Archive for Friday, February 13, 2004

Groups top $100 million in first year of new law

Big political donors find new recipients

February 13, 2004


— In the first year of a new law broadly banning "soft money" donations to parties, 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 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.

The groups' 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 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 Assn. 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 advocates, 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.

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