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Copyright 2000 The National Journal, Inc.  
The National Journal

December 2, 2000

SECTION: CAMPAIGN FINANCE; Pg. 3738; Vol. 32, No. 49

LENGTH: 4651 words

HEADLINE: Big Bucks, Tiny State

BYLINE: Eliza Newlin Carney


The Senate race in Delaware was a case study in this year's
record-breaking spending on political campaigns.


Nobody is haggling over the number  of people who elected Gov.
Thomas R. Carper of Delaware to the Senate on  Nov. 7. There have
been no agonizing recounts, no lawsuits, and no disputed chads.
Carper, a Democrat, won 181,566 votes out of the 327,000 cast-a
comfortable victory (with 55.5 percent of the vote) over five-
term Republican Sen. William V. Roth Jr.

     But the vote tallies in Delaware are remarkable in one
respect: the amount of money that Carper and his allies spent per
voter to win. Between them, Carper and the Democratic Party spent $6.1 million on the race, which breaks down to $ 33.60 for each
pro-Carper vote. Most of that money came from the Democratic
Party, which shelled out $ 4 million, while Carper himself spent $2.1 million. To put those figures in perspective,
multimillionaire Jon Corzine, who spent a record $ 60 million of
his own money in the Senate race in New Jersey, paid only
slightly more for each vote cast in his favor: $ 37.15.      To be sure, Carper won his votes after spending day after
grueling 16-hour day shaking hands at factories, bowling alleys,
and parades, just as he had when he first ran for state treasurer
in Delaware in 1975. But back then, Carper bankrolled his
campaign with a grand total of $ 10,000-his life savings at the
time-to put up billboards, and with a $ 5,000 bank loan to pay for
other advertisements. This time, Carper spent 140 times that

     "I said many times throughout the campaign that if I
wasn't convinced that we needed to change the way we do campaigns
before, I certainly am now," Carper said in an interview. "They
are too long, and they are too expensive." By his own estimate,
Carper spent virtually as much time raising money as he did
campaigning. "I felt I had three full-time jobs: Being governor,
being the candidate, and raising money," he said.

     Carper isn't the only candidate-winner or loser-who is
still reeling over his campaign's price tag. This year's election
was a record-breaker on all fronts. Political parties, interest
groups, and candidates collectively spent some $ 3 billion, an
increase of 50 percent more than the previous presidential
election cycle, according to the Center for Responsive Politics,
a Washington nonprofit group that tracks political money.

     What made Campaign 2000 different was not just the spike
in spending, which outpaced inflation many times over, but the
uncontrolled and often secret nature of the money. Both of the
major political parties and an army of advocacy groups, from
health insurers to environmentalists, brazenly embraced the use
of "soft," or unregulated, money to an unprecedented degree.

     Technically, election laws allow only "hard," or
regulated, money to be spent on campaigns. These dollars are
subject to limits on the amount and the sources of contributions.
But those rules seemed to mean little this year, particularly to
the political parties. Both Democrats and Republicans spent
millions of dollars in soft money on issue ads to promote their
candidates. Their rationale: These ads weren't really campaign
ads, but a form of "party-building" that by law may be financed,
in part, by soft money.

     Together, the national Democratic and Republican parties
raised close to $ 393 million in soft money, an increase of 90
percent from 1995-96, a Common Cause analysis concluded. And both
parties found creative new ways to raise and spend soft money.
For instance, the national parties set up controversial joint
committees with their Senate candidates. They also funneled
unparalleled amounts of soft money to the state parties, which
can spend it more freely.

     Interest groups, for their part, more than doubled their
spending on unregulated issue ads during this year's campaign.
Like the parties, interest groups escaped regulation by running
ads that functioned essentially as campaign ads but purportedly
backed "issues," not candidates. Such groups spent an estimated $340 million during the 2000 election season on issue ads,
according to the Annenberg Public Policy Center at the University
of Pennsylvania. That total is more than twice the $ 135 million
to $ 150 million that Annenberg reported was spent by the leading
advocacy groups on issue ads in 1996.

     Members of Congress were so taken aback this year by the
millions of dollars being dumped into secretive, unregulated
interest-group ads that they hurriedly enacted a law to improve
campaign finance disclosure. The much ballyhooed disclosure rules
shed little light, however, on the bulk of secretive issue ads.
Most of the groups running such ads are 501(c)3 or 501(c)4
nonprofits, which are not covered by the new law.

     Also still shrouded in secrecy is the source of the more
than $ 100 million that the two host committees collectively
raised for the Democratic and Republican national conventions
this year. That total is more than twice the tab for the
conventions four years ago. Moreover, the presidential candidates
continue to raise millions of dollars in unregulated money for
their legal defense funds and, in the case of George W. Bush, for
the transition.

     Soft money wasn't the whole story, of course. The amount
of hard money also increased dramatically in this year's
political campaigns. In the presidential election, Bush raised a
record $ 184.2 million after deciding during the primaries to
eschew public financing so that he could ignore federal spending
limits. A vast team of wealthy Bush allies (his "Pioneers")
raised $ 100,000 each for Bush, all in hard-money contributions of $1,000 or less. Al Gore, meanwhile, pulled in $ 133.3 million.
(The totals for both candidates include federal matching funds.)

     Congressional candidates raised a staggering $ 800.7
million in hard money, a 39 percent increase over two years ago,
according to the latest reports from the Federal Election
Commission. Thirty-two House candidates, or three times as many
as in the 1998 election, cleared $ 2 million each in hard money,
the Common Cause analysis found. Several Senate races set
dramatic new benchmarks. Corzine's $ 60 million outlay in New
Jersey was more than twice what any Senate candidate had spent of
his personal fortune on an election. And the face-off between
Carper and Roth, which cost close to $ 11 million overall, broke
records in Delaware.

     Incumbents in both the House and Senate, most of them in
safe seats, donated tens of millions of dollars in regulated
money from their own campaign war chests and from their personal
political action committees, known as leadership PACs, to their
colleagues in contested races.

     For advocates of campaign finance reform, the 2000
election was a case study in excess and audacity. Some reform
backers, including Sens. John McCain, R-Ariz., and Russell
Feingold, D-Wis., believe that this year marks a breaking point,
and that a ban on soft money will finally be enacted during the
coming Congress.

     Others see no end to the ever-escalating campaign costs,
given the ongoing and evenly matched power struggle between the
two major parties. "As ferocious as the fund raising was in
2000," said Larry Makinson, the outgoing executive director and a
senior fellow at the Center for Responsive Politics, "it's going
to be even worse in 2002 because both the House and the Senate
are razor-thin in their margins."

     Whatever the case, Campaign 2000 is sure to be remembered
as a watershed, the year when political players of all stripes
stopped even pretending to follow the rules. Federal laws that
bar labor unions and corporations from making direct political
contributions became a quaint fiction, as the major parties
raised hundreds of millions from these forbidden sources.
Likewise, FEC disclosure requirements and contribution limits
were buried in the blizzard of interest-group issue ads.

     "This election cycle is the first election cycle in the
history of the current regulatory regime where the money that was
not supposed to be spent on elections exceeded the money that is
permitted to be spent," said E. Joshua Rosenkranz, the president
of the Brennan Center for Justice at New York University's School
of Law.
Dueling in Delaware
The major trends that defined this year's campaign-the explosion
of unregulated spending by parties and interest groups; the
record fund raising by candidates; the growth of leadership PACs;
the secret expenditures-were all vividly evident in the Delaware
Senate race. It was billed from day one as a "clash of the
titans," given Roth's ability to woo big donors as chairman of
the influential Senate Finance Committee, and Carper's pull as a
governor and former House member.

     Both parties considered the fight between Roth, 79, and
Carper, 53, a must-win contest. Myriad interest groups also
targeted it as a key race. All told, the candidates, the parties,
and the interest groups spent at least $ 10.8 million on the Roth-
Carper race, according to an analysis by National Journal. The
actual total was probably closer to $ 11 million, given the vast
amounts spent on issue ads that evade disclosure rules. Yet tiny
Delaware has only 503,672 registered

     On paper, Roth appeared to enjoy a significant fund-
raising advantage. As of Oct. 18, he had raised $ 3.8 million to
Carper's $ 2.2 million, with most of Roth's money coming from
PACs. Roth's FEC reports tally page after page of PAC
contributions from truckers, real estate agents, builders,
doctors, insurers, and other wealthy business interests.

     Roth's biggest benefactors, not surprisingly, represented
the finance, credit, and banking industries. His top donor,
according to a financial profile by the Center for Responsive
Politics, was Delaware-based MBNA America Bank. MBNA's
contributions totaled $ 240,750 in PAC money and in checks written
by company employees and executives. Other top Roth contributors
included Verizon Communications and Citigroup, which each gave
about $ 20,000 in PAC and individual employee contributions.

     Roth's secret weapon, though, was the patchwork of
interest groups that spent as much as $ 1 million on issue ads and
mailings on his behalf. These included pro-gun groups, anti-
abortion activists, business associations, environmentalists, and
lobbyists representing the nursing home industry.

     It's impossible to say precisely how much these groups
spent, since their pro-Roth messages did not explicitly call for
his election or for Carper's defeat. As such, they were not
technically election ads, and therefore were not subject to FEC
disclosure rules. But the pro-Roth ad blitz heavily influenced
the race-and Carper's poll numbers, according to Carper's

     Most damaging to Carper were the incessant TV ads by the
American Health Care Association-a Washington-based group
representing the nursing home industry-and its affiliate, the
Alliance for Quality Nursing Home Care. Beginning in August,
these groups ran a barrage of ads praising Roth for "working to
improve nursing home care" and "caring for seniors," as one spot
put it.

     The ads' purpose was to draw attention to a leading
nursing home industry concern, namely the need to restore
Medicare funding for long-term care and nursing facilities, said
Alan E. DeFend, the vice president for public affairs at the
American Health Care Association. "Senator Roth has, over time,
shown an appreciation for the concerns of the frail and elderly
population, not only in his state but nationwide, and he has been
a champion for the needs of seniors," DeFend said in an interview
before Election Day. "And we just want to call attention to

     Carper spokesman Brian Selander estimated that nursing
home lobbyists spent at least $ 1 million on the ads, which ran
for several weeks in the Philadelphia and Salisbury, Md., media
markets. (Delaware lacks major network broadcasters, so political
advertisers must pay top dollar to Philadelphia TV stations in
order to reach viewers statewide.)

     DeFend called Selander's $ 1 million estimate "way off."
But the nursing home ads cost at least $ 293,000, and probably
considerably more, according to data furnished by the Annenberg
center. Using information collected from the Campaign Media
Analysis Group, a commercial firm that monitors political
advertising, Annenberg was able to show that the Alliance for
Quality Nursing Home Care spent $ 293,590 for pro-Roth ads on
Philadelphia TV stations between Sept. 1 and Oct. 31. Given that
the nursing home ads also ran in August, and aired on Maryland
stations as well, their total cost was probably at least in the $400,000 to $ 500,000 range.

     Business groups also invested heavily in pro-Roth ads and
mailings. The Health Benefits Coalition, a consortium of business
associations opposed to new health care mandates on employers,
targeted the Roth-Carper race as part of a $ 1 million national ad
campaign to help key congressional allies in five states. One
coalition radio ad praised Roth for voting "for real health care
reforms," as opposed to more-sweeping regulations "that would
mean more lawsuits, higher premiums, and more uninsured."

     "We've been in a lot of the states where Senators are
facing tough re-election races, and we wanted to make sure that
the voters there understood the votes that (those Senators) took
on the patients' bill of rights," said Todd Irons, a spokesman
for the Health Benefits Coalition. Irons declined to furnish
specifics, however; after all, the coalition's position is that
these were not election ads.

     Assuming, for the sake of argument, that the coalition
spent roughly the same amount in each of the five states it
targeted, its outlay in Delaware would have been $ 200,000 or so.
Coalition members that helped pay for the ads were the Business
Roundtable, the National Association of Manufacturers, the
National Association of Wholesaler-Distributors, the National
Federation of Independent Business, and the U.S. Chamber of

     A couple of these business groups launched separate pro-
Roth ad campaigns. The Business Roundtable ran a series of warm-
and-fuzzy TV ads, featuring a gurgling baby and children singing
in the background, that played up Roth's free-trade stance.
Children "need an America opening foreign markets around the
globe," the announcer crooned, before adding that this is
something that "Roth has been working and fighting for."

     Those ads, along with a print version, ran for two weeks
as part of a $ 6 million Business Roundtable campaign to help pro-
business lawmakers in 36 races. "We certainly expect that it will
have an effect on the perception of voters toward trade," said
Johanna Schneider, communications director for the Business
Roundtable. Schneider, too, declined to say how much the group's
ads on behalf of Roth had cost. If the $ 6 million was divided
more or less evenly between 36 candidates, the group's pro-Roth
ads were in the $ 167,000 range.

     The NFIB also invested heavily in Roth's race by giving
him the maximum PAC contribution and sending out thousands of
pieces of pro-Roth literature to its Delaware members. The
organization spent between $ 50,000 and $ 60,000 to help Roth, an
NFIB official said, including direct contributions, mail, fax
alerts, and phone calls to get out the vote.

     Roth also benefited from Sierra Club radio ads that
thanked him for his opposition to oil drilling in Alaska's Arctic
National Wildlife Refuge. The group spent about $ 50,000 on the
ads, said Daniel J. Weiss, the Sierra Club's political director.
Overall, the Sierra Club spent between $ 9 million and $ 9.5
million in the 2000 election.

     The list goes on. A Virginia-based pro-gun group called
the Law Enforcement Alliance of America, which receives funding
from the National Rifle Association, also spent an indeterminate
amount on anti-Carper mailings during the campaign's final days.
The LEAA did not return calls seeking comment.

     A couple of groups also made independent campaign
expenditures on Roth's behalf. (These are explicit campaign
expenditures that are subject to FEC contribution limits and
disclosure rules.) In this category, the National Right to Life
Committee spent $ 2,385 to help Roth, while the NRA spent $ 40,429,
according to FEC reports. The NRA money underwrote flag-waving TV
ads that featured Charlton Heston admonishing: "Vote freedom
first. Vote Bill Roth for Senate."

     A conservative estimate, then, puts pro-Roth spending by
interest groups in the $ 800,000 range-perhaps one-fourth of what
Roth himself spent. That spending was one of "the grossest abuses
of independent expenditures in Delaware history," declared
Selander. Carper "was a strong supporter of campaign finance
reform before" the election, Selander added. "But after staring
down the million-dollar muzzle of special-interest spending on
behalf of Roth, you learn a lot about how much our system is in
need of reforming."

     Carper, however, had his own secret weapon in the
election: Some $ 4 million in unregulated money spent on his
behalf by the Democratic Senatorial Campaign Committee. The DSCC
ultimately spent about twice what Carper himself did. A small
fraction of that money-$ 140,000-was hard money that is subject to
federal contribution limits. But the vast bulk of it was soft
money, ostensibly spent on get-out-the-vote and party-building

     Never mind that the DSCC money went for costly TV ads
that most viewers probably took for election ads. One typical
spot, which featured an unflattering image of Roth looking all of
his 79 years, attacked "Bill Roth and congressional Republicans"
for "spending the surplus before it even comes in." The ad then
praised Carper (saying he "believes in the Delaware way-investing
our surplus for our families' future") for balancing the budget
as governor. Significantly, the ads do not say "vote for Carper,"
which would brand them as campaign ads, but end with the tag
line: "Call Bill Roth. Tell him the people of Delaware deserve a
debate now-on the surplus and on the future."

     The Democratic National Committee also spent more money
in Delaware than in any previous election. "Delaware is not just
the first state in the country, it is the first state for the
Democratic Party," said DNC National Chairman Joe Andrew, as
quoted by the Associated Press, on his visit there in September.
"We know that as Delaware goes, so goes the nation."

     FEC data show that the DNC had transferred a record $233,803 to the state Democratic Party in Delaware as of Oct. 18.
That money certainly was targeted in large part to the
presidential election, but it also helped Carper.

     Both the DNC and the DSCC funneled their money through
the Delaware Democratic Party, rather than spending it directly.
That's because FEC rules require the national parties to pay for
at least 65 percent of their party-building activities with hard
money. The Delaware rules are more relaxed: parties may pay for a
full 70 percent of their party-building activities with soft
money-virtually the reverse of the federal rules.

     Delaware was no anomaly. Nationally, the two major
parties shifted much of their activity in 2000 to the states,
according to the FEC. This appeared to be for the precise purpose
of circumventing federal rules that encourage parties to spend
hard money. In toto, the national Democratic committees
transferred $ 142.7 million to the various states, while the
Republicans transferred $ 136.6 million.

     The DSCC also set up a joint committee with Carper, one
of several such controversial accounts that both parties set up
with Senate candidates. The Carper joint committee, ambiguously
dubbed "Democratic Senate 2000," netted $ 326,650 at fund-raisers
attended by Carper. The donors at these events wrote checks far
bigger than they could have legally made out to Carper's
campaign. The DSCC transferred a portion of that purse-some $71,500 in hard money-directly into Carper's war chest. The rest
could not legally be earmarked for Carper's campaign.

     But such joint accounts inevitably benefit the featured
candidate, say campaign finance watchdogs. Several pro-reform
advocacy groups, including Common Cause, have complained to the
FEC that these joint accounts are illegal because they allow
candidates to raise soft money.

     "They were deliberately fuzzing the line between hard and
soft (money), and sending the message to donors that there's no
such thing as a limit," said Makinson, of the Center for
Responsive Politics. "And we had not seen that before."

     Carper also got big money from his former colleagues on
Capitol Hill. He received an extraordinary $ 65,500 from
leadership PACs run by incumbent Democrats, including Senate
Minority Leader Thomas A. Daschle, D-S.D. (DASHPAC); Sen. Barbara
Boxer, D-Calif. (PAC for a Change); Sen. Harry Reid, D-Nev. (the
Searchlight Leadership Fund); and Sen. Edward Kennedy, D-Mass.
(Committee for a Democratic Majority). Carper's old House
colleagues also transferred $ 16,000 to him directly from their
campaign war chests.

     "Many of them had encouraged me to run in the first
place" Carper said of the helpful congressional Democrats. "And
they said to me later: 'Since we got you into this, Tom, we want
to ensure that you at least have the money to be financially
competitive.' "

     Carper's reputation as a centrist New Democrat also
helped. The New Democrat Network PAC gave Carper $ 8,000 in direct
contributions and shipped to him another $ 13,600 worth of checks
bundled from NDN donors. By far, Carper's biggest New Democrat
sugar daddy was his old friend Sen. Evan Bayh, D-Ind., who
regularly consults with Carper on policy matters.

     Bayh's leadership PAC, Americans for Responsible
Leadership, gave Carper the maximum contribution of $ 10,000, and
bundled $ 49,000 in checks made out to Carper from its donors.
This made Bayh's PAC the top individual contributor to Carper's

     Carper's other top source of campaign money came from
labor unions, which collectively gave him $ 216,500. In addition,
the AFL-CIO mounted an aggressive voter education and get-out-
the-vote drive on Carper's behalf, but its exact value could not
be determined.

     The strong support that Carper received from his
colleagues was not unusual. Leadership PACs gave out at least $14.7 million to congressional candidates as of Oct. 18,
according to an analysis by CQ's Daily Monitor, $ 9.6 million of
it from Republicans and $ 5.1 million from Democrats. The four
congressional campaign committees also collected unprecedented
sums from sitting lawmakers to help embattled candidates. For
instance, House Republicans gave the National Republican
Congressional Committee $ 21.3 million in its "Battleground 2000"
fund-raising drive, $ 5.3 million more than originally targeted.

     Roth also got some help from his colleagues, including $10,000 from the New Republican Majority Fund, the PAC run by
Senate Majority Leader Trent Lott, R-Miss. The National
Republican Senatorial Committee spent the maximum amount that it
legally could in coordination with Roth, which was $ 140,000, and
also shipped about $ 250,000 to the Delaware GOP to help get out
the vote. But the NRSC did not target Roth's race for a huge
soft-money blitz, as it did in some other races.

     That was partly Roth's doing. "We decided that we were
going to run our campaign with money that we raised, within the
election limits for candidates for office," said Jo Anne
Barnhart, Roth's campaign manager.

     The NRSC may also have wanted to direct its money to
Republican Senate candidates it believed were more needy. After
all, Roth had bankrolled close to $ 4 million as of
Oct. 18. "We knew he was not going to have any problem raising
money," said NRSC spokesman Stuart Roy.

     Did Roth lose because of Democratic Party soft money?
Money and ads alone don't win elections, of course. The personal
qualities and campaign platforms of the candidates are always key
factors, and in Roth's case, questions loomed large about his age
and health. (He fainted twice during the campaign in public view-
once while a local TV camera crew was interviewing him.) But the
race remained close in many polls until the end, and Roth and his
interest-group allies certainly would have vastly outspent Carper
without soft money from the Democratic Party.

     "I think there's no doubt that the outcome would have
been much closer had they (the DSCC) not invested in the
campaign," said Neil Oxman, president of the Campaign Group, a
Philadelphia-based media consulting firm that was in charge of
Carper's TV advertising.

     Oxman's firm accounted for about half ($ 1 million) of the $2.1 million that Carper paid out during his campaign, according
to FEC reports. Most of that money went directly back out to TV
stations, but the Campaign Group kept a percentage. Usually such
consultants keep between 7 percent and 15 percent. If Oxman
received the average, that means his firm netted some $ 100,000.
But Oxman, like Carper, was staggered by the cost of the
campaign. "Even though I benefit from it, the system has to be
changed," he said.

     Carper has pledged to vote for legislation sponsored by
McCain and Feingold banning soft money if it comes to the Senate
floor next year. But he admits that he may not have made it to
the Senate had it not been for the $ 4 million in soft money that
Democrats spent to elect him. "I acknowledge that freely," Carper
said. "But I think their legislation also would have had an
impact on independent expenditures" by interest groups.

     If Roth is bitter, he's not showing it. He did not make
himself available for an interview for this story. But a couple
of days after the election, he gamely made his way to "Sussex
County Return Day," a 200-year-old postelection tradition in
Delaware, where he symbolically buried the hatchet with Carper.
"It's more fun when you're the winner," Roth admitted to The
Baltimore Sun. Still, he clasped hands with Carper in a horse-
drawn carriage and joined in the parade.

     Roth sported his trademark "Big Dog" tie that day, but
his election is testament that chairing a powerful Senate
committee only goes so far in modern campaigns. As the 2000
election attests, a candidate's war chest is just part of the
picture these days. Increasingly, outside groups and political
parties are the lead players.

     Maybe Roth sensed that last year, when he abruptly
dropped his opposition to campaign finance reform and voted to
end a filibuster blocking the McCain-Feingold soft-money ban. It
remains to be seen whether his Senate colleagues will take Roth's
experience to heart when the McCain-Feingold bill resurfaces-as
it inevitably will-next year.

LOAD-DATE: December 5, 2000

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