Soft-Money Group Promotes Ties to GOP Leaders Despite Warnings
By Thomas B. Edsall
Washington Post Staff Writer
Sunday, May 30, 2004; Page A08
In a bid to overcome GOP donors' reluctance to contribute large amounts of "soft money," the pro-Republican Leadership Forum has begun promoting its ties to House Speaker J. Dennis Hastert (R-Ill.) and other prominent party leaders.
The Leadership Forum, along with Progress for America, the Club for Growth and the Republican Governors Association, is engaged in a hurried drive to try to catch up with the millions of dollars already raised and spent by pro-Democratic groups.
But Hastert's involvement -- along with that of Sen. Rick Santorum (Pa.), chairman of the Senate Republican Conference -- appears to run counter to a warning issued two years ago by the Federal Election Commission that the group was too closely linked to GOP lawmakers, according to campaign watchdog groups.
Many corporations and wealthy individuals have shied away from contributing to these groups, known as "527s" for the section of the tax code governing their activities -- fearing they might violate campaign finance law. Even after the FEC's May 13 decision to put off adopting tough new regulations on soft-money fundraising and spending, some of these donors have held back.
The forum recently sent out an announcement of plans to revive the organization that was headlined "Leadership Forum Launches Major Effort to Counter Liberal 527s; Speaker Hastert to Headline July 6th Dinner for Forum."
The appearances of Hastert and Santorum at two separate events are designed to assuage concerns of prospective contributors, but their involvement would appear to conflict with the warning issued by the FEC's general counsel to the Leadership Forum in March 2002.
Fred Wertheimer, president of Democracy 21, said, "Speaker Hastert's involvement only serves to give further support to the case that this entity was improperly created by House Republicans, and therefore barred from the soft money game."
John Feehery, Hastert's spokesman, replied, "His participation in this event has been thoroughly vetted by our lawyers and is well within the law and the spirit of the law."
In November 2002, campaign finance watchdog groups filed complaints against the Leadership Forum and other 527s. In the case of the forum, the watchdog groups, including Democracy 21 and the Campaign Legal Center, charged that it was created by the Republican House leadership and that its seed money was a $1 million gift from the National Republican Congressional Committee.
As a result, the watchdog groups charged, the NRCC and the Leadership Forum and its organizers -- Susan B. Hirschmann, former aide to House Majority Leader Tom DeLay (R-Tex.), and former NRCC chairman and now lobbyist Bill Paxon -- were "engaged in an illegal scheme to raise and spend soft money in the 2004 election."
Under the McCain-Feingold campaign finance law, any group financed, maintained, established or controlled by a national party or by federal elected officials is prohibited from raising and spending unregulated soft money from corporations, unions and wealthy people.
The FEC general counsel, Lawrence Norton, recommended that no action be taken against the Leadership Forum. He noted that the involvement of the NRCC and the House leadership with the forum predated Nov. 6, 2002, the effective date of McCain-Feingold; the importance of the $1 million was "diminished" because the forum returned it and the forum appeared to be inactive. The FEC dismissed the complaint.
Norton warned that "if the Forum begins to undertake activities . . . a different conclusion" could be reached. "Thus, in light of the apparent close and continuing ties that persons associated with the Forum have with the NRCC and House Republican leadership, the Forum would do well to ensure that it is thoroughly familiar with the definition of 'directly or indirectly establish, maintain, finance or control,' " Norton wrote, referring to the kind of relationship that would prohibit soft-money spending.
Hirschmann rejected suggestions that Hastert's and Santorum's involvement could endanger the forum's plans. "We don't think so at all," she said, adding that the organization has been established independent of the House leadership and the NRCC. While Hastert and Santorum will speak to prospective donors, the events will not be fundraisers, she said.
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