Leadership Forum Returns $1 Million

Nonprofit Group Run by DeLay’s Former Chief of Staff Returns Money to NRCC

Posted January 7, 2003 at 5:48pm

The Leadership Forum, a nonprofit group run by a former top aide to House Majority Leader Tom DeLay (R-Texas), has returned a $1 million soft-money donation it received from the National Republican Congressional Committee in early November.

The $1 million transfer by the NRCC to the Leadership Forum, a 527 group, triggered a Federal Election Commission complaint by several campaign watchdog organizations, including Common Cause, Democracy 21, the Center for Responsive Politics and the Campaign and Media Legal Center.

The watchdogs charged that the NRCC and House GOP leaders, as well as Democrats, were attempting to evade the McCain-Feingold campaign law that went into effect following the November elections by setting up shadow campaign committees run by hand-picked political operatives. These groups would be allowed to collect soft money, something the national parties are prevented from doing under McCain-Feingold, and spend it on federal races.

The Leadership Forum returned the $1 million by the end of December — just seven weeks after receiving the donation, according to GOP sources, but they are unclear what the motivation was for that decision. There are some indications that the Leadership Forum wanted to avoid becoming entangled in legal action over McCain-Feingold.

The $1 million was then refunded by the NRCC to its original donors. NRCC officials were unable at press time to provide details on which donors received the funds.

An NRCC spokesman declined to comment on the $1 million gift to the Leadership Forum or its eventual return. In the past, NRCC officials have publicly insisted that the Leadership Forum is not formally affiliated with the GOP campaign committee in any way.

The Leadership Forum is run by Susan Hirschmann, who was DeLay’s chief of staff until last August. She is now a lobbyist with the firm Williams & Jensen, which represents such clients as AOL Time Warner, General Motors Corp. and the Pharmaceutical Research and Manufacturers Association, among other high-powered clients. She did not return a phone call seeking comment.

Former Rep. Bill Paxon (R-N.Y.), now a lobbyist with Akin, Gump, Strauss, Hauer & Feld LLP, serves as the Leadership Forum’s vice president. Paxon, who ran the NRCC from 1993 to 1996, also declined to comment.

In the days leading up to Nov. 6, when the soft-money ban took effect, the House and Senate Republican campaign committees scrambled to give away millions in soft money they had not used.

The $1 million transferred to the Leadership Forum came from the NRCC’s building fund and was seen by most GOP strategists as a sign that the House leadership, most notably DeLay, was giving its seal of approval to Hirschmann’s organization. The idea was that the Leadership Forum could raise unlimited donations from corporations and wealthy individuals in order to fund issue ads to help defend Republican lawmakers, although Hirschmann and Paxon would then have to be extremely careful during any contacts with GOP leaders to avoid the appearance of illegal coordination.

DeLay and other top Republicans are not prohibited from appearing at Leadership Forum events or even having their names on invitations for Leadership Forum fundraisers, as long as they do not directly solicit soft money for the group.

In their FEC complaint, the watchdogs also charged that the Democratic State Parties Organization, an entity representing state parties created by the Democratic National Committee, is also a violation of McCain-Feingold.

DNC Chairman Terry McAuliffe has urged Democratic donors to raise as much as $40 million in soft money for the DSPO, a nonprofit corporation that reportedly has the legal status of a state party, although McAuliffe has denied using that figure or suggesting that Democrats can use the DSPO to get around McCain-Feingold restrictions on soft money.