Hourly Update

Pederson's personal campaign spending to be under close watch

PHOENIX (AP) - In a state where Democratic congressional candidates have routinely been outspent by their GOP challengers, money envy isn't something Arizona Republicans are accustomed to. Enter Democratic real-estate developer Jim Pederson. Though Pederson, who is gunning for Republican Sen. Jon Kyl's seat, hasn't had as much success as Kyl in collecting campaign contributions, the depth of the developer's personal checkbook has Republicans feeling anxious. And the possibility that Pederson could easily outspend the two-term senator simply by writing a personal check has Kyl's camp researching something called the "millionaire amendment" _ a campaign finance law that allows challengers to wealthy candidates to raise larger donations to keep pace. The idea behind the law is to even the fundraising playing field by making it more difficult for wealthy candidates to "buy" their way into office. Under the amendment, once a self-financed candidate's spending hits certain levels, a rival relying on fundraising can collect increasingly higher amounts from donors to catch up. But the amendment is laden with conditions and sliding scales that vary state by state, making it one of the most complex in the campaign finance reform laws that took effect with the 2003-04 election cycle. And in the Pederson-Kyl race, there's also another issue. Neither candidate faces opposition from within his party. So the millionaire's amendment wouldn't help Kyl even the playing field if Pederson spends huge sums of his own money before the Sept. 21 primary election, even if he used the money to attack Kyl. "Jim Pederson has spent millions of dollars to support liberal causes and liberal candidates like John Kerry and Ted Kennedy," said Kyl campaign spokesman Andy Chasin. "Now he wants to spend millions of dollars electing another liberal candidate: himself." Bill McGinley with the National Republican Senatorial Committee said that campaign attorneys would be "watching closely" to ensure that Pederson obeys both the letter and the spirit of the law. According to a recent disclosure, Pederson is worth between $26 million and $119 million. Just how much of that he's willing to spend to try and unseat Kyl he won't say. But Pederson has estimated that he intends to use at least $1.1 million of his own money for the primary election. The Federal Election Commission hasn't addressed what to do if a candidate tries to roll over self-financed cash from a primary to the general election. FEC spokesman George Smaragdis said the statute doesn't go into that detail. "That question hasn't come up yet," he added, "so the commission hasn't answered it." Unlike many of his Senate peers, Kyl's no millionaire. His financial holdings fall somewhere between $633,000 and $847,000, excluding his two Arizona homes and a D.C.-area apartment, disclosure reports show. But Kyl has a healthy war chest of nearly $6.3 million and has raised almost six times more than Pederson so far with support from John McCain, Rudy Giuliani and President Bush. California Gov. Arnold Schwarzenegger is hosting a $500-a-plate dinner for Kyl on Feb. 23. Pederson got off to a good start, raising $723,000 within the first two weeks of announcing his candidacy in September. But despite help from Democrats like Kerry, former NATO commander Wesley Clark and Senate Minority Leader Harry Reid, he took in just over $800,000 in the last three months to Kyl's $2.7 million. Though Pederson says he hasn't decided ultimately how much personal money he'll use to run, his political contribution track record is generous. The former state Democratic Party chairman has poured more than $6 million into state party coffers within the past five years, according to the Center for Public Integrity. His campaign says the developer's deep pockets aren't an unfair advantage, just parity. "Special interests are going to continue to fuel money into Jon Kyl's campaign and we are going to have the resources to be competitive," said Pederson spokeswoman Selena Shilad. But besides scaring incumbents, success has been elusive for self-financing Senate candidates since the amendment was created. None of the six Senate candidates who have triggered the millionaire amendment have gone on to win a general election, said Jennifer Steen, an assistant professor of political science at Boston College. "The overwhelming trend is that self-financers lose," Steen said. "Usually if you're self-financing a lot of your campaign spending, you probably don't have much else going for you." Still, Steen said access to early money is invaluable because voters are more pliable to campaign information when they know the least about a candidate. "You want to get to people before they make up their minds," Steen said. "You want to strike early and often."