BEATING THE SYSTEM

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Finding ways to be just barely legal has become an art form. For example, big donors can give unlimited amounts of so-called soft money to the major parties for the purpose of "party building" efforts, even if the definition of party building ends being, say, a biographical ad about the virtues of Dole. (The Republican Party did just that this summer.) It's this kind of legerdemain that prompted Common Cause last week to call for the appointment of an independent prosecutor to investigate both parties for $31 million worth of soft-money spending that, in that organization's judgment, came across clearly as straight-ahead electioneering. Ann McBride, president of the watchdog group, calls these kinds of activities "the most massive violations of campaign-finance laws since the Watergate scandal."

But there's more. Powerful constituents can also exceed the per-candidate spending limits through a type of earmarking called "tallying," which routes their big checks to the party and then back to their candidate of choice. The Washington Post found memos from the campaign of Senator Carl Levin, a Michigan Democrat, that openly asked donors to tally their extra contributions to benefit his campaign. One letter from Levin soliciting a tallied contribution from the Chrysler Corp.'s PAC in 1995 called it "crucial to my re-election effort next year."

Foreigners aren't supposed to contribute at all, but they do through cleverly designed U.S. subsidiaries. Last week the Wall Street Journal and columnist William Safire of the New York Times reported that the Democratic Party had collected hundreds of thousands of dollars from relatives and employees of the Riady family, which heads the $6 billion Lippo Group of Indonesia. Although the party and the donors denied violating the foreign-contributors ban, Republicans on Capitol Hill say they plan to hold hearings to examine any favors the Clinton Administration did for Lippo.

The most gaping new loophole in the campaign-finance laws is the one that allows independent expenditures. During the past two elections, both the left and the right discovered just how effectively these loopholes can be used. The conservatives did it first in 1994, when such Republican-leaning lobbies as the Christian Coalition, the National Rifle Association and the tobacco industry joined forces to defeat the late Mike Synar of Oklahoma, a Clinton friend, by spending more than $1 million on billboards, radio spots, phone appeals and "voter guides" handed out in church pews and in Wal-Mart parking lots. Similar tactics around the country were a key to producing the first Republican-controlled House in 40 years.