Did both parties raise soft money?

Yes, they did. The Republicans were the first to see the possibilities in the FEC rulings, but the Democrats soon caught up to them.

To get private funds for Ronald Reagan's publicly funded campaign, the Republican Party set up a soft-money operation to raise, distribute, and spend state-regulated money. They could raise and spend money from corporations in states that permitted corporate funds in elections; but they could also raise corporate money in states that did not permit it if it was spent in states that did. Rich donors who lived in states with no contribution limits could start writing checks to state parties after giving the maximum allowed under the FECA.3

This sort of thing has to be well organized, and the GOP set up a national "nonfederal" account in Washington, D.C., to manage it. It was in effect a parallel campaign finance system that was regulated neither by the FECA nor by the laws of any particular state. The FECA was a national system authorized by federal legislation, but the soft-money system had no authorizing law. It was a nationally centralized legal arrangement for taking advantage of the differences among state laws.

The Democrats eventually caught on to what the Republicans were doing, but it was late in the game by then and their feeble attempts to catch up in 1980 did not amount to much. They were a bit better organized in 1984, although still no match for the GOP.

But they launched a much more aggressive fundraising campaign in 1988, which raised three times more soft money than in 1984, and matched the Republicans' soft-money operation dollar for dollar.

It was also in 1988 that both parties decided to voluntarily disclose at least some of their soft-money donors. The public learned that 267 people had made $100,000 contributions to the GOP, and that 130 donors had given the same amount to the Democrats. That was more $100,000 donors than in the 1972 election, and some of them were corporations. The "fat cats" of pre-Watergate days were back in force.4

Reformers had seen soft money as a problem since 1980. The FEC did not share their concern, though, and did not meet their persistent requests to require the parties to disclose their soft-money accounts until 1992. It is only for the years 1992 to 2000 that we know how soft money was being raised and spent.

Soft money was supposed to pay for state-level party-building activities such as voter registration and turnout drives, administrative costs, and building funds. And when the parties began filing soft- money disclosure reports in 1992, it turned out that they did spend the great majority of that money on activities that could fall into a stretched definition of party building. The parties spent far more money than was necessary to achieve the goal Congress had set out in the 1979 FECA amendments. But for twelve years and four presidential elections, there was surface plausibility to the parties' claim that they were doing no more than paying for generic campaign activities.5

The nature of soft money changed after 1992, though. That is when the parties began to raise much more money and spend it for purposes that had nothing to do with party building.

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