Soft-money groups raise over $100 million in law's first year

WASHINGTON -- In the first year of a new law broadly banning "soft money" donations, political groups still managed to collect more than $100 million in big checks from companies, unions and wealthy individuals.

Among the largest recipients are new groups like America Coming Together and the MoveOn.org Voter Fund, which want to help win the White House for Democrats, and the Republican State Leadership Committee, which is focusing on state and local races.

Such tax-exempt political groups began cropping up in larger numbers after a law enacted by Congress in 2002 banned political parties from accepting soft money donations as they had for two decades.

Their biggest donors include people and companies who used to write huge checks to political parties.

Democratic giver and billionaire financier George Soros gave ACT $5 million. Hollywood producer Steve Bing gave millions to the Democratic Party in 2002; last year he donated nearly $1 million to MoveOn.org and $2 million to be split between ACT and a like-minded group. Citigroup gave $65,000 to the Republican State Leadership Committee, along with $217,580 to the Republican Governors Association and $100,000 to its Democratic counterpart. The law, upheld by the Supreme Court in December, left such tax-exempt groups as the primary repository for big political donations from companies and unions.

"The soft money -- your corporate and labor union money that used to be going to the national parties -- is now starting to crop up in these nonparty groups," said Kent Cooper, co-founder of Political Money Line.

The nonpartisan campaign finance tracking service compiled the total by reviewing the tax-exempt political groups' IRS filings.

So far, most groups have been started by Democratic activists, whose party was more reliant on soft money than the GOP. The Republican Party for years collected millions of dollars more in the limited "hard money" donations from individuals the parties can still raise. That advantage has continued this election cycle.

The law also broadly bans outside groups like the tax-exempts from using soft money for federal election activity. But exactly what that means is under debate. The Federal Election Commission is expected to issue its first key opinion on the issue next week.

Several of the top 10 soft money-raising groups last year are liberal groups that have said their top priority is helping elect a Democratic president in 2004.

One of them, America Coming Together, raised $12.51 million, second only to the Republican Governors Association's $12.53 million in soft money.

ACT is focused on get-out-the-vote activities and is raising both soft money and the limited hard money. How it will spend soft money to try to influence the presidential race within the law's confines remains to be seen; its 2004 election activity is yet to come.

ACT attorney Laurence E. Gold said it plans to pay for its activities with a mix of soft and hard money, adding that the FEC has long allowed such groups to do so. Its purpose is winning "election of progressive candidates at all levels of government," not just defeating President Bush, Gold said.

Other top soft money raisers last year include the Democratic Governors' Association, with $9.3 million; the Democratic-leaning American Federation of State, County and Municipal Employees Special Account, $6.2 million; the pro-Democratic MoveOn.org Voter Fund, $4.8 million; and the Republican State Leadership Committee, $3.7 million.

In the 2001-02 election season, before the new law took effect, "527" groups raised more than $200 million. At that time, many of the multimillion-dollar groups were started by members of Congress to raise funds for fellow party members; the lawmakers are now banned from raising soft money.

Cooper said that despite the $102 million tally so far, the political groups haven't reached their full soft money-raising potential. He believes uncertainty about the law's fate during the more than yearlong court fight and jockeying among new groups to become the go-to organization for big donors have slowed their activities.

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On the Net:

FEC: http://www.fec.gov/

Political Money Line: http://www.politicalmoneyline.com/