RICH MAN'S GAME

By RICHARD LACAYO/NEW YORK

YOU SHOULD HAVE BEEN there a few weeks ago when Steve Forbes held one of his campaign bashes at New York City's Waldorf-Astoria Hotel. Joan Rivers emceed. The $1,000-a-plate tables were flush with interested parties like Alan ("Ace") Greenberg, head of the prominent investment firm Bear Stearns, and Leonard Lauder of the Estee Lauder cosmetics family. More than 1,400 people attended, which meant about $1.2 million for the campaign treasury. It was a big night for Forbes, his most successful fund raiser yet.

His most successful what? To avoid becoming obligated to special interests, wasn't Forbes supposed to be financing his own campaign? Not quite. He's held at least one other sizable fund raiser so far. Half a dozen others are scheduled, and as many as 15 more are being planned. His campaign manager, Bill Dal Col, says Forbes is raising money to demonstrate that he has "a broad-based campaign." And by law his donors are limited to $1,000 a person, which is not the kind of money that makes a millionaire beholden to anybody.

But some of Forbes' business-world friends, including Greenberg, Lauder and Philadelphia developer Richard Fox, have served as shakers of the donor tree, persuading others to chip in. While they deny seeking personal gain, if Forbes wins, they still might hope for special treatment from his White House. (Or if he loses, from his magazine.) Charles Lewis, author of The Buying of the President, sees it this way: "Forbes is a millionaire who says he's not beholden to special interests who is now beholden to special interests."

What's more, the money chase could serve Forbes in a highly personal way. Unlike Ross Perot, Forbes is not giving his own money to his campaign. He's lending it--with the option to repay himself later from any donor funds that remain unspent at the end of his campaign. If he gains the White House, he can also legally undertake postelection fund raising until he completely pays back his IOUs to himself. Though he says they haven't discussed it, Dal Col adds, "I'm sure Forbes would do it, pay himself back." In the meantime, by fronting himself with his own money, the thrifty Forbes can afford to decline federal matching funds, which most of his Republican rivals can't do without but which saddle them with campaign-spending limits that Forbes can ignore.

Let's concede that it's easier for a camel to pass through the eye of a needle than for a rich man to enter heaven. When it comes to entering the White House, wealth still has its advantages. So many, in fact, that American politics has become a rich person's game as never before. In addition to Forbes, the '96 G.O.P. presidential field includes Morry Taylor, a multimillionaire tire manufacturer. And billionaire Ross Perot may run again.

With serious presidential contenders needing $20 million for the primaries alone, a candidate's most reliable friend, Phil Gramm once quipped, is "ready money." And there's none readier than what's in your own checkbook. Forbes says he is willing to spend $25 million. Perot shelled out more than $60 million.

Bank accounts of distinction are also muscling into Senate and House races in record numbers: 38 candidates for the Senate and 93 for the House put at least $100,000 of their own money into their 1994 campaigns, about twice as many as eight years earlier. The influx of the rich has many people concerned that politics is becoming a game for the well heeled only. "Money has become the key factor in who runs for office and who wins," says Jamin B. Raskin, co-author of The Wealth Primary: Campaign Fund Raising and the Constitution. "I would consider it a real crisis of democracy."

Some would ask, What's the big deal? The first Presidents--Washington, Adams and Jefferson--were all rich. In 1958 New York State offered the spectacle of millionaire gridlock. Railway heir Averell Harriman lost the Governor's race to petroleum heir Nelson Rockefeller, and investment-banking heir Corliss Lamont lost the Senate race. (He was running as a Socialist, no less.) Cash on hand also doesn't guarantee success at the polls. Ask Michael Huffington, the poster boy for thwarted ambitions who spent his own $28 million in an unsuccessful 1994 bid for the Senate seat of California Democrat Dianne Feinstein. Morry Taylor's spending has got him nowhere in the opinion polls.

But conditions have ripened in recent years to favor wealthy newcomers as never before. Voters are skeptical of both major parties, and the decline of party affiliations has paralleled the rising importance of TV spots. "Party organization and the support of party leaders are no longer as important as they were," says Tony Corrado, an expert on campaign finance at Colby College in Maine. "Candidates can now appeal directly to the electorate through television." Then there are the unintended consequences of the post-Watergate attempt to reduce the role of money in politics. In 1974 Congress created the present donor caps. It also put a $50,000 limit on what candidates could spend from personal funds. Two years later that provision was disallowed by the Supreme Court, which held that political spending by individuals is a form of free speech.

Signs are right for another round of reform. The anti-Washington mood among conservatives has converged with the liberals' suspicion of big money. In both the House and Senate there are bipartisan bills to change congressional campaign-finance rules. Supporters of the House version were inspired to fight harder last November when Speaker Newt Gingrich and minority leader Richard Gephardt tried to derail the idea. Both bills would ban or limit contributions from political-action committees. To discourage out-of-state contributors from swaying elections, they would also require most of a candidate's money to come from within his or her state.

To limit the advantages enjoyed by wealthy politicians, they would require broadcasters to give 50% discounts on TV advertising to congressional candidates who agree to accept the campaign-funding limits--a change that reformers are urging for presidential campaigns too. For those there are also proposals to scrap state-by-state campaign-spending limits in favor of a single cap on total spending nationwide. That acknowledges the fact that candidates must inject money disproportionately in key early states with small populations, like Iowa and New Hampshire. Last week Senator Bill Bradley went even further, urging a constitutional amendment imposing spending limits for Senate races. The New Jersey Democrat would permit taxpayers to contribute additional amounts of from $1 to $5,000 to a fund that would finance Senate races in their own states. Candidates would be forbidden to accept funds from any other source. Good luck on that one. The existing irs check-off box, which lets taxpayers shift $3 of their payment to a similar fund, is already in trouble. With the number of taxpayers checking the box going as low as 15%, that fund may run out of cash by the year 2000.

The easiest reform would be a significant rise in the 22-year-old cap for individual donors, which has never been adjusted for inflation. Make it $10,000, for instance, and you are likely to slash the time that candidates without personal wealth must devote to the money chase. Higher caps are a notion that horrifies some liberal good-government groups. "Then politicians will be wholly owned rather than just shared," says Ellen Miller, executive director of the Washington-based Center for Responsive Politics.

Will they? When the average Senate campaign costs nearly $5 million, $10,000 hardly buys much special attention. Then again, any idea popular with both candidates and rich donors probably bears some skeptical scrutiny. For the record, one of those who support higher caps is Steve Forbes.

--Reported by Jeffrey H. Birnbaum/Washington and Charlotte Faltermayer/New York

With reporting by JEFFREY H. BIRNBAUM/WASHINGTON AND CHARLOTTE FALTERMAYER/NEW YORK