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Party Hails Increase in Fund-Raising (Washington Post, Jan. 31)

DNC Dumps Ban on Donations From Legal Aliens (Washington Post, Jan. 11)

DNC Trims Debt, Says
It Can Compete in '98

By Ruth Marcus
Washington Post Staff Writer
Friday, April 10, 1998; Page A04

The Democratic National Committee announced yesterday it had pared it once-mountainous debt to less than $7 million – a level party leaders said would allow Democrats to be competitive in the 1998 elections.

The DNC had piled up an unprecedented debt during the 1996 elections and the congressional and Justice Department investigations that came in their aftermath. The party spent $12 million on legal costs alone to deal with the fallout from 1996 fund-raising, including $2.5 million still owed to its law firm, Debevoise & Plimpton. The DNC expects to incur as much as $1.4 million in additional legal bills this year.

At its height last September, the party's net debt – the amount it owes in loans and bills minus its cash on hand – was $15.3 million. As of March 31, that number had been cut by more than $8 million. On its Federal Election Commission report filed yesterday, the party said it had total debt of $9.3 million ($2.6 million in loans and $6.7 million in owed bills). The DNC has cash on hand of $2.6 million, leaving a net debt of $6.7 million.

"Many people wrote us off," said national chairman Steve Grossman. "I think we're back." It is a measure of the dire financial straits in which the party had found itself that a $6.7 million debt looks like good news. Four years ago at this time it had a $4.3 million surplus.

"This is going to enable us, now that we've gotten our debt under control, to come out and be very strong players" in the 1998 elections, said Colorado Gov. Roy Romer, the DNC's general chairman.

In contrast, the Republican National Committee said it had essentially erased its debt, reporting $500,000 owed and $5.4 million cash on hand as of March 31.

"The Democrat Party is on financial life support," said RNC spokesman Mike Collins.

The DNC raised more than $12 million during the first three months of the year, about $2 million more than during the same period in 1994, but far less than the $18.5 million brought in by the RNC.

The DNC's total included $4.5 million in unlimited "soft money" contributions from individuals, corporations and labor unions. But party officials attributed a significant part of the upturn in their fund-raising to small donors angered at GOP attacks on President Clinton. "The average person is offended by the approach the Republican Party is taking," Romer said.

A recent fund-raising letter sent out under the name of Democratic consultant James Carville took direct aim at independent counsel Kenneth W. Starr. Carville calls Starr the "federal persecutor . . .whose connections with the Republican Party, Pat Robertson and the tobacco industry make him as objective as the Spanish Inquisition."

During the first quarter of 1998, the DNC reported receiving nine contributions of $100,000 or more. But only two were significantly above $100,000 – the contribution limit the party adopted when the fund-raising controversy first arose and which it later abandoned. The largest contribution, from Miramax Films, was $148,000, and the second largest, $125,000, was from Philadelphia consultant Peter L. Buttenwieser.

Romer and Grossman also disclosed that they had quietly decided last year not to take money from tobacco companies or their political action committees. Although tobacco industry giving is heavily tilted toward the GOP, which received $2.5 million in soft money last year, the Senate and House Democratic campaign committees last year received $549,000 in soft money contributions from the industry, according to figures complied by Common Cause.

© Copyright 1998 The Washington Post Company

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