Skip to main content


North Carolina has some new players in this year’s elections: Indian tribes in Florida and California, a Los Angeles company giving $100,000, other business donors, and scores of individuals from Miami Beach to Las Vegas whose checks of up to $250,000 are being routed by the Republican and Democratic parties into bank accounts earmarked for North Carolina elections.

A campaign finance watchdog group today asked the State Board of Elections to shut down the operations of the parties’ special bank accounts, which stand poised to channel as much as $10 million of national “soft money” into North Carolina politics.

The Republican Party has already shipped more than $1 million into the state, including $400,000 in direct contributions to Richard Vinroot’s campaign for governor. The Democratic Party has sent in over $500,000 that is being used to pay the salaries of campaign managers for some legislative candidates, as well as more generic “party building” activities.

In 1998, the State Board of Elections ruled that soft money – the large checks written by corporations, unions and other wealthy donors to the national parties – must not be spent for the campaigns of specific state candidates and must only come from personal funds, not from business or union treasuries – or from Indian tribes and Buddhist temples.

The watchdog group, Democracy South of Chapel Hill, wants the Board to either enforce its own ruling or take other action immediately to stop what it calls “the madness” of soft money from “corrupting North Carolina’s election process.”

“If national parties can flood state campaigns with huge soft money donations, we’ll lose all control of our elections,” said Peter MacDowell, executive director of Democracy South. “We’ve seen what soft money does in national politics. It’s a giant loophole that turns elections into auctions.”

Under federal law, only “hard money” – donations from individuals and PACs in limited amounts – can go to federal candidates. But the national parties can raise “soft money” in unlimited amounts from almost any source for “party building activities,” a catch-all category that keeps growing in scope.

Republican and Democratic officials say the State Board’s 1998 ruling is no longer important because the General Assembly passed an amendment in 1999 that exempts national parties from the state’s $4,000 contribution limits.

But Democracy South’s complaint argues that the new law doesn’t override the ban against soft money going to state candidates. Other statutes, still in effect, ban the parties from transferring corporate money “directly or indirectly” into North Carolina and instruct the parties to give to candidates through their hard-money committees, not through their soft-money operations.

The General Assembly in 1999 also gave the State Board of Elections new authority to adopt emergency rules “to become effective immediately to preserve the integrity of upcoming elections” and to “prevent the circumvention” of campaign finance laws.

“This is a crisis that needs immediate attention,” said MacDowell of Democracy South. “We could move from an elections process that already favors big, in-state donors to a total free-for-all.”