Federal Campaign Donors’ Limits Not Being Enforced : Politics: More than 60 contributors exceeded the $25,000 mark, but FEC took no action against them.

More than 60 wealthy donors exceeded the $25,000 annual limit on campaign contributions in the last election, and the Federal Election Commission did not enforce the law in these cases, according to the agency’s own records.

A Times review of FEC campaign finance files found that enforcement of the annual limit on individual donations--a cornerstone of the election reforms enacted after the Watergate scandal of the 1970s--has been so lax that at least 10 contributors appear to have exceeded it with impunity in both 1989 and 1990, and at least three people gave more than double the allowable sum without any repercussions.

The biggest contributor last year was Michael L. Keiser, president of Recycled Paper Products of Chicago, the nation’s fourth-largest greeting-card manufacturer. FEC records show that Keiser made a total of $95,750 in campaign contributions last year--almost four times the federal limit. There is no record that the FEC ever asked him to explain his actions. Efforts by The Times to reach Keiser for comment were unsuccessful.

Not all the contributors whose names appear in FEC files as having given more than $25,000 would necessarily be found guilty of violating federal elections laws. Some of them are likely to be victims of reporting errors and other commonplace glitches in the complex campaign finance disclosure system.

But critics contend that by failing to investigate any such cases, the FEC is sending a signal to rich campaign contributors that there is no reason to worry about violating the law.

“The fact that the FEC refuses to act in these cases is a disservice to the system,” said Ellen Miller, executive director of the Center for Responsive Politics, a think tank devoted to campaign finance reform. “It means there is no deterrent at all.”

FEC Commissioner Joan R. Aikens, asked why violators of the $25,000 limit are almost never brought to justice, said her agency, which has a budget of nearly $19 million for the current fiscal year, does not have the personnel to monitor contributions by individuals.

“There are parts of the law that we consider more serious,” Aikens said. “We have to focus our resources on the violations of the law that we consider more egregious. . . . We do monitor (individual campaign contributions) to a certain extent. But we have found that it is not as widespread a violation as others.”

Aikens said the FEC depends primarily upon public disclosure of contributions to act as a deterrent to would-be lawbreakers. She noted that some news organizations have publicized the names of violators over the last year, prompting several public interest groups to file FEC complaints against them. The Times last year named nine persons who had exceeded the limits in 1988, and the citizens lobbying group Common Cause asked the FEC to investigate many of these cases.

But there is no evidence that the FEC has ever fined any of the people named in these complaints, and FEC officials refuse to discuss specific cases. “These cases have disappeared into the deep, dark recesses of the FEC,” said Miller, whose organization has filed complaints against 15 contributors who appear to have exceeded the limit.

Even contributors of more than $25,000 who come to the attention of the FEC have little or nothing to worry about. Not only are the penalties relatively mild, but most people escape punishment by agreeing to “reallocate” their contributions--assigning them to other years--or by requesting a refund from the recipient of the contribution long after the election is over.

Under the federal campaign laws, the FEC is empowered to negotiate civil fines of up to $5,000 for unwitting violations and up to $10,000 for willful violations. But few contributors have ever been fined for exceeding the $25,000 limit, and the penalties in the rare cases where this provision of the law is invoked are never more than a few hundred dollars.

Ironically, the FEC’s super-secretive approach to these cases and its lax enforcement also deprive innocent contributors of an opportunity to clear their names after widely publicized complaints have proved to be unfounded.

For example, after the Center for Responsive Politics filed a complaint last June against five persons, including Joseph J. Bogdanovich of Rolling Hills, Calif., chairman of Starkist Foods Inc., attorneys for Bogdanovich persuaded the agency that he had been the victim of an “accounting error” by the Democratic Senatorial Campaign Committee.

The FEC did not investigate the matter, according to David Lawson, spokesman for Bogdanovich. Nor did the agency make any public statement clearing Bogdanovich.

Of the more than 60 contributors whose reported annual donations add up to more than $25,000 in the last election, The Times found that they generally fall into one of two categories:

--Elderly persons--usually Republicans--with little grasp of the federal campaign laws, who are extremely vulnerable to persistent, high-pressure money appeals from aggressive fund-raising organizations. Virtually all of these elderly donors made numerous, multiple contributions to the National Republican Senatorial Committee.

Although elderly donors make up no more than a quarter of this group, Aikens said the FEC is reluctant to enforce the $25,000 limit because the commissioners do not want to penalize such people. “I don’t want to send these people to jail,” she joked.

According to sources, the Republican Party has strongly urged the FEC to ignore these violators because they are such loyal supporters of the GOP.

--Successful business people who are seeking access to influential members of Congress, sometimes with the objective of influencing legislation that would affect their business interests. Unlike the elderly contributors, these donors usually have the benefit of expert legal advice on the intricacies of federal election laws.

These wealthy business executives are the very campaign contributors that Congress had in mind when it rewrote the federal campaign laws in 1974, in the midst of the Watergate scandal, in order to restrict the giving by individuals to $25,000 a year. Indeed, the law was intended to limit contributors’ ability to influence the political process.

Included in this group of contributors during the last election, according to FEC records, were William Lerach, a San Diego attorney; Marvin Schwan, chief executive of a Minnesota food manufacturing and distribution company; Richard M. DeVos of Grand Rapids, Mich., president of the Amway Corp.; Frederick W. Field of Los Angeles, film producer and heir to the Marshall Field fortune, and John P. Camp, a Washington lawyer and lobbyist.

When contacted by The Times, many of these big contributors said they were either unaware of the $25,000 limit on campaign contributions or had failed to keep track of the checks they were writing to congressional candidates. None of them said they were ever contacted by officials of the FEC regarding their contributions.

“I haven’t been paying enough attention to that,” conceded Camp, whose law firm of Camp, Barsh, Bates & Tate represents such corporate clients as Exxon, Arco, Citgo, Shell, Texaco, K mart and Southland. “We clearly have an inadvertent violation. We didn’t have the slightest intention to violate the rules. . . . This means that you can give a good deal less to candidates than most of us appreciated.”

Lerach has a similar explanation: “I just started to give money in the 1989-90 election cycle,” he said. “I’m a little confused about these cycles. . . . Obviously, if you put all the numbers together, they appear to be over the limit.”

Others, such as DeVos and Schwan, said that all of their contributions were intended to be made jointly with their wives. Under the law, every individual must give separately, or joint checks must be signed by both spouses. Each spouse may give up to $25,000.

John Bode, a spokesman for Schwan, said the Minnesota executive’s contribution checks were co-signed by his wife, but he cannot explain why all of these gifts were reported to the FEC as having come solely from Schwan.

A spokesman for DeVos acknowledged that his boss failed to comply with the letter of the law. “Mr. DeVos thought as long as they were on a joint checking account, they would be split evenly,” he said.

In almost every case, these big contributors vowed to take steps to remedy these apparent violations. DeVos said he already has contacted the FEC in response to a complaint filed against him by the Center for Responsive Politics. Camp said he will ask some of the recipients of his donations to allocate them to future years, then notify the FEC.

Stanley Hirsh, a Studio City garment manufacturer, told The Times after consulting his accountant that he could easily prove to federal officials that “we’re completely clean.”

Roy H. Cullen, owner of Quintana Petroleum of Houston, has written a letter to the Republican Party asking that half his contributions be credited to his wife.

Some donors accuse the recipients of their money of erroneously reporting some of their contributions to the FEC. Lerach, for example, said the Democratic Senatorial Campaign Committee inaccurately reported to the FEC a $20,000 contribution that he had made to the group’s “soft money” fund.

Soft money is the term commonly used to describe contributions that escape federal restrictions because they are funneled through state party committees for such things as voter registration campaigns. Reformers have been trying for several years to persuade Congress to close this loophole in the law, arguing that soft-money contributions undermine the federal limits on campaign contributions.

Unlike those business executives who were anxious to correct FEC records, most elderly contributors who were contacted by The Times seemed unperturbed by their excess campaign contributions. The wife of one such contributor confided that her husband “is not always aware of what he is doing--sometimes he forgets.”

Typical of the elderly contributors was Polly M. Stone, 93, a Republican and widow of the late Stanley Stone, owner of the Boston Store chain in Milwaukee, Wis. Her political contributions during 1990 included 23 checks, ranging from $250 to $2,880, to the National Republican Senatorial Committee and the Republican Senatorial Inner Circle.

Her lawyer, Dudley Godfrey, said Stone is “perfectly capable” of making her own decisions about political contributions. “She’s able to write a check; she’s not incompetent,” Godfrey said. Officials of the National Republican Senatorial Committee say they cannot explain why so many elderly Republicans such as Stone have been writing so many checks to the group, sometimes two in one day. Committee sources say contributors are often bombarded with repeated direct-mail appeals for money, but an NRSC spokeswoman, Wendy Burnley, insisted that these big donors seldom receive more than two letters a year.

Most party committees make little or no effort to inform contributors about the limits on campaign donations, and Aikens said the law does not require that they do so.

Aikens said that in response to pressure from Common Cause, the Center for Responsive Politics and other groups, the FEC commissioners recently discussed the possibility of beefing up their enforcement of the $25,000 limit, and the staff was directed to conduct a study to determine how much it would cost. But Aikens sees “very little likelihood that this will be entered into the budget.”

Excessive Campaign Contributions

Contributors exceeding $25,000 federal limit, according to FEC:

NAME CITY 1990 1989 Michael L. Keiser Chicago $95,750 $24,000 William Lerach San Diego $58,000 $16,000 Marvin Schwan Marshall, Minn. $51,655 $23,650 Mrs. Stanley Stone Milwaukee, Wis. $49,220 $17,555 Roy H. Cullen Houston $42,800 $26,055 Elsie H. Hillman Pittsburgh $39,820 $19,250 Arthur B. Belfer New York $36,880 $39,615 Satiris Kolokotronis Sacramento, Calif. $39,500 $ 2,000 Stephen Schutz La Jolla, Calif. $39,500 $20,000 Joseph J. Bogdanovich Long Beach, Calif. $38,950 $31,000 Susan Schutz La Jolla, Calif. $38,500 $20,000 Charles Harrington Wilmington, Del. $38,280 $20,126 Stanley Hirsh Studio City, Calif. $38,100 $30,000 Kuei Yu Kings Park, N.Y. $21,990 $38,050 Henry J. Casey Portland, Ore. $37,725 $25,250 Bennett Lebow New York $37,500 $20,000 Norman V. Kinsey Shreveport, La. $37,350 $24,250 John P. Chase Boston $30,340 $37,330 John C. Camp Washington, D.C. $36,328 $ 8,998 Henry H. Slack Peapack, N.J. $21,500 $36,000 Mary C. Bingham Glenview, Ky. $35,900 $15,750 Elinor Goodspeed Washington, D.C. $35,830 $10,350 Mrs. Wesley West Houston $34,525 $20,335 Maura Morey Tiberon, Calif. $34,500 $26,600 A. D. Hulings Bayport, Minn. $34,300 $18,000 Roger Milliken Spartanburg, S.C. $33,400 $13,000 Frederick W. Field Los Angeles $32,750 $13,825 James R. Houghton Corning, N.Y. $32,500 $13,750 Morton Mandel Shaker Heights, Ohio. $ 5,500 $32,500 Henry J. Evertt New York $32,200 $22,000 Robert N. Rose New York $ 5,000 $32,000 Steven Grossman Chestnut Hill, Mass. $31,000 $26,450 Richard Devos Sr. Grand Rapids, Mich. $30,750 $24,340 Cloud L. Cray, Jr. Atchison, Kan. $30,240 $23,740 Edith Everett New York $30,000 $ 5,250 Vonnie M. Davidson Los Angeles $29,840 $ 0 John C. Whitehead New York $29,500 $ 5,000 Mrs. Julius E. Pierce Miami $19,500 $29,275 Geraldine Lebow New York $29,250 $20,000 Lewis Rudin New York $29,140 $28,000 Robert Morey Tiberon, Calif. $28,000 $20,250 John Torkelsen Princeton, N.J. $28,000 $20,000 James F. Keenan Aiken, S.C. $ 4,500 $28,000 Susie Field Los Angeles $27,750 $21,000 Joseph C. Canizaro New Orleans $27,750 $10,000 John Kluge New York $27,750 $ 1,000 Yong C. Kim Fremont, Calif. $13,000 $27,575 Monty Hundley New York $ 1,000 $27,500 Harvey Friedman Miami $27,450 $ 7,265 Mark B. Dayton Wayzata, Minn. $22,750 $27,100 Richard J. Dennis Chicago $22,000 $27,000 Phillip B. Rooney Hinsdale, Ill. $26,975 $25,000 Hamlet T. O’Hanian Los Angeles $21,455 $26,769 John Mascotte New York $26,750 $20,000 Mrs. R. H. Hargrove Shreveport, La. $26,567 $11,320 Albert J. Dwoskin Fairfax, Va. $26,100 $18,500 Paul Tudor Jones New York $26,000 $24,000 Jerome Kohlberg, Jr. New York $26,000 0 Ernest Hubbell Kansas City $25,895 $20,970 Robert Rubin New York $25,750 $21,000 Diane T. Macarthur Bethesda, Md. $25,475 $19,000 Ellen St. John Garwood Austin, Tex. $25,417 $18,650

Source: Los Angeles Times computer study of Federal Election Commission records