The Center profiled select industries giving to state political party and caucus committees that are not directly related to the two major parties to better explain their support of certain policies and politicians at the state level in 2003 and 2004.

Attorneys and Law Firms

People: Jon Haber, chief executive officer, Association of Trial Lawyers of America—former chief of staff to Sen. Dianne Feinstein, former special counsel to the Overseas Private Investment Corporation; Wayne Hogan, partner; Terrell Hogan—2002 candidate for the U.S. House of Representatives (D-Fla.)

Places: Among trial lawyers, Hogan is the largest individual contributor to state parties and has mostly supported Democratic candidates, such as former Sen. John Edwards. Many prominent trial lawyers are Republicans, though their organization tends toward Democrats. Sometimes ATLA finds it tough to choose between the two parties: the U.S. Senate race in Pennsylvania featured two candidates favored by trial lawyers, Republican incumbent Arlen Specter and Democratic challenger Joseph Hoeffel.

Politics: ATLA, the world's largest trial advocacy bar with more than 56,000 attorneys, has fought to protect plaintiffs' access to the justice system, especially in regard to personal injury and medical malpractice. The trial lawyer group is a significant lobbying force in Washington, D.C.—spending at least $27 million since 1998—in battling Congress' efforts to restrict tort plaintiffs' access to the courts. Tort reform was a prominent issue around the country during the 2004 election season, with many Republicans on the campaign against "frivolous lawsuits."

The Center profiled the top consultants hired by state political party and caucus committees in 2003 and 2004.

Feather Larson Synhorst (formerly known as Feather Hodges Larson & Synhorst) 
Web site: www.fls-dci.com

People:  Tony Feather, partner—political director for the Bush-Cheney 2000 Campaign; Jeff Larson, partner—regional director for the Bush-Quayle 1992 Campaign; Tom Synhorst, partner—advisor to the Bush-Cheney 2000 Campaign and Dole 1988 Campaign

Places: FLS, a telemarketing and fundraising firm based in St. Paul, Minn., and Phoenix, Ariz., has worked for hundreds of Republican candidates and party committees in all 50 states, according to its Web site. In addition, the firm has helped win several governors' races for such clients as Florida's Jeb Bush and California's Arnold Schwarzenegger. The firm has also worked for state legislative committees in Ohio, Pennsylvania, and Minnesota among others.

Politics: In 2004, FLS was contracted by the president's reelection campaign as well as a number of Republican members of Congress such as Sen. Kit Bond (R-Mo.). Through one of its partners, Tom Synhorst, FLS is linked to the DCI Group, a Washington, D.C., lobbying group that runs Progress for America—one of the more successful 527 groups that supported the president in 2004 and now advocates for Social Security reform. FLS has conducted a number of issue campaigns as well, including surveying Minnesotans on a new baseball stadium and advocating for casino-style slot machines in south Florida.

AMS Response 
Web site: www.amsresponse.com

Campaign finance reform took a bite out of the bottom line for state parties in 2004 as overall fundraising dipped to slightly more than $735 million for the cycle, with an even split between Democrats and Republicans.

That is $65 million less than state parties pulled in during the 2000 presidential election and an $85 million decline from the 2002 mid-term elections, a Center for Public Integrity analysis of state and federal campaign finance reports shows.

The downturn is largely attributable to the Bipartisan Campaign Reform Act, also known as McCain-Feingold, which outlawed "soft money"—the unlimited, mostly unregulated campaign cash donated to national party committees by individuals, corporations and unions.

In elections before the reforms were enacted, large transfers from the "big six" Democratic and Republican national committees—most of it soft money—accounted for about 40 percent of all the money coming into state party coffers. Much of that money was funneled into broadcast advertisements. In 2004, with the law in place, the national parties transferred no soft money to their state counterparts.

Consequently, state parties on both sides of the aisle reported spending far less on television and radio advertising than before the law took effect in November 2002, according to the Center's six-year study. Also, state parties retooled their operations to focus more on direct voter contact.

Missouri became a hotbed of activity for 527s—the political groups that had an outsized impact on the 2004 election season by funding controversial advertisements and organizing voters outside of the traditional party system. The Missouri Democratic Party, which bills itself as the "oldest political party west of the Mississippi," took in $3 million from the Democratic Governors' Association in 2003 and 2004.

Missouri is one of 13 states that allow unlimited contributions from all sources. Joe Carroll, the campaign finance director at the Missouri Ethics Commission, was not fazed by the influx of money.

"This election, we had an open seat for governor, lieutenant governor, secretary of state, and state treasurer," Carroll said. He mentioned that two of Missouri's seats in Congress were also open. "Those were in the largest metropolitan areas in the state. Those are expensive media buys there."

To support expensive media buys on their side of the aisle, the Republican Governors Association shifted $1.8 million to the Missouri Republican Party for the 2004 cycle.

That money turned out to be well spent. In a fiercely contested race, Republican Matt Blunt was elected governor over Democrat Claire McCaskill, Missouri's state auditor.

To operate outside the limitations set up by campaign finance regulations, these state-oriented groups—the DGA and the RGA—severed affiliations with their respective national party committees and organized as 527s. As a result, these two groups can accept the kind of soft money contributions that are no longer permitted at the federal level. Those types of donations cannot be given to federal candidates or political parties.

The Bipartisan Campaign Reform Act of 2002 brought about monumental changes in campaign finance practices, forcing political parties at all levels to significantly modify their operations. County parties—which are often closest to the ground during key elections —are having an especially difficult time adjusting, according to a Center for Public Integrity analysis of Federal Election Commission data covering the first 20 months of the 2004 election cycle.

In fact, county parties appear to be shying away from overtly "federal" activities, even in key presidential "swing states" and states with other hotly contested U.S. House and Senate elections. Records show that 82 county party committees in 15 states raised just $3.3 million in "hard money" (the regulated contributions that can fund federal election campaign activities) between January 2003 and August 2004. This pales in comparison to the 100 Democratic and Republican state parties, which raised almost $80 million in hard money over the same time period.

County parties showed a similar caution about Levin funds, a special kind of campaign account created by BCRA that parties can use for get-out-the-vote and voter registration and identification. A Center report earlier this month showed that just two county parties in the entire country reported raising Levin funds between January 2003 and July 2004, and both raised a combined total of only $64,000.

Why the counties' reluctance to use hard money? Some county officials say that complex BCRA rules have made their jobs much more difficult. "We have money, and I'm afraid to spend it," said Conni Brunni, of the Kern County, California, Republican Party. "The rules don't always reconcile with our distinct state law, and it has made it very difficult for me in my attempts to comply."

State, district and county political party committees throughout the country are largely shunning a new kind of federal campaign money, according to a Center for Public Integrity analysis of Federal Election Commission data covering the first nineteen months of the 2004 election cycle. With only weeks left in the campaign season, preliminary data already shows how parties are adjusting to—and struggling with—new campaign finance rules.

So-called Levin funds, a creation of the Bipartisan Campaign Reform Act of 2002, are named after Michigan Democratic Sen. Carl Levin, who introduced an amendment to BCRA to lessen the impact on state and local party committees of BCRA's ban on unlimited "soft-money" contributions. The amendment allows such committees to receive up to $10,000 from individuals to pay for certain limited federal election activities such as voter registration and get-out-the-vote efforts.

When the amendment was first introduced, several lawmakers and watchdog organizations—including the Center for Public Integrity—warned that the Senate had simply introduced a large loophole through which significant sums of money would flow. Bob Ney, a republican representative from Ohio, mockingly dubbed them "the $30 million dollar loophole," a figure he arrived at by multiplying the $10,000 contribution limit by the nation's 3,000 counties. The Center for Public Integrity, in a 2002 report, predicted an explosion of new local party committees created to absorb the deluge of $10,000 contributions.

It hasn't turned out that way. In fact, according to a Center analysis of FEC data, from January 2003 to July 2004 only 14 state and two county party committees in 12 states reported raising Levin funds. The total amounts raised are less than impressive: $1.4 million. Democratic Party committees raised almost three-quarters of the total.

Laying the groundwork for the November election, the national political parties have transferred nearly $13.5 million to their state counterparts thus far in 2004, according to a Center for Public Integrity analysis of Federal Election Commission data.

Three state parties – the Democrats in Alaska and Republicans in Florida and California – have received the most money from the national parties this year, records show. The Florida GOP received a $659,720 transfer from the Republican National Committee, the largest single transaction in 2004, on July 29. The California Republican Party got two $500,000 checks from the RNC earlier this year.

The other national party committees are the Democratic National Committee, the National Republican Senatorial Committee, the Democratic Senatorial Campaign Committee, the National Republican Congressional Committee and the Democratic Congressional Campaign Committee.

All of these transfers involve "hard money," funds raised under federal limits that can be used to benefit any candidate at the federal or state level. State parties that conduct voter registration and turnout drives close to the election must use either hard money or a combination of hard dollars and funds from a Levin account. Created by a 2002 federal campaign finance law, Levin accounts can accept up to $10,000 per donor.

The $13.5 million through the end of July is already more than the $12.4 million that state parties received in all of 2003, and the combined figure should only grow as Nov. 2 draws close. During the 2001-02 election cycle, the national parties sent $86 million in hard money to the states.

Kentucky had no federal elections in 2003, but it did have an expensive gubernatorial race pitting Ernie Fletcher, a Republican congressman, against Ben Chandler, the Democratic state attorney general.

Yet this quintessential state race had a heavy federal flavor: most of the money raised by the Bluegrass State's main political parties went to their federal accounts, which can accept up to $10,000 from individuals—four times the limit for contributions to parties' state accounts.

Using their federal accounts, Kentucky's two major party committees were able to take in between $976,000 and $1.5 million more in individual contributions than state contribution limits would otherwise allow. And there was no loss of utility for the money, either: Federal funds can be spent directly on state races.

The emphasis on federal account fundraising—the Kentucky Republican Party raised nearly nine of every 10 dollars that way—is one of the changes that the Bipartisan Campaign Reform Act, commonly known as McCain-Feingold, has brought to state political parties. Although Kentucky's low state contribution limit is unusual, a handful of mostly smaller states—including New Hampshire, South Dakota, Vermont, West Virginia and Alaska—could see their parties use federal accounts to benefit state candidates.

The Center for Public Integrity studied the receipts and expenditures of more than 200 state party and state legislative caucus committees in 2003, the first full year under BCRA's new rules. While most caucus committees have little contact with the federal system, they too were affected by the law's ban on national party transfers of unlimited funds known as "soft money."