WASHINGTON, July 26, 2001 — Political parties registered at the state level raised more than $600 million during the 2000 elections, according to initial findings released today as part of a project that will, for the first time, examine soft money in the states.

The study was released by “State Secrets,” a joint project of the Washington, D.C.-based Center for Public Integrity and Center for Responsive Politics, and the Montana-based National Institute on Money in State Politics. The contribution figures were compiled over the past year by the Institute, which continues to audit state reports to eliminate instances in which soft money was inadvertently reported to both the federal and state governments.

The study compiled data from election reports for the 1999-2000 cycle submitted by more than 900 political committees at the state and local level in all 50 states. (See the charts for full contribution totals.)

The “State Secrets” project will examine several aspects of soft money fund raising at the state level, including how Democrats and Republicans fared in the money chase and which industries and organizations were the most generous contributors. The project plans to issue a report of its findings during the first half of 2002. Although party and industry breakdowns of federal soft money have existed for years, no such examination of state soft money has ever been performed.

“Special interests easily evade national scrutiny by pumping huge sums of soft money into the coffers of state political parties,” read a joint statement by Peter Eisner, acting executive director of the Center for Public Integrity, Samantha Sanchez, co-director of the Institute, and Larry Noble, executive director and general counsel of the Center for Responsive Politics. “The role of soft money is well documented in federal elections, but no one has attempted to calculate the vast amount of cash flowing into and out of state and local party committees until now.”

Although several current campaign finance reform proposals before Congress would eliminate or cap “soft money” at the federal level, none would ban it at the state level.

“Our investigation focuses on an area of political fund raising that is all but certain to grow by leaps and bounds in the next several years, regardless of whether current proposals to reform campaign finance laws are enacted,” the statement read.

The term “soft money” commonly refers to contributions to the political parties by corporations, labor unions, and wealthy individuals that are not subject to limits and prohibitions under federal law. Federal party committees report their soft money fund raising and spending to the FEC, but state party committees do not. Reporting requirements, as well as contribution limits, vary from state to state.

The National Institute on Money in State Politics is a nonpartisan, nonprofit organization based in Helena, Montana, that is dedicated to accurate, comprehensive and unbiased documentation and research on campaign finance at the state level. It was founded in 1997.

The Center for Responsive Politics is a nonpartisan, nonprofit research group based in Washington, D.C., that tracks money in federal politics and its effect on elections and public policy. It was founded in 1983.

Statement of Peter Eisner, acting executive director of the Center for Public Integrity, at the opening news conference of statement of “State Secrets,” a joint project of the Center for Public Integrity, the National Institute on Money in State Politics, and the Center for Responsive Politics.

Good morning and welcome. My name is Peter Eisner and I’m the acting executive director of the Center for Public Integrity. We’ve invited you all here today to announce an unprecedented endeavor. It is a project that involves the Center and two organizations weve worked with informally over the years the Montana-based National Institute on Money in State Politics, led by Samantha Sanchez, and the Washington, D.C.-based Center for Responsive Politics, headed by Larry Noble.

Today we launch “State Secrets,” a joint investigation into an aspect of money in politics that has been largely screened from public view. This research involves hundreds of millions of dollars that wont be affected by the pending federal legislation seeking to wipe out so-called soft money in elections. By looking outside the “Beltway,” we discovered that in the 2000 election cycle, political party committees in the states raised $600 million in “soft money” they could spend in virtually any way they wanted.

Soft money – the Washington vernacular for an under-examined repository of political money – confuses most Americans. The term refers to the unlimited amount of dollars contributed by corporations, labor unions and wealthy individuals to our countrys political parties. Much attention in recent years has been drawn to the amount of soft money raised by the Democratic and Republican National Committees, along with their congressional and senatorial counterparts, because their use of the “soft money” loophole has skyrocketed. In 1992, according to the Federal Election Commission, the national parties raised $86.1 million in soft money. By 2000, national party committees raised a record $487 million in soft money, up from $263 million during the 1996 presidential year.

There has always been a sense that similar activity occurs at the state level, but because of wildly disparate reporting requirements and logistical complexities, no one has previously attempted to untangle the soft money web at that level of government. Thanks to a generous grant from The Pew Charitable Trusts, we’ve taken on this challenge and today we present the initial results the tip of the iceberg.

This daunting undertaking presents a special opportunity for our three groups, working on concurrent tracks, to join forces. We think we are a uniquely qualified bunch. The Center for Responsive Politics, formed in 1983, pioneered and perfected the collection and dissemination of campaign finance data for congressional and presidential races. The National Institute on Money in State Politics, formed in 1997, specializes in doing the same for money moving in state elections for both executive offices and legislative positions.

The Center for Public Integrity is a nonprofit, nonpartisan research organization that investigates public service and ethics-related issues. The Center was founded by our executive director, Charles Lewis, in 1990, and since then we have issued more than 100 investigative reports. In recent years, we have written extensively about how powerful, moneyed interests have been distorting our democracy at the federal level. In our books, The Buying of the President (1996), The Buying of the Congress, and The Buying of the President 2000, we breathe life into data collected by CRP by telling the stories behind the numbers. In our reports “Hidden Agendas: How State Legislators Keep Conflicts of Interest Under Wraps” and “Our Private Legislatures Public Service, Personal Gain,” we analyze personal financial disclosure laws for state legislators and document startling conflicts of interest, incorporating the Institutes campaign finance data along the way.

This new effort is a logical progression. We have combined our individual strengths to examine thoroughly the pervasive effects of campaign money on elections in our country. We will expand upon these preliminary findings. In addition to contributions to state political parties, we are tracking their expenditures in an effort to document where that money has gone. We are coupling this state data with federal data to analyze the interaction among the various levels of the political party system. In the end, we will be able to follow the money from the local level all the way up to the federal level — and then back down again. During the first half of 2002, we will reconvene to release comprehensive databases and analysis, detailing the way the soft money operates across the board.

We are excited to be able to come together to announce this groundbreaking project and share with you this striking new data. To provide further information about todays release, please let me introduce Samantha Sanchez, the co-director of the National Institute on Money in State Politics. Samantha, who is an attorney and has lived and worked in Washington, helped found her organization in 1997, which, like ours, is nonprofit and nonpartisan.

Washington, D.C.
July 26, 2001

Peter Eisner has been managing director of the Center for Public Integrity since April 1999. He directed the creation of the Centers online investigative publication, The Public i, which has received awards two years in a row from the journalistic organization Investigative Reporters and Editors (IRE).

Peter is a veteran journalist and news executive. He was the founder in 1990 of the international online news agency, NewsCom, serving more than 1,000 news media worldwide. He worked at newspapers in New York state and was a reporter and bureau chief for The Associated Press in Latin America. He was in charge of Newsdays foreign desk from 1985-1989 and won the InterAmerican Press Association Award in 1990 for his drug trafficking reports. He has written two books about Latin America. Peter was born in New Jersey and is a graduate of Rutgers University with a degree in English literature and a minor in Spanish literature.

Statement of Samantha Sanchez, co-director of the National Institute on Money in State Politics, at the opening news conference of “State Secrets,” a joint project of the Center for Public Integrity, the National Institute on Money in State Politics, and the Center for Responsive Politics

I am very pleased to team up with the Center for Public Integrity and the Center for Responsive Politics on this project designed to close the gap in the tracking of money into politics through the political parties. Soft money has gotten a lot of attention lately with Congressional efforts to curb that otherwise unlimited and unregulated flow of money into politics and according to the FEC, nearly 60 percent $300,000,000 of it goes to state parties.

The National Institute on Money in State Politics is a non-partisan, non-profit research organization that has been tracking state-level political contributions for 10 years, starting in the West. This past election will mark the first time we have been able to compile a complete, 50-state database of contributions tracking over 16,000 candidates for statewide and legislative offices, though our data in some states goes back to 1990. We use the same coding system that has been pioneered by the Center for Responsive Politics to identify the economic interests of contributors. The databases are searchable, for free, on our Web site at http://www.FollowTheMoney.org.

In the process of analyzing money in state politics, we have become aware of the increasing share that comes to candidates through the political parties and so we decided to collect and input those records as well. The resulting database is nearly complete, and its preliminary findings have surprised us all.

The state party committees do their own fund-raising our compilation of 50 states shows they raised more than $600 million in the 2000 election cycle. (The actual total may exceed this amount, but we won’t have a final total until we’ve had a chance to sort out possible duplicate reporting at the federal level.) And, just as the term soft money at the federal level means funds that are collected without contribution limits, 28 states impose no limits on contributions from individuals to party committees and 30 impose no limits on contributions from political action committees. In fact, 14 states allow unlimited corporate contributions and 19 allow unlimited union contributions.

A handful of the states with limits allow unlimited contributions for non-electoral purposes, but few have any restrictions on the use of the funds, either the funds passed down from the national parties or the funds raised at the state level. Clearly the fundraising rules are much looser at the state level than at the federal level even though most states have limits on direct contributions to candidates.

The amounts raised by the states range from highs of nearly $92 million in New York and nearly $43 million in California to lows of less than $367,000 in New Hampshire and $245,000 in Rhode Island. NY is one of the 28 states that does not limit contributions by individuals to state parties while WV only allows $1,000.

In compiling our data, we have asked each state to send contributions reported by party, caucus, legislative leader and, in some instances, county committees. We received reports from more than 900 committees, and we have put that information into a database. Further breakdowns of the data will not be available until we have audited it to remove any contributions that have been reported to both the state and federal election authorities and our research has been completed. But our early research clearly shows that soft money is a significant factor in state-level politics, so this partnership effort is timely and important.

The Institute and CRP already have worked closely in the past, because our work on tracking campaign contributions is so similar. Its been a great partnership, and I’m pleased to introduce Larry Noble, who will discuss the work CRP has been doing for several years on soft money at the federal level.

Washington, D.C.
July 26, 2001

Samantha Sanchez, co-director of the National Institute on Money in State Politics, is a founder of the Institute, which grew out of an earlier Western organization she headed that collected and analyzed state campaign finance data in the West. The Institute has steadily increased its coverage, collecting information for 42 states in 1998 and for all 50 states for the 2000 election. The Institutes Web site now has the largest and most complete collection of data on money in state politics in the country.

Samantha is an attorney and a member of the District of Columbia and Montana Bars. Formerly an Associate Dean and faculty member at the Columbus School of Law, Catholic University of America in Washington, D.C., she taught federal taxation and contract law for 15 years. Prior to that, she was tax counsel for U.S. Senator Floyd Haskell on the Senate Finance Committee and also worked for the Tax Reform Research Group, a Capitol Hill tax watchdog group.

Statement of Larry Noble, executive director and general counsel of the Center for Responsive Politics, at the opening news conference of “State Secrets,” a joint project of the Center for Public Integrity, the National Institute on Money in State Politics, and the Center for Responsive Politics

The Center for Responsive Politics is pleased to participate in this truly exciting and invaluable project. Many of you may already know us as the research group that since 1988 has been tracking campaign contributions and their effect on federal elections and policy. Weve been on the soft money trail since the national political parties were first required to report their soft money donors in 1991. And since 1996, with the launch of our Web site, OpenSecrets.org, we have made our information available at no cost to anyone who wants it.

We all know that the amount of soft money pouring into the campaign accounts of the national political parties has been increasing by leaps and bounds over the past several elections. As the amount of soft money contributions has grown, so too has the proportion of soft money raised by the parties. In other words, the parties are much more reliant on soft money than ever before. The Democrats, for example, raised 36 percent of their total funds in soft money for the 1996 elections, compared to 47 percent in soft money for the 2000 elections. Republicans are less reliant on soft money than Democrats, but their dependence on it has grown nonetheless from 25 percent for the 1996 elections to 35 percent for the elections last year.

As the parties reliance on soft money has grown stronger, the pressure on contributors to ante up has gotten more intense. As a result, many donors now view soft money contributions as nothing short of necessary to play the influence game. According to our figures, the Securities & Investment industry alone contributed $38.9 million in soft money in the 2000 elections, making it the top soft money donor among the more than 80 industries we track. Real estate developers, brokers, and agents contributed $28.1 million in soft money, good enough for second place on the top soft money donor list. In third place were Lawyers & Law Firms, with $21.3 million in soft money contributions. In all, 14 industries contributed $10 million or more in soft money for the 2000 elections, while 29 industries, from building trade unions to telephone utilities, made more than $5 million in soft money donations.

As we saw in the 2000 elections, soft money doesnt necessarily go straight to the parties anymore. Candidates can form joint fund-raising committees that raise hard and soft money at the same time. These committees can accept checks of unlimited amounts. After peeling off a couple thousand dollars for the candidates hard money account, they transfer huge sums of soft money to one of the party committees, such as the DSCC or the NRSC. Technically, the money cant be allocated to help that candidate, but the party knows from whose campaign committee the money came, and the candidate is certain to be rewarded. From the donors perspective the picture is even rosier. They hand their huge soft money checks to a committee controlled by a specific candidate. Sometimes the committee has a candidates name right in it. The potential for influence over that candidate is clear.

Of course, soft money contributions to the national parties are only half the story. As Peter and Samantha have pointed out, the focus until now has been on soft money contributions at the federal level, not at the state level. Special interests have thus been able to use state soft money contributions to go largely undetected, to fly under the radar of news organizations and groups like ours trying to track the money. By the same token, federal candidates have set up fund-raising committees at the state level to make disclosure of their supporters all the more difficult. If the past decade has taught us anything, it is that money is like liquid wherever it can flow, it will flow. Big donors have specific reasons for giving; campaign contributions are an investment in a relationship, a tool used to accomplish a set of goals. Until now weve been looking at only half of the tool box, but through this project we will gain insight into a much more complete picture of soft money giving.

The results of our work are bound to have serious implications on the campaign finance system. By examining the flow of soft money to the states well be putting a magnifying glass against a sophisticated system of campaign commerce that has been largely ignored by those of us not directly involved in it. Regardless of the outcome of the current campaign finance debate, the findings will reveal new information about the way our campaign finance system works, painting a clearer picture of where campaign money is coming from, and where it might be directed in the future.

Washington, D.C.
July 26, 2001

Larry Noble joined the Center for Responsive Politics as Executive Director and General Counsel in January 2001. Prior to that, he served as General Counsel of the Federal Election Commission from October 1987 through December 2000. Larry also served as the president of the Council on Governmental Ethics Laws from 1997 to 1998 and received the 2000 COGEL Award for his “efforts to promote the highest level of ethical conduct amongst governmental officials and candidates…”

He has testified before Congress on problems with the existing campaign finance laws and has served as an official observer and consultant with respect to elections held in the former Soviet Union, Benin, Senegal, Mexico, the Dominican Republic, Cambodia and Bangladesh. He also teaches Campaign Finance Law at George Washington University Law School.

Total Contributions Given to State Political Party Committees in 1999-2000 election cycle, ranked by amount

	State	Amount	State	Amount
	1. New York	$90,442,701	26. Maine	$3,545,484
	2. Florida	$53,233,671	27. Nebraska	$3,511,422
	3. California	$42,614,868	28. Arkansas	$3,311,974
	4. Pennsylvania	$37,579,726	29. Arizona	$3,163,151
	5. Illinois	$35,118,933	30. Utah	$2,800,590
	6. Michigan	$34,423,394	31. Kansas	$2,691,172
	7. Ohio	$33,154,138	32. Alabama	$2,418,797
	8. Missouri	$25,576,507	33. Connecticut	$2,129,295
	9. New Jersey	$23,066,643	34. Maryland	$1,971,291
	10. Minnesota	$22,602,597	35. Idaho	$1,626,378
	11. Washington	$20,675,050	36. Massachusetts	$1,617,173
	12. Virginia	$20,187,544	37. South Dakota	$1,549,107
	13. Indiana	$19,142,534	38. Mississippi	$1,520,619
	14. Iowa	$15,823,122	39. North Dakota	$1,380,692
	15. Georgia	$13,396,093	40. Delaware	$1,252,581
	16. Oregon	$12,311,242	41. Wyoming	$1,238,676
	17. Texas	$11,827,693	42. Oklahoma	$1,220,908
	18. Kentucky	$10,095,584	43. South Carolina	$1,079,763
	19. Louisiana	$9,449,103	44. Vermont	$982,180
	20. Colorado	$9,428,909	45. Wisconsin	$734,785
	21. Montana	$7,846,413	46. Alaska	$631,898
	22. Tennessee	$5,654,857	47. Hawaii	$610,669
	23. Nevada	$4,639,508	48. West Virginia	$497,046
	24. North Carolina	$4,408,409	49. New Hampshire	$367,641
	25. New Mexico	$4,332,437	50. Rhode Island	$245,640
	Total			$609,129,608

Note: Contribution data were compiled from election reports for the 1999-2000 cycle submitted by more than 900 political committees at the state and local level to election agencies in every state. The Institute continues to audit state reports to eliminate instances in which soft money was inadvertently reported to both the federal and state governments. Final findings will be released during the first half of 2002.

Total Contributions Given to State Political Party Committees in 1999-2000 election cycle, Sorted by State

State	Amount	State	Amount
Alabama	$2,418,797	Montana	$7,846,413
Alaska	$631,898	Nebraska	$3,511,422
Arizona	$3,163,151	Nevada	$4,639,508
Arkansas	$3,311,974	New Hampshire	$367,641
California	$42,614,868	New Jersey	$23,066,643
Colorado	$9,428,909	New Mexico	$4,332,437
Connecticut	$2,129,295	New York	$90,442,701
Delaware	$1,252,581	North Carolina	$4,408,409
Florida	$53,233,671	North Dakota	$1,380,692
Georgia	$13,396,093	Ohio	$33,154,138
Hawaii	$610,669	Oklahoma	$1,220,908
Idaho	$1,626,378	Oregon	$12,311,242
Illinois	$35,118,933	Pennsylvania	$37,579,726
Indiana	$19,142,534	Rhode Island	$245,640
Iowa	$15,823,122	South Carolina	$1,079,763
Kansas	$2,691,172	South Dakota	$1,549,107
Kentucky	$10,095,584	Tennessee	$5,654,857
Louisiana	$9,449,103	Texas	$11,827,693
Maine	$3,545,484	Utah	$2,800,590
Maryland	$1,971,291	Vermont	$982,180
Massachusetts	$1,617,173	Virginia	$20,187,544
Michigan	$34,423,394	Washington	$20,675,050
Minnesota	$22,602,597	West Virginia	$497,046
Mississippi	$1,520,619	Wisconsin	$734,785
Missouri	$25,576,507	Wyoming	$1,238,676
Total			$609,129,608

Note: Contribution data were compiled from election reports for the 1999-2000 cycle submitted by more than 900 political committees at the state and local level to election agencies in every state. The Institute continues to audit state reports to eliminate instances in which soft money was inadvertently reported to both the federal and state governments. Final findings will be released during the first half of 2002.