January 25, 1999

COST OF SEAT IN GENERAL ASSEMBLY SOARS;
LAWMAKERS EXPECTED TO SEEK RELIEF

The cost of a seat in the North Carolina General Assembly jumped again in the 1998 election, with the 170 winners spending $12 million according to unaudited reports filed at the state Board of Election.

That's three times the amount spent by winners in the 1992 election and a 32% jump over 1996.
At least 36 winners due to be sworn in on Wednesday spent over $100,000. That compares with 23 winners exceeding $100,000 in 1996 and just 2 in 1992.

The average House winner spent $53,090 in 1998, while the new Senators averaged $112,172.
Analysts say the "arms race" in political fundraising is fueled by intense bipartisan competition and a ready flow of cash from soft-money and special-interest donors seeking the advantages that money buys.

"While the candidates and parties jockey for partisan control, wealthy donors focus on investing in winners. Many of the big players, like Duke Energy, NationsBank, and the Home Builders PAC, now invest in both sides because overall the parties are very competitive and can deliver big returns on those investments," said Bob Hall of Democracy South, a campaign finance research and advocacy group.

Hall noted that the three top legislative spenders - Senate President Pro Tem Marc Basnight, out-going House Speaker Harold Brubaker, and the expected new Speaker, Jim Black - each sent hundreds of thousands of dollars to other candidates or to party committees which, in turn, spent money on behalf of those candidates. Legislative leaders can attract big donations, and then use them for partisan gain.

Party committees, which can accept unlimited amounts from donors, were especially active in funneling money into targeted campaigns, Hall said. Walter R. Davis a Texas oilman with North Carolina roots gave $250,000 to the various state Democratic Party committees in 1998, while Richard Mellon Scaife, a Pittsburgh donor to conservative causes, gave $50,000 to the state Republican Party.

The rapid rise in fundraising is also fueling more calls for campaign finance reform. A poll this fall by the Mellman Group in Washington shows that 2 out 3 North Carolinians want serious remedies, including public financing, as a means to challenge special-interest dominance in elections.

Meanwhile, more politicians are publicly expressing concern over the big-money arms race.
Gov. Jim Hunt, Senate leader Marc Basnight, and Rep. Jim Black have expressed a strong desire to control political spending. They'll get their chance now that Democrats control both House and Senate.

Because of a 1976 ruling by the U.S. Supreme Court, which said political spending is a form of free speech, the state can not mandate a cap on campaign spending. The only constitutional solution is to provide incentives, including an alternative source of campaign money, to those candidates who voluntarily accept a spending ceiling.

More than a dozen public financing programs exist around the country, with four states providing full financing to candidates who demonstrate a strong base of voter support. The latter option, called the Clean Election program, as well as partial public-funding programs in such states as Florida and Kentucky, will likely be debated this year in both chambers of the General Assembly.

WINNING CANDIDATES FOR GENERAL ASSEMBLY
IN 1998, RANKED BY SPENDING

LOSING CANDIDATES IN 1998, RANKED BY SPENDING

NOTE: No legislative candidate who spent at least $150,000 lost.

* Spending includes operating expenses, in-kind expenses, loan repayments,
contributions to other candidates or political committees, and coordinated
party expenditures.

** Receipts includes contributions received, in-kind contributions, loan
proceeds, interest, and refunds. Does not include balance from '96 campaign.