Bush signs campaign finance bill

Bush described the new law as 'far from perfect'

US President George W Bush has signed into law a bill that limits the funding of political campaigns.

"The president signed campaign finance reform in the Oval Office this morning," White House spokesman Ari Fleischer told reporters.

"On balance the president believes it improves the system but it's a far from perfect bill."

Soft money

Campaign spending in 2000:

$498m from organisations

$509m on "issue ads"

Source: The Brookings Institution

The new law dramatically changes US campaign finance laws by banning unlimited contributions or "soft money" to national political parties.

Both the Democratic and Republican parties have, in recent years, taken in hundreds of millions of dollars in "soft money."

The new legislation also limits such contributions to state and local political parties, restricts broadcast ads by outside groups shortly before elections and doubles to $2,000 the ceiling for strictly regulated "hard money" donations to congressional and presidential candidates.

Enron

Opponents fought the measure long and hard in both houses of Congress but the scandal surrounding collapsed energy giant Enron tipped the scale.

Legislators were galvanised by the uproar surrounding Enron's ties to leading politicians and the corporation's efforts to use those connections to arrange a hasty bail-out package when it collapsed under the weight of dubious financial practices.

Bush received millions of dollars from Enron

Enron executives had contributed to nearly half the members of the House of Representatives and three-quarters of senators across the political spectrum, according to campaign finance reports filed in Washington.

Mr Bush received millions of dollars from Enron during his presidential campaign and Enron executives have held meetings with Vice-President Dick Cheney, though the White House said no favouritism was shown.

Previous scandals included nights in the White House's Lincoln Bedroom and coffee with former President Bill Clinton for donors, former Vice-President Al Gore's visit to a Buddhist temple and the Chinese military's attempts to sway US domestic politics.

Changes

The new law will:

• Ban national political parties from receiving unlimited and largely unregulated "soft money" contributions from organisations

• Limit corporate donations to state and local parties to $10,000

• Double to $2,000 the amount of "hard money" an individual may contribute to a candidate

• Ban special interest groups from broadcasting ads referring to specific candidates close to elections

• Give additional funding sources for congressional candidates running against wealthy and largely self-financed opponents.

Legislators will, however, raise money under the old rules for November's elections as the law will take effect the day after the poll.