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    Money Talks

    A Questionable Form Of Interstate Commerce

    By Dwight L. Morris
    July 15, 1996

    The now-defunct campaign finance reform bill championed by Sens. Paul Wellstone (D-Minn.), John McCain (R-Ariz.), and Dianne Feinstein (D-Calif.) included a provision that would have required Senate candidates to raise at least 60 percent of their money from in-state residents in order to qualify for reduced advertising and mailing rates. Similar proposals have floated through the House for years and, like the recent Senate bill, have gone absolutely nowhere.

    While such proposals earn their sponsors headlines and kudos from reformers, they are doomed to failure for one simple reason: out-of state money forms the foundation of political empires built by those in key leadership positions and funds the campaigns of many members that represent poorer or less populous states.

    Between January 1, 1991 and March 31, 1996, former House Majority Leader and current Minority Leader Richard A. Gephardt raised $3,550,529 from individual contributors who donated at least $200 to his campaign committee. Sixty-two percent of that impressive total, or $2,216,051, came from supporters who live outside his home state of Missouri. No other House member raised as much from large, individual out-of-state donors.

    During that same period, Gephardt paid Gold Communications Co. of Austin, Texas, $389,742 to orchestrate a massive nation-wide direct-mail fund-raising effort that helped rake in $674,671 from individual contributors who gave less than $200. While it is impossible to say just what proportion of that bounty was raised from Missouri residents, since candidates are not required to report names and addresses of their small donors, it is safe to assume that most of these small donations were generated from the mailing lists he developed during his failed 1988 presidential bid. Adding to Gephardt's dependence on out-of-state money, political action committees (PACs) – few of which represented companies headquartered in the state – poured $2,854,035 into Gephardt's coffers during this five-year stretch.

    Trailing only Gephardt on the list of those who depend on out-of-state donors to fund their political adventures is House Majority Leader Newt Gingrich. Between January 1, 1991 and March 31, 1996 Gingrich raised $2,629,691 from well-healed donors who could afford to write checks of at least $200. Of that total, 56 percent came from people who reside beyond Georgia's borders. While bitterly complaining that the PAC community did not sufficiently support Republican candidates, Gingrich managed to tap those same PACs – precious few of which call the Peach State home – for $1,992,960. A direct-mail fund-raising network that reached out to conservatives across the country helped attract $1,841,779 from small donors.

    Perhaps looking ahead to a future Senate or gubernatorial bid, Massachusetts Rep. Joseph P. Kennedy II has significantly increased his national fund-raising effort over the past five years. In 1992, 62 percent of the $456,146 he raised from his large-donor base came from Massachusetts residents. In 1994, in-state residents accounted for just 45 percent of the $986,012 he collected from those who gave at least $200. During the first 15 months of the current election cycle, Kennedy as raised $906,305 from his biggest individual donors, and 51 percent has come from out-of-state.

    During the past five years, 10 percent of the $2,348,463 Kennedy has raised from his large-donor base has been collected from California residents. New Yorkers have pitched in $183,775, accounting for another 8 percent. Fund-raising trips to Illinois have netted $122,722, or roughly 5 percent of his large donations. There have also been multiple stops in Texas, Florida, New Jersey, Ohio, and Puerto Rico which together have raised another $322,325. While raising $450,348 from PACs, Kennedy's Washington, DC events have generated individual donations totaling $127,951, much of which came from the almost inexhaustible supply of lawyer-lobbyists that populates the nation's capital and its Virginia and Maryland suburbs.

    Driven by his key role in rewriting legislation regulating the telecommunications industry, out-of-state donations accounted for 61 percent of the $1,574,551 in large donations Rep. Edward Markey has collected since 1991. While the Massachusetts Democrat eschews all PAC money, wealthy individual donors who work for telephone companies, movie studios, cable television concerns, and others with a compelling interest in telecommunications deregulation pumped $314,299 into his campaign coffers during this five-year span. Lawyers, lobbyists, and public relations firms – most of whom represent companies with an interest in either jump-starting or derailing telecommunications deregulation wrote checks for $200 or more totaling $415,265.

    Many members who toil in relative anonymity also depend heavily on out-of-state money simply because the states they represent cannot possibly generate the sums needed to fund a modern campaign. During his brief four year tenure (he was defeated in 1994), New Hampshire Democratic Rep. Dick Swett raised $791,517 from his large-donor base. A staggering 84 percent of that total was raised outside the Granite State. Since deciding to seek Rhode Island's 1st District seat in 1994, Rep. Patrick J. Kennedy has raised $756,097 from contributors willing to give at least $200. Out-of-state donors accounted for 82 percent of that total.

    If Democratic Rep. Earl Pomeroy suddenly found himself in the position of having to raise 60 percent of his money from North Dakota residents, he would be extremely hard-pressed to assemble much of a war chest. Harold Shafer, the state's largest single donor, has given a total of only $18,140 to all federal candidates, party committees, and causes since 1991. Warren B. Diederich and Harry Wood, who share the distinction of having given more to federal campaign committees than all but eight of their fellow North Dakotans, have each donated just $8,500 since 1991. There is no money in North Dakota.

    As a result, Pomeroy has turned almost exclusively to out-of-state sources to fund each of his three campaigns. Since 1992, Pomeroy has raised $192,172 from his relatively small large-donor base, $161,752 of which has come from out-of-state. His PAC donations have totaled $1,064,815. Even assuming that every dime of the $328,663 he's raised in small donations came from North Dakota residents, Pomeroy's in-state fund-raising efforts have yielded just 23 percent of the money he's raised.

    What's true for House members who represent states like North Dakota is also true for Senators, as well. During his 1992 campaign to fill the remaining two years of the late Sen. Quentin N. Burdick's term, North Dakota Sen. Kent Conrad raised $2,283,943, including $1,708,368 from PACs. Virtually none of that money came from PACs representing companies headquartered in the state. While his large donations amounted to $459,040, $430,811 of that total , or 94 percent, was raised out-of-state. With small contributions of only $116,535, Conrad raised only 6 percent of his money in-state. That pattern was repeated in 1994, when Conrad won another six-year term.

    With numbers like these, it's not hard to see why many members turn a cold shoulder to any suggestion that fund-raising primarily target their constituents.

    This article originally appeared on the PoliticsNow Web site.

    © Copyright 1998 The Washington Post Company

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