Dollar still dominates US politics

Just under a year ago, Senator Frank Lautenberg, a Democrat from New Jersey, called a press conference to announce he would NOT be seeking re-election this year for a fourth term. A powerful factor in this decision was money.

The senator had calculated that to get re-elected he would have to spend half of every day until the election fund-raising. "I would have to ask literally thousands of people for money. I would have had to raise $125,000 [€124,000] a week, or $25,000 every working day. That's about $3,000 an hour."

Money - huge amounts of it - are dominating and corrupting American politics to an extent never seen before. The irony is that all this is happening in spite of the campaign finance reforms introduced after the Watergate scandals in the 1972 election. Not only was President Nixon revealed to be behind the breakin at the headquarters of the Democrats but secret slush funds by corporations to help Republicans were discovered and more than $1.7 million was donated to re-elect Nixon by people who subsequently got ambassadorships.

In 1974 after Nixon was forced to resign, a sweeping reform of campaign financing for federal elections was passed. Individuals could contribute only $1,000 to a candidate in a presidential or congressional election. Political Action Committees (PACs) were limited to $5,000. Cash contributions were limited to $100.

Public financing called matching funds was offered to presidential candidates who accepted limits on what they spent from their own funds. All this was meant to eliminate excessive contributions from wealthy individuals in the expectation of future favours and put rich candidates on the same basis as the not so rich.

Even before Watergate, corporation and trade unions were banned from directly contributing to candidates, so with the new reforms, clean elections should be assured.

But this was not to be. The Supreme Court two years later ruled on the basis of the free speech amendment to the Constitution that there could be no limits on contributions made "independently" of the campaigns. It also ruled that candidates could not be limited in what they spend of their own money.

These loopholes were not really exploited until the 1996 presidential election when what is called "soft money" was raised in large amounts by the ClintonGore campaign to pay for TV ads in the year before the election.

This money escaped federal law scrutiny because contributors did not give it directly to the Clinton campaign but to the Democratic National Committee (DNC).

The DNC could not run advertisements asking viewers to vote for a particular candidate but could spend the money on "issue advocacy" which promoted President Clinton's policies and rubbished those of his opponent. The wealthy contributors were offered "coffee mornings" in the White House to meet the president and for bigger sums could sleep in the Lincoln Bedroom and fly on AirForce One.

The Republicans with their richer clientele actually raised more "soft money" than the Democrats but they denounced the abuse of the White House. The Democrats also had to return large amounts of money illegally contributed from individuals and corporations in Asia seeking influence.

American corporations and labour unions which are banned from making direct contributions use "soft money" to get around the legal restriction.

This abuse has gone so far that a judge in Pennsylvania has asked an appeal court to rule that "soft money" has made the bans on direct contributions from corporations and trade unions meaningless. Judge Vanaskie in his referral describes how "soft money" donors buy access to federal lawmakers and thus get influence.

"Access to candidates and high federal government office-holders is often the quid pro quo for large soft money contributions," the judge wrote. Such contributions "have the ability to corrupt and cause an appearance of corruption that the ban on corporation contributions to candidates for federal elective office was intended to avoid".

But at least the 1974 law's insistence on full disclosure of all contributions has not been overturned so "soft money" contributors' names are published by the Federal Election Commission which oversees the rules. Making a connection between such contributions and decisions by presidents or members of Congress is another story. It is pointed out that in spite of the contributions from tobacco companies to the political parties, they have received tough treatment from Congress and the White House in the past year.

The Centre for Public Integrity, a private watchdog organisation, tries to alert the public to possible abuses by publishing pamphlets and books. The latest called The Buying of the President 2000 by Charles Lewis calls itself "the authoritative guide to the big-money interests behind this year's presidential candidates".

The book publishes the "top 50 patrons" of the two main parties and the "top 10 patrons" of the candidates. The main supporters of the Democratic Party are the labour unions but the communications industry, tobacco and oil companies and the financial sector including Goldman Sachs and Lazard Freres are also prominent contributors.

On the Republican Party list, tobacco, oil and telephone companies and the financial sector also figure. Over the 1991-1999 period, Philip Morris tops the list at more than $6 million. It gave $1.2 million to the Democrats.

The Amway Corporation, the biggest "direct sales" company in the world, owned by the de Vos family contributed $4.5 million to the Republican Party. Microsoft gave almost $1 million.

One of the biggest contributors to the Democrats is Bernard Schwartz, head of Loral Space & Communications. Under the Clinton administration, the company has benefited from a loosening of the controls on the export of satellite technology to China against the advice of the State Department.

Top contributors to Vice-President Al Gore include Ernst and Young International, BellSouth, Goldman Sachs, Citigroup and Walt Disney. His rival, Bill Bradley has tapped into Wall Street in a big way.

George Bush who has raised a record $67 million for his campaign in less than a year has opted not to receive federal matching funds but not surprisingly he has large Texas contributions.

His Republican rival for the nomination, Senator John McCain, has campaigned for four years for the abolition of "soft money" with the help of Democratic Senator Russ Feingold, but their Senate colleagues continue to reject such a reform.

The American public also calls for reform but in a half-hearted way. The $1,000 legal limit on direct contributions has been eroded by two-thirds by inflation since 1974 so it is not surprising that politicians and parties seek ways to get around it.