Reform Groups Claim Parties Conspiring to Evade ‘Soft Money’ Ban

W By Thomas B. Edsall

wASHINGTON – Four campaign finance advocacy groups filed a formal complaint Thursday with the Federal Election Commission accusing officials of both parties and two prominent Republican lobbyists of conspiring to evade the new ban on party-raised “soft money.”

The complaint appears likely to become a test of the enforcement of the McCain-Feingold law that went into effect Nov. 6. The political parties and a number of political operatives are openly, and in some cases secretly, forming groups to get around the law and continue the flow of large contributions known as soft money from corporations, unions and the wealthy into federal campaigns.

“The attitude in Washington of some of our elected representatives and the political parties is that there is no sheriff, there is no judge and therefore there is no need to comply with the nation’s campaign finance laws,” said Fred Wertheimer, president of Democracy 21.

The most significant provisions of the McCain-Feingold law prohibit the national parties and federal candidates from raising and spending soft money.

The complaint filed by Democracy 21, Common Cause, the Campaign and Media Legal Center and the Center for Responsive Politics names the Democratic and Republican Congressional Committees; the Democratic National Committee and its chair, Terence McAuliffe; Joseph Carmichael, chairman of the Democratic State Parties Organization (DSPO); the Leadership Forum and two Republican lobbyists, Bill Paxon and Susan Hirshmann, who are forum officers.

Wertheimer contended that the Leadership Forum is particularly vulnerable to legal challenge because it received $1 million the day before the McCain-Feingold law took effect. This puts the forum in direct violation of the prohibition against soft money fund-raising and spending by “any entity that is directly or indirectly established, financed, maintained or controlled” by a national party committee.

A spokeswoman for McAuliffe dismissed the complaint as “completely laughable.” She said it’s based on inaccurate “thirdhand” newspaper accounts, and McAuliffe “had nothing to do with setting up” a new soft money committee.

Separately, a key Republican operative acknowledged Thursday telling a postelection meeting in Florida of the National Association of Business Political Action Committees that “the Leadership Forum would give PACs, individuals, corporations and trade associations an avenue for providing soft money for an entity that at some point may well get involved in political activities at the state, local and federal levels in support of Republican candidates.”

Forum lawyer Randy Evans disputed Wertheimer’s charges. He said the forum, which is a tax-exempt political committee, has separately asked the Federal Election Commission for an advisory opinion on the $1 million from the NRCC, which has been kept in a separate account and which will be returned if the commission rules that acceptance of the money puts the forum in violation of the law.

As the advocacy groups were holding a news conference, PoliticalMoneyLine, a campaign finance Web site, disclosed that a new set of groups filed organization statements with the IRS. They include the American Majority Fund, a tax-exempt group run by prominent Democrats such as Harold Ickes, John Podesta and Morton Halperin. Ickes intends to create a “presidential media fund” to support of the party’s 2004 nominee.

In addition, Christopher Hellmich, a Republican lawyer who has represented the Republican National Committee and the Bush-Cheney 2000 Committee, registered two tax-exempt groups, Americans for a Responsible Government and the National Committee for a Responsible Senate (NCRS). The NCRS is what is called under the tax code a 501c6 committee, which is what top officials of the National Republican Senatorial Committee privately said they were in the process of creating just before the election.

On Nov. 4, three organizations run by Democratic operatives, the Democratic Senate Majority PAC; the PAC for a Democratic House, and Democratic Issues Agenda, filed papers with the IRS. All used the same street address as the law firm that represents the Democratic senatorial and congressional committees.