More Soft Money Than Ever, McAuliffe Says

By Susan Jones | July 7, 2008 | 8:30 PM EDT

( - "There is more soft money in this election than we've ever seen," said Terry McAuliffe, chairman of the Democratic Party, in a Fox News interview on Wednesday.

"When McCain Feingold was being passed, I said on every television show, if you're going to get rid of soft money, get rid of all of it." But that's not what happened under the McCain-Feingold campaign finance law, McAuliffe noted.

"I am also a realist," he said. "They're not going to shut it down in the next 60 days," he added, referring to 527 groups -- both Republican and Democrat -- that are collecting unlimited donations and running various attack ads.

McAuliffe said all the candidates can do right now is condemn the ads that are "wrong."

McAuliffe repeated that President George W. Bush ought to tell the Swift Boat Veterans for Truth to stop running their ads, which he considers a smear campaign. "Knock it off -- let's talk about issues for the next 60 days," he said.

Discussing the Republican National Convention, McAuliffe said he is particularly offended by the distribution of band-aids with purple hearts on them -- a mockery of the injuries that earned John Kerry three Purple Hearts in Vietnam.

"The guy who handed those out is a guy who trained Karl Rove -- is very close to Karl Rove," McAuliffe said. "The president should come out and condemn these things."

Republican National Committee Chairman Ed Gillespie told Fox News he spoke to one of the delegates who was wearing a "Purple Heart" band-aid and the delegate agreed to remove it.

"We don't control all of the delegates and everything they do," Gillespie said.

At the end of his interview on Fox News, McAuliffe joked that "Fox and Friends" is his favorite morning news show. "Absolutely. Always has been. Don't pay any attention to what I just said down the street," he laughed.