DNC Lagging Behind ’96 in Fund-Raising

Amid a record-breaking flood of money to both major political parties, one organization is struggling to match its fund-raising pace of four years ago: the Democratic National Committee.

The DNC, host of this week’s national convention, stands alone among the six national fund-raising committees in failing to surpass its frenetic 1996 finance efforts. Through June 30, the DNC has collected $110.6 million in total contributions--a 12% drop compared with the first 18 months of the last presidential election.

The falloff could mean trouble for the Democrats and their certain presidential nominee, Al Gore, as they compete with GOP nominee George W. Bush and the Republican Party in an expensive television ad war during the weeks before the election. Much of the money generated by the DNC is spent on advertising and party-building activities in support of its presidential nominee and other Democratic campaigns.

The drop in DNC contributions is particularly striking given that it occurred during a period of prolonged economic prosperity that has fueled an escalation in political giving to campaigns and candidates nationwide.

“If you look at where the economy is and where the other party committees are, they should be doing much better than they are,” said one prominent Democratic strategist who declined to be named.

In-House Competition Also an Issue

The DNC also faces serious competition from a new front: the first family. President Clinton and his supporters are busy raising large sums for his presidential library in Arkansas and his legal defense fund, and First Lady Hillary Rodham Clinton is aggressively soliciting Democratic donors for her U.S. Senate bid in New York. Together, these ventures have goals exceeding $165.2 million.

After a lackluster 1999, the DNC has scrambled in recent months to try to close the gap with its GOP counterpart. The party is now flush with an unprecedented $35.1 million in cash on hand for the fall campaign. DNC officials say that since Gore emerged as the Democratic presidential front-runner earlier this year, the DNC set a record for both first-quarter revenues and a single event--a gala tribute to Clinton in May that yielded $26.5 million.

But the Republican National Committee still has a distinct advantage over the DNC when it comes to money in the bank: $63.4 million at midyear. Contributions to the Republican National Committee have jumped 21% thus far to $165 million, according to an analysis of federal election records by the Campaign Study Group of Springfield, Va.

Among the reasons cited by Democratic leaders for the DNC’s slow start: Gore was locked in a tough primary battle until early this year; the belated involvement of the party’s fund-raiser-in-chief, President Clinton; disarray within the DNC organization; and sudden competition from the Democratic congressional campaign committees. Some also attributed an initial lack of aggressiveness to fallout from the 1996 Democratic fund-raising scandal.

DNC Chairman Edward G. Rendell conceded that the committee is trying to recover from woeful fund-raising returns during 1999. He said the DNC is lagging in “hard-money” donations, the tightly restricted individual contributions of $1,000 or less, as opposed to the unlimited, unregulated “soft-money” checks from wealthy individuals, corporations and unions. Federal law requires parties to use at least 65% hard dollars in most of their spending for advertisements and other party work.

“We were behind the eight ball,” Rendell said. “You know how bad our fund-raising was until this year. We didn’t keep apace. Now we’re on our way.”

Indeed, with the party’s House and Senate campaign committees bringing in money at a furious clip, the Democrats find themselves in striking distance of the GOP during an election year when the White House and control of the House and possibly the Senate are all up for grabs.

The three major Democratic committees garnered a total of $222.7 million from Jan. 1, 1999 to June 30, 2000. The Democratic Congressional Campaign Committee coffers swelled 185% to $60.7 million, and contributions to the Democratic Senatorial Campaign Committee soared 135% to $51.4 million. Overall, the Democrats’ total was up 31% compared with the same period four years ago; the Republicans enjoyed a 21% increase.

The DSCC, with $27.4 million in cash on hand, and the DCCC, with $37.4 million, exceeded their Republican counterparts, nearly neutralizing the GOP edge in available funds.

Although these figures bode well for the Democrats’ hopes of retaking control of the House and possibly the Senate, the GOP still enjoys a comfortable edge with $308 million raised through June 30. The National Republican Congressional Committee’s total increased by 32% to $86.6 million; the National Republican Senatorial Committee gained slightly to $56.2 million. Congressional Republicans also raised $15.4 million for their House-Senate Dinner Committee, which helps elect GOP candidates.

The higher congressional totals for both parties were driven by skyrocketing soft-money fund-raising. This is the first time that these committees are planning to spend substantial sums on so-called issue ads on behalf of hotly contested House and Senate races.

Republicans, with more deep-pocketed donors, have historically raised more money than Democrats.

DNC National Chairman Joe Andrew made light of the Democrats’ traditional fund-raising disadvantage on Sunday afternoon in the bustling convention hall, when a Democratic organizer announced at a delegate briefing that someone had lost a money clip.

“That’s how you know it’s a Democratic money clip,” Andrew quipped to the crowd. “There’s no money in it.”

The DNC largely offset this disadvantage in 1996 through the vigorous efforts of Clinton, in particular, and Gore to generate huge amounts of soft money. But this campaign also came back to haunt the DNC when it had to return millions of dollars in foreign or tainted contributions, and some of its controversial tactics became the focus of investigations.

Clinton, McAuliffe Picking Up Steam

In 1999, by contrast, the DNC did not have the luxury of a president seeking reelection without primary opposition and was so slow to rev up its fund-raising that some activists feared it would be unable to compete in the costly television ad wars.

In response, Clinton, still a gold-plated draw, and his close friend Terry McAuliffe, a rainmaker nonpareil, became active this year. McAuliffe spearheaded the spectacularly successful Clinton tribute for the DNC in Washington and was drafted as chairman of the Los Angeles convention when plans for it fell behind schedule. Previously, the pair had been focused primarily on raising funds for the other Clinton causes.

Fred Wertheimer, a longtime advocate of campaign finance reform, said he expects the Democrats to be significantly outspent at the presidential level for the first time since the post-Watergate campaign finance system was established after the 1972 election.

He said that the high-powered “pioneers” who raised a record $90 million-plus for Bush largely from individual contributors limited to $1,000 during the GOP primary are now soliciting huge soft-money donations from well-heeled supporters and corporations.

“The Bush operation should be able to at least double the Gore operation in this election,” Wertheimer said. “In a very close election, that could well make the difference.”

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Miller reported from Washington and Shogren from Los Angeles. Times staff writer Jeff Leeds contributed to this story.

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WORKERS UNITE

Unions are pouring money and effort into electing Al Gore, whom they view as their best option in the election. U1

HAIL DEMOCRACY?--The bosses gave us Franklin D. Roosevelt, Harry S. Truman and John F. Kennedy; primaries gave us everybody since. B7

GOING HOLLYWOOD--

What if the Democrats hired Tinseltown’s best and brightest to produce a blockbuster convention script? E1