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Spreading The Money Around

The Olympics and presidential elections have at least two things in common: They occur every four years, and they set new records.

But when it comes to contributions and spending, this year’s campaign looks to be another gold-medal winner of all time.

George W. Bush has shattered fund-raising records, and is already sitting on more than $100 million. The John Ker­ry campaign expects to raise $80 million by the July convention, observers say. Other federal elections are also expected to garner huge sums.

And once again, lawyers as a group are not only the larg­est donors of any single profession tracked, they are also the most consistent, campaign watchers say. As of March 1, when the lat­est Federal Election Com­mission figures were available, the legal profession had con­trib­uted more than $65 million to federal campaigns since Jan. 1, 2003, according to the nonpartisan Center for Respon­sive Politics. The campaign cycle runs through Dec. 31, 2004.

That puts the profession well on its way to topping the 2000 presidential election year figure of $112 million, and keeps it in first place among industries, including health care, insurance and pharmaceuticals, according to the Wash­­­­­­­ington, D.C.-based CRP.

“Lawyers are so much more civically engaged than most parts of society because of what they do,” says Washington, D.C., attorney William Canfield, chair of the ABA’s Stand­ing Committee on Election Law. “It shouldn’t come as any surprise to pick up a random FEC disclosure statement and see how many lawyers are contributing. Law is what they do.”

This year, the legal profession is expected to play an even bigger role, especially with higher individual contribution levels and the loss of soft money—funds given to state organizations as a way of bypassing federal election regulations.

“It looks like lawyers are making a strong effort to make up for the lack of soft money,” says CRP spokesman Steve Weiss.

Lawyers tend to be “well-to-do, aware and politically active,” Weiss adds. And, he says, they are pragmatic. “Do­na­tions are an investment, and they want to spread [the money] around.” Lawyers, he says, “are just trying to score as many points as they can.”

There will likely be increasing political activism from individuals, partnerships and partnership political action committees, says Washington, D.C., attorney Trevor Pot­ter, a former FEC chairman and current co-chair of the ABA Ad­ministrative Law Section’s Elections Commit­tee.

Potter and other experts also cite a closely divided electorate and the candidacy of former trial lawyer John Ed­wards as motivators for attorneys’ contributing.

SMALL CONTRIBUTIONS MEAN MORE NOW

And then there’s the Bipartisan Campaign Reform Act, also known as the McCain-Feingold legislation, which last year was upheld almost in its entirety by the U.S. Su­preme Court. The BCRA, which Potter helped to craft, prohibits soft money contributions and corporate and labor funding of issue ads that refer to federal candidates and run close to elections. The consequence is that donors feel it’s a more level playing field and that their mo­ney will go further.

“Campaign finance reform democratized the process to a degree no one” anticipated, says John Merrigan, chairman of Piper Rud­nick’s federal affairs and legislative practice group in Wash­ington. “There will be a lot more people contrib­uting and par­tici­pating in this pro­cess than ever be­fore.”

Merrigan should know. He is treasurer of the firm’s PAC, the largest of any law firm and the second-most lucrative industry contributor, at more than $576,000, according to the CRP. Only the Asso­ci­ation of Trial Lawyers of America PAC tops it, at $1.2 million.

All these changes in campaign finance law mean funds from individual donors are more valuable than in past cycles.

“For those who are active givers, who are known commodities to campaign committees, it’s getting more expensive,” says Canfield, a partner with Williams & Jen­­sen.

“The system is so insatiable,” says Joel Jankowsky, chair­man of the public law and policy department with Akin Gump Strauss Hauer & Feld in Washington. “We barely have enough money to participate in the congressional process.”

Akin Gump ranks No. 5 in campaign contributions thus far, according to the CRP. Like Piper Rudnick, the firm’s PAC does not participate in presidential elections, leaving that to individual attorneys.

Nevertheless, PACs are the vehicles of choice for most large law firms, especially those with large Washington practices. Formed to raise and spend campaign money, most PACs are affiliated with business, labor or ideological interests. They must be registered with the FEC, and they are allowed to give up to $5,000 to a candidate’s committee, and up to $15,000 to a national party.

“PAC funds are the cleanest political money out there,” says Richard Gold, a partner at Holland & Knight’s Wash­ington office and treasurer of the firm’s PAC, which ranks number nine on the list of law-profession donors. “It’s all reported damned near instantaneously, and it’s pretty clear who the money is going to.”

Most Washington, D.C., firms with active legislative practices have active federal PACs, Gold says. “You have to have a PAC to have an active Capitol Hill practice,” he says. “These folks are working really hard on client issues that are relevant to you. The only way to interact with them and be of help to them is on the fund-raising side. Until the public decides it wants to be taxed to run campaigns, this is how things work.”

Adds Canfield: “More lawyers than you would suspect give money in Washington because so many of the law firms here have a lobbying component. Becoming friendly with various members of Congress is a method by which clients can achieve what they want.”

At Piper Rudnick, the firm PAC requires lawyers to put up a 25 percent match. If Merrigan, for example, asks for $1,000 for his favorite senator, the PAC cuts a check for $750 and Mer­rigan writes a personal check for $250. “It’s a way to gauge the seriousness of people’s requests,” Merri­gan says.

While participation isn’t universal within the firm, it is high. According to FEC records, Piper Rudnick donors gave 1,030 contributions of $200 or more to the firm PAC since Janu­ary 2003. Some 30 attorneys—Merrigan is one—donated the maximum $5,000.

Not all firms have PACs—yet. Philadelphia’s Blank Rome, the third-largest political contributor behind Piper Rudnick, does so completely outside a PAC. Chairman David Girard-diCarlo says his firm is considering forming both state and federal PACs. “Apparently there is a benefit to getting your name out there via a federal PAC. We may very well go down that path,” Girard-diCarlo says.

Not that Girard-diCarlo has ever had trouble getting his fund-raising prowess noticed. He’s a longtime friend of Homeland Security Secretary Tom Ridge, an early supporter of President Bush, and chairman of the president’s fund-raising committee in Pennsylvania. He’s also one of the president’s coveted Rangers, fund-raisers who have pledged to raise $200,000 by soliciting donations from others, a process known as bundling.

According to the CRP figures, Blank Rome gives heavily to Republicans, who get 73 percent of the firm’s contributions. Other firms follow different allocation stan­dards. And ATLA swings toward the Democrats, who get 90 percent of the association’s funds.

On the other hand, Piper Rudnick’s PAC disbursements track the political makeup of the House and Senate: 52 per­cent of the money goes to Republicans, and 48 percent to Demo­crats. Merrigan predicts Piper Rudnick PAC giving to Republicans will increase as Republican power increases in both cham­bers.

For Merrigan, the firm’s PAC helps balance the mixed marriage most firms find themselves in, with partners passionately active in both parties. Merrigan raises money for Kerry, while other partners are working for Bush. “You have to respect your partners’ pursuits,” he says.

But experts expect the change in campaign laws to keep the contests cleaner. “The absence of soft money in the national party fund-raising scheme is a big step forward,” Pot­ter says. “Corruption comes from huge contributions, not from a large war chest of small contributions.”