COMMUNICATIONS SECTOR GIVES GENEROUSLY TO PRESIDENTIAL CAMPAIGNS
With less than 5 months to go before the Ia. presidential caucus, companies and executives in 3 key industries -- telecom, mass media and Internet -- have begun giving aggressively to the 10 major presidential campaigns. The hard-money donations are more notable than ever this election cycle as it’s the first since the passage of the Bipartisan Campaign Reform Act (BCRA). That law banned soft- money donations to political parties but doubled the hard- money amount individuals could give to candidates. Our affiliated publication, Washington Internet Daily (WID), reviewed the roughly 70,000 individual donations recorded by the Federal Election Commission (FEC) to the 10 campaigns as of the most recent filing date of June 30, and focused mostly on donations of $1,000 or more. This is the first of a 5- part series.
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These 3 industries gave a combined $138.1 million in soft money to the Democratic and Republican parties in the 2000 and 2002 election cycles, according to FEC data compiled by the Center for Responsive Politics. The parties then spent much of that money to support presidential campaigns. With that spigot turned off, hard money -- now limited to $2,000 per individual for the primary cycle and another $2,000 for the general election -- is the lifeblood of presidential campaigns. BCRA has increased pressure on candidates “to raise money in large amounts, to raise money early [and] to exhaust money early in the process,” said U. of Akron Prof. John Green.
The campaigns of Sen. Edwards (D-N.C.), Rep. Kucinich (D-O.) and former Vt. Gov. Howard Dean (D) have collected 100% of their funds from individual donors. Former Sen. Carol Moseley Braun (D-Ill.) and Rev. Al Sharpton (D) have received 99% of their funds from individual donors, Sen. Lieberman (D-Conn.) 98% and President Bush 96%. Sen. Kerry (D-Mass.) and Rep. Gephardt (D-Mo.) have raised a majority of their funds from individual donations but trailed their competitors’ percentages with 83% and 72%, respectively (other sources of funds include personal money given by the candidate and political action committee funds). That contrasts to Ronald Reagan’s early primary campaign in 1980, where only 28% of his funding came from individual donations, according to Green.
BCRA has succeeded in diluting significantly the power of a few major donors. Haim Saban of Saban Entertainment, a children’s TV show producer, in 2002 gave $7 million -- an individual soft-money record -- to the Democratic National Committee to help it build a new hq in Washington. In the 2004 primary election cycle, Saban is limited to $2,000 donations. So far he has given $1,000 each to Edwards, Dean, Kerry and Lieberman (the last is somewhat surprising given Lieberman’s criticism of violence in the media; Saban produces Teenage Mutant Ninja Turtles). BCRA is facing legal challenges from numerous interest groups and politicians, and oral argument before the U.S. Supreme Court is scheduled for Sept. 8.
As Much as $25 Million Needed for Viability, Experts Say
Individual donations have to be large and they have to come early, said Colby College Prof. Anthony Corrado, who with Green participated in a Campaign Finance Institute forum earlier this year. States have been moving their primaries earlier to be more influential in the nomination process, Corrado said, and we “now have a process that’s a sprint, a heavily front-loaded selection process in which the nominee is essentially going to be chosen by March.” Traditionally this period, more than a year from the presidential election, didn’t involve such intense fund-raising, he said, as candidates would hope to gain momentum in early primaries and use that to raise funds to continue deeper in the primary season. Now, Corrado said, it “essentially means that candidates have to amass $20 to $25 million if they hope to be competitive” at the start of the primary season.
Corrado isn’t alone in that assessment. Public Campaign’s Nick Nyhart estimates that any candidate serious about winning the Democratic nomination will need to have raised $20 million or more by Nov. “so that they can make media buys in December for the early primary states in 2004.” He estimated candidates spent 90% of their time fund-raising. Public Campaign advocates full public financing for candidates who agree to stop raising private funds and abide by a spending limit.
While more money as a whole has been given to Democratic presidential contenders -- $66.3 million to Bush’s $35.1 million -- that Democratic money is spread among 10 candidates (including gadfly Lyndon LaRouche). Kerry leads all Democrats with $16 million ($10.9 million on hand), approaching the $20-$25 million estimated as necessary by Corrado and Nyhart, followed by Edwards at $11.9 million ($8.1 million on hand). Dean, who has adopted the 2000 model of Sen. McCain (R-Ariz.) in using the Internet to solicit funds, has raised $10.5 million ($6.4 million on hand), and vowed Tues. to raise $10.5 million in the 3rd quarter ending Sept. 30. He was followed by Gephardt at $9.8 million ($6.2 million on hand).
Gephardt’s 4th-place showing among Democratic candidates has surprised some political observers, who expected him to be more successful in tapping into his impressive fund- raising Rolodex, compiled during his years as House Democratic leader. Another candidate expected to be a stronger fund-raiser was Lieberman, the Democrats’ 2000 vice presidential candidate. He has raised $8.1 million, but has only $4 million in hand. LaRouche has outraised 4 other Democrats with $4.8 million, but has spent all but $94,373 of it. Trailing are Graham ($3.1 million, $1.8 million on hand), Kucinich ($1.7 million, $1.1 million), Moseley Braun ($217,109, $22,177) and Sharpton ($184,415, $12,061). In every presidential election since 1984, Nyhart said, the candidate with the most money on Jan. 1 of the election year has won the nomination.
Bush on Record Fund-Raising Pace
President Bush was the last candidate to begin holding fund-raising events, beginning his effort shortly before the June 30 filing date. But according to data released by the FEC Aug. 19, he already has collected $35.1 million in donations and has $32.7 million cash on hand. He is not expected to face any serious primary opposition, but his campaign is aiming to collect at least $180 million before the end of the primary season, and some political observers predict he will surpass $200 million, easily a fund-raising record for any U.S. campaign.
To accomplish that, Bush is eschewing federal matching funds because the acceptance of such funds requires a limit on spending. Corrado and Green both said that could be an increasing trend in the future under BCRA, with the individual donor limit doubled to $2,000. That’s a concern of Michael Malbin, dir. of the nonpartisan Campaign Finance Institute. His group, funded by the Pew Charitable Trust, Smith Richardson Foundation and the Joyce Foundation, has created a bipartisan task force to propose remedies to the campaign finance system and plans to issue a report next month. Among the task force members are former Republican National Committee Chmn. Bill Brock and former Democratic National Committee Chmn. Charles Manatt. “The system is broken,” Malbin said: “The new [BCRA] unintentionally will make it worse, but at least it does bring the underlying issues out into the open.”
In 2000 Bush had a number of individuals who bundled donations from multiple donors to a total of $100,000. They were called Pioneers; with the increase in hard money limits to $2,000 from $1,000, Bush now has a number of “Rangers,” who have collected $200,000 in individual donations. Three of Bush’s Rangers are, separately, Christopher and Richard Egan of EMC Corp.; and Gregory Slayton, a Palo Alto-based venture capitalist. Richard Egan, a former ambassador to Ireland, was a Pioneer in 2000. A Pioneer this year who aspires to be a Ranger is Univision CEO Jerrold Perenchio; his company is attempting to merge with Hispanic Bcstg. Corp. (CD July 28 p1).
Analysis by WID revealed that Bush had had significant success raising funds from telecom, mass media and Internet companies and executives. Edwards, Gephardt and Kerry have had success raising money in Hollywood, and the latter 2 also have landed a few key telecom donations. Lieberman has little in the way of pure telecom donors, but has excelled at fund-raising among Internet-related executives, in particular recruiting donations from numerous Kleiner Perkins Caufield & Byers venture capitalists (with the notable exception of strong Bush supporter Floyd Kvamme). Kerry and Dean also have made some inroads in the high-tech community. All other candidates trailed in donations from key executives or company PACs. All of the presidential campaigns we contacted declined to detail their fund-raising strategies. -- Patrick Ross Editor’s Note: -- This is the first of a 5-part series. Tomorrow, we will highlight in 2 separate stories funding from broadcast, cable, satellite, film studio and record label donors. On Fri., we'll examine telecom industry donations, while our sister publication Washington Internet Daily (WID) will focus on donations to Internet-related companies. (To get a trial subscription to WID, go to www.warren-news.com/widtrial.htm .)