The PAC mentality How Mitt Romney, Hillary Clinton, and other 2008 White House hopefuls are greasing palms across America BY DAVID S. BERNSTEIN

As the election returns came in last November 4, Mitt Romney had a big stake in a number of state-legislative races — but in Massachusetts, where he failed to help the Republican Party gain a single seat. No, we’re talking about places like Iowa’s 35th District, where Kraig Paulsen narrowly won election as state representative, and the South Carolina 31st, where Hugh Leatherman cruised to a state-Senate victory. Why did the Bay State governor care so much about these distant battles? Because Romney — or rather, Romney’s Commonwealth Political Action Committee (PAC) — gave $1000 donations to both candidates. All in all, Romney’s PAC gave roughly $50,000 to Republican state-legislative candidates and county party committees in early-voting presidential-nomination states. After all, any would-be president who does poorly in Iowa, New Hampshire, and South Carolina won’t be around when other states vote.

In 2004, Romney wasn’t the only one flashing cash in key states in preparation for a 2008 presidential run. In Iowa alone, Senator Hillary Clinton’s HillPAC gave $25,000 to Democrats running for state legislature (including $5000 to the Democrat who lost to Paulsen); Senator Bill Frist of Tennessee contributed $14,500 to 13 Republicans through Volunteer PAC; and Nebraska congressman Chuck Hagel gave $7000 to three party committees in the state through his Sandhills PAC. All are considered likely ’08 candidates.

More than a dozen presidential hopefuls, in both parties, are actively operating these so-called leadership PACs. John Kerry, who had the Citizen Soldiers Fund PAC for the early part of his 2004 campaign, set up a new one, Keeping America’s Promise PAC, almost immediately after losing. Governor Tom Vilsack of Iowa, Governor Mark Warner of Virginia, and Senator Russ Feingold of Wisconsin have all generated "are they running?" buzz by launching leadership PACs this year.

Yes, the first phase of the 2008 presidential election is well under way. Through the 2006 midterm elections, presidential hopefuls will continue raising money by the bushel through their leadership PACs, and hand it out in early-primary states like horny businessmen in a strip club.

PAC it in

Leadership PACs became popular in the 1980s, when politicians like Bob Dole, Newt Gingrich, and Dick Gephardt used them to gain power within Congress. By the 1992 campaign cycle they were playing a role in presidential politics, and by 2000 almost every candidate had one.

"It’s a lobbying effort," says Steve Weiss, communications director for the Center for Responsive Politics, which tracks campaign finances. "This is all part of an orchestrated effort to get endorsements from key state and local officials. The federal candidate wants to see some return for his investment."

The Federal Election Commission (FEC) distinguishes between a single-candidate campaign committee, like "Kerry for Senate," and a multi-candidate PAC, which promotes issues and candidates who support those issues. A leadership PAC is considered one of the latter; Commonwealth PAC promotes Romney’s ideas about what’s good for America, the way the Sierra Club PAC promotes environmental policies or the US Chamber of Commerce PAC promotes business interests. The FEC gives these PACs much more latitude in raising and spending money. So, politicians in the early stage of a national campaign use their leadership PACs to fly around the country, buy tables at fundraising events, hold meet-and-greet functions, host a Web site, build up campaign staff, and even do campaign-like activities — Commonwealth PAC did a 17-state direct mailing last month. These PACs also offer a way to court other influential pols by contributing to their campaigns. Indeed, it was through leadership PACs that Republican Pat DeWine, running in a special June 14 election for an open Ohio congressional seat, received contributions from rumored presidential aspirants Lamar Alexander, Sam Brownback, Frist, Hagel, John McCain, Rick Santorum, and George Voinovich — and that was just a primary. (DeWine lost, by the way.)

"The distribution of money creates good will. It’s public relations, it curries favors, and it gets one-to-one contact," says Rick Ridder, campaign manager during the early stages of Howard Dean’s presidential run. "John Edwards’s leadership PAC basically gave the Iowa party $50,000 to help them build their voter file. The Iowa Democratic Party becomes a little cash cow."

But why a second fund? Easy answer: more money. Under campaign-finance laws, a Hillary Clinton supporter can contribute only $2000 to her Senate campaign committee. The same supporter can give another $5000 to HillPAC. And at the state level, PAC contribution limits are even looser, which is why Romney set up separate PACs in Iowa, South Carolina, Arizona, and Michigan, in addition to his federal leadership PAC. The more numerous these fundraising vehicles, the more deeply Romney’s backers can reach into their pockets: the bulk of his 2004 contributions to Iowa state legislators came from two Utah businessmen, who gave a combined $19,000 to the Iowa Commonwealth PAC last October — many times more than they could give to Romney’s own campaign committee. In fact, a mere dozen key supporters, including several from his old company, Bain Capital, provided almost all of Romney’s PAC money last year.

For anyone looking for influence through political donations, Iowa will present a uniquely fertile opportunity for the next 16 months, leading up to the November 2006 elections. The governor’s seat and at least one of the state’s five congressional seats will be open. But even more important, the state Senate stands at an even 25-25 split between Democrats and Republicans, while the GOP holds a one-seat lead in the House.

"It will be quite competitive, and I’m sure both sides will be raising and spending a great deal of money," says Cullen Sheehan, executive director of the Iowa Republican Party. "Anyone who agrees with our ideals and who wants to contribute, that’s something we accept and appreciate, whether it’s a presidential candidate or not."