McCain Taps Cash He Sought to Limit

(from the Wash Post)

McCain Taps Cash He Sought To Limit
Onetime Reformer Calls on Big Donors

By John Solomon
Washington Post Staff Writer
Sunday, February 11, 2007; A01



Just about a year and a half ago, Sen. John McCain went to court to try to curtail the influence of a group to which A. Jerrold Perenchio gave $9 million, saying it was trying to "evade and violate" new campaign laws with voter ads ahead of the midterm elections.

As McCain launches his own presidential campaign, however, he is counting on Perenchio, the founder of the Univision Spanish-language media empire, to raise millions of dollars as co-chairman of the Arizona Republican's national finance committee.

In his early efforts to secure the support of the Republican establishment he has frequently bucked, McCain has embraced some of the same political-money figures, forces and tactics he pilloried during a 15-year crusade to reduce the influence of big donors, fundraisers and lobbyists in elections. That includes enlisting the support of Washington lobbyists as well as key players in the fundraising machine that helped President Bush defeat McCain in the 2000 Republican primaries.

After enduring his own brush with scandal in the early 1990s, when he and four Senate colleagues pressured regulators on behalf of Charles Keating, chairman of a failed savings and loan association, while collecting donations and favors from him, McCain became a leader in the effort to eliminate "soft money" in elections -- large donations from corporations, labor unions and wealthy individuals. In 2002, McCain joined forces with Sen. Russell Feingold (D-Wis.) to finally push through legislation ending soft money and placing strict limits on donations.

But now the contrast between McCain the presidential candidate and McCain the reformer can be jarring. McCain's campaign says that he is still studying whether to forgo the public financing and spending limits he has long supported, but that he will not be handicapped by restrictions his competitors will not face in 2008.

McCain the reformer worked unsuccessfully through Congress and the courts to try to stop nonprofit political groups known as 527s from using unlimited donations to run political ads and fund other activities aimed at influencing voters in the run-up to elections. He reintroduced legislation last week to end 527 donations, but there appears to be little appetite in Congress to pass it.

McCain the candidate now expects Republicans to use the same big-money 527 groups in the 2008 elections to beat Democrats, if the groups remain legal. "The senator believes that both parties should be subjected to an even playing field. If Democratic organizations are allowed to take advantage of 527s, Republican organizations will, too," said Mark Salter, a senior McCain adviser. The senator declined to be interviewed.

McCain the reformer relentlessly argued that six- and seven-figure "soft money" checks that corporations, wealthy individuals and unions were giving to political parties to influence elections were corrupting American politics. "The voices of average Americans have been drowned out by the deafening racket of campaign cash," he warned just a few years ago.

McCain the candidate has enlisted some of the same GOP fundraising giants who created and flourished in the soft-money system, including Bush's fundraising "Pioneers" and "Rangers," who earned their designations by raising at least $100,000 or $200,000 for his campaigns.

At least six of McCain's first eight national finance co-chairmen have given or raised large donations for political parties or 527 groups, campaign and IRS records show. In all, the finance co-chairs have given at least $13.5 million in soft money and 527 donations since the 1998 election.

They include former Bush moneymen such as lobbyist Thomas G. Loeffler and financier Donald Bren, whose personal and corporate donations total in the hundreds of thousands of dollars each in recent elections.

In key states, McCain has enlisted the likes of New York financier Henry Kravis, one of the GOP's largest donors over the past two decades, and Texas energy executive Robert A. Mosbacher, the architect of the Republicans' "Team 100" fundraising machine that helped make soft money a staple of politics by raising $20 million in large donations to help Bush's father win the presidency in 1988.

The big moneymen gravitating to McCain are politically pragmatic. They may not always agree with him, but they say they admire the Arizona senator for his work on campaign finance reform, his Vietnam War record, his support of Bush on Iraq and his recent campaigning for GOP candidates.

"He did things for our country that very few people I know would have had the courage to do," said Brian Ballard, a Florida lobbyist and longtime fundraiser for former Florida governor Jeb Bush who signed on this month to raise money for McCain.

Ballard said most of the big-money players he knows are not fazed by McCain's attacks on the political-money and lobbying systems, calling it more of an issue for consultants who make their living off big donations.

"I myself don't mind him calling out lobbyists when they've done something bad," Ballard said.

Lobbyists have been a favorite target of McCain the reformer, who proposed legislation requiring so-called grass-roots groups that organize average citizens into lobbying forces to disclose their financial backers.

But McCain the candidate switched positions and last month voted against that disclosure requirement after influential GOP groups such as Focus on the Family and National Right to Life strongly opposed the idea. McCain also hired as his campaign manager one of the grass-roots-lobbying industry's key consultants, Bush strategist Terry Nelson.

"When the senator heard from legitimate public-interest organizations in January of last year that a provision in the legislation would unfairly penalize them for Jack Abramoff's behavior, he agreed and withdrew his support for the provision at that time," Salter explained, referring to the lobbyist in prison for fraud, tax evasion and conspiracy.

In December, Sen. Trent Lott (Miss.), a darling of GOP conservatives and lobbyists, acted as a surrogate for McCain at a fundraising meeting with a group of lobbyists at a Capitol Hill hotel. McCain's political action committee has collected donations -- capped at $5,000 -- from several big-name lobbyists, including Loeffler and fellow Bush fundraiser Wayne Berman, whose blue-chip clients frequently have issues pending before Congress and the White House.

"Both Wayne Berman and Tom Loeffler are longtime supporters of the Republican Party, President Bush and Senator McCain," Salter said. "Senator McCain is pleased to have their support."

Ed Rogers, one of Washington's most influential GOP lobbyists and strategists, said the embrace of McCain is not surprising. "Lobbyists are the ultimate pragmatists, and they deal with the world as is," said Rogers, who last year gave $5,000 to McCain's political action committee, though he says he has not yet endorsed a candidate.

Perenchio, now a member of McCain's finance committee, funneled more than $1.4 million in soft money to Republican causes in the 1998, 2000 and 2002 election campaigns, often in amounts McCain used to criticize. For one GOP fundraising dinner in the spring of 2001, for example, he donated $250,000. Perenchio has also been a major donor to the 527 groups formed to exploit a loophole in the legislation sponsored by McCain and Feingold.

Taking their name from a little-known provision of the IRS tax code, the groups began raising large donations -- some in the millions of dollars -- and running ads and funding other activities designed to influence the 2004 presidential election. Federal election regulators have refused to rein in the groups and their donations in the past two elections.

Perenchio gave $4 million to a pro-Republican 527 group called Progress for America, which helped Bush in the 2004 campaign. In the 2006 congressional races, Perenchio gave $5 million more to the same group.

In the summer of 2005, McCain's allies in the reform movement went to court seeking to force the Federal Election Commission to regulate the 527 groups and make them abide by the same donation limits as other political committees.

In a friend-of-the-court brief, McCain and Feingold specifically cited Progress for America as an example of what was wrong with 527 groups. The court filing cited one of the group's pro-Bush commercials -- which starred a 16-year-old whose mother was killed in the Sept. 11 attacks -- to illustrate the impact large donations had on the election. Perenchio was not mentioned.

"The deployment of section 527 groups as the new vehicle for using soft money to conduct political activities to influence federal elections is simply the latest chapter in a long history of efforts to evade and violate the federal campaign finance laws," the McCain court filing stated. "Sadly, it is another chapter in the FEC's failure to enforce the campaign finance laws."

Perenchio declined to be interviewed. Salter said Perenchio's support of McCain "pre-dates the existence of 527s. Perenchio served on Senator McCain's fundraising committee in 2000, and the senator is pleased to have his continued support."

That support has come in a number of ways. Tax records show that Perenchio's Chartwell Foundation donated $100,000 on March 1, 2002, to the Reform Institute, a nonprofit foundation of which McCain was co-chairman and which was advocating the end of big political donations.

At the time, McCain was chairman of the Senate Commerce Committee, which oversees the broadcast industry, and Univision had numerous issues pending before the government. Cablevision, another broadcaster, also donated $200,000 to the McCain foundation around the same time the senator took action in Congress favorable to that company.

McCain's allies in the campaign finance reform movement seem resigned to the fact that he will not abide by many of the principles he advocated for a decade as a reformer, including public financing and its associated spending and fundraising limits.

"Certainly we are disappointed that he has decided not to take the lead in fixing the presidential-financing system he is competing in," said Mary Boyle of Common Cause, the ethics watchdog that cheered McCain's reform efforts for years. "But it is understandable he is opting out.

"It is apparent to us that to run a competitive presidential campaign inside a system that is still broken, that is what he has to do," she said.