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State Account Helped Thune

Former Rep. John Thune (R-S.D.) spent roughly $50,000 from a long-dormant state campaign account to fund travel, staff salaries and consulting fees in 2003, leading Democrats to call on him to fully disclose the nature of those expenditures.

The former Congressman, who is now running against Senate Minority Leader Tom Daschle (D), used the Thune for Governor Exploratory Committee, which he created in 2001 as he prepared for a gubernatorial bid, to finance his activities.

Thune campaign manager Dick Wadhams said the disbursements were made early in 2003 on “incidental expenses.”

“John Thune was a private citizen,” said Wadhams. “He was not a candidate for anything. He didn’t talk about running.”

But Daschle campaign manager Steve Hildebrand was not satisfied with that response and said that Thune may have violated the provision of the Bipartisan Campaign Reform Act banning soft money if he spent those funds on political activities related to the Senate race.

“John Thune should provide full disclosure of what he spent this soft money on,” said Hildebrand. “He should say what consultants got paid, what travel was used for what and come clean in a very specific way as to how this money got spent.”

Wadhams shot back: “If the Daschle campaign wants to wrap their arms around full disclosure we are going to give them ample opportunity to disclose a lot in the coming months.”

Wadhams would not elaborate on what he meant.

At issue is whether Thune’s activities in 2003 qualify as “testing the waters” for a political race.

Under a guide written by the Federal Election Commission for potential federal candidates, an individual in this stage “does not have to register or report as a candidate even if the individual raises or spends more than $5,000 — the dollar threshold that would normally trigger candidate registration.”

“Nevertheless the individual must comply with the contribution limits and prohibitions,” according to the guide.

Ian Stirton, a spokesman for the FEC, said “you cannot use state money for a federal race” but added that it was impossible to know whether Thune had violated this prohibition given the disclosure requirements for the gubernatorial committee.

For his part, Wadhams maintained that Thune was “not testing the waters when that money was spent.”

“There were a lot of people talking about [Thune] running,” he added. “He didn’t do anything politically last year.”

Thune did meet with National Republican Senatorial Committee Chairman George Allen (Va.) as well as other NRSC officials during the year.

He also weighed a race for his old House seat after then-Rep. Bill Janklow (R-S.D.) announced his intention to resign last fall.

In November, Thune told Roll Call he was “giving active consideration to what if anything I want to do politically next year.”

All told, Thune raised roughly $500,000 for gubernatorial account in 2001, spending $411,000 — roughly $275,000 of which was in contribution refunds following his decision to take on Sen. Tim Johnson (D) in 2002 rather than run for governor. He lost that race by 524 votes.

The state committee began 2002 with $86,000 on hand, raising nothing and spending $32,000 ($20,000 in contribution refunds) for the year.

In 2003, the organization again raised no money but disbursed $49,824, none of which went to contribution refunds.

A report covering the organization’s 2003 activities was filed with the South Dakota secretary of state on Feb. 2.

The largest expenditure was approximately $11,000 for salaries; $10,000 went to consulting, $8,000 to office rent and $6,000 to travel expenses.

The committee ended 2003 with just $4,800 left on hand.

In the report Thune did not — and was not required to — disclose specific itemization of the committee’s disbursements.

This is not the first time the Daschle campaign has accused Thune of violating the tenets of BCRA.

After losing to Johnson, Thune formed a 527 committee, known as South Dakotans for Responsible Government, which was aimed at harvesting soft money for issue-advocacy efforts.

Two months later Thune distanced himself from the group after Democrats noted that he had spent $22,000 in the first three months of 2003 through his still-functioning Senate committee even as he chaired the 527 group.

Under BCRA, a potential candidate for office who spends better than $5,000 in a federal campaign account cannot also have a soft-money organization.

In a June letter to supporters explaining his decision, Thune wrote that “federal law often make[s] it difficult to voice our opinions.”

After a year of deliberation, Thune officially entered the Senate race in early January and filed his statement of candidacy with the FEC on Jan. 18.

He begins from a dead fundraising stop in his race against Daschle, who has already collected $7 million and spent $4.6 million in the five years since he coasted to re-election in 1998.

In the final three months of 2003, Daschle raised $2 million, spent $1.2 million and banked $3.9 million. He has repeatedly said he will spend upwards of $10 million on the contest.

Wadhams admitted Thune has “a lot of ground to make up” on the fundraising front but said the campaign has been “very active” so far in 2004.

“The reception has been superb,” said Wadhams. “We look forward to a strong fundraising report at the end of March.”

In his 2002 race against Johnson, Thune raised and spent nearly $6 million.

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