The money behind the movement: term limits is touted as a grassroots uprising. But guess who's paying the bills?

Common Cause Magazine, Summer, 1993 by Amy E. Young

Term limits is touted as a grassroots uprising. But guess who's paying the bills?

In October the 1992 Washington state term-limit campaign was in crisis: three weeks to go and not enough money for radio ads critical to its effort. So the head of the campaign, Sherry Bockwinkel, picked up the phone and called Howard Rich, founder of U.S. Term Limits (USTL), a Washington, D.C.-based group.

Within days, the wealthy New York developer rustled up $150,000 for the Washington state effort. "Howard was basically dialing for dollars," she says. "He called up ... 28 people who each sent us $5,000 checks." Voters approved the measure 52 to 48 percent. "Without that money we couldn't tip the scales in our favor," says Bockwinkel, who also headed a 1991 Washington state term-limit campaign that voters rejected.

In all, Bockwinkel's group raised $410,112 in cash and in-kind contributions. But while hundreds of people sent $10 and $15 checks, more than 80 percent of the receipts came from two national term-limits organizations and 69 donors of more than $500. USTL contributed $55,600 in cash and in-kind donations, and 17 members of its National Finance Committee were among the large donors.

On Election Day last November, more than 20 million voters in 14 states approved ballot measures that would cap U.S. senators' service at 12 years and representatives' at six, eight or 12. USTL spokesperson Jeff Langan calls term limits the "biggest grassroots movement ever in the United States." But if proponents describe support for term limits as a spontaneous, populist prairie fire driven by local outrage over entrenched congressional incumbents, a Common Cause Magazine analysis of campaign finance reports filed in the 14 states suggests that something else is fueling the fire: More than three-fourths of the movement's financing in 1992 came from four national groups and a relatively small number of wealthy individual donors.

According to the analysis, term-limit committees in 14 states raised $5.9 million in cash and in-kind contributions, of which 80 percent was raised from the four groups and just 624 donors of $500 or more. The groups -- USTL, the now-defunct Citizens for Congressional Reform (CCR), Americans Back in Charge and Americans to Limit Congressional Terms -- supplied more than $2.2 million, while more than $2.5 million came from the 624 individual donors.

Term-limit proponents say they were forced to raise big money in anticipation of a strong opposition financed by special interest groups out to protect their friends in Congress. While powerful interests indeed helped finance opposition efforts, term-limit backers outspent them by nearly 6 to 1.

A Continuing Trend

From the very beginning the term-limits movement was financed by large donors. The first major national term-limits group, CCR, spent more than $1 million in California, Washington and Michigan and then closed shop amid controversy surrounding its funding sources. CCR was bankrolled largely by two conservative billionaire industralist brothers, Charles and David Koch of Wichita, Kan., who often wired money from their bank accounts directly to the term-limit committees. The group disbanded in late 1991, just after term-limit opponents filed a complaint with the Michigan secretary of state questioning the validity of a list of donors CCR filed to comply with a state law.

In early 1992 Howard Rich bought CCR's assets -- mainly a mailing list and some office furniture -- assumed its liabilities and set up shop as USTL. The group contributed $1.8 million to various 1992 state term-limit campaigns, while members of its finance committee kicked in another $119,700 in personal donations and loans. USTL's donations went for petition printing, signature gathering and, late in the campaigns, advertising. The group also provided political advice to the campaigns, emphasizing local coalition building and paid media.

USTL spokesperson Langan, who stresses his group's independence from the defunct Koch-financed organization, says his group's money comes from 80,000 members nationwide, whose donations average $17, and 58 national finance committee members who kicked in nearly $2 million. Langan declines to provide specifics about the contributions, saying the nonpartisan, tax-exempt organization has no obligation to do so. Rich refused a request for an interview.

Although USTL was the major backer of the state term-limit committees, other national groups also pitched in. Americans to Limit Congressional Terms, based in Langley, Va., contributed more than $70,000, while the Denver-based group Americans Back in Charge gave just over $72,000 nationwide.

For the most part, the financial backers of these groups remain a mystery. Of the 14 states that the passed term limits, only Michigan law requires out-of-state organizations that donate to political committees to disclose the sources of their funds. A close look at documents filed last year by Michigan's Vote Yes on Proposal B committee, however, sheds some light on USTL's backers. According to the records, less than half of USTL's $370,000 contribution was in small donations, while $102,940 came from the Howard Rich Irrevocable Trust; $60,000 from OKE Associates, a business partnership of USTL finance committee member Eric O'Keefe; and $20,000 from Crunch Fitness, a health club in New York run by USTL finance committee member Doug Levine. USTL also donated more than $5,000 in staff time and expenses for fundraising and advertising. This amounted to nearly 75 percent of Vote Yes's total $504,556 fundraising effort. A separate Michigan committee, Campaign to Limit Politicians' Terms, raised $346,782 for the signature-gathering effort -- $202,782 from CCR.