Clinton Plan to Ban 'Soft Money' May Spark Reform

President aims to limit gifts to parties - and rescue Democrats from campaign-finance storm

President Clinton's proposal that the Federal Election Commission ban campaign contributions of so-called soft money is unlikely to get off the ground unless the political composition of the commission changes.

But even if it fails, Mr. Clinton's latest campaign-finance reform initiative, which he was set to present to election officials yesterday, could pay short term political dividends for the president and a Democratic Party badly battered in fund-raising scandals.

Clinton challenged Congress in his State of the Union address in January to pass comprehensive campaign-finance reform legislation before July 4. But with that deadline fast approaching, there is no indication on the horizon that enough members of the Republican-controlled Congress are committed to a campaign-finance revamp.

By appealing to FEC commissioners to write soft money out of their regulations, Clinton is positioning himself in the reform camp just as the White House and the Democratic Party are about to face hearings next month in Congress over alleged fund-raising abuses during the 1996 election.

Analysts say that if history is any guide, the FEC effort will fall short. But, they say, the president can't lose for trying.

"Politically it is a wonderful thing to do," says Paul Herrnson, a professor at the University of Maryland and a campaign-finance expert. "[The president] is looking bad in terms of the soft-money issue, and the party is not looking too good. This is a way they can get back on the horse of the reformers again," he says.

Renewed hopes

Some analysts see the Clinton initiative as a possible means to kick-start stalled reform efforts in Congress.

"It is an interesting way to go about trying to change campaign-finance rules. Certainly Congress isn't rushing to it," says Diana Dwyre, a professor and campaign-finance expert at California State University at Chico. "Maybe it will start the ball rolling."

Soft money is at the center of the ongoing investigations in Congress and the Justice Department. The White House coffees and the fund-raising of John Huang and other Clinton associates all involve either soliciting or contributing soft money.

A request similar to Clinton's is already pending before the commission. It was made last month by three Republican and two Democratic members of Congress.

Soft-money donations are those made outside federal contribution limits. For example, corporations and labor unions are barred from making any contributions directly to federal candidates. But currently there are no restrictions on donations by corporations, labor unions, or any other wealthy donors to political parties.

Some critics of the practice call the arrangement a "loophole" in federal campaign-finance laws. But the regulations that allow it were endorsed by the FEC in the 1970s in the hope that they would strengthen the party's role in waging national campaigns.

Last year the Democratic Party raised $122 million in soft money, and the Republicans raised $141 million. The combined total was roughly three times the amount of soft money raised for the 1992 election.

Some analysts say that such large amounts of unregulated soft-money donations create the appearance that major donors are buying access and influence from the nation's political leaders.

Roadblocks to reform

Campaign-finance experts say Clinton's FEC soft-money effort faces two major hurdles:

* It remains unclear whether the Supreme Court will uphold a new regulation banning soft money. The court in the past has viewed such contributions as a form of political speech by the donors and has been reluctant to uphold restrictions on them.

* It is uncertain that a majority of FEC commissioners would vote to approve a soft-money ban.

The six-member commission comprises three Democrats and three Republicans. Traditionally commissioners have voted on such issues along party lines, and if most Republicans in Congress continue to oppose new soft-money regulations, the commission would be unable to muster enough votes to adopt a new rule.

Kent Cooper, executive director of the Center for Responsive Politics, says if Clinton is serious about the FEC soft-money ban he has the power to make it happen.

Mr. Cooper, who worked for 22 years at the FEC prior to heading CRP, says that four of the six FEC commission seats are open for appointment by the president. He says that if Clinton appointed four independent-minded, watchdog types to the commission the soft-money ban would pass.

"It is a rare opportunity for a president who is not up for reelection to dramatically change the type of commission that regulates elections," Cooper says.

He says such a commission would likely adopt a regulatory bright-line test that would impose very specific restrictions on soft money to prevent it from playing any influential role in federal campaigns. Such a regulation could withstand a constitutional challenge, he says.