GUEST COLUMN ON SOFT MONEY IN NORTH CAROLINA

DON'T GO SOFT…ON ILLEGAL CONTRIBUTIONS

by Bob Hall

North Carolina has some new players in this year's elections: Indian tribes in Florida and California, a Los Angeles company giving $100,000 and scores of individuals from Miami Beach to Las Vegas whose checks of up to $250,000 are being routed by the national Republican and Democratic parties into bank accounts earmarked for North Carolina elections.

Democracy South, a campaign finance watchdog group, has asked the State Board of Elections to shut down these special bank accounts, which could channel as much as $10 million of national "soft money" into North Carolina by November 7.

Soft money donations are those large checks written by corporations, unions and other wealthy donors who often want something in return - a special tax break or a night in the Lincoln bedroom. The checks are so big, they have triggered an arms race in fundraising that has completely changed national politics.

We can't afford to allow this type of money hustling to overtake elections in North Carolina. But who will stop it?

Already, the Republican Party has shipped more than $2 million into the state, including $750,000 in direct contributions to Richard Vinroot's campaign for governor. The Democratic Party has sent in over $1.5 million, with some of it being used to pay the salaries of campaign managers for state legislative candidates.

In 1998, the State Board of Elections ruled that soft money from the national parties (a) must only go to the state parties for "party building activity," not for the campaigns of specific state
candidates, and (b) must only come from personal funds, not from business or union treasuries - or from Indian tribes and Buddhist temples.

But those rules are being ignored. The disclosure reports for the national parties show that the soft money coming into North Carolina is a mixture of corporate and individual donations. They also show that this money - which would be illegal if given directly - is being channeled by the parties to candidates and to committees financing candidates.

Several candidates are even sending "hard money" donations from their campaign committees to Washington and getting back "soft money" from the national party to use in other North Carolina campaigns. One candidate sent up $100,000 and got back $200,000 for his favorite committee.
In other words, we are starting to see money laundering and money trading on a grand scale.
Republican and Democratic officials say the State Board's 1998 ruling is no longer important because the General Assembly passed an amendment in 1999 that exempts national parties from the state's $4,000 contribution limits. The parties believe that means they can give any amount of soft money to anyone.

But the new law doesn't override other statutes, such as North Carolina's strict ban against corporations trying to buy elections by making "direct or indirect" donations to candidates. So the parties still can't mix and trade corporate money with individual donations and send the result down to North Carolina.

The Board of Elections is meeting this Friday to decide what to do. Hopefully, the members won't go "soft." Hopefully, they will use their authority, written into law last year, to adopt emergency rules "to preserve the integrity of upcoming elections and the election process" and to "prevent the circumvention" of campaign finance laws.

If they don't act, we will see an election process that already favors big, in-state donors become a total free-for-all, with huge checks and high-stakes money trading becoming the norm for political campaigns in North Carolina.
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Bob Hall is research director of Democracy South.