Monday, February 21, 2000
Bush fund skirts cap on election donations
GOP officials tapped earlier contributors
BY MICHAEL HAWTHORNE
Enquirer Columbus Bureau
COLUMBUS — Republican Party officials in Ohio and 19 other states have collected $5.2 million from top donors to George W. Bush's presidential campaign to give him a boost if he survives a challenge from Sen. John McCain.
Most of the $800,000 raised in Ohio came from Mr. Bush's friends in the Cincinnati area, who were able to legally circumvent federal election law even though many of them already had given the maximum $1,000 contribution to the Texas governor's campaign.
Campaign finance experts say the special fund-raising committee set up by the Bush campaign and various state parties is the first of its kind. The fund was created in late 1999, when Mr. Bush's campaign was more concerned about a general election race against Vice President Al Gore than a primary battle with Mr. McCain.
“They sensed a willingness on the part of many of these major donors to give more,” said Kenneth A. Gross, a Washington lawyer and former head of enforcement at the Federal Election Commission.
“It's certainly unprecedented and unusual,” said Mr. Gross, who represents donors who sought his advice about giving to the special fund. “But it's all perfectly legal.”
Under the deal struck by the Bush campaign with the Ohio Republican Party and its counterparts in the other states, donors to the 1999 State Victory Fund gave up to $25,000 each, far more than the amount they could give directly to the Bush for President committee.
Some of the money was intended for the Bush campaign. The rest is to be doled out to the state parties for direct mail, phone banks and other get-out-the-vote efforts to benefit the entire Republican ticket.
Ohio contributors gave $809,500 to the fund, according to federal election records. Of that amount, all but $105,500 came from Cincinnati donors.
Tom Whatman, executive director of the Ohio GOP, said the state party is expected to get about $275,000 for the general election.
The state GOP had a similar arrangement with former President Bush's 1992 campaign, Mr. Whatman said. What makes the 1999 State Victory Fund unique is how the same fund-raising technique was expanded into several other key states, including California, Florida, Texas, New York, New Jersey, Pennsylvania and Illinois.
“The Bush people wanted to do something to help the parties,” Mr. Whatman said. “But that money will be there no matter who the nominee is this fall.”
Although Mr. Whatman and others said the money was not intended to directly benefit the Bush campaign, none of the Ohioans who contributed has given money to Mr. McCain.
Indeed, most of the Ohio contributions to the fund came from people with ties to Mercer Reynolds III, a Cincinnati investor and former business partner of Mr. Bush's who has been one of the Texas governor's top fund-raisers.
Mr. Reynolds is one of Mr. Bush's “Pioneers,” a group of individuals who have raised at least $100,000 each for the presidential campaign. Contributors from the Cincinnati area, including Northern Kentucky and southeast Indiana, gave $696,883 to the Bush for President committee last year, according to the Center for Responsive Politics, a nonpartisan group that tracks campaign cash.
Unlike a Cincinnati fund-raiser at the Omni Netherland Plaza Hotel last summer that featured Mr. Bush and raised $1 million for his campaign, Mr. Reynolds said Ohio money for the victory fund was raised with a few select telephone calls he made.
“I don't really want to discuss it,” said Mr. Reynolds, whose family gave $90,000 to the victory fund. “We've been instructed by Austin (the Bush campaign headquarters) not to talk about it.”
Several donors who already had given Mr. Bush's campaign the $1,000 maximum contribution gave generously to the separate victory fund in November and December, according to federal election records.
For instance, Cincinnati financier Carl H. Lindner and members of his family kicked in $130,000. Robert Castellini, chairman of the Castellini Co., gave the $25,000 maximum to the victory fund. Members of his family gave another $75,000.
“We are big fans of George Bush and really want him to do well,” said Mr. Castellini's wife, Susan, who gave $25,000. “We also want the entire Republican Party to do well. Any way we can help we are glad to do so.”
Another Ohio contributor to the victory fund was Katherine Kern of Cincinnati, whose father is William O. DeWitt Jr., Mr. Reynolds' business partner. She gave $12,500.
“He (Mr. DeWitt) asked me if I would give but didn't explain what it was for, other than to help George Bush,” she said.
Other donors included John W. Berry Jr of the Dayton-based Berry Co. and members of his family, $50,000; Richard T. Farmer, chairman of Cintas in Mason, and members of his family, $44,000; and Dudley Taft, Gov. Bob Taft's cousin and president of Taft Broadcasting Co., who gave $25,000.
Also contributing was James F. Dicke II, president of Crown Equipment Corp. in New Bremen, Ohio, and chairman of the Ohio GOP's finance committee. He gave $22,000 to the victory fund.
Larry Sabato, a political scientist at the University of Virginia and close follower of presidential campaigns, said Republican Party leaders and Mr. Bush's advisers likely created the special fund to avoid problems Bob Dole faced during his 1996 presidential campaign.
“Dole ran out of money after the '96 primary, so the Bush campaign was looking ahead and planning the most advanced campaign possible to get them through the spring and fall,” Mr. Sabato said. “The irony is George Bush and his people have gone to an enormous amount of trouble to raise millions of dollars that may go to John McCain.”
With nearly $70 million in his campaign account at the beginning of the year, Mr. Bush declined to accept federal campaign funds and therefore does not face spending limits in Republican primaries and caucuses.
But after Mr. McCain trounced Mr. Bush in New Hampshire, the Bush campaign spent millions in an attempt to beat back the Arizona senator. By last week, Mr. Bush's advisers revealed their account was down to $20 million.
If he wins the nomination, Mr. Bush has said he will accept federal funds and the spending cap that accompanies the money. As a result, Republican leaders have been searching for more creative ways to bolster what had been a presumptive general election campaign for Mr. Bush.
The Bush campaign referred questions about the victory fund to Fred Meyer, the fund's treasurer and former chairman of the Texas Republican Party.
“I can't remember who thought of this, but once they told me how it would work I thought it was a hell of an idea,” Mr. Meyer said. “If we would have thought of it earlier in the year I'm sure we would have raised even more.”
Mr. Meyer said the chief concern for Republican leaders is being able to counter millions of dollars in unregulated and unlimited “soft money” contributions made by Democratic donors. While both parties are raising millions in soft money, Democrats transferred huge sums of cash in 1996 to state parties, which in turn ran TV ads attacking the GOP.
The victory fund appears to be one way to accomplish that goal without relying on soft money, which Mr. Bush's chief primary opponent, Mr. McCain, has fought to eliminate from campaigns.
Federal law allows soft money contributions to be used only for party building activities such as get-out-the-vote drives, polling and voter education. Donations to the victory fund are known as “hard money,” which is regulated and limited but can be used to directly benefit a candidate.
“They all want hard money more than soft money,” said Larry Makinson, director of the Center for Responsive Politics. “That way they don't have to hide who it's really designed to help.”
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