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  •   Staying Ahead of the PACs

    By Ruth Marcus
    Washington Post Staff Writer
    Tuesday, November 25, 1997; Page A01

    On March 20, Texas businessman John Flavin gave Lamar Alexander's political action committee $5,000, the legal maximum. The same day, Flavin wrote a $50,000 check to another Alexander entity – his Tennessee political action committee, which is allowed to accept unlimited donations.

    Alexander's PACs, which have raised more than $1 million so far this year, then paid for an array of activities that read like a road map for a fledgling presidential race by Alexander, from polling in Iowa and New Hampshire to a lobster-fest for 1,300 in New Hampshire last August.

    Potential presidential candidates since Ronald Reagan have used political action committees as launching pads for their presidential campaigns. Alexander's approach of using federal and state PACs gives the technique a new twist – allowing him to raise money in far bigger chunks than federal contribution limits permit and, in essence, partly finance his embryonic campaign with unregulated soft money.

    But Alexander, a former Tennessee governor, education secretary and unsuccessful GOP candidate in 1996, is hardly alone in what Colby College political scientist Anthony Corrado calls "the pre-campaign campaign." Three years before the next presidential election, the would-be contenders are already at work, finding a number of ways to finance their embryonic campaigns and lay the political and financial groundwork for the real event.

    With GOP accountant Stan Huckaby predicting that candidates will need to raise $22 million by the start of the election year to have a realistic shot at the nomination, many in the class of would-be presidents are already wooing big fund-raisers and bulking up their direct mail lists for a presidential bid.

    "The politics of fund-raising – how much and how quickly – will drive the GOP nomination in 1998 and 1999," said Scott Reed, former campaign manager for 1996 presidential nominee Robert J. Dole. "It's the first real cut at separating the men from the boys."

    Also active on the pre-presidential front – but employing a technique different from Alexander's – is his 1996 GOP rival, Malcolm S. "Steve" Forbes, who spent $37 million of his own money on that race. Now, Forbes has created an "issue advocacy" organization, Americans for Hope, Growth and Opportunity (AHGO), with $100,000 of his own funds but also building a nationwide network of financial supporters.

    The group has raised about $3 million this year from 75,000 contributors, mostly through direct mail, giving Forbes something he did not have in the '96 campaign – a donor base that could be used to help fund a presidential campaign.

    This year, AHGO has spent about $500,000 on television, radio and print advertising on such issues as abortion, school choice, assisted suicide, drug legalization, the flat tax and auto insurance.

    Forbes's organization also has been making some strategic contributions that put him in good stead with Christian conservatives, a constituency that was skeptical of Forbes in 1996. Forbes's group bought a $2,000 table at a fund-raising dinner last month for the Robertson School of Government honoring former Christian Coalition executive director Ralph Reed.

    It also gave $10,000 to the Catholic Alliance, a spin-off of the Christian Coalition, to run a media campaign on "partial birth" abortion last March. When Forbes highlighted social issues at the Heritage Foundation last month, Catholic Alliance President Keith A. Fournier heaped praise on what he called a "wonderful speech."

    The group is organized as a not-for-profit corporation in New Jersey, but does not receive any tax breaks. Its president, William Dal Col, said the group will disclose its donors, though it is not legally required to do so.

    Most of the other potential candidates are going the PAC route.

    Under federal election rules, presidential candidates are limited to $1,000 contributions and – if they want to receive federal matching funds – must promise to spend no more than a specific amount. It was $37 million in 1996; the amount in 2000 has yet to be determined.

    But until they announce their candidacy and start raising money for the presidential campaign, potential candidates can fly around the country, hire staff and consultants and develop fund-raising programs through their PACs. Even better, they can raise the money in chunks of up to $5,000 and not have it count against their presidential spending limits. And potential candidates' PACs can spent millions of dollars developing donor lists – then sell the names to the candidate's campaign committee for a fraction of that cost.

    Corrado calls the PAC device "one of the biggest loopholes in the presidential nomination campaign."

    "These PACs are nothing more than shadow campaign organizations," Corrado said. "They're basically a way to conduct a presidential campaign without being subject to the spending regulations and contribution limits."

    Thus, former vice president Dan Quayle has Campaign America, the PAC he inherited from Dole; former vice presidential candidate Jack Kemp has the Freedom and Free Enterprise PAC; and other possible contenders, including Sen. John D. Ashcroft (R-Mo.), conservative activist Gary Bauer and Rep. John R. Kasich (R-Ohio), have established PACs in recent months. Like Alexander, Bauer has both a state and federal PAC.

    Quayle has raised $1.9 million; Kemp $600,000; Bauer $1.8 million; Ashcroft $16,000 through June 30 and Kasich $220,000, according to FEC reports and interviews with PAC officials.

    Kemp, who has been to Iowa seven times this year, "hasn't made any concrete decision about . . . 2000 but he's certainly done quite a bit to lay the groundwork should he decide to move ahead," said his spokesman, Christian Pinkston. "He's raising a lot of money for the PAC, meeting with people in key states . . . trying to have all his ducks in a row when it's time to make a decision."

    Congressional leaders who may be in the presidential mix, including House Minority Leader Richard A. Gephardt (D-Mo.), Senate Majority Leader Trent Lott (R-Miss.) and Speaker Newt Gingrich (R-Ga.), have long-standing "leadership PACs" – vehicles they use to finance their travel and raise money for other candidates that can serve as precursors to a presidential run.

    Gephardt, for example, has been to Iowa and New Hampshire three times each, trips financed by the Democrats' House campaign committee or his leadership PAC, the Effective Government Committee, which raised $175,000 through June 30.

    Congressional leaders can also raise money for their congressional campaign committees and transfer large chunks into a presidential committee – as Sen. Phil Gramm (R-Tex.) did in 1996 when he jump-started his campaign with a $5 million infusion from his Senate coffers. And former senator Bill Bradley (D-N.J.) has quietly transformed his Senate campaign committee into a PAC, Time Future Inc., and given it his remaining $174,000 in campaign funds.

    Some likely candidates, including Vice President Gore and Sen. Bob Kerrey (D-Neb.), don't have political action committees. But, as the sitting vice president and the head of the Democratic Senatorial Campaign Committee, respectively, they have ample opportunities to make their way around the country through official or party-related travel. Kerrey, for example, went to New Hampshire earlier this month on a trip paid for by the DSCC because he was recruiting potential candidates.

    Other possible contenders are busy raising money for their current races – like Texas Gov. George W. Bush – or still struggling to pay off their debt from last time around before they can start thinking seriously about the presidency, like Sen. John F. Kerry (D-Mass.), who as of June 30 was $1.2 million in debt from his Senate race against then-Gov. William F. Weld (R).

    Bush, with a large fund-raising network inherited from his father and a base in a big-money state that alone can bring $6 million to $8 million into a presidential campaign coffers, is seen as a formidable financial presence. Another sitting governor, New York's George E. Pataki, earlier this month made a nationwide fund-raising tour for his reelection race that was also widely viewed as a way to broaden his fund-raising portfolio for a possible presidential run.

    And Patrick J. Buchanan's charitable foundation, The American Cause, dormant during the 1996 election, has been revived, sending out weekly TAC-grams on issues such as "fast track" trade legislation. Another group, Coalition for the American Cause, recently sent out a fund-raising letter over Buchanan's signature calling for abolition of the "rogue regime" Internal Revenue Service.

    Alexander offers a case study in how to use PACs to potential presidential advantage with his state and federal PACs, both called Campaign for a New American Century.

    His staff has a decidedly presidential campaign cast. The political director, Brian Kennedy, is a former head of the Iowa Republican Party. The finance chairman, Ted Welch, oversaw Alexander's presidential fund-raising and, said Republican fund-raiser Wayne Berman, is "the single most effective high-dollar fund-raiser in the GOP today." Iowa Gov. Terry E. Branstad was named national chairman yesterday.

    The PACs' political giving also seems to have been done in significant part with an eye on early primary contests. The state PAC gave $2,500 this year to GOP groups in Iowa and New Hampshire. The federal arm gave more than one-fourth of its $100,000 in donations in the 1995-96 cycle to candidates and state parties in those two states.

    And Alexander has been to Iowa and New Hampshire several times each already this year – travel underwritten by the PACs. Most costs – everything from office rent to travel to polling to fund-raising – are split 50-50 between the state and federal PACs, based on the division of contributions made by each; in 1995-96, the state PAC picked up a greater share, 60 percent of the tab.

    "One of the things we've been doing is going to places where we made a lot of friends during the '96 campaign – Iowa and New Hampshire and some states in the South – where we can have the most impact on helping candidates because we're known there," said Alexander spokesman Mel Lukens. "That just makes good sense."

    And, Lukens said, "If he were to run, then he probably still has good friends in the places where it makes sense to have good friends."

    © Copyright 1997 The Washington Post Company

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