Unions, Dems handcuffed at wrists, ankles

Democrat John Edwards insisted Saturday he has not taken any money from special interests as the Obama campaign complained about big spending by outside groups friendly to Edwards.

"His campaign simply exploited the biggest loophole in the campaign finance system in order to get public matching funds while arranging through allies to benefit from a 527. That's how they avoided the spending limits that are a condition of the public matching funds," Obama campaign manager David Plouffe said in a statement.

Plouffe said the outside spending allows Edwards to stay within the limits required by public financing "while still spending all he needed to spend in Iowa."

His memo was prompted by disclosure of a $495,000 donation from philanthropist Rachel Mellon to a 527 group called the Alliance for a New America that is running ads in Iowa in support of Edwards' campaign. The nonprofit 527 groups can legally carry out some political activity but have come under scrutiny by the Federal Election Commission for their advertising during past presidential campaigns.

An FEC report showed the donation came from Oak Spring Farms LLC, the corporate entity that holds Mellon's fortune. Mellon is the 97-year-old widow of Paul Mellon, the son of industrialist Andrew Mellon.

She also contributed the maximum $4,600 allowed to Edwards' campaign earlier this year. The lawyer who serves as director of the investment fund, Oak Springs Farm LLC, also has contributed the maximum $4,600 allowed to Edwards' campaign.

Last month at a town hall meeting in Bow, N.H., Edwards referenced the Mellon family as part of the Gilded Age interests and used it as an example of how he'll fight back against special interests if he's elected.

Edwards said "back in the period where, you know, the Rockefellers and the Mellons and the Carnegies, all these people, owned most of America or a big chunk of America and they used their money and power to dominate what was happening in the government and to dominate what was happening in the economy."

On Saturday, Edwards had dropped the Mellons from his remarks.

"You remember before Franklin Roosevelt was president, America was mostly owned by a few families. Rockefellers, etc.," he said. When asked about dropping the Mellon family from the statement, he said it wasn't on purpose.

"I wish I were that skillful. There was nothing intentional about that," he said. "What I've said about the past I still believe. I believe very strongly that what FDR did ... was transformational for this country, and I think we need a president who will stand up to these people."

Edwards dismissed the Obama camp's criticism of outside spending.

"I'm very proud of my record now, almost 10 years now ... unlike other candidates including Sen. Obama, I've never take money from a Washington lobbyist, never taken money from a PAC." He added: "If Sen. Obama and his campaign want to focus on negative attacks they can do that, but that is not what I'm going to do."

The Alliance for a New America is a newly created organization headed by former Edwards adviser Nick Baldick. It has received most of its support from labor groups, many of them locals belonging to the Service Employees International Union. The alliance is spending about $600,000 on radio ads and about $750,000 on television ads in Iowa supporting Edwards.

Edwards is also getting support from another 527 group — Working for Working Americans — that is financed by the United Brotherhood of Carpenters and Joiners and is running television ads supporting Edwards in Iowa.

Such groups are not allowed to coordinate their efforts with a political campaign. Edwards aides have said there has been no such coordination, and Edwards himself has called on the 527 to stop its activities.

"I'm proud to have the support of labor unions. Unless I'm mistaken what they are doing is just positive support for my campaign. But, I've said 527s should be outlawed, I stand by that," he added.


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