Politics

Loaded And Loving It

By CBSNews.com staff CBSNews.com staff

February 9, 2000 / 2:09 PM EST / CBS

Both Hillary Clinton's $8 million and Rudolph Giuliani's $12 million raised in 1999 break the record for fund-raising in the year before a Senate election. The record for raising money (as opposed to using a personal fortune) was set by former New York Senator Alfonse DAmato, who raised over $6 million in 1997 for his unsuccessful 1998 race against Charles Schumer.

The first lady and the New York mayor are each on track to break the all-time record for fund-raising for a Senate race, also set by D'Amato, who raised $27.4 million for the 1998 race. The record for fund-raising by a non-incumbent who did not use personal money was set by Oliver North in 1994, when he collected $21 million in his losing race against Virginia Sen. Charles Robb.

Mrs. Clinton and Giuliani are also poised to break the record for total spending in a Senate race. The current record-holders are Dianne Feinstein and Michael Huffington, who spent a combined $44 million in 1994; and D'Amato and Schumer, who spent a combined $41 million in 1998.

Out of State Money

Despite Mrs. Clinton's carpetbagger status, Giuliani collected almost as much as she did from out of state: 45 percent of his 1999 donations came from outside New York, while 55 percent of Clinton's came from beyond New York's borders. Looking at Giuliani's fund-raising in the last six months of 1999 alone, more than half of his donations (53 percent) came from outside New York.

Though raising money from out of state is not rare in hotly contested Senate races, Hillary and Rudy's percentage of out-of-state donors far exceeds the average. In large states such as New York, Senate candidates usually collect around 30 percent of their donations from elsewhere.

For example, in the 1998 New York Senate race, D'Amato raised 37 percent of his money from out of state, compared to Schumer's 27 percent. Another comparable state is California, where Sen. Barbara Boxer raised 30 percent of her funds from out of state in the 1998 Senate race, compared to challenger Matt Fong's 13 percent.

Direct Mail

Giuliani and Mrs. Clinton's strong out-of-state fund-raising may be due in large part to direct-mail solicitations - they each spent about $1.4 million on direct-mail operations in 1999. Giuliani's advisers say about 40 percent of his donations have come from direct mail.

Giuliani's financial disclosure reports show he spent $1,478,260 on direct-mail in 1999 - nearly one-third of his total spending for the year. Over half of that amount ($828,026) went to one direct-mail company in Virginia - American Target Advertising - run by Richard A. Viguerie. Viguerie headed Oliver North's direct-mail campaign in 1994, and has also worked for Senator Jesse Helms and Pat Buchanan.

Mrs. Clinton's campaign has attacked Giuliani for sending negative letters to potential out-of-state donors warning of her "radical agenda" and referring to her as the "darling of the left-wing elite." Meanwile, Mrs. Clinton's campaign has used mailing lists of liberal givers, in particular those provided by Emily's List, a Washington D.C.-based nonprofit organization committed to electing pro-choice women.

Party Committees

Of the $8 million that Mrs. Clinton raised in 1999, $1.2 million came to her from two joint fund-raising committees with the Democratic Senatorial Campaign Committee (DSCC): $1.05 million from New York Senate 2000 and over $100,000 from New York Democratic Victory 2000.

Ninety-six percent of the donors to New York Senate 2000 came from outside New York state. Several Hollywood celebrities gave to her campaign through New York Senate 2000, including Steven Speilberg and his wife Kate Capshaw, who each gave $2,000; Tom Cruise and Nicole Kidman, who each gave $2,000; TV producer Aaron Spelling, $2,000; Tom and Rita Hanks, $2,000; and Barbra Streisand, $1,000. Despite the strong California presence, a small number of New Yorkers did donate to New York Senate 2000, among them Christie Brinkley and Martin Scorsese, who each gave $2,000.

The second committee - New York Democratic Victory 2000 - transferred $110,000 to the first lady's campaign, of which 16 percent came from out-of-state donors. Contributors to this fund included Melanie Griffith, $1,000; Billy Joel, $3,000; as well as five members of the New York-based independent film company, the Shooting Gallery, who each gave $5,000.

Mrs. Clinton has come under criticism for her joint fund-raising with the DSCC because unlike her Senate campaign, which can only accept $2000 per donor, the DSCC can accept unlimited soft-money donations. Though the DSCC makes no explicit commitment to donors to spend their contributions on Mrs. Clinton's race, the money can be used to pay for issue-oriented ads and party-building activities to help her, as long as they do not explicitly advocate voting for her. In 1996, the Federal Election Commission cited the Clinton-Gore and Dole campaigns for violating the law by taking advantage of this same soft-money loophole, though the party-controlled Board of Commissioners later reversed the decision.

Giuliani has also come under scrutiny for collecting money through two political action committees - a federal leadership PAC, Solutions America, and a New York State Committee, Giuliani for New York. These two committees are subject to more lenient fund-raising restrictions ($5,000 per donor for Solutions America and $45,000 per donor for Giuliani for New York) than his official Senate committee, Friends of Giuliani, which can only accept $2,000 per donor.

Last month, the New York Democratic Party threatened to file a formal complaint with the Federal Election Commission (FEC) charging Giuliani with accepting more than $700,000 in excess of legal limits through these two PACs and illegally subsidizing his Senate campaign by $630,000. The Giuliani campaign says the committees stopped sharing expenses in April 1999, when he formlly told the FEC that he was considering running for Senate.

The Road Ahead

There was an attempt (some say a PR stunt) to deal with one aspect of the money squabbles between the two campaigns. On Jan. 12, Clinton campaign manager Bill de Blasio telephoned Giuliani campaign honcho Bruce Teitelbaum to discuss a bilateral ban on soft money in the race.

Teitelbaum followed up the five-minute conversation with a letter that day to de Blasio saying that before Giuliani would consider a soft-money ban, Mrs. Clinton should first repay the New York State Democratic Party for nearly $400,000 in ads it aired for her last summer. De Blasio fired off a letter in response citing Giuliani's questionable fund-raising through his two PACs.

Though the discussions were highly publicized, the campaigns appear to be far from any agreement on a soft-money ban. In the meantime, seasoned observers say it is highly unlikely the two candidates would agree to limiting spending in what is expected to be the most expensive Senate race in history.

Giuliani and Mrs. Clinton are not required to file with the FEC again until April 15. At that point, we'll see if the trends of 1999 - large amounts of out-of-state money and the pre-eminent role of direct-mail solicitations - continue to be the defining factors behind both campaigns' fund-raising prowess. Needless to say, both sides will be watching closely.