The money behind the movement: term limits is touted as a grassroots uprising. But guess who's paying the bills?

Term limits is touted as a grassroots uprising. But guess who's paying the bills?

In October the 1992 Washington state term-limit campaign was in crisis: three weeks to go and not enough money for radio ads critical to its effort. So the head of the campaign, Sherry Bockwinkel, picked up the phone and called Howard Rich, founder of U.S. Term Limits (USTL), a Washington, D.C.-based group.

Within days, the wealthy New York developer rustled up $150,000 for the Washington state effort. "Howard was basically dialing for dollars," she says. "He called up ... 28 people who each sent us $5,000 checks." Voters approved the measure 52 to 48 percent. "Without that money we couldn't tip the scales in our favor," says Bockwinkel, who also headed a 1991 Washington state term-limit campaign that voters rejected.

In all, Bockwinkel's group raised $410,112 in cash and in-kind contributions. But while hundreds of people sent $10 and $15 checks, more than 80 percent of the receipts came from two national term-limits organizations and 69 donors of more than $500. USTL contributed $55,600 in cash and in-kind donations, and 17 members of its National Finance Committee were among the large donors.

On Election Day last November, more than 20 million voters in 14 states approved ballot measures that would cap U.S. senators' service at 12 years and representatives' at six, eight or 12. USTL spokesperson Jeff Langan calls term limits the "biggest grassroots movement ever in the United States." But if proponents describe support for term limits as a spontaneous, populist prairie fire driven by local outrage over entrenched congressional incumbents, a Common Cause Magazine analysis of campaign finance reports filed in the 14 states suggests that something else is fueling the fire: More than three-fourths of the movement's financing in 1992 came from four national groups and a relatively small number of wealthy individual donors.

According to the analysis, term-limit committees in 14 states raised $5.9 million in cash and in-kind contributions, of which 80 percent was raised from the four groups and just 624 donors of $500 or more. The groups -- USTL, the now-defunct Citizens for Congressional Reform (CCR), Americans Back in Charge and Americans to Limit Congressional Terms -- supplied more than $2.2 million, while more than $2.5 million came from the 624 individual donors.

Term-limit proponents say they were forced to raise big money in anticipation of a strong opposition financed by special interest groups out to protect their friends in Congress. While powerful interests indeed helped finance opposition efforts, term-limit backers outspent them by nearly 6 to 1.

A Continuing Trend

From the very beginning the term-limits movement was financed by large donors. The first major national term-limits group, CCR, spent more than $1 million in California, Washington and Michigan and then closed shop amid controversy surrounding its funding sources. CCR was bankrolled largely by two conservative billionaire industralist brothers, Charles and David Koch of Wichita, Kan., who often wired money from their bank accounts directly to the term-limit committees. The group disbanded in late 1991, just after term-limit opponents filed a complaint with the Michigan secretary of state questioning the validity of a list of donors CCR filed to comply with a state law.

In early 1992 Howard Rich bought CCR's assets -- mainly a mailing list and some office furniture -- assumed its liabilities and set up shop as USTL. The group contributed $1.8 million to various 1992 state term-limit campaigns, while members of its finance committee kicked in another $119,700 in personal donations and loans. USTL's donations went for petition printing, signature gathering and, late in the campaigns, advertising. The group also provided political advice to the campaigns, emphasizing local coalition building and paid media.

USTL spokesperson Langan, who stresses his group's independence from the defunct Koch-financed organization, says his group's money comes from 80,000 members nationwide, whose donations average $17, and 58 national finance committee members who kicked in nearly $2 million. Langan declines to provide specifics about the contributions, saying the nonpartisan, tax-exempt organization has no obligation to do so. Rich refused a request for an interview.

Although USTL was the major backer of the state term-limit committees, other national groups also pitched in. Americans to Limit Congressional Terms, based in Langley, Va., contributed more than $70,000, while the Denver-based group Americans Back in Charge gave just over $72,000 nationwide.

For the most part, the financial backers of these groups remain a mystery. Of the 14 states that the passed term limits, only Michigan law requires out-of-state organizations that donate to political committees to disclose the sources of their funds. A close look at documents filed last year by Michigan's Vote Yes on Proposal B committee, however, sheds some light on USTL's backers. According to the records, less than half of USTL's $370,000 contribution was in small donations, while $102,940 came from the Howard Rich Irrevocable Trust; $60,000 from OKE Associates, a business partnership of USTL finance committee member Eric O'Keefe; and $20,000 from Crunch Fitness, a health club in New York run by USTL finance committee member Doug Levine. USTL also donated more than $5,000 in staff time and expenses for fundraising and advertising. This amounted to nearly 75 percent of Vote Yes's total $504,556 fundraising effort. A separate Michigan committee, Campaign to Limit Politicians' Terms, raised $346,782 for the signature-gathering effort -- $202,782 from CCR.

Other big donors to the Michigan campaign included Ed Prince and his manufacturing company, Prince Corp. ($60,000); term-limit committee co-chair Glen Steil ($26,230); Bruce Elder, who is self-employed ($30,000); O'Keefe ($24,990 in loans and contributions); and Amway's Richard DeVos ($10,000).

State term-limit campaigns like to trumpet the number of small contributions to suggest their support is broad-based, but most admit they couldn't have won without the big and out-of-state money. "We needed to get to those [who could] make substantial contributions. It's extremely difficult to make it on small [ones]," says Allan Schmid, treasurer for Michigan's Vote Yes committee. "If I had to take money from Saddam Hussein, it wouldn't bother me in the least."

But Kathy Pelleran, former executive director of Michigan Citizens Alert, a group opposed to term limits, criticizes this kind of support. "They brought in an agenda from outside the state. It doesn't take a rocket scientist to figure out there are just a few people behind this movement," she says.

Local term-limit advocates not only raised large donations from out of state; some also helped finance the campaigns personally.

Phil Handy, chair and founder of Florida's Citizens for Limited Political Terms (CLPT) and a member of USTL's board of directors, loaned the committee $111,850 through BKA Inc., one of his investment partnerships. Another of his businesses, Winter Park Capital Corp., donated $19,000 in in-kind contributions. Handy also raised $42,000 in small donations, but says the $626,469 in large donations -- of which $107,750 came from his Chicago and New York friends -- helped foot the payroll for his six staff members. In all, the Florida committee raised $862,653, with term-limit groups kicking in $100,700. Handy has forgiven the loans and the committee has disbanded.

"It was worth it," he says of his $130,850 donation. A former Republican fundraiser and financial manager for former Florida Gov. Bob Martinez's 1992 reelection bid, he adds, "It is rare that one has an opportunity to have such an impact on the process."

In Missouri and Arizona, term-limit committee chairs also made big loans that weren't repaid. Gregory Upchurch, a St. Louis patent attorney and chair of Missourians for Limited Terms, is out $49,367, in addition to his $20,000 donation. "I started this effort and I wasn't going to let it fail for lack of money," he says. Altogether his committee raised $288,222, nearly half from big-money donors. In Arizona William Long put up $58,135 to keep Citizens for Limited Terms afloat. Long's loan-turned-donation and contributions from other large donors -- totaling $177,025 -- made up three-fourths of Arizona's campaign budget.

Big money also financed campaigns to defeat term-limit initiatives. Indeed, the contributor report for "No on 573," a coalition formed to oppose Washington state's term limits, includes some of the nation's most well-financed lobbying interests: tobacco giants Philip Morris and RJR Nabisco, defense contractors Northrop and General Electric, five labor unions and the National Rifle Association. "We asked the congressional delegation [representing the state] to help raise money. There is no question about it.... Philip Morris donated because of who asked them to," says No on 573 Treasurer Mark Brown, who defended the group's contributors, saying they all lived, worked or had business in the state.

Even with that help, the group raised only $190,971, less than half the $410,112 raised by LIMIT, the Washington state term-limits group.

In Michigan, two opposition committees raised $503,725, of which 90 percent came from large donors, including General Motors ($50,000), Upjohn ($50,000) and Ford Motor Co. ($30,000).

Term-limit opposition committees in eight states raised a total of $1.1 million -- 94 percent from donors of $500 or more -- but some barely got off the ground. While term-limit supporters in Wyoming raised more than $54,000, for example, the opposition group Voters Opposed to Election Restrictions raised $402.

Term-limits opponents in fact had no national advocacy group, but it wasn't for lack of trying. Let the People Decide, an organization launched in 1991 to oppose term-limit initiatives around the country, opened and closed its doors within months. Linda Rogers-Kingsbury, who headed the group, says she tried to tap the "incumbent" fundraising power, but came up empty. "We talked to business and labor, public interest groups and political parties. For them, it was too hot to touch."

In the meantime, despite court challenges to four term-limit initiatives on constitutional grounds, fundraising efforts for the second round of campaigns are under way in the nine remaining states where citizens can change state law by ballot initiative: Alabama, Idaho, Nevada, Utah, Oklahoma, Maine, Mississippi, Illinois and Massachusetts. At stake, one USTL fundraising appeal proclaims, is "the future of our country."

COPYRIGHT 1993 Common Cause Magazine
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