Campaign Reform Has the Parties Strategizing

For the 2000 elections, Vinod Gupta, a high-tech mogul from Omaha, donated more than $1.2 million to Democratic Party causes and candidates.

As thanks, he had lunch with President Clinton and a few other big donors at Barbra Streisand’s cliff-top Malibu estate. He hobnobbed with Brad Pitt and other movie stars at a steady stream of parties. Over the years, he has shared his opinions with presidents and with members of Congress.

If the campaign finance reform bill that passed the House last week becomes law, Gupta’s cozy political world will disappear: With unlimited contributions to parties no longer legal, the checks he writes will have to contain fewer zeros, and they probably won’t buy him the same perks.

There will be a new generation of kingmakers under the new rules, but it will not necessarily be those with bottomless bank accounts. It will be those who can get a lot of people to make contributions in sizable but still legal amounts--as much as $2,000 at a time for candidates and $25,000 for political parties.

So Gupta--and others like him--already are reinventing themselves.

“I pick up the phone, I write letters and e-mails, meet friends at gatherings,” Gupta said. “I think what could happen--the people who can raise more money through their network and friends will become more important than someone who can write a large check.”

The campaign finance bill may be close to enactment. The Senate, which passed its own, similar version of campaign finance reform last year, soon will decide whether to accept the House bill. If it does, the measure will go to President Bush, who has given the bill’s Republican opponents no strong reason to hope for a veto.

The measure will jolt the process of running for federal office. Because candidates will have to raise money in smaller amounts, for example, they may have to spend even more time talking up potential contributors than they do now.

But the big donors will feel the shock too. Those who may be able to make an effortless transition from the old world to the new will be the party stalwarts whose Rolodexes are as thick as their wallets.

“Someone who is skilled at raising money is not extremely common. They will be even more valuable friends and allies to have now,” said Bill Carrick, a Los Angeles political consultant. “People who aren’t good fund-raisers but are generous with their own money? That sort of personality will be less influential.”

Bradford Freeman, a Los Angeles merchant banker who is a personal friend of Bush, already has straddled the worlds of big donors and big fund-raisers. Freeman gave $100,000 to Republican candidates and causes in the last election cycle--not bad, but not world class.

Focus Will Move to Networking

But Freeman’s value to his party may lie in what he does best: asking like-minded others to open their checkbooks. During the 2000 campaign, no one was better at asking Republicans for money.

“It’s what I’ve been doing forever,” Freeman said. “You do the network thing. You get 10 guys, who get 10 guys.”

Freeman was spectacularly successful at bringing in checks for hundreds of thousands of dollars. But he also was good at collecting lots of smaller checks.

“We raised $10.5 million for Bush for president in California,” at no more than $1,000 per donor, he said. “It can be done.”

But some big political donors say they are unwilling to remake themselves into fund-raisers.

The almost $200,000 that Trevor Pearlman donated to Democratic Party committees and candidates in the last election cycle gave the Dallas investment banker status as a top contributor. During the 2000 Democratic National Convention in Los Angeles, he and his wife had access to President Clinton, presidential candidate Al Gore and other top party luminaries.

He concedes that he’s unlikely to keep the same company if the rules change.

“I have never raised tons of money. My focus has been giving my own resources,” Pearlman said. “Frankly, I don’t feel comfortable asking people to donate. It’s not something I enjoy doing. Some people are better at it than others.”

Campaigns May Become More Grass-Roots

Pearlman plans to stay politically active, however, and would be willing to fund-raise if he is really moved by an individual candidate.

“I will channel my energy in a different way. Helping with ideas and organization,” he said. “I think it will actually make the campaigns more grass-roots.”

Just as certain kinds of individual donors will thrive in the new campaign finance climate, so will certain fund-raising techniques and skills.

Fussy, high-priced dinners may become fewer. Longtime political hands say these events make far less sense if their high overheads can’t be offset by huge donor checks.

Consider instead a “cyber cocktail hour” where, for a more modest fee, the donor might be urged to pour himself a drink while he poses questions online to a candidate. The ban on “soft money,” the unlimited contributions to national political parties, may accelerate the ascendance of fund-raisers savvy in using the Internet to reach large numbers of people willing to donate--a method that costs a fraction of traditional direct mail and telemarketing.

“Campaign finance reform makes the need to expand your donor base even greater,” said Max Fose, who managed Arizona Republican Sen. John McCain’s highly successful Internet campaign during his 2000 run for the GOP presidential nomination.

Fose said McCain’s success with the Internet, where he earned a quarter of his donations, proved that campaigns could reach illusive, and now even more desirable, independent voters and first-time donors.

“It worked,” he said, “because you’re breaking down the barrier that exists in campaigns where it’s just the same 100 people who volunteer each time.”

In any case, political consultants say the most valuable players will be those with long mailing and e-mailing lists, distribution systems and grass-roots, get-out-the-money networks that are ready to go.

“Doctors, lawyers, car dealerships--any situation where you have a group of people who probably share some political views--being able to tap into those networks will become very, very important again,” said Carrick, a Democratic strategist who helped manage Richard Riordan’s successful 1997 reelection campaign for mayor of Los Angeles. Carrick said corporations would quickly relearn old methods of signaling wishes to their executives.

“Ford Motor Co. would say: ‘We think Sen. Jones is great,’ ” Carrick said. “And everyone would figure out what they were supposed to do.”

Those who want to contribute huge sums probably still will have one recourse. Analysts say the campaign finance bill’s provisions curtailing money spent by private interest groups on issue advertising probably will be struck down in the federal courts as an infringement of free speech. That would enable such groups--from the American Civil Liberties Union to the National Rifle Assn.--to produce their own ads touting a candidate’s position on a particular issue.

And 1st Amendment protections still make it possible for the very wealthy to take their personal message directly to the public with television, radio or print ads, a scenario that makes some political hands uneasy.

Ways to Defeat Spirit of the Bill

“What this bill does is empower these independent groups and wealthy individuals because they are going to control the political playing field,” said a GOP lobbyist who bitterly opposed the reforms. “Right now the parties moderate the message. Anyone who thinks this [the reform bill] gets us fewer attack ads is mistaken.”

Political consultants for the two major political parties predict a whole new class of groups would be created to front political causes and take in the type of big-money checks that reformers have been trying to bury.

Karl Gallant, a former aide to Rep. Tom DeLay (R-Texas), already has created the Republican Majority Issues Committee to raise money and influence elections.

“People are going to find a way to structure an ad so it’s not a negative ad about a politician as described by [the House bill],” he said. “There’s not a way to stop it.”

The prospective loss of six-figure checks from donors like Pearlman concerns Democratic Party organizers, who concede that their ability to take in large, soft-money contributions that could be used for advertising campaigns had made the party less adept at bringing in small donations.

A Need to Appeal to the Little Guy

“We’ll just have to find new ways as a party to appeal to smaller donors,” said Jim Jordan, the Senate Democratic Campaign Committee’s executive director. “We’ve been able to push that aside for the last couple of cycles. We cannot afford to do that now. But we will certainly not come anywhere close to matching the Republican donor base in the near future.”

Anticipating the passage of campaign finance reform, the Democratic Congressional Campaign Committee, which works to elect Democrats to the House of Representatives, has expanded its capabilities of reaching out to large numbers of potential donors by direct mail and the Internet.

“We’re prepared for this,” committee spokeswoman Jenny Backus said. Direct-mail donations were up 30% in 2001, she said, when the committee picked up 150,000 new donors.

At least some major players under the current system said they welcome the change and believe it will be significant.

Alan Solomont, a major donor and fund-raiser for the Democrats and a former Democratic National Committee finance chairman, said he did not think that big corporations and wealthy individuals would find new ways to funnel the same amount of money into the system through creative new means.

“People don’t jump to donate,” he said. “A lot of corporate America has already grown disgusted with this business.”

Gupta, the technology multimillionaire who came to this country from a poor village in India more than 30 years ago, said he will not miss writing large checks of his own to political parties.

“I would rather take that money and donate it to social causes like the women’s school in my village in India.”

Even though Gupta enjoyed the fruits of the old system, he is not sorry to see it on its way out.

“The change is happening,” he said, “because the system is abused.”

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Times staff writers Janet Hook and Alan C. Miller contributed to this report.