US poised to ban 'soft money' for political parties

Congress has pushed through the first part of the most sweeping overhaul in 25 years in the way the United States finances and runs its elections, spurred by the fiascos of the Enron collapse and the disputed 2000 presidential vote.

With a vote of 60-40 yesterday the Senate completed the most contentious reform by giving final approval to legislation to reform campaign finance, banning "soft money" donated by corporations and interest groups to political parties. In the 2000 election cycle, this totalled more than $500m.

After the Bill passed the House of Representatives last month, the final hope of opponents lay with a filibuster in the Senate, which can only be cut off by a vote of 60 of the 100 senators. That faint hope vanished when a procedural vote passed by an emphatic 68-32 margin.

The Bill now needs only the signature of President George Bush to become law, and that seems a foregone conclusion. Though he opposed finance reform during his White House campaign, Mr Bush has indicated he will not use his veto.

Indeed, so great is his personal popularity that he and the Republicans would probably be the main beneficiaries of more "hard money" ­ the individual contributions to a specific candidate, whose importance will now increase.

Thus ends a seven-year battle that until the Enron scandal seemed unwinnable. But the outrage provoked by the revelation that the disgraced energy group had given money to almost 50 per cent of all congressmen and senators completely changed the equation.

The widespread public perception that the American political process was up for sale overwhelmed all resistance.

Yesterday even Senator Mitch McConnell, the Kentucky Republican who has led a last-ditch battle to block the Bill, ran up a white flag, acknowledging: "It's clear we are not going to prevail." Mr McConnell's last stand will now almost certainly be made before the Supreme Court, where the anti-reform camp will challenge the Bill as a limitation on political expression, and thus a violation of the First Amendment, which guarantees free speech.

Under the new rules, soft money will be no more. Instead, permitted individual contributions to a candidate will double to $2,000, and state parties will be able to raise up to $10,000 per person to finance get-out-the-vote drives.

However, before the rules come into force after the mid-term elections this November, the scramble will grow for soft money ­ unlimited donations nominally meant to promote general party organisation, but which are channelled into specific campaigns.

With control of both Senate and House up for grabs, both parties are pulling out all the fund-raising stops. Mr Bush is scheduling an average of two $1m events a week, and the Democrats will wheel out their most potent weapon, the former president Bill Clinton.

Shortly after the Easter break Congress is expected to approve changes in election procedures to prevent a repeat of the disputes that turned the 2000 presidential election day into a five-week legal wrangle only resolved in the Supreme Court.

A deal is close allowing two states, Oregon and Washington, to continue to operate voting by mail. The Bill will streamline voting procedures and clamp down on electoral fraud. But actual voting methods, including Florida's infamous "butterfly ballot", will remain matters for individual states, not the Congress, to decide.