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Supporters find new source of cash for Kerry campaign

DNC-run unit would spend big

From the moment he locked up his party's presidential nomination in March, Senator John F. Kerry's candidacy has been propped up financially by a group of Democratic advocacy groups spending heavily on his behalf. He still faces a major funding gap in his fierce battle against President Bush, but Kerry's party is now poised to open up a new source of indirect financial aid for the Democratic challenger.

The Democratic National Committee is developing an ''independent expenditure" operation that would funnel party money to fund advertising in support of Kerry. An in-house unit would not be controlled by the Kerry campaign but would work for Kerry's election; it would be able to spend unlimited funds on ads that specifically promote Kerry or attack Bush and would capitalize on a much higher ceiling on individual contributions ($25,000 to a national party versus $2,000 to a candidate committee).

Ellen Moran, who in mid-April took a leave from the AFL-CIO to become director of independent expenditures at the DNC, said such a unit is not a done deal.

''No final decisions have been made," said Moran, a Massachusetts native. Other party sources, however, say that it is almost a certainty and that they expect the Republicans to respond in kind.

''It's something we're taking a look at, but no decisions have been made at this time," said Christine Iverson, spokeswoman for the Republican National Committee.

With an influx of new party money and the help of other anti-Bush groups, Kerry could compensate for the Bush campaign's massive war chest.

So concerned was Kerry about the Bush money advantage that earlier this month he toyed with the idea of delaying his presidential nomination so that he could continue raising and spending contributions during the five weeks between the Democratic and Republican conventions.

Party-based independent expenditures would be the latest side effect of the Bipartisan Campaign Reform Act of 2002, better known as McCain-Feingold, the law designed primarily to eliminate the corrupting influence of unlimited contributions, known as soft money, on the national parties.

But in the first presidential campaign after the law went into effect, money is pouring into politics via new routes. In particular, the amount of money being spent by independent groups, so far mostly to the benefit of Kerry, has exploded.

''It was never the intent to stop money from being spent on elections," said Representative Martin T. Meehan, Democrat of Lowell and cosponsor of the House version of McCain-Feingold. ''The only question for us was could we make it illegal for federal officials to raise unlimited amounts of money by asking corporate executives to give $500,000 or $1 million. That has happened."

Consequently, there has been a proliferation, mostly on the Democratic side, of 527s, tax-exempt political advocacy groups so named for the section of the tax code under which they operate.

''The 527s have been around a long time, but now are the focus of activity because a lot of soft money that used to go to the parties now goes to 527s," said Larry Noble, executive director of the nonpartisan Center for Responsive Politics. ''Whenever you are dealing with power and money and laws, there are always going to be attempts to get around the laws."

Chief among the 527s in this election year are The Media Fund, which has spent about $24 million on television ads in key states attacking Bush policies, and America Coming Together, which intends to spend more than $100 million building field organizations to help Kerry and other Democrats in 17 battleground states.

By law, these groups must operate independently of a candidate, but one way or another they benefit the candidate. By early this month, the combined spending on television ads of the Kerry campaign, The Media Fund, and other Democratic advocacy groups exceeded that of the Bush campaign by $94.4 million to $78 million, according to Erik Smith, executive director of The Media Fund. The Kerry camp spent about $58 million of the total, Smith said.

A DNC ''independent expenditure" on Kerry's behalf could be especially helpful to him between late July, when he receives the Democratic nomination, and early September, when Bush is nominated by his party. During that five-week interim, Kerry can no longer spend private donations; he must draw from the $74.7 million in federal money for the general election. Bush can keep spending from his war chest during that period, meaning that his $74.7 million, when he takes it on Sept. 2, will go farther.

A DNC subsidiary funding pro-Kerry or anti-Bush ads during that period could make a difference.

By law, the party and the Kerry campaign cannot communicate about how this subsidiary would work, how much it will spend, or what it will do to promote Kerry's candidacy.

Joseph E. Sandler, counsel to the DNC, said an in-house entity has been permissible since 1996 under US Supreme Court rulings, and he has been advising party personnel and potential consultants about restrictions on their communication with the Kerry campaign or other DNC employees who deal with the Kerry apparatus.

''Those people can't be involved in anything on the other side of the firewall," Sandler said. There can be no coordination of effort, he said, except for those party employees who deal directly with the campaign as part of the ''coordinated campaign," the formal collaboration of candidate and party.

One prospective independent-expenditure consultant joked that he plans to ''tattoo on my arm the names of the people I can and cannot speak to."

Moran has already assembled a team to run the DNC shadow effort. They are seasoned Democratic operatives, mostly veterans of campaigns of Kerry's vanquished rivals in the race for the Democratic nomination. The group includes ad makers David Axelrod of John Edwards's campaign; David Plouffe of Richard A. Gephardt's campaign; Gephardt campaign manager Steve Murphy and his media consultant partners Mark Putnam and Saul Shorr; pollster Geoff Garin of Wesley K. Clark's campaign; Maurice Daniel, who was Gephardt's political director; and James Aldrete, a consultant based in Austin, Texas.

An independent expenditure by the party, added to the 527 spending, would simultaneously boost the amount being spent to promote Kerry and leave the candidate with less control over his message.

Kerry campaign manager Mary Beth Cahill said the new entities are altering the art of presidential politicking. ''There have always been independent expenditures, but in the past, it was a smaller percentage of the money being spent," she said. ''It makes this a completely different atmosphere to operate in. You have no idea what's going to be on the air until you actually see it."

The advantage of an independent expenditure is that, for the first time, parties can run unlimited ''express advocacy" ads that urge a vote for their candidates or the defeat of the opponent. In the past, ads paid for with soft money could not use words like ''vote for," ''elect," or ''defeat." They were supposed to be limited more generally to advocacy about specific issues, but widespread abuse in the last election cycle was an impetus behind McCain-Feingold.

In the 2000 presidential campaign, combined party spending on so-called issue ads was at least $80 million, more than the totals spent by the campaigns of Bush and Democrat Al Gore.

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