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Bush, Kerry Awash in Money

Times Staff Writer

This year’s presidential race -- fueled by more than a million donors, including many who have never given before -- is well on its way to becoming the country’s first $1-billion political campaign, experts say.

The money is coming in small donations and large ones, online and in the mail, from wealthy philanthropists and immigrants who can’t even vote. In part, it represents unprecedented interest in the campaign from people throughout the country.

Together, President Bush and his presumptive challenger, Sen. John F. Kerry, have drawn money from 700,000 more individual donors than those who contributed to Bush and Democrat Al Gore in the entire 2000 campaign, according to figures provided to The Times by the three campaigns.

Already, donations to Bush, Kerry and the Democrats who had contested the Massachusetts senator for the party’s nomination have exceeded more than $400 million -- more than double what was raised at this point four years ago.

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By the time it’s all over, when all the money spent by the political parties, state party organizations, independent groups, conventions and the candidates themselves is tallied, several campaign finance experts said the total will be up to $1 billion or more.

“The numbers are phenomenal,” said Anthony Corrado, a campaign finance expert at Colby College in Maine. “Something’s happening here. It’s like the explosion of civic participation in fundraising.”

Experts say several factors explain the 2004 money phenomenon. The contribution limit from individuals was doubled to $2,000, which naturally led to more money in the system. Both Bush and Kerry opted out of the public financing system during the primaries and caucuses, allowing them to raise as much money as possible until this summer’s conventions.

Donors can now give money over the Internet more easily. And the country is politically polarized, which has motivated people to try and give their candidate an edge in a very close race.

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“It’s the perfect political storm for fundraising,” said Terry McAuliffe, chairman of the Democratic National Committee.

That money has translated into extensive television advertising, particularly in the 17 battleground states where the presidential election is being fought most intensely. It’s also paying for voter mobilization drives and hefty fees for dozens of political consultants who strategize, produce ads and conduct polls, as well as to the broadcast stations and networks selling air time.

“You’re definitely talking in excess of $1 billion,” said Dwight L. Morris, who analyzes campaign finance data for news organizations. “It is mind-boggling.”

The thought of a $1-billion presidential campaign shouldn’t bother people, said Ed Gillespie, the Republican National Committee’s chairman.

“When you look at the amount of money spent to get people to vote and participate in the political system,” he said, “it pales in comparison to what is spent to get people to buy toothpaste.”

Not all experts agree on how the billion-dollar figure will break down, but here’s one conservative scenario that would easily put the race near that mark: Bush is expected to raise and spend about $210 million and Kerry, $120 million, including funds designated for legal and accounting expenses. After the conventions, each candidate will receive $75 million in public money for the general election. The rest of the Democratic field has already spent about $160 million, including matching funds.

The RNC plans to pour at least $50 million into the presidential campaign; the DNC is confident it will spend at least that much as well. Another $100 million will be spent on the political conventions. Independent groups known as 527s say they will spend $145 million. And MoveOn.org has announced a $50-million fundraising goal for its political action committee.

That would put the total over $1 billion. And that doesn’t include money spent by other PACs, state political parties and interest groups on the presidential race.

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In the wake of campaign finance reform, the outpouring of so much money -- particularly from individual donors -- has turned conventional political wisdom on its head.

“Everyone’s assumptions have proved wrong,” said Trevor Potter, a Washington lawyer and former chairman of the Federal Election Commission.

The political parties, particularly the Democrats, were expected to be struggling for cash. The McCain-Feingold legislation approved two years ago banned them from receiving unlimited contributions -- known as soft money -- from unions, corporations and individuals. Yet, the Republican and Democratic national committees together have raised $230 million, more than what they collected at the same time in 2000 when soft money was allowed.

Many “thought this party would be wiped out with McCain-Feingold,” said McAuliffe. “Contrary to public perception, we are in the strongest financial position in the history of our party.”

The DNC has $35 million in cash today, compared with the spring of 2000, when it was millions of dollars in debt.

Soft money is still finding a niche in the election through donations to the independent groups, known as 527s after a section of the Internal Revenue Service tax code. Most of those groups are spending unlimited dollars on anti-Bush political advertising and get-out-the-vote programs.

“We are seeing people coming out of the woodwork,” said Ellen Malcolm, president of America Coming Together, one of the 527s.

Donors to both parties feel the outcome of this year’s election is critical -- from the retired Honduran army colonel who has given money to Bush even though he is not a U.S. citizen, to the Hollywood producer who counted more than 200 new faces at a fundraiser she helped put on recently for Kerry.

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“Bush is a great motivator. I can’t stand the guy. He’s ruining our country and everything it stands for,” said Roy Cloud, 45, a wine importer in Washington, D.C. He made his first political contributions this year -- $250 to Kerry and a smaller amount to the MoveOn.org Voter Fund, an independent anti-Bush group.

Castlen Moore, 25, who commutes between her house in Houston and her job at a Washington, D.C. engineering firm, had equally passionate things to say about why she recently contributed $250 to Bush’s campaign. It was her first political contribution.

“Once you donate money to a campaign, you feel connected to it,” Moore said. She’s decided that Americans will be much safer with Bush in office and is encouraging her friends to contribute money to him, even if they can afford only a $15 donation.

Former Vermont Gov. Howard Dean shocked the political world early in the campaign when he raised $30 million in donations in chunks of less than $200 before dropping out of the race for the Democratic nomination.

But like most fundraising records this year, that record has already been shattered. Bush had raised $37 million in donations of less than $200 as of the end of March; Kerry had raised $21.5 million in small donations, according to an analysis by the Campaign Finance Institute, a nonpartisan, nonprofit affiliated with George Washington University.

The bulk of money flowing to both campaigns still comes from large donors such as Ravi Narayan, 45, an accountant in Virginia, who donated the maximum $2,000 to Bush.

Narayan said he gave money “to make a stand.” He supports Bush’s positions on family values and taxes. “Everyone thinks the rich people are supporting Bush,” he said. “I’m a new immigrant,” from India.

Hector Rene Fonseca, a retired Honduran army colonel, donated $2,000 to Bush and raised about $50,000 more on behalf of the president, even though he can’t vote in the election. (As a permanent legal resident, he can give money).

Bush’s position on gay marriage motivated Fonseca to contribute.

“That’s what’s key for me. Being of Latino descent, I do respect the institution of marriage between a man and a woman,” he said.

Allyn Stewart, a Los Angeles film producer and longtime Democratic fundraiser, has hosted two such events for Kerry. Both attracted political novices, including women who had never raised money for a political cause, she said, “moms, entertainment executives, lawyers, architects, truly all over the map.”

She’s surprised by the number of people wanting to donate the maximum to Kerry: “There are a lot of people saying, ‘I want to go to the full $2,000.’ I’ve never experienced that before.”

Louis Susman, Kerry’s national finance chairman, said he has never seen such interest in a presidential campaign: “Every single event I’ve had, I’ve been closed down by fire marshals or there’s not been enough room.”

On Monday night in Minneapolis, thousands of donors packed a cavernous hall and contributed $1 million to Kerry -- double the goal set by the campaign.

The political parties are also benefiting from new money. The RNC said it had a million new donors since Bush took office. And the DNC said it has counted a million new donors since 2001 -- including 800,000 who were identified through direct-mail solicitation.

In Pittsburgh, engineer Lynda Bilec, “a young 63,” gave her first contribution ever to the RNC this year, “because I like President Bush and I don’t like the Democrats anymore.”

She said she donated $50 to the RNC and $50 to the Bush campaign. The campaign thanked her with a note and a picture of the president.

In Atlanta, retired real estate executive Jack Cross, 73, a long-time Republican, said he became so distressed about the Bush administration’s fiscal and foreign policies in January that he donated $25,000 to the DNC, the maximum allowed by an individual.

Giving “money is the only thing I could do,” he said. “My wife was shocked. She said, ‘You’re what?’ ”

Concerned that there wouldn’t be enough money for a Democratic presidential candidate to wage a successful campaign, a small group of wealthy liberals and Democratic strategists met last summer at philanthropist George Soros’ home in the Hamptons to strategize.

Out of that meeting, America Coming Together and other 527 groups were born. These groups fall under IRS regulations, so the money collected is not subject to soft-money restrictions.

In March, the Bush campaign and the RNC filed a complaint with the FEC, alleging that what the 527s are doing is illegal. But donors who were named in that complaint are undeterred.

“In my particular case, it motivated me to give more,” said pharmaceutical company founder Agnes Varis, who donated $995,000 to the Joint Victory Campaign 2004, the fundraising arm of America Coming Together, before the complaint was filed.

“What can I tell you? I come from Brooklyn,” said Varis, 74. “I can’t think of any better act of patriotism than giving to ... get the message out to the American people about what is really going on in this country. We have to take it back in 2004. I have a stake in that at my age.”


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