HARD FACTS: Hard Money in the 2000 Elections

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Washington, DC…For every one soft dollar raised by national political parties in the 2000 federal elections, nearly five hard dollars have been raised by parties and federal candidates: $256 million in party soft money versus $1.3 billion in hard, according to a new report by Public Campaign, Hard Facts: Hard Money in the 2000 Elections.

Nearly two-thirds of all this hard money comes from a tiny group of mostly wealthy individuals and special interest Political Action Committees (PACs). Many of the hard money donors are the same cast of characters that are giving soft money contributions, and they are giving for the same reasons: to gain access to elected officials and influence policy.

“We are seeing politicians defending hard money contributions to their campaigns as ‘clean’ or ‘good’ compared to soft money contributions,” said Nick Nyhart, Public Campaign’s executive director. “Yet these politicians are taking millions of dollars in hard money from the very same special interests that contribute soft money. It’s a scam, and the public needs to know about it.”

Among the findings in the report:

Hard money receipts increased by $327 million during the first 18 months of the election cycle, compared to the same point in the 1996 elections. That’s more than three times the increase in party soft money-$106 million.
For Congressional candidates, hard money provides the greatest part by far of campaign cash. By June 30, 2000, Senate candidates had raised $259.7 million in hard money. The National Republican Senatorial Committee and the Democratic Senatorial Campaign Committee raised another $55.5 million in hard money. The sum of these amounts dwarf the $51.4 million in soft money raised by the Senate party committees. The same pattern holds for the House. Candidates for House seats raised $393 million-and the Democratic Congressional Campaign Committee and the National Republican Congressional Committee raised another $80.5 million in hard money. In comparison, the committees raised only $62.9 million in soft money
Seventy-five percent of the automotive industry’s contributions to federal candidates and parties during the 2000 election cycle are hard money, according to the Center for Responsive Politics. So are 59 percent of the securities and investment industry’s contributions, 51 percent of the oil and gas industry’s contributions, and 52 percent of the TV/Movies/Music sector’s contributions.
“There is a purpose behind the mislabeling of hard money as ‘good’ political money,” the report states. “[I]f hard money contributions are perceived as innocent, the campaign finance reform debate becomes confined to regulation of soft money, and the door is opened to the unholy tradeoff of banning soft money in exchange for loosening regulations on hard money.”

Although soft money has grown in importance in recent years, hard money remains the focus of fundraising, particularly in the early stages of campaigns, the report shows. The way for candidates to show viability is by accumulating early contributions directly for their campaign treasuries-these are hard money contributions. Party soft money is useless without hard money. Federal law requires that party soft money may be spent only in combination with hard money according to a complex state-by-state formula-in a presidential election year, roughly two hard dollars for every one soft dollar.

The term “hard money” refers to campaign contributions regulated by the Federal Election Campaign Act (FECA), which sets limits on contributions by individuals, political parties, and PACs, among other conditions. “Soft money” describes unlimited contributions to national party committees.

Effective reform must address both hard and soft money contributions. Public Campaign supports a comprehensive Clean Money system that addresses both hard and soft money contributions, by providing public funds and eliminating the need for candidates to depend on special interest contributions, hard or soft. Arizona, Maine, Massachusetts and Vermont have new Clean Money systems. Missouri and Oregon voters have the opportunity this election to approve Clean Money-style initiatives in their states. On the federal level, Senator Paul Wellstone (D-Minn.) and Representative John Tierney (D-Mass.) have proposed legislation and Vice-President Al Gore has stated his support for full public funding of federal general elections.

The 10-page report provides analysis of national hard money and party soft money fundraising through June 30, 2000, comparing it to the first 18 months of the 1995-96 election cycle. The report discusses the significance of hard money with examples from specific campaigns and describes survey results on why donors give hard money. It includes profiles of hard and soft money giving by selected industries that lobby in Washington for policies that are not always in the public interest-including the automotive, computer/internet, pharmaceutical, and the TV/movies/music industries.

For a hard copy of the report, contact Public Campaign, at 202-293-0222. The report is also posted on Public Campaign’s web site, at www.publicampaign.org