Cranston Will Support Bill to Ban ‘Soft Money’ : Election reform: State parties spend millions on federal races. The senator fears the plan to prohibit the fund-raising practice is not tough enough.

WASHINGTON —  Sen. Alan Cranston (D-Calif.), who in 1986 solicited a controversial “soft-money” contribution of $85,000 for the California Democratic Party from Lincoln Savings & Loan owner Charles H. Keating Jr., will support a ban on all such fund-raising activities by state parties that escape federal regulation, an aide disclosed Sunday.

Cranston’s administrative assistant, Roy Greenaway, said the senator will back a Democratic plan to prohibit the practice in the future, even though he fears it is not tough enough to entirely eliminate the soft-money phenomenon.

“Soft money” is the term used to describe the millions of dollars currently being spent by the state parties in presidential and congressional elections. In 1988, it is estimated, each of the presidential campaigns raised at least $20 million in soft money, which was spent by the state parties.

Soft money now escapes federal regulation because the state parties claim it is being spent only on behalf of state and local candidates. But national party officials admit that they collect and distribute soft money primarily to affect the outcome of congressional and presidential races.

To compensate for the proposed ban on soft money, Greenaway said, Cranston will propose to raise the maximum contribution that a state party can accept in federal elections from $5,000 a year to $20,000. The same limit now applies to the national parties in raising individual and PAC contributions for presidential and congressional elections.

Cranston, a longtime proponent of public financing of congressional elections, will also propose an amendment to allow Americans to authorize the Internal Revenue Service to take $1 per month from their paychecks to fund all federal elections, Greenaway disclosed. He said this proposal is much less likely to be enacted than a ban on soft money.

Both Cranston and Greenaway previously have declined to disclose the amendments that the senator is planning to offer to the campaign reform legislation, which is scheduled to be debated on the Senate floor next month. Cranston is currently scheduled to testify on the subject before the Senate Rules Committee on Feb. 27.

Cranston is one of five senators under investigation by the Senate Ethics Committee for intervening with federal regulators in 1987 on Keating’s behalf when his thrift was under investigation by the Federal Home Loan Bank Board.

Prior to intervening for Keating, Cranston had received about $35,000 in campaign contributions from Keating and his associates. He also solicited a soft-money contribution of $85,000 from Keating for the California Democratic Party and later persuaded the thrift executive to give $850,000 to voter registration drives supported by the senator.

In recent weeks, Cranston has been accused by an aide to Sen. David L. Boren (D-Okla.) of trying to weaken the campaign reform legislation to be offered in the Senate next month by Boren and Senate Majority Leader George J. Mitchell (D-Me.). The bill seeks to ban soft money.

Greg Kubiak, Boren’s aide, criticized efforts by Cranston to organize support for several amendments to the Boren-Mitchell bill on grounds that all Democratic senators should support the measure. The bill is strongly opposed by most Senate Republicans.

Fred Wertheimer, president of Common Cause, the self-styled citizens’ lobby, which supports the Boren-Mitchell bill, said he also thought Cranston was trying to weaken the bill’s ban on soft money, which he called “essential if we are going to stop soft-money abuses in the future.”

But Greenaway denied that any of the amendments Cranston has been drafting would weaken the Boren-Mitchell bill or its provision banning soft money.

“We’re not going to oppose the provisions of the Boren bill that prohibit parties from spending soft money,” Greenaway said. He later added: “There are no provisions of the Boren bill that we oppose.”

Greenaway said Cranston does not intend to be silent on the subject of campaign financing, even though his own fund raising is under scrutiny by the Ethics Committee. Prior to the Keating affair, Cranston had a reputation as one of the most successful fund-raisers in the Senate.

Although he supports it, Greenaway said, Cranston fears that the Boren-Mitchell bill will weaken the state parties by requiring that all the money they spend in federal elections must be raised under federal laws, which restrict individual and PAC contributions to $5,000 a year.

As a result, he said, Cranston will propose to raise those limits to $20,000 under federal law. Or as a possible alternative, he said, Cranston might seek to exempt contributions to state parties from the aggregate limit of $25,000 on contributions that an individual or PAC can give to all party organizations during an election cycle.

In California in 1988, the state Republican Party received $5.8 million in soft-money contributions intended to affect the presidential race, and the state Democratic Party collected $4.4 million.

The Boren-Mitchell bill would set a voluntary limit on the total amount of money that congressional candidates can spend in an election. If a candidate failed to abide by it, his opponent would be eligible for public funding. The measure also would prohibit a candidate from accepting more than 12% of his funding from PACs.

Greenaway said Cranston believes the spending limits in the Boren-Mitchell bill are not low enough. In California, a Senate candidate could still spend about $10 million, or about half of the nearly $20 million Sen. Pete Wilson (R-Calif.) is believed to have spent for his reelection last year.

Cranston would prefer public financing of congressional elections or enactment of a constitutional amendment setting mandatory spending limits, Greenaway said.