Empty War Chest: How The Dems Blew $30 Million

President Clinton is rising in the polls. The economy is humming. So why the long faces at the Democratic National Committee? For starters, despite raising a record $29.2 million in 1993, the DNC ended the year with a $2 million deficit. And the party needs all the money it can get for this year's struggles. Its top legislative priority, Clinton's health-care reform plan, is getting chewed up on Capitol Hill. And Democrats are bracing for losses in the midterm congressional elections. So there's little wonder that party regulars are on edge as they head for the DNC's Mar. 10 meeting in Cleveland. That's raising doubts that it's up to the challenges of 1994.

Party insiders complain that DNC staffers, many of them young ex-campaign workers, spent like teenagers who had suddenly come into an inheritance. Critics grouse that DNC Chair David C. Wilhelm spent too much money on everything from $8 million worth of direct mail to fat consulting contracts for Clinton advisers, including about $2 million for Presidential pollster Stanley B. Greenberg. And the committee spent $4 million lobbying for Clinton's deficit-reduction and health-care efforts and $5 million on costs left from the '92 campaign and transition. "The DNC became the piggy bank for Clinton invoices," says one Democratic consultant. "The money should have been spent to build the party."

STAFF CUTS. Some Democrats also complain that the party ignored their election needs and promoted the White House's agenda instead. Last summer's budget debate was a particular sore point because lawmakers felt pressured to vote for politically dangerous tax hikes.

Elected officials always complain about party committees being tools of the White House. Democrats have been out of power for so long that they've probably forgotten. But the party was shaken by six straight losses in high-profile elections last year, and the top brass realizes that it needs to stir things up before the fall campaign. The result: Wilhelm has embarked on a major reorganization. He has cut the bloated staff by 20%. And he has hired seasoned pros, such as new Executive Director Debra S. DeLee from the National Education Assn., Political Director Donald R. Sweitzer, a veteran consultant with labor ties, and pollster Edward H. Lazarus, who will plan media strategy.

With the President ready and willing to be the fund-raising headliner, Wilhelm says he expects no problems meeting his target of $30 million this year. One promising source of funds: Executives putting up $10,000 apiece to join the DNC's Business Leadership Forum, which has grown to 600 members from 130 before Clinton's election. Major contributions to the party include $265,000 from American Financial CEO Carl H. Lindner, $71,000 from Anheuser-Busch, and $95,000 from Archer-Daniels-Midland. (ADM Chairman Dwayne O. Andreas last year gave more than $350,000 to Republican causes.)

"SCAPEGOAT." Wilhelm has pledged $2 million to the election efforts of Democratic congressional candidates and $7 million to help state parties coordinate the campaigns of all Democrats running for office. "We will raise more money and do more things on behalf of candidates than any DNC in history," he vows.

Wilhelm says he always intended to focus his attention on elections this year. But there's no escaping the White House's claim on the DNC's time and money. For 12 years, the party chair worked only for Democrats in Congress and the statehouses. Now, sighs Wilhelm, "you are pulled in a million directions. You're an easy scapegoat." In the end, he'll be judged on the results, both on health reform and the midterm elections. If he succeeds, all will be forgiven. If not, he'll be the $30 million dud.