McCain Funds Solicit Big Donors

[Dan J 277]

Sen. John McCain's campaign has announced that it is asking individuals to donate as much as about $70,000 to accounts that could help his campaign. The cap on donations to presidential candidates is $4,600 per election campaign.

The McCain campaign has established several fund-raising accounts that will collect large donations from wealthy individuals and parcel them out to national and state Republican parties that can spend the money to help Sen. McCain and other Republican candidates.

The fund-raising accounts, which will supplement his existing fund-raising efforts, will give the Arizona senator the "ability to raise much faster larger sums of money," said campaign manager Rick Davis, who outlined the plan for reporters Friday.

Such joint fund-raising accounts aren't new. President Bush relied on them during his 2000 and 2004 campaigns; Sen. John Kerry used a similar account in 2004.

But Sen. McCain's use of the method could contradict his congressional record as a champion of reducing the influence of big money in politics.

Campaign spokesman Tucker Bounds said the senator "has a long record of rooting out the corruptive influences in campaign finance, and it would be impossible to paint him as the candidate of big money in this race." He called the fund-raising structure "completely commonplace" and said their efforts were intended to "remain competitive with Senators Clinton and Obama, who have raised millions more than we have at this point."

In 2002, Sen. McCain helped enact a campaign-finance-reform law that banned corporations, unions and wealthy individuals from writing six-figure and seven-figure checks to the national political parties. During debate on the legislation, Sen. McCain said "it is self-evident that contributions from a single source that run to the hundreds of thousands of dollars are not healthy to a democracy." The law eliminated about $500 million in corporate and union money from politics.

Now Sen. McCain plans to ask people to donate about $70,000 each to the new accounts. Talking to reporters, Mr. Davis said the "advantage we have is that we are able to raise money really above 10 times the individual donation [limit] that right now anybody inside the [barack] Obama or Hillary Clinton campaign can raise."

Mr. Davis said the money raised by the funds will be spent by national and state parties to identify likely Republican voters and get them to the polls on Election Day.

Mr. Davis said donations to the central account will be divvied up: about $2,300 will go to Sen. McCain's primary-election campaign, about $2,300 will be deposited in his legal and accounting fund for the general-election campaign, about $28,500 will be sent to the Republican National Committee, which will spend money on Sen. McCain's behalf in November, and about $40,000 will be split among the Republican parties in four states the McCain campaign considers to be critical for the fall campaign: Colorado, Minnesota, New Mexico and Wisconsin. The campaign plans other joint accounts to route funds to Ohio, Florida and California.

"The appearance is that you are writing a very large check to the campaign, but the reality is that only a small fraction of the contribution is actually going to McCain," said Ken Gross, a campaign-finance lawyer who has worked for Republican presidential campaigns.

The Republican National Committee will spend tens of millions of dollars to help elect a Republican to the White House, so it is in Sen. McCain's interests to fill the party's coffers. Spending by the state parties will help Sen. McCain as well, though not as directly.

Democrats have seized the fund-raising advantage this cycle by collecting huge numbers of small donations over the Internet, forcing Sen. McCain to do everything possible to keep up. Sunday night, Sen. Obama reported having $51.1 million in the bank at the end of March after raising $42.8 million for the month.

Sen. McCain began operating the fund-raising accounts in early March after he became the party's likely nominee. So far, financial details are available for only one of the accounts. That one raised $317,000 in March, all in checks received March 21 from donors in the investment banking and consulting industries around Wall Street.

Five employees of hedge fund Elliott Management Corp. donated about one-third of that total. Paul Singer, the founder and general partner of Elliott, and four employees donated a total of nearly $100,000 to the account. Mr. Singer and other Elliott employees had been top supporters and donors to former New York Mayor Rudy Giuliani until he dropped out of the race.

A spokesperson for Mr. Singer and the firm declined to comment.

The new fund-raising accounts could help Sen. McCain make up a fund-raising deficit with his Democratic opponents. Campaign finance reports filed at the Federal Election Commission Sunday showed that Sen. McCain's campaign raised $15 million during the month.

Sen. McCain has raised far less money than his Democratic opponents have during the 2008 presidential campaign, but he has shown signs of life this year. After ending last year with less than $3 million in the bank, Sen. McCain now has $12 million on hand. That is an improvement from $8 million at the end of February.

Still, Sen. McCain is expected to accept government funding for the general election, which would disqualify him from accepting donations for the general election. His financial report filed Sunday shows that he has returned donations to people who contributed to his general-election campaign.

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