Vol. II, No. 16 Capital Bits & Pieces
Note to the Media
New "shadow committees" tied to the Democratic senatorial and congressional campaign committees and designed to evade the new law banning soft money are being formed today, one day before the new law takes effect, according to an article in today's Washington Post.
They are joining other "shadow committees" that have already been formed by both major parties in a blatant attempt by the parties and their leaders to continue the corrupt soft money system as if no new law banning soft money had been enacted.
According to the Post article, "these new committees are being created with full knowledge of, and advance clearance by, the House and Senate leadership, including top Democrats who led the fight for passage of the McCain-Feingold measure prohibiting the national parties and candidates for federal office from raising and spending soft money."
"We intend to challenge the efforts by the parties and their leaders to blatantly and massively evade the new soft money ban in every available legal forum," said Democracy 21 President Fred Wertheimer.
"The Washington political establishment is used to arrogantly ignoring the nation's campaign finance laws, with the collusive help of the failed Federal Election Commission, the agency that is suppose to enforce these laws," Wertheimer said.
"We are determined to stop this long standing practice. Law abiding Americans should demand that the nation's elected Republican and Democratic leaders comply with the new anti-corruption soft money ban, just as these leaders expect all citizens to comply with the country's laws," Wertheimer said.
Enclosed for your information is the article that appeared in today's Washington Post about the "shadow committees" being created by the national parties to evade the new campaign finance law. Also enclosed is an editorial from today's Washington Post about the new soft money ban which takes effect on November 6, 2002.
Washington Post
November 5, 2002
Campaign Money Finds New Conduits As Law Takes Effect
By Thomas B. Edsall
With the McCain-Feingold campaign finance law taking effect tomorrow, top Republican lobbyists and Democratic operatives are putting finishing touches today on shadow organizations designed to evade the intent of the law and continue the flow of unregulated "soft money" into presidential and congressional campaigns.
These new committees are being created with full knowledge of, and advance clearance by, the House and Senate leadership, including top Democrats who led the fight for passage of the McCain-Feingold measure prohibiting the national parties and candidates for federal office from raising and spending soft money.
All the party committees, the Democratic and Republican national, Senate and House campaign committees, are engaged in setting up one or more special conduits for soft money, according to reliable sources, with each operating under varying degrees of secrecy.
"May a thousand flowers bloom," declared a Republican legal specialist who would like to see as many soft money options emerge as possible so that financial backers can put money into media, get-out-the-vote and other election activities of their choosing. In 2000, party committees raised and spent nearly $500 million in soft money, and they are on track to beat that record this year.
The new law goes into effect tomorrow, and it faces immediate court challenge with briefs to be filed tomorrow in accelerated proceedings that will put the McCain-Feingold bill before the Supreme Court within months.
New committees with ties to the Democratic senatorial and congressional campaign committees will register with the Federal Election Commission today, sources said.
In addition, Harold Ickes, who was an aide to President Bill Clinton, will take responsibility for a special "presidential media" soft money committee, several Democratic sources said. A Republican group called the Leadership Forum, run by two prominent GOP lobbyists, has already registered with the Internal Revenue Service, and officials at the National Republican Senatorial Committee say they are helping form soft-money committees that under tax law will not have to disclose who gives money or how the money is spent.
Sen. John McCain (R-Ariz.), the lead sponsor of the campaign finance legislation, vowed to "fight these activities in the courts, in Congress, wherever we have to."
The Democrats are generally setting up committees to channel the controversial large, unregulated donations from corporations, unions and rich people that are required by law to disclose their sources of money and how they spend it on advertising, voter registration or other political activities. Most Republican strategists are creating groups that are not required to disclose the sources of money or how it is spent. "That's a no-brainer. Most donors don't want their names in the paper," said one Republican.
A new GOP committee to channel soft money to House campaigns has been set up by two prominent lobbyists, former representative Bill Paxon (R-N.Y.) and Susan Hirschmann, a former aide to House Majority Whip Tom DeLay (R-Tex.).
Paxon, vice president of the Leadership Forum, has 51 clients including drug companies, Japanese banking interests, the chemical industry and waste disposal companies. Hirschmann, the president of the committee, works in a firm with a list of lobbying clients very similar to Paxon's.
In its registration with the IRS, the Leadership Forum said it would "engage in nonfederal political activities on state and local levels and to engage in dialogue on issues of importance to all Americans."
A number of Republican lawyers who are not directly involved in the Paxon-Hirschmann venture said the two lobbyists are opening themselves up to a host of potential legal difficulties because the McCain-Feingold law sets severe restrictions on the ability of those tied to soft-money groups to communicate with federal officials, the essence of lobbying work.
"I don't know what Bill is up to, but he is going to have Fred Wertheimer on his back demanding depositions explaining every conversation he has with any congressman. He and Hirschmann have clients who pay them to talk to the leadership. How can they put that at risk?" said one Republican election-law specialist. Wertheimer runs Democracy 21, which is one of the leading advocates of the McCain-Feingold bill and which has gone into court to force tough enforcement.
The Republican chairman in a major state volunteered: "I hope Paxon and Hirschmann help my candidates, but there is no way I'll talk to them. I'm not going to spend my days in court explaining who said what when and where."
Neither Paxon nor Hirschmann returned phone calls. In addition, two other people are listed on the Leadership Forum IRS filing: Julie Wadler, president of Epiphany Productions and former deputy finance director of the National Republican Congressional Committee, and J. Randolph Evans, an Atlanta lawyer who declares on his Web site that his clients include "the former and current Speaker of the United States House of Representatives, Newt Gingrich (R-Ga.) and Dennis Hastert (R-Ill.)." Wadler and Evans did not return phone inquiries seeking comment.
Many of those involved in creation of soft-money groups declined to provide detailed specifics on the record, for fear of legal challenges by Wertheimer, Common Cause and other groups that support campaign finance legislation. "It would be unfair to my clients," pleaded one source.
© 2002 The Washington Post Company
Washington Post editorial
November 5, 2002
Weaseling on Reform
THE COMPOSITION of the next House and Senate may or may not be clear tonight. But one aspect of the political landscape was supposed to be clear on the morning after the election: a fundamental change in the rules for financing federal campaigns. The campaign finance reform law passed in March takes effect tomorrow. Its sponsors aimed to change a corrosive system with open and offensive links between donations and access to officeholders. But Democrats and Republicans, enabled by the spineless Federal Election Commission, have been working to undercut the reform even before it takes effect, in part by creating new vehicles for raising and spending soft money. Their efforts fly in the face of the reform's intent.
This year the parties have been raking in the soft money more shamelessly than ever. Through Oct. 16, according to the FEC, each party had raised more in soft money for this election cycle than for the last, which included a presidential campaign. Republicans had reported roughly $222 million in soft money donations, Democrats about $200 million. In both cases the parties' soft money contributions more than doubled since the last midterm election cycle, the FEC reported. Voters in districts with closely contested House or Senate races saw the impact as national parties poured resources into direct mail and "issue" ads that pounded away at candidates' records.
It was public disgust with this kind of money campaigning that finally moved Congress, after a seven-year fight, to pass the reforms. The bill was never going to take money out of politics, but it was rightly aimed at putting more distance between big givers and federal decision-makers. To achieve even that requires lawmakers to stand up for the spirit of the law for which they voted and to demand that their parties do the same. Real reform will also require a revamped and strengthened election agency with the independence and authority to enforce the campaign laws, rather than a desire to undermine them.
© 2002 The Washington Post Company
