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Clinton Wanted DNC Fund Curb

By John F. Harris
Washington Post Staff Writer
Thursday, August 21, 1997; Page A01

In January, a few weeks before beginning his second term, President Clinton agreed to what his advisers considered a radical solution to a rapidly growing political problem: The Democratic National Committee would ban "soft money."

A soft money ban would mean the DNC would no longer accept the uncapped and largely unregulated contributions from wealthy individuals and corporations. These are the very donations – often of $100,000 or more – that are at the heart of the current uproar over improper Democratic fund-raising during last year's campaign.

It was a bold decision. And Clinton abandoned it within days.

The voluntary soft money ban was the idea of Terence R. McAuliffe, the 1996 Clinton campaign's chief fund-raiser, according to a variety of administration and other Democratic sources. Clinton and Vice President Gore agreed to it, these people said, while they were vigorously courting McAuliffe to be the new DNC chairman.

McAuliffe was on the verge of taking the job when he begged off, citing family obligations. The idea of banning soft money at the DNC died with his candidacy, according to various people with knowledge of the deliberations.

Clinton's initial agreement, unpublicized until now, is even more striking in light of his recent pronouncements on the subject.

He bristled when pressed at a news conference two weeks ago to justify his continued efforts to raise millions in soft money for the DNC at the same time he advocates that the law should be changed to make these big-dollar contributions illegal.

As long as Republicans continue to raise soft money, the president asserted, he will help Democrats do the same. "I don't believe in unilateral disarmament," Clinton said.

The appeal of McAuliffe's plan, however, was precisely that it would be unilateral, according to people familiar with it. The DNC would publicly trumpet its rejection of soft money as a way to excite small donors and put political pressure on the Republican Party also to eschew l arge contributions. The message to small contributors would have been, "You're making politics clean again," said one person familiar with the plan. "Clinton and Gore would have stumped this all across America."

"Hard money" donations can be spent to assist individual federal candidates, but the law limits amounts. Soft money contributions are not subject to such limits. Republicans raised $141 million in soft money in 1995-96; Democrats raised $122 million. This money is supposed to be spent for "party building," but as a practical matter in recent years parties have pushed the limits of the law and used the money to fund major TV ad campaigns. Many critics identify limiting soft money as a priority, but incumbents in both parties in Congress have displayed little interest.

White House press secretary Michael McCurry, while not detailing the particulars of the McAuliffe-Clinton conversations, acknowledged that renouncing soft money was a live option last winter.

"We gave serious consideration to unilateral disarming," McCurry said, adding that most of Clinton's advisers and the president himself came to the conclusion that the DNC could not raise enough to erase a mounting debt and compete in the 1998 elections if it followed such a course. "It would have been great to do the feel-good thing. In the end, realism won the day."

Clinton and Gore initially endorsed a soft money ban, according to several advisers, because of their confidence in McAuliffe, a 40-year-old businessman and longtime Democratic fund-raiser. He successfully raised funds for the Clinton-Gore reelection team with none of the controversy that has since descended on the fund-raising operation at the DNC, which has had to return large sums after they were shown to have been raised illegally.

But McAuliffe, according to White House officials, was always a reluctant candidate for DNC chairman throughout late December and early January, when he was being lobbied. He told Clinton and Gore that he needed rest and time with his family after the campaign's frenetic exertions. His wife, Dorothy, was so opposed that she lobbied Clinton not to pressure McAuliffe while dancing with the president at a White House Christmas party.

Some associates said they warned him that if he took the DNC job, he would inevitably be drawn into the fund-raising controversy. He had earlier taken himself out of the running for commerce secretary for the same reason, administration officials said.

Some administration officials said the voluntary soft money ban was simply an idea McAuliffe presented to Clinton at the time he was leaning toward accepting the job. One Clinton associate said he made the voluntary ban an express condition of his taking the job, something McAuliffe denies.

"Are you nuts? I would never put a condition on a president," McAuliffe said. He declined to describe in detail his discussions. "My conversations with the president and vice president are confidential," he said. "But we have always been in sync in favor of campaign finance reform, and the more money we can get out of the political process, the better off we all are."

The president and the two men he selected once McAuliffe withdrew – General Chairman Roy Romer and National Chairman Steven Grossman – endorsed a variety of more modest restrictions. The DNC, for instance, pledged to not take soft money donations of more than $100,000.

Both the DNC and Clinton are in favor of pending legislation sponsored by Sens. John McCain (R-Ariz.) and Russell Feingold (D-Wis.) that would ban soft money, although critics have complained that Clinton has done little to push the proposal to passage.

The DNC is gradually reducing its reliance on soft money, Grossman said, but to swear it off in one swoop, "as much as I'd like to," would have a "seriously detrimental effect on our ability to be competitive."

The RNC, meanwhile, has not imposed any restrictions on itself. The most recent Federal Election Commission reports show the RNC has raised about $12 million in soft money so far in 1997 – including $1 million from Amway Corp. executive Richard M. DeVos of Michigan – compared with a little shy of $7 million for the DNC.

RNC Chairman Jim Nicholson said that his party has no reason to apologize and that the DNC's focus on changing campaign finance laws is an attempt to "sweep under the rug" the fund-raising abuses it committed in 1996. Representatives for several public watchdog groups said Clinton missed an opportunity. While a unilateral rejection of soft money would have dramatically reshaped national politics, they said, the abortive proposal is instead a footnote to a year in which popular uneasiness about the role of big money has risen to new heights.

"They would have been remembered for having changed the system," said Sheila Crumholz of the Center for Responsive Politics. "As soon as we see the leadership that President Clinton promised in 1992 [for overhauling campaign laws], maybe we'll have substantial reform."

Staff writer Bob Woodward and researchers Nathan Abse and Barbara J. Saffir contributed to this report.

© Copyright 1997 The Washington Post

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