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AUTHORIZING EXPENDITURES BY THE COMMITTEE ON GOVERNMENTAL AFFAIRS
(Senate - March 10, 1997)
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AUTHORIZING EXPENDITURES BY THE COMMITTEE ON GOVERNMENTAL AFFAIRS
The PRESIDING OFFICER. Under the previous order, the Senate will now
proceed to the consideration of Senate Resolution 39, which the clerk
will report.
The bill clerk read as follows:
A resolution (
S. Res. 39) authorizing expenditures by the
Committee on Governmental Affairs.
The Senate proceeded to consider the bill, which had been reported
from the Committee on Rules and Administration, with an amendment to
strike all after the resolving clause and insert the following:
That (a) Senate Resolution 54, agreed to February 13, 1997,
is amended by adding at the end the following:
``Authorization of Additional Funds
``Sec. 24. (a) In General.--A sum equal to not more than
$4,350,000, for the period beginning on the date of adoption
of this section and ending on December 31, 1997, shall be
made available from the contingent fund of the Senate out of
the Account for Expenses for Inquiries and Investigations for
payment of salaries and other expenses of the Committee on
Governmental Affairs under this resolution, of which amount
not to exceed $375,000 may be expended for the procurement of
the services of individual consultants, or organizations
thereof (as authorized by section 202(i) of the Legislative
Reorganization Act of 1946, as amended). The expenditures by
the Committee on Governmental Affairs authorized by this
section supplement those authorized in section 13 and may be
expended solely for the purpose stated in this section.
``(b) Purpose of Additional Funds.--The additional funds
authorized by this section are for the sole purpose of
conducting an investigation of illegal activities in
connection with 1996 Federal election campaigns.
``(c) Referral To Select Committee on Ethics.--The
Committee on Governmental Affairs shall refer any evidence of
illegal activities involving any Member of the Senate
revealed pursuant to the investigation authorized by
subsection (b) to the Select Committee on Ethics.
``(d) Final Report.--The Committee on Governmental Affairs
shall submit a final public report to the Senate no later
than January 31, 1998, of the results of the investigation,
study, and hearings conducted by the Committee pursuant to
this section.''.
(b) Section 16(b) of Senate Resolution 54, agreed to
February 13, 1997, is amended by--
(1) striking ``$1,339,109'' and inserting $1,789,109''; and
(2) striking ``$200,000'' and inserting $300,000''.
(c) The Committee on Rules and Administration shall
continue to conduct hearings on campaign reform.
Mr. WARNER. Madam President, on Thursday of last week, the Rules
Committee reported out an amendment to Senate Resolution 39, and it is
my understanding that the present business is that pending amendment,
which does amend, if decided by the Senate, rule 39.
The PRESIDING OFFICER. The Senator is correct.
Mr. WARNER. Madam President, I thank the Chair. We will now proceed
to discuss the amendment as passed by the Rules Committee on Thursday
of last week, the 6th of March.
Madam President, the responsibility of the Rules Committee is to
entertain, from all committees of the U.S. Senate, their requests for
funding. We have, in Senate Resolution 54, which has been adopted by
the Senate, the budgets for all of the committees of the Senate for
their fiscal year, which runs from March 1 through February 28.
The Committee on Governmental Affairs, in Senate Resolution 39,
submitted their request for funding. In the initial consideration of
Senate Resolution 39 by the Rules Committee, the committee determined
that they would grant a portion of the funding request, and that is
reflected in Senate Resolution 54.
The Governmental Affairs Committee still had, under Senate Resolution
39, the balance of their request, which was considered on the 6th of
March by the Rules Committee. After a full debate--and certainly in the
judgment of the chairman, myself, and actively participated in by
Senators on both sides, as we had nearly 100 percent attendance at the
committee hearing on both sides--the committee voted to provide $4.35
million for the Committee on Governmental affairs as a supplemental to
the request as reported in Senate Resolution 54.
Now, how did we arrive at that figure? You can look at the request of
the distinguished Senator from Ohio--indeed, a request that, by and
large, was supported by most on that side of the aisle--that there be a
definitive date for cutoff, and that date by the senior Senator from
Ohio was December 31 of this calendar year, 1997.
If I took that and viewed it as a reduced period of time; namely,
that the Governmental Affairs Committee could begin its work using the
supplemental funds, March 15, from a practical standpoint, through
December 31, 1997, it would appear to this Senator that we would have,
by and large, given that committee the funding profile in dollars in
proportion to the timing from which those funds may be expended.
The next question was the scope. I worked with other colleagues,
primarily those on the Rules Committee, and I devised a formula, in
consultation with the distinguished majority leader and others, whereby
looking at the original Watergate resolution, we took from that the
concept that we would allow the Governmental Affairs Committee to
expend the supplemental budget for such investigations that they felt
were illegal in connection with the 1996 Presidential election and
congressional elections--not delineating between the House and Senate,
but simply all Federal elections in calendar year 1996.
So it seems to me that the Rules Committee, in a fair manner,
recognized the dollars that we needed, gave the Governmental Affairs
Committee a scope of the investigation and illegal--illegal is a very
broad scope. It goes beyond. And I will at a later time today put into
the Record the definitions of illegal. But it goes beyond just criminal
assertions of allegations of criminal violations. It goes beyond that.
So it is a broad scope. Then the Rules Committee took from the
proposal, which the senior Senator from Ohio will address momentarily,
a termination date of December 31, 1997.
In addition to the Rules Committee, I think very importantly
recognizing the essential need for the Senate of the United States to
actively participate in determining what happened, certainly in 1996 in
connection with the ever-increasing number of allegations--most
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of them regrettably could border on or do, in fact, constitute
illegal--it was essential that the other committees of the Senate take
on their responsibilities, which is traditional under the allocation in
the Senate of the responsibilities among the several committees.
Therefore, we charged the Rules Committee, of which I am privileged to
be the chairman, the duty to continue its hearings on campaign finance
reform, gave it a sum of $450,000 to be used by that committee in
enlarging and broadening the scope of their operations in the overall
context of campaign reform and campaign financing. So the Rules
Committee will take on an added role.
In addition, if there is that development by the Governmental Affairs
Committee or the Rules Committee of facts which should be examined by
the Ethics Committee of the U.S. Senate as those facts relate to a
Member of this body, it will be incumbent upon the Ethics Committee to
review any allegations we feel merit the judgment of that committee as
it relates to an individual in the U.S. Senate.
So, Madam President, I feel that the Rules Committee unanimously,
regrettably--bipartisan, yet unanimous among the Republicans--has
addressed this tough issue, and we are here today for the purpose of
amending Senate Resolution 39 such that they can have the additional
funds and under a very carefully crafted and proscribed scope of
activities within a time limit of December 31, 1997.
Madam President, I yield the floor so that my distinguished colleague
from Ohio can present his views.
Mr. GLENN addressed the Chair.
The PRESIDING OFFICER. The Senator from Ohio.
Mr. GLENN. Madam President, we are now into the second week in March.
The Senate has been operating for approximately 2 months. I don't know
that we have had much in the way of accomplishment during that time
period. Certainly, there are national problems that should be
addressed.
For example, we ought to be working on balancing the budget instead
of just trying to pass amendments, which we tried to do, and it failed.
We also have a series of problems with our health care system. Managed
care may be saving money, but there is increasing evidence that it is
happening at the expense of lower quality of health care. So, for
uninsured Americans, that continues to be a major problem. As far as
health care goes, we are going to have a debate, I guess, about
partial-birth abortion.
In other areas, the stock market has gone through the roof.
Unemployment is at a 25-year low. But there is concern about the
future, and about Social Security and Medicare. But there are no
serious proposals by the Republican majority to deal with these issues.
Well, today we have an opportunity. We have an opportunity to have the
possibility of beginning a serious discussion about a serious issue:
the campaign finance system used by both political parties in the
United States.
The American people are disgusted by what they see in campaign
finance. And they should be. Along with the steady drumbeat of
antigovernment ideologues, it is a major factor in America's loss of
faith in our institutions of government. It is that serious. All you
have to do is look at the polling data and such things as decreased
participation in voting. If this trend continues, if America goes
downhill because of the lack of confidence in our Federal Government, I
say that we face a crisis that could literally threaten the foundation
of democracy in the United States.
There is a remedy to avert this crisis, as I see it, and to begin the
restoration of public support for this system of government. The remedy
requires that we reform the campaign finance system. It is a wonderful
place to start because it certainly needs reforming.
Will this get a serious examination by Congress, or will we get
sidetracked by a partisan political circus? The jury is definitely out
on that at this time. We have before us a resolution to fund a Senate
investigation which, if the scope were made broader than it currently
is, has enormous potential as a tool to stimulate public pressure on
Congress to enact meaningful campaign finance reform, honest campaign
finance reform.
Recent revelations about fundraising involving 1996 Federal races are
disturbing. They involve both parties in both congressional and
Presidential campaigns. The truth is that the current fundraising
system, both Presidential and congressional, is scandalous. Having said
that, in my opinion, most Members of Congress are honest elected
officials, both over in the House and here in the Senate. They are
honest elected officials trying to do a good job, albeit from different
political philosophies. But that is our system. But the general public
perception that money gets its way in determining policy is, indeed,
true for too many.
There is a public perception that access follows money, and anybody
who has been around Capitol Hill very long knows that sometimes it
does. Access can alter the balance of arguments weighed by a Member and
his or her staff when deciding a course of action, be it a vote on the
floor or in committee, a colloquy on the Senate floor, introduction or
cosponsorship of a piece of legislation, floor speech, insertion of
language in a committee report, or a communication with an executive
branch agency requesting an action, or the withholding of an
action. But even when there is no connection whatsoever between a
donation by a person to a politician and the latter's specific action
as a legislator favoring that person, the perception of a payoff, even
the possibility of a perception of a payoff, is corrosive to public
trust in our Government. We must dispel this growing perception that
Congress or parts of Congress are for sale if we are to reverse
electoral apathy and restore faith in our Government. Gift bans have
not done it. Honoraria bans have not done it. Only deep changes in the
campaign finance system will do the job, and it will not be easy.
The question is what should be the relationship of the Governmental
Affairs Committee investigation to the drive for effective bipartisan
campaign finance reform? The resolution before us,
S. 39, as amended by
the Rules Committee, states that the supplemental funds to be given to
the Governmental Affairs Committee for this investigation are for the
sole purpose of an investigation into illegal activities in the 1996
Federal election campaign.
There are two things wrong with this statement of scope for the
investigation. The first thing is that it is a bald-faced attempt by
the Republican majority of the Rules Committee to undo a unanimous
bipartisan agreement among the members of the Governmental Affairs
Committee to have a broad investigation that would examine improper as
well as illegal activities along with previous campaigns. Contrary to
the claims of the Rules Committee chairman that his language tracks the
Watergate resolution, the fact is that the Watergate resolution called
for an investigation of improper and unethical activities as well as
illegal ones.
I am looking at a copy of the Watergate resolution that was passed in
the Senate back in 1973. It was submitted by Senator Ervin, Sam Ervin
and Mike Mansfield. In part 15 on page 8, it says they are ``to look
into any other activities, circumstances, materials or transactions
having a tendency to prove or disprove that persons, acting either
individually or in combination with others, engaged in any illegal,
improper, or unethical activities in connection with the Presidential
election of 1972, or any campaign, canvas, or activity related to such
election.''
That is the language of one of the parts of what the Watergate
Committee was to look into--any illegal, improper, or unethical
activities in connection with the Presidential election of 1972.
The narrowing of the scope of the Governmental Affairs investigation
by the Rules Committee is nothing more than a blatant pander to those
elements in the Republican Party that do not wish to reform the
campaign finance system and who are quite willing to scuttle the
Governmental Affairs investigation if necessary to avoid creating
public pressure to pass a decent bill.
How does narrowing the scope to illegal activities avoid this problem
for the Republicans? The first thing to understand is that the problem
with the campaign finance system is not just what politicians do that
is illegal. It is what politicians do that is legal that is
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an equal scandal, and it happens every single day on Capitol Hill and
with both political parties.
Let me give you an example. Let us talk about soft money. That is the
best example. One of the most pernicious influences in politics these
days is soft money. Let me give you an example of that. Let us say
Senator X, whoever it might be, solicits $50,000 or $500,000 in soft
money from a potential donor to his or her party, ostensibly for party-
building purposes, get-out-the-vote drives or the like. But the party
can then turn around and use the money on an issue ad during the
Senator's reelection campaign that helps him or her and hurts the
opponent.
According to the Department of Justice, Senator X can even do the
solicitation for that $500,000 from his or her office because the
solicitation is not for his or her campaign specifically but, rather,
for the Senator's party.
This practice should be illegal, but it is not. Suppose Senator X
wants a direct contribution to his or her campaign from a potential
donor, direct to his personal campaign. In that case, Federal election
law prohibits the donor from contributing more than $1,000 per person,
and it must be in the donor's own name.
But that same donor can go out and collect checks of $1,000 for
Senator X from everyone he knows, bundle them together, and send them
to the Senator's campaign. Let us say Senator X calls from the
Senator's office for those donations. If Senator X calls, he is
committing an illegal act. But if Senator X calls from outside, it is
OK.
Suppose Senator X is so grateful, wherever the call came from, for
the donor's willingness to help that the next time the donor is in town
and wants to talk to Senator X about a legislative matter he has an
interest in, Senator X not only lets him into his office but he
welcomes him and listens to his pitch. And suppose that Senator X is
sufficiently concerned about maintaining the donor's political help
that the Senator does what the donor wants on the issue and there was
no discussion linking the donation to the donor's request or to the
Senator's action.
In that case, there has been no bribe. But it is certainly the case
that Senator X made his decision on the issue as a result of the donor
having had access to the Senator, access that was based at least in
part on the donation the Senator was given.
Now, suppose Senator X made the original call to the donor from the
Senator's office phone instead of from an outside phone. That would be
a violation of law. You cannot do that.
Let me pose the question. Which is the worst ethical lapse, making
the phone call from a legally prohibited place or letting the money
influence the Senator's vote? I submit that the answer is not even
close. Senator X's constituents and the people generally will have been
ill served if he lets money influence his decision, and that
overshadows the question of whether the phone he used was a private
phone or a Government phone.
What is the point of this fictitious example? Well, the resolution
before us, which limits the scope of the investigation only to illegal
activities, would allow an investigation of whether Senator X committed
an illegal act by using a Government phone for the direct solicitation
if there was an allegation that he had done so but would allow no
investigation of the contribution, and if a soft money contribution was
involved, whether Senator X's party had spent that money on certain ads
helpful to the Senator's campaign, a legal practice but one that should
be illegal.
It is not just the independent expenditures by the major parties that
is the problem. There are also the independent expenditures by outside
private groups including tax-exempt organizations that should be
investigated for possible collusion with party organizations. The
Washington Post had an article yesterday concerning nonprofits. To
quote them: ``Mysterious organizations that funded a flurry of attack
ads at the end of the 1996 election,'' that were targeted mainly
against Democratic candidates. No one apparently knows who supports
them. One group, the Coalition for Our Children's Future, spent
$700,000 on ads, mailings, phone banks, to help Republican candidates
from Louisiana to California.
Another group, Citizens for Reform, spent $2 million on ads,
including a mailing labeling a Democratic candidate for Congress as
sexist and anticonsumer. And this organization is tax exempt. They are
not supposed to deal in political matters. In the case of tax-exempt
organizations, collusion with a political party would be illegal but
would not involve criminal penalties. In the case of a so-called
501(c)(3) tax-exempt organization, which is prohibited from engaging in
political activity, there is the question of whether the placing of
certain issue ads should be considered political activity under certain
circumstances.
Will this be investigated by the Governmental Affairs Committee under
the funding resolutions' current scope statement? That will depend on
how the word ``illegal'' is interpreted. I must say, at several points
along the way we have had different interpretations of that word.
Madam President, I ask unanimous consent that the Washington Post
article be printed in the Record at the end of my remarks.
The PRESIDING OFFICER. Without objection, it is so ordered.
(See exhibit 1.)
Mr. GLENN. That is only the beginning of the problems with this
resolution. It also requires that if any evidence of illegality is
discovered in the 1996 campaign activities of a Member of Congress by a
Member of Congress, then such evidence is to be referred to the Ethics
Committee.
Does that mean the committee's investigation is to be terminated at
that point? And, if the evidence comes to the attention of the
committee before an investigation has even been initiated, does that
mean the committee is to defer to the Ethics Committee for the
investigation of the Member? Does referral to the Ethics Committee mean
that Governmental Affairs will defer to the Ethics Committee on any
possible criminal referral to the Department of Justice? We need
answers to all of those things, obviously.
What if we are into an investigation and there is something that pops
up that looks as though it might be an ethical matter and might be
illegal, which this committee would be permitted to deal with? Since
there is this special provision with regard to ethics in the Senate, in
referring it to the Ethics Committee, do we have to stop any
investigation before anything comes out beyond a point where there has
been just an allegation of illegality?
So, let me return to the question of the meaning of the word
``illegal'' in the resolution. What is the standard to be used by the
Governmental Affairs Committee to determine that an activity involves
an illegality and is therefore subject to an investigation? Is
illegality meant to be equivalent to criminality? Or is it broader and
includes activities that are in violation of law but subject to only
civil penalties or no penalties at all? The answer to this question
will determine whether the activities of tax-exempt organizations
engaged in political activity will be investigated.
I believe the questions I am raising need to be answered during this
debate so Members will know precisely what they are voting on when the
time comes. These questions also need to be answered in order to
examine whether the 54 subpoenas issued thus far by the chairman of the
Governmental Affairs Committee are within the new scope of the
investigation.
Let me turn to some other deficiencies in the resolution. These are
also deficiencies of omission. My remarks stem once again from my
belief that a balanced investigation of fundraising by both parties,
highlighting legal transgressions as well as their legal but ethically
dubious fundraising activities, could be effective in pointing the way
toward real reform. Conversely, an unbalanced, partisan investigation
suggesting that the problems lie solely or even mainly with one party
would be destructive to forging a consensus and would lead to political
games, possibly including an attempt to pass reform legislation crafted
not so much to fix the system as to give one party a fundraising
advantage over the other.
As the ranking Democrat on Governmental Affairs, I have urged the
chairman of the Governmental Affairs Committee to follow standard
Senate practices and enter into a written agreement that the
investigation will be
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carried out in a bipartisan manner with an agreed-upon agenda and with
fairness. That involves ensuring that both the majority and minority:
have contemporaneous access to all documentary evidence received by the
committee; have the right to be given adequate advance notice of, to be
present at, and to participate equally in all depositions and
investigatory interviews; have equal opportunity to obtain and present
relevant evidence on the subjects of the committee's inquiry; and, are
treated equally and without discrimination in the discharge of the
committee's administrative responsibilities.
I regret to say that no agreement on these matters has been reached
thus far. This has most egregiously shown up in the way subpoenas have
been handled thus far.
I am hopeful that passage of a funding resolution for the committee's
investigation will be the occasion to put this investigation back on a
bipartisan track. I believe that failure to do so will redound to the
credit of no one and mark the first major stain on this committee's
record of bipartisan cooperation during my 22-year tenure on it.
Finally, I must comment on that part of the resolution that provides
for authorization of some $450,000 in additional funds for the Rules
Committee to examine those aspects of campaign fundraising that are
outside the scope of the Governmental Affairs Committee's investigation
under the terms of this resolution as currently written. It is
certainly true that the Rules Committee has legislative jurisdiction
over campaign finance reform and, therefore, can look into soft money
and independent expenditures, among other things, as policy matters.
But the Rules Committee is not basically an investigative committee.
I could not recall the last time it ever issued a subpoena. We made
some inquiry into this and found that no subpoenas have been issued by
the committee since at least 1980. We do not know whether any were
before that time or not. They may do hearings, but that is not the same
as an investigation as conceived under this resolution.
Let us not deceive the public about this. Recent press reports
clearly indicated that at least two members of the Rules Committee,
Republican members of the Rules Committee, would not vote for the
funding resolution for the investigation that originally came out of
the Governmental Affairs Committee because the scope of the
investigation would have included legal as well as illegal
congressional fundraising practices. Those Members were concerned that
the result of such an investigation might be to raise public pressure
on Congress to pass campaign finance reform legislation.
The fact is, there is little support for campaign reform among my
Republican colleagues. The McCain-Feingold bill has only one other
Republican cosponsor, and that is Senator Thompson, to his credit. So
we know what game is being played with the Rules Committee rewrite of
the previously-agreed-to scope of the Governmental Affairs Committee's
investigation. It is a game in which legal but improper congressional
fundraising is kept off the table while a parade of Presidential
fundraisers for the Democratic Party and the Clinton-Gore campaign are
brought before the cameras at televised hearings, to give the
impression that all the problems are with the Democratic Party and
there is no need to change the laws.
I do not believe it will work. I do not believe the American people
are that naive. I believe they will see through such a strategy were it
to unfold. Chairman Thompson has said congressional fundraising should
be on the table. I agree with him. That is one of the reasons I was
disappointed when none of his first 65 subpoenas were directed toward
congressional fundraising. I and my Democratic colleagues will attempt
to broaden the scope to include legal activities that are improper,
which is where many of the major campaign finance problems are, and
which should be thoroughly investigated by the Governmental Affairs
Committee. So, I hope--in fact I invite Chairman Thompson to join me in
cosponsoring an amendment I plan to offer to broaden the scope, and I
invite him to join me in voting against tabling any such amendment.
I also invite all Members of the Senate, Democratic and Republican,
who truly want to change our system to join us.
Let us look at it from your children's perspective of 20 years from
now. Whichever party is in the majority--and that may have changed in
that time, maybe before that--but look at your children as adults out
there, taking part in the political system at that time. Whichever
party is in the majority at that time, I am sure we can all hope that
political fundraising will not be the mess that it is today. One way to
gain that end is to assure that investigations are carried out now
without fear or favor and spotlighting the dark corners, whether
illegal or legal, but in either event, wrong, improper, and unethical.
The resolution before us does not take us in that direction, and that
is why I also urge Senator Thompson, even if we fail to pass such an
amendment, to seek every opportunity at our committee level to examine
and thoroughly investigate any alleged illegal fundraising activities
by Members of Congress, in the House or Senate. That will at least be a
start, and I pledge my full support to such efforts.
So I await with interest his proposed agenda and subpoenas in this
area.
At the appropriate time today, before we finish this debate, I will
have an amendment to submit. I would like to lay it down this evening.
I doubt all the people on either side of the aisle who wish to speak on
the amendment will return before we go out of session, but I would like
to have time later on to submit the amendment before we go out of
session this evening.
I yield the floor.
Exhibit 1
[From the Washington Post, Mar. 9, 1997]
For Their Targets, Mystery Groups' Ads Hit Like Attacks From Nowhere
(By Charles R. Babcock and Ruth Marcus)
Campaign watchdog groups and government regulators are
concerned about the emergence of mysterious organizations
that funded a flurry of attack ads at the end the 1996
election and could play an even larger role in coming
campaigns.
The groups, with bland names such as Citizens for Reform
and the Republic Education Fund, spent millions of dollars on
television advertising, mailings and telephone banks in the
closing weeks of the campaign, mostly on the side of the
Republicans. None of their activities was reported to the
Federal Election Commission (FEC).
``The public has no idea who these people are or where
they're coming from or who funds them,'' said Charles Lewis,
executive director of the Center for Public Integrity, which
monitors political ethics. ``They are trying to influence the
political process and the public is in the dark.''
For example, a group called the Coalition for Our
Children's Future spent more than $700,000 on television and
radio ads, mailings, and telephone banks to bolster GOP
candidates in key races from Louisiana to California.
The last-minute onslaught, financed in part by a donor who
demanded a written confidentiality agreement, was conducted
without the knowledge or approval of the group's directors.
Two of the directors resigned in protest after The Washington
Post informed them of the late ads, saying they never
approved the expenditures. They said they still do not know
exactly what was done or the source of funding.
Former director Deborah Steelman, a GOP lobbyist, said she
thought the group had been inactive since spending more than
$4 million on advertising backing the GOP's legislative
agenda in 1995. ``Clearly, the organization created another
mission of which we were not a part,'' she said.
Like the more identifiable AFL-CIO and environmental groups
that also ran advertising, leaders of organizations such as
the coalition say their television commercials were not
political because they did not explicitly endorse a
candidate. Since they were engaging in ``issue advocacy,''
they said, they were not required to report to the FEC the
source of their funds or how much they spent.
One group created last spring and calling itself Citizens
for Reform spent $2 million in the closing days, according to
its president, conservative activist Peter Flaherty. In
California, it sent mailings into the district of Democratic
Rep. George Brown accusing him of being sexist and anti-
consumer. The Consumer Federation of America, cited as the
source in one flier although it endorsed Brown, denounced the
mailing as ``extremely misleading and grossly unfair.'' In
Montana, the group bought television time calling Democratic
congressional candidate Bill Yellowtail a convicted criminal
who ``preaches family values . . . but took a swing at his
wife.''
Another new group called Citizens for the Republic
Educaiton Fund obtained at least $1 million in late ads,
according to director Lyn Nofziger, longtime political aide
to Ronald Reagan. In Texas, it bought television ads against
Democratic congressional candidate Nick Lampson that said he
had been
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accused of Medicare fraud. In Erie, Pa., another television
ad denounced ``big labor bosses'' for trying to buy ``a
Congress they can control.''
Some ads were so inflammatory that the Republican
candidates they were designed to help denounced them. And
some stations would not run some ads or pulled them off the
air after complaints by Democratic candidates. Leaders of the
groups targeting Democrats say they operated independently
and they and GOP officials said the groups were not fronts
for the party.
Nofziger called it, ``outrageous'' that advocacy groups
like his are allowed to ``go and run political ads and call
them education.'' He added, ``We wouldn't have had to do it
if it had not been for labor'' and its attacks on GOP
candidates.
The Flaherty and Nofziger groups were run by a Washington-
based firm, Triad Management, that advertises itself as sort
of an underground version of the Republican Party. A Triad
marketing video includes testimonials from Sen. Don Nickles
(R-Okla.) and several House members aimed at recruiting
donors for what the video labels a ``privatized Republican
national coalition.''
Triad's Carolyn Malenick, a former fund-raiser for Oliver
L. North, says on the video that labor has always been the
``rapid fire'' of the Democratic Party. ``If the Republican
Party needs that quote `rapid fire' where're we going to find
it?'' she said. ``If we need to move or have $100,000 put
into a congressional race tomorrow where're we going to find
it?'' Malenick declined to be interviewed.
Mark Braden, Triad's attorney, said the group was not a
front for the GOP or a particular special interest, like the
tobacco industry. Malenick's donors are mostly individuals
from ``ideologically driven networks,'' he said.
While most of the late negative issue ads with mysterious
sponsors targeted Democratic races, a labor-funded group, the
'96 Project, paid for voter guides mailed in the name of
other groups in 14 races. The project paid $50,000 for
mailings in six House districts where the fliers said they
were ``sponsored'' by local or state affiliates of the
National Council of Senior Citizens, a group made up
predominantly of retired union members. There was no mention
of the '96 Project in the mailings.
Scott Wolf, director of the project, said there was no
intent to deceive the public on who was behind the mailings,
which made GOP candidates look unfavorable on key issues.
His group also paid for mailings in eight races
``sponsored'' by the Interfaith Alliance, a group of
ministers formed as an alternative to the Christian
Coalition, according to the alliance's Greg Lebel. Lebel said
``it never occurred to us'' voters might be misled because
the eight mailings said only that the '96 Project
``prepared'' the voter guides.
Most of the late money from obscure groups was spent on
television. And Federal Communications Commission officials
who monitor political advertising say their authority over
broadcasters is limited. Charles Kelley, chief of enforcement
for the FCC's mass media bureau, said the agency wants to
know ``who is the attempted persuader'' in such ads. The
question, he said, is ``what legal authority we have, if any,
to obligate the true sponsor to step forward.''
The FCC managed to do that in a case in Oregon last fall,
when it discovered that a group calling itself Fairness
Matters to Oregonians was being financed by the Tobacco
Institute. The FCC ruled the group's ads, which opposed an
increase in the state cigarette tax, could be aired but the
tobacco Institute had to be identified as the sponsor.
Various campaign reform proposals in Congress attempt to
address the late attacks by saying the name or image of
candidates cannot be mentioned in ads in the last 60 days
before the general election. But many lawmakers and interest
groups say such proposals would put unconstitutional limits
on their First Amendment rights.
Flaherty, who also heads the Conservative Campaign Fund
PAC, said concerns about sponsorship are misplaced. ``Most
people when they see an ad don't focus on who put it on, but
focus on the message,'' he said. ``If the message has
strength and credibility it will persuade people. If it
doesn't, it won't.'' In applying for tax-exempt status, which
allowed it to avoid paying taxes on investment income,
Citizens for Reform told the IRS it had no plans to spend
money ``attempting to influence'' elections. But asked
whether the groups' advertising had been effective, Flaherty
said, ``I think we made a big difference. It was an absolute
onslaught in some of these areas by labor and liberal groups
and I think we helped stanch the bleeding artery.''
Perhaps the most peculiar of the late ad campaigns was the
one run in the name of the Coalition for our Children's
Future, which spent money in six House districts, the
Louisiana Senate race and 12 Minnesota legislative races,
according to Executive Director Barry Bennett.
Two directors, Dirk Van Dongen, president of the National
Association of Wholesaler-Distributors, and Donald L. Fierce,
a GOP consultant and former Republican National Committee
aide, resigned in protest; two others, Steelman and Gary
Andres, had left the board earlier.
How the unauthorized advertising campaign was launched and
how races were targeted remains murky. Bennett, working in
Ohio at the time of the election as chief of staff to then-
Rep. Frank A. Cremeans (R), at first said he did not know of
any extensive late advertising. Then he acknowledged he had
signed the secrecy agreement with the donor and signed blank
checks to pay a Houston political consultant who ran the
advertising campaign. Bennett said he did so without telling
board members.
Bennett and the group's fund-raising consultant, John
Simms, said the consultant, Denis Calabrese, approached them
last summer and helped connect them with some donors, who
they declined to identify. Calabrese, who has worked on
industry's side to make it harder to win large damage awards
in lawsuits, did not return numerous phone calls.
Bennett said he had tried without success, after the Post
inquiries, to obtain copies of the television scripts from
Simms' firm. He said he had no idea what the coalition,
organized to address federal issues, was doing in Minnesota
statehouse races.
``Am I embarrassed by this?'' Bennett said before he
stopped returning phone calls. ``Yes . . . I understand we've
created a huge mystery here and that's our fault.''
Mr. WARNER addressed the Chair.
The PRESIDING OFFICER (Mr. Allard). The Senator from Virginia.
Mr. WARNER. Mr. President, there are others anxious to speak to this.
I see Senator Hatch is here, and I want to, just in reply to my
distinguished friend and colleague, say a few words here, and then
Senator Hatch, hopefully, will take the floor momentarily.
First, I want to make it very clear, I am not going to personalize
this debate in any way or use the word ``pandering.'' Nobody is
pandering anybody around here. What we are trying to do is how to get
as quickly as possible to the point where the U.S. Senate, in several
committees, can start looking into this very important issue, hopefully
in a fair and objective manner, for the best interests of this
institution and our country.
I have been in politics--I am almost hesitant to mention how many
years--but it is a good 40-plus, and I have never in my lifetime ever
seen a situation engulfing this great Nation, casting more doubt in the
minds of the voters with regard to how we, those who serve in the
Congress and those who serve in the executive branch as the President
and Vice President, go about the process of elections, and we have to
get at the bottom of this thing as quickly as possible.
I have indicated my support for Chairman Fred Thompson as a man I
have absolute faith in, who can deal with this matter fairly and
objectively, and I have said that for weeks. Never once have I
deviated, and I do not think there will ever be a basis that I shall
deviate. I said from the beginning that I want to support him as an
individual. I want to support the work of his committee. But there is a
very careful delineation of responsibilities here among the several
committees, and there is clearly, within the jurisdiction of the Rules
Committee, which I am privileged to chair, the right to superimpose our
own judgment on the scope and activities of the other committees of the
Senate as it relates to those funds under our jurisdiction.
This is in no way any bald-faced effort by myself or other members of
the Rules Committee, particularly the distinguished majority leader,
who was just on the floor consulting with me minutes ago, no way to try
to do other than what I have just said, which is to get the Senate on
the track as quickly as possible. We just have to get beyond all of
this procedure business and get on with the business.
I said that I drew this scope language, drawing from the Watergate. I
never said I used it. I have read it now probably 25 times and studied
the history of it. I know all the words that are in it. It is
interesting. In the Watergate resolution, I ask my friend, if he wants
to debate it later on, whether or not you find any authority in there
to investigate the Congress. I do not find it in the Watergate
resolution, but it is very clearly expressed in this resolution as
adopted by the Rules Committee. We in no way tried to obfuscate that
issue.
This volume is the ``Authority and Rules of Senate Committees'' for
the last fiscal year, but it is applicable to this. I would like to
just read the question of jurisdiction of the Rules Committee, and it
is found on page 155 of that book. It states we have the authority to
investigate ``corrupt practices.''
Now that is about as broad as any charter can be--as broad as any
charter can be. Then go to section 5:
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Federal elections generally, including the election of the
President, Vice President, and Members of the Congress.
There it is. That is the jurisdiction of the Rules Committee.
Now go over to the jurisdiction of the Governmental Affairs
Committee--and I urge my colleague from Ohio to take a moment or two to
look through this book so that he can reply--found on page 101, and in
detail on page 102, where it says, the committee is duly authorized, or
a subcommittee thereof is authorized to study and investigate.
You do not find--at least I haven't thus far in studying it--that
precise language as it relates to the Rules Committee concerning
jurisdiction over precisely what it is that the U.S. Senate must
investigate. If anything, this volume gives clearly the authority to
the Rules Committee, and I find less specificity as it relates to the
Governmental Affairs Committee.
Lastly, as to campaign finance reform, the generic subject, the Rules
Committee held a number of hearings last year. We already commenced our
series of hearings this year. The distinguished majority leader
designated the majority whip, Mr. Nickles, and a group of us, including
the Senator from Virginia speaking, and it is our responsibility to try
to come up with a grouping of proposals which we have reason to believe
will effect the greatest possible reform in this generic subject of
campaign finance reform.
You bet there are areas which I would like to see changed. In my last
campaign, I experienced spending by my opponent--and I do not castigate
him in any way at this point in time, nor did I ever--but clearly he
had the authority under the Supreme Court decision to spend all the
money of his personal funds he wished. He set a record in the history
of the U.S. Senate races from the first day this body was constituted
through and including today for the greatest amount of money spent for
a State per capita in the United States.
I think we should enact some legislation that would curtail, in some
manner, the limit of an individual to expend millions and millions and
millions of dollars. In the case of my race, it is presumably in
excess, it was reported, $10 million out of personal spending. Maybe
subsequent records will show an additional amount, but that is not here
to argue. The point being, the only way that can be done is by a
constitutional amendment. I would not want to see this body rest its
entire package of reforms that a constitutional amendment is going to
be adopted in this area of campaign finance reform.
My own personal opinion, it is highly unlikely that such an
amendment, even though I would favor certain types of constitutional
amendments on campaign reform, that that can be achieved; essentially,
the first amendment, which, again, would require a constitutional
amendment. There are many areas of campaign finance reform that would
be solely predicated on the ability to get a constitutional amendment
in order to achieve those goals.
I would not want to see this body pass a package of campaign finance
reform proposals knowing full well in our hearts that the Federal court
is going to strike down in large measure a number of those provisions.
So I look forward to continuing to work with the distinguished
majority leader and the majority whip in seeing what we can come up
with in a package of campaign finance reform proposals which can be
adopted by this body and, Mr. President, can withstand the essential
scrutiny that will come about by the third branch of Government,
namely, the Federal court system.
Mr. President, I now yield the floor.
Mr. HATCH addressed the Chair.
The PRESIDING OFFICER. The Senator from Utah.
Mr. HATCH. Mr. President, it befalls me to make a few comments here
today concerning why this investigation is so important. Before I do, I
want to compliment the Rules Committee and the people on the Rules
Committee who have handled this very difficult subject matter and have
done it in a credible and responsible way.
I also personally believe that no two people could handle this matter
better than the chairman and ranking member of the Governmental Affairs
Committee. Senator Thompson has had extensive experience in these
matters and Senator Glenn is known as an eminently fair and worthy
person here in this body. I have total confidence in both of them that
they will be fair, they will be thorough, they will be tough, and they
will do what is right.
We simply have to get to the bottom of this. The American people are
concerned about it. Certainly the media has written extensively about
these matters. It is incumbent upon the Senate in its oversight
capacity to investigate these matters fairly and thoroughly.
As we take up Senate Resolution 39 today, I would like to just take a
few minutes to emphasize one major point: That there is a serious
number of very, very troubling matters to investigate, simply at the
very core of Senators Thompson's and Glenn's inquiry.
Merely in recent press reports--if that is all you had--there are
very substantial and troubling questions that must be answered
regarding whether foreign money and foreign influence has infiltrated
the American political process. While numerous other allegations of
improper fundraising at the White House and by the White House have
surfaced in the media in the past week or so, that is not what I want
to talk about today.
Even putting aside all of those allegations, the fact is that we have
before us very serious allegations that China funneled funds into
American elections in an attempt to influence American policy and
policymakers. The gravity of these allegations should not and must not
be underestimated. Were our national interests sold out? I hope they
were not. But this matter must be pursued, and it must be done in a
thorough, fair, and honest manner.
Later this week the Judiciary Committee will forward a letter to the
Attorney General requesting that she apply for an independent counsel.
To date, she has refused to do so in this matter. I do not read
anything sinister into that--I believe that the Attorney General is an
honorable, ethical person of integrity. She has applied for the
appointment of no less than four independent counsels since she has
been Attorney General. I think she has shown that she is a person who
can act. But to date she has refused to act on this matter.
Accordingly, Congress must be all the more vigilant. And given the
apparent conflict of interest, the public will be relying on Congress
to ascertain the facts and get to the bottom of this whole affair.
The Governmental Affairs Committee inquiry into fundraising
improprieties is, in my opinion, one of the most important
congressional investigations in history and involves some of the most
serious allegations we have seen to date about our electoral system and
our Government. The press and congressional committees have uncovered
material facts that prompt numerous questions:
First, did a foreign government try to influence our national
elections and our domestic and/or foreign policy?
No. 2, were millions of dollars of foreign money laundered through
various groups to the Democratic National Committee, particularly by
three individuals--Charlie Trie, Johnny Chung, and John Huang, all of
whom have some ties to China.
No. 3, were there violations of any of our existing laws, such as the
Hatch Act, the Ethics in Government Act, and our current Federal
elections laws?
The breadth of this particular investigation is immense. We cannot
allow ourselves, in an attempt to satisfy the tendentious cause for a
broad inquiry into congressional campaigns, to interfere with what is a
serious matter.
Investigating the 1996 Presidential campaign alone will require a
very substantial budget and a substantial amount of time--I presume
even more time than the Rules Committee has allowed in this instance,
which is only until the end of this year or approximately 8 months. I
suspect this will go on beyond that and will have to go on beyond that
because of what will be brought out. Let us focus for a moment,
however, in terms of the breadth of this investigation, on one
individual--Mr. John Huang. He was born in China. He worked for the
Lippo Group, a huge conglomerate based in Indonesia with large business
interests in China. Lippo is owned and controlled by the Riady family--
Mochtar, James, and Stephen. These are also Chinese natives.
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By 1994, Huang was the top Lippo executive in the United States.
Huang was appointed Deputy Assistant Secretary for International
Economic Policy in our Department of Commerce in September 1994.
Let me just go down through what John Huang did while employed at
Commerce--just a quick glance. He was, according to reports, given a
top security clearance without the usual background check, which is all
but unheard of; 78-plus visits to the White House; 70-plus calls to
Lippo during this period of time; 39 classified top secret briefings
dwelling on China and other countries in Asia; 30-plus phone
conversations with Mark Middleton or associates; 9 phone messages from
or calls to Webster Hubbell; 9 phone messages from the Chinese Embassy
officials; 5 months of top secret clearance before joining the Commerce
Department. In other words, even before he got in this very important
position in Government, he had 5 months of top secret clearance. Why?
That is a question that is going to be a big question in this matter.
Huang enjoyed a top secret clearance for 5 months of top secret
clearance before joining Commerce and nearly a year after leaving
Commerce to join the Democratic National Committee. Why? Why would
those security clearances go with him outside of Government? Why would
he be permitted this kind of access to very sensitive information?
These are questions that are very important. Taken with the $780,000
severance pay Huang received from Lippo prior to joining the Commerce
Department, these facts naturally raise questions.
This next chart involves a meeting at the White House to discuss the
Huang transfer from the White House to the Democratic National
Committee on September 13, 1995. It was an Oval Office meeting. The
President was there. James Riady, the Lippo executive was there. Bruce
Lindsey, the Deputy White House Counsel, was there. Joseph Giroir, who
is, I believe, the former top partner in the Rose Law Firm, the Lippo
joint venture partner/adviser, former Rose Law Firm partner, and, if I
recall correctly, was the managing partner of that firm, and none other
than John Huang, former Lippo executive, Principal Deputy Assistant,
Secretary of Commerce.
At this meeting, it was decided that John Huang would move from the
Commerce Department to the Democratic National Committee as vice
chairman of finance.
We do not know what happened at this meeting, although some extremely
troubling explanations have been reported by the media. Each one of
these people, it seems to me, with the possible exception of the
President, will have to be questioned regarding just what went on at
that meeting, why Huang left Commerce, and why he was immediately
transferred to the Democratic National Committee as the finance vice
chairman, why James Riady, was even at this meeting. That is a very
important meeting.
Let me put another chart up here.
This is John Huang at the Democratic National Committee. These are
examples of illegal funds raised by Huang. The Wiriadinatas raised
$450,000, all of which was returned by the DNC. Pauline Kanchanalak,
$250,000. She has since left the country. She is now in Thailand. All
funds returned by the DNC. Wogesh Gandhi, $250,000. He testified he had
no assets. All funds returned by the DNC, the Democratic National
Committee.
Cheong Am America--or John H.K. Lee--$250,000. Like Kanchanalak and
others, Cheong Am America--or John H.K. Lee--has disappeared. All of
these funds were returned by the Democratic National Committee. Hsi Lai
Buddhist Temple, $166,750: This comes from a temple where the residents
take a vow of poverty; $74,000 of the $166,750 was returned by the DNC.
All together, that we know of, John Huang raised $3.4 million, $1.6
million of which has been returned by the Democratic National
Committee.
These are just a few of some of the problems that I think the
Governmental Affairs Committee is going to have to go into. I do not
see how they can avoid doing it. To give a picture of some of the
people who seem to be involved in this, let me just highlight some of
the other individuals involved in this affair.
We start with John Huang, former top Lippo executive in the United
States, who had a $780,000 severance package when he went to Congress.
He had multiple contacts while there with Lippo.
The former Democratic National Committee vice chairman raised more
than $3.4 million, $1.6 million was returned, and he visited the White
House during this period more than 75 times. C.J. Giroir, in the Lippo
joint ventures, former Rose Law Firm attorney, met with James Riady,
President Clinton, and Lindsey on the Huang move to DNC, and donated
$25,000 to the DNC. Mark Middleton, former White House aide from Little
Rock, met with James Riady and President Clinton on that occasion, Far
East business interests, had unlimited access to the White House after
his departure.
Charles Trie, Little Rock restauranteur, received a $60,000 loan from
Lippo, and he arranged with the former Lippo executive Antonio Pan to
get a Hong Kong dinner for Ron Brown. Trie also attempted to give
$600,000 to the Clinton legal trust fund, and he visited the White
House at least 37 times.
Mark Grobmyer, Little Rock attorney, close friend of President
Clinton, consultant to Lippo, Far East business interests, met with
James Riady, Huang and President Clinton. Soraya Wiriadinata, daughter
of Hashin Ning, former Lippo executive, contributed $450,000 to the
DNC, and it was all returned, according to the committee. Soraya has
gone back to Indonesia.
S. Wang Jun, Lippo joint ventures, Chinese arms merchant, senior
executive at CITIC and COSTIND, Chinese Government entities, and
attended a White House conference. Webster Hubbell, former Associate
Attorney General, received a $250,000 consulting fee from Lippo--would
not say why he got that.
Charles DeQueljoe is the president of Lippo Securities in Jakarta,
gave $70,000 to the Democratic National Committee and was appointed to
the USTR office. Pauline Kanchanalak, a Thai lobbyist who worked with
Huang when he was at Lippo, contributed $253,000 to the DNC, and it was
all returned. She had frequent contacts with Huang. She visited the
White House at least 26 times. And then we come back to John Huang
himself.
Now, all of these people are going to have to be interviewed. We are
going to have to find out what the facts are here. What was going on?
Were there illegalities?
In that regard, these are key players who have taken the fifth
amendment: John Huang, Charlie Trie, Pauline Kanchanalak, Mark
Middleton, and Webster Hubbell. I do not see how anybody on the other
side of the floor can argue that this set of hearings should not go on,
or that this would not take almost every second of any committee's
time, and I am only talking about one aspect of it. There are many
other aspects to this.
The key players who have left the country--and we have not been given
reasons why they left the country--are John H.K. Lee--gone. If he is
going to be interviewed, it is overseas. Charlie Trie, gone, after
taking the fifth. Pauline Kanchanalak, gone--as far as I know, back in
Thailand, after having taken the fifth amendment. Arief and Soraya
Wiriadinata, gone. Charles DeQueljoe, gone. And James and Mochtar
Riady, gone. They left the country.
All this is a brief discussion of one aspect of this. There are other
aspects of this, but this is a brief glimpse into some of the serious
allegations the Government Oversight Committee will have to look into.
I emphasize the point with which I opened, just that at the core of
this investigation is a vast series of matters which must be looked
into. This will be one of the most important congressional
investigations in history. I hope it is not obstructed by partisan
tactics and politics. I hope with all my heart it is not. I think the
American people expect as much.
When I found out over the weekend that the FBI--and I did not know
this before--had notified seven Members of Congress that they might be
receiving laundered funds from a foreign country, mainly China, I was
kind of shocked at that, because if they informed those seven Members
of Congress, surely the FBI informed the White House. I have been led
to believe by the FBI they informed the National Security Council. That
being the case,
[[Page
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why are all these people having such access to our White House under
those circumstances? As chairman of the Judiciary Committee, as
chairman of the committee that oversees the Justice Department and the
FBI, naturally, I have to be concerned about it.
Now, in addition to all of this, there are newer revelations coming
out every day. I challenge the Government Affairs Committee to
substantiate these allegations, to look into them.
Let me just list some of the new revelations about the campaign
finance scandals that were first reported after the Governmental
Affairs Committee made a request of $6.5 million to investigate the
scandal.
First, Deputy Chief of Staff Harold Ickes made a telephone call from
Air Force One to warn of the wiring of the money to the Democratic
National Committee and additional funds to nonprofit organizations.
There is some indication they used Air Force One for the purpose of
raising funds. I hope that is not the case.
Second, questions have been raised concerning whether the White House
database was created for official--as opposed to political--purposes,
since it contained individuals' Social Security numbers, nicknames,
relations to the First Family, pet political issues, and sometimes a
photograph.
Third, China may have sought to influence U.S. policy through the
direction of foreign campaign contributions to the Democratic National
Committee and actions taken at the Chinese embassy. It has been
disclosed that Huang had contacts with the embassy while he worked at
Commerce.
Fourth, the NSC, National Security Council, at the White House
provided the White House with warnings about Johnny Chung, who has ties
to the Chinese Government, who was nonetheless subsequently granted
access to the White House on numerous occasions, even though they knew
about those ties.
Fifth, Huang approached two business associates and offered to pay
them $45,000 if they would take $250,000 from him and donate it in
their own names to the Democratic National Committee. That is illegal.
Sixth, the White House fired four staff members whose salaries were
being paid by the Democratic National Committee while they were working
at the White House. I don't know whether that has ever been done
before, but it should not be done.
There are other allegations, but
Major Actions:
All articles in Senate section
AUTHORIZING EXPENDITURES BY THE COMMITTEE ON GOVERNMENTAL AFFAIRS
(Senate - March 10, 1997)
Text of this article available as:
TXT
PDF
[Pages
S2057-S2078]
AUTHORIZING EXPENDITURES BY THE COMMITTEE ON GOVERNMENTAL AFFAIRS
The PRESIDING OFFICER. Under the previous order, the Senate will now
proceed to the consideration of Senate Resolution 39, which the clerk
will report.
The bill clerk read as follows:
A resolution (
S. Res. 39) authorizing expenditures by the
Committee on Governmental Affairs.
The Senate proceeded to consider the bill, which had been reported
from the Committee on Rules and Administration, with an amendment to
strike all after the resolving clause and insert the following:
That (a) Senate Resolution 54, agreed to February 13, 1997,
is amended by adding at the end the following:
``Authorization of Additional Funds
``Sec. 24. (a) In General.--A sum equal to not more than
$4,350,000, for the period beginning on the date of adoption
of this section and ending on December 31, 1997, shall be
made available from the contingent fund of the Senate out of
the Account for Expenses for Inquiries and Investigations for
payment of salaries and other expenses of the Committee on
Governmental Affairs under this resolution, of which amount
not to exceed $375,000 may be expended for the procurement of
the services of individual consultants, or organizations
thereof (as authorized by section 202(i) of the Legislative
Reorganization Act of 1946, as amended). The expenditures by
the Committee on Governmental Affairs authorized by this
section supplement those authorized in section 13 and may be
expended solely for the purpose stated in this section.
``(b) Purpose of Additional Funds.--The additional funds
authorized by this section are for the sole purpose of
conducting an investigation of illegal activities in
connection with 1996 Federal election campaigns.
``(c) Referral To Select Committee on Ethics.--The
Committee on Governmental Affairs shall refer any evidence of
illegal activities involving any Member of the Senate
revealed pursuant to the investigation authorized by
subsection (b) to the Select Committee on Ethics.
``(d) Final Report.--The Committee on Governmental Affairs
shall submit a final public report to the Senate no later
than January 31, 1998, of the results of the investigation,
study, and hearings conducted by the Committee pursuant to
this section.''.
(b) Section 16(b) of Senate Resolution 54, agreed to
February 13, 1997, is amended by--
(1) striking ``$1,339,109'' and inserting $1,789,109''; and
(2) striking ``$200,000'' and inserting $300,000''.
(c) The Committee on Rules and Administration shall
continue to conduct hearings on campaign reform.
Mr. WARNER. Madam President, on Thursday of last week, the Rules
Committee reported out an amendment to Senate Resolution 39, and it is
my understanding that the present business is that pending amendment,
which does amend, if decided by the Senate, rule 39.
The PRESIDING OFFICER. The Senator is correct.
Mr. WARNER. Madam President, I thank the Chair. We will now proceed
to discuss the amendment as passed by the Rules Committee on Thursday
of last week, the 6th of March.
Madam President, the responsibility of the Rules Committee is to
entertain, from all committees of the U.S. Senate, their requests for
funding. We have, in Senate Resolution 54, which has been adopted by
the Senate, the budgets for all of the committees of the Senate for
their fiscal year, which runs from March 1 through February 28.
The Committee on Governmental Affairs, in Senate Resolution 39,
submitted their request for funding. In the initial consideration of
Senate Resolution 39 by the Rules Committee, the committee determined
that they would grant a portion of the funding request, and that is
reflected in Senate Resolution 54.
The Governmental Affairs Committee still had, under Senate Resolution
39, the balance of their request, which was considered on the 6th of
March by the Rules Committee. After a full debate--and certainly in the
judgment of the chairman, myself, and actively participated in by
Senators on both sides, as we had nearly 100 percent attendance at the
committee hearing on both sides--the committee voted to provide $4.35
million for the Committee on Governmental affairs as a supplemental to
the request as reported in Senate Resolution 54.
Now, how did we arrive at that figure? You can look at the request of
the distinguished Senator from Ohio--indeed, a request that, by and
large, was supported by most on that side of the aisle--that there be a
definitive date for cutoff, and that date by the senior Senator from
Ohio was December 31 of this calendar year, 1997.
If I took that and viewed it as a reduced period of time; namely,
that the Governmental Affairs Committee could begin its work using the
supplemental funds, March 15, from a practical standpoint, through
December 31, 1997, it would appear to this Senator that we would have,
by and large, given that committee the funding profile in dollars in
proportion to the timing from which those funds may be expended.
The next question was the scope. I worked with other colleagues,
primarily those on the Rules Committee, and I devised a formula, in
consultation with the distinguished majority leader and others, whereby
looking at the original Watergate resolution, we took from that the
concept that we would allow the Governmental Affairs Committee to
expend the supplemental budget for such investigations that they felt
were illegal in connection with the 1996 Presidential election and
congressional elections--not delineating between the House and Senate,
but simply all Federal elections in calendar year 1996.
So it seems to me that the Rules Committee, in a fair manner,
recognized the dollars that we needed, gave the Governmental Affairs
Committee a scope of the investigation and illegal--illegal is a very
broad scope. It goes beyond. And I will at a later time today put into
the Record the definitions of illegal. But it goes beyond just criminal
assertions of allegations of criminal violations. It goes beyond that.
So it is a broad scope. Then the Rules Committee took from the
proposal, which the senior Senator from Ohio will address momentarily,
a termination date of December 31, 1997.
In addition to the Rules Committee, I think very importantly
recognizing the essential need for the Senate of the United States to
actively participate in determining what happened, certainly in 1996 in
connection with the ever-increasing number of allegations--most
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of them regrettably could border on or do, in fact, constitute
illegal--it was essential that the other committees of the Senate take
on their responsibilities, which is traditional under the allocation in
the Senate of the responsibilities among the several committees.
Therefore, we charged the Rules Committee, of which I am privileged to
be the chairman, the duty to continue its hearings on campaign finance
reform, gave it a sum of $450,000 to be used by that committee in
enlarging and broadening the scope of their operations in the overall
context of campaign reform and campaign financing. So the Rules
Committee will take on an added role.
In addition, if there is that development by the Governmental Affairs
Committee or the Rules Committee of facts which should be examined by
the Ethics Committee of the U.S. Senate as those facts relate to a
Member of this body, it will be incumbent upon the Ethics Committee to
review any allegations we feel merit the judgment of that committee as
it relates to an individual in the U.S. Senate.
So, Madam President, I feel that the Rules Committee unanimously,
regrettably--bipartisan, yet unanimous among the Republicans--has
addressed this tough issue, and we are here today for the purpose of
amending Senate Resolution 39 such that they can have the additional
funds and under a very carefully crafted and proscribed scope of
activities within a time limit of December 31, 1997.
Madam President, I yield the floor so that my distinguished colleague
from Ohio can present his views.
Mr. GLENN addressed the Chair.
The PRESIDING OFFICER. The Senator from Ohio.
Mr. GLENN. Madam President, we are now into the second week in March.
The Senate has been operating for approximately 2 months. I don't know
that we have had much in the way of accomplishment during that time
period. Certainly, there are national problems that should be
addressed.
For example, we ought to be working on balancing the budget instead
of just trying to pass amendments, which we tried to do, and it failed.
We also have a series of problems with our health care system. Managed
care may be saving money, but there is increasing evidence that it is
happening at the expense of lower quality of health care. So, for
uninsured Americans, that continues to be a major problem. As far as
health care goes, we are going to have a debate, I guess, about
partial-birth abortion.
In other areas, the stock market has gone through the roof.
Unemployment is at a 25-year low. But there is concern about the
future, and about Social Security and Medicare. But there are no
serious proposals by the Republican majority to deal with these issues.
Well, today we have an opportunity. We have an opportunity to have the
possibility of beginning a serious discussion about a serious issue:
the campaign finance system used by both political parties in the
United States.
The American people are disgusted by what they see in campaign
finance. And they should be. Along with the steady drumbeat of
antigovernment ideologues, it is a major factor in America's loss of
faith in our institutions of government. It is that serious. All you
have to do is look at the polling data and such things as decreased
participation in voting. If this trend continues, if America goes
downhill because of the lack of confidence in our Federal Government, I
say that we face a crisis that could literally threaten the foundation
of democracy in the United States.
There is a remedy to avert this crisis, as I see it, and to begin the
restoration of public support for this system of government. The remedy
requires that we reform the campaign finance system. It is a wonderful
place to start because it certainly needs reforming.
Will this get a serious examination by Congress, or will we get
sidetracked by a partisan political circus? The jury is definitely out
on that at this time. We have before us a resolution to fund a Senate
investigation which, if the scope were made broader than it currently
is, has enormous potential as a tool to stimulate public pressure on
Congress to enact meaningful campaign finance reform, honest campaign
finance reform.
Recent revelations about fundraising involving 1996 Federal races are
disturbing. They involve both parties in both congressional and
Presidential campaigns. The truth is that the current fundraising
system, both Presidential and congressional, is scandalous. Having said
that, in my opinion, most Members of Congress are honest elected
officials, both over in the House and here in the Senate. They are
honest elected officials trying to do a good job, albeit from different
political philosophies. But that is our system. But the general public
perception that money gets its way in determining policy is, indeed,
true for too many.
There is a public perception that access follows money, and anybody
who has been around Capitol Hill very long knows that sometimes it
does. Access can alter the balance of arguments weighed by a Member and
his or her staff when deciding a course of action, be it a vote on the
floor or in committee, a colloquy on the Senate floor, introduction or
cosponsorship of a piece of legislation, floor speech, insertion of
language in a committee report, or a communication with an executive
branch agency requesting an action, or the withholding of an
action. But even when there is no connection whatsoever between a
donation by a person to a politician and the latter's specific action
as a legislator favoring that person, the perception of a payoff, even
the possibility of a perception of a payoff, is corrosive to public
trust in our Government. We must dispel this growing perception that
Congress or parts of Congress are for sale if we are to reverse
electoral apathy and restore faith in our Government. Gift bans have
not done it. Honoraria bans have not done it. Only deep changes in the
campaign finance system will do the job, and it will not be easy.
The question is what should be the relationship of the Governmental
Affairs Committee investigation to the drive for effective bipartisan
campaign finance reform? The resolution before us,
S. 39, as amended by
the Rules Committee, states that the supplemental funds to be given to
the Governmental Affairs Committee for this investigation are for the
sole purpose of an investigation into illegal activities in the 1996
Federal election campaign.
There are two things wrong with this statement of scope for the
investigation. The first thing is that it is a bald-faced attempt by
the Republican majority of the Rules Committee to undo a unanimous
bipartisan agreement among the members of the Governmental Affairs
Committee to have a broad investigation that would examine improper as
well as illegal activities along with previous campaigns. Contrary to
the claims of the Rules Committee chairman that his language tracks the
Watergate resolution, the fact is that the Watergate resolution called
for an investigation of improper and unethical activities as well as
illegal ones.
I am looking at a copy of the Watergate resolution that was passed in
the Senate back in 1973. It was submitted by Senator Ervin, Sam Ervin
and Mike Mansfield. In part 15 on page 8, it says they are ``to look
into any other activities, circumstances, materials or transactions
having a tendency to prove or disprove that persons, acting either
individually or in combination with others, engaged in any illegal,
improper, or unethical activities in connection with the Presidential
election of 1972, or any campaign, canvas, or activity related to such
election.''
That is the language of one of the parts of what the Watergate
Committee was to look into--any illegal, improper, or unethical
activities in connection with the Presidential election of 1972.
The narrowing of the scope of the Governmental Affairs investigation
by the Rules Committee is nothing more than a blatant pander to those
elements in the Republican Party that do not wish to reform the
campaign finance system and who are quite willing to scuttle the
Governmental Affairs investigation if necessary to avoid creating
public pressure to pass a decent bill.
How does narrowing the scope to illegal activities avoid this problem
for the Republicans? The first thing to understand is that the problem
with the campaign finance system is not just what politicians do that
is illegal. It is what politicians do that is legal that is
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an equal scandal, and it happens every single day on Capitol Hill and
with both political parties.
Let me give you an example. Let us talk about soft money. That is the
best example. One of the most pernicious influences in politics these
days is soft money. Let me give you an example of that. Let us say
Senator X, whoever it might be, solicits $50,000 or $500,000 in soft
money from a potential donor to his or her party, ostensibly for party-
building purposes, get-out-the-vote drives or the like. But the party
can then turn around and use the money on an issue ad during the
Senator's reelection campaign that helps him or her and hurts the
opponent.
According to the Department of Justice, Senator X can even do the
solicitation for that $500,000 from his or her office because the
solicitation is not for his or her campaign specifically but, rather,
for the Senator's party.
This practice should be illegal, but it is not. Suppose Senator X
wants a direct contribution to his or her campaign from a potential
donor, direct to his personal campaign. In that case, Federal election
law prohibits the donor from contributing more than $1,000 per person,
and it must be in the donor's own name.
But that same donor can go out and collect checks of $1,000 for
Senator X from everyone he knows, bundle them together, and send them
to the Senator's campaign. Let us say Senator X calls from the
Senator's office for those donations. If Senator X calls, he is
committing an illegal act. But if Senator X calls from outside, it is
OK.
Suppose Senator X is so grateful, wherever the call came from, for
the donor's willingness to help that the next time the donor is in town
and wants to talk to Senator X about a legislative matter he has an
interest in, Senator X not only lets him into his office but he
welcomes him and listens to his pitch. And suppose that Senator X is
sufficiently concerned about maintaining the donor's political help
that the Senator does what the donor wants on the issue and there was
no discussion linking the donation to the donor's request or to the
Senator's action.
In that case, there has been no bribe. But it is certainly the case
that Senator X made his decision on the issue as a result of the donor
having had access to the Senator, access that was based at least in
part on the donation the Senator was given.
Now, suppose Senator X made the original call to the donor from the
Senator's office phone instead of from an outside phone. That would be
a violation of law. You cannot do that.
Let me pose the question. Which is the worst ethical lapse, making
the phone call from a legally prohibited place or letting the money
influence the Senator's vote? I submit that the answer is not even
close. Senator X's constituents and the people generally will have been
ill served if he lets money influence his decision, and that
overshadows the question of whether the phone he used was a private
phone or a Government phone.
What is the point of this fictitious example? Well, the resolution
before us, which limits the scope of the investigation only to illegal
activities, would allow an investigation of whether Senator X committed
an illegal act by using a Government phone for the direct solicitation
if there was an allegation that he had done so but would allow no
investigation of the contribution, and if a soft money contribution was
involved, whether Senator X's party had spent that money on certain ads
helpful to the Senator's campaign, a legal practice but one that should
be illegal.
It is not just the independent expenditures by the major parties that
is the problem. There are also the independent expenditures by outside
private groups including tax-exempt organizations that should be
investigated for possible collusion with party organizations. The
Washington Post had an article yesterday concerning nonprofits. To
quote them: ``Mysterious organizations that funded a flurry of attack
ads at the end of the 1996 election,'' that were targeted mainly
against Democratic candidates. No one apparently knows who supports
them. One group, the Coalition for Our Children's Future, spent
$700,000 on ads, mailings, phone banks, to help Republican candidates
from Louisiana to California.
Another group, Citizens for Reform, spent $2 million on ads,
including a mailing labeling a Democratic candidate for Congress as
sexist and anticonsumer. And this organization is tax exempt. They are
not supposed to deal in political matters. In the case of tax-exempt
organizations, collusion with a political party would be illegal but
would not involve criminal penalties. In the case of a so-called
501(c)(3) tax-exempt organization, which is prohibited from engaging in
political activity, there is the question of whether the placing of
certain issue ads should be considered political activity under certain
circumstances.
Will this be investigated by the Governmental Affairs Committee under
the funding resolutions' current scope statement? That will depend on
how the word ``illegal'' is interpreted. I must say, at several points
along the way we have had different interpretations of that word.
Madam President, I ask unanimous consent that the Washington Post
article be printed in the Record at the end of my remarks.
The PRESIDING OFFICER. Without objection, it is so ordered.
(See exhibit 1.)
Mr. GLENN. That is only the beginning of the problems with this
resolution. It also requires that if any evidence of illegality is
discovered in the 1996 campaign activities of a Member of Congress by a
Member of Congress, then such evidence is to be referred to the Ethics
Committee.
Does that mean the committee's investigation is to be terminated at
that point? And, if the evidence comes to the attention of the
committee before an investigation has even been initiated, does that
mean the committee is to defer to the Ethics Committee for the
investigation of the Member? Does referral to the Ethics Committee mean
that Governmental Affairs will defer to the Ethics Committee on any
possible criminal referral to the Department of Justice? We need
answers to all of those things, obviously.
What if we are into an investigation and there is something that pops
up that looks as though it might be an ethical matter and might be
illegal, which this committee would be permitted to deal with? Since
there is this special provision with regard to ethics in the Senate, in
referring it to the Ethics Committee, do we have to stop any
investigation before anything comes out beyond a point where there has
been just an allegation of illegality?
So, let me return to the question of the meaning of the word
``illegal'' in the resolution. What is the standard to be used by the
Governmental Affairs Committee to determine that an activity involves
an illegality and is therefore subject to an investigation? Is
illegality meant to be equivalent to criminality? Or is it broader and
includes activities that are in violation of law but subject to only
civil penalties or no penalties at all? The answer to this question
will determine whether the activities of tax-exempt organizations
engaged in political activity will be investigated.
I believe the questions I am raising need to be answered during this
debate so Members will know precisely what they are voting on when the
time comes. These questions also need to be answered in order to
examine whether the 54 subpoenas issued thus far by the chairman of the
Governmental Affairs Committee are within the new scope of the
investigation.
Let me turn to some other deficiencies in the resolution. These are
also deficiencies of omission. My remarks stem once again from my
belief that a balanced investigation of fundraising by both parties,
highlighting legal transgressions as well as their legal but ethically
dubious fundraising activities, could be effective in pointing the way
toward real reform. Conversely, an unbalanced, partisan investigation
suggesting that the problems lie solely or even mainly with one party
would be destructive to forging a consensus and would lead to political
games, possibly including an attempt to pass reform legislation crafted
not so much to fix the system as to give one party a fundraising
advantage over the other.
As the ranking Democrat on Governmental Affairs, I have urged the
chairman of the Governmental Affairs Committee to follow standard
Senate practices and enter into a written agreement that the
investigation will be
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carried out in a bipartisan manner with an agreed-upon agenda and with
fairness. That involves ensuring that both the majority and minority:
have contemporaneous access to all documentary evidence received by the
committee; have the right to be given adequate advance notice of, to be
present at, and to participate equally in all depositions and
investigatory interviews; have equal opportunity to obtain and present
relevant evidence on the subjects of the committee's inquiry; and, are
treated equally and without discrimination in the discharge of the
committee's administrative responsibilities.
I regret to say that no agreement on these matters has been reached
thus far. This has most egregiously shown up in the way subpoenas have
been handled thus far.
I am hopeful that passage of a funding resolution for the committee's
investigation will be the occasion to put this investigation back on a
bipartisan track. I believe that failure to do so will redound to the
credit of no one and mark the first major stain on this committee's
record of bipartisan cooperation during my 22-year tenure on it.
Finally, I must comment on that part of the resolution that provides
for authorization of some $450,000 in additional funds for the Rules
Committee to examine those aspects of campaign fundraising that are
outside the scope of the Governmental Affairs Committee's investigation
under the terms of this resolution as currently written. It is
certainly true that the Rules Committee has legislative jurisdiction
over campaign finance reform and, therefore, can look into soft money
and independent expenditures, among other things, as policy matters.
But the Rules Committee is not basically an investigative committee.
I could not recall the last time it ever issued a subpoena. We made
some inquiry into this and found that no subpoenas have been issued by
the committee since at least 1980. We do not know whether any were
before that time or not. They may do hearings, but that is not the same
as an investigation as conceived under this resolution.
Let us not deceive the public about this. Recent press reports
clearly indicated that at least two members of the Rules Committee,
Republican members of the Rules Committee, would not vote for the
funding resolution for the investigation that originally came out of
the Governmental Affairs Committee because the scope of the
investigation would have included legal as well as illegal
congressional fundraising practices. Those Members were concerned that
the result of such an investigation might be to raise public pressure
on Congress to pass campaign finance reform legislation.
The fact is, there is little support for campaign reform among my
Republican colleagues. The McCain-Feingold bill has only one other
Republican cosponsor, and that is Senator Thompson, to his credit. So
we know what game is being played with the Rules Committee rewrite of
the previously-agreed-to scope of the Governmental Affairs Committee's
investigation. It is a game in which legal but improper congressional
fundraising is kept off the table while a parade of Presidential
fundraisers for the Democratic Party and the Clinton-Gore campaign are
brought before the cameras at televised hearings, to give the
impression that all the problems are with the Democratic Party and
there is no need to change the laws.
I do not believe it will work. I do not believe the American people
are that naive. I believe they will see through such a strategy were it
to unfold. Chairman Thompson has said congressional fundraising should
be on the table. I agree with him. That is one of the reasons I was
disappointed when none of his first 65 subpoenas were directed toward
congressional fundraising. I and my Democratic colleagues will attempt
to broaden the scope to include legal activities that are improper,
which is where many of the major campaign finance problems are, and
which should be thoroughly investigated by the Governmental Affairs
Committee. So, I hope--in fact I invite Chairman Thompson to join me in
cosponsoring an amendment I plan to offer to broaden the scope, and I
invite him to join me in voting against tabling any such amendment.
I also invite all Members of the Senate, Democratic and Republican,
who truly want to change our system to join us.
Let us look at it from your children's perspective of 20 years from
now. Whichever party is in the majority--and that may have changed in
that time, maybe before that--but look at your children as adults out
there, taking part in the political system at that time. Whichever
party is in the majority at that time, I am sure we can all hope that
political fundraising will not be the mess that it is today. One way to
gain that end is to assure that investigations are carried out now
without fear or favor and spotlighting the dark corners, whether
illegal or legal, but in either event, wrong, improper, and unethical.
The resolution before us does not take us in that direction, and that
is why I also urge Senator Thompson, even if we fail to pass such an
amendment, to seek every opportunity at our committee level to examine
and thoroughly investigate any alleged illegal fundraising activities
by Members of Congress, in the House or Senate. That will at least be a
start, and I pledge my full support to such efforts.
So I await with interest his proposed agenda and subpoenas in this
area.
At the appropriate time today, before we finish this debate, I will
have an amendment to submit. I would like to lay it down this evening.
I doubt all the people on either side of the aisle who wish to speak on
the amendment will return before we go out of session, but I would like
to have time later on to submit the amendment before we go out of
session this evening.
I yield the floor.
Exhibit 1
[From the Washington Post, Mar. 9, 1997]
For Their Targets, Mystery Groups' Ads Hit Like Attacks From Nowhere
(By Charles R. Babcock and Ruth Marcus)
Campaign watchdog groups and government regulators are
concerned about the emergence of mysterious organizations
that funded a flurry of attack ads at the end the 1996
election and could play an even larger role in coming
campaigns.
The groups, with bland names such as Citizens for Reform
and the Republic Education Fund, spent millions of dollars on
television advertising, mailings and telephone banks in the
closing weeks of the campaign, mostly on the side of the
Republicans. None of their activities was reported to the
Federal Election Commission (FEC).
``The public has no idea who these people are or where
they're coming from or who funds them,'' said Charles Lewis,
executive director of the Center for Public Integrity, which
monitors political ethics. ``They are trying to influence the
political process and the public is in the dark.''
For example, a group called the Coalition for Our
Children's Future spent more than $700,000 on television and
radio ads, mailings, and telephone banks to bolster GOP
candidates in key races from Louisiana to California.
The last-minute onslaught, financed in part by a donor who
demanded a written confidentiality agreement, was conducted
without the knowledge or approval of the group's directors.
Two of the directors resigned in protest after The Washington
Post informed them of the late ads, saying they never
approved the expenditures. They said they still do not know
exactly what was done or the source of funding.
Former director Deborah Steelman, a GOP lobbyist, said she
thought the group had been inactive since spending more than
$4 million on advertising backing the GOP's legislative
agenda in 1995. ``Clearly, the organization created another
mission of which we were not a part,'' she said.
Like the more identifiable AFL-CIO and environmental groups
that also ran advertising, leaders of organizations such as
the coalition say their television commercials were not
political because they did not explicitly endorse a
candidate. Since they were engaging in ``issue advocacy,''
they said, they were not required to report to the FEC the
source of their funds or how much they spent.
One group created last spring and calling itself Citizens
for Reform spent $2 million in the closing days, according to
its president, conservative activist Peter Flaherty. In
California, it sent mailings into the district of Democratic
Rep. George Brown accusing him of being sexist and anti-
consumer. The Consumer Federation of America, cited as the
source in one flier although it endorsed Brown, denounced the
mailing as ``extremely misleading and grossly unfair.'' In
Montana, the group bought television time calling Democratic
congressional candidate Bill Yellowtail a convicted criminal
who ``preaches family values . . . but took a swing at his
wife.''
Another new group called Citizens for the Republic
Educaiton Fund obtained at least $1 million in late ads,
according to director Lyn Nofziger, longtime political aide
to Ronald Reagan. In Texas, it bought television ads against
Democratic congressional candidate Nick Lampson that said he
had been
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accused of Medicare fraud. In Erie, Pa., another television
ad denounced ``big labor bosses'' for trying to buy ``a
Congress they can control.''
Some ads were so inflammatory that the Republican
candidates they were designed to help denounced them. And
some stations would not run some ads or pulled them off the
air after complaints by Democratic candidates. Leaders of the
groups targeting Democrats say they operated independently
and they and GOP officials said the groups were not fronts
for the party.
Nofziger called it, ``outrageous'' that advocacy groups
like his are allowed to ``go and run political ads and call
them education.'' He added, ``We wouldn't have had to do it
if it had not been for labor'' and its attacks on GOP
candidates.
The Flaherty and Nofziger groups were run by a Washington-
based firm, Triad Management, that advertises itself as sort
of an underground version of the Republican Party. A Triad
marketing video includes testimonials from Sen. Don Nickles
(R-Okla.) and several House members aimed at recruiting
donors for what the video labels a ``privatized Republican
national coalition.''
Triad's Carolyn Malenick, a former fund-raiser for Oliver
L. North, says on the video that labor has always been the
``rapid fire'' of the Democratic Party. ``If the Republican
Party needs that quote `rapid fire' where're we going to find
it?'' she said. ``If we need to move or have $100,000 put
into a congressional race tomorrow where're we going to find
it?'' Malenick declined to be interviewed.
Mark Braden, Triad's attorney, said the group was not a
front for the GOP or a particular special interest, like the
tobacco industry. Malenick's donors are mostly individuals
from ``ideologically driven networks,'' he said.
While most of the late negative issue ads with mysterious
sponsors targeted Democratic races, a labor-funded group, the
'96 Project, paid for voter guides mailed in the name of
other groups in 14 races. The project paid $50,000 for
mailings in six House districts where the fliers said they
were ``sponsored'' by local or state affiliates of the
National Council of Senior Citizens, a group made up
predominantly of retired union members. There was no mention
of the '96 Project in the mailings.
Scott Wolf, director of the project, said there was no
intent to deceive the public on who was behind the mailings,
which made GOP candidates look unfavorable on key issues.
His group also paid for mailings in eight races
``sponsored'' by the Interfaith Alliance, a group of
ministers formed as an alternative to the Christian
Coalition, according to the alliance's Greg Lebel. Lebel said
``it never occurred to us'' voters might be misled because
the eight mailings said only that the '96 Project
``prepared'' the voter guides.
Most of the late money from obscure groups was spent on
television. And Federal Communications Commission officials
who monitor political advertising say their authority over
broadcasters is limited. Charles Kelley, chief of enforcement
for the FCC's mass media bureau, said the agency wants to
know ``who is the attempted persuader'' in such ads. The
question, he said, is ``what legal authority we have, if any,
to obligate the true sponsor to step forward.''
The FCC managed to do that in a case in Oregon last fall,
when it discovered that a group calling itself Fairness
Matters to Oregonians was being financed by the Tobacco
Institute. The FCC ruled the group's ads, which opposed an
increase in the state cigarette tax, could be aired but the
tobacco Institute had to be identified as the sponsor.
Various campaign reform proposals in Congress attempt to
address the late attacks by saying the name or image of
candidates cannot be mentioned in ads in the last 60 days
before the general election. But many lawmakers and interest
groups say such proposals would put unconstitutional limits
on their First Amendment rights.
Flaherty, who also heads the Conservative Campaign Fund
PAC, said concerns about sponsorship are misplaced. ``Most
people when they see an ad don't focus on who put it on, but
focus on the message,'' he said. ``If the message has
strength and credibility it will persuade people. If it
doesn't, it won't.'' In applying for tax-exempt status, which
allowed it to avoid paying taxes on investment income,
Citizens for Reform told the IRS it had no plans to spend
money ``attempting to influence'' elections. But asked
whether the groups' advertising had been effective, Flaherty
said, ``I think we made a big difference. It was an absolute
onslaught in some of these areas by labor and liberal groups
and I think we helped stanch the bleeding artery.''
Perhaps the most peculiar of the late ad campaigns was the
one run in the name of the Coalition for our Children's
Future, which spent money in six House districts, the
Louisiana Senate race and 12 Minnesota legislative races,
according to Executive Director Barry Bennett.
Two directors, Dirk Van Dongen, president of the National
Association of Wholesaler-Distributors, and Donald L. Fierce,
a GOP consultant and former Republican National Committee
aide, resigned in protest; two others, Steelman and Gary
Andres, had left the board earlier.
How the unauthorized advertising campaign was launched and
how races were targeted remains murky. Bennett, working in
Ohio at the time of the election as chief of staff to then-
Rep. Frank A. Cremeans (R), at first said he did not know of
any extensive late advertising. Then he acknowledged he had
signed the secrecy agreement with the donor and signed blank
checks to pay a Houston political consultant who ran the
advertising campaign. Bennett said he did so without telling
board members.
Bennett and the group's fund-raising consultant, John
Simms, said the consultant, Denis Calabrese, approached them
last summer and helped connect them with some donors, who
they declined to identify. Calabrese, who has worked on
industry's side to make it harder to win large damage awards
in lawsuits, did not return numerous phone calls.
Bennett said he had tried without success, after the Post
inquiries, to obtain copies of the television scripts from
Simms' firm. He said he had no idea what the coalition,
organized to address federal issues, was doing in Minnesota
statehouse races.
``Am I embarrassed by this?'' Bennett said before he
stopped returning phone calls. ``Yes . . . I understand we've
created a huge mystery here and that's our fault.''
Mr. WARNER addressed the Chair.
The PRESIDING OFFICER (Mr. Allard). The Senator from Virginia.
Mr. WARNER. Mr. President, there are others anxious to speak to this.
I see Senator Hatch is here, and I want to, just in reply to my
distinguished friend and colleague, say a few words here, and then
Senator Hatch, hopefully, will take the floor momentarily.
First, I want to make it very clear, I am not going to personalize
this debate in any way or use the word ``pandering.'' Nobody is
pandering anybody around here. What we are trying to do is how to get
as quickly as possible to the point where the U.S. Senate, in several
committees, can start looking into this very important issue, hopefully
in a fair and objective manner, for the best interests of this
institution and our country.
I have been in politics--I am almost hesitant to mention how many
years--but it is a good 40-plus, and I have never in my lifetime ever
seen a situation engulfing this great Nation, casting more doubt in the
minds of the voters with regard to how we, those who serve in the
Congress and those who serve in the executive branch as the President
and Vice President, go about the process of elections, and we have to
get at the bottom of this thing as quickly as possible.
I have indicated my support for Chairman Fred Thompson as a man I
have absolute faith in, who can deal with this matter fairly and
objectively, and I have said that for weeks. Never once have I
deviated, and I do not think there will ever be a basis that I shall
deviate. I said from the beginning that I want to support him as an
individual. I want to support the work of his committee. But there is a
very careful delineation of responsibilities here among the several
committees, and there is clearly, within the jurisdiction of the Rules
Committee, which I am privileged to chair, the right to superimpose our
own judgment on the scope and activities of the other committees of the
Senate as it relates to those funds under our jurisdiction.
This is in no way any bald-faced effort by myself or other members of
the Rules Committee, particularly the distinguished majority leader,
who was just on the floor consulting with me minutes ago, no way to try
to do other than what I have just said, which is to get the Senate on
the track as quickly as possible. We just have to get beyond all of
this procedure business and get on with the business.
I said that I drew this scope language, drawing from the Watergate. I
never said I used it. I have read it now probably 25 times and studied
the history of it. I know all the words that are in it. It is
interesting. In the Watergate resolution, I ask my friend, if he wants
to debate it later on, whether or not you find any authority in there
to investigate the Congress. I do not find it in the Watergate
resolution, but it is very clearly expressed in this resolution as
adopted by the Rules Committee. We in no way tried to obfuscate that
issue.
This volume is the ``Authority and Rules of Senate Committees'' for
the last fiscal year, but it is applicable to this. I would like to
just read the question of jurisdiction of the Rules Committee, and it
is found on page 155 of that book. It states we have the authority to
investigate ``corrupt practices.''
Now that is about as broad as any charter can be--as broad as any
charter can be. Then go to section 5:
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Federal elections generally, including the election of the
President, Vice President, and Members of the Congress.
There it is. That is the jurisdiction of the Rules Committee.
Now go over to the jurisdiction of the Governmental Affairs
Committee--and I urge my colleague from Ohio to take a moment or two to
look through this book so that he can reply--found on page 101, and in
detail on page 102, where it says, the committee is duly authorized, or
a subcommittee thereof is authorized to study and investigate.
You do not find--at least I haven't thus far in studying it--that
precise language as it relates to the Rules Committee concerning
jurisdiction over precisely what it is that the U.S. Senate must
investigate. If anything, this volume gives clearly the authority to
the Rules Committee, and I find less specificity as it relates to the
Governmental Affairs Committee.
Lastly, as to campaign finance reform, the generic subject, the Rules
Committee held a number of hearings last year. We already commenced our
series of hearings this year. The distinguished majority leader
designated the majority whip, Mr. Nickles, and a group of us, including
the Senator from Virginia speaking, and it is our responsibility to try
to come up with a grouping of proposals which we have reason to believe
will effect the greatest possible reform in this generic subject of
campaign finance reform.
You bet there are areas which I would like to see changed. In my last
campaign, I experienced spending by my opponent--and I do not castigate
him in any way at this point in time, nor did I ever--but clearly he
had the authority under the Supreme Court decision to spend all the
money of his personal funds he wished. He set a record in the history
of the U.S. Senate races from the first day this body was constituted
through and including today for the greatest amount of money spent for
a State per capita in the United States.
I think we should enact some legislation that would curtail, in some
manner, the limit of an individual to expend millions and millions and
millions of dollars. In the case of my race, it is presumably in
excess, it was reported, $10 million out of personal spending. Maybe
subsequent records will show an additional amount, but that is not here
to argue. The point being, the only way that can be done is by a
constitutional amendment. I would not want to see this body rest its
entire package of reforms that a constitutional amendment is going to
be adopted in this area of campaign finance reform.
My own personal opinion, it is highly unlikely that such an
amendment, even though I would favor certain types of constitutional
amendments on campaign reform, that that can be achieved; essentially,
the first amendment, which, again, would require a constitutional
amendment. There are many areas of campaign finance reform that would
be solely predicated on the ability to get a constitutional amendment
in order to achieve those goals.
I would not want to see this body pass a package of campaign finance
reform proposals knowing full well in our hearts that the Federal court
is going to strike down in large measure a number of those provisions.
So I look forward to continuing to work with the distinguished
majority leader and the majority whip in seeing what we can come up
with in a package of campaign finance reform proposals which can be
adopted by this body and, Mr. President, can withstand the essential
scrutiny that will come about by the third branch of Government,
namely, the Federal court system.
Mr. President, I now yield the floor.
Mr. HATCH addressed the Chair.
The PRESIDING OFFICER. The Senator from Utah.
Mr. HATCH. Mr. President, it befalls me to make a few comments here
today concerning why this investigation is so important. Before I do, I
want to compliment the Rules Committee and the people on the Rules
Committee who have handled this very difficult subject matter and have
done it in a credible and responsible way.
I also personally believe that no two people could handle this matter
better than the chairman and ranking member of the Governmental Affairs
Committee. Senator Thompson has had extensive experience in these
matters and Senator Glenn is known as an eminently fair and worthy
person here in this body. I have total confidence in both of them that
they will be fair, they will be thorough, they will be tough, and they
will do what is right.
We simply have to get to the bottom of this. The American people are
concerned about it. Certainly the media has written extensively about
these matters. It is incumbent upon the Senate in its oversight
capacity to investigate these matters fairly and thoroughly.
As we take up Senate Resolution 39 today, I would like to just take a
few minutes to emphasize one major point: That there is a serious
number of very, very troubling matters to investigate, simply at the
very core of Senators Thompson's and Glenn's inquiry.
Merely in recent press reports--if that is all you had--there are
very substantial and troubling questions that must be answered
regarding whether foreign money and foreign influence has infiltrated
the American political process. While numerous other allegations of
improper fundraising at the White House and by the White House have
surfaced in the media in the past week or so, that is not what I want
to talk about today.
Even putting aside all of those allegations, the fact is that we have
before us very serious allegations that China funneled funds into
American elections in an attempt to influence American policy and
policymakers. The gravity of these allegations should not and must not
be underestimated. Were our national interests sold out? I hope they
were not. But this matter must be pursued, and it must be done in a
thorough, fair, and honest manner.
Later this week the Judiciary Committee will forward a letter to the
Attorney General requesting that she apply for an independent counsel.
To date, she has refused to do so in this matter. I do not read
anything sinister into that--I believe that the Attorney General is an
honorable, ethical person of integrity. She has applied for the
appointment of no less than four independent counsels since she has
been Attorney General. I think she has shown that she is a person who
can act. But to date she has refused to act on this matter.
Accordingly, Congress must be all the more vigilant. And given the
apparent conflict of interest, the public will be relying on Congress
to ascertain the facts and get to the bottom of this whole affair.
The Governmental Affairs Committee inquiry into fundraising
improprieties is, in my opinion, one of the most important
congressional investigations in history and involves some of the most
serious allegations we have seen to date about our electoral system and
our Government. The press and congressional committees have uncovered
material facts that prompt numerous questions:
First, did a foreign government try to influence our national
elections and our domestic and/or foreign policy?
No. 2, were millions of dollars of foreign money laundered through
various groups to the Democratic National Committee, particularly by
three individuals--Charlie Trie, Johnny Chung, and John Huang, all of
whom have some ties to China.
No. 3, were there violations of any of our existing laws, such as the
Hatch Act, the Ethics in Government Act, and our current Federal
elections laws?
The breadth of this particular investigation is immense. We cannot
allow ourselves, in an attempt to satisfy the tendentious cause for a
broad inquiry into congressional campaigns, to interfere with what is a
serious matter.
Investigating the 1996 Presidential campaign alone will require a
very substantial budget and a substantial amount of time--I presume
even more time than the Rules Committee has allowed in this instance,
which is only until the end of this year or approximately 8 months. I
suspect this will go on beyond that and will have to go on beyond that
because of what will be brought out. Let us focus for a moment,
however, in terms of the breadth of this investigation, on one
individual--Mr. John Huang. He was born in China. He worked for the
Lippo Group, a huge conglomerate based in Indonesia with large business
interests in China. Lippo is owned and controlled by the Riady family--
Mochtar, James, and Stephen. These are also Chinese natives.
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By 1994, Huang was the top Lippo executive in the United States.
Huang was appointed Deputy Assistant Secretary for International
Economic Policy in our Department of Commerce in September 1994.
Let me just go down through what John Huang did while employed at
Commerce--just a quick glance. He was, according to reports, given a
top security clearance without the usual background check, which is all
but unheard of; 78-plus visits to the White House; 70-plus calls to
Lippo during this period of time; 39 classified top secret briefings
dwelling on China and other countries in Asia; 30-plus phone
conversations with Mark Middleton or associates; 9 phone messages from
or calls to Webster Hubbell; 9 phone messages from the Chinese Embassy
officials; 5 months of top secret clearance before joining the Commerce
Department. In other words, even before he got in this very important
position in Government, he had 5 months of top secret clearance. Why?
That is a question that is going to be a big question in this matter.
Huang enjoyed a top secret clearance for 5 months of top secret
clearance before joining Commerce and nearly a year after leaving
Commerce to join the Democratic National Committee. Why? Why would
those security clearances go with him outside of Government? Why would
he be permitted this kind of access to very sensitive information?
These are questions that are very important. Taken with the $780,000
severance pay Huang received from Lippo prior to joining the Commerce
Department, these facts naturally raise questions.
This next chart involves a meeting at the White House to discuss the
Huang transfer from the White House to the Democratic National
Committee on September 13, 1995. It was an Oval Office meeting. The
President was there. James Riady, the Lippo executive was there. Bruce
Lindsey, the Deputy White House Counsel, was there. Joseph Giroir, who
is, I believe, the former top partner in the Rose Law Firm, the Lippo
joint venture partner/adviser, former Rose Law Firm partner, and, if I
recall correctly, was the managing partner of that firm, and none other
than John Huang, former Lippo executive, Principal Deputy Assistant,
Secretary of Commerce.
At this meeting, it was decided that John Huang would move from the
Commerce Department to the Democratic National Committee as vice
chairman of finance.
We do not know what happened at this meeting, although some extremely
troubling explanations have been reported by the media. Each one of
these people, it seems to me, with the possible exception of the
President, will have to be questioned regarding just what went on at
that meeting, why Huang left Commerce, and why he was immediately
transferred to the Democratic National Committee as the finance vice
chairman, why James Riady, was even at this meeting. That is a very
important meeting.
Let me put another chart up here.
This is John Huang at the Democratic National Committee. These are
examples of illegal funds raised by Huang. The Wiriadinatas raised
$450,000, all of which was returned by the DNC. Pauline Kanchanalak,
$250,000. She has since left the country. She is now in Thailand. All
funds returned by the DNC. Wogesh Gandhi, $250,000. He testified he had
no assets. All funds returned by the DNC, the Democratic National
Committee.
Cheong Am America--or John H.K. Lee--$250,000. Like Kanchanalak and
others, Cheong Am America--or John H.K. Lee--has disappeared. All of
these funds were returned by the Democratic National Committee. Hsi Lai
Buddhist Temple, $166,750: This comes from a temple where the residents
take a vow of poverty; $74,000 of the $166,750 was returned by the DNC.
All together, that we know of, John Huang raised $3.4 million, $1.6
million of which has been returned by the Democratic National
Committee.
These are just a few of some of the problems that I think the
Governmental Affairs Committee is going to have to go into. I do not
see how they can avoid doing it. To give a picture of some of the
people who seem to be involved in this, let me just highlight some of
the other individuals involved in this affair.
We start with John Huang, former top Lippo executive in the United
States, who had a $780,000 severance package when he went to Congress.
He had multiple contacts while there with Lippo.
The former Democratic National Committee vice chairman raised more
than $3.4 million, $1.6 million was returned, and he visited the White
House during this period more than 75 times. C.J. Giroir, in the Lippo
joint ventures, former Rose Law Firm attorney, met with James Riady,
President Clinton, and Lindsey on the Huang move to DNC, and donated
$25,000 to the DNC. Mark Middleton, former White House aide from Little
Rock, met with James Riady and President Clinton on that occasion, Far
East business interests, had unlimited access to the White House after
his departure.
Charles Trie, Little Rock restauranteur, received a $60,000 loan from
Lippo, and he arranged with the former Lippo executive Antonio Pan to
get a Hong Kong dinner for Ron Brown. Trie also attempted to give
$600,000 to the Clinton legal trust fund, and he visited the White
House at least 37 times.
Mark Grobmyer, Little Rock attorney, close friend of President
Clinton, consultant to Lippo, Far East business interests, met with
James Riady, Huang and President Clinton. Soraya Wiriadinata, daughter
of Hashin Ning, former Lippo executive, contributed $450,000 to the
DNC, and it was all returned, according to the committee. Soraya has
gone back to Indonesia.
S. Wang Jun, Lippo joint ventures, Chinese arms merchant, senior
executive at CITIC and COSTIND, Chinese Government entities, and
attended a White House conference. Webster Hubbell, former Associate
Attorney General, received a $250,000 consulting fee from Lippo--would
not say why he got that.
Charles DeQueljoe is the president of Lippo Securities in Jakarta,
gave $70,000 to the Democratic National Committee and was appointed to
the USTR office. Pauline Kanchanalak, a Thai lobbyist who worked with
Huang when he was at Lippo, contributed $253,000 to the DNC, and it was
all returned. She had frequent contacts with Huang. She visited the
White House at least 26 times. And then we come back to John Huang
himself.
Now, all of these people are going to have to be interviewed. We are
going to have to find out what the facts are here. What was going on?
Were there illegalities?
In that regard, these are key players who have taken the fifth
amendment: John Huang, Charlie Trie, Pauline Kanchanalak, Mark
Middleton, and Webster Hubbell. I do not see how anybody on the other
side of the floor can argue that this set of hearings should not go on,
or that this would not take almost every second of any committee's
time, and I am only talking about one aspect of it. There are many
other aspects to this.
The key players who have left the country--and we have not been given
reasons why they left the country--are John H.K. Lee--gone. If he is
going to be interviewed, it is overseas. Charlie Trie, gone, after
taking the fifth. Pauline Kanchanalak, gone--as far as I know, back in
Thailand, after having taken the fifth amendment. Arief and Soraya
Wiriadinata, gone. Charles DeQueljoe, gone. And James and Mochtar
Riady, gone. They left the country.
All this is a brief discussion of one aspect of this. There are other
aspects of this, but this is a brief glimpse into some of the serious
allegations the Government Oversight Committee will have to look into.
I emphasize the point with which I opened, just that at the core of
this investigation is a vast series of matters which must be looked
into. This will be one of the most important congressional
investigations in history. I hope it is not obstructed by partisan
tactics and politics. I hope with all my heart it is not. I think the
American people expect as much.
When I found out over the weekend that the FBI--and I did not know
this before--had notified seven Members of Congress that they might be
receiving laundered funds from a foreign country, mainly China, I was
kind of shocked at that, because if they informed those seven Members
of Congress, surely the FBI informed the White House. I have been led
to believe by the FBI they informed the National Security Council. That
being the case,
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why are all these people having such access to our White House under
those circumstances? As chairman of the Judiciary Committee, as
chairman of the committee that oversees the Justice Department and the
FBI, naturally, I have to be concerned about it.
Now, in addition to all of this, there are newer revelations coming
out every day. I challenge the Government Affairs Committee to
substantiate these allegations, to look into them.
Let me just list some of the new revelations about the campaign
finance scandals that were first reported after the Governmental
Affairs Committee made a request of $6.5 million to investigate the
scandal.
First, Deputy Chief of Staff Harold Ickes made a telephone call from
Air Force One to warn of the wiring of the money to the Democratic
National Committee and additional funds to nonprofit organizations.
There is some indication they used Air Force One for the purpose of
raising funds. I hope that is not the case.
Second, questions have been raised concerning whether the White House
database was created for official--as opposed to political--purposes,
since it contained individuals' Social Security numbers, nicknames,
relations to the First Family, pet political issues, and sometimes a
photograph.
Third, China may have sought to influence U.S. policy through the
direction of foreign campaign contributions to the Democratic National
Committee and actions taken at the Chinese embassy. It has been
disclosed that Huang had contacts with the embassy while he worked at
Commerce.
Fourth, the NSC, National Security Council, at the White House
provided the White House with warnings about Johnny Chung, who has ties
to the Chinese Government, who was nonetheless subsequently granted
access to the White House on numerous occasions, even though they knew
about those ties.
Fifth, Huang approached two business associates and offered to pay
them $45,000 if they would take $250,000 from him and donate it in
their own names to the Democratic National Committee. That is illegal.
Sixth, the White House fired four staff members whose salaries were
being paid by the Democratic National Committee while they were working
at the White House. I don't know whether that has ever been done
before, but it should not be done.
There are other allegat
