Soros Bumped as Top Political Giver by Swift-Boat Group's Perry

By Michael Forsythe and Jonathan D. Salant

Nov. 3 (Bloomberg) -- Bob Perry, the Houston homebuilder who led the drive to discredit Democratic presidential nominee John Kerry's war record in 2004, has replaced George Soros as the biggest donor in U.S. politics.

Perry, 74, has given at least $9.2 million to groups backing Republican House and Senate candidates, Federal Election Commission records show. In 2004, Soros, 76, was the top contributor, giving at least $27 million in an effort to defeat President George W. Bush.

Perry is targeting congressional races in states such as Georgia, Oregon, Iowa and West Virginia that may have slipped off the radar of national party leaders. ``You're dealing with a much more rifle-shot operation'' than in 2004, said Kent Cooper, co- founder of Washington-based PoliticalMoneyLine, which tracks campaign spending. ``Play the long shot and your payoff is much bigger.''

In 2004, Perry gave at least $4.5 million to Swift Boat Veterans for Truth, the group that aired commercials assailing Kerry's Vietnam war record. This year, his contributions to such so-called 527 groups -- named for the section of the tax code under which they operate -- are focusing on Democratic lawmakers the groups regard as vulnerable, paying for attack ads independent of the Republican candidates and official party apparatus.

Outspending the Parties

One group, the Sacramento-based Economic Freedom Fund, received $5 million from Perry -- almost its entire budget -- and spent at least $829,811 since Sept. 1 on TV commercials attacking Georgia Democratic representatives Jim Marshall and John Barrow. That's more than either party has spent on those races.

``In Washington, liberal Marshall votes repeatedly against limiting lawsuits that drive up health-care costs,'' says one ad.

``It put us on the defensive for a while,'' Marshall spokesman Doug Moore said. ``Any time you have those groups coming after you, it is going to have an impact.''

The group is also airing ads against Democratic representatives Leonard Boswell in Iowa, Darlene Hooley in Oregon and Alan Mollohan in West Virginia. Only Boswell is among the most endangered Democratic incumbents, according to non-partisan groups monitoring the campaign.

Perry's money is also helping Senator Joseph Lieberman of Connecticut, who lost the Democratic primary and is running as an independent. The Perry-backed Free Enterprise Fund, based in Washington, has run ads attacking Lieberman's opponent, Democratic nominee Ned Lamont.

Criticizing Candidates

The group, which spent at least $977,000 this month, also paid for commercials criticizing Democratic Senate candidates in Montana, New Jersey and Tennessee and House candidates in Indiana, Illinois and Minnesota, FEC figures show.

Perry spokesman Anthony Holm declined to comment. Mallory Factor, a New York banker who heads the Washington-based Free Enterprise Fund, said Perry doesn't get involved in the operations of the group, dealing instead with overall strategy.

Since Sept. 1, 527s have spent about $9.4 million on television and radio, FEC records show; Republicans benefited from about two-thirds of that money. The groups also pay for direct mail and voter canvassing.

The 527s have raised $131 million through mid-October, compared with $99 million for the midterm elections four years ago, according to the Campaign Finance Institute, a Washington- based research group. The groups aren't regulated by the FEC and can accept unlimited donations.

Soros's Donations

Soros this year has given at least $4.1 million to 527s, according to Internal Revenue Service and FEC figures compiled by PoliticalMoneyLine.

In 2004, Soros ``felt it was extremely important to defeat President Bush,'' said Michael Vachon, his spokesman. This year isn't ``the historic moment that 2004 was,'' he said.

Groups allied with Democrats, like those backing Republicans, are focusing on races that might become more competitive with a cash infusion.

Majority Action, whose leaders include former Democratic National Committee chairmen Joe Andrew and Don Fowler and former representatives Tony Coelho of California and Martin Frost of Texas, has spent $525,515 to unseat Republicans Sue Kelly and James Walsh in New York House races. The group has stayed out of the state's most competitive contest, the race to succeed retiring Representative Sherwood Boehlert. Soros gave the group $50,000 on Oct. 4.

Walsh's campaign persuaded one Syracuse television station to pull a Majority Action ad.

``They're not local people,'' Walsh spokesman Dan Gage said. ``What they're allowed to do is come in and distort a record and tarnish a reputation without having to substantiate their charges.''

Closing the Gap

Majority Action has helped Walsh's Democratic challenger, Dan Maffei, close the fund-raising gap. Through Oct. 18, Walsh had spent $1.3 million to $608,096 for Maffei.

The group's ads may also have persuaded national party leaders to invest in the race. This week, the Democratic Congressional Campaign Committee spent more than $330,000 in the district.

Only seven of the 26 races that 527s have spent money on since Labor Day are rated tossups by three Washington-based publications that track congressional contests: Congressional Quarterly, the Cook Political Report and the Rothenberg Political Report.

``There's such an inherent advantage of an incumbent in terms of raising money,'' Maffei campaign manager Michael Whyland said. ``Having a group such as Majority Action certainly helps to close that gap.''

To contact the reporters on this story: Michael Forsythe in Washington at mforsythe@bloomberg.net ; Jonathan D. Salant in Washington at jsalant@bloomberg.net .

Last Updated: November 3, 2006 00:12 EST

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