Campaign Finance Fight Not Over

Having Lost on Hill, Opponents Prepare Court Challenge

Advocates of overhauling campaign finance regulations, which Congress approved this week, had every reason to celebrate yesterday. But their battles are hardly over.

Opponents quickly announced a "dream team" of prominent lawyers to challenge the measure in court. And Democrats, who traditionally lag far behind Republicans in collecting "hard money," which will become even more crucial under the new law, are quietly contemplating the abandonment of an earlier reform: public financing of presidential elections.

President Bush says he will sign the campaign finance bill, which will ban unregulated "soft money" contributions beginning next year. Such donations totaled nearly $500 million in the 2000 elections.

Opponents, led by Sen. Mitch McConnell (R-Ky.), aren't waiting for the president to lift his pen. Yesterday they confirmed plans to sue in hopes of overturning the measure. Their lawyers include Kenneth W. Starr, who led the impeachment investigation of Bill Clinton, and First Amendment specialist Floyd Abrams.

Referring to the conservative Starr and more liberal Abrams, McConnell said the six-member legal team's "ideological and political diversity is transcended by their shared commitment as Americans to defend the Constitution."

They will attack the bill's ban on "soft money" and its new regulations on "issue ads" as violations of the constitutional right to free speech. Within limits, courts have ruled that campaign contributions and expenditures are forms of expression or speech.

The two parties have used issue ads to attack candidates, staying within existing laws by stopping just short of specifically calling for someone's defeat. The new law's restrictions on such ads -- which often are financed with money from corporations or unions -- will probably provide the biggest legal target, lawyers on both sides agree.

The measure will apply stringent disclosure rules and contribution limits to TV and radio ads that refer to federal candidates in the final weeks before a primary or general election. Many organizations on the left and right contend this provision violates the First Amendment right of free speech. They cite the landmark 1976 post-Watergate campaign case, Buckley v. Valeo. In it, the court held that Congress could not regulate fundraising or spending with respect to independent issue advertising unless the ads expressly advocated a specific electoral outcome with phrases such as "vote for" or "vote against."

The proposed soft money ban is a more open issue, legal analysts say, because neither Buckley nor subsequent cases directly addressed it.

McConnell's team may challenge other provisions. Most contributions now will be capped at $2,000 per person. But that ceiling is raised to $6,000 in the case of House candidates and $12,000 for Senate candidates running against wealthy opponents who finance their campaigns. Critics say this proves the lower limit is irrational and unfair, because in theory a $6,000 donation is more corrupting than a $2,000 one.

While lawyers draft their plans, campaign strategists in both parties are pondering how to wage the 2004 campaigns under the new rules. Some Democratic activists said their party's presidential hopefuls must give serious consideration to abandoning a tradition: partial public financing of presidential primaries.

Many people consider the public funding arrangement, in which candidates agree to spending limits, as a major reform itself. Rejecting it, therefore, could be a tough sell to pro-reform constituencies that tend to vote in Democratic primaries.

The dilemma facing Democrats is that if they accept taxpayer financing, they will have to comply with a spending limit of roughly $46 million in the primaries. A Democratic presidential candidate who accepts public financing limits may run out of cash in early spring 2004, and then face a six-month drought until the August convention triggers a new release of public funds.

Bush rejected public funding, and the spending limits that go with it, in his 2000 primary bid, and is likely to do so again in 2004. In 2000, Bush raised and spent more than $100 million. In 2004, he is expected to raise much more.

Aside from the public financing dilemma, Democrats also confront the fact that Republicans, especially Bush, excel at raising hard money. And under the new law, hard money will be king.

Terence R. McAuliffe, chairman of the Democratic National Committee, has set a goal of replacing the $100 million in party-raised soft money during the 2000 election with difficult-to-raise hard money. He wants to raise $100 million from direct mail (Democrats raised $31 million in 2000) and $12 million via e-mail donations, instead of the previous $2 million.

McAuliffe, whose selection by President Bill Clinton was widely criticized because of his involvement in controversial fundraising in the past, is now widely viewed as having the skills needed to meet the demands for a massive shift in fundraising strategies. Among other things, the law will put a premium on "bundlers"; that is, people who can persuade scores of associates to write checks of $2,000 each that can be presented to a candidate or party in a stack.

"There couldn't be a better person in the chair; he understands the mechanics of all this," said Charlie Baker, a Boston operative who has held a senior post in every Democratic presidential campaign since 1988.

McAuliffe and other party officials said the law will force political activists to adhere to several new regulations. For example, it will prohibit coordinating activities between presidential campaigns and political parties at the state and national levels.