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CASH CONFRONTATION <br> IN-CLINTON-LAZIO AND OTHER RACES, SOFT-MONEY CONTRIBUTIONS ARE BECOMING A FLASH POINT FOR DEBATE- AND HELPING CANDIDATES DO AN END RUN AROUND STRICT LIMITS ON THEIR OWN FUND RAISING.

On the day last week when Senate hopeful Rick Lazio renewed his call for a ban on soft-money political contributions, Buffalo's biggest Republican donor of that controversial cash was host to former President George Bush at a lavish fund-raising event.

Cello-Pack Corp. of Cheektowaga -- owned by Anthony H. Gioia and his brother Richard -- gave a Republican National Committee soft-money account $100,000 earlier this year. That's the biggest local campaign contribution that The Buffalo News found after reviewing nearly a decade's worth of federal data.

Anthony Gioia insisted there was no connection between last week's visit from the former president and his company's soft-money gift.

Nevertheless, he acknowledged that, as a big donor and fund-raiser, he has met with the former president's son, Republican presidential nominee George W. Bush, five times since last year.

Welcome to the world of modern-day campaign finance. Although Lazio and his opponent, Democrat Hillary Rodham Clinton, agreed over the weekend to ban soft money from their race, both parties are still collecting millions of dollars in unregulated, unlimited and unprecedented contributions all over the country.

It's a dash for cash that aims to skirt the hard-money limits that prevent individuals from donating more than $2,000 to a campaign and bans corporate and union contributions. Political parties simply collect huge sums instead and spend them on behalf of candidates.

"Soft money is an evasion of all the rules that were established to protect the integrity of the political system," said Fred Wertheimer, president of Democracy 21, a campaign reform group.

Lazio pushed the soft-money ban, but doing so pitted him against his friends and the nation's trends. For example:

Anthony Gioia and his wife are big Lazio supporters. And Lazio's campaign chairman -- Rep. Thomas M. Reynolds of Amherst -- made a $50,000 soft-money donation to a GOP committee two years ago.

Democrats and Republicans have raised $631,624 in soft money from Western New York for the upcoming election, with contributions stretching from the boardroom to the tattoo parlor. The biggest single Democratic donation, $60,000, came from businessman Frank McGuire. And Stylin' Tattoo of Cheektowaga gave $300 to a Republican soft money committee.

The parties already have raised a record amount in soft money for this election. In New York, the biggest contribution came from the Service Employees International Union, which gave $1.25 million to the Democrats. Philip Morris Companies Inc. gave $850,649 to the Republicans.

Meanwhile, the equally controversial practice of "independent expenditures" -- ads that special interests buy -- has more than doubled nationwide. And the soft-money ban in the Senate race won't stop that kind of spending.

Soft money in Senate race

The fight against soft money is nothing new to Lazio, who has regularly voted to ban unregulated gifts to political parties.

And it's not really new to the first lady, who proposed a soft money ban in December -- but only after setting up a soft-money committee of her own that has raised $4.36 million so far.

Privately, even Lazio aides acknowledge he stands to gain from the soft money ban; while successfully raising soft money, Clinton has fallen behind in hard money, with $3.1 million less on hand as of Aug. 23 than Lazio had.

The soft money ban prevents the Republican and Democratic Parties, along with the Conservative, Liberal and Working Families parties, from buying ads in the New York Senate race.

Reformers lauded the Clinton-Lazio agreement Sunday, but said it's just a start.

"If the candidates wanted to show they're serious about this, they would both pledge to pass a soft-money ban when they're elected," Rachel Leon, executive director, executive director of Common Cause-New York, told the Associated Press.

The deal comes at a time when Republicans and Democrats alike are boosting their soft-money giving, often while decrying the evils of such unlimited donations.

Republican soft money

Gioia never made a soft money donation until this year. He stressed that neither he nor Cello-Pack, which makes plastic bags, will gain from his decision to join "Team 100," the GOP's elite club of $100,000 donors.

"All I get is the satisfaction that comes from helping someone I respect and admire to get to the White House," Gioia said.

As one of Western New York's top GOP fund-raisers, Gioia only enhanced his stature with the party with his donation. Yet he had unusual access to the GOP presidential candidate even before giving the money.

"What was really very touching to me was that, when Gov. Bush was in town for a fund-raiser last fall, he said to me: 'Come on, Gioia, let's go in together,' " Gioia said. "I'll never forget that."

Gioia said he and his brother made their big soft-money contribution through Cello-Pack, rather than as individuals, for personal reasons. Anthony Gioia also made a $3,600 personal donation to a GOP soft-money account.

He said he has not discussed the soft-money issue with Lazio. And while the GOP Senate candidate has made the soft-money fight the centerpiece of his campaign, Gioia noted some concerns about an overall soft-money ban.

That could hand a big advantage to Democrats, Gioia said, because it wouldn't curb organized labor's ability to help Democrats through get-out-the-vote drives and other such activities.

Reynolds expressed similar worries. He said he made a $50,000 soft-money donation to the National Republican Congressional Committee from his old state campaign fund in 1998 because he wanted to help the party preserve its congressional majority.

"In today's times, it (soft money) is the reality of a level playing field," Reynolds said.

Democrat soft money

McGuire, the Buffalo nursing home owner who gave $60,000 to the Democratic National Committee, said he opposes soft money on principle.

"I don't think it's wholesome for all this influence to be bought," he said.

Not that he's trying to buy any.

"I gave this money because I think Al Gore will make an excellent president," said McGuire, adding that he's been a friend of Gore's for 15 years. "No, I don't want to go to Washington. I don't want any favors."

McGuire noted that his donation pales in comparison to others made by much more powerful forces, such as cigarette companies. Most notably, Philip Morris has given $5 million in soft money from its New York headquarters, mostly to Republicans, since 1996.

The cigarette and food products giant also gave another $2 million from its Washington office, with more than $1 million of it going to the Democratic Party.

"It's important for us to be engaged in the political process on behalf of our employees and shareholders," said Peggy Roberts, director of corporate communications for Philip Morris. "We take a bipartisan approach."

This year, Philip Morris lost its top spot among New York soft money donors to the Service Employees International Union, which gave the Democrats $1.25 million.

The union made its contribution to Democrats because it represents many of the state's health care workers, whose future depends in large part on federal funding for hospitals, said George Kennedy, the statewide union's Buffalo-based secretary-treasurer.

"We really think we have no choice but to try to contribute money so that our message can get out," Kennedy said.

Reformers' ideas

Then again, reformers think it's not exactly democratic for the largest donors to have the strongest voices in Washington.

"These donations create the danger of undue influence," Wertheimer said.

Campaign finance watchdogs worry because soft-money fund-raising is growing. The parties raised $252 million in soft money as of the end of August, up from $242 million in all of 1996.

Democracy 21 and Common Cause also question the legality of soft money, challenging Clinton in a Federal Election Commission complaint and the national parties' efforts in court.

So far, though, the FEC and the courts have only expanded how soft money can be used.

Soft money was originally seen as nothing but a tool for "party building" activities. But through a series of recent FEC and court decisions, the parties have been able to dramatically broaden its use.

Now the parties can say just about anything in soft-money ads, so long as they don't explicitly tell voters to vote for a candidate.

"Neither party wants to stop the soft money," said Kent Cooper, co-founder of FEC Info, which compiles a soft-money database used in researching this story.

Independent money

As bad as soft money is, Cooper said, there's something worse: the kind of "independent expenditures" by interest groups that Lazio and Clinton didn't ban from their race.

"There you're dealing with an entity that's not accountable to anybody," Cooper said.

That's starting to change, thanks to legislation pushed through Congress this summer by reformers including Rep. Amo Houghton, R-Corning. That bill requires such political groups to publicly disclose their activities.

"Our political system is drowning in money, and too often subject to secretive influence by special interests whose names we never know," Houghton said.

Such entities are growing much faster than soft money. According to the Annenberg Public Policy Center, special interests have spent or committed $342 million so far for the 2000 election -- more than in the 1996 and 1998 elections combined.

Numerous groups have been buying ads in the New York Senate race. Most notably, the Republican Leadership Council spent $1 million on an ad that showed Lazio with retiring Sen. Daniel Patrick Moynihan, D-N.Y. -- even though the two men had never appeared together.

Despite a backlash from Moynihan on the ad, the group's executive director, Mark Miller, defends independent expenditures from groups such as his.

Asked why such efforts are growing so rapidly, Miller said: "You have people with more disposable income who feel they're not getting their fair share of political speech for $1,000," Miller said.

You also have political parties and interest groups with an insatiable appetite for cash.

Matthew Mesiano knows all about that. He's the owner of Stylin' Tattoo, and he gave $300 to a Republican Party committee after getting a phone solicitation more than a year ago. Mesiano also didn't know what he was getting himself into. Since giving that $300, he's received another 30 calls from GOP committees wanting more money.

"They said it was going to politicians fighting for business rights and lower taxes," he said. "I didn't know it was soft money."

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