Democrats mired in money woes Party sees debts hit $14.4 million, legal bills $4 million


WASHINGTON -- The Democratic National Committee is in its most precarious financial position in decades, facing debts of $14.4 million and projected legal bills of $4 million in the next year alone, party officials said yesterday.

The party also does not have the money to repay $1.5 million in unlawful or questionable 1996 campaign donations it has

promised to return.

This monetary hole has left the Democratic Party and its leaders in the uncomfortable position of having to turn to its loyal -- and legal -- donors to help repay donors whose motives have been questioned.

In a further complication, as the struggle over fund raising intensifies, there are signs of strain in the relationship between the White House and the party.

Several veteran Democrats said in interviews that it could take years for the party to recover from its financial and political turmoil. Even the party's general chairman, Gov. Roy Romer of Colorado, said in an interview yesterday that the disclosures about Democratic fund-raising practices in the 1996 campaign had been so disruptive that he found it nearly impossible to get anyone to listen to how the party stood on issues.

Instead, the national committee spends much of its time responding to subpoenas.

"If you just look at the subpoenas you know that are coming out," Romer said, "sometimes you think they are calculated not to get information but just to occupy you so much that you can't do anything else but answer subpoenas."

He said it had been difficult for him to extract details from the White House about many of the allegations. Romer said he could not even get answers from his own staff about what happened in the frenzy of fund raising in 1996.

"I am confident I don't know everything," Romer said, explaining that he got much of his information from newspapers.

Amy Weiss Tobe, a party spokeswoman, said the committee's financial picture was better than the $14.4 million owed to creditors suggests because the DNC had $1.7 million on hand.

But Romer said the party was having more than the usual trouble raising money in a nonelection year.

He said it was considering loosening some restrictions in its fund-raising procedures that it announced in late January, although he disputed that such a move would be intended to relieve the financial pressure. In addition to paying off the debt, the party needs to raise $50 million for operations this year, officials said.

Romer, 68, also expressed frustration with the pace at which the White House had authorized the party to release documents on its fund raising.

"Why do you want to have a congressional committee leak them one at a time?" he said. "It seems to me the best thing in the world is to dump them out the door."

In interviews, other veteran Democrats were more explicit in expressing their concerns about how the party's troubles were hampering fund raising -- and could threaten the party's future.

Donald Sweitzer, a former political director and finance director of the national party, said donors were often motivated "because they truly care about electing Democrats." Now, Sweitzer said, what he hears is "I don't want my money to go to paying for some bunch of lawyers defending the sins of the past."

Romer conceded that it was tough for the party to raise money given the allegations about its fund raising.

Some Democrats said that although they thought the party would pull itself out of debt by tapping its most loyal donors, they were more concerned that other contributors would no longer give because they were even more dispirited, and that this would seriously diminish fund raising for the 1998 midterm elections.

Several accused Clinton of blaming the party for the fund-raising controversies and of neglecting the financial needs of his party's congressional candidates last year.

"What has Bill Clinton done for the Democratic Party?" asked Dan Carol, a Democratic strategist who was the party's national research director during the 1992 campaign.

"We lost the House. We've produced a fabulous moderate Republican agenda. And now, the very term 'Democratic' has been sullied by this fund-raising situation -- at his behest."

Brian Lunde, a former executive director of the DNC, said current party officials "are in survival mode -- they just want to survive until tomorrow."

Noting that the party had a surplus after the 1992 elections, Lunde said: "We ought to be flush as we head into the '98 elections, but the opposite is true. We're still looking backward."

The Republican National Committee has a debt of $7.5 million, said Mary Crawford, a party spokeswoman. But unlike the Democrats, the Republicans are not saddled with huge legal fees or embroiled in a fund-raising controversy.

"Our fund raising has been going gangbusters," she said. "This is a typically slow time, but we're ahead of budget for the year."

Pub Date: 3/27/97

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