Finance Laws Helping Political Parties' Accounts Overflow

Unlimited 'Administrative' Gifts Free Up Other Money to Go to Candidates

In a campaign year that has shattered all fundraising records in Maryland, corporations, unions and horse-racing interests are pouring money into the coffers of the state political parties in amounts far larger than donors could give directly to the candidates.

The latest filings with the state Board of Elections show that since late 2002, the state Republican State Central Committee has received about $2.15 million from about 1,000 businesses, including Comcast, Lockheed Martin, Marriott and ACS State and Local Solutions, a tech firm that recently won a $110 million contract with the state's Department of Health and Human Services.

A substantial amount of the money raised by the GOP from business interests was through so-called administrative donations, which are not subject to size limits.

That allowed some companies, including Comcast, to give as much as $25,000 one day this fall to the GOP. Since late 2002, Comcast has given $105,000 to the Republican Central Committee and $35,000 to the Democrats, according to the state's campaign finance Web site.

SJ Strategic Investments, a Tennessee company that invests in pharmaceuticals and coal, among other industries, gave the GOP its largest single administrative donation: $75,000 in February.

Democrats reported about $1 million in business and union donations from about 400 contributors. Among the largest was $50,000 from the Maryland Jockey Club, a horsemen's association controlled by Joseph A. DeFrancis, who has a minority share of the Pimlico and Laurel Park racetracks. DeFrancis has been an avid supporter of legalizing slot machine gambling.

Other equine interests, including firms owned by Montgomery County's William Rickman, donated to Democratic and Republican state parties and candidates.

Among the largest union donations the Democrats received was $33,500 from the Service Employees International Union over the past four years.

The Democratic committee has spent more than $90,000 on polling, mailings, television ads and other campaign expenses aimed at helping Democrats statewide but not any particular candidate.

The Republican committee has spent about $620,000, giving nearly $500,000 to pay salaries and expenses to Gov. Robert L. Ehrlich Jr.'s campaign. But the candidate was forced to return it after the state Board of Elections ruled in September that the money could not go directly to his campaign.

Yesterday, an attorney for the GOP state committee said the party is preparing to challenge that ruling.

"We expect the Federal Elections Commission to write an advisory opinion saying that Maryland is wrong," Dirk D. Haire said of the ruling, which was first reported by the Baltimore Sun.

He said that Maryland officials failed to update the laws and election procedures after recent changes in federal election law and that that may account for what he called a flawed decision by the state board.

On their own, the candidates for governor have raised more than $30 million -- $16 million for Ehrlich and $14 million for Martin O'Malley (D), according to reports filed last week. Ehrlich had $2.4 million left to spend and the Baltimore mayor had $600,000.

Maryland law restricts individual and business campaign contributions, but there are several ways to get around those limits. Individuals may donate only $4,000 a candidate in each four-year election cycle and a total of $10,000 to all candidates in a four-year cycle. Political action committees can give $6,000 per candidate per cycle.

But donors can give through separate corporate entities, even if they are owned by the same person or company. Individual family members, drawing from the same bank account, can make separate donations to the same candidates.

And there are virtually no limits on giving to a state party if the donation is marked "administrative." An administrative donation can be used for rent, salaries, office equipment, cellphones and generic polling but not to support a specific candidate, said Jared DeMarinis of the state Board of Elections.

However, administrative funds can have a ripple effect on the overall fundraising, freeing up other money that can be used to directly assist candidates.

Staff researcher Meg Smith contributed to this report.