CLINTON ANNOUNCES CAMPAIGN REFORM : DEMOCRATS URGED TO REFUSE FOREIGN, CONTROVERSIAL CONTRIBUTIONS.

Byline: Knight-Ridder Tribune News Wire

His re-election stained by fund-raising scandals, President Clinton announced Tuesday that the Democratic Party will limit large campaign contributions and prohibit foreign citizens who live in the United States from giving altogether.

Clinton described the changes, including a ban on donations from U.S. subsidiaries of foreign companies and a tighter screening system for White House guests, as a ``first step'' and challenged Republicans to help reform the system.

But one day after he took the oath of office for his second term and called for an end to partisan bickering, both the president and Vice President Al Gore laid bare some apparent scorn for the opposing party.

``On the other side, our friends may not think that they have any interest in campaign-finance reform,'' Clinton told members of the Democratic National Committee. ``Why should they? They raise more money; they raise more foreign money; they raise more money in big contributions, and we take all the heat. It's a free ride.''

For their part, Republican leaders showed no sign they would push for greater changes - including a bipartisan bill reintroduced in Congress on Tuesday - or follow the Democrats' lead in limiting contributions that currently are legal.

Republican National Committee Chairman Jim Nicholson issued a terse statement, saying the Democrats' announcement was nothing more than ``an admission that the DNC cannot police its own fund-raising efforts.

``Clearly,'' Nicholson said, ``before any serious discussion about campaign-finance reform can take place, there must be a commitment to abiding by the current law of the land.''

Clinton has criticized the DNC for relaxing its screening process and failing to catch a number of large, illegal contributions. The committee returned $1.5 million in questionable contributions last year.

Under the voluntary changes announced Tuesday, the Democratic Party no longer will accept even legal contributions that raised scrutiny in the 1996 election, including those from foreign nationals living in the United States and subsidiaries of foreign-owned companies. Party officials said the rule would have cost them between $750,000 and $1.5 million last year.

Currently, foreign nationals and subsidiaries of foreign-owned companies can legally contribute money earned in the United States.

Perhaps more noteworthy, the DNC will prohibit any individual or company from contributing more than $100,000 in ``soft money,'' which is unrestricted as long as it goes to political parties instead of individual candidates. The rule would have cost the Democratic Party about $6.5 million of the $71 million it raised in soft money in 1996, officials said.

But although Democratic officials said they would more closely examine people who attend fund-raising events with the president and vice president, neither Clinton nor Gore suggested putting an end to controversial White House meetings with big contributors.