Democrats Face Biggest Debt Ever

The Democratic National Committee is facing the biggest debt in the party’s history, lacks the money to refund $1.5 million in questionable donations it promised to return earlier this year, and is expecting that the fund-raising controversy will cost more than $4.5 million in legal fees this year, according to party officials.

In an interview last week, DNC national chairman Steve Grossman said the party’s current debt is $14.4 million, but that it has $1.7 million cash on hand, putting the net debt at $12.7 million. That amount does not include the $1.5 million the party has promised to return by the end of June in questionable donations identified by an internal audit, nor does it take into account the expected legal bills.

As it prepares for the 1998 elections, the DNC is competing against a traditionally better financed foe, starting from far deeper in the hole, and - most of all - seeking to raise money in a climate in which its fund-raising practices are under intense scrutiny.