SOFT MONEY: THE LOOPHOLE Issue Backgrounder

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During the 1996 election cycle, the Republican and Democratic parties spent nearly a quarter of a billion dollars. Most of that money was a result of a special category of campaign donations known as soft money. Soft money is made up of those contributions given to political parties rather than specific candidates. There are few regulations regarding how much money a corporation or individual can give to political parties. The laws instead focus on what a party can do with soft money. According to the original regulations drafted after Watergate, soft money was supposed to be used only for "party-building activites," that is getting out the vote, developing grassroots, and other organizational issues facing the parties. But during the 1996 presidential elections, soft money became, according to some public advocates, simply another source of advertising dollars. At one point there are reports that President Clinton personally oversaw the production of ads which were run with Democratic National Committee dollars. As the Senate and House look at the issues surrounding the 1996 elkections, soft money will be high on the agenda. As a part of his effort to reform the election process, President Clinton has now asked the Federal Election Commission to ban soft money. Some GOPers criticized the proposal for not addressing such things as the $35 million ad campaign run not by a party but by the AFL-CIO. These so called independent expenditures came under heavy criticism during the election. Here is a look at the stories that have focused on the soft money and independent expenditure issues from the past year: Banning Soft Money -- June 12, 1997 Freshmen Shimkus and Allen on Soft Money -- June 11, 1997 The Senate expands its investigation to include Soft Money -- March 11, 1997 Senator Christopher Dodd and Haley Barbour explain the labyrinthine world of campaing finance -- October 21 1996 Campaign Finance Reform -- October 18, 1996 Setting Limits -- April 15, 1996 Labor and Politics -- April 10, 1996

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