Democratic Senate Majority Fund Slows Activity As Group Awaits Decision in BCRA Court Case

Posted September 12, 2003 at 2:40pm

A political action committee created as a fundraising conduit for Senate Democrats has significantly slowed its operations as it awaits the pending Supreme Court ruling on the Bipartisan Campaign Reform Act.

The Democratic Senate Majority Fund is currently experiencing “a period of lower activity,” said Marc Farinella, a campaign consultant to the group. He rejected the idea that the slowdown was an intermediate step to shuttering the group altogether.

“Presuming the court doesn’t throw out McCain-Feingold, this is temporary,” said Farinella, referring to the two Senators who sponsored the campaign finance reform legislation.

The Supreme Court heard four hours of arguments last week on the constitutionality of the new law, and most legal experts expect a decision by the end of the year so that any changes can be implemented for the 2004 elections.

Under the law, national party committees are banned from accepting or spending so-called soft money, which can be raised in unlimited chunks from corporations, labor unions and individuals.

Soon after President Bush signed the bill, several outside groups were formed in hopes of becoming the unofficial recipients of the soft dollars that had been previously allocated to the committees.

On the Democratic side, the DSMF was joined by the New House PAC, which was founded by former Democratic Congressional Campaign Committee Executive Director Howard Wolfson and former DCCC Finance Director Jonathan Mantz.

Each group has a hard-money political action committee as well as a 527 arm, which collects soft-dollar contributions. Members can help raise money for the PAC but can in no way be involved in the 527.

There are also a number of other Democratic groups seeking to fill the soft-money void, including the labor-oriented Partnership for America’s Families, Americans Coming Together and the John Podesta-led American Majority Institute.

Former New York Republican Rep. Bill Paxon and fellow GOP lobbyist Susan Hirschmann created the Leadership Forum, a 527 group; three lawyers with close ties to Republican ber-attorney Ben Ginsberg formed the National Committee for a Responsible Senate, which files as a 501(c)(6) organization, allowing it to collect unlimited contributions without revealing donors.

In the first six months of the year, Democrats were significantly more aggressive in outreach and fundraising than their Republican counterparts.

The DSMF raised $105,000 in hard dollars in the first six months of 2003 and an additional $35,000 in soft money.

The soft-money component received a $15,000 donation from Cyber City Care, a company based in Manasquan, N.J., $10,000 from Manhattan PSO and $5,000 each from the International Brotherhood of Electrical Workers and attorney Thomas Green.

“We are still raising money but there is a lower level of activity,” Farinella said.

The New House PAC raised no soft dollars, but brought in $101,000 in hard money.

Wolfson said his group continues to aggressively raise money and reach out to Members and interest groups despite the looming court decision.

“We are moving forward, raising money and meeting with donors,” Wolfson said.

The structure of the two entities differ, however, making the DSMF a more cumbersome organization to fund on a day-to-day basis.

Both Farinella and Halle Mayes work for the group full-time and draw salaries, while both Mantz and Wolfson are part-time employees and have not received any compensation from the venture so far.

As a result, the DSMF doled out $63,000 from Jan. 1 to June 30 with $39,000 of that going to Farinella and his firm, while the New House PAC spent just $36,000.

Farinella confirmed that the staff had been reduced by one person, but not because of any financial struggles. Stephen Neumann, who received $1,700 in salary in the organization’s July quarterly report, left for law school this fall.

Farinella added that his firm has taken on several other clients in order to help defray the overhead costs of the DSMF, a move he said had always been planned.

Reports filed with the Internal Revenue Service indicate that the Leadership Forum, which returned a $1 million soft-money contribution from the National Republican Congressional Committee in late 2002, had not raised or spent any money through June 30.

Sources familiar with the Forum said it has been aggressively raising money over the past several months, a fact that would be reflected in its year-end report.

The NCRS on the other hand remains largely unformed as it has acquired no staff nor done any fundraising so far this year. Some GOPers close to the group are skeptical that it will ever get off the ground given donor concerns about running afoul of BCRA.