page of debts. The DNC owes almost $4 million, including a $162,500 bank loan personally guaranteed by chairman Charles Manatt, vice-chairman Ann Lewis, and other party officials.
A close look at these folders helps illustrate what the parties have been doing to gear up for the '84 elections. It also demonstrates how, in the words of Wayne State University political scientist David Adamany, the GOP ''has been successfully making the transition to the cash economy of the new politics,'' while the Democrats struggle to catch up.
At the national level, both the Democratic and Republican Parties have three main branches: the central command and two affiliated committees that fund Senate and House contests. The Democratic National Committee, for example, is downtown here, on Massachusetts Avenue, while its sidekicks, the Democratic Senatorial Campaign Committee and Democratic Congressional Campaign Committee, share office space near the Capitol.
It's no secret that these Democratic committees are poorer than their Republican counterparts. In August, the Democratic Party spent $2,678,917; the Republicans, $15,216,017.
''The Republicans' major problem is figuring out legal ways to spend their money,'' says Gary Jacobson, a political science professor at the University of California at San Diego.
Both parties spend about 70 percent of their funds on a line item labeled ''operating expenditures'' by the Federal Election Commission (FEC). For the most part, these are the routine expenses of party politics, such as phone calls , fliers, and political consultant salaries.
One of the DNC's larger expenses for August, for instance, was the $49,051 it paid Capital Mailing Services for postage. The committee's phone bill for the month was at least $10,000. Craver, Mathews, Smith & Co., political consultants helping the Democrats build direct-mail fund-raising lists, was paid upwards of Shining Sea, at 2313 Wisconsin Avenue, was also paid $209.40 for a ''meeting.'')
The RNC's operating expenses were similar - although on a somewhat larger scale. The Republicans had one postage bill of $146,794. American Telemarketing, a company in Vienna, Va., was paid $100,000 in August for fund-raising assistance. The GOP did seem to have more computer-related expenses than the Democrats. Template Inc. of New York City received $32,000 on Aug. 9 for ''software''; Communications Corporation of America was paid $240,000 for ''computer services.''
(Among other GOP expenditures were $4,000 paid to former Interior Secretary James Watt for consulting, and $54 for an exterminator.)
One area where the Democratic National Committee does outdistance the Republicans is in debt. The RNC lists no outstanding loans. The DNC owes $3,944, 999.03, and it made $475,000 in loan payments during August.
But the Democratic Party has long had a hard time paying off its bills - in part because of its generosity. After the divisive 1968 presidential campaign, the DNC promised to pay off the debts of primary candidates Robert Kennedy and Eugene McCarthy, as well as those of nominee Hubert Humphrey.
DNC financial reports still list these debts (Eastern Airlines is owed $67, 000 for Mr. Humphrey's air travel, for instance), although the party purchased an annuity in 1982 that will eventually pay them off.
''We don't owe on those anymore,'' says DNC spokesman Terry Michael. ''The insurance company does.''
Most of the Democrats' current active debt was incurred for the party's ill-fated 1983 Memorial Day telethon. The party's August financial report lists page after page of guarantors - big contributors, politicians, and party officials - who in effect co-signed the loans to pay for production of the telethon. One loan, $162,500 borrowed from the National Bank of Washington, is backed by the personal credit of DNC officials themselves, from chairman Manatt down to at least one administrative assistant.
''All those guarantor loans stem from the telethon,'' Mr. Michael says. ''We have paid down a lot on them, though.''
The parties' relative fiscal positions can also be seen clearly in the way they ship cash out to congressional candidates and state parties.
Both Republican and Democratic committees spend little on traditional, direct contributions, since federal law places tight caps on such giving. The GOP sent House and Senate candidates $381,355 in checks during August. Democratic committees contributed $196,664.
But there are more sophisticated ways to get money to candidates, and it is in these ways that the Republicans far outdo their competition.
Consider ''coordinated expenditures,'' money the party spends on such items as polls and commercials in conjunction with candidates. Federal law on this spending is relatively loose, and GOP coordinated expenditures in August were $2 ,474,443 - almost equal to the Democratic Party's entire budget for the month.
The Democratic coordinated spending for August was $250,430.
''In many ways, coordinated expenditures are better from the party's point of view than direct giving. They have more control over where the money ends up,'' notes Professor Jacobson of UCSD.
Through astute use of coordinated expenditures, the GOP (or the Democrats, if they have the money) can foot 25 to 50 percent of the bill for a House or Senate candidate, Jacobson estimates. He says this party support can make a crucial difference in a tight race.
Says Ceci Cole, an official of the National Republican Senatorial Committee: ''We expect to give the legal maximum to all Senate races.'' She says the total cost of these contributions will be about $8 million.