Texas Gov. George W. Bush has enlisted wealthy supporters to underwrite his participation in an Iowa straw poll next month, arguing that he does not need to pay the money out of his campaign funds because the donations are contributions to the state GOP, not spending on his presidential race.
While presidential campaigns are limited to donations of $1,000, Bush has already raised $50,000 -- in checks of $5,000 and $10,000 -- from six wealthy donors for the Aug. 14 straw poll, which has become a crucial battleground in the competition for the Republican presidential nomination. The checks went to the Bush campaign, which then passed them on to the state party.
Bush is determined to win the straw poll by a decisive margin, and he has spent heavily to achieve that goal, including bidding $43,500 to rent prime space just outside the coliseum where the balloting will take place.
Bush spokeswoman Karen Hughes said yesterday that the checks will be used to pay the rental fee along with the $25 tickets Bush supporters need to vote. Luke Roth, Bush's Iowa manager, has set a target of getting 5,000 Bush supporters to the straw poll, double the record of any previous winner.
Federal election law requires presidential candidates to pay out of their campaign funds any expenditures to promote their candidacy, and it defines expenditures as any payment "made by any person for the purpose of influencing any election for federal office."
Federal Election Commission spokesman Ian Stirton said a formal ruling would have to be made by the full commission, but "off the top of my head, I'd say yes," the money used to pay for the space rental would appear to be a campaign expenditure.
Hughes defended the practice. "The straw poll is a fund-raiser for the Iowa Republican Party. We urged our donors to support the Iowa Republican Party. Our lawyers looked at this and determined that it complied completely with both Iowa state law and federal law."
But some of Bush's GOP rivals expressed outrage over his tactic, saying they were paying for their straw poll efforts out of their campaign funds. Election law experts also questioned its legality.
"Campaign activities must be paid by the campaign, not outside backers," said Keith Appell, spokesman for the campaign of Steve Forbes.
"What is going on here is different than just raising money for the party," said election law expert Kenneth A. Gross. "This is for a specific benefit for one campaign, and the better course would be to have this be a campaign expenditure."
"It certainly sounds like an evasion of the spirit and very likely the meaning of the law," said Fred Wertheimer, head of Democracy 21, a think tank specializing in campaign finance issues. Beyond that, he said, "it is really cheap, given the fact that Mr. Bush is sitting on $30 million."
Bush has raised $37 million, far more than any competitor, Democrat or Republican, and he has roughly $30 million in the bank.
Hughes said Sen. Phil Gramm (R-Tex.) used non-campaign funds to compete in the straw poll in 1995. Bob Haus, Gramm's Iowa manager in 1995, said he thought all expenses were paid out of federal money, but Hughes supplied a 1995 newspaper article that said a Florida supporter gave Gramm $20,000 to pay for tickets to the straw poll.
Dee Stewart, executive director of the Iowa GOP, said one other campaign used checks from individuals to pay for rental space, but he refused to disclose which one it was. Bush paid by far the highest amount, and Forbes was second at $8,300.
The Bush donors for the Iowa effort are all from outside the state and are major figures in GOP and Bush fund-raising. They include two Texas oilmen, Ray L. Hunt, who oversees fund-raising for Bush in Texas, and Louis A. Beecherl, who gave $395,000 to various GOP candidates and state parties in the 1996 and 1998 campaigns.
Two others, Heinz C. Prechter and C. Michael Kojaian, are Michigan business partners and major GOP financial supporters with close ties to Michigan Gov. John Engler (R). Prechter first made money by starting a car customizing company, and Kojaian is a real estate developer. Recently, the two paid $18.4 million to buy JPE Inc., an automotive supply company.
Bradford M. Freeman, a Los Angeles corporate buyout specialist and close friend of Bush's who is now leading Bush's California operation, raised $320,000 for Bush's gubernatorial campaign. John D. Collins is a Fort Lauderdale real estate developer.
"We had a list of people who had offered to help, who had maxed out on their contributions to the governor, and offered to help in other ways," Hughes said. "We contacted them and let them know that one of the ways they could help was through contributions to the Iowa Republican Party."
CAPTION: Texas Gov. George W. Bush shows off his griddle skills during a campaign stop at a pancake breakfast in Des Moines yesterday. The Republican straw poll in Iowa is Aug. 14.