CLINTON CALLS FOR OVERHAUL OF FINANCING.

Byline: Todd S. Purdum The New York Times

Seeking to quell controversy over the Democratic Party's fund-raising practices, President Clinton on Friday proposed to ban political contributions by noncitizens and reiterated his support for a range of other changes in campaign finance law that he has endorsed in the past but never pressed hard for.

In a speech in Santa Barbara, Clinton did not mention John Huang, a former executive for an Indonesian banking family who went on to serve as a Commerce Department official and then a top fund-raiser for the Democrats. He was suspended by party officials last month after reports that he had solicited questionable contributions from foreigners.

But with the election just three days away, the White House is concerned that the issue could siphon enough undecided voters to Ross Perot, who has long made overhauling campaign finance laws a staple of his platform, to keep Clinton from winning more than 50 percent of the vote, as he badly wants to do.

Accordingly, the president inserted a healthy dose of campaign finance religion into the middle of an otherwise standard stump speech Friday before flying off to an airport rally in El Paso where he asked listeners to help him pass a bill.

``Everybody knows the problems of campaign money today,'' Clinton told a crowd at a rally overlooking the Pacific Ocean at Santa Barbara City College, reading from a prepared text in a break with his typical practice at such events. ``There's too much of it, it takes too much time to raise and it raises too many questions.''

Clinton, who has taken in record amounts for his party from large donors and who for two weeks has avoided answering questions about Huang's activities, sought to defend and apologize for the current state of fund-raising practices.

``We have played by the rules,'' Clinton said. ``But I know, and you know, we need to change the rules.''

It was the first time the president had suggested that contributions from noncitizens should be barred. Currently, legal residents who are not citizens are allowed to contribute to political candidates. Contributions from foreign corporations are banned under current law, but those from their U.S. subsidiaries are permitted.

``If the essence of a democracy is that citizens decide and only citizens can vote, then I believe only citizens should be able to contribute,'' Clinton said. ``That is not anti-immigrant. It is simply stating the fact.''

Clinton also reiterated his support for legislation that would set voluntary spending limits for House and Senate races; grant free television time to candidates who accepted the limits; ban contributions by political action committees to federal candidates; eliminate so-called soft money, which is contributed to parties after existing limits on contributions to individual candidates have been reached; and ban contributions by corporations and labor unions to parties.

The bill was sponsored by Sens. John McCain, R-Ariz., and Russell Feingold, D-Wis., but died in the Senate this year after Bob Dole initially blocked it from reaching the floor, and its sponsors then failed to win enough votes to stop a filibuster.

McCain and Feingold have said they would amend the bill to bar contributions by noncitizens, as Dole has proposed.

Dole, who has been harshly critical of the Democrats' fund raising, has endorsed some of the same measures, though not spending limits or free television time. He sought to pre-empt Clinton's remarks Friday by challenging the president to debate the issue before Election Day, saying, ``We need to change the system, but above all, we need to change the White House and have a new occupant in January 1997.''

Republican national chairman Haley Barbour had an even sharper reaction, calling Clinton's proposal ``the height of hypocrisy'' and complaining, ``It's like O.J. Simpson pledging to dedicate his life to go out and find the real killer.''

The White House dismissed the Republican criticism but made it clear that Dole had struck a nerve all the same, as Clinton aides distributed a flurry of handouts intended to show Clinton on the side of reform.