Soft money

"Soft money" refers to political contributions by corporations, unions, industry groups and other organizations that is not subject to the contribution size and source limits of the Federal Election Campaign Act.

Soft money in U.S. elections
Quotes from "New Ways To Harness Soft Money In Works: Political Groups Poised To Take Huge Donations," which covers the growing role of soft money in the 2002 elections:


 * "Some of the biggest names in Republican and Democratic circles are establishing new groups to collect and spend the unlimited political donations that are supposed to be curbed by the recent campaign finance law.


 * "White House political operatives, high-profile lobbyists, former aides of President Bill Clinton and staffers at the Democratic and Republican senatorial campaign committees are setting up tax-exempt organizations to raise and spend soft money. That term refers to the large sums collected from corporations, unions, trade groups and individuals outside the normal limits on donations to federal campaigns.


 * "One of the new organizations, Progress for America, is operating from the downtown offices of a company run by Tony Feather. He was the political director of the Bush-Cheney 2000 campaign and remains a close ally of Karl Rove, President Bush's top political aide.


 * "Democrats are busy, too. Three former high-ranking aides of Clinton -- Harold Ickes, Doug Sosnik and John D. Podesta -- are working to set up a Democratic soft-money operation with the goal of running pro-Democratic issue ads. The three are part of the informal brain trust of Democratic National Committee Chairman Terry McAuliffe.


 * "These efforts underscore the vital role that soft money has played in recent presidential and congressional elections. Until now, the Democratic and Republican parties have been the primary recipients and spenders of such funds, which totaled about $500 million in 2000. Soft money has been used to finance mass 'get-out-the-vote (GOTV)' programs and ads that have been cloaked as issue discussions but are actually aimed at helping or hurting particular candidates.


 * "The McCain-Feingold campaign finance law -- a bitterly debated measure that will take effect on Nov. 6[, 2002] -- was meant to sharply restrict the influence of such money, mainly by forbidding the parties from raising and spending it. [See links below.]


 * "That's why political activists on both sides are frantically creating new groups to fill the gap, using provisions of the tax code that allow the creation of tax-exempt organizations that they say are not covered by the new law. These groups can raise and spend soft money as long as they do not coordinate their efforts with the political parties or candidates, according to officials involved in these undertakings.


 * "The officials describe their initiatives as a way to make sure soft money is used on behalf of the broad interests of the two parties, not just the interests of ideological groups on the left and the right. Democrats also contend that the party faces the prospect of being overwhelmed in 2004 by a Bush reelection organization equipped to raise $200 million to $300 million. Without some soft money support, the Democratic presidential candidate will be unable to compete, they say.


 * "'It's very clear that there are going to be a proliferation of special interest committees to pick up where the parties were before on soft-money funding,' said GOP lobbyist Vin Weber. 'The law is going to spawn a lot of efforts to fill the gap in party financing, and the gap should be filled by entities generally committed to the broad interest of the parties.'


 * "But supporters of the McCain-Feingold measure fear that these efforts might undermine the purpose of the law by creating new conduits for soft money that require less public disclosure than was required before the legislation was enacted. They contend that these activities are purposeful evasions of the law, encouraged by the weak enforcement regulations issued by the Federal Election Commission.


 * "'To the extent the parties are planning a massive evasion scheme, they are planning massive illegal activity and they will be challenged,' said Fred Wertheimer, president of Democracy 21 and former president of Common Cause.


 * "Progress for America (PFA) is precisely the type of organization at issue.


 * "It has raised millions of dollars, which it uses to promote Bush's agenda of tax cuts, energy legislation, conservative judicial appointments and free trade.


 * "Although it takes unlimited donations from corporations and individuals, it discloses neither its contributors nor its expenditures.


 * "Feather, in an interview, said PFA is simply a vehicle for building grass-roots support for Bush's policies. Many other Republicans, however, described it as the first organization designed to capture some of the soft money that the political parties will be barred from accepting after Nov. 6[, 2002].


 * "PFA has strong ties to the Republican establishment. Its spokesmen include Ken Adelman, the top arms control officer in the Ronald Reagan administration. White House operatives, such as Rove and political director Kenneth B. Mehlman, have addressed private PFA briefing sessions at the Hay Adams Hotel.


 * "Progress for America isn't the only Republican-related group in the scene. Weber is working with lobbyists Ed Gillespie and Bill Paxon to build an organization to back GOP candidates. Gillespie has strong ties to both the Bush administration and the Republican House and Senate leadership. Weber and Paxon are former House members with extensive ties to the GOP establishment.


 * "The clients of these three lobbyists alone gave $19.4 million in soft money during the 1999-2000 election cycle, according to the Web site of PoliticalMoneyLine.


 * "Simon B. Rosenberg, president of the centrist New Democrat Network, said: 'The center is going to have a hard time holding in the new system. Interest groups will be more powerful tomorrow than today, and there will be a real tug to pull candidates to the extremes.'


 * "Rosenberg and others contend that the flow of soft money that had gone to the parties will likely go to ideological and single-interest groups that take polarizing stands on guns, abortion, school prayer, unions and taxes, effectively driving the politicians receiving the money further to the right or the left.


 * "To counter this, he said, the New Democrat Network will substantially expand its soft-money fundraising and will add 'an aggressive paid media component to our activities.' He added: 'Our hope is that it will be in the millions of dollars.'


 * "From the more liberal wing of the Democratic Party, Mike Lux, a former Clinton aide and a former political director for People for the American Way, said he and his allies plan to unveil two projects in September -- which will tap liberal soft-money donors -- to fill the 'need for more infrastructure on [the] progressive side of things.'


 * "'What I hope,' Lux said, 'is that, unlike so many times in the past, those on the progressive side will actually coordinate.'


 * "One affiliate of the Democratic National Committee -- the Association of State Democratic Chairs -- has already taken formal steps to create a separate organization, the Democratic State Party Organization (DSPO), to raise contributions, including soft money, for get-out-the-vote and voter registration activities.


 * "'We must chart a new path after campaign finance reform,' said Joe Carmichael, the Missouri Democratic chairman who will run the DSPO, which will be headquartered in Washington and will register with the Federal Election Commission as a political committee. 'Without an organization such as DSPO, grass-roots activities and participation would be eradicated and replaced by television-only campaigns.'


 * "To preserve their ability to raise soft money, both the Democratic and Republican governors' associations are severing all ties with the Democratic National Committee and the Republican National Committee, respectively. The groups will have to live within the new law's restriction on issue ads financed with soft money within 60 days of a general election or 30 days of a primary.


 * "Both the Democratic and Republican senatorial campaign committees are exploring the creation of separate soft-money funds. Officials of the Democratic Senatorial Campaign Committee declined to discuss the work of staffers and consultants on the subject. Monica Dixon, a consultant to the DSCC, has been working on plans to channel soft money in support of Democratic Senate candidates, but she did not return phone inquiries.


 * "Alex N. Vogel, general counsel for the National Republican Senatorial Committee, said: 'We are looking at all the options for the committee, post-McCain-Feingold and post-Election Day.'


 * "A central factor shaping the new organizations is deciding how much information to disclose to the public. A number of operatives would prefer not to reveal the sources of the money raised or the details of how it is spent. They say they are likely to form 501c4's, tax-exempt advocacy organizations under the tax code.


 * "Others, including Weber, Rosenberg and officials of the DSPO, say they intend to make this information publicly available by setting up what are called 527 committees, which must make regular disclosures to the Internal Revenue Service, or traditional political committees, which report to the Federal Election Commission.


 * "Progress for America has rejected the disclosure option, and its leaders show little appetite for publicity. Adelman, who noted that he is the group's chairman, said he knows neither the organization's budget nor its sources of financial support.


 * "'I can't tell you off the top of my head,' he replied, when asked who was giving to PFA. 'We get private donations from businesses and individuals.'


 * "Adelman could not remember the phone number of Progress for America, the name of the woman who runs it (Jennifer Oschal) or its address; he had to look them up in his directory. Oschal did not return a phone inquiry. At the office building address Adelman provided, the high-rent Lafayette Center complex in downtown Washington, there is no listing for Progress for America.


 * "Instead, on the center's mezzanine floor, there are offices belonging to Feather Larson & Synhorst DCI, Feather's firm. Feather described PFA as a grass-roots organization that supports the president's agenda. Asked to provide its membership roster or to release the names of its donors, Feather -- noting that PFA has been organized under the 501c4 provisions of the tax law, which do not require such public disclosure -- said, 'No.'

Related SourceWatch Resources

 * 501c3
 * bundling
 * Bush-Cheney '04 Inc. (Bush-Cheney 2004)
 * Bush's Rangers
 * election reform
 * electoral fraud
 * Federal Election Commission
 * lobbying firms
 * McCain-Feingold
 * political terms
 * Progressive Donor Network
 * soft money groups
 * U.S. election irregularities
 * U.S. presidential election, 2004
 * voter outreach

General

 * The Soft Money Laundromat is a searchable database of special interest soft money contributions to the Democratic and Republican national party committees. Learn about soft money. Who gives it, who gets it and what it all means for our democracy; Common Cause.
 * Top Soft Money Donors is a searchable database; OpenSecrets.org.
 * The Purposes and Beneficiaries of Party "Soft Money", Brennan Center for Justice at NYU School of Law.
 * Craig B. Holman, The End of Limits on Money in Politics: Soft Money Now Comprises the Largest Share of Party Spending On Television Ads in Federal Elections, Brennan Center for Justice at NYU School of Law.
 * Searchable database of contributions to 527 organizations in the 2006 elections.

Articles & Commentary

 * Hard Road for Soft Money, Political Action Network, February 25, 2002.
 * Chris Cillizza and Mark Preston, Clinton Broadens Role, National Republican Senatorial Committee, January 29, 2003.
 * Going slow on soft money, International Herald Tribune, April 22, 2003.
 * "Silent Partners", a Sept.'03 published project of the Center for Public Integrity.
 * Public Campaign Financing Collapses, New York Times Op-Ed, November 24, 2003.
 * Court Backs Campaign Finance Law, CBS News, December 10, 2003: "A sharply divided Supreme Court upheld key features of the nation's new law intended to lessen the influence of money in politics, ruling Wednesday that the government may ban unlimited donations to political parties."
 * The Shadow of Soft Money, New York Times Op-Ed, January 16, 2004: "he Federal Election Commission is now facing the first big test of its gumption since the Supreme Court ruled decisively last month in favor of the new campaign finance law's prohibitions on the use of unregulated soft money in federal election campaigns. ... On one side are campaign finance activists who charge that the law is already being subverted by illegal shadow groups that are set up to collect and distribute soft money, just as the parties did before the new law. On the other are the groups themselves, who say they are operating within the law. Much is at stake here, and the commission is obliged to conduct a painstaking investigation."
 * Alexander Bolton, Charities fill parties' roles with help of millions of dollars in soft money, The Hill, March 17, 2004: "Five large liberal-leaning charities interviewed by The Hill said they plan to register upwards of 5 million new voters through registration programs that will cost millions of dollars. ... The organizations are: USAction, People for the American Way, the Center for Community Change, the Southwest Voter Registration Education Project and the League of Conservation Voters. ... Two charities that are also expected to conduct major registration operations, the NAACP Voter Education Fund and ACORN/Project Vote, did not respond to requests for comment. ... On the Republican side, conservative activists have created a new charity, Americans of Faith, to register 2 million new conservative Christian voters. The group is hoping to raise $2.5 million for that effort. ... Nevertheless, officials at the charities, which are tax-exempt under section 501(c)3 of the U.S. tax code, say they are complying with the law and their activities are purely nonpartisan."
 * Nichols Confessore, "Bush's Secret Stash. Why the GOP war chest is even bigger than you think," Washington Monthly, May 2004: "There are, however, a few key differences that make 501(c)s a far more insidious vehicle for soft money. The law does not require that they disclose how much they spend until well after Election Day. Worse, they don't have to disclose who their donors are at all. Even foreign governments can in theory give money, with no questions asked. No one knows how much the Republican shadow party has raised or will spend this year. But the tens of millions they spent in 2002 were instrumental in putting the Senate back in GOP hands--and there's every possibility they could help push Bush and the Republicans over the line come November."
 * Steve Weissman and Ruth Hassan, "BCRA and the 527 Groups," Campaign Finance Institute, February 9, 2005; revised March 8, 2005.
 * Press Release: "Effort Underway in House to Allow Again Federal Candidates and Political Parties to Use Corrupting Soft Money in Federal Elections," US Newswire, September 23, 2005.