Democratic Party fund-raising took a nosedive in 1985, reversing gains made in recent years against a powerful Republican money machine.
Battered by a landslide defeat in the presidential election and facing internal competition from the ad hoc Democratic Leadership Council, the Democratic National Committee (DNC) raised only $7 million in 1985, less than one-third of its 1984 total and the lowest amount since 1981.
"When you come off a defeat in 1984 that disastrous, you have what might be called in the business community 'investor reluctance,' " said Terry Michael, spokesman for the DNC. "The consequences of the 1984 defeat in 49 of 50 states cannot be overstated."
DNC Chairman Paul G. Kirk Jr. contended that 1985 was a rebuilding year during which the party leadership reduced influence of special caucuses and interest groups. He argued that, in recent months, this drive has paid off and that the community of political givers has been persuaded that "we are serious about our political business and they are prepared to invest in it."
On each side of the partisan aisle are three basic committees: the Democratic and Republican National, Congressional and Senatorial committees. On the Democratic side, the committees that raise funds for congressional and Senate candidates held their own in 1985, in contrast to the DNC.
The past year was generally viewed as poor in fund-raising by both political parties, but none of the major party political committees experienced anything quite as tough as the DNC did. On a year-by-year basis, the cash flow to the DNC went from $4.9 million in 1981 to $7.8 million in 1982, $11.3 million in 1983, $22.4 million in 1984 and $7 million in 1985.
The shortage of DNC cash regained for the Republicans their overwhelming money advantage. The ratio of Republican to Democratic dollars fell from 6.7 to 1 in 1981-82 to 4.6 to 1 in 1983-84. In 1985, however, the major GOP committees raised $93.8 million to the Democrats' $15.4 million, a 6.1-to-1 GOP advantage.
On the GOP side, the National Republican Senatorial Committee (NRSC), which appealed to contributors on the theme that their dollars will help keep the Senate in Republican hands, had a better year than the other GOP committees. The Republican National Committee (RNC) had a modest year.
The National Republican Congressional Committee (NRCC) turned in the weakest performance of the GOP committees. In the GOP euphoria after the 1980 election, Republican fund-raisers could claim to prospective donors that a GOP takeover of the House was a realistic goal. Since then, however, this message has lost much of its strength. Because of the decline in cash, the NRCC has sharply cut back on a highly touted program to channel $6 million to $9 million into the districts of Democratic incumbents where voters had cast strong majorities for President Reagan. Only $500,000 will be spent, according to Joseph R. Gaylord, NRCC executive director.
Over the last decade, the Republican Party financial advantage has significantly altered the shape of partisan competition in the country.
GOP money has been used to build a technological machine. The party has acquired extensive computer resources providing political and demographic data on states and districts. The Republicans have been able to finance polling designed to determine the most advantageous formulations of political and legislative policies.
In addition, the GOP cash has been used to hire a network of field and recruiting staffs, which has sought out prospective candidates who can be guaranteed not only direct party support, but indirect fund-raising assistance.
Even with its stalled cash flow, the GOP congressional committee increased its field staff from 12 to 35, one reason its surplus fell from $10 million in 1984 to $3.5 million last year, Gaylord said.
In the 1983-84 political cycle, the GOP committees raised $245.9 million compared with $53 million by Democrat committees. A small reflection of the consequences of this disparity is in polling. The RNC routinely spends more than $90,000 monthly for surveys. The DNC, in contrast, had to borrow money to finance a major national poll in 1985, its first since 1981.
In 1985, Kirk, as the new DNC chairman, began substantial changes in the fund-raising. He ended the DNC's direct-mail fund-raising contract with the firm of Craver, Mathews, Smith & Co. and moved the job in-house. He also decided to leave vacant the position of finance chairman, using instead a network of regional fund-raisers.
Several political and financial specialists outside the party said they believe, however, that one force damaging DNC fund-raising has been emergence of the independent Democratic Leadership Council.
The council does not raise huge amounts -- Alvin From, executive director, said its annual budget is $400,000 -- but has become the focal point of activity for several centrist-to-conservative prospective presidential candidates, including former Virginia Gov. Charles S. Robb, Arizona Gov. Bruce Babbitt, Sen. Sam Nunn (D-Ga.) and Rep Richard A. Gephardt (D-Mo.).
These candidates are the type that many consider attractive to business people who support the Democratic Party -- a group heavily laced with real estate developers and investment bankers -- and the independent presence of the leadership council diverts attention and contributions from the DNC, according to several sources.
In terms of ranking all of the committees by comparing their 1985 performance to their 1983-84 totals, the most successful were the Democratic and Republican Senatorial Committees, followed closely by the Democratic Congressional Campaign Committee. Each raised in 1985 at least 42 percent of its 1983-84 totals.
Wyatt Stewart, the NRCC director of finance and administration, said 1985 was "a tough year" but far more successful than expected. He said the NRCC had budgeted a yearend $5 million surplus and had $3.5 million in the bank.
Over the last 11 years, his committee's funds have risen from $3 million in 1975 to an average of $7.4 million in 1976-79. In 1980, the the figure jumped to $17.3 million; the next year, to $30.4 million. From 1982 to 1984, the committee consistently raised more than $26 million, reaching $32.2 million in 1984. In 1985, however, the figure fell to $19.4 million, by Stewart's accounting.