Wealthy Liberals Give Heavily in Bid to Oust Bush

Faced with a new ban on unlimited donations to political parties, some of America’s wealthiest liberals have given large sums to help finance independent organizations that want to defeat President Bush in November, according to records released by the IRS on Monday.

Major contributors to the groups include philanthropist George Soros, who gave $5 million, and Cleveland-based insurance billionaire Peter Lewis, who donated $3 million. Hollywood producer Steven Bing gave $2 million, and Rob Glaser, chief executive of RealNetworks, a software maker, gave $745,000.

But the groups, known as 527s for the section of the tax code that applies to them, have raised nowhere near the hundreds of millions their organizers predicted, the reports show. Such predictions had led to speculation that the groups would take advantage of loopholes in campaign finance law to become a shadow Democratic money machine.

“There have been a lot of exaggerated numbers floating around about how much ... groups related to Democrats would raise and spend in the 2004 election,” said Fred Wertheimer, president of Democracy 21, a campaign-finance watchdog group in Washington. “The two biggest groups ... announced plans to spend a total of $190 million to defeat President Bush. What these reports show is that to date, they have raised just 8% of that $190 million.”

Democracy 21 has filed a complaint about the groups with the Federal Election Commission, alleging they were created to skirt the ban in the 2002 campaign finance law on so-called soft money -- the unlimited donations to political parties.

Jim Jordan, a spokesman for three of the 527s working to defeat Bush, said the groups still expect to raise the money they had estimated they would.

“We have many millions more in hard, dependable pledges,” he said. “We’re very pleased with our fundraising to date.”

One of the groups Jordan represents, America Coming Together, reported raising $12.5 million in 2003. The group hopes to raise $95 million.

Most of its money has come from Soros and Lewis. Other big givers included Taco Bell heir Rob McKay, who gave $245,000; Rockefeller Family Fund President Anne Bartley, who gave $120,000; and philanthropist Lewis Cullman, who gave $50,000.

A related group, the Joint Victory Campaign 2004, raised nearly $8 million, including the $2 million from Bing. The producer had been among the largest contributors of soft money to the Democratic Party.

The group also collected $900,000 from Houston investor Linda Pritzker; $345,000 from Agnes Varis, a New York chemical company owner; $100,000 from Julie Packard of the Monterey Bay Aquarium; and $95,000 from Laurie David, wife of HBO star Larry David.

Former Clinton aide Harold Ickes, whose Media Fund is part of the Joint Victory Campaign, said, “When we say we’ll hit the $75-million mark, that is cash and hard pledges,” he said.

Bing, for instance, has pledged a total of $7 million, he said, and Soros and Lewis have promised their donations would total $10 million apiece. “People are not going to give it until we have a cash need,” Ickes said.

But even if the groups do raise that money, they face scrutiny from the FEC about how they can spend it.

The commission is expected to discuss the issue this week. The matter came to the forefront when a group with links to the Republican Party set up a 527, then asked the FEC to issue rules about how it could spend money.

The group, Americans for a Better Country, did not file a year-end fundraising report -- it hasn’t raised any money. And Ickes and other Democrats have charged that the group was set up to get a ruling that would severely curtail the political activities of 527s.

“We think it’s completely political,” Ickes said.

Frank Donatelli, a political advisor to the Reagan administration who is counsel to Americans for a Better Country, said of the group: “We were set up to help President Bush and the Republicans in any way we legally can. The [FEC] opinion is a means to an end.”

Last week, FEC officials issued a draft advisory opinion that said, in part, that 527s could not spend money to promote or oppose a federal candidate. But the opinion is not binding on the commission.

“If the draft opinion were enacted word for word ... it would have a profound impact on our operations,” Ickes said. “It might even put us out of operation.”

He added: “We do not think the FEC has the legal authority ... to now change the rules concerning 527s.”