Party Goals for Raising Money: ‘Hard’ and Fast

Standing under a full moon, Cher headlined a concert Tuesday in Camden, N.J., drawing 2,500 people to write checks totaling $1 million to the Democratic National Committee.

On Wednesday, James Taylor serenaded 900 donors at a barbecue in Boston, where about $1 million more was raised for the Democrats.

And for the piece de resistance, a collection of performers that could be outdone only by the Grammys will gather tonight at the 6,000-seat Radio City Music Hall to try to push the week’s take to $7 million.

Jon Bon Jovi; Sheryl Crow; Lenny Kravitz; k.d. lang; Bette Midler; Macy Gray; Paul Simon; Crosby, Stills & Nash; and Don Henley, Glenn Frey & Timothy B. Schmit will all pick up the microphone for Al Gore.

The weeklong race for “hard” campaign money, which is mostly what the Democrats were after, is just the newest chapter in the long saga of record-breaking fund-raising for November’s elections.

While it may seem like both political parties are awash in money--indeed, they are--they are also confronted with the fact that in politics, not all money is created equal. Because of a complicated formula embedded in the election laws, the parties need a certain amount of “hard” money--which comes only from individuals and in chunks of $20,000 or less--to be able to spend their “soft” money--huge donations from individuals, corporations and unions--on advertising in the final crunch before the voters go to the polls.

But at this home-stretch stage of the money chase, neither of the parties has enough of the hard stuff, party officials said.

“We never are going to have enough,” said Jennifer Backus, spokeswoman for the DNC.

“The emphasis is on raising hard dollars,” echoed Fred Meyer, chairman of Victory 2000, the Republican National Committee’s money-raising arm. “We need to get as many hard dollars as we can.”

In fact, the hard money crunch, which the DNC and some other Democratic Party committees have felt particularly acutely, is caused in part because these committees are swimming in more “soft” money than ever before.

By the end of June, the Republican and Democratic parties--including their congressional campaign committees--had raised a total of more than half a billion dollars to elect their candidates, according to the Campaign Study Group, a Springfield, Va.-based campaign finance firm. That total--collected from individuals, corporations, unions and interest groups--is 25% more money than the parties raised over the same period in 1996.

Since July, the last time all party committees were required to file reports with the Federal Election Commission, the parties have raised tens of millions of dollars more. On top of that, the presidential campaigns of Vice President Gore and Republican nominee George W. Bush have received almost $68 million each in public funds from the federal government.

But, as this week’s events demonstrate, the mad dash for campaign cash is likely to continue right up until election day.

This unprecedented money flow has kept political ads running for longer periods, and both parties are promising their most aggressive efforts in decades to get voters to the polls on Nov. 7.

“The money is very important,” said Anthony Corrado, professor of government at Colby College in Waterville, Maine, and an expert on campaign finance. “It has provided them the means of conducting permanent campaigns.”

Ironically, the influx of large soft-money donations has put the onus on the parties to collect more checks in smaller amounts from individuals. The law requires that, for most campaign expenditures, the national parties must spend two hard dollars for every soft dollar they spend. The parties can--and do--get around this requirement to some extent by funneling money through their state party organizations to pay for advertising time, but the states also require a hard-soft match, at a ratio more favorable to the parties.

DNC Falls Behind 1996 Hard Money Pace

As of early last month, the DNC was lagging in its hard money accounts--$17 million behind where it had been at that stage of the last presidential campaign, in part because of the disputed primary between Gore and former Sen. Bill Bradley. Current figures for the DNC are not available, but a fund-raiser in Los Angeles last month raised $5.3 million, mostly in hard dollars, and the party has engaged in steady fund-raising since then.

Backus stressed that her party’s finances are in good shape and attributed the earlier shortfall to the other claims on Democratic donors’ dollars--including an aggressive direct-mail effort by the New York Senate campaign of First Lady Hillary Rodham Clinton.

Even the Republicans, who have done much better so far at raising hard dollars, are hunting for more this week. Texas Gov. Bush has attended fund-raisers in Southern California, aiming in part to raise hard money for his party.

By the end of June, the RNC had raised $91.3 million in hard money and $73.9 million in soft. The DNC comparative totals were $51.8 million and $58.8 million. The RNC raised $37.5 million in July--$15.4 million of it in hard money, according to Meyer. The DNC will not release additional fund-raising figures until October.

One goal of Watergate-inspired public funding for presidential campaigns was to relieve the candidates of the need to spend time fund-raising. But Gore and Bush and their respective running mates, Sen. Joseph I. Lieberman and Dick Cheney, all have kept busy in recent weeks attending fund-raisers for their parties.

“We have now come to a system where candidates take public money and yet spend a lot of time raising money for the parties,” Corrado said.

And the parties aren’t the only ones spending money. Interest groups, from labor unions to pharmaceutical companies, are spending tens of millions of dollars, according to some estimates, to elect favored candidates and win support for certain policies and programs.

With the campaigns in full post-convention swing, there is as much emphasis on spending money these days as there is on raising it. The biggest chunk of money will be spent in the few weeks remaining before voters go to the polls. Since the television ad wars started in June, the DNC has spent $35 million and the RNC $25 million to keep issue ads in front of viewers.

State Parties Also Benefit From Efforts

In recent weeks, the RNC also has sent about $10 million to state parties, particularly in key battleground states, for direct mailings, phone banks and other get-out-the-vote efforts and expects to send an additional $25 million to the states before election day, Meyer said.

The parties have engaged in financial acrobatics to avoid the federal requirement that they spend two hard dollars for every one soft dollar. The RNC and DNC both transfer most of their money for ad time to the state parties. Each state has its own ratio for hard-soft money spending, but the average works out to be the opposite of the national rule: one hard dollar for every soft dollar spent.

The parties would much rather go through the financial gymnastics than pay for their ads directly from their national committee coffers.

“You wouldn’t unless you’re stupid,” Meyer said, because the money is so much more dear.

The practice is legal but avoids the intent of the election law, which was to ensure that the bulk of the money spent by the national parties on federal elections came in limited amounts from individuals and political action committees. But now, corporations and labor unions--which are prohibited from contributing directly to federal campaigns--along with wealthy individuals, underwrite much of the federal elections.

“What we have done is found ways for the large fat-cat contributions and corporate contributions that were always considered illegal to play an increasing role in the political process,” Corrado said.

Gore has said that, if elected, he would work to ban all soft money, while Bush has said he would ban large contributions from corporations but not wealthy individuals.

At this stage of the money game, however, hard money is the focus. Republicans, who rely on a network of direct-mail contacts, have traditionally been far more successful than Democrats at raising hard money.

The DNC has an active direct-mail campaign as well, but for the big hauls of hard dollars, the DNC calls on its celebrity friends and rents huge halls where donors get the privilege of seeing the candidates as well as a performance by a superstar.

The $5.3-million fund-raiser in Los Angeles was organized by Barbra Streisand, the event at the Radio City Music Hall, which is also expected to raise about $5 million, was hosted by actors Ben Affleck, John Cusack, John Leguizamo and Billy Bob Thornton, who is also a director, writer and Oscar-winning screenwriter.

Republicans could not help underscoring the irony that in the same week that Gore was calling on the entertainment industry to help him out of his money fix he also called it to task for wooing minors to its violent video games and films.

“If there had been an Emmy Award for brazen hypocrisy this week, Al Gore would have swept the field,” said RNC Co-Chairman Pat Harrison. “He’s the last person who could ask Hollywood to clean up its act.”

Gore spokesman Douglas Hattaway rejected that notion.

“That’s the difference between [Gore] and George Bush,” Hattaway said. “George Bush will take massive contributions from big special interests and do their bidding--like the pharmaceutical industry and oil industries. Al Gore is happy with support from people in the entertainment industry. But he will not hesitate to say if they’ve made a mistake.”