Loophole lets big donors sway N.C. races

Famed novelist John Grisham gave $4,600 earlier this year to the campaign of Democrat U.S. Senate candidate Kay Hagan. That's the maximum allowed under federal election law.

Grisham didn't stop there.

About the same time, Grisham, whose daughter is a friend of Hagan's daughter at UNC Chapel Hill, gave $28,500 to a national Democratic committee that has spent millions of dollars tearing down Hagan's opponent, Republican incumbent Elizabeth Dole.

Backers of Hagan and Dole have exploited a loophole in federal election laws to bypass normal campaign contribution limits, which are designed to lessen the influence of big donors. Supporters of the candidates have given hundreds of thousands of dollars to national party committees that have played a critical role in North Carolina's Senate race.


Billionaire Kirk Kerkorian, a major figure in shaping Las Vegas, gave $4,600 to Dole's campaign in July 2007. About the same time, Kerkorian gave $28,500 to the National Republican Senatorial Committee, which has run ads criticizing Hagan as a big spender.

Hagan's father, Joe Ruthven, a Lakeland, Fla., businessman, gave her the maximum contribution last November. The next month, Ruthven gave $28,500 to the Democratic Senatorial Campaign Committee.

R.D. Faber, a Merrill Lynch investment banker from New York, gave $2,250 to Dole in June and about the same time gave $28,500 to the GOP Senate committee.

An analysis of campaign records shows that, as of June 30, a group of supporters who contributed a total of almost $200,000 to Hagan's campaign collectively contributed $1.7million to the Democratic Senatorial Campaign Committee.

A group of supporters who contributed a total of almost $400,000 to Dole's campaign collectively gave $1.5 million to the National Republican Senatorial Committee during the same period.

Dole, as an incumbent with a web of Washington connections, might have had an advantage this year when it came to campaign money.

She had raised $13.8 million for her re-election committee by the end of September, compared with $5.3 million that Hagan has raised, according to reports filed with the Federal Election Commission.

The Democratic Senatorial Campaign Committee has helped erase Dole's financial edge. The committee poured money into the race this summer, with an ad campaign – estimated to cost $7 million by the Dole campaign – that portrayed Dole as old and ineffective.

Such contributions are legal. But some find the practice of donors bypassing federal campaign limits troubling.

“It's one more way that donors can have an impact on elections and wealthy donors can have an even bigger impact, giving an advantage to those who have wealth,” said Bob Hall, executive director of Democracy North Carolina, a campaign finance watchdog group.

Donors to Hagan or Dole are often encouraged to also contribute to the national committees.

“We absolutely ask our donors to give to the RNC and NRSC,” said Daniel McLagan, a Dole spokesman. “We are doing everything we can to combat the $10 million in attack ads the Democrats have brought to North Carolina.”

Hagan – or at least her allies – are doing the same.

Richardson Preyer, a Hillsborough businessman, gave $2,300 to Hagan because he had grown up in Greensboro with her husband, Chip Hagan. He gave an additional $17,700 to the national committee at the request of former N.C. Gov. Jim Hunt, who helped recruit Hagan to run.

Mack Pearsall, an Asheville businessman, and his family gave $9,200 to Hagan and $20,000 to the national committee after receiving calls from Hunt and from Schumer's office.

“They said we need a certain amount of money to show that we in North Carolina are serious about her Senate candidacy,” Pearsall said.