An Endowed Chair

Sen. John McCain's push for campaign-finance reform has helped his presidential bid. Donations from special interests haven't hurt, either.

"Hard money" donations made directly to candidates are limited to $2,000 per individual, per election cycle ($1,000 for the primary, $1,000 for the general) and $10,000 ($5,000 primary, $5,000 general) per PAC per election cycle. Corporations are prohibited from donating unlimited amounts of cash directly to a campaign, but they can, for example, host a fund-raiser for the candidate and collect dozens of checks from employees, as some McCain donors have. This is known as "bundling." Companies are not supposed to reimburse employees who contribute to the firm's favorite politicians, but there's no way to monitor whether this occurs.

The money adds up. And it's all legal. Bundling -- a term made familiar by the Keating Five scandal -- is strictly defined by the Federal Elections Commission as checks written on the same day, literally bundled together and handed over by a company employee to a campaign employee. Bundling is acceptable, FEC officials say, as long as a candidate files a letter reporting it as such.

Most campaign-finance reformers have a looser definition: Bundling should be considered money from employees/PACs of a special interest, collected during a single election cycle.

This chart reflects individual and PAC contributions of $9.8 million to John McCain's 1998 Senate and 2000 presidential campaigns. Federal rules require that campaign officials make their "best faith" effort to identify and disclose a donor's employer.

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This chart reflects individual and PAC contributions of $9.8 million to John McCain's 1998 Senate and 2000 presidential campaigns. Federal rules require that campaign officials make their "best faith" effort to identify and disclose a donor's employer.

View a larger image



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Larry Makinson of the Center for Responsive Politics, a nonpartisan group that monitors campaign funding trends, says that while soft money and hard money are different, "they both have some things in common ... the ultimate goal is influence with the politicians."

He continues, "Now, there's such a thing as a benign [bundle] and there's such a thing as a not-so-benign [bundle]. A bundle of, let's say, Italian voters in Manhattan or Brooklyn or something like that is one thing, and a bundle from one company that has business before your Senate committee is quite another."

Some observe that McCain is a prisoner of his war chest -- absolutely forced to clamor for money in order to be a viable candidate for the White House, where he might have a shot at making reforms stick. Others are weary of hearing him grouse about the evils of special interests as he takes their money.

Senate Majority Leader Trent Lott has criticized McCain for complaining that others take soft money as he rakes in the hard money. And the publication Campaigns and Elections even dubbed McCain the "Political Hypocrite of 1998" because he raised almost $4.5 million while his no-name Senate opponent raised only $375,463.

In recent weeks, the national press has started to report that executives for companies like America Online, EchoStar, Union Pacific, and US West -- all of whom regularly have business before his committee -- have been hosting fund-raisers for McCain, blanketing him with cash.

The McCain campaign sees no duplicity. McCain has no choice but to take contributions from individuals with business before his committee, says campaign spokesman Howard Opinsky.

"About 80 percent of all business in this country is somehow or another impacted by decisions made by the Commerce Committee, so to ... make a decision to not accept contributions from anybody who has anything to do with the Commerce Committee would mean that you would systematically make anyone who works for any corporation ineligible to give to your campaign," he says.

The distinction, Opinsky insists, is soft money vs. hard money. His boss has only complained about the former. "He's never criticized the current FEC rules and he doesn't criticize people that raise money," Opinsky says. "He's never said anything about George W. Bush or anyone else that's able to raise sums of money according to the FEC rules. That's not what's at issue. What he's trying to do is eliminate the $100,000 check. That's a huge sum of money that undoubtably has an impact on the way things work. A $1,000 contribution in the face of a $100,000 contribution is insignificant."

But what about more than $100,000 from US West employees and PACs?

Opinsky says the campaign pays no attention to a contributor's employer.

"The contributions are made from individuals. ... There are no corporate contributions, they are only from individuals and they are according to the law," he says.

"What you're trying to do," Opinsky continues, "is compare soft money donations to donations made by individuals who all belong to a similar corporation. And I don't really see that there's a comparison. I mean, if a company wants to make a soft money donation, they should go ahead and make a soft money donation."

But then they couldn't donate to John McCain.

Without a confession from a politician, it would be all but impossible to prove that any particular campaign contribution influenced a public policy decision. But there are instances where McCain has taken actions that affected donors. Sometimes, the donor lost. Sometimes not.

McCain did not respond to an interview request made through Opinsky, but he was recently quoted in Business Week: "I'm influenced by the big donor who has access to my office," he says. "I know I'm influenced by people having access to me when average citizens do not."

Last month, the public interest group Common Cause released a report linking Congress' decision to gut the so-called Airline Passenger Bill of Rights with soft-money campaign contributions from major airlines.

"The reason for this timidity in Washington?" the report asked. "Because when it comes to influencing Congress with campaign cash, the airlines are always on time. At the same time the airline industry has vigorously fought recent congressional efforts to establish airline passenger rights, its political giving has taken off."

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