To Dean, finance law is familiar dilemma

By Michael Kranish, Globe Staff, 9/6/2003

WASHINGTON -- Six years ago, then-Governor Howard Dean signed legislation that he said would "change the way campaigns are run" in Vermont. The intent of the law was to provide candidates for governor who participated in a voluntary system with a maximum of $300,000 in public financing, and set a spending cap.

Dean, who at that time could attract donations more readily than challengers for his job, said he signed the law "even though I knew it was going to be to my own disadvantage." But when it came time for Dean to run for reelection in 2000, he rejected public financing and busted the spending cap by 300 percent.

The governor cited several reasons for the turnabout, including a court ruling that enabled his Republican opponent, Ruth Dwyer, to take large contributions from the national party, as well as his need to offset money funneled to Dwyer from what he called an "anti-homosexuality" lobby intent on unseating him because of his support for civil unions.

Whatever the reason for Dean's change of mind, his reversal on campaign spending in Vermont provides insights into Dean's record on the issue at a time when he is seriously considering reversing his original decision to abide by a spending cap in the Democratic presidential primaries.

On June 7, Dean wrote to the Federal Election Commission that he will abide by spending limitations in the primaries. The letter, signed by Dean, said he "will not incur qualified campaign expenditures in connection with my campaign for nomination in excess of the expenditure limitations."

But Dean more recently has said he might drop that pledge, because he is concerned that President Bush is not abiding by a spending limit and would be able to financially "murder" Dean next summer should he secure the Democratic nomination. Yesterday, Dean campaign manager Joe Trippi said Dean's lawyers have assured him that the FEC letter did not put the campaign "past the point of no return." He added that Dean will make a final decision later this year.

Some opponents, including the campaign of Senator John F. Kerry, question whether Dean should be allowed to revoke his pledge. Kerry campaign manager Jim Jordan said yesterday that "Governor Dean's devotion to campaign finance reform is only occasional and only when it suits his political interests. We would have to seriously consider our options if Governor Dean decides to opt out and the FEC allows him to."

As governor, Dean promised to enact campaign reform he called "the most far-reaching in the country." Funded by a tax on lobbyists, the law enabled a candidate who collected a total of $35,000 from 1,500 people to get a campaign finance grant bringing their total to $300,000. According to the Vermont Secretary of State's website, incumbents would get 85 percent of that amount.

In 2000, Dean said he would participate in the system and qualified for it. The Progressive Party candidate, Anthony Pollina, who had also been a strong advocate of the law, also promised to participate. Dwyer, who ran a poorly financed campaign in losing to Dean in 1998, decided early on not to participate.

Dean became worried that Dwyer would try to surpass him financially with large contributions from the national Republican Party. That concern escalated on Aug. 11, 2000, when a federal court said that Vermont could not restrict the amount of contributions from a national party and could not put a mandatory cap on spending. The law originally was intended to cap spending at $300,000 regardless of whether the candidate took public financing, unlike a similar federal law. But the ruling did not wipe out the law, and the voluntary public-financing system remains in place. "He always knew I wasn't" taking public money, Dwyer said.

Eight days later, Dean announced he was abandoning public financing. As part of his rationale, Dean said he was concerned about what he called a "hateful" statement made by Dwyer, who said on a radio call-in show that she agreed that the National Education Association was backing the agenda of the gay-rights movement in public schools.

Dean seized on Dwyer's comments as part of his rationale for busting the spending cap. The Rutland Herald quoted him as saying, "I think those comments were hateful, I think they were hate-incited." Dean was also quoted in an Aug. 13, 2000, Associated Press report saying he had no doubt that the "anti-homosexual lobby" would funnel money through the GOP to Dwyer.

Earlier that year, Dean signed a law legalizing civil unions after the state Supreme Court ruled gay couples should have the same legal rights as heterosexual married couples; Dwyer opposed civil unions.

As a result, Dean said, it was especially important that he not be underfinanced against Dwyer. "I regret this because I believe in public financing of campaigns," he said, but "I am not going to fight this campaign with one hand tied behind my back." Dwyer, reached at her farm in Thetford Center, Vt., remains bitter about the experience. She said that Dean distorted her statement and attacked her to divert attention from the fact that he was abandoning his pledge.

"He had to do something to distract the media from the hypocrisy," Dwyer said. "I spent the whole time defending myself from something I never said. He is very slick."

In the end, both Dwyer and Dean spent about $1 million, with Dean winning the race with 50.4 percent of the vote, barely above 50 percent required to avoid a runoff. While the law originally said that no more than $400 could be taken from a national party, the court decision eventually led to Dean and Dwyer each accepting about $500,000 from their respective parties, a Dean aide said.

Trippi, noting the heavy party contribution, said, "The governor had signed [the law] and he obviously wanted campaign finance reform. But he wasn't going to do it unilaterally."

Michael Kranish can be reached at kranish@globe.com.