May 9, 2003
Contribution Mistake Underscores Presidential Money Race
By J. Barlow Herget
RALEIGH - There are going to be some bumps in the road for the new campaign finance rules, especially as they work their way to the US Supreme Court, but supporters of presidential candidate Sen. John Edwards recently fell into an old, clearly marked pothole.
An Arkansas supporter told four office assistants that if they would give Edwards a $2,000 contribution, the supporter would reimburse them for their contributions. That’s illegal and Edwards’ campaign returned the money.
A report in "The Washington Post" further noted that Edwards’ campaign had received, according to his March 31 financial statement, 29 more contributions of $2,000 each from similar assistants elsewhere. The federal Justice Department is investigating those instances.
The practice has been illegal for some time, but it’s also politics. Given the pressure to raise millions of dollars for today’s high profile political campaigns, wealthy supporters often bend the rules.
They have the money to give, but they are limited in how much they can give. The new contribution limit is $2,000 per election ($2,000 for primary, another $2,000 for the general election). If you’re a Ken Lay of Enron infamy, that’s tip money for your accounting assistant.
Such supporters often turn to relatives as conduits. It will be interesting, for example, to see if the inquiring press will track down how many minor grandchildren, some babes in arms, are donating $2,000 to Democratic and Republican presidential candidates.
Another practice, popular among business (and government) executives more than their lowly paid secretaries and assistants, is bundling. A Ken Lay, for example, will send word out, preferably not in writing or e-mail, that he is supporting a particular candidate.
A word to the wise is often sufficient, but less subtle executives will let subordinates know that they will be expected to contribute, and someone will shortly be by to pick up the checks. These contributions are "bundled" and returned to the boss or lieutenant who then gives them to the candidate. While the executive's individual contribution may have only been $2,000, the collective "bundle" of much more is credited to his or her fundraising ability.
This is entirely legal and very proper -- if all the contributors truly support their boss’ candidate. Such things do happen.
As noted earlier, ever-higher campaign costs are driving the race for money, which often becomes a measure of a candidate’s success and momentum. "The London Financial Times," for example, commented on the recent financial reports filed by the nine Democratic challengers thusly:
"The first results are in from the so-called ‘invisible’ primary election among Democratic candidates … and there is a surprise winner. John Edwards, the North Carolina senator, outpolled his rivals in the unseemly but crucial contest for cash raised in the first quarter of 2003."
And on the West Coast, the "Los Angeles Times’" headline was "[Sen. John] Kerry Lags Edwards in Fund-Raising." Edwards raised about $7.4 million.
Perception often becomes reality in politics, and Edwards’ achievement is no small matter. But it is very, very early in the 2004 presidential campaign, and Edwards and his Democratic competitors have a long road to travel in fund-raising before they can match President Bush.
The President established himself in 2000 as the champion of fund-raisers. He out-raised and out-spent Vice President Al Gore, $186 million to $120 million in the 2000 election.
According to Time magazine, Bush plans to raise an astounding $200 million for the 2004 campaign in the primary alone. This compares with his father President George H.W. Bush’s campaign war chest of $27 million in the primary election of 1992.
Why would President Bush want to raise and spend $200 million for a primary election in which he will face no serious opposition?
He knows as does his political adviser Karl Rove that what really counts in modern politics is the bottom line amount a candidate can spend on his or her campaign. The odds overwhelmingly favor the candidate who spends the most money.
In the 2002 congressional campaigns, for example, the bigger spender in House races won 95 percent of the time and over 75 percent of the time in the Senate, according to the non-partisan Center for Responsive Politics in Washington. Recent elections in North Carolina showed the top spender winning 85 percent of the time.
Bush, Edwards and the others understandably want those odds in their favor. Until the public clamors for more changes to the current system of campaign financing, look for more bumps in the road when you follow the money.
Barlow Herget served two terms on the Raleigh City Council and is a contributor to "The North Carolina Century."
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