Ban on ads reinstated

District Court does 'soft money' flip-flop

WASHINGTON — Hollywood’s political contributors can be excused if they seem to be suffering from whiplash today.

A U.S. District Court that on May 2 reopened the fund-raising floodgates to wealthy showbiz individuals and entertainment companies Monday forced them closed again until the Supreme Court can settle the matter.

The earlier ruling declared most of the new campaign finance reform laws unconstitutional. Monday’s ruling restores the restrictions Congress passed last year and clears up an ambiguous fund-raising environment that left even the savviest Washington political fund-raisers scratching their heads.

“This court’s desire to prevent the litigants from facing potentially three different regulatory regimes in a very short time span, and the court’s recognition of the divisions among the panel about the constitutionality of the challenged provisions of (the law), counsel in favor of granting a stay,” wrote U.S. Circuit Judges Karen LeCraft Henderson and Colleen Kollar-Kotelly, who voted in favor of the stay.

The federal court’s stay of the issue takes the heat off Hollywood donors, giving them an excuse to keep the big money in their pockets — at least for now. The Supreme Court is not expected to rule on the issue for months.

The first ruling in early May overturned key components of the law, known as McCain-Feingold for its two main sponsors, Sens. John McCain (R-Ariz.) and Russell Feingold (D-Wis.). The law, which went into effect Nov. 6, banned the raising and spending of so-called “soft money” — unlimited funds that corporations, unions and wealthy individuals gave the national political parties and outside groups for party-building activities and attack ads.

In recent years, Washington has leaned heavily on showbiz to underwrite its political activities.

Entertainment mogul Haim Saban and his company Saban Capital Group and its employees, for instance, doled out $12.3 million during the 2002 election cycle; Fred Eychaner and his Newsweb Corp. gave $7.4 million; and Steve Bing and his Shangri-La Entertainment donated $6.6 million, according to the Center for Responsive Politics.

The major nets and studios also were big players in the soft-money game. Viacom, the parent company of CBS, and its employees cut a total of nearly $2 million in checks that cycle, while AOL Time Warner was responsible for $1.45 million; Walt Disney Co., which owns ABC, gave $1.2 million; and Vivendi Universal channeled nearly $1.2 million to politicians during the same time period.

In the 2000 federal election, broadcasters reaped an estimated $623 million in political ad revenues, much of it the “soft money” in question.

After the first federal court ruling was announced in early May, the party committees immediately vowed to fire up the soft-money machinery again.

Under pressure from politicos in Washington, corporations and individuals privately debated whether to reopen the money spigot or play it safe and stay out of the big-money race until the Supreme Court rules on the issue.

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