The Center for Public Integrity

Even where disclosure laws are among the strongest in the country, political party committees have succeeded in keeping millions of dollars in receipts off the books and hidden from public view.

In the 2000 election cycle, the Washington State Democratic Central Committee failed to properly report nearly $6 million in soft money transferred to from national parties during the 2000 elections, the Center for Public Integrity reported on June 25.

Yet Washington earned the second-highest ranking among the states in the Center's survey of campaign finance disclosure laws.

The Washington Public Disclosure Commission, the state election regulatory agency, has also found accounting problems at the Washington Republican State Committee. The PDC identified nearly $6 million in alleged illegal transfers from the Republican National Committee and affiliated committees to the state GOP, and has asked that Republicans turn the money over to the state's general fund.

The Center first documented the reporting discrepancies in "State Secrets" this summer. The study, conducted jointly with the Center for Responsive Politics and the National Institute for Money in State Politics, found that state parties raised $570 million in the 2000 elections, with nearly half of that coming in the form of unregulated, unlimited "soft money" transfers from the accounts of the national party committees.

Since the Republican National Committee and the Democratic National Committee must report soft money transfers to the Federal Election Commission, those federal records were analyzed, as well.

In the 2000 elections, Democratic and Republican state party committees raised $570 million, with 46 percent comprised of soft money transfers from national party organizations, according to an unprecedented study of party activity at the state level.

The transfers of unregulated soft money from federal party committees to their state counterparts confirm a commonly held perception that state parties are used to launder soft money and influence presidential and congressional elections in a way never envisioned nor intended by federal election law. Of immediate concern to state parties is the fact that after the 2002 mid-term elections, those national soft money transfers will in effect be banned as a result of the passage of the Bipartisan Campaign Reform Act—more familiarly known as McCain-Feingold or Shays-Meehan, after its Senate and House sponsors. The act, which Congress passed and President George W. Bush signed earlier this year, bans soft money contributions at the federal level.

However, the Federal Election Commission is adopting rules that will allow members of Congress to raise soft money for state parties. The sponsors of the act claim this exemption is counter to the law and will create a huge loophole that simply transfers soft money activity from Washington to the states.

The year-long study of state parties' role in federal elections was conducted by the Center for Public Integrity, the Center for Responsive Politics and the National Institute on Money in State Politics. The end result is a unique, detailed roadmap of the party money system at the state level in American politics. Records used to compile the report were collected from elections officials in every state as well the FEC.