Unregulated Soft Money Now Pays for Most Party Electioneering Ads

March 28, 2001

For Immediate Release

March 28, 2001

Contact Information:

Craig Holman, 212 992-8642

Amanda Cooper, 212 998-6736

Unregulated Soft Money Now Pays for Most Party Electioneering Ads

Federal Contribution Limits No Longer Relevant

“Soft money"-money in federal elections that would otherwise be illegal, such as direct corporate or union contributions or contributions in excess of legal limits-has now become the primary source of funding for party ads that promote the election or defeat of federal candidates. This means that federal campaign finance laws limiting the sources and amount of campaign contributions from special interest groups and wealthy individuals have been bypassed by the Democratic and Republican parties. Making full use of the soft money loophole, the parties made 2000 a watershed year in which anyone could give unlimited amounts of money to pay for electioneering ads for or against federal candidates.

Findings from a new study conducted by the Brennan Center for Justice at NYU and Professor Ken Goldstein at the University of Wisconsin show that in the 2000 elections the Democratic and Republican parties systematically exploited the FEC’s “allocation ratio” loophole in order to get around federal election law. This loophole permitted corporations, unions and wealthy individuals to pump money into the political process that would otherwise be illegal for the one purpose most considered off-limits to such soft money funds: television advertising for and against federal candidates.

Using data from the Campaign Media Analysis Group (CMAG) to monitor political advertising in the nation’s top 75 media markets, researchers at the Brennan Center and the University of Wisconsin have documented the frequency, content and costs of television ads in the 2000 election. The study is funded by the Pew Charitable Trusts.

Among the key findings regarding soft money and party politics in this study are:

  • Soft money has flooded into party coffers in recent years, beginning in earnest in 1996 and reaching unprecedented levels in 2000 (see Table 1).
  • Awash in a new source of funds, party committees have reduced the importance of candidate spending in federal campaigns; party spending has even surpassed candidate spending in the 2000 presidential general election. Party committees combined spent $81 million on television advertising in the 2000 presidential general election, while the candidates themselves spent about $71 million, signaling that voters now rely on parties and special-interest groups for the bulk of their campaign information.
  • While total soft money spending by the Democratic and Republican parties is roughly comparable, Democrats made much more use of the FEC loophole in the federal law, funneling most of its soft money to state party committees where it was used for television campaign ads. Republicans also exploited this loophole, but relied somewhat more on hard money to finance its television ads.
  • Only a small fraction of soft money spending on advertisements by the parties went for party-building activities. Almost 92% of party television ads did not encourage voters to join a party, support the party or even mention the party name (see Table 2).
  • All party ads aired in the 75 major media markets surveyed were designed as electioneering ads to promote the election or defeat of candidates. None of the ads were perceived as genuine issue ads designed to discuss important pressing issues. In fact, more than 95% of party ads focused instead on specific candidates for federal office.
  • At all levels of federal elections-House, Senate and Presidential elections-soft money financed the majority of party-sponsored television ads that promoted or attacked candidates (see Table 3).

“The findings of the study rebut the argument that banning soft money will weaken party strength,” Dr. Craig Holman, author of the study, said. “The parties do not use soft money to air ads about party issues or to build the party. When the parties do advertise on TV, it is to promote one candidate or attack another.”

The key to evading federal source and contribution limits is a regulation developed by the FEC called the “allocation ratio.” This regulation permits state parties to pay for television commercials that promote or attack candidates for federal office with large sums of soft money, based on the assumption that a large percentage of the costs is benefiting state elections and party-building activities. But what it has meant in reality is that the national parties funnel enormous sums of otherwise illegal contributions to state party committees, and then instruct the state parties how to spend the money. The national committees will even share common campaign consultants and strategists with the state parties.

“Now that we see soft money has become the principal source of funds paying for party ads that electioneer for or against federal candidates under the veneer of party ‘issue advocacy,’” says E. Joshua Rosenkranz, President of the Brennan Center, “we see that the federal laws limiting the flow of money into politics no longer have any meaning. If you want to give a million to help Bush get elected, give it to his friends who run the Republican party. They’ll make sure Bush knows.”

The most disturbing finding of this study is that soft money has become the single largest source of funds to pay for party ads that saturate the airwaves months before the election. Legal, hard money is now less important than the large contributions from special interest groups and wealthy individuals. 

Click here to view:

data tables.

March 14, 2001 press release.

March 13, 2001 press release.

December 11, 2000 press release.

November 21, 2000 press release.

October 19, 2000 press release.

October 16, 2000 press release.

September 28, 2000 press release.

September 27, 2000 press release.

September 19, 2000 press release.