Funds Misused in Senate Race, Groups Claim

Special donation accounts for Hillary Rodham Clinton and Rudolph W. Giuliani are illegal, two government watchdog groups said in a complaint filed Tuesday with the Federal Election Commission.

Common Cause and Democracy 21 asked the Justice Department’s campaign finance task force to investigate.

The complaint targets accounts set up by the Democratic Senatorial Campaign Committee and the National Republican Senatorial Committee to accept unlimited contributions, known as “soft money,” from unions, corporations and individuals.

Soft money cannot be spent on advertisements that specifically advocate for a candidate but can be used for general issue ads, as well as get-out-the-vote and other party-building activities. However, it increasingly is being used for issue ads that benefit candidates.

Critics say soft money allows candidates to bypass campaign donation limits.

“The campaigns of first lady Hillary Clinton and Rudy Giuliani are thumbing their noses at the federal campaign finance laws and treating the voters of New York as if they were fools,” Democracy 21 President Fred Wertheimer said.

Party officials defended the accounts. DSCC political director Jim Jordan called the complaint “frivolous, disingenuous and utterly without merit.”

But Common Cause President Scott Harshbarger pointed to remarks made by top Clinton advisor Harold M. Ickes, who said the campaign had reviewed and provided input for a DSCC-funded commercial featuring the first lady last year.

The NRSC did not return a telephone call seeking comment. Neither did the Clinton and Giuliani campaigns.

However, the DSCC sought to discredit Harshbarger, a Democrat and former Massachusetts attorney general, saying he received soft money when he ran for governor of Massachusetts in 1998.

Harshbarger said the soft money used in his race was “a completely different kind.”

With seven months to go before the election, the Giuliani-Clinton contest is on track to become the most expensive in New York history. Giuliani has raised $19 million and Clinton $12 million. Recent polls show the two in a dead heat.

Clinton’s New York Senate 2000 account had raised more than $700,000 in soft money by the end of February. The Giuliani Victory Committee was set up just weeks ago and has not reported its contributions yet.