Penny-Pinching Politics

Under the new rules, even the richest candidates go broke

"An abomination," says Richard Viguerie, a fund raiser for John Connally. "Absolutely counterproductive," echoes Larry Pryor, an aide to Jerry Brown. "An overreaction to the Nixon campaign," says Morris Dees, chief fund raiser for Ted Kennedy.

The target of this abuse is not a candidate or a presidential policy but a federal law that these aides agree has seriously impeded their fund raising and has hurt their candidates. All three campaigns, in fact, are close to going broke.

Kennedy's aides have just been put on half salary after getting no paychecks for a month. Last week both Brown and Connally suspended staff salaries, and Connally closed down campaign operations in all states that choose delegates after March 18. Vows a penurious but defiant Brown: "We'll hitchhike to the convention if we have to."

Passed by Congress in 1974 and amended in 1976, the Federal Election Campaign Act forbids a candidate for President from taking individual contributions of more than $1,000. If the candidate wants to receive federal campaign matching funds, he must stay within a $17.7 million limit during the caucuses and primaries and spend no more than $50,000 of his own and his family's money. Only Connally has refused matching funds.

In a stroke, the new limits wiped out the influence of the fat-cat contributors. No longer can a few well-heeled backers keep a candidate alive if he does not seem to have popular support. If he cannot get the votes, he cannot get the money. Both Kennedy and Connally raised large war chests (as of the end of January, $6.1 million by Kennedy, $10 million by Connally). But when they faltered in the polls and initial caucuses, their contributions fell off. Since they had spent lavishly without much regard for the future, they were in trouble. In contrast, donations to George Bush soared after he won the Iowa caucuses. People voted with their pocketbooks early in the presidential race.

With the big contributors cut out of presidential politics, candidates more than ever before have had to become their own fund raisers--one of their most difficult and demeaning duties. They have become so involved in the finances of their campaigns, thinks Republican Congressman Richard Cheney of Wyoming, who was President Ford's chief of staff, that they are "better equipped to serve as Budget Director than as President."

Nothing has higher priority with the candidates than keeping their coffers from going empty. Even though he was badly lagging in New Hampshire, Howard Baker had to give up a day's campaigning last week to go hat in hand to three fund raisers in Detroit (his take: more than $30,000). Says Larry Pryor of Brown's campaign: "A disproportionate amount of our energy goes to scrounging for small donations. We're like people that have to scratch all day for ground nuts and never get a chance to think of higher things."

The only finance director who professes to be satisfied with the current system is Fred Bush, who works for George Bush (no kin). But Candidate Bush was one of the few who could spend most of last year digging up small contributions. Complains Howard Baker's treasurer, Robert Perkins: "The candidates who can offset these constraints are those who go around sleeping in farmhouses and spend a year of their life getting off the ground."

Adding to the squeeze is the spending ceiling set by the law for each state, ranging from $3.9 million in California to a paltry $294,000 in New Hampshire, the same amount allowed for the Guam caucuses in May. Yet New Hampshire is one of the most crucial primaries. To try to spend as much as possible and yet stay within the law, candidates resort to every possible" device, not to say ruse. Says Perkins: "The state-by-state allocations are ludicrous. We find ourselves staying overnight in Vermont to avoid the New Hampshire limit and that burdens us with unnecessary paper work." The main reason Connally rejected federal funds was to spend as much as he wanted in South Carolina, a make-or-break state for him. He insists: "I want the flexibility of using what resources we have in the states where we need them most."

The law provides that the spending limits be raised each election to keep pace with inflation, but candidates complain that this is not enough. Says Ben Barnes, Connally's chief fund raiser: "The cost of running for office has almost doubled in four years. Gas is up 100%, TV in some markets is up 80%." Four years ago, the cost of chartering a Boeing 727 jet for a four-day trip to New England, the Midwest and the South was $37,500. The price tag today: $91,172.

Some candidates also gripe about the expense of complying with a provision of the law that they otherwise find praiseworthy--the requirement that they report periodically on donations and expenditures. At Carter-Mondale headquarters in Washington, 15 staffers work full time to prepare Federal Election Commission accountings that run some 500 pages. By convention time, each candidate still in the race will have spent an estimated $1.5 million on compliance, or five times the amount he is allowed for the New Hampshire primary.

Trying to raise money as best they can, most candidates have not had much success with direct-mail appeals. They also have not received significant amounts from the political action committees of special-interest groups. The candidates' favorite fund raiser is still the cocktail party, dinner or reception, where a lot of contributors can be dunned in one place. Connally has staged the most spectacular events: a telethon over cable TV from Atlanta that reached as many as 40 million homes across the country and is expected to raise more than $1 million, and a reception and dinner for 1,200 people in New York City last week that netted $200,000. The Democratic candidates prefer rock and country music groups, whose services are not subject to the $1,000 limit. Carter has signed up Country Star Willie Nelson for a fund raiser, and Brown has frequently called on his friend Linda Ronstadt. Says Brown Fund Raiser Jeff Wald: "There's a fierce dogfight going on for top groups. It's getting wild."

Perhaps the most important criticism of the campaign finance law is that it further fragments American politics. By channeling money directly to the candidates, the law encourages them more than before to run independently of party organizations, both on the local and national levels. The strict spending limitations also increase the centralization of campaigns. Since all state and local spending is included in candidates' totals, they are inclined to keep as tight control of their campaigns as they can. This discourages spontaneous grass-roots political activity and alienates many people from the campaigns--an unhealthy development in a pluralistic, democratic society that is supposed to thrive on participation.

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