WASHINGTON — In a decision with serious implications for Hollywood political fund-raising, a three-judge federal panel struck down large portions of the new federal campaign finance law Friday.
The ruling, which will face immediate appeal to the Supreme Court, allows state and national parties to return to raising tens of millions of dollars from corporations, unions and wealthy individuals like entertainment tycoon Haim Saban. Saban’s personal contributions and donations from his company totaled $12.3 million during the 2002 election cycle.
Passed early last year, the law known as McCain-Feingold for its two main sponsors, Sens. John McCain (R-Ariz.) and Russell Feingold (D-Wisc.), banned the raising and spending of so-called “soft money” — unlimited funds political parties used for attack ads and grassroots, get-out-the-vote activities.
Before the law went into effect last year, Saban cut the Democratic National Committee a $7 million check to help build a new headquarters, a record-breaking gift for the party.
Some bans still intact
While the court deemed sweeping sections of the law unconstitutional, it upheld the ban on spending soft money on attack ads, as well as a portion barring federal candidates from raising soft money.
Judge Karen LeCraft Henderson, a member of the three-judge panel, harshly criticized “virtually all the particulars” of the law.
“It breaks faith with the fundamental principle understood by our nation’s Founding Generations, inscribed in the First Amendment and repeatedly reaffirmed by the United States Supreme Court that debate on public issues should be uninhibited, robust and wide-open,” she wrote.
Dems stand to gain
While opponents of the law on both sides of the aisle celebrated over the weekend, Democrats may have the most to gain. The McCain-Feingold law handed President Bush and his party a major competitive edge. Historically, Republicans pull in far more “hard money” contributions (small donations from individuals and corporations) than Democrats have.
With control of the bully pulpit and Congress, Republicans were positioned to do even better in the hard-dollar chase this cycle.
Struggling to catch up, Democrats were holding out hope that Tinseltown elites could help turn out legions of like-minded peers at networks or studios for $2,000-a-plate dinners.
In an industry breakdown of political giving, showbiz consistently ranks in the top five, and Washington is increasingly relying on Hollywood to underwrite its political activities. Contributions from the industry have increased from $5.7 million in 1990 to $46 million in 2002 — $34.3 million in soft money, according to the Center for Responsive Politics. Eighty-two percent of those dollars last cycle went to Democrats.
With the law in legal limbo, it’s unclear right now whether the party committees will re-start the soft-money race.
Some party fundraisers have already indicated they will start raising the unlimited money, but may wait for the final ruling to spend it.
With that in mind, Democrats will no doubt go back, hat in hand, to their deep-pocketed showbiz pals. Aside from Saban, Hollywood producer Stephen Bing ponied up $8.5 million and media mogul Fred Eychaner delivered $4 million to Democrats last cycle alone.