Court Ruling Affirms New Landscape of Campaign Finance  
Thu Dec 11, 8:35 AM ET  

By GLEN JUSTICE The New York Times

WASHINGTON, Dec. 10 The Supreme Court's decision to uphold most of last year's campaign finance law quashed any final hopes politicians and their parties had about returning to the days when unlimited contributions flowed freely into their hands.


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The decision affirmed the core provisions of the largest overhaul of the campaign finance system in the last 30 years, locking in place rules that have been in effect since last November. It upheld the ban on the "soft money" that national political parties collected from corporations, labor unions and anyone wealthy enough to write a large check. And it restricted political advertising around election time.


What's left is a system in which regulated contributions known as "hard money" are the official coin of the realm for those who play in federal politics. Candidates can collect up to $2,000 per donor in each election and parties can raise $25,000 per donor each year.


Practically speaking, those who have skillfully found ways to raise such contributions in large amounts will hold the largest sword in next year's elections. At the top of the list is President Bush (news - web sites), who has established a vast network of business executives and other loyal Republicans and has amassed roughly $110 million so far this year. Among the Democratic candidates, Howard Dean (news - web sites) has far surpassed his party's rivals by building an Internet-based network of contributors who have so far given more than $25 million.


The decision is toughest on the Democratic National Committee (news - web sites) and its counterparts in the House and Senate, which have counted on soft money to make up as much as half their contributions and have had to rethink their fund-raising strategies since the law was passed.


Had the court overturned the ban, one Democratic party official said, the party had been poised to begin soliciting prospects immediately to collect soft money. Now, both parties will have to operate on a steady diet of hard money contributions, which Republicans have been far more adept at soliciting.


National Republican committees out-raised their Democratic counterparts 2 to 1 through the third quarter, campaign finance records show.


One daunting challenge for the parties is that they will be increasingly competitive with new groups of outside organizations that can legally collect unlimited contributions and are already attracting tens of millions from wealthy donors. They could displace the parties as a home for large donations.


"It puts them in a damaged position relative to these groups," said Bob Bauer, a Democratic campaign finance lawyer who represents political parties and organizations. "This was not a good decision for the parties."


More than anyone else, the ruling was a personal victory for Senator John McCain, Republican of Arizona, who, along with Senator Russell D. Feingold, Democrat of Wisconsin, was a primary architect of the legislation. "Now, no politician can pick up the phone, call the head of a major corporation and say, `Give me a million dollars,' " Mr. McCain said in a telephone interview.


Senator Mitch McConnell, Republican of Kentucky, the chief critic of the law in Congress, said that the ruling cut into the free speech rights of those who want to have a role in federal elections and that money will always find a way into the system. "This law will not remove one dime from politics," he said in a statement.


Many campaign finance experts agree that, after months of waiting for a Supreme Court ruling, political players who were frozen by uncertainty will slowly wade back into the system. The question is how many will step back in and how they will spend their money.


Thousands of corporations, labor unions and wealthy ideologues gave about $500 million in soft money to the national parties in last year's races. Some believe major donors will now direct that money to third-party organizations.


The most prominent of these third-party groups have been formed this year to press liberal causes and have had varying fund-raising success. Some have yet to crack $50,000 in donations. Others, like an organization called America Coming Together, have tapped wealthy donors such as George Soros, the financier and philanthropist, and gathered pledges for more than $30 million.


Though most are subject to the advertising restrictions under the new law and coordination with candidates is restricted, several of the groups plan to spend millions on large-scale efforts to register and mobilize voters.


"Soft money is not gone," Mr. McConnell said, "it has just changed its address."


Others say that as long as there are restrictions on what the groups can do with the money, they pose no threat to the new law's intent. Mobilizing voters, they say, is far different from spending millions on television advertising.

 



Either way, a battle begun earlier this year over what these groups can and cannot do may only intensify. Though Republicans have several of their own groups, party members began an aggressive attack on Democratic organizations earlier this year, including Congressional hearings and an appeal to the Federal Election Commission (news - web sites) to render an opinion on what these groups can legally do. Both matters are still pending.

For other organizations, the primary focus is the advertising rules, which restrict how political organizations must pay for television and radio ads. In general, candidates, political parties and advocacy groups using regulated hard money to pay for their ads can run them without restrictions. Organizations using soft money to pay for ads cannot mention or depict a candidate within 30 days of a primary, a provision that will kick in state-by-state, or within 60 days of a general election nationwide.

Campaign finance experts say that much of the money that was spent on television in previous elections may be directed to other forms of influence that are not covered by the new law, such as direct mail, phone banks and Internet sites.

Such is the case with the National Rifle Association. Wayne LaPierre, the group's executive vice president, said his organization, which has some four million members and spent about $25 million on television advertisements in last year's races, will shift its energies to other avenues. It will also boost efforts to raise more hard money through its political action committee, he said.

"We are going to be heard, I promise that," he said. "We have new lines on the football field, but the game is still going to be played."

As for the parties, both Republicans and Democrats have been functioning without soft money since November of 2002 and are retooling their fund-raising efforts to attract more hard money. State parties, which also fell under heavy soft money restrictions brought about by the law, are also adjusting.

While they have more ground to cover because they relied more heavily on soft money, Democrats provided most of the support for the bill when it emerged from Congress last year.

"For years, Democrats pretended that they wanted campaign finance reform, all while relying heavily on soft money," Representative Thomas M. Reynolds of New York, the chairman of the National Republican Congressional Committee, said in a statement. "Today's ruling breaks the Democrats' back. Republicans will continue to out-raise Democrats."

Not so, insisted Terry McAuliffe, the chairman of the Democratic National Committee, who played down the disadvantage to his party and instead pointed to intensive efforts to increase mail and Internet solicitation in the years since the bill came through Congress.

"We're alive and well," he said. "We've transformed from a soft money committee to a hard money committee."