The move makes Time Warner, the parent of Cable News Network, Time magazine and Warner Brothers, the fifth company to stop making donations of "soft money," so named because they are not subject to federal contribution limits.
In addition, the Committee for Economic Development, a group of 200 business executives, also has pushed for a ban on "soft money."
"It's the right moral position to take and it's also an easier policy," said Rep. Christopher Shays of Connecticut, the lead Republican sponsor of campaign finance legislation passed by the House. "If you don't give soft money, you won't be asked for it. Therefore, you don't have to say no."
A Republican-led filibuster in the Senate in October killed legislation to ban "soft money," a month after the House had passed a similar bill.
Time Warner has given more than $150,000 to the Democratic and Republican parties this year, and gave $396,000 during the 1997-98 election cycle.
It also made a $100,000 donation to the Republican National Convention in 1996 and gave $50,000 to a now-defunct foundation headed by former Sen. Bob Dole, the 1996 GOP presidential nominee.
"The impact of unregulated soft money and the prevalence of highly expensive, often negative advertising are increasingly distorting the electoral process," Time Warner Chairman and Chief Executive Officer Gerald Levin and President Richard Parsons said in a statement.
"Soft money," which is not subject to federal contribution limits, goes to political parties rather than individuals and cannot be used for the direct benefit of a presidential or congressional candidate. But such funds increasingly have been spent on issue ads designed to help elect or defeat particular candidates without specifically urging a vote for or against them.
Both parties have been raising record amounts of "soft money" this year. Democratic committees took in $26.4 million in unrestricted "soft money" contributions from January through June, almost double the $13.7 million raised during the first six months of 1997, the last comparable period. Republicans raised even more "soft money" - $30.9 million - in the first six months of the year, a 42 percent boost over 1997's $21.7 million.
Besides Time Warner, four other companies - General Motors, Monsanto, Allied Signal and Hasbro - also have stopped making such donations from their corporate treasuries, according to the advocacy group Common Cause.
GM, however, continues to make contributions from its political action committee to the "soft money" accounts of the political parties.
Time Warner's decision to forgo "soft money" contributions, meanwhile, was combined with an announcement that the mdia conglomerate would increase the amount of money Time, CNN and its local cable news channels have to spend on political coverage.
The company also has allocated money to support voter registration.
"This is Time Warner stepping up to make opportunities for candidates to reach the public and the public to get engaged," Common Cause President Scott Harshbarger said.
Time Warner will continue, however, to give contributions through its political action committee. The PAC made $21,000 in donations so far this year and $425,573 during the 1997-98 election cycle.
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