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Ney to Hold Hearings on Democratic Groups

With two controversial Democratic fundraising organizations holding a big event Wednesday night, House Administration Chairman Bob Ney (R-Ohio) is planning hearings on the legality and activities of such groups.

The New House PAC and the Democratic Senate Majority Fund are designed to collect both hard and soft money. Under last year’s Bipartisan Campaign Reform Act, soft-money fundraising is banned for the national parties, and some GOP operatives privately believe what both organizations are doing is illegal, although they have declined to file any type of complaint with the Federal Election Commission so far.

Several dozen Democratic lawmakers from both chambers — including House Minority Leader Nancy Pelosi (Calif.) and Senate Minority Leader Tom Daschle (S.D.) — were expected to attend Wednesday night’s event at the Phoenix Park Hotel, which was expected to generate about $50,000 in hard money for the two organizations.

Ney wants to explore how these Democratic-linked organizations can operate under BCRA, and just what contacts lawmakers can have with individuals associated with such groups. He will hold hearings during the next few weeks, although no formal date has been set yet.

“I simply cannot understand why some of the biggest self-proclaimed opponents to soft money would support campaign finance reform one day and then seek to circumvent it the next,” said Ney, who strongly opposed passage of BCRA. “It would appear, at least from initial reports, that organizations such as the Democratic Senate Majority Fund and the New House PAC violate the spirit, if not the letter, of [BCRA].”

But Howard Wolfson, one the co-founders of the New House PAC and a former executive director of the Democratic Congressional Campaign Committee, said his organization was well within its legal rights to raise both hard and soft money.

“Everything we have done has been within the law,” said Wolfson, who added that the well-known Democratic law firm Perkins Coie LLP vetted, and approved, the organization’s structure before it was created.

Neither the New House PAC nor the DSMF has raised large sums of money this cycle, although both have now accepted soft-money contributions. The New House PAC has raised $12,500 in soft money so far, while the DSMF reported taking in $35,000 in soft money through June 30. The two organizations have taken in several hundred thousands of dollars in hard money as well.

Democrats on the House Administration panel had not received any formal notification from Ney and declined to comment, but they would be expected to call several well-known GOP figures to appear at any hearing Ney convenes.

Susan Hirschmann, former chief of staff for House Majority Leader Tom DeLay (R-Texas), and ex-Rep. Bill Paxon (R-N.Y.), founded the Leadership Forum, a 527 organization, in late 2002 to collect soft money for House GOP races. The group first accepted, and then returned, a $1 million donation from the National Republican Congressional Committee and, while dormant most of this year, has recently begun raising money again.

A Senate Republican version of the Leadership Forum, the National Committee for a Responsible Senate, has apparently engaged in no fundraising activities.

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