From the WSJ:
A Hard Sell on 'Soft Money'
'Shadow Democrats' Work Around
Ban on Unlimited Donations
By JEANNE CUMMINGS
Staff Reporter of THE WALL STREET JOURNAL
WASHINGTON-- The Mccain-Feingold law's ban on unlimited donations to political parties was barely three weeks old last November when liberal operatives started plotting ways around it.
The result will be a shadow Democratic Party -- an alliance of nonprofit groups that hopes to raise $200 million to mobilize voters and run ads slamming Republicans. It took months of struggle for the Democrats' allies to figure out how to coordinate the left's efforts, while abiding by the new law and not offending the party's unruly constituencies. The story illustrates the difficulties Democrats face as the 2004 campaign heats up.
Democratic leaders in Congress relentlessly fought to ban so-called "soft money" donations for years, scoring points by depicting Republicans as captives of fat-cat contributors. Many liberals privately opposed the ban, however, rightly predicting that it would exacerbate the Democrats' financial disadvantage because Republicans have a huge lead in "hard money" donations that fall under federal limits on size and source. Now outside activists are trying to make sure that the unrestricted "soft money" from corporations and wealthy individuals that the party can no longer accept keeps flowing into pro-Democrat efforts -- a strategy that has the tacit approval of party leaders who backed the ban.
"It could make a mockery of the reform law," says David Magleby, a money-and-politics expert at Brigham Young University.
We continue with shockingly extensive fair-use excerpts below.
The ban took effect the day after Election Day 2002. In late November, several activists gathered for dinner at BeDuCi's, a restaurant near Dupont Circle here.
The meeting was the brainchild of Gina Glantz, a Service Employees International Union official who has since joined the Howard Dean campaign. New nonprofits had been begging for some of the $4 million-plus in soft money that the union had been giving Democrats every two years. Without coordination, she thought, the groups likely would waste money. Most of the groups were set up under a provision in the tax code that lets them accept unlimited donations, as long as they disclose donors and don't explicitly advocate federal candidates' election or defeat -- or coordinate with candidates or parties.
The gathering included SEIU President Andrew Stern; Harold Ickes, a Clinton White House advisor who hopes to raise $80 million for a spring TV barrage; Steve Rosenthal, a former AFL-CIO political director whose new Partnership for America's Families wants to raise $10 million to register minority voters; Carl Pope, head of the Sierra Club; and Ellen Malcolm, founder of Emily's List, which supports pro-choice Democratic women.
Ms. Glantz told them an umbrella group was needed to coordinate all left-leaning groups' campaign-related efforts. "I'm in," Mr. Pope said. Others chimed in support, but the evening ended with no clear plan -- and the whole effort almost fell apart three months later.
At the AFL-CIO's winter meeting in Hollywood, Fla., Mr. Rosenthal led a seminar on politics. The talk turned to Florida Gov. Jeb Bush's easy re-election. Mr. Rosenthal blamed ineffective efforts to get minority voters to the polls. His new Partnership would do it right in 2004, he promised.
Minority union leaders seethed at his remarks, because it had been their job to get their members to the polls. Some fired off outraged letters to the AFL-CIO, blaming the failure on insufficient AFL-CIO funding.
The quarrel was a headache for Gerald McEntee, the union head who oversees the AFL-CIO's political operation, for he had agreed to be president of Mr. Rosenthal's Partnership and to have the AFL-CIO help finance it. On May 8, the fissure roiled a big meeting called to persuade all the major outside groups -- environmentalists, abortion-rights advocates, the NAACP, trial lawyers and others -- to join an umbrella group.
At the meeting, Mr. Rosenthal displayed similar images of children, landscapes and senior citizens adorning mail from both outside groups and Democratic candidates. Voters don't trust candidate mail, but "what do we do?" he asked. "Design our mail to look like theirs!" Another piece used the image of a middle-aged, cigar-chomping white man to illustrate corporate corruption. The AFL-CIO had tested the picture and rejected it as ineffective, but a vendor sold it to another group, Mr. Rosenthal said. His point: An umbrella group would prevent such missteps.
Most attendees embraced the idea, but Mr. McEntee was still dogged by the Rosenthal dustup and announced he wouldn't join. Two weeks later, William Lucy, head of the Coalition of Black Trade Unionists, said having Mr. Rosenthal or any other white operative lead minority-registration efforts amounted to "paternalism." Shortly afterward, Mr. McEntee quit Mr. Rosenthal's Partnership.
The effort took another hit from an influential adviser to Democratic donors, Michael Lux. He outlined the emerging hodgepodge of nonprofits in a July 3 memo to donors. Despite signs of cooperation, "it's definitely not soup yet," he said, suggesting they withhold support for now. Baltimore lawyer Peter Angelos, a major Democratic donor, read Mr. Lux's memo and decided to sit on his checkbook.
Then Ms. Malcolm, Mr. Pope and Mr. Rosenthal were invited to the Southampton, Long Island, home of 74-year-old liberal billionaire George Soros to discuss how to beat Mr. Bush. The consensus: Put money into voter mobilization. Mr. Soros pledged $10 million. Wealthy friends, including Peter Lewis, chairman of auto-insurance giant Progressive Corp. in Ohio, and Rob McKay, of the San Francisco-based McKay Investment Group, promised $12 million more.
Mr. Soros says his money isn't "a bid to gain influence with the Democratic Party," but adds, "I think the result will be the defeat of George Bush."
That $22 million provided needed momentum. In August, Ms. Malcolm and Mr. Rosenthal used it to launch America Coming Together, or ACT, which hopes to raise $85 million. Mr. Rosenthal is chief executive, Ms. Malcolm is president and Messrs. Pope and Stern are on the board. Unlike other groups, ACT will include a division that it says can legally advocate President Bush's defeat.
Also in August, AFL-CIO President John Sweeney ended the bickering over Mr. Rosenthal's voter drive, telling minority leaders that Mr. McEntee planned to raise $20 million for a new minority-registration group called Voices for Working Families, and Mr. Rosenthal agreed to narrow his focus to urban areas.
Later that month, the final piece of the plan came together. Cecile Richards, daughter of former Texas Gov. Ann Richards, left her job as House Minority Leader Nancy Pelosi's deputy chief of staff to start America Votes, an umbrella group of 22 pro-Democrat groups. Each is contributing $50,000. The group meets regularly, giving the left a strategic counterweight to periodic get-togethers that conservative activist Grover Norquist and others long have hosted for right-wingers.
The momentum caught the eye of Democratic donors, including Mr. Angelos, who has begun writing checks. "We will be competitive on the money," Mr. Ickes predicts.
The groups face many hurdles, including legal ones. Republicans are on the lookout for illegal coordination with candidates or the Democratic Party and improperly explicit electioneering. Congressional Republicans held a hearing last month to probe such issues. Describing himself as "extremely risk averse," the SEIU's Mr. Stern routinely brings four attorneys to ACT meetings.
Write to Jeanne Cummings at jeanne.cummings@wsj.com
And, the accompanying table, not quitw as nicely formatted as in the original:
IN THE SHADOWS
Some of the new nonprofit groups formed to do the jobs the Democratic National Committee can no longer afford to do:
GROUP FUNCTION BUDGET (millions)
America Coming Together Mobilize Democratic voters nationally $85
The Media Fund Run anti-Bush TV ads $80
Voices for Working Families Register black, Hispanic and female voters $25
Partnership for America's Families Register urban voters $12
America Votes Coordinate among the groups $3
Moving America Forward Register Hispanic voters $2
Where is MoveOn.org?
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