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CAMPAIGN '08: RACE FOR THE WHITE HOUSE

An FEC system is caught in a Web

The federal campaign finance fund is losing to Internet donations.

October 20, 2008|Dan Morain | Times Staff Writer

The epitaph of the federal campaign finance system is being written by 3.1 million people like Sharon Pipino.

Pipino offered her latest contribution to Barack Obama on Sunday via the Internet: $25. She was answering an e-mail from Obama campaign manager David Plouffe in which he announced that the Democratic presidential nominee raised a record-setting $150 million in September. Obama also added 632,000 new donors last month.

As he does several times a week, Plouffe urged people like Pipino to dig deeper.

Pipino, 58, a massage therapist in Anchorage, figures she has given $2,000 to Obama since the campaign began.

"I just want to see him get over the top," she said happily.

Obama -- the first presidential candidate to opt out of the government financing system since its establishment in 1976 -- is free to raise and spend unlimited amounts of money. He gets hefty sums from big donors. But the universe of high-end donors is relatively small, particularly as the Wall Street crisis erodes their wealth.

There are far more people like Pipino, who have provided half of the $605 million that Obama has raised since last year. And it's those donors who are sealing the fate of the public finance system that was created in response to the Watergate scandals. Intended to restrain the corrupting effect that money can play in politics, the system is financed by taxpayers who voluntarily check 'yes' on their annual returns to allow $3 of their taxes to be set aside for the Presidential Election Campaign Fund.

Republican nominee John McCain, lacking Obama's small-donor base, accepted the $84.1-million grant from the Federal Election Commission. His campaign has had access to almost $140 million, split among his account, the Republican National Committee and various state accounts.

But with Obama's $150 million from September plus $49 million raised by the Democratic National Committee, the Democrats have a vast cash advantage heading into the Nov. 4 election. Obama can go on offense in states that Republicans must hold and still spend freely on costly TV ads.

"It is working out brilliantly," California Democratic consultant Bill Carrick said of Obama's decision to forgo public funding.

A year ago, before attaining front-runner status, Obama signed a pledge to the group Common Cause in which he vowed to push for "full public funding for qualified candidates who agree to spending limits and to stop accepting private contributions."

"I will make passage of such legislation one of the priorities in my campaign and in my presidency if elected," Obama told the group. But he decided to forgo public financing once he realized that he could amass far more through Internet donations than McCain.

McCain, appearing on "Fox News Sunday," said Obama was "completely breaking whatever idea we had after Watergate to keep the costs and spending on campaigns under control."

"The dam is broken," McCain said. "We're now going to see huge amounts of money coming into political campaigns, and we know history tells us that always leads to scandal."

Whether Obama will take action on public financing of campaigns if he is elected is uncertain. Republicans and many Democrats are skeptical of public funding schemes. The Internet favors Democrats. Experts note Democrats tend to be younger than Republicans and more accustomed to buying things online.

"My guess is that this system will just go away," Carrick said. "The public financing system is basically the horse and buggy of politics."

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dan.morain@latimes.com

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