Republicans Contend Relatively Low-Cost Items to Be Sold at Fund-Raiser May Amount to Campaign-Finance Violations

© unknownA nylon tote bag designed by Diane von Furstenberg and selling for $85.

Move over, PACs. The latest campaign-finance flap is about sacks.

At a New York fund-raising event Tuesday called "Runway to Win," President Barack Obama's re-election campaign plans to begin selling campaign-themed tote bags, T-shirts and accessories designed by more than two dozen famous designers.

Attendees can purchase a tote bag designed by Derek Lam for $75. A collectible makeup bag created by Richard Blanch with nail polish in Red-y To Win Red, Victory White and Bo Blue is going for $40. And a silk scarf featuring Mr. Obama's likeness by Thakoon Panichgul is $95. Profits from the sales will go to Mr. Obama's campaign chest.

Republicans contend the sale might violate campaign-finance rules. The gear will sell for a fraction of the price the designers' merchandise typically fetches at department stores. Republicans say that suggests they relied on corporate resources to keep costs low, which could amount to illegal campaign contributions. On Mr. Lam's website, handbags range in price from $340 to $1,890. The three scarves offered on Mr. Thakoon's website go for $325 apiece.

"This raises serious questions about whether corporate money, property and employees were improperly used in the design and production of these items without reimbursement," said Sean Spicer, a spokesman for the Republican National Committee.

Jan Baran, an election lawyer with Wiley Rein LLP, said designers can't ask employees to work on political projects unless they willingly volunteered their time. "Someone who is paid to do campaign work is not a volunteer," he said. If the designer or staff are paid by anyone other than the campaign, it would be considered a campaign contribution from a company to a candidate.

The Obama campaign said the gear complies with campaign-finance rules.

"All of the designers volunteered their personal time to create these great designs," the campaign said, and were "not underwritten with any corporate funds."

People involved have another argument: They say the designers didn't spend much time on the items, which are also cheap to make. Out are leather straps and linen shirts, more typical of their designer goods. In are canvas bags and cotton T-shirts.

The fund-raising effort will be launched before the start of Fashion Week in New York. It was a project of Vogue magazine editor Anna Wintour, who rounded up Obama supporters to apply their creativity - and more important, their names - to otherwise pedestrian campaign gear. She referred questions about the project to the Obama campaign.

Election finance regulations govern almost everything a campaign does, down to how singers, artists and designers can volunteer their time. One of the first rulings on the topic came in 1975, just a year after the Federal Election Commission was created. Mo Udall wanted to know if a well-known entertainer could perform at an event for his 1976 Democratic presidential campaign, or if he had to pay with campaign funds. The agency said entertainers can volunteer their time to perform, but ancillary costs such as travel expenses had to be paid by the campaign or counted as an "in-kind" donation.

A few years later, the FEC expanded that definition to cover an artist who wanted to create an art print to raise money for the campaign arm of Senate Democrats.

In 2008, the FEC permitted Elton John to perform for free at a fund-raising event for Hillary Clinton's 2008 presidential campaign at Radio City Music Hall in New York.

More recently, the Senate campaign of Sen. Scott Brown (R., Mass.) paid thousands of dollars to the band of Mr. Brown's daughter, Ayla Brown, a onetime American Idol contestant. Mr. Brown's campaign pays for compensation for the entire band and the band's overhead.

For the Obama fund-raiser, the products bolster the claim that the designers didn't put much time into their effort.

Plain canvas bags and unisex, polyester-blend T-shirts bear each designer's take on Mr. Obama and his campaign's ubiquitous red, white and blue sunrise logo.

Designer Narciso Rodriguez estimated it took about 24 hours to design a $45 Obama T-shirt. He said he brainstormed for several hours and held three meetings with an aide, who volunteered to help create the design.

Mr. Rodriguez said "sketch-time is not really work." He said he designed a T-shirt for Mr. Obama's 2008 presidential bid and volunteered this year because "the president is cool ... someone I believe in."