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Political Fund Raising - 2004-07-30


Democratic presidential candidate John Kerry is now considered to be in a close race with Republican President George Bush. A victory would give a badly needed boost to a party facing an uncertain future. While the United States is quite evenly divided between the two parties, Democrats have been losing members, while Republicans have not. They have benefited from a well financed, cohesive conservative movement.

What to do? Some affluent, concerned Democrats got together and decided to raise money in a different way. Banned by campaign finance laws from contributing directly to the political parties, they seized on an obscure provision of the tax code, known as 527, to raise funds independently of party.

An article in the Sunday New York Times magazine reports that by election time in early November, financier George Soros and others will have contributed some $150 million to groups outside the Democratic Party though in general support of it.

Yet this very success which could lead to a Democratic victory this year might end up damaging the party in the future, says the New York Times. Rich individuals backing a particular cause could wrest control from the Democratic Party and perhaps replace it altogether.

But how distant are they from the Democratic Party as required by law? Maybe closer than they admit, says James Reichley, author of a classic account of American political parties, "The Life of the Parties."

"These outside groups are not supposed to coordinate with the parties or with the candidates, but I'm sure there will be or may already be a good deal of winking at that, which introduces a new level of cynicism into the system."

Fred Wertheimer, president of Democracy21, a group promoting campaign finance reform, has accused some 527 groups of cooperating with the Democrats; they, in turn, deny it. What do you expect? asks Larry Sabato, director of the Center for Politics at the University of Virginia. Each successive campaign finance law passed by the U.S. Congress is meant to reduce the role of money in politics. But it never works:

"The campaign finance reformers do not seem to be able to learn the basic message of all of American history in campaign finance. You cannot eliminate money from the system. If you shut off one avenue, that money will find another avenue. It will ever be thus. It is neither good nor bad. It just is. It is American reality."

Mr. Reichley says that the 527 fund raising adds to political polarization because individuals, unlike parties, do not have to compromise. George Soros says his main intention is to defeat President Bush whom he considers a menace to America. Who knows what Mr. Soros' next campaign will be? He may not know himself.

Mr. Soros and other political investors are cool to Democratic candidate Kerry, says New York Times author Matt Bai: "The way they look at it, centrist Democrats spent a decade appeasing Republicans, while the right consolidated its occupation of American government. The donors see themselves as the emerging liberal resistance, champions of activist government at home and multilateral cooperation abroad."

They are powerful, to be sure, says Mr. Sabato. But they are rivaled by Republican donors who are not relying much on 527 but contributing heavily to state parties that have fewer restrictions on what they can spend. Whatever the case, he says, money will out:

"If they were not giving to the 527's now, they were giving to the parties. And if they were not doing that, they were funding independent committees. And if they were not doing that, they were funding individual presidential, senate and house campaigns. So nothing has changed and nothing ever will change except for the packaging."

Nor has there been that much political change, contends James Reichley. He thinks the two political parties are in some ways stronger than ever:

"The party lines are more strictly maintained in Congress. The Republican Party is becoming a more distinctly conservative party, and the Democratic Party a more thoroughly liberal party. It gives the voters some opportunity to really judge between the parties."

That makes the parties more ideological, says Mr. Reichley, but also more attractive to those who take issues seriously.

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