WASHINGTON -- Despite a redistricting that put him in a heavily Republican district, Democratic Rep. Benjamin Erdreich of Alabama has emerged as a slight favorite - partly because of financial support from banks, thrifts, and other business groups.

The rallying around Rep. Erdreich, which allowed his campaign to outspend his opponent's by a wide margin, illustrates the lasting power of money in politics.

Flexing Political Muscle

Major banks and trade groups have shown a renewed resolve this year to make their influence felt. The American Bankers Association leads the industry, with $1.1 million in political action committee contributions in the 1991-92 election cycle. Four banking companies and the Independent Bankers Association of America each spent at least $250,000 through Sept. 30.

As in past years, most of the industry's money is chasing incumbents seen as sure winners, who would be expected to reward major contributors with saccess in the coming congressional term.

But this year, an unusually high number of districts have no incumbent running, and contributors are thinking a little harder about where to disburse funds.

"I'd much rather put my money into a tight race like" Rep. Erdreich's, than into one with a sure-bet incumbent, said Marty Farmer, the lobbyist for Barnett Banks Inc. of Florida, which came up with $4,000 for the Alabama Democrat.

Steeped in Banking Issues

At stake for the banking industry, Mr. Farmer said, is "10 years of accumulated knowledge on banking issues."

"We look for races in which a pro-business candidate can be identified, and which look close," said Edward L. Yingling, executive director of government relations for the ABA.

Among them: Ohio Republican Deborah Price, who received $5,000 from the ABA, and Maryland Democrat Albert Winn, who got $6,000.

Still, with a $1 million war chest, the ABA doesn't have to be too selective. The largest banking trade group has serious money invested in most of the 35 Senate races and a presence in more than half of the congressional contests.

As of the end of September, the ABA had contributed to 196 Democratic candidates and 164 Republicans. In those numbers are 42 Senate hopefuls, including some who lost n primaries.

~Saints' and ~Sinners'

The Independent Bankers had two litmus tests for evaluating incumbents: votes to maintain existing levels of deposit insurance and to oppose interstate branching.

"Double saints" voted "right" on both issues, said Stephen Verdier, the IBAA lobbyist. Legislators who cash both votes "wrong" are "double sinners."

"That king of begins the inquiry," said Mr. Verdier. "If they were against us on both issues, it would be kind of hard to support them."

Still, that litmus test isn't the group's only criterion. Affiliated state organizations have some say about two gets money.

Flexibility on Positions

"You have to be a bit introspective about your positions and decide how reasonable they are," Mr. Verdier said. "Interstate is a very important issue, but it's not a big issue in California, and we have to take that into account.

"You can't ask lawmakers there to take a vote that is not their constituent's point of view. You alienate members that way."

For open seats, beneficiaries of the IBAA's political action committee included Virginia Democrat Bobby Scott and New Jersey Republican Joel Bubba. Both are moderates whose views are compatible with the IBAA's, Mr. Verdier said.

Still, contributions made through PACs do not tell the whole story. While they are the banking industry's primary vehicle for political donations, some industry segments put more emphasis on individual contributions.

Brokers Contribute More

In a recent study of PAC contributions, individual contributions to presidential candidates, and "soft dollar" contributions to the political parties, the Center for Responsive Politics found a wide gulf between donations from bankers and from the securities and insurance industries.

Through 18 months of the current two-year election cycle, the securities industry contributed $11.2 million, nearly twice the $5.7 million that came from commercial banking. The insurance industry registered $9.9 million and the real estate sector $6.1 million.

Topping the list were lawyers, with $11.4 million in contributions. !!!BEGIN TABLE Leaders of the PAC Banking's top contributors in 1991-92 election cycle American Bankers

Association $1,082,100

NationsBank* 408,267

Independent Bankers

Association 371,060

Barnett Banks 365,900

Citicorp 324,352

J.P. Morgan 265,550

BankAmerica* 249,710

*Includes merged institutions Source: Federal Election Commission, Sept. 30 reports !!!END TABLE

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