Second-Guessing Birds of a Feather Flocking Together
By Paul Farhi
Friday, July 30, 2004; Page A21
BOSTON, July 29
Erik Smith spent part of the week at the Democratic National Convention justifying his existence. At official events and after-hours parties, people (well, reporters) would ask Smith a variation on the same question: What the heck are you doing here?
Smith is president of a liberal organization called the Media Fund, which has raised and spent millions of dollars of "soft money" -- large unregulated contributions -- on TV ads bashing President Bush. The organization, partly funded by billionaire George Soros, isn't part of Sen. John F. Kerry's official campaign or of the Democratic Party. Indeed, by law, it can't have anything to do with it. Under the McCain-Feingold campaign finance law, Smith's outfit isn't permitted to coordinate any of its activities with the party, even down to borrowing stamps or swapping staplers.
Hence, the raised eyebrows and guilt-by-association innuendo whenever Smith showed up around town this week. It was the same for three of his allies, Steve Rosenthal, Ellen Malcolm and Harold Ickes, who together run another big soft-money group, a grass-roots voter-registration organization called America Coming Together. ACT is also funded in part by Soros.
"I don't want this to come out wrong," Smith said, "but those who question whether two people who are in the same city at the same time can talk to each other don't know what they're talking about. . . . It's illegal to talk about details or share plans. But I can't walk around the same room with these people? That's silly."
The slightly defensive tone betrays some of Smith's weariness over one of the longest-running, if lower-profile, controversies of this campaign. Republicans have tried to brand the Media Fund, ACT and other Democratic-leaning 527 groups (named for the section of the Internal Revenue code that regulates them) illegal. Although no court or government body has so far agreed with that assertion, independent reform advocates have said the 527s are taking advantage of a gray area in the campaign finance law.
The law bans large direct contributions to the parties and candidates, but it doesn't explicitly address the flow of big checks to groups with close ties to the parties. The law also prohibits direct "coordination" between the official organs of the parties and these independents.
If anything, the convention offered a weeklong display of just how far the 527s can go to push the "coordination" question as they sought to win favor with rich liberals gathered here.
Ickes, for example, spent his days in a suite at the Four Seasons Hotel with Rosenthal, Smith and Malcolm, greeting a steady stream of would-be donors to ACT and the Media Fund. The hotel also happened to be the one used by fundraisers for the Kerry campaign and the Democratic Party.
At night, Ickes took off his fundraiser hat and mingled with other Democrats on the floor of FleetCenter as a superdelegate, representing Washington, D.C. Ickes is also a member of the Democratic National Committee's executive committee, which makes him a party official.
Another 527, the New Democrat Network, has counted New Mexico Gov. Bill Richardson on its advisory board. As chairman of the convention, Richardson could be found gaveling open the proceedings. He also appears in anti-Bush ads aimed at Hispanics that NDN has run around the country.
At one point this week, Rosenthal acknowledged that ACT had hired a phone-bank operation owned by the Dewey Square Group, the Boston-based consulting firm run by several key Kerry strategists.
Such connections make Republicans see red.
How can Democrats not run afoul of the law's prohibition on conveying information between the campaign and the 527s, they ask, when the same people are serving in official and unofficial capacities simultaneously? "You'd have to give yourself a frontal lobotomy not to remember what you'd just heard in the last briefing," says a lawyer familiar with the issue who has ties to the Republican Party. "If you're helping to plan the convention or getting briefings as a superdelegate, you're conveying information illegally."
Like Smith, Ickes gets a little agitated at the suggestion that there's anything questionable about his activities. "We're operating in a totally legal, totally above-board manner," he said.
"Look, we're not defending the system. It's not a system we created. Anyone who wants to come up with a better system and get it through Congress I would applaud. But the fact is, this is a competitive political environment. We're not going to sit back and see this country corrupted by a bunch of people who are running amok and not do anything about it."
In fact, ACT's fundraising is going so well that Rosenthal, the former political director of the AFL-CIO, thinks he can raise $125 million by Election Day, up from a projected budget of $100 million. And, Rosenthal adds, ACT will do so within the boundaries of the campaign finance law.
He recalled recently going to a wedding attended by several prominent figures from the Democratic Party and the Kerry campaign. Everyone, he said, was conscious of the line between the permissible and the prohibited. "It was the only time I've been at a wedding," he said, "where everyone was dancing around each other instead of with each other."
© 2004 The Washington Post Company