Fund-Raiser, Reform Bill at Odds, White House Says

WASHINGTON —  The White House conceded Wednesday that a million-dollar political fund-raising event attended by President Clinton this week would violate the requirements of a campaign finance reform bill he is prodding Congress to enact.

More than 60% of the funds raised at Tuesday night’s $10,000-a-person dinner, sponsored by the Democratic Business Council, was in the form of corporate “soft money” contributions to support Democratic Party political activities, according to organizers of the event.

Such donations, which are not subject to the limits imposed on contributions to candidates, would be made illegal under campaign finance reform legislation endorsed by Clinton. Indeed, the president touted the need for such reforms at a news conference just hours before the fund-raiser.

White House Press Secretary Mike McCurry acknowledged that if the proposal were law, the fund-raiser would have included “either fewer people or people contributing only pursuant to the contribution limits in the bill.”

He reiterated, however, that the business council, the Democratic National Committee’s donor program for businesses and corporations, could and would continue to exist under the proposed new rules.

On another issue in the growing controversy over campaign fund-raising, McCurry stressed that the White House stands firmly behind its nomination of Alexis Herman to be Labor secretary, despite criticism of some of her political activities during the recent campaign.

Herman, until recently a White House staff member, worked on her own time doing political “outreach” for Clinton in the minority community, administration officials have said. She participated in political gatherings at the White House for donors and supporters. And her office invited Edward Ludwig, a federal banking regulator, to a political gathering at the White House in May for banking executives to meet with the president.

“We think that as people work through these issues, and as she has an opportunity to see individual senators, answer their concerns . . . she’ll be able to address these matters in a way that will be to the satisfaction of the Senate,” McCurry said. “The president is certainly willing to work very hard on behalf of a nominee that he considers exceptionally well qualified.”

A spokesman for Sen. James M. Jeffords (R-Vt.), chairman of the Senate Labor and Human Resources Committee, which will conduct Herman’s confirmation hearings, said the senator has “a lot of questions” about Herman’s activities. “The [committee] staff is going through those White House documents about her involvement in fund-raising. He has not said her nomination is in any trouble, but he wants answers.”

Ever since the controversy over Democratic Party fund-raising practices surfaced toward the end of the 1996 campaign--a furor that has resulted in the party returning about $1.5 million in questionable contributions--Clinton has responded by stressing his support for reforming the system. But at the same time he has continued to actively raise money for his party, noting that the realities of the political system demand it.

Tuesday’s exclusive event took place at the Sheraton Carlton, a posh hotel favored by the Capitol’s lobbying crowd. It was attended by about 70 guests, many of them CEOs and partners in law firms, according to Todd Glass, a Democratic Party spokesman. Individuals paid $10,000 to attend, and corporations paid $15,000 per seat.

Before the event, Clinton was asked at his news conference about the image he was projecting by attending such an affair as he is publicly pushing for reform.

Clinton dodged the question, saying only that the business council would be “quite consistent” with the proposed legislation.

Times staff writer Marc Lacey contributed to this story.