Givers, Getters Hesitant About Fund-Raising

The recent barrage of revelations about the dark side of campaign fund-raising is having a chilling effect on the bustling business of getting and giving political money, lawmakers and fund-raisers say.

Some members of Congress have canceled or postponed glitzy fund-raising events. Others have rigged up new safeguards against shady contributions. Some corporations are having second thoughts about political giving. And a deep pall has been cast over lawmakers and lobbyists who are living in fear that even their legal political transactions will be splashed on the front pages of newspapers.

“There’s no doubt about it, this has certainly put people on their best behavior,” said Tony Bullock, chief of staff to Sen. Daniel Patrick Moynihan (D-N.Y.), who recently canceled a fund-raiser in deference to the current climate. “It has a chilling effect and, frankly, it ought to. People ought to be careful.”

To be sure, there is still plenty of fund-raising and business as usual going on--from the special events both parties stage for big donors to the meat-and-potatoes fund-raisers that clutter every lobbyist’s evening calendar. But much of it is being conducted with a new level of self-consciousness and defensiveness.

“There is no question that there is a paranoia, a fear going through people who work in this town,” said a lobbyist for major corporate interests who asked not to be identified by name.

Intense Scrutiny Expected to Worsen

It is too early to tell whether all the unflattering light on fund-raising will drive away donors permanently or have a lasting effect on how politicians raise and manage their money. But for now, politicians and fund-raisers are anxiously struggling to navigate what seems like a sea change in what is acceptable in the world of money and politics.

“The legal rules of the road are very clear, but the standards that are going to be applied are changing,” said Mark Mellman, a Democratic pollster. “Things that were never commented on or newsworthy all of a sudden are subjects of front-page stories.”

The source of the anxiety is the steady drumbeat of publicity being given to campaign fund-raising practices that range from the illegal to the questionable to the merely unseemly: contributions from foreign sources to the Democratic National Committee, aggressive fund-raising tactics by Vice President Al Gore, the use of White House perquisites to reward donors, the lavish wining and dining of big contributors by both political parties. And scrutiny will only intensify in coming months as Congress gears up House and Senate investigations of congressional and presidential fund-raising activities.

The effect has been to make many politicians more sensitive to even the appearance of impropriety and to send them scrambling for ways to keep their distance from the roiling controversy. Most of the heat has been felt by Democrats, but the anxiety is spreading even among Republicans. “The nervousness level is way up,” said Sen. John McCain (R-Ariz.).

Moynihan, who is up for reelection in 2000, had planned a March fund-raiser to kick off his campaign. But he sent a letter to supporters in February canceling the event--”in view of the current discussions of campaign finance reform, which I favor.”

Congress Members Taking Precautions

House members and senators up for reelection in 1998 might not have the luxury of forgoing fund-raisers, but some are trying to avoid inviting criticism. Senate Minority Leader Tom Daschle (D-S.D.), a vocal proponent of campaign finance reform, recently canceled a posh fund-raising event he had planned this month in California’s wine country. After the event received some negative publicity, Daschle called it off, pleading the need to tour storm-damaged areas in South Dakota. He rescheduled the fund-raiser for later this year--in his home state.

“Senators who are raising money this spring are going to be more interested in doing low-visibility events in their states than high-visibility, glitzy, big-ticket events,” said Anita Dunn, a Democratic media consultant.

Rep. William M. Thomas (R-Bakersfield) recently canceled a fund-raising breakfast sponsored by the Health Insurance Political Action Committee after he realized that it was scheduled for the same day he planned a hearing on an issue of great concern to the group. An aide to Thomas insisted that the move was not driven by the controversy over fund-raising but was in keeping with the representative’s past policy of avoiding such conflicts.

Mellman, the Democratic pollster, said he knows of several other members of Congress who have quietly postponed fund-raisers. “It’s not because they think there is anything wrong but because they are uncertain of the standards that are going to be applied to them,” he said.

Many members also are taking new precautions to make sure that the contributions they collect are on the up-and-up. Several have returned donations from contributors who have come under scrutiny for questionable donations to the Democratic National Committee from foreign sources.

‘It Gives Some Contributors Pause’

California’s two Democratic senators, Barbara Boxer and Dianne Feinstein, both recently have set new policies of refusing to accept contributions from legal immigrants--even though such donations are legal. Both are going to ask donors to certify that they are U.S. citizens.

Boxer also has decided against accepting political action committee donations from U.S. subsidiaries of foreign corporations.

The controversy also has made many lawmakers more diligent in checking the sources of their contributions.

“There’s no question this is going to produce a substantial alteration in people’s behavior,” said Sen. Bob Kerrey (D-Neb.), chairman of the Democratic Senatorial Campaign Committee. “They will be a lot more careful.”

Some Democrats are worried that the controversy will also have a particularly chilling effect on their party’s donors, who may be reluctant to contribute if they believe it will get them embroiled in embarrassing publicity and messy congressional investigations. “It gives some contributors pause,” said Sen. Richard Durbin (D-Ill.).

One Democratic senator has heard complaints from contributors who have been called by reporters questioning their donations. “That’s not gone over real well,” said an aide to the senator.

DNC National Chairman Steve Grossman and other Democratic Party officials have said that they see no signs now of donors holding back. “I’m not concerned at all that our fund-raising will be harmed,” Grossman said. “In fact, out major donors, our principal fund-raisers and other people who play leadership roles are energized, excited and ready to get going on a substantive fund-raising plan.”

“It’s having some effect, but you can’t tell how it will ultimately play out down the road,” Frost said. He added that his campaign committee is trying to counter the potential drag on fund-raising with a more aggressive effort to get outside of Washington and stage unconventional events, like fund-raisers at baseball games.

Much of the recent controversy has focused on big contributions of “soft money”--donations from corporations and labor unions that are unlimited because they are given to political parties rather than to particular candidates.

Michael Lewan, a lobbyist and Democratic fund-raiser, says he has advised his corporate clients not to contribute soft money--and has even suggested that they get their boards to adopt policies prohibiting them from making soft-money donations.

Another lobbyist for a big soft-money donor said that the company is rethinking its donations policy. “I don’t know any company that is not rethinking its giving policy,” he said.

Others are skeptical that many donors will pull out of the money game if they think it will put them at a political disadvantage. Candice Johnson, a spokeswoman for the Communications Workers of America--one of the top soft-money contributors to the Democratic Party--said that the union would continue giving soft money as a way to counterbalance the giving power of the wealthy. “Giving soft money is a legal way to supplement activities supporting the issues that working people care about,” Johnson said.