A Hard Road for Democrats in a Day of No 'Soft Money'
By GLEN JUSTICE New York Times
WASHINGTON, Nov. 19 — Terry McAuliffe, the Democratic National Committee chairman, found himself under the disco lights at a dance-club fund-raiser one recent evening. The total raised from 4,400 donors was about $250,000.
It was a blunt contrast to three years ago, when the chairman stood with President Bill Clinton, Vice President Al Gore and more than 13,000 Democratic supporters in Washington's convention center. The take that night was $26.5 million.
"It's a whole different world today," Mr. McAuliffe said.
Democrats provided most of the backing for last year's campaign finance law, which bars national political parties from taking unlimited "soft money" checks, and their party was hardest hit when it took effect.
Their Republican rivals have long been better at raising the smaller, limited "hard money" contributions favored by the law. Nine months into the first campaign under the new rules, national Democratic Party committees are being surpassed by Republicans, 2 to 1, in raising money.
Faced with decreased party fund-raising, and the threat of President Bush raising at least $170 million for his re-election, Democrats have responded by forming a handful of outside groups to collect large contributions from wealthy donors, an effort that provoked sharp attacks from Republicans this week.
"I think there's a question here as to whether what these groups are doing is appropriate," said Ed Gillespie, chairman of the Republican National Committee. Mr. Gillespie called on campaign finance watchdogs to scrutinize these groups, which operate independent of the parties and are not bound by all the same restrictions.
In addition, Representative Bob Ney, Republican of Ohio and chairman of the Committee on House Administration, will hold a hearing on the organizations on Thursday. The move set off a partisan firefight, with five Democratic operatives declining to testify at the hearing. The five said in a joint letter to Mr. Ney that the proceeding "is certainly vulnerable to the suggestion or appearance of a political purpose."
Mr. Ney plans to ask the committee for subpoena power. "I don't think they can sit there and thumb their nose at Congress," he said.
While Republicans and Democrats have always had outside groups supporting them, how large a role the new groups will play in this election is an open question. That question will be answered partly by the courts; a challenge to several provisions in the new law is pending before the Supreme Court.
Democrats have moved aggressively to form groups to raise millions from those like George Soros, the financier and philanthropist who has already pledged at least $12.5 million to Democratic groups.
One group, America Coming Together, has pledges for about a third of its $94 million goal, including about $10 million each from Mr. Soros and Peter B. Lewis, chairman of the Progressive Corporation. The organization hopes to put workers in battleground states to contact voters directly in an effort to increase the turnout. Other groups have different strategies, including running advertisements to attack Mr. Bush.
Republicans have established similar groups, though some say they have not had similar luck attracting money from the business community and other traditional Republican donors. Recently a group called Americans for a Better Country was formed by Republicans who asked the Federal Election Commission for an opinion on what types of fund-raising, spending and activities are legal. "We want to call attention to activities on the other side and get a true opinion from the F.E.C. as to whether these activities are permissible," said Craig Shirley, a group founder. "If so, we want to play too."
Meanwhile, Democratic Party committees are learning to live without soft money. Mr. McAuliffe said he was happy with the Democratic National Committee's performance under the new law. "It could have shut our doors," he said.
Mr. McAuliffe has repeatedly extolled Democratic efforts to build direct-mail and Internet solicitation programs and increase donor rolls over the last two years.
"It was a huge shift," he said. "We adapted and we are alive today."
Yet it is not without strain. Lawmakers complain that there is more pressure to raise money for the parties, which they call "dues." And officials at the party committees find themselves competing for donors.
Steve Grossman, a Democratic fund-raiser and former chairman of the Democratic National Committee, said Democrats were in a strange position. "The irony of campaign finance reform," Mr. Grossman said, "is that the party disadvantaged the most pushed the hardest."
In last year's elections, Republican committees still outraised Democrats, but the parties raised soft money in roughly equal numbers, $264.5 million for the Republicans to $240.8 million for the Democrats, according to PoliticalMoneyLine, which tracks campaign finance. But Democrats were more dependent on it, relying on soft money for 56 percent of their contributions. For Republicans, it was 39 percent.
This year, Democratic Party committees raised $66.5 million through September, while Republican committees raised about $158 million.
"Eliminating soft money is a pretty big hole," Representative Martin Frost, Democrat of Texas, said. "The party is working hard to make up some of that disadvantage, but it can't make it all up."
Compounding the issue, Republicans control both the White House and Congress. Some say the pressure on the Democrats has less to do with the law and more to do with the fund-raising edge that comes from that control. They say Republicans traditionally raise more than Democrats and might be even further ahead if soft money had survived.
"This is not ironic," Senator Russell D. Feingold of Wisconsin, chief Democratic sponsor of the bill, said. "This whole idea that Democrats backed the bill and then were disadvantaged, it's just the opposite."
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