Raise Campaign Cash Back Home, Democrats Are Told

When Brian Baird needed more money this fall for his congressional election campaign, he turned to a gimmick typically used to raise funds for schools and churches. Baird, a Democrat, auctioned off a hodgepodge of donated items: a loaf of homemade bread, an afternoon of kayaking, the use of a horse arena for a kid’s birthday party.

The result? Another $10,000 for Baird’s campaign for an open House seat in Washington state.

That may seem like pocket change in an era of million-dollar congressional campaigns. But it represents one of several key strategies devised by Democratic officials at a time when interest groups in Washington, D.C., are sending more of their contributions to Republicans.

Looking ahead to the 1998 midterm elections, the Democratic National Committee has lifted some of the restrictions it imposed on its fund-raising less than a year ago. Centrist Democrats, groping for an alternative to the party’s heavy reliance on labor money, are cultivating a new breed of donors among high-tech entrepreneurs. And the Democratic Congressional Campaign Committee is urging House candidates to do more fund-raising back home rather than schmoozing with political action committee directors in the nation’s capital.

Still, Democrats are fighting an uphill battle against a powerful trend in campaign giving. Contributions to Democrats from business political action committees have taken a nose-dive since Republicans took control of Congress in 1995. That has put Democrats at a growing financial disadvantage and in the politically awkward position of being more dependent than ever on labor for PAC dollars.

“As the Republicans are now finding, it’s easier to raise money when you are in the majority,” said Dan Sallick, a spokesman for the DCCC. “You can raise money in the minority, but you have to work much harder on it.”

Indeed, Democrats have succeeded in raising more money so far this year than they did two years ago. But they are still outdistanced by the Republicans.

According to the Federal Election Commission, the Democrats’ party committees raised $35.1 million in the first six months of 1997. That’s up 25% over the same period in 1995. But it’s far below the $59 million raised by Republicans in the first half of this year.

A big element of the GOP advantage is detailed in a report issued this week by the Center for Responsive Politics, a nonprofit research group in Washington, documenting the big shift of business giving in the last election cycle.

According to the center, business PACs gave 70% of their money to Republicans in 1995-96. When Democrats were in the majority in 1993-94, business PACs split their money almost evenly between the parties.

“The abrupt flip-flop of business contributions is clear proof that money follows power,” said Kent C. Cooper, executive director of the center.

Labor contributions to Democratic candidates, meanwhile, grew from $40 million in 1994 to $45 million in 1996. The increase, which has continued this year, has Republicans clamoring to portray the Democratic Party as a tool of organized labor.

That theme, while used in past campaigns, may have a sharper edge next year because labor has been tarred by allegations that DNC officials and some union leaders participated in an illegal scheme to help finance the 1996 reelection of Teamsters President Ron Carey.

“Big labor is now part of the national Democratic fund-raising scandal splashed all over the front pages of the newspaper,” said Mary Crawford, spokeswoman for the National Republican Congressional Committee. “That has to hurt.”

Some Democrats privately acknowledge anxiety about their party’s ties to the labor movement. Those ties were highlighted this fall by President Clinton’s failure to win House approval of “fast-track” trade negotiating authority, which was bitterly opposed by the unions and House Democratic leaders. “What’s going to happen if there is a wide-ranging union corruption scandal in the middle of the ’98 campaign and every Democrat is leveraged to the hilt with union money?” asked a Democratic strategist who requested anonymity. “And the leadership of the House is undercutting our ability to expand our base.”

Compounding the Democrats’ problems, the DNC is struggling to raise money not only for the next campaign but also to retire a debt of about $15 million, including legal bills arising from multiple investigations of its fund-raising in 1996.

The DNC took one step toward rearming for the political money war last week when it decided to lift a self-imposed $100,000 limit on donations it would accept. The party set that limit in January, when the DNC was neck-deep in controversy over “soft-money” contributions from questionable foreign sources in 1996. But as the party heads into 1998, good-government appearances are giving way to cold-cash realities. DNC spokeswoman Melissa Bonney said Republicans’ strong showing in 1997’s off-year elections showed the hazards of the Democrats’ decision to impose contribution limits on themselves when Republicans have no such caps.

“After we are outspent five-to-one by Republicans in this year’s election, we intend to make sure we are competitive in the 1998 elections by making sure we are playing by the same rules,” Bonney said. “It didn’t make sense to continue sending our players out on the field without a helmet.”

The DNC is considering lifting two other restrictions it imposed in January: bans on donations from legal immigrants and from U.S. subsidiaries of foreign corporations.

Steve Grossman, chairman of the DNC, said he expects Democrats to make up for any drop-off in business PAC donations with increased giving from individual business executives who have been drawn to the party by the more moderate brand of Democratic politics espoused by Clinton and Vice President Al Gore.

“We will try to create a broader base of giving from entrepreneurs all over this country who see in this president and vice president a program they want to support,” said Grossman.

He cited growth of the DNC’s Democratic Business Council, a group of corporate contributors that grew from 300 members in 1993 to 2,000 in 1996. Last year, its members contributed $21 million, or one-fifth of all the money the DNC raised.

Indeed, another analysis by the Center for Responsive Politics shows that increased contributions from business-related individuals to Democratic candidates in 1996 more than made up for the drop in business PAC donations to them.

The New Democrat Network, a year-old group of Democratic centrists, is trying to expand the party’s fund-raising beyond its traditional union base. They hope to tap a new generation of business donors--those who have made their money in computers, telecommunications and other entrepreneurial ventures--who might not be as reflexively Republican as traditional business interests. Going to the heart of Silicon Valley to mine that vein, the New Democrats raised $75,000 at a fund-raiser in Palo Alto in August.

But the effect will inevitably be limited. Simon Rosenberg, executive director of the New Democrat Network, said the group hopes to make $600,000 in contributions to candidates in this election cycle--a pale shadow of the $45 million that labor unions gave to Democratic candidates in 1995-96.

Rep. Martin Frost (D-Texas), chairman of the DCCC, said the best way for House candidates to tap new funding sources is to go back to their districts and home states rather than try to gather more support from interest groups in Washington.

“One of the key ways is more in-state and in-district fund-raising,” said Frost. “When we were the majority party, you didn’t have to do that much of that. Now we’re having to go back to this old-fashioned politics.”

The DCCC has followed its own advice, holding more of its fund-raisers around the country. According to Sallick, about half of the $12 million the party has raised so far this year came from outside Washington. Before Republicans took control of Congress in 1995, Sallick said, the committee raised only about one-quarter of its money beyond the Beltway.

For individual candidates, old-fashioned local fund-raisings, such as neighborhood coffee klatches, spaghetti dinners, or Baird’s auction, have the added political advantage of demonstrating a candidate’s support back home, where the ballots are cast.

But there is a big drawback: It is a lot harder than collecting PAC contributions at $5,000 a pop.

“We’ve gotten so used to going to the PAC community,” said Michael Lewan, a Washington consultant and fund-raiser. “It takes an awful lot of hat-passing to get $5,000. It’s a real disadvantage for Democrats.”