Progressive Donor Network

Progressive Donor Network was co-founded by political consultant Mike Lux.

An April 23, 2002 article posted on the Fox News Marketwire -- Democrats Plan Campaign Finance Alternatives -- announced that "dozens of election-year demonstrations criticizing Republicans and the president for ties to fallen energy giant Enron Corp. have been coordinated by a little-known group called the Progressive Donor Network."

According to Business Week in a July 2002 article, sometime in April Lux had begun meeting "with some 150 liberal groups ... This so-called Progressive Donor Network hopes to position itself as a one-stop account for liberal givers who once wrote large checks to the Democratic National Committee (DNC). A rival group, the centrist New Democrat Network, hopes to draw corporate donors who once contributed to the DNC."

Business Week reported that "Superlobbyist Ed Gillespie is leading a similar Republican effort. Like the Dems, Gillespie hopes to concentrate money and spend it where it is needed most rather than dilute it among dozens of uncoordinated groups. 'It is not in the interest of Republicans to let a thousand flowers bloom,' he says. His goal: to raise $15 million to $25 million every election cycle."

The Network, the Fox News article said, had "held a private conference in Washington earlier [in April] to discuss ways of raising and spending money when new campaign finance laws kick in after election day. Some of the most powerful Democratic-leaning special interests attended, including NARAL (formerly the National Abortion and Reproductive Rights Action League), People for the American Way (PFAW), the NAACP (National Association for the Advancement of Colored People), the League of Conservation Voters (LCV), environmental groups, labor groups, and others."

"Senate Majority Leader Tom Daschle (D-SD) addressed the donors at a dinner the night before conference ... The next day [attendees] heard from a number of interest groups as well as House Minority Leader Richard Gephardt (D-MO), Sens. Barbara Boxer (D-CA) and John Edwards (D-NC) and Democratic National Committee Chairman Terry McAuliffe, according to a copy of the conference's agenda."

"Progressive Donor Network documents suggest they will raise and spend on 'targeted TV, radio, phones, mail' using a 'network of allied organizations.'"

"'What this is an attempt for the like-minded organizations to work together, much as Republicans have done,' said Joseph J. Andrew, former national chairman of the Democratic National Committee."

Hill News reported that "A presentation made at the conference revealed that organizers stressed the importance of adopting new strategies for the upcoming elections and working in tandem with independent groups. Organizers emphasized that 'focus groups and polling data show that outside, non-party messengers are more effective with voters' and that 'new campaign finance laws take political parties out of running issue advertising.'"

When interviewed by Hill News, "Lux said the point of the conference was to initiate a dialogue between the party's different constituencies. 'We felt there ought to be a way for folks in the labor movement, the environmental movement and the pro-choice movement to get together and talk,' Lux said. 'We wanted to create a vehicle for donors to come together with those groups and political strategists and talk strategy.'"

Lux explained that "he invited individual donors who contribute between $25 thousand and $50 thousand in political donations and organizations that spend between $50 thousand and $2 million on races. Lux conceded that one of the purposes of the conference was to adapt donors to the new campaign finance laws that will go into effect at the end of the year. To dispel any notion that the donors and party officials had gathered to circumvent the new laws, he pointed out that many of the attendees at the conference are strong advocates of reform. 'Many supporters of the new campaign finance law were in the room,' he said. 'With the law changing, our strategy has to change. Organizations are looking to raise money from donors who used to give much of their money to the party and are now looking for other avenues. I don't think people on the campaign finance [reform] side have ever been naïve to that.'"

"Lux also [told Hill News] that he is affiliated with the Arca Foundation, a philanthropic organization that 'put a lot of money in campaign finance law.'"

"So far," wrote Fox News, "Republicans do not have official outside organizations designated to coordinate efforts among their friendly special interests. They may, however, develop them in light of the Progressive Donor Network's activities and its potential successes."

Republican Protest & Network Rebuttal

Hill News also reported the Republican response to the Network's meeting: "Upon learning of the effort to coordinate donors with independent groups, conservatives fighting the new campaign finance laws in court were harshly critical. 'This is the height of hypocrisy,' said Roberta Combs, president of the Christian Coalition, one of the groups challenging the law. 'Just weeks after campaign finance reform was signed into law, Democrats are trying to circumvent it. The Democratic Party is now trying to ensure that their own special interest groups gain even more power.'"

"Rep. Bob Barr (R-GA), another plaintive in a lawsuit seeking to overturn the law, said he was not surprised. 'It's sort of the ultimate Washington hypocrisy that you work to support reform publicly but undermine it privately,' he said. 'It's probably technically legal but it's unethical. That doesn't stop the party from doing it.'"

"But Lux said that conservative groups have been coordinated in a similar way for years. 'I don't think there is any question that they are ahead of us,' he said. 'The right wing has an infrastructure that has been in place for several years and continues to grow. They do a far better job communicating to their troops and the general public. They've done more with it.'"

"Lux told donors that for years conservative donors have sought to bolster the GOP in elections by funneling money to groups such as Americans for Tax Reform, Citizens for a Sound Economy and the Christian Coalition."

"Betsy Loyless, the political director for the League of Conservation Voters, said her group would be a natural option for donors looking to help Democrats in key races around the country. 'Individuals are looking to make investments, campaign-related investments in organizations that run smart, effective and aggressive campaigns,' said Loyless. 'LCV meets all of those criteria. … We run the campaigns smart. We don't just throw money at it. [We] have the right issue, and we have the right campaign expertise, and we have a history of winning our 'dirty dozen' campaigns.'"

"Ralph Neas, the president of People for the American Way, which played a major role in the recent Senate rejection of U.S. District Judge Charles Pickering Sr.'s nomination for the court of appeals, said independent progressive groups have become much more effective in influencing elections. 'One of the great untold stories in the media is the extraordinary work the progressive community did in 2000,' said Neas ... [pointing] out that eight organizations spent nearly $70 million on races in the 2000 campaigns, between six and seven times the amount spent on the '98 campaigns." --- On April 24, 2002, The Washington Times published a lengthy article about the Progressive Donor Network: "Democrats to exploit finance-law loophole". "Democrats, facing the ban they supported on unregulated 'soft' campaign money, have formed a fledgling 'political donor network' to take advantage of a loophole in the new law.

"The Progressive Donor Network held its inaugural strategy meeting in Washington two weeks ago. Its president and co-founder is political consultant Michael Lux, who was a top fund-raising official for the 1996 Clinton-Gore campaign and served as an aide in the William Jefferson Clinton White House.

"Mr. Lux told the conference that the network is designed as 'a force to compete with right-wing money.' But watchdogs say the group will be walking a fine line to avoid the new law's prohibitions against coordinating with the Democratic Party and individual candidates.

"'People misunderstand what we're trying to do,' Mr. Lux said in an interview. 'We can talk to [candidates] about the issues we care about. I don't think anybody is trying to coordinate with candidates or parties.'

"Sen. John McCain, Arizona Republican and prime sponsor of the campaign finance law, said he wasn't aware of the network. But he added, 'There's always unintended consequences' to new laws.

"The Progressive Donor Network's strategy includes using groups who are viewed as 'outside, nonparty messengers' to promote Democrats' agenda. Mr. Lux said those groups include the Sierra Club and the National Abortion and Reproductive Rights Action League (NARAL).

"'The Democrats are doing what they can to make sure they're not at a disadvantage,' said Larry Noble, executive director of the Center for Responsive Politics, which tracks money in politics.

"Democrats have been more competitive at raising soft money -- donations to political parties that often are used to buy TV or radio advertisements that promote candidates indirectly.

"The new law, which takes effect after the November [2002] elections, bans those donations and places more importance on 'hard' money -- contributions to individual candidates. Hard dollars will be limited to $4,000 per donor per election cycle, and Democrats traditionally have trailed Republicans in raising hard dollars.

"Sen. Barbara Boxer, California Democrat and a featured speaker at the Progressive Donor Network conference, said the group will be vital for liberal candidates because of the new campaign finance law. 'It's more important now than ever because there's no soft money,' Mrs. Boxer said. 'You need grass roots to make up for the money you're not going to be able to raise in soft money.'

"The donor network is encouraging its members to get involved in 23 House races and the Senate race in North Carolina, where conservative Republican Sen. Jesse Helms is retiring.

"Sen. Mitch McConnell, Kentucky Republican and chief opponent of the new law, called the group's actions 'perfectly permissible.' Frankly, I'm in favor of loopholes,' Mr. McConnell said. 'They're gearing up to raise money for outside groups who will then go out and do their bidding for them in the election.'

"The group's D.C. conference included Democratic National Committee Chairman Terry McAuliffe; Ralph Neas, president of the liberal watchdog group People for the American Way; Kate Michelman, president of NARAL; Ellen Malcolm, president of EMILY's List; House Minority Leader Richard A. Gephardt, Missouri Democrat; former Clinton administration officials James Carville, Paul Begala and Joe Lockhart; former Gore 2000 campaign manager Donna Brazile; and representatives of several labor unions.

"Mr. Noble said the group represents 'one of the avenues that soft money is going to take after campaign finance reform.' He said the Federal Election Commission is likely to decide case by case whether such organizations run afoul of the law's restrictions against coordinating with political parties. 'These are people who have been close to the heartbeat of the Democratic Party,' Mr. Noble said.

"'The question will be: 'How much can they coordinate on a day-to-day basis?' Even if they are kept at a short-arm distance, there's still a tremendous amount they can do.'

"Mr. Lux said Republicans have been successful for years by 'moving money' to groups such as the National Rifle Association and the Christian Coalition.

"The Progressive Donor Network's goals also include forming 'rapid-response teams' to plant news stories critical of Republicans and the George Walker Bush administration. Its leaders cited several negative news stories recently about the collapse of Enron, the Texas-based energy giant with ties to the White House.

"House Majority Leader Dick Armey, Texas Republican, said Republicans have employed rapid-response teams for years. 'We have a rapid-response team because what they put out there is lies,' Mr. Armey said. 'We put out the truth. I don't know how you put together a rapid-response team to respond to the truth. But if anybody can figure out how to do it, they will.'

"Mrs. Boxer said the organization's real value for Democratic candidates could come from its grass-roots efforts. 'They can help get out the vote, organize, register,' she said. 'Progressives need to have, just as conservatives have, a really good grass-roots network. And I think we've fallen down on that job. The progressive network, if they take the issue of prescription drugs and they take the issue of the Superfund being cut in half and they go out for raising the minimum wage, and they take those issues out to the people who are progressive, and tell them that they should connect the dots between who's here [in Washington] and those issues, it means a lot.'" ---

Related SourceWatch Resources

 * 501c4
 * 527 committee
 * lobbying firms
 * McCain-Feingold
 * soft money