W A S H I N G T O N, Aug. 1, 2002 -- Soft-money accounts at the Republican and Democratic campaign committees are quickly thickening this summer, as a Congress preoccupied with the first midterm election of the 21st century takes up corporate reform and the bread-and-butter basket of appropriations bills.

These summer months are hot for another reason: beginning Nov. 6, and barring a court order, many of these soft-money conduits — by which donors can contribute unregulated and unlimited sums of money to political parties — will be shut down, and donors will have to find less direct ways to contribute to the party of their choice.

An analysis of receipts and disbursements for the month of June shows that the parties combined took in more than $20 million in soft-money checks, which, since they aren't used to directly influence federal elections, are not subject to donation limits.

Much of that money came through state party transfers, owing to increased political activity in a dozen battleground states. An exact accounting could not be made because the disclosure documents often number in the thousands of pages and amendments to the filings have yet to be accepted.

Between the Democratic and Republican House and Senate campaign committees alone, there are least 20 separate non-federal, or soft money accounts. That's because states have different rules for spending non-federal money. Minnesota and South Dakota, for example, don't allow labor or corporate contributions of any amount. Texas allows money from organized labor and corporations only for administrative purposes. In New Hampshire, soft money can be spent only in $5,000 increments. Since the parties pool contributions, they need to maintain separate accounts to keep on the right side of state law.

Soft Money's Critical Role

But soft money remains essential to their efforts.

"Political parties are involved in promoting ideas that are contained in their platform. They promote legislation that the people who join political parties believe in. They support a national structure," said James Bopp, a Republican lawyer who is part of the team challenging the new campaign finance law. "All of those activities are paid for by soft money."

There were familiar patterns, showing clearly the ideological divisions that mark American politics. Most Democratic soft money came from organized labor, Hollywood entrepreneurs and trial lawyers. Businesses and wealthy entrepreneurs were the most reliable contributors to the Republicans.

And, as usual, Republicans outraised Democrats, scoring a much larger number of individual donors as well as a larger number of corporate checks.

The National Republican Congressional Committee's non-federal accounts took in more than $11 million from April to June, according to its latest filing.

Much of the money came from corporations, including SBC Communications, itself among the nation's biggest campaign donors. The GOP House campaign committee received $100,000 checks from several airlines, from the Farmers' Insurance Group, and a $250,000 check from banker Morgan Stanley. As its members took up accounting reform, Ernst and Young and Deloite and Touche, two of the Big 4 accounting firms, contributed $25,000 and $50,000 respectively. The U.S. Telecom Association, which represents telecommunications companies, gave $50,000. And the Pharmaceutical Research and Manufacturers of America, PhRMA, has given almost $500,000 this cycle.

President's Dinner Donors

The filings also reveal several of the previously anonymous underwriters of a major fund-raising dinner.

The American Hotel and Lodging Association, Wine and Spirits Wholesalers, Union Pacific Railroad, Northrop Grumman, Fidelity Investments, the National Rifle Association, Archer Daniels Midland and Amgen, the biomedical company, each gave thousands of dollars to the President's Dinner back in June, which added nearly $30 million to the accounts of Republican House and Senate candidates.

Contributions to the Republican's Senate campaign arm were not available, but an analysis of them done by the PoliticalMoneyLine web site shows a similar distribution. Top contributions include $112,500 from GlaxoSmithKline, the drug company, and $125,000 from Pepsi.

From April 1 to June 30, the NRCC reported spending $6.9 million from their non-federal accounts.

Sources of Democratic Money

Democrats pipe in their soft money from several wells.

A plurality was transferred from joint fund-raising accounts with state parties, like $225,000 from Oregon Democrats and $125,000 from Arkansas Democrats, both given to the DSCC in July. An account set up by Sen. Robert Torricelli and the DSCC included a $1 million check in June.

Some of that money is shelved for later use in those states, usually for advertisements that subtly, though not directly, advocate the election of a particular Democrat. The rest of it is pooled, so that the national party committee can send the money where it's needed, according to the DSCC.

Labor unions have been the Democrats' most reliable source of large checks, and they've increased the pace of their giving in the past few months.

That money is in addition to the contributions the labor union's PACs will make directly to campaign accounts, party committee hard money funds, and does not include the time and money the unions will spend bringing their members to the polls.

The DNC's soft money account for labor money netted $100,000 plus donations from the Service Employees International Union, the American Federation of Teachers, AFSCME, and the Communications Workers of America.

The Democratic Senatorial Campaign Committee raked in more than $850,000 from labor-linked donors alone in June, including $100,000 from the United Food and Commercial Workers union, $260,000 from the AFSCME government employees union.

The biggest checks were $500,000 from the Carpenters' Unions, and $360,000 from the Transport Workers Union.

Top corporate donors to the DSCC include Agvar Chemicals, which has given $105,000 this cycle, Fleet Bank, which has given more than $250,000; Microsoft's $50,000

The Federation of American Hospitals, which represents investor-owned medical facilities, gave $25,000, even though many Democrats don't support malpractice insurance reform, which is one of the group's major concerns.

"We've given money to both parties, and like other organizations, we tend to support people who tend to support us," said Richard Coorsh, a spokesperson for the group.

Wealthy Hollywood moguls, from writers and producers to studio chiefs, form the third largest aggregate of Democratic money. Hollywood writer Stephen Bing gave $500,000 to the DSCC on June 27. That's in addition to a $250,000 contribution earlier this year. And he wrote a $1,000,000 contribution to the DCCC's "Non Federal Account #7."

Bing, heir to a $600 million fortune, has contributed at least $10 million to Democratic causes in the past few years, according to records and published records. He was not available for comment.

Disbursements patterns track close races. Nearly $475,000 has been given to the South Dakota Democratic Party, $363,000 to the New Hampshire Democratic Party, $125,000 to the Louisiana Democratic Party. In Colorado, where candidate Tom Strickland lags incumbent Wayne Allard, the DSCC has given the state party about $263,000.

DSCC spokeswoman Tovah Ravitz-Meehan said that party leaders were pleased with the pace and scope of donations. She said that hard money receipts had also shown an increase.

"I think we will have the money we need for the races that are in play," she said.

Ravitz-Meehan acknowledged that Democrats are working to broaden their hard money base for future election cycles, assuming that they won't be able to rely nearly as much on soft money.

"We've made a pretty hard pitch on hard money [donations]," she said "They're better, stronger, and more flexible for us."

Republican officials said they're stressing hard money appeals, too.

The State of the Law

Under federal law, corporations and unions aren't allowed participate in federal political activity, so both sets of interests have turned to the soft money accounts, which indirectly subsidize party building, administrative and turn-out activities.

Under the McCain-Feingold-Shays-Meehan law, which was signed by President Bush in May, those groups and others would be prohibited from sending soft money to the parties. And all incorporated groups, whether for profit or tax-exempt, would face severe restrictions on television and radio ads run right before an election.

A draft of regulations written by the FEC and released earlier this week recommends an exemption for non-profit issue groups that don't take money from labor or corporate interests because a 1986 Supreme Court decision expressly allows them to air ads in federal elections.

The FEC will hold hearings Aug. 28.

The Republican National Committee, which is challenging the new law, argues that it would cripple the ability of political parties to help candidates and promote the agenda of its members.

For them, much of that activity is funded by soft money from corporations, interest groups and wealthy people.