Battle hots up over campaign funding

US: When the Bush-Cheney re-election campaign e-mailed a video link to six million people last week accusing John Kerry of being…

Senator John Kerry on the campaign trail yesterday. He has attacked President Bush for taking special interest money and is now being targeted himself.

US: When the Bush-Cheney re-election campaign e-mailed a video link to six million people last week accusing John Kerry of being "unprincipled" for taking campaign money from "special interests," the Massachusetts senator shot back that George Bush had taken more special interest money than any person in history.

This classic case of the pot calling the kettle black signalled the real start of the 2004 presidential election fight between Mr Bush and Senator John Kerry, who has caught the Republican Party off guard by his early emergence as the almost-certain Democratic nominee.

The White House had planned on keeping Mr Bush "presidential" until after the party conventions but this strategy has been abandoned in the face of a sharp fall in the president's ratings after months of Bush-bashing by Democratic candidates, an erosion of his credibility over Iraq, and damaging questions about his service in the Air National Guard.

The Bush e-mail to supporters last week was a retort to the charge that the administration is in hock to special interest money from the corporate world. It showed an Internet search turning up news stories that Senator Kerry for his part "raised more special interest money than any other senator".

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At campaign rallies Senator Kerry frequently says he has a message for special interests in Washington: "We're coming. You're going. And don't let the door hit you on the way out." The watchdog Common Cause website, which chronicles the role of special interests in American politics, has provided plenty of ammunition for his case.

In a long list of alleged abuses, it claims for example that Maurice "Hank" Greenberg, head of American International Group, gave $500,000 to Bush campaigns over the years and got favourable insurance legislation and that that Jerrold "Jerry" Perenchio, boss of Univision Communications, gave $711,500 and got a $3.5 billion media merger.

Under new campaign legislation an individual is barred from contributing more than $2,000 to a candidate, but pro-Republican lobbyists and special interest groups have got round this by "bundling" contributions from well-heeled guests invited to fund-raising dinners addressed by Mr Bush, Vice President Mr Dick Cheney or First Lady Ms Laura Bush.

The Bush-Cheney campaign raised $110.7 million, mostly from "bundlers" in the last nine months of 2003. A "bundler" who donates more than $200,000, like Mr Richard Egan, the head of EMC and former US ambassador to Ireland, is known as a "Bush Ranger".

Now that he is front-runner, Mr Kerry is coming under intense scrutiny over his claims to be the enemy of special interests. He too is obtaining money from "bundlers", leading to a charge from Mr Howard Dean - who got his campaign finance from small donations on the Internet, of "behaving like a Republican in his practice of fund-raising".

The Massachusetts senator, who last autumn had to take out a mortgage on a Boston townhouse as his campaign floundered, currently has 32 "bundlers" who collected over $100,000 each and 87 who have raised $50,000.

One of the $100,000 "bundlers" is Mr Devin Hosea, CEO of Predictive Networks, a Massachusetts tech firm, co-founded by Mr Paul Davis. Mr Davis told ABC News that such cash raised for the senator was "absolutely" special interest money (Mr Hosea has not commented).

"We were in that business to make money, not to perform any kind of social service," Mr Davis said.

In 2002, the Predictive Networks' CEO held fundraisers at a Boston restaurant and at a Manhattan Club, collecting more than $100,000 for Mr Kerry. In Washington, the senator helped draft a bill favouring the company, which monitors what Internet and cable consumers are viewing.

This is one example of a number where Mr Kerry is alleged to have taken "bundled" contributions from lobbyists who had an interest in legislation he was helping draw up.

Like the president, Mr Kerry has denied ever doing anything because of a contribution. He said last week the only cheques he took were from individuals and only "one half of one per cent of all the money I've ever collected has come from anybody who has ever lobbied for anything".

He also said that the Federal Election Commission showed he ranked 92nd among 100 senators in terms of the amount of money taken from special interests.

Campaign finance is also being provided indirectly to both sides by partisan groups that can spend unlimited money on advertising on behalf of a candidate.

The Republican Governors Association and the pro-Democrat group America Coming Together both for example raised $12.5 million in 2003, the liberal MoveOn.org Voter Fund took in nearly $5 million and the Republican State Leadership Committee $4 million.

A small pro-Kerry group funded by disgraced ex-senator Mr Bob Torricelli paid for adverts attacking Mr Howard Dean in recent primary campaigns.

In previous years the nominee has frequently emerged penniless from an exhaustive primary campaign to face a well-funded incumbent. To counter this the Democratic Party has set aside $10 million to give the nominee a head start.

Mr Kerry has already run 15 television adverts attacking Mr Bush that aired 9,712 times at a cost of $4.9 million, according to the Republican Party.

With battle being joined so early in the year, and threatening to be one of the ugliest in presidential history, $10 million may be little more than a drop in the bucket, as funds flow in to both candidates to help them characterise the other as not fit for office.