By Carl Weiser
Enquirer Washington Bureau

WASHINGTON - Congress passed a law last year that was supposed to keep big, special-interest money out of politics.

It's not happening.

While large amounts of special interest money can no longer go to political parties, the money simply is flowing to other groups.

That's being felt several ways in Greater Cincinnati:

• The Republican Governors Association is the new power in political money, and Tristaters have seen it flex its muscle with a barrage of campaign ads in the Kentucky governor's race.

• Cincinnati financier Carl Lindner, who for years was a top donor to political parties, has shifted his money to the Republican Governors Association, giving it $150,000 in the past year.

• The Republican Governors Association will be an even bigger force next year, when 11 governorships are up for election. Experts say the association's new clout will help shift power from the parties to governors. The chairman next year? Ohio Gov. Bob Taft.

For ordinary voters like Tony Schrand, 79, a retired pipe fitter from Erlanger, it's evidence that big money always will try to influence politicians.

"I do object to out-of-state interests trying to buy our elections," he says.

The Republican and Democratic governors associations run what are known as "527" committees, named after a section of the tax code. They officially have no relation to the national Republican or Democratic parties.

Donors to the national parties can give only $25,000 a year. But donors can give any amount to either governors association or any of the thousands of other 527s.

And they are.

A report this month from the Center for Public Integrity found that corporate and labor money that used to support the political parties now is bolstering the governors associations. The center's analysis showed the Republican governors had raised more money than any other 527 this year - $7.5 million through Sept. 30.

The Democratic Governors' Association was second with $3.7 million through June 30.

"We will maintain an aggressive fund-raising schedule," promises Brian Hicks, a Columbus political consultant who handles Taft's fund-raising. Hicks, who until recently was Taft's chief of staff, will work closely with the Republican Governors Association when Taft takes it over in November.

As chairman, Taft will help determine which races will get money, making him a power broker among governors and state legislators. Republicans now are governors of 26 states, not counting California.

"We certainly hope to keep that and add to that," Hicks says.

The Republican Governors Association calls its donors "members." The highest membership level costs $100,000 and is known as "cabinet" level. The Democratic Governors' Association operates in the same way, with those who give or raise $100,000 getting named to a "finance council," says executive director BJ Thornberry. Big donors get invited to VIP receptions and other exclusive special events, she says.

The top donor to the Republican Governors Association this year is Cincinnati's Lindner, owner of the Cincinnati Reds and chairman of American Financial Group and Great American Insurance Group.

A spokesman for Lindner says he doesn't seek favors from politicians and donates only because "he is a believer in the American system." He donates at every political level, from city council to president, and though most of his money goes to Republicans, he also donates to Democrats.

Altria, parent company of Kraft Foods and Philip Morris, wrote a $72,000 check to the Republican Governors Association in August. Company officials say Altria is just doing what it always has done: staying active in politics.

"We feel like it's our responsibility to do so for our millions of shareholders, our employees and other important stakeholders for the company," spokesman David Tovar says. "We want to work with elected officials on important policy decisions they make that affect our companies."

While Tovar says he didn't know the specifics of the donation and whether it had anything to do with the Kentucky governor's race, he says the Bluegrass State is important to Altria.

"A lot of the tobacco we use is grown there," Tovar says.

The Republican Governors Association has been airing ads in every Kentucky market accusing Democrat Ben Chandler of wasting money he won for the state in a health-care settlement. Chandler, Kentucky's attorney general, has been asking stations not to air it and says he had been victimized by "an avalanche of money" poured in by "Washington insiders."

The Democratic Governors' Association also has been collecting huge checks from typical donors to Democrats. Its five biggest donors are labor unions. The top one is the union representing government workers, the American Federation of State, County, and Municipal Employees. Representatives did not return calls.

The biggest donor to 527s in the past three years has been actress Jane Fonda and other liberals. Liberal and labor groups plan to use 527s to mount a major campaign to get rid of President Bush. Financier George Soros alone has pledged $10 million to a new 527 called Americans Coming Together, which will spend $75 million to air anti-Bush ads and get out anti-Bush voters on Election Day.

The 527 committees existed before campaign finance reform, and the new law limits such committees from coordinating campaigns with federal candidates, such as House members, senators, or presidents.

The new federal campaign finance law, which took effect after November's elections, barred political parties from receiving unlimited donations that corporations, labor unions and individuals once lavished on them.

Opponents, chief among them Sen. Mitch McConnell, R-Ky., argued that stopping the flow of big money into politics was like trying to stop water from flowing downhill: It would just flow around any obstacle.

"It's just shoved the money around to other sources," groups that are less accountable for what they say than local politicians who must face voters, says Bob Doyle, a Democratic political consultant who helped Ohio Rep. Tim Ryan and is trying to re-elect Kentucky Rep. Ken Lucas.

"This is basically a reordering of the hierarchy of campaign spending," Doyle says.

Top donors

Top donors to the Republican and Democratic governors associations in recent years:

FROM OHIO:

Republican Governors Association

Carl Lindner, Indian Hill, $100,000 in April and $50,000 in November 2002.

David Luff of FirstEnergy Corp., Akron, $100,000 in 2002.

HCR Manor Care, Toledo, $50,000 in June.

Frank Gates, Dublin, $40,000 in September.

Anthem Inc., Cincinnati, $25,000 in August.

Lewis Smoot of the Smoot Corp., Columbus, $25,000 in 2002.

Diebold, Canton, $25,000 in May.

Democratic Governors' Association

Nationwide Mutual Insurance Co., Columbus, $20,000 in 2002.

Anthem Inc., Cincinnati, $20,000 in 2001.

HCR Manor Care, Toledo, $20,000 in 2002.

FROM KENTUCKY:

Republican Governors Association

Kindred Healthcare Operating Inc., Louisville, $25,000 in June.

Brown & Williamson Tobacco Corp., Louisville, $20,000 in July.

Brown-Forman Corp., Louisville, $15,000 in June.

Democratic Governors' Association

Ashland Inc., Ashland, $55,000 combined in 2001 and 2002.

National Thoroughbred Racing Association, Lexington, $25,000 in 2002.

Almost Family, Louisville, $25,000 in 2002.

Churchill Downs, Louisville, $30,000 combined in 2000 and 2001.

Brown & Williamson Tobacco Corp., Louisville, $15,000 in 2001.

Brown-Forman Corp., Louisville, $15,000 in 2002.

Enquirer Washington Bureau

E-mail cweiser@gns.gannett.com