Clinton, party are criticized for raising 'soft money' they railed against in '92


WASHINGTON -- As a presidential candidate, Bill Clinton railed against "soft money," a notorious campaign finance loophole through which corporations and wealthy individuals funnel huge sums to presidential candidates.

"George Bush recently vetoed the 1992 Campaign Finance Reform Bill in order to protect the special interests that support him," Mr. Clinton said in Putting People First, his campaign manifesto. "We will . . . end the unlimited soft-money contributions."

As president, however, Mr. Clinton and the Democratic National Committee (DNC) have raised and spent soft money in record amounts while offering what critics say is half-hearted leadership in support of legislation that would end the practice.

"He hasn't kept his commitment to the American people," said Fred Wertheimer, president of Common Cause, the citizens' lobby that has sought reform. "He hasn't fought for change the way he said he would -- and a bill that would do it is stalled in Congress because of House Democrats."

Most disturbing to the liberal reformers who had high hopes for the Democratic administration is that Mr. Clinton and the DNC have raised almost $1.5 million in soft money from some of the same millionaires who had contributed hefty checks to Mr. Bush and the Republican National Committee.

"A lot of these big contributors don't really care if it's a Democrat or a Republican in the White House," said Joshua Goldstein of the Center for Responsive Politics, a nonpartisan group that tracks political money. "They want the access, the ambassadorships, the favors and the other things that this money will bring them."

Common Cause, in a study to be released today, cataloged some $40.5 million in soft money given to the Democrats in the 21 months between the time Mr. Clinton received his party's nomination and last March. This is nearly double what the Republican National Committee raised in the same period.

"President Clinton has become the leading practitioner of the worst campaign-finance abuse in American politics today -- the soft-money scam," Mr. Wertheimer said. "And the numbers keep getting bigger."

To dramatize its disappointment in Mr. Clinton, Common Cause is organizing a demonstration tonight outside the Washington Hilton Hotel, where the president will speak at a $1,500-a-plate dinner expected to raise $2 million for party coffers.

The controversy is causing embarrassment at the White House, where officials insist that Mr. Clinton is committed to changing the law but that in the meantime he must play politics by the existing rules.

"This is a president who's been in office 18 months and has a very aggressive agenda," said Ginny Terzano, deputy White House press secretary. "You can't do everything overnight."

Jim Whitney, a spokesman for the DNC, added that campaigns require money, and that until the legislation is passed, the president and his party would not "unilaterally disarm."

The post-Watergate rewriting of campaign finance laws was supposed to have ended such excesses. Congress, responding to the abuses of President Richard M. Nixon, outlawed cash contributions of more than $250, restricted individuals from giving more than $1,000 per election and forbade corporate contributions except through political action committees, whose contributions were limited to $5,000 a year.

But in 1988, Robert Farmer, a Democratic fund-raiser working for Michael S. Dukakis, found a loophole. Saying that the money was to be used for party-building activities, he solicited $100,000 contributions from 130 wealthy Democrats. The checks were made out to various Democratic organizations legally chartered in each state.

The money was controlled by the Dukakis campaign, however, and was disbursed out of the same office in Boston that served as Mr. Dukakis' campaign headquarters.

Republican Rich Bond, deputy campaign manager for Mr. Bush, denounced Mr. Farmer's brainchild as "illegal on its face," but Mr. Bush's fund-raisers decided to follow suit. At the Republican National Convention that year, Robert A. Mosbacher Sr., treasurer of the Bush-Quayle campaign, tapped 250 wealthy Republicans to join the "Team 100" and contribute at least $100,000 each for Mr. Bush's election effort.

Mr. Bush won, but in 1992 his campaign was embarrassed by revelations that nine of the Team 100 had been appointed ambassadors, others had seen federal environmental and business decisions changed in their favor, and others received perks ranging from invitations to state dinners to a ride on Air Force One with the president, Ted Williams and Joe DiMaggio.

Mr. Wertheimer said then that Mr. Bush had "created the impression that White House policy is up for auction to the highest bidder."

By continuing to accept such huge contributions, Mr. Clinton is opening himself to the same criticism.

Many of those who contributed, ranging from the National Education Association, which donated $340,000, to Barbra Streisand, who gave $25,000, had an obvious ideological affinity with Mr. Clinton -- and might not expect anything in return. But others have complicated issues pending before the federal government -- issues that can mean millions of dollars to a big company and its executives.

Asked about the $508,333 soft money contribution by media giant Time Warner and its top executives, spokesman Edward Adler said: "Over half of that was given for the Democratic Party convention in New York. We were instrumental in bringing the convention here, and we are one of New York's leading corporate citizens. . . ."

But White House actions are also likely to affect communications firms such as Time Warner, with its major investments in cable television and other strands of the emerging information superhighway.

Three of Mr. Clinton's biggest soft money contributors -- Pamela Harriman, M. Larry Lawrence and Swanee Hunt -- have been appointed ambassadors. The qualifications of Mr. Lawrence -- a San Diego hotelier -- were the subject of a spirited confirmation battle in the Senate Foreign Relations Committee.

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