DNC Tied to Plan to Test Gifts Limits

Democratic attorneys devised a plan to push legal limits on money sent to nonprofit--and supposedly nonpartisan--groups to pay for get-out-the-vote efforts without drawing attention from the Federal Election Commission or the public, documents show.

The plan--outlined in an October 1994 memo marked “privileged and confidential”--called for the Democratic National Committee to transfer “limited” amounts of money to tax-exempt groups that sign up voters or get them to polls on election day. The limit the memo suggested was $500,000.

“Grants of amounts much larger would risk drawing public, press and FEC and/or [Internal Revenue Service] attention,” wrote DNC chief counsel Joe Sandler, who co-authored the memo with assistant Neil Reiff. Larger amounts, he added, also would “raise the inference” that the charitable donations were intended to influence the nonpartisan groups or skirt federal election rules.

But that, one campaign expert said Thursday, appears to be exactly what the Democrats were trying to do. “He [Sandler] knows what he’s doing is shady, so he’s trying to stay out of public view,” said Chuck Lewis, director of the Center for Public Integrity, a Washington-based watchdog group.

“It shows a fairly contemptuous view of the public, not to mention the law . . . “ Lewis said. “You can see right here the manipulation and deliberate deceit that drips off this memo.”

The memo, one of hundreds of White House documents released this week, sheds further light on the Democrats’ quiet strategy of directing money to nonprofit groups that sought to sign up voters in minority communities sympathetic to them. The questions raised in the memo were not whether the party should give money to the groups but rather how much it could give them without attracting unwanted attention.

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In the wake of the Sandler memo, the DNC gave $168,000 to nonprofit groups in 1994, DNC spokeswoman Amy Weiss Tobe said Thursday.

In addition, party and White House officials directed contributions to such groups. Harold M. Ickes, former deputy White House chief of staff, arranged shortly before the November election to steer $250,000 from a donor to Vote Now ‘96, a Washington-based tax-exempt group that works to mobilize black voters. And in July 1996 some 40 top contributors to the group were honored at a White House dinner.

Democratic officials also steered contributors to other tax-exempt groups, known as 501-C3 charities under the U.S. Tax Code. A 501-C3 organization is prohibited by law from engaging in substantial political activity and donations to them are tax-deductible.

On Thursday, Tobe of the DNC acknowledged that the party gave $117,500 to the National Coalition on Black Voter Participation and asked several Democratic donors to contribute directly to the group. The coalition helped register 150,000 African American voters during the “Million Man March” in 1995 and it worked to elect Democrats to Congress in 83 House districts during the last election cycle.

“This group is the oldest and one of the best established groups doing nonpartisan voter registration in this country,” Tobe said.

The subject of political parties giving money to nonprofit groups is a murky area in federal elections law, said former FEC Chairman Trevor Potter. He said that FEC guidelines spell out the types of political contributions that parties can use when paying directly for field activities, such as get-out-the-vote efforts.

But there are no rules when political parties give money to tax-exempt groups that perform the same task, FEC officials said. No guidelines have been promulgated and no one has ever requested an advisory opinion on the subject, they said.

Thus, Sandler was dealing with a gray area when he wrote in his 1994 memo to then-DNC Executive Director Bobby Watson that the party could give tax-exempt voter groups “soft” money.

However, Sandler noted in the memo that “the matter is not free from doubt,” since the FEC’s general counsel had “taken a contrary view.” He concluded by suggesting that the party direct its soft money to the groups but only in amounts that would avoid notice.

In an interview, Sandler said that he was trying to be cautious. Every dollar spent by the Democrats, including donations to nonprofits, is duly reported on FEC forms, he said.

“It’s not a matter of sneaking it by,” he said. “It’s a question of limiting the exposure because of uncertainty in the law.”

Potter, now a private attorney who teaches election law at the University of Virginia, agreed that Sandler was “grappling with one of the many grayer areas of election law.”

But Potter, who chaired the FEC in 1994, said that Sandler appeared to be arguing that “there may be a problem here but that, if we only do $500,000, nobody will know it.”

“I guess it’s an object lesson in why you ought to decide whether it’s permissible or not, rather than whether anyone’s going to find out about it,” he said. “Obviously, he never intended to have this memo read by everybody.”

Added Lewis, of the Center for Public Integrity: “I always thought that that’s what election lawyers did for political parties--find the gray areas and exploit them to their benefit. And it sounds precisely what the Democrats did in this memo.”