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Federal law adds crimp to campaign

Unlike U.S. Rep. Jim Davis, the other three gubernatorial candidates can raise unlimited soft money for the state.

By ADAM C. SMITH
Published February 20, 2006

Membership in Congress has had its privileges for the gubernatorial campaign of Jim Davis: The Tampa Democrat has swept up endorsements from popular Washington colleagues who have introduced him around the state, and Congress has given him a high-profile platform to take on issues like offshore drilling.

But a campaign finance wrinkle that is surfacing for the first time in a statewide Florida campaign could make Davis' federal office more of a hindrance than help.

Federal campaign laws impose on Davis a fundraising restriction that does not apply to the two Republican gubernatorial candidates or to state Sen. Rod Smith, Davis' Democratic rival. Because Davis holds a federal office and is seeking a state office, federal law limits how much he can raise for the state Democratic Party.

The three other candidates can raise unlimited amounts of so-called soft money for their state parties while Davis can't ask someone to write a check for more than $10,000 to the state Democratic Party. Nor can he solicit money from corporations or labor unions.

Whether it proves to be a blip or a major obstacle remains to be seen, but political observers are watching closely.

"That's a huge deal," said Chris Korge, a Miami developer, Smith supporter and leading fundraiser nationally for Democrats. "In my opinion, if Jim Davis was to win the primary, he would put the Democrats at a tremendous - and I mean tremendous - disadvantage over the Republicans."

But this is uncharted territory for Florida elections, loaded with hypothetical scenarios and untested questions.

Election law lawyers and experienced political fundraisers have been studying how the arcane restrictions on soft money fundraising by federal politicians might affect Florida's 2006 governor's race. They haven't reached a consensus.

Indeed, early last year, when some Democrats questioned why Davis hadn't yet announced his candidacy, the delay was partly because his advisers were studying this section of the campaign finance law to see whether it might cripple him. They concluded that he could overcome the obstacle.

"The Davis campaign has known from the begining we would have restrictions that others would not have, and we've followed the law from the beginning," said Tait Sye, Davis' communications director.

When Democratic U.S. Sen. Jon Corzine of New Jersey started looking at running for governor last year, he sought clarity from the Federal Election Commission about the implications under federal campaign finance laws.

The result can be seen in Davis' unusually complex invitation to a Feb. 22 Broward County fundraiser. It invites people who have given maximum $500 contributions directly to the Davis campaign to donate as much as $10,000 to the Florida Democratic Party's federal account and $10,000 to the nonfederal account.

Florida law caps donations to candidates at $500, but campaigns also rely heavily on their state parties, which can raise unlimited soft money. Besides raising money for their own campaigns, statewide candidates also aggressively raise soft money for their parties, which in turn cover much of a campaign's overhead expenses, such as staff.

State parties are legally barred from earmarking soft money to any particular candidate, and there is no way to track how much soft money any candidate has raised for his party. But finance reports provide at least a hint of how much soft money Smith and Davis have raised for the state party: It covered more than $710,000 of Davis' campaign expenses and nearly $600,000 in Smith expenses.

There's no evidence yet that the federal soft money restrictions are hurting Davis, but Smith has a clear advantage. Where he might raise $100,000 for the party with two phone calls, Davis would have to make at least 10.

"It's going to create more work and more hoops to jump through for Davis. That makes things more difficult because in fundraising, it's how much can you do with the least amount of calls," said former state Democratic chairman Bob Poe.

Davis is leading Smith in hard money fundraising, and that lead is expected to grow during the next few months because Smith faces a fundraising obstacle of his own. As a member of the state Legislature, he cannot raise any money during the state's 60-day legislative session, which starts March 7. Davis does not face that restriction, but by some accounts, Smith will try to make up for this disadvantage by raising more soft money.

Consider the prospect of TV ads in the primary. Florida law allows state parties to pay for so-called "three-pack" ads, which technically tout at least three candidates but in practice promote one person while only briefly mentioning the other two. If Smith raises much more money for the party than Davis, he could expect the party to put much more money into TV spots touting him.

State party leaders say they have not decided if the party will pay for ads in the gubernatorial primary, but Smith allies say they expect the party will pay for positive ads. Poe, who is neutral in the governor's race, said the party paid for such ads in the 2002 Democratic gubernatorial primary between Bill McBride and Janet Reno.

Quietly, some Democratic strategists are wondering whether the soft money restrictions on Davis could be a decisive factor in the primary. Officially, though, both campaigns downplay it.

"That remains to be seen," said David Kochman, communications director for the Smith campaign. "I hope that both campaigns are following whatever laws apply, but at the end of the day, money is not going to be the biggest thing in the race. It's about which candidate is best at articulating what's important to voters, and I think Rod Smith has proven that he's the best candidate at that."

The Davis campaign's Sye noted Davis thoroughly examined the financing issue before jumping in.

"The comparative advantage is minuscule, since the universe of $10,000-plus donors is small," Sye said. "We're all raising money for the party because we believe in a strong party."

Last year, at least 35 individuals and corporations gave more than $10,000 to the Florida Democratic Party, accounting for more than a quarter of the $3.8-million raised in 2005. The two biggest donors, Boars Head Provisions founder Frank Brunckhorst of Sarasota ($160,000) and Orlando developer Jim Pugh ($70,000), are Davis supporters, but Sye said Davis did not solicit those contributions.

--Computer assisted reporting specialist Connie Humburg contributed to this report.

[Last modified February 20, 2006, 04:00:22]