Funds flow through loophole into political 'non-profits'.

INDEPENDENT political non-profits are the hottest tool in campaign finance. While the McCain-Feingold campaign finance law cracked down on "soft-money" donations from political parties, a loophole has allowed these non-profits--known as "527s" after a section of the IRS tax code--to raise tens of millions of dollars for the presidential campaign.

So far, most of the activity has been from Democratic-leaning groups such as MoveOn.org, America Coming Together and the New Democrat Network. But Republicans have recently formed groups that include the Club for Growth, the Leadership Forum and the Traditional Values Forum. Last week, Republican leaders announced the formation of a new 527 called Progress for America.

From January 2003 through mid-May, these groups have raised $179 million, according to the Center for Responsive Politics, which is almost as much as was spent during the entire 2000 presidential campaign. The Federal Election Commission decided this month not to regulate contributions from these non-profits, virtually guaranteeing hundreds of millions of dollars more will be raised before the November election.

Topping the list of contributors to 527 non-profits is Hollywood producer Steven Bing, who gave $8.1 million through mid-May. Nearly $7 million of that went to the Joint Victory Campaign 2004, run by America Coming Together and the Media Fund. Bing gave another $971,000 to MoveOn.org and $150,000 to Americans for Progress & Opportunity.

Billionaire investor George Soros, who gave $7.8 million during the same period, has committed to raising $12.5 million toward the ouster of Bush.

Three other Angelenos made the center's list of Top 25 contributors. Hollywood producer Marcy Carsey gave $1 million to Joint Victory Campaign 2004; and Richard and Shari Foos gave $405,000 to four groups: Joint Victory Campaign 2004 ($245,000); MoveOn.org ($100,000); Campaign for America's Future ($50,000), and Progressive Majority ($10,000). Richard Foos was co-founder of Rhino Records and recently started Shout Factory Records, a label focusing on historical recordings.

"The passion to elect a new president among progressives is nothing like we have ever seen in all our years of being concerned about politics," said Richard Foos. "So we are giving more and working harder than we ever have before."

Campaign Funding Triage

It's the biggest issue for labor on California's November ballot: campaigning to uphold the law passed last year to require employers to pay for employees' health care.

But labor groups, who are looking to raise between $12 million and $15 million locally to defend SB 2, might see some of that money diverted to other states. In Washington, where the spending decisions are made, the national labor movement has made the defeat of President Bush its top priority.

Organized labor, led by the California Federation of Labor, kicked off their formal campaign to support SB 2 last week, after employer groups placed it on the ballot as a referendum. (Employers plan to raise $20 million.)

The problem is, money raised by unions in California must be sent to Washington first, where the national AFL-CIO has committed to raising $40 million to $50 million for presidential candidate John F. Kerry. The amount of locally raised union money that comes back to California is anybody's guess.

"With the presidential election as close as it appears to be, we may see the national AFLCIO come in and use some of the SB 2 money for the national campaign," said Miguel Contreras, executive secretary of the L.A. County Federation of Labor.

Contreras said he understands why some of it may be used to support Kerry in several battleground states (California is not one of them).

"Right now, there is no pro-labor voice in Washington: the Republicans control both houses of Congress and the White House. That's why we must seize this chance," Contreras said. "The stakes are just so much bigger (nationally) than with SB 2."

(Janice) Hahn Criticizes Port Contracting

L.A. City Councilwoman Janice Hahn last week had some harsh words for Port of Los Angeles officials and their policies for leasing terminals.

Speaking at a Current Affairs Forum event. Hahn said the system for leasing terminals isn't working right when two entities are negotiating separately with city or port officials for the same piece of property. Hahn's district includes the Port of Los Angeles.

Hahn was referring to a Business Journal report that former Deputy Mayor Troy Edwards was negotiating with Evergreen America Corp. to lease a terminal vacated by Matson Navigation Co., while port staff workers were recommending another shipper, P&O Nedlloyd Container Line Ltd., for the same terminal.

"I think there needs to be a better way to lease out this land for future tenants," Hahn said.

Among other things, she said lease deals need to take into account the concerns of surrounding residents more than they do at present. "There need to be other things that are as important as making money," she said.

Hahn said she also wanted to look more at the mix of port tenants. "We are working on getting out tenants that we think are not compatible in a port that is so close to millions of people," she said.

However, Hahn said she didn't believe anything illegal has taken place in the port's contracting practices. And she made sure to say she was "re-endorsing" her brother, L.A. Mayor James Hahn, as he seeks re-election next year.

Staff reporter Howard Fine can be reached at [phone], ext. 227, or at [e-mail].