LA Times Article February 23 2002

WASHINGTON -- The Mashantucket Pequot Nation, a small Indian tribe that owns a mega-casino in Connecticut, knows how to make itself heard in Washington.

The tribe gave about $500,000 in national political donations during the 2000 campaign, more than any other Native American group in the country.

And, in theory, it could approach that total again in 2004, even if Congress passes legislation to crack down on big political donations from special interests and wealthy individuals. That's because Indian tribes, including many politically active ones in California, are among the unheralded beneficiaries of potential loopholes in the reform bill, which faces a crucial test soon in the Senate before it can be sent to President Bush.

The bill would ban soft money--unlimited, loosely regulated contributions to national political parties--from all donors, including Indians. But it eases some restrictions on hard money donations--sums that may be given directly to congressional and presidential candidates, as well as parties.

Indian tribes, though, are part of a small category of donors that would not have to abide by an overall cap on these hard money contributions.

As a result, while the typical individual could give the new maximum donation of $2,000 to a relatively small number of federal candidates, tribes could funnel contributions of this size to as many candidates as they want--potentially hundreds.

Few expect that any tribe would go that far. But in a new fund-raising world, with most soft money off limits, the two major parties would redouble their chase for hard money. And groups such as Indian tribes that can give large chunks of that precious funding source would likely gain influence.

This potential loophole is one of several in the legislation, which advocates acknowledge is more likely to rearrange rather than reduce the flow of money in politics.

Another would let incorporated groups, such as the National Rifle Assn. or the Sierra Club, pour unlimited funds into preelection political attacks through media other than television. The bill also would encourage state and local parties, acting as proxies for their national counterparts, to solicit from deep-pocket donors.

These provisions underscore the limits of a bill that seeks to overhaul federal campaign law for the first time in nearly 30 years. Political pros are already combing through the fine print to find what could be exploited if the measure becomes law.

"We'll do anything that's legal," said Rep. Thomas M. Davis of Virginia, chairman of the National Republican Congressional Committee. "We'll raise hard money. We'll raise soft money [where possible]. We'll raise Indian gaming money."

Votes Nearly There to End Any Filibuster

Next week, advocates of a House-passed campaign finance measure will press the Senate to send it to the president. The pro-reform coalition of Democrats and a small bloc of Republicans appears close to having the 60 votes needed to overcome a possible Senate filibuster.

Most congressional Republicans oppose the legislation, criticizing it as an unconstitutional infringement on free speech. But a major reason why Bush may embrace the bill is that it actually expands certain forms of fund-raising in which his party excels.

Under the bill, donors would no longer be able to give unlimited sums of soft money to the national parties for such activities as voter turnout drives and "issue" advertisements, which typically tout or attack candidates without directly soliciting votes. Such money totaled nearly $500 million in the last election cycle, split about equally between Republicans and Democrats.

In a compromise to win backing for a soft money ban, the legislation would allow individuals to give up to $95,000 every two years to parties and candidates. These hard money donations, which Republicans historically have raised in far larger quantities than Democrats, may be spent on direct election expenses. Currently, the limit is $50,000.

But the legislation leaves untouched a federal rule that would exempt Indian tribes and certain other donors from the proposed $95,000 limit.

In May 2000, the Federal Election Commission found that tribal entities, like unincorporated partnerships and homeowner associations, were subject to some contribution limits but not others.

The bottom line: Under the pending legislation, tribes could no longer give soft money to the national parties and would have to abide by a $2,000 limit in hard money donations per election to any federal candidate. But the tribes would be able to give to as many candidates as they choose, while others would have to stop after they hit the $95,000 limit.

In theory, that means a tribe could give the maximum amount to every candidate for the House, Senate and White House--$2,000 for primary elections and $2,000 for the general elections--totaling hundreds of thousands of dollars in each election cycle.

The exception is potentially important because tribes have gained in wealth and political clout in recent years as the Indian casino industry has grown, and questions about gambling regulations and tribal rights have confronted state legislatures and Congress.

Federal election data show that Indian gaming interests gave $2.9 million in hard and soft money during the 2000 campaign, up from about $128,000 in the 1992 cycle. Five of the top 10 tribal donors from the last cycle were from California. They gave more than $600,000, mostly in soft money.

It is unclear how tribes would react to a new federal finance system.

"It's critical that tribes maintain their ability to participate in America's political process," said Mark A. Macarro, tribal chairman of the Pechanga Band of Luiseno Indians in Temecula, which gave $132,000 to federal candidates and party groups--all Democratic--during the 2000 campaign.

More than half of the funds the Mashantucket Pequots gave in 1999 and 2000 were soft money donations to parties, predominantly to Democratic organizations.

The tribe also gave to lawmakers across the country, including $1,000 each to Reps. Maxine Waters (D-Los Angeles), J. D. Hayworth (R-Ariz.), Jim Ramstad (R-Minn.) and Dave Camp (R-Mich.).

"We support legislators that support tribal interests," said Daniel Little, legislative manager in Washington for the tribe. "We are bipartisan. We give to both parties, including incumbents and challengers."

Little, defending the donation exception for Indians, noted that tribes give far less than corporations or unions have given. He said the Mashantucket Pequots would probably give less if soft money is banned from federal elections.

The $95,000 limit on hard money donations would rise with inflation. Campaign finance data indicate it is a generous standard.

If soft money had been banned and if a $95,000 limit had been in effect during the 2000 cycle, most individual donors would have been unaffected.

Data from the Center for Responsive Politics in Washington, which tracks political fund-raising, show that only 755 individuals gave more than $95,000 in hard and soft money during the campaign.

Effect of Exception Called 'Minimal'

Rep. Christopher Shays (R-Conn.), a House sponsor of the campaign finance legislation, predicted the exception to the proposed $95,000 limit for Indian tribes and other groups would have "minimal" effect. He said he doubts tribes would seek to give to a huge number of federal candidates.

Nonetheless, critics fear that tribes flush with gaming income would continue to pour vast sums into the political system.

Rep. Rob Simmons (R-Conn.), who backs the reform bill, last July proposed an amendment to cap tribal donations.

But the bill's chief advocates, including Sen. John McCain (R-Ariz.), himself a leading congressional recipient of Indian gaming money, were skeptical. Some feared it would split the pro-reform coalition; others argued that tribal sovereignty issues could hinder efforts to craft new regulations.

"It is disappointing that at a time when we are trying to enact meaningful campaign finance reform we refuse to close an obvious loophole that could be easily sealed," Simmons said at the time.