FEC Reviews Campaign Funding

Federal election commissioners are deciding whether President Clinton and Republican challenger Bob Dole must repay millions of dollars in taxpayer funds for exceeding spending limits during their 1996 presidential campaigns.

The commissioners, who include three Democrats and three Republicans, were meeting Thursday to review their auditors' recommendations that Clinton repay $7 million and Dole repay $17.7 million. The auditors said both men illegally benefited from issue ads run by their political parties.

The Justice Department is in the midst of a 90-day inquiry into whether the Federal Election Commission allegations warrant the appointment of an independent counsel to investigate the Clinton campaign. A decision is due next week.

The repayments are the highest ever recommended by FEC auditors, eclipsing the $4 million figure for Clinton's 1992 campaign. But the commissioners often alter repayment figures.

Clinton's 1992 audit was settled with the campaign repaying $1.6 million. Auditors recommended that President Bush repay $1.3 million, but the commissioners set the figure at $680,855.

Ann McBride, president of the watchdog group Common Cause, urged the commissioners to follow the recommendations of its auditors in this case. "Otherwise, the commissioners themselves will become parties to the destruction of the law that they are sworn to uphold and administer," she said.

At least one commissioner, Republican David Mason, already has indicated his opposition. Mason said the FEC did not have the authority to order campaigns to repay the Treasury for exceeding the primary spending limits.

In addition, he objected to the auditors' finding that most of the Republican ads should count against the general election spending limit, which requires a dollar-to-dollar payback, while allocating the Democratic ads against Clinton's primary spending limits, where the payback is smaller.

"An argument could be made that the advertisements run well in advance of the nomination could not properly be construed as exclusively for the general election," Mason said.

The issue ads are the subject of a lawsuit filed by Ross Perot's Reform Party. The suit was heard last month by a three-judge panel of the U.S. Court of Appeals for the Ninth Circuit in San Francisco.

"By paying for campaign ads thinly disguised as issues ads, we believe that the Republican and Democratic parties and their presidential campaigns effectively denied American citizens the right to cast an effective vote," said Russell Verney, chairman of the Reform Party.

By JONATHAN D. SALANT