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    Money Talks

    The Soft Money Trail

    By Dwight L. Morris
    December 12, 1996

    The recent Lippo scandal set off a mini-hurricane of outrage in the closing days of campaign '96 because the suspicion of foreign influence in U.S. internal affairs. But if the Lippo money is considered problematic because of the alleged effect it may have had, several unions and American-based companies – big names like Philip Morris, Glaxo and Seagram – have been blazing the contribution trail for years. In so doing, they've rendered post-Watergate reforms, which were supposed to have made it impossible for a few wealthy individuals to dominate the political process, ineffective.

    Over the past 23 months, nearly 400 corporations, labor unions, and individuals have donated buckets of cash worth at least $100,000 in so-called soft money to the Republican National Committee and the Democratic National Committee. It is nothing but the latest sad chapter in the increasingly insane chase for political contributions.

    The contributions have sometimes come at a price: Since late September, the DNC has been forced to return roughly $1.5 million that it illegally raised from foreign donors, individuals who could not substantiate the true source of the money they donated, and other corporations and individuals who provided money deemed "inappropriate." And the DNC has been forced to kick back illegal contributions of $100,000 or more to four donors.

    Overall however, the enrichment has far outweighed the negative effects: Nearly 200 contributors have managed to legally join the DNC's $100,000 club for the 1996 election cycle. Together, these major benefactors have poured $32.9 million into the committee's coffers, accounting for 38 percent of the committee's soft money receipts from all individual, organized labor, and corporate donors during the past two years.

    The following report details contributions by companies, unions and individuals to the DNC and RNC.

    Democrats

    Since January 1, 1995, the Communications Workers of America have pumped $985,500 into the DNC's treasury. Miramax Films Corporation has added $552,500. Revlon has ponied up $542,250 over the past two years. Arnold Hiatt, former chairman of Stride Rite Corporation and current chairman of the Stride Rite Foundation, wrote one check for $500,000 – the single largest individual contribution to the DNC. Integrated Health Services Inc., a nursing home concern headquartered in Maryland, has contributed $460,000. Edgar M. Bronfman Jr. has given $435,000, and as president and chief operating officer of Joseph E. Seagram & Sons, he also undoubtedly had a great deal to do with that firm's decision to donate $260,000 to the DNC's cause.

    Joining the Communication Workers of America on the roster of national labor organizations donating at least $200,000 in soft money to the DNC are the Laborers' International Union of North America ($443,900), United Food and Commercial Workers ($371,000), American Federation of State, County and Municipal Employees ($369,000), National Education Association ($277,900), American Postal Workers Union ($260,000), International Brotherhood of Electrical Workers ($240,500), International Association of Machinists and Aerospace Workers ($220,000), Sheet Metal Workers International Association ($220,000), Service Employees International Union ($216,500), American Federation of Teachers ($215,500), and National Association of Letter Carriers ($200,200). Three other labor unions have weighed in with donations of at least $150,000.

    The DNC has raked in huge sums of soft money from Hollywood, including $336,023 from producer Steven Spielberg, a $275,500 corporate donation from Walt Disney, $240,000 from television producer Haim Saban, $234,500 from Gail Zappa, the widow of rock musician Frank Zappa, $225,000 from former MCA chairman Lew Wasserman, and $205,127 from David Geffen, Spielberg's Dreamworks partner.

    Soft money has flowed to the DNC from telecommunications giants MCI ($380,960) and AT&T ($271,704). Atlantic Richfield and Occidental Petroleum have forked over $205,000 and $184,600, respectively. Bernard L. Schwartz of Lockheed Martin has spearheaded the defense contingent with donations of $370,000 while United Technologies Corporation has written soft money checks totaling $176,900.

    Wall Street is well represented among the DNC's roster of soft money high rollers. Dirk Ziff, co-chair of Ziff Brothers Investments, has donated $380,000 since January 1, 1995. Lazard Freres managing director Felix G. Rohatyn has donated $300,000. Corporate contributions from Ernst & Young have amounted to $166,435. Goldman, Sachs & Company chairman Jon S. Corzine has contributed $162,500, while two of his lieutenants, Robert B. Menschel and Barrie Wigmore, have each given $100,000.

    Perhaps rewarding President Clinton for his veto of legislation that would have limited damages in product liability cases, the Association of Trial Lawyers of America contributed $300,000 to the DNC's soft money account. Milberg, Weiss, Bershad, Hynes & Lerach, a San Diego law firm active in the fight to stop Republican efforts to limit such damage awards, donated $150,000, and coupled with individual donations by three of its partners – Melvin J. Weiss ($250,000), William S. Lerach ($90,000), and David J. Bershad ($40,000) – the firm pumped a total of $530,000 into the DNC's soft money pot. Four partners in Nix & Associates, a law firm that stands to collect millions of dollars as a result of its victory over Dow Corning in a landmark breast implant class action lawsuit, donated a total of $410,000.

    Republicans

    Even without the added fund-raising pull of a Republican in the White House, the RNC's $100,000 soft money fund-raising club for the 1995-1996 election cycle numbers 200, and by the time the final counting is finished next month, it will probably climb still higher. These 200 individuals, companies, and unions have contributed a total of $32.5 million, accounting for approximately 42 percent of the RNC's soft money receipts. Among this august group of donors, tobacco is definitely king.

    Angered by administration efforts to regulate tobacco as a drug, Philip Morris has poured $1,413,349 into the RNC's coffers, easily making it the committee's top soft money donor. With contributions totaling $584,725, R J Reynolds Tobacco Company ranks third on the RNC's soft money list, and if the $100,000 donated by the firm's New York-based food processing subsidiary, RJR Nabisco, is included, the company grabs the second spot by a wide margin. Connecticut-based United States Tobacco has written checks to the RNC totaling $348,703, earning it ninth place on the committee's soft money honor roll. The Tobacco Institute and Brown & Williamson Tobacco have given $151,300 and $132,500, respectively.

    The RNC also proved to be the political committee of choice for the nation's pharmaceutical industry, led by Eli Lilly's soft money donations totaling $364,985. Undoubtedly thrilled with the party's staunch opposition to Clinton's healthcare reform proposals, Bristol-Myers Squibb, Glaxo Wellcome, and Pfizer have anted up $312,900, $285,000, and $253,395, respectively.

    Continuing a long-standing tradition, the insurance lobby has opened its collective checkbook for the RNC, as well. Alfa Insurance, a property and casualty insurer headquartered in Montgomery, Alabama, has spearheaded this group with donations totaling $405,000, while AFLAC ($228,200), Torchmark ($195,000), New York Life Insurance ($183,300), Freemont Compensation Insurance ($181,135), Massachusetts Mutual Life Insurance ($161,600), Great West Life Insurance ($155,000), the American Council of Life Insurance ($151,075), the Blue Cross Blue Shield Association ($112,675), and Independent Life and Accident Insurance ($100,000) have done their best to keep up.

    As with donations to the host committees for the Democratic and Republican national conventions, the RNC's list of the top soft money donors is littered with many of the same names found near the top of the DNC's soft money roster. While Republican presidential nominee Bob Dole was blasting the various teachers unions for donating to the Democrats, the RNC was collecting $441,635 from the National Education Association – a contribution total that earned the nation's largest teachers union fifth place on the RNC soft money list. The RNC has collected $400,000 from Joseph E. Seagram & Sons over the past two years, and AT&T has provided $328,500 – $56,796 more than it has given to the DNC. At $317,071, Atlantic Richfield's donations to the RNC cause have outstripped the company's donations to the DNC by more than $100,000. Entergy, the Louisiana-based energy conglomerate, has given $235,500 to the RNC over the past two years, virtually matching the $232,500 it has donated to the DNC. While Anheuser-Busch has given the DNC $310,500, earning it sixteenth place on the list of that committee's top soft money donors, the firm has also contributed $198,200 to the RNC. MCI, the DNC's eighth largest contributor, also has given the RNC $195,500. The list of double dippers is so long that it rivals the list of party loyalists.

    If you are confused at this point, it is little wonder. While we have very nice laws prohibiting direct corporate contributions to political campaigns, the mutually beneficial soft money "loophole" allows them to dominate the political process. While post-Watergate reforms supposedly placed a $25,000 limit on individual contributions during any one calendar year, the soft money exception makes those limits a joke.


    Related Resources:

    FEC reports huge jumps ('96 vs. '92) in RNC and DNC fundraising and spending.

    Where does the money go? (Links to specific areas of partisan web sites)


    This column originally appeared on the PoliticsNow Web site.

    © Copyright 1998 The Washington Post Company

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