csua.org/u/9r7 -> www.sfgate.com/cgi-bin/article.cgi?file=/c/a/2004/10/20/MNG789CNP21.DTL
Politics Page Republican groups championing President Bush are fast catching up with De mocratic organizations in exploiting a loophole they once railed against that allows them to raise and spend huge political donations. Though Republicans avoided using the tactic for months, new filings with the Internal Revenue Service show they are now raising almost as much mo ney -- about $45 million the past three months -- through the loophole as the De mocrat-affiliated groups. Still, the Democrat-leaning groups, which began using the independent com mittees earlier, have raised much more money during the campaign. The largest contributions to the Republican groups are from Bush's networ k of well-heeled donors. Their donations, of as much as $5 million per d onor, dwarf the amount that would otherwise be allowed under campaign fi nance laws that ban unlimited donations. Among those donors are Stockton-area developer Alex Spanos, who owns the San Diego Chargers football team, and Jerrold Perenchio, the former chie f executive of the Univision television network in Los Angeles. The money is being used to buy television advertising time in key battleg round states such as Iowa and Ohio, mostly for ads attacking Democratic presidential nominee John Kerry. Known as 527 committees for the IRS code section that governs them, these groups operate outside the political system -- with little oversight -- raising and spending as much as they like to air advertisements and reg ister voters. The lack of oversight makes it difficult to gauge exactly how much is bei ng spent to influence the presidential race. Estimates, however, show th at Democratic 527 groups, which have been more successful in attracting huge contributions from wealthy donors such as New York fund manager Geo rge Soros, have raised at least $141 million so far. But the new figures show the Republican groups, who once derided the tactic as an evasion o f campaign finance laws, are quickly gaining ground and have raised an e stimated $73 million overall. "The Democrats were first out of the gate," said Stephen Moore, president of the Club for Growth, a conservative anti-tax group that has raised $ 77 million through its 527 group and has aired TV ads attacking Kerry. "The Republicans very stupidly tried to prevent the George Soroses of the world from giving money," he said. "That didn't slow down the liberal g roups, and it had a chilling effect on Republicans, and that gave them a three-month lead. "There was no question that if Republicans got into this, they would be v ery successful," said Derek Willis, an analyst with the group. With dono rs who can give such large amounts, "it'll get you caught up in a hurry. " Democratic operatives who were criticized for creating 527 groups see a d ouble standard in the Republicans' new embrace of the tactic. org, one of the first liberal groups to start a 527 fund. "When they we re behind, they said it was illegal, and now that they figured out how t o make it work for them, they're all for it." In just three months, the Progress for America Voter Fund, the largest Re publican-oriented group, raised $283 million, its filing shows. The group has spent more than $25 million on air time in contested states and announced this week it will spend $14 million to air a TV ad called "Ashley's Story" featuring a 15-year-old Ohio girl who lost her mother in the World Trade Center attack. The ad shows Ashley hugging Bush at a campaign rally and saying, "All he wants to do is make sure I'm safe." While Democratic groups have also been running TV ads, they have devoted more money to the "ground game" -- voter registration and get-out-the-vo te operations, hoping a surge of new voters will help elect Kerry. America Coming Together, the largest of the Democratic groups, says it ha s registered 450,000 new voters, while its partner group, America Votes, said it had registered more than 2 million new voters. The Bipartisan Campaign Reform Act, passed by Congress in 2002, was suppo sed to have cracked down on unlimited contributions by corporations, lab or unions and wealthy individuals by placing strict limits on how much p oliticians and political parties can raise and spend. But a loophole in the law known as McCain-Feingold for its sponsors, Repu blican Sen. Russ Feingold of Wisconsin, has allowed outside groups to continue to raise unlimited don ations and spend them on all manner of political activity. The only rest riction is that, in their communications, they cannot expressly advocate the election or defeat of a particular candidate. Democratic groups were among the first to begin using the loophole aggres sively. org, the Media Fund and America Coming Together started 5 27 committees that could take in unlimited contributions. Just months ago, the Bush-Cheney campaign decried the Democratic groups a s "illegal soft money from wealthy special interests" and filed a compla int against several of them with the Federal Election Commission, the U S agency that regulates campaigns. Bush has criticized 527 groups as "bad for the system" and has pledged to work with McCain to crack down on them. Yet in a recent solicitation letter to potential donors, the GOP group, P rogress for America Voter Fund, said: "We must catch up to the funding c ampaign of George Soros and those who are on a mission to defame the pre sident's agenda, but with your help we can beat them at their own game!" Brian McCabe, president of Progress for America Voter Fund, said his grou p began its fund-raising effort only after the Federal Election Commissi on announced in May that it would not rule on the legality of the 527 gr oups until after Nov. Of the fund's $32 million, $10 million came from just two people: Dawn Ar nall, the wife of Ameriquest Corp. chairman Roland Arnall, and Spanos, w ho each gave $5 million. Perenchio, the former Univision chief, was among the first donors to the fund, with a $2 million contribution earlier this year. Perenchio and the Arnalls are so-called Pioneers for Bush -- people who h ave pledged to raise $100,000 in political donations from others and del iver them in "bundles" to the campaign. Spanos is a "Ranger" for the cam paign -- someone who has pledged to raise $250,000. By contrast, the maximum individual donation that can be given to a presi dential candidate is $2,000. Perenchio, Spanos and Dawn Arnall all failed to respond to requests for c omment for this story. Moore, of the Club for Growth, said his group sought a broad array of don ors to try to match the huge donations from well-heeled Democrats. All the groups say they do not coordinate their efforts with the campaign s, which is illegal. But their spending is clearly plotted to echo the c ampaign's themes and to air in swing states where the candidates are loo king for an edge. Moore said his group had run several anti-Kerry ads depicting the Democra t as a flip-flopper -- a Bush campaign line of attack -- including one c ommercial portraying Kerry as a rooftop weather vane pushed by the polit ical winds. "We all believe the candidates can do their own 'pro' ads."
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