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Justice Probes Democrat Transfers

October 2, 1997

WASHINGTON (AP) _ The Justice Department is investigating whether the Democratic Party illegally transferred campaign donations to state parties in order to skirt federal limits on presidential campaign spending, The New York Times said today.

The Democratic National Committee quietly transferred at least $32 million to state Democratic parties in the 1994 election so the state organizations could pay for advertising campaigns that indirectly helped re-elect President Clinton, the newspaper said.

Investigators are examining these ``issue adds,″ which might be thinly veiled candidate advertisements for the Clinton-Gore campaign. The money sent to state parties came with specific instructions on how to spend it, state party officials told the Times.

Although money transfers to state parties can be legal, the Justice Department and Senate investigators are looking into whether the transfers were purposefully used to evade the legal limits on campaign spending.

In an interview, former Democratic campaign adviser Dick Morris was quoted as saying, ``It was a charade to say those were ads of the state parties.″

White House spokesman Lanny Davis said no laws were broken. ``This program was reviewed by the DNC and the clinton-Gore campaign and found to be legal and appropriate,″ Davis told the Times.

The Republican Party used similar strategies, but it transferred less money, and later in the election cycle, according to election records cited by the Times. The Justice Department is reviewing some GOP expenditures, the newspaper said.

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