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Transfer makes soft money hard; Florida GOP benefits

By SARA FRITZ, Times Washington Bureau Chief
© St. Petersburg Times
published November 5, 2002

WASHINGTON -- The Florida Republican Party received $3.2-million from the National Republican Senatorial Committee during the past two years, even though today's election does not include a Florida Senate race, public records show.

The Center for Public Integrity, an independent watchdog group, says the unusual cash transfer was the first step in a process that enabled the Republicans to convert restricted soft money contributions to so-called hard money, which can be used for a wider variety of political purposes than the soft money.

The Florida Republican Party took a percentage of the funds for itself, and then returned $2.7-million in hard money to the NRSC within a few days. Later, the NRSC used its new hard money reserves to assist in campaigns of Republicans running for Senate in hotly contested races in states other than Florida.

"It is basically money laundering," said Chuck Lewis, executive director of the Center for Public Integrity. "There is a Rube Goldberg element to the current campaign financing system. Money sloshes around the nation from account to account until nobody knows where it came from or where it is going."

Lewis noted public reports showing these transfers between the NRSC and the Florida GOP cover only a part of the two-year election cycle.

There are no reports available yet on transactions after June 30.

"Just think what else might have been going on since then," he said.

Soft money, by definition, is contributed to the parties by individuals, companies or labor unions in chunks far exceeding the $2,000 donation limit on hard money. According to law, it cannot be used to pay for candidate expenses, advertising or other ordinary campaign costs in federal elections. Instead, it is used to maintain party facilities or for get-out-the-vote initiatives.

Hard money, on the other hand, can be donated only by individuals or political action committees in sums limited to $2,000 or less. Because hard money can be used to pay for any campaign expense in a federal election, it is also considered more valuable by the political parties.

The Florida party participated in the transaction because it yielded an apparent $500,000 profit and because hard money is not needed in state-level races.

Furthermore, direct contributions to candidates are limited by Florida law, but there are no limits placed on money transfers to the state parties.

Towson Fraser, spokesman for the Florida GOP, and the NRSC's Dan Allen acknowledged the transfers and emphasized that both parties use this technique.

"It's completely legal," Fraser said. "It's what we do and what the Democrats do also."

Also prior to June 30, the Democratic Senatorial Campaign Committee transferred $1.1-million in soft money to the Michigan Democratic State Central Committee, which subsequently returned $917,000 in hard dollars to the DSCC. Unlike Florida, however, Michigan does have a Senate contest this year.

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