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The most expensive election in history

By Julian Borger

WASHINGTON, OCT. 15. This year's U.S. presidential contest is set to be the first billion-dollar election in political history. According to the latest official figures, the President, George Bush, and the Democratic nominee, Senator John Kerry, together have raised more than $500 millions, double the previous record set by Mr. Bush and his then rival, Al Gore, in 2000.

Allies and surrogates operating through a loophole in the campaign finance laws have amassed a further $330 millions and are still rapidly sucking in cash, most of which will be thrown into the Bush-Kerry duel in the form of attack advertisements.

Add in the $150 millions in Federal funds provided to the candidates, and the considerable funds spent on the presidential contest by the Republican and Democratic party machines, and it is clear that a once unthinkable financial benchmark has fallen by the wayside."It's fairly safe to say now that the billion dollar mark is going to be passed," said Derek Willis, an expert on money in politics at the Centre for Public Integrity, a Washington watchdog group. "The combined total for the two of them is more than I ever thought two candidates would raise."

Closely contested

Not only is this the most cash-drenched presidential battle ever, it is also one of the most closely contested, in money terms as well as electoral support. Republican candidates normally outspend Democrats by large margins.

This year, Mr. Bush has raised more money than any candidate before him, but Mr. Kerry has stayed in contention. He has collected more than $236 millions, against Mr. Bush's $264 millions. Furthermore, this time Mr. Kerry has well-financed allies, liberal support groups whose expenditure does not show up in the official figures and who are easily outspending their conservative counterparts.

"Last time Bush had twice the money Gore had. This time they're close enough that money isn't going to make any real difference," said Larry Noble, the head of an independent monitoring organisation, the Centre for Responsive Politics.

Fury against Bush

The Democrats have the President partly to thank for their unusually full pockets. Fury at the Bush administration among wealthy liberals including the billionaire financier George Soros, the insurance magnate Peter Lewis, and leading Hollywood moguls such as Stephen Bing (best known for being the father of Elizabeth Hurley's son) has opened some fat wallets.

As one Democratic fundraiser put it: "This is a nasty and even campaign, so people are coming out and spending more money. The Howard Dean campaign (in the Democratic primaries) galvanised the angry people, and there is one thing that angry people will do. Angry people will write cheques."

This year's flood of political contributions is the perverse consequence of a legislative attempt two years ago to curb the influence of corporate money on American politics.

The McCain-Feingold law, promoted by two Senators from either side of the political divide, outlawed "soft money" — big money contributions to the parties which escaped Federal limits as long as the adverts they funded were about `issues' rather than candidates.

In practice, it was clear what side a soft money advertisement was on.

To compensate, the law doubled the legal limit on "hard money" individual contributions to the campaigns to $2,000.

Consequently, both campaigns have raised far more hard money, but the flow of soft money has not been staunched. Instead of going to the parties, it has gone to political groups known as `527' committees after a clause in the campaign finance rules which allows `independent' organisations to raise unlimited funds with few restrictions, as long as they do not formally coordinate their activities with the parties.

Huge potential

Democrats were the first to see the huge potential of the loophole, and leading liberal figures set up an array of anti-Bush 527 groups.

For example, Harold Ickes, a former aide to Bill Clinton and a veteran Democratic strategist, helps run the Media Fund, which has run a series of scathing anti-Bush advertisements. Jim Jordan, Mr. Kerry's former campaign manager, has become the chief spokesman for America Coming Together (Act), which sponsors adverts and mobilises liberal voters.

Since it became clear that the Federal Election Commission was not going to ban 527s, the Republicans have been scrambling to catch up. Swift Boat Veterans for Truth, a virulently anti-Kerry group, has produced blistering adverts questioning his war record. — © Guardian Newspapers Limited 2004

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