The Hindu Business Line : US elections, a billion dollar game

A FORMER Ohio political boss and Senator Mark Hanna is said to have remarked in 1895: "There are two things that are important in politics. The first is money and I can't remember what the second one is." In 2004, he may have had nothing different to say.

There is really nothing surprising about the `big' news that the George W. Bush and John Kerry campaigns along with the two national parties and independent groups have netted more than $1 billion in cash thus far or almost twice the amount collected at the corresponding time of the 2000 campaign.

And consider this other fact: Senator Hillary Rodham Clinton, who is expecting a major re-election tussle in 2006, raked in some $1.8 million between April 1 and June 30 or more than double of any of the other 31 Senators who will be in the fray two years hence. And since 2001 Senator Clinton through the Friends of Hillary campaign is said to have raised more than $9 million and the freshman Senator from New York has promised to raise "whatever money I need to raise".

Sounds baffling? It should not be the case where money and American elections are concerned. In 1994, for instance, Mike Huffington, seeking a Senate seat from California, spent nearly $30 millions of his own money; but in 2000 Jon Corzine, an investment banker from New Jersey proved that he could get elected to the Senate by `merely' doubling the amount — he spent $60 million of his personal fortune. Overall, the average winning candidate for the Senate spent about $7.4 million, while the average winning candidate in the House of Representative coughed up a little less than $1 million.The elections of 2000 were said to be the most expensive in American history.

Close to $3 billion was spent on the Presidential and Congressional elections, and another $1 billion was poured into the State races.

That year, candidate George W. Bush raised more than $100 million for his primaries just to get the better of his Republican challengers.

This time around the incumbent Republican has doubled his record and is still collecting. And his Democratic challenger is not too far behind in the money-raising business and perhaps for the first time given the tough political environment and the real possibility of change in the White House, the Democrats have actually done better. Mr Bush is said to have collected thus far some $242 million and is expected to break the $250-million barrier once the Republican Convention ends on September 2; and Mr Kerry, who has raised $234 million, is still collecting.

Current federal law stipulates that individuals can give up to $25,000 a year to Presidential and Congressional campaigns but they cannot give more than $1000 to any one candidate directly for any one election.

But the catch is that individuals and corporations can contribute unlimited amounts that parties can use for general expenses or the so-called issue advertisements.

For example, major corporations that cannot bankroll political candidates directly have gone another direction — they are major contributors to the parties' national conventions. It is being pointed that for the 2004 Democratic National Convention in Boston, corporate contribution is around $40 million with some of the big names giving between $500,000 and $1 million. And the Republicans will not lag too far behind in their political show in New York this month.

`Soft Money' has now become the real target of those serious and well-meaning politicians who wish to bring about genuine campaign finance reform.

Statistics show that `soft money' funds coming in from corporations and labour unions, formed a major part of the 2000 election. It will be the same this year as well; the Republicans and Democrats raised about $244 million each with much of the soft money for Democrats coming from trade unions and Republicans getting theirs from big businesses and banks.

Forget the political parties and the distinction between hard and soft money. Take a look at another aspect of elections in America that involves the tax-payer: Law enforcement agencies — federal, state, and local — are expected to spend close to $100 million for the two political conventions and in the general run-up to the November 2 elections what with the events leading up to polling day placed in the high security category.