A 'Cayman Islands' For PACs

Virginia's loose campaign rules are a windfall for some presidential hopefuls who are raking in six-figure donations here that would be barred under the federal government's post-Watergate election laws.

Former Vice President Dan Quayle has set up a political action committee in Virginia, which puts no limit on political contributions, and accepted contributions as large as $250,000, 50 times the federal law's limit of $5,000.

"It's become the Cayman Islands for leadership PACs," said Jennifer Shecter of the Center for Responsive Politics, a Washington-based group that studies the relationship between money and campaigns. "It's such a haven because they have no laws."

Quayle filed a statement of candidacy with the Federal Election Commission on Thursday, setting up an exploratory committee to begin raising and spending money under the federal rules for his campaign.

Unlike the money raised for the exploratory committee, the Virginia PAC money can't be spent directly on a presidential campaign. But it has been used for activities that can pay off down the road.

For example, Quayle spread $96,350 among candidates in Iowa, site of the first presidential caucuses, and New Hampshire, site of the first primary. In addition, the New Hampshire Republican Party got $19,000.

"Vice President Quayle spent most of 1998 helping people," said his spokesman, Cameron Carter. "It's not unreasonable to assume he might ask them to help him should he run for president."

Former Tennessee Gov. Lamar Alexander aired $1.6 million worth of ads in 10 states, including Iowa and New Hampshire. The commercials featured Alexander, who also served as U.S. education secretary, talking about his ideas for better discipline in schools and a tax break to help parents.

"Any time you're on television frequently, whether it's on the evening news or the local cable access channel, that's going to raise your visibility," Alexander spokesman Steve Schmidt said. "That, of course, is good for a presidential candidate."

Overall, Quayle's Virginia-based Campaign America PAC spent $611,464 in the second half of 1998 and raised $697,750. The average contribution reported by the PAC was $21,144. Giant agribusiness Archer Daniels Midland gave $100,000. Another company, Wilshire Financial Services of Portland, Ore., gave Quayle $250,000.

Virginia records show Alexander's We the Parents PAC raised $1.6 million and spent $1.8 million over six months. The average contribution was $19,557. There were four $100,000 contributors, including cable TV executive Leo Hindrey of Colorado and Florida businessman John Sykes.

Two other potential 2000 Republican presidential candidates, conservative activist Gary Bauer and 1996 vice presidential nominee Jack Kemp, also have Virginia-based political action committees, but neither was as active in 1998 as the Quayle and Alexander PACs.

Kep's Virginia committee reported raising just $63,260 in the last six months of 1998 and spending $61,896, including a $40,000 campaign contribution to Dan Lungren, the unsuccessful Republican nominee for governor of California.

Peter Dickinson, executive director of Bauer's Campaign for Working Families PAC, said the Virginia group was created solely to help candidates in the commonwealth and wasn't active last year because there were no state elections there.

Each of the four candidates also has a related federal PAC account to contribute to congressional campaigns and raise money in accordance with federal limits. In some cases money raised by the state PACs can be transferred to their federal counterparts for shared expenses.

Another potential Republican presidential candidate in 2000, New York Gov. George Pataki, said last week he has set up his own Virginia-based PAC, the 21st Century Freedom PAC, to finance his increased travel schedule across the country and to contribute to other Republicans. Pataki also set up a federal PAC in Washington.

The Democratic Party's potential presidential candidates also have federal PACs, but so far none has set up an account in Virginia.

Written By Jonathan D. Salant, Associated Press Writer