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  •   Senate Campaign Cash Diverted to N.Y. GOP

    By Blaine Harden and Charles R. Babcock
    Washington Post Staff Writers
    Wednesday, February 19, 1997; Page A01

    Some donors who wrote sizable checks last year to a national campaign committee headed by Sen. Alfonse M. D'Amato (R-N.Y.) thought they were giving money to help elect Republican Senate candidates across the country.

    But without their knowledge – and, in many cases, to their chagrin – a healthy chunk of that money was diverted to state and local races in D'Amato's home state. Democrats reeling from charges of improper presidential fund-raising were quick to criticize the practice, reported in yesterday's New York Times.

    Despite the uproar, however, other Democrats acknowledged that their party has done the same thing as the National Republican Senatorial Committee (NRSC) chaired by D'Amato. The Democratic Senatorial Campaign Committee transferred $2.8 million to state and local candidates in the last election cycle, including $1.6 million to state candidates in California. D'Amato's GOP panel earmarked $5.9 million for local candidates, with $2.3 million going to state candidates in New York, including D'Amato's close ally, Gov. George E. Pataki (R).

    D'Amato, at a Washington news conference, strongly defended the money-shifting. But the controversy threw a spotlight on yet another strange wrinkle in the handling of "soft money," or donations to the political parties that are supposed to be used for party-building activities. Unlike contributions to candidates, which are limited to $2,000 for a primary and general election, there are no limits on soft money donations to the committees. And committee chairmen such as D'Amato have great leeway in spreading this money around.

    Thus, donors to D'Amato's Senate fund-raising panel had no idea that $275,000 of their money was being funneled to James S. Gilmore III, a Republican running for governor of Virginia. Among those whose checks were transferred to local candidates, according to the Times, were cosmetics executive Ronald Lauder, Goldman Sachs, US West Communications, Paine Webber Group and Morgan Stanley.

    "What we did was done this year by both parties," D'Amato told reporters. "I think we have to set the record straight. What we did was not only within bounds, it was absolutely necessary. We're not looking to spend more money on state and local races than we have to. This idea that this is somehow close to the line . . . is just not the case."

    The shifting of money from the national to the state level is but one ingredient in a confused cauldron of questionable fund-raising practices from the 1996 campaign that are likely to be examined next month by the Senate Governmental Affairs Committee.

    In a letter to Sen. Fred D. Thompson (R-Tenn.), the panel's chairman, the New York Democratic Party yesterday asked that D'Amato's "highly questionable" money transfers be investigated as part of a "bipartisan, fair and even-handed investigation" of fund-raising abuses. Democrats fear that the primary focus of Thompson's committee will be improper fund-raising in the campaign to reelect President Clinton.

    "It is an exceedingly complicated, almost Byzantine structure that [the Republicans have] created here. Contributors who thought they were writing a check to elect a U.S. senator were in fact contributing to candidates in the state," said Faith Hope, New York's Democratic chairman.

    Under federal election rules, the parties can use soft money to help pay part of their administrative costs. If they choose to do so, they are required to spend the same ratio of funds on non-federal candidates – a requirement that both parties cited yesterday. The GOP committee steered 35 percent of its soft money to state and local candidates.

    Mark A. Miner, a spokesman for Virginia's Gilmore, said it is important that the state's governorship stay in GOP hands this year. "The Gilmore contributions came after the federal election cycle was over. This was surplus cash that was available, this was money given after the election cycle," Miner said.

    Paul Johnson, executive director of the Democratic Senate committee, said his group raises soft money because "we do have an interest in building a farm team of future Senate candidates, in having a healthy Democratic Party at all levels."

    But Johnson said the Republican committee's $1.9 million transfer to Pataki, which D'Amato has acknowledged ordering, was more than the Democrats spent last year in any single state.

    Asked if New York state candidates received a disproportionate share of the money, D'Amato said that the allotment was "based upon party effort." Those state parties that produced the strongest participation in the election cycle received more money, while in other cases "there was little participation."

    He said he saw no comparison between the NRSC's activities and the questionable fund-raising practices of the Clinton White House and the Democratic National Committee. "This is an open book; this is not an analogy between people who make illegal contributions," D'Amato said. "This is apples and oranges . . . an attempt by some to attempt to establish that this is wrong. . . . They're doing this for their own demagogic purposes."

    Still, the money-shifting surprised and disappointed some well-heeled donors who thought they were giving money to maintain a Republican majority in the Senate, not to help D'Amato-backed candidates in New York.

    "I gave the money openly. There wasn't any subterfuge. I wanted it to go to the National Republican Senatorial Committee. It was not my intention for the money to go to Mr. Pataki's campaign," said William R. Jordan, a urologist from Fayetteville, N.C., who last year wrote a $50,000 check to the NRSC.

    Jordan said he had no idea that his money had gone to New York until he was called last month by a reporter.

    "I am not going to give money again unless I have some assurance about what is going to happen to it. I certainly feel like my wishes were not complied with," Jordan said.

    Ann McBride, president of Common Cause, which is lobbying for a ban on soft money, said D'Amato "has developed a very sophisticated Laundromat." She said he raised money for one purpose and then sent it to his home state "where it will clearly in the future help him politically. And in the process disclosure and limits get lost."

    McBride challenged the rationale of Senate and House campaign committees in raising non-federal money at all. "What is the NRSC doing in the business of raising soft money?" she asked. "Their sole job is to elect Senate candidates. There is no reason or rationale why they should be in the business."

    Kent Cooper, a former Federal Election Commission official who is now director of the Center for Responsive Politics, a group that tracks political money, said: "Anyone who wants to gain favor with Senator D'Amato doesn't care how he makes out the check. The reason for giving and D'Amato's reason for receiving is to give him more power. Money provides that power. It doesn't provide a voice for those who can't contribute."

    Staff writer Guy Gugliotta contributed to this report.

    © Copyright 1997 The Washington Post Company

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