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May 2, 2000, Tuesday
National Desk

AS POLITICAL GIFTS SET A RECORD PACE, SOME STOP GIVING


By DON VAN NATTA Jr.

Soft-money donations to the political parties are on a pace to set a record this year, but more and more large corporations have quietly stopped giving them.

In some cases, senior executives say they want to distance themselves from what they describe as the capital's unseemly culture of cash and influence, while others acknowledge that their companies are simply not getting much in return for the money.

Thirty-one corporations that in each previous election cycle since 1993-94 contributed at least $100,000 in soft money -- unlimited and largely unregulated gifts to the parties -- have not donated any soft money in the current cycle, covering the last 15 months, according to a computerized study of Federal Election Commission records. The list includes prolific past contributors like Revlon, Advanced Micro Devices, Miramax Films, and Starwood Hotels and Resorts.

None of the 31 companies have made statements announcing an end to their soft-money contributions, and many still make much smaller, federally regulated donations through political action committees. But some executives confirmed, although not for attribution, that their companies had adopted, or were weighing, a permanent ban on writing soft-money checks.

Only a few large companies -- General Motors, Monsanto, AlliedSignal, Time Warner, none of them among the most recent 31 -- have formally announced in recent years that they have sworn off soft money.

Few corporations have followed suit, in at least some cases because they do not want to risk angering legislators in Washington. ''There are more and more companies out there who are refusing to give money, but they are not advertising their decision,'' said Charles E. M. Kolb, president of the Committee for Economic Development, an association of corporate executives fighting for a campaign finance overhaul that would outlaw soft money. ''I suspect that there are more and more companies asking themselves if this is really worth it. What's just as interesting, though, is the fact that companies are scared to tell people.''

Several executives said their corporations had stopped giving soft money because they had found better use of their resources, like lobbying, contributing to political action committees and acting as hosts for fund-raising events. Others have stopped giving because they believe that soft money plays an unhealthy role in the political process.

While more companies quietly join the ranks of those forgoing soft-money donations, other corporate interests, senior executives and labor unions are redoubling them. Since January 1999, the Democratic and Republican Parties have raised $160.5 million in soft money, according to data compiled last week by the nonpartisan watchdog Common Cause. That was nearly double the $84.6 million in soft money raised by the parties in the first 15 months of the 1996 election cycle. By November, the parties will have raised nearly $500 million in soft money, some experts predict, as against $262 million in the 1996 cycle.

But the addition of 31 companies to the roster of those turning their backs on giving soft money does add muscle to the effort of two organizations of corporate leaders that are pushing for a soft-money ban.

The effort began in 1995, when Jerome Kohlberg, a founder of the leveraged buyout firm Kohlberg Kravis Roberts & Company, created Campaign for America to fight for an overhaul of the nation's campaign finance system. Mr. Kohlberg is being assisted by Warren E. Buffett, the acclaimed value investor and chief executive of Berkshire Hathaway. Last fall, Campaign for America reported that 121 companies that had given at least $100,000 each in 1994 or 1996 had since stopped contributing soft money.

The other group, Mr. Kolb's Committee for Economic Development, has an even larger number of corporate executives, although not all of them have persuaded their companies to stop giving soft money.

A senior vice president at one company that has stopped giving soft-money donations said that ''there was not much benefit'' to them, especially inasmuch as membership fees of the parties' most elite donor clubs had jumped to $250,000 from $100,000.

''What happens is by the time you give the base amount to the House Republicans, Senate Republicans, House Democrats and Senate Democrats, it costs the company a total of $60,000 and you find you don't get a lot of action for it,'' this executive said. ''As companies go through cost-cutting measures, it's an expense that is harder to justify.''

This executive's company, which stopped giving soft money in late 1998, has since found no negative ramifications in its dealings with lawmakers. ''When we were giving $10,000 or $15,000,'' the officer said, ''it was never enough; you are constantly asked for more. The no-money pledge is better than the some-money pledge.''

Some longtime fund-raisers and political strategists say they have seen recent signs of what they call ''donor fatigue,'' especially among corporate executives who are bombarded with solicitations for the parties' elite donor clubs and almost weekly black-tie dinners and political retreats at resort hotels. The fund-raisers say the fatigue is the fault of both parties' enormous appetite for soft money.

''Just in the last few weeks, I have had several clients of mine say they are getting out of this soft-money business,'' said Lanny J. Davis, a lawyer and lobbyist at Patton Boggs.

''Both political parties have gotten so excessive in trying to beat the other in the soft-money hunt,'' Mr. Davis said. ''I'm part of the problem, and I've never seen such disgust with the practice in all my years here. It has reached critical mass.''

In past election years, the Democratic National Committee and the Republican National Committee were the most aggressive soft-money solicitors. This year, however, the Senate and House fund-raising committees of each party are also pushing hard to collect big soft-money checks. With the battle for control of Congress intensifying, many donors are being solicited by multiple party committees at the same time, exhausting some supporters.

Other fund-raisers, however, play down the danger of donor exhaustion, noting that more corporations are writing larger checks than ever.

Last week, for example, the Republican National Committee brought in $21.3 million -- the most ever raised in a single event -- at its gala in Washington saluting the party's apparent presidential nominee, Gov. George W. Bush. The Republicans received six-figure contributions -- and fund-raising assistance -- from Philip Morris, AT&T and the National Rifle Association, all three of which are among the most generous soft-money contributors to the party this year. The Democrats hope to raise a similar amount at a tribute to President Clinton later this month.

One longtime Republican lobbyist predicted that more corporations would shun soft-money giving if they learned that competitors were doing the same. ''I think we are going to see a rush to the exit, if not a stampede,'' the lobbyist said. ''People are beginning to say it does not make sense in the context of our budgeting and our giving.''

Mr. Kolb, whose Committee for Economic Development has enlisted more than 250 executives and retired executives to endorse a soft-money ban, said an interesting question would be whether companies that had stopped giving believed that their interests were given short shrift by Congress as a result.

General Motors, which stopped soft-money giving in 1997, thinks not. Bill Noack, a G.M. spokesman, said the company had found that its decision had not affected relations with Congress at all.

''There are so many issues that affect us -- the environment, safety and trade -- there is something every day,'' Mr. Noack said. ''And I can't say our decision has made an impact at all.''

(The company, through its political action committee, still makes regulated donations, with a $5,000 legal maximum, to federal candidates.)

Like G.M., Monsanto, which had given $88,700 in soft money during the 1995-96 election cycle, stopped giving it in 1997. And like G.M., St. Louis-based Monsanto, which merged in April with Pharmacia & Upjohn, found that relations with Congress were unaffected, a spokeswoman said.

''Before we gave -- and after we stopped giving -- we always had wonderful relationships with the members in Congress who represent our company in Missouri,'' said the spokeswoman, Linda Fisher, Pharmacia's vice president for government affairs. ''We support them through our PAC and fund-raisers, and we have found that to be the most successful way to have our voice heard.''

Among the 31 companies that have most recently abandoned soft-money giving -- identified through a computerized check for The New York Times by the nonpartisan Campaign Study Group of Springfield, Va. -- some, of course, may find reason to make such a donation before November.

Further, among these companies, some top executives have stepped up their contributions. The Spanos Companies, for instance, contributed $295,000 in soft money in 1997-98, and none in the last 15 months. But its chairman, Alex G. Spanos, gave $250,000 to the Republican National Committee in March 1999, records of the Federal Election Commission show.

And while neither Revlon nor its chief executive, Ronald O. Perelman, has given any soft money this cycle, Mr. Perelman has given a total of $7,000 in federally restricted contributions to various candidates.