[Congressional Record Volume 143, Number 113 (Tuesday, September 2, 1997)]
[Senate]
[Pages S8643-S8646]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                        CAMPAIGN FINANCE REFORM

  Mr. SPECTER. Madam President, in the absence of any other Senator on 
the floor, I will utilize this time to comment on the subject of 
campaign finance reform. I stated earlier that in my travels through 
Pennsylvania during part of the month of August, I heard considerable 
concern about the necessity for campaign finance reform, and I had 
commented about the overtone throughout my open house town meetings 
about people of my State being very suspicious of Government, very 
distrustful of Government. One of those items was Ruby Ridge, and I 
spoke at some length about that. Another item was the subject of 
campaign finance reform, where I have found very considerable interest, 
disagreeing with some of the pundits and some of the public comments.

[[Page S8644]]

  It is my hope, Madam President, that the hearings before the 
Governmental Affairs Committee, on which you and I sit, will stimulate 
an interest in campaign finance reform. I have said with some frequency 
in the past that I do not believe we will have campaign finance reform 
until the American people demand it. It is contrary to the interests of 
incumbents to have campaign finance reform. This is a matter of 
considerable disagreement within this body, and I respect the views of 
our colleagues who have disagreed. But I do believe that we are awash 
in money. After 6 months of investigation and after 4 weeks of hearings 
by our Governmental Affairs Committee during the month of July, it 
confirms my conclusion and the view of most Americans that campaign 
finance reform is necessary.
  Politics is awash in money, corrupting some, appearing to corrupt 
others, and making almost everybody in or out of the system uneasy 
about the way political campaigns are financed. I compliment our 
colleagues, John McCain and Russ Feingold, for providing leadership on 
campaign finance reform in Senate bill 25. I believe that the key 
provision there, which would give candidates free television 
advertising time, does not measure up to the constitutional standard of 
the fifth amendment on taking property without due process of law. I 
recognize the contention that the airwaves belong to the American 
people. But in the context where television stations and networks have 
operated, I do not see how you can square, constitutionally, the taking 
of that property without compensation.
  I voted last year for cloture, to bring the issue to the floor so we 
can debate it, consider it, and it would be my hope that it would be 
brought to the floor in the month of September. I am aware of the 
public statements made by Senator McCain and others that it may be 
brought and attached to other bills. So we will wait to see if that 
does occur.
  My intention is to offer my own bill on campaign finance. I am in the 
final stages of the drafting of the bill and the floor statement. It 
would target some of the specific abuses and would expand upon what any 
other legislation has done in terms of what we have found from our 
Governmental Affairs investigation.
  My own sense is that the evidence is conclusive that soft money ought 
to be eliminated. When you take a look at the millions of dollars which 
have been poured into the American electoral system, including 
corporate contributions on soft money, it has just totally distorted 
the Presidential campaigns--and also congressional campaigns--as that 
money moves in and out in a variety of contours. But we have public 
financing of Presidential elections. That public financing has been 
undertaken on the basis that there will not be private financing. But 
somehow soft money is not deemed to be a contribution, so says the 
Department of Justice of the United States in an inexplicable 
interpretation--inexplicable, in my opinion. And then according to the 
reports of both Dick Morris and former chief of staff Leon Panetta, the 
President of the United States edited and wrote Democratic National 
Committee campaign commercials. That, obviously, is coordination.
  There is a constitutional rule that an independent expenditure, 
constitutionally may not be limited by a statute. But here you have the 
President taking money from the Democratic National Committee that was 
raised as soft. And, when I talk about the President, the same thing is 
done on the Republican side. So that I think there is bipartisan blame 
here.
  The specific evidence has been forwarded as to what President 
Clinton's personal involvement was. And there are these commercials. 
They extol the virtues of one candidate, and they criticize the other 
candidate. And for some reason they are not classified as being 
advocacy commercials but only issue commercials.
  I ask unanimous consent to include illustrations of these commercials 
on a letter that I wrote to Attorney General Reno dated May 1, 1997, 
her response, and also the response of the Federal Election Commission 
on this subject.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                                     U.S., Senate,


                                   Committee on the Judiciary,

                                      Washington, DC, May 1, 1997.
     Hon. Janet Reno,
     Attorney General,
     Department of Justice, Washington, DC.
       Dear Attorney General Reno: Following up on yesterday's 
     hearing, please respond for the record whether, in your legal 
     judgment, the text of the television commercials, set forth 
     below, constitutes ``issue advocacy'' or ``express 
     advocacy.''
       The Federal Election Commission defines ``express 
     advocacy'' as follows:
       ``Communications using phrases such as `vote for 
     President,' `reelect your Congressman,' `Smith for Congress,' 
     or language which, when taken as a whole and with limited 
     reference to external events, can have no other reasonable 
     meaning than to urge the election or defeat of a clearly 
     identified federal candidate.'' 11 CFR 100.22
       The text of the television commercials follows:
       ``American values. Do our duty to our parents. President 
     Clinton protects Medicare. The Dole/Gingrich budget tried to 
     cut Medicare $270 billion. Protect families. President 
     Clinton cut taxes for millions of working families. The Dole/
     Gingrich budget tried to raise taxes on eight million of 
     them. Opportunity. President Clinton proposes tax breaks for 
     tuition. The Dole/Gingrich budget tried to slash college 
     scholarships. Only President Clinton's plan meets our 
     challenges, protects our values.
       ``60,000 felons and fugitives tried to buy handguns--but 
     couldn't--because President Clinton passed the Brady Bill--
     five-day waits, background checks. But Dole and Gingrich 
     voted no. One hundred thousand new police--because President 
     Clinton delivered. Dole and Gingrich? Vote no, want to repeal 
     `em. Strengthen school anti-drug programs. President Clinton 
     did it. Dole and Gingrich? No again. Their old ways don't 
     work. President Clinton's plan. The new way. Meeting our 
     challenges, protecting our values.
       ``America's values. Head Start. Student loans. Toxic 
     cleanup. Extra police. Protected in the budget agreement; the 
     president stood firm. Dole, Gingrich's latest plan includes 
     tax hikes on working families. Up to 18 million children face 
     healthcare cuts. Medicare slashed $167 billion. Then Dole 
     resigns, leaving behind gridlock he and Gingrich created. The 
     president's plan: Politics must wait. Balance the budget, 
     reform welfare, protect our values.
       ``Head Start. Student loans. Toxic cleanup. Extra police. 
     Anti-drug programs. Dole, Gingrich wanted them cut. Now 
     they're safe. Protected in the '96 budget--because the 
     President stood firm. Dole, Gingrich? Deadlock. Gridlock. 
     Shutdowns. The president's plan? Finish the job, balance the 
     budget. Reform welfare. Cut taxes. Protect Medicare. 
     President Clinton says get it done. Meet our challenges. 
     Protect our values.
       ``The president says give every child a chance for college 
     with a tax cut that gives $1,500 a year for two years, making 
     most community colleges free, all colleges more affordable . 
     . . And for adults, a chance to learn, find a better job. The 
     president's tuition tax cut plan.
       ``Protecting families. For millions of working families, 
     President Clinton cut taxes. The Dole-Gingrich budget tried 
     to raise taxes on eight million. The Dole-Gingrich budget 
     would have slashed Medicare $270 billion. Cut college 
     scholarships. The president defended our values. Protected 
     Medicare. And now, a tax cut of $1,500 a year for the first 
     two years of college. Most community colleges free. Help 
     adults go back to school. The president's plan protects our 
     values.''
           Sincerely,
     Arlen Specter.
                                  ____



                               Office of the Attorney General,

                                    Washington, DC, June 19, 1997.
     Hon. Arlen Specter,
     U.S. Senate,
     Washington, DC.
       Dear Senator Specter: I have received your letter of May 1, 
     1997, asking that I offer you my legal opinion as to whether 
     the text of certain television commercials constitutes 
     ``express advocacy'' within the meaning of regulations of the 
     Federal Election Commission (``FEC''). For the reasons set 
     forth below, I have referred your request to the FEC for its 
     consideration and response.
       Under the Federal Election Campaign Act, the FEC has 
     statutory authority to ``administer, seek to obtain 
     compliance with, and formulate policy with respect to'' FECA, 
     and exclusive jurisdiction with respect to civil enforcement 
     to FECA. 2 U.S.C. Sec. 437c(b)(1); see 2 U.S.C. Sec. 437d(e) 
     (FEC civil action is ``exclusive civil remedy'' for enforcing 
     FECA). The FEC has the power to issue rules and advisory 
     opinions interpreting the provisions of FECA. 2 U.S.C. 
     Sec. Sec. 437f, 438. The FEC may penalize violations of FECA 
     administratively or through bringing civil actions. 2 U.S.C. 
     Sec. 437g. In short, ``Congress has vested the Commission 
     with `primary and substantial responsibility for 
     administering and enforcing the Act.''' FEC v. Democratic 
     Senatorial Campaign Comm., 454 U.S. 27, 37 (1981), quoting 
     Buckley v. Valeo, 424 U.S. 1, 109 (1976).
       The legal opinion that you seek is one that is particularly 
     within the competence of the FEC, and not one which has 
     historically been made by the Department of Justice. 
     Determining whether these advertisements constitute ``express 
     advocacy'' under the FEC's rules will require consideration 
     not only of

[[Page S8645]]

     their content but also of the timing and circumstances under 
     which they were distributed. The FEC has considerably more 
     experience than the Department in making such evaluations. 
     Moreover, your request involves interpretation of a rule 
     promulgated by the FEC itself. Indeed, it is the standard 
     practice of the Department to defer to the FEC in 
     interpreting its regulations.
       There is particular reason to defer to the expertise of the 
     FEC in this matter, because the issue is not as clear-cut as 
     you suggest. In FEC v. Colorado Republican Federal Campaign 
     Comm., 839 F. Supp. 1448 (D. Colo. 1993), rev'd on other 
     grounds, 59 F.3d 1015 (10th Cir. 1995), vacated, 116 S.Ct. 
     2309 (1996), the United States District Court held that the 
     following advertisement, run in Colorado by the state 
     Republican Federal Campaign Committee, did not constitute 
     ``express advocacy'':
       ``Here in Colorado we're used to politicians who let you 
     know where they stand, and I thought we could count on Tim 
     Wirth to do the same. But the last few weeks have been a real 
     eye-opener. I just saw some ads where Tim Wirth said he's for 
     a strong defense and a balanced budget. But according to his 
     record, Tim Wirth voted against every new weapon system in 
     the last five years. And he voted against the balanced budget 
     amendment.
       ``Tim Wirth has a right to run for the Senate, but he 
     doesn't have a right to change the facts.''
       839 F. Supp. at 1451, 1455-56. The court held that the 
     ``express advocacy'' test requires that an advertisement ``in 
     express terms advocate the election or defeat of a 
     candidate.'' Id. at 1456. The Court of Appeals reversed the 
     District Court on other grounds, holding that ``express 
     advocacy'' was not the appropriate test, and the Supreme 
     Court did not reach the issue.
       Furthermore, a pending matter before the Supreme Court may 
     assist in the legal resolution of some of these issues; the 
     Solicitor General has recently filed a petition for 
     certiorari on behalf of the FEC in the case of Federal 
     Election Commission v. Maine Right to Life Committee, Inc., 
     No. 96-1818, filed May 15, 1997. I have enclosed a copy of 
     the petition for your information. It discusses at some 
     length the current state of the law with respect to the 
     definition and application of the ``express advocacy'' 
     standard in the course of petitioning the Court to review the 
     restrictive definition of the standard adopted by the lower 
     courts in that case.
       It appears, therefore, that the proper legal status of 
     these advertisements under the regulations issued by the FEC 
     is a question that is most appropriate for initial review by 
     the FEC.
       Accordingly, I have referred your letter to the FEC for its 
     consideration. Thank you for your inquiry on this important 
     matter, and do not hesitate to contact me if I can be of any 
     further assistance.
           Sincerely,
     Janet Reno.
                                  ____

                                       U.S. Department of Justice,


                                            Criminal Division,

                                    Washington, DC, June 19, 1997.
     Hon. John Warren McGarry,
     Chairman, Federal Election Commission,
     Washington, DC.
       Dear Mr. Chairman: Enclosed for the attention and whatever 
     further reply the Federal Election Commission (FEC) finds to 
     be appropriate is a copy of an exchange of correspondence 
     between the Attorney General and Senator Arlen Specter of 
     Pennsylvania concerning the application of the Commission's 
     rules governing issue advocacy by political parties to a 
     specific advertisement. The Department of Justice regards the 
     subject matter of this inquiry as properly within the primary 
     jurisdiction of the FEC.
       If we can assist the Commission in any way in this matter, 
     please let me know.
           Sincerely,
                                                  Mark M. Richard,
                                Acting Assistant Attorney General.

  Mr. SPECTER. Madam President, that subject came up in Judiciary 
Committee oversight with the Attorney General testifying the day 
before, on April 30, where the commercials extol one candidate, 
criticize another, and, yet, are not considered to be advocacy 
commercials.
  The first point of the legislation which I am preparing would end 
soft money.
  The second point would define express advocacy to enforce the intent 
of the Federal election laws to prevent coordinated campaigns and to 
say where a commercial praises a named candidate or criticizes a named 
candidate, that that does constitute express advocacy.
  The third provision on legislation that I am preparing would require 
affidavits on so-called independent expenditures. In Buckley versus 
Valeo, the Supreme Court of the United States said that as a matter of 
constitutional law Congress could not limit what an individual wanted 
to spend on the campaign--for example, Senator X or Presidential 
candidate Y--if they were truly independent. But the reality of many of 
these independent expenditures, if not most, is that they are not 
independent at all.
  After surveying the scene and thinking about it, my legislation would 
require an affidavit to be taken by the individual who is making the 
independent expenditure, or the head of the committee making 
independent expenditure, that the expenditure is truly independent. If 
someone sits down and reads an affidavit, takes an oath and understands 
that person is subject to the penalties of perjury, there may be a 
little more credibility or more attention paid to what is said. If you 
go to jail for 5 years, that may make someone pause on a representation 
that an expenditure is independent.
  Then my legislation would provide 48 hours after that affidavit is 
filed, the individual making the independent expenditure would have 24 
hours to file the affidavit, and then within 48 hours file the 
affidavit with the Federal Election Commission. And then within 48 
hours the Federal Election Commission would give that affidavit to the 
campaign on whose behalf the expenditure was made. And then the 
candidate and the campaign treasury would have to take an affidavit 
that the expenditure in question is truly independent. If people are 
prepared to take affidavits, both the person making the expenditure and 
the person committing on whose behalf the expenditure is made, we might 
see some independent expenditures which are truly independent.
  The fourth provision in the bill, which I intend to offer and 
hopefully becomes statute, would eliminate foreign transactions which 
funnel money into the U.S. campaigns. This would be along the line of--
we heard the testimony as to what happened in the famous transaction 
where the former Republican National Chairman, Mr. Haley Barbour, 
testified. There, if you collapse the transaction, money did come from 
a foreign source into the Republican National Committee. I think that 
Mr. Barbour got bad advice as to what was going on there, and details 
of that evidence show that when advice of counsel was obtained that the 
transaction was lawful. It was on the condition that the money not go 
to a political committee. But, in fact, that is what happened. The 
attorney who received that letter, saying that the legitimacy of the 
transaction would depend upon the money not going to a political 
committee, testified at our Governmental Affairs Committee that he 
didn't notice that provision, even though a letter was to him, or read 
that provision. The letter was, in fact, going to someone else. So 
that, if we tighten up on that provision so that the transaction is 
viewed as a whole, those kinds of foreign contributions would be 
eliminated.
  A fifth provision of the legislation which I will propose would seek 
to deter massive spending of personal wealth which adopts a new standby 
financing framework similar to the one recently enacted in Maine, the 
State represented by our distinguished Presiding Officer at the moment.
  Buckley versus Valeo provides as a constitutional matter that an 
individual may spend as much of his or her money as he or she chooses. 
For many years, Senator Hollings and I have sought to have a 
constitutional amendment. That split decision by the Supreme Court of 
the United States, in my opinion, does not accurately state what is 
meant by ``freedom of speech.'' Freedom of speech does not give, in my 
judgment, the right of an individual to spend as much of his or her 
money as he or she may choose when the Supreme Court acknowledges at 
the same time that any other individual may be limited by what that 
individual may give to a Senator's campaign--$1,000 in the primary, or 
$1,000 in a general election.
  I personally was running against Senator Heinz for the U.S. Senate 
seat in 1976 on a campaign which started with a limitation as to how 
much money an individual could spend. For a State the size of 
Pennsylvania it was $35,000, which was close to my amassed wealth. I 
was prepared to spend it. In the middle of that campaign, on the end of 
January 1976, the Supreme Court of the United States said that an 
individual could spend as much of his or her money as he or she chose 
but that my brother, Morton Specter, who could have financed my 
campaign rather generously had he chosen to do so, and I think was 
prepared to do so, was limited to $1,000. Where were Morton Specter's 
constitutional rights for freedom

[[Page S8646]]

of speech contrasted with the rights of a candidate? But that is the 
constitutional law.
  But Maine has a very interesting way of handling excessive spending 
by providing matching funds to candidates when an opponent exceeds 
certain spending limits. I personally oppose public financing of 
Federal elections. But I think in a situation where a wealthy 
individual knew that a multimillion-dollar expenditure would be matched 
by the State, it would be a deterrence, and, in fact, the State would 
not have to put up that money. I think that provision is well worth 
considering.
  The final provision of the statute which I have in mind would subject 
contributions for legal defense funds to be reported. And our 
Governmental Affairs Committee has heard incredible testimony about 
moneys brought in by Mr. Yah Lin ``Charlie'' Trie, something in the 
neighborhood of $639,000. He brought it in to the trustees of the 
President's legal campaign fund. Those moneys were not subject to any 
reporting requirements. And an article, which appeared in yesterday's 
Philadelphia Inquirer, points out how these suspect funds were known, 
and that reporting was delayed.
  I ask unanimous consent that the text of this article be printed in 
the Congressional Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

            [From the Philadelphia, Inquirer, Sept. 1, 1997]

           Clinton and Wife Reportedly Knew of Suspect Funds


 Questionable donations to the Clinton defense fund were hidden until 
                    after the election, a paper says

       Los Angeles.--Trustees of President Clinton's legal defense 
     fund acted with the knowledge of the President and Hillary 
     Rodham Clinton in hiding $639,000 in contributions funneled 
     through Democratic fund-raiser Yah Lin ``Charlie'' Trie, the 
     Los Angeles Times reported yesterday.
       The trustees of the Presidential Legal Expense Trust in 
     June 1996 used accounting measures that would allow them to 
     refund the money from a Taiwan-based religious sect Suma 
     Ching Hai, without reporting the transactions until after the 
     November election, the newspaper reported.
       A month earlier, the Times said, the trustees met to 
     discuss the contributions with six administration officials 
     including presidential aides Bruce Lindsey and Harold Ickes 
     and White House attorneys.
       The Clintons were informed last spring about the delivery 
     of Trie's checks, as well as the decision not to inform the 
     public, the Times reported.
       The trust--which was established in 1994 to raise money for 
     the Clinton's legal bills from Whitewater investigations and 
     a sexual harassment suit brought by Paula Corbin Jones--is 
     supported to operate independent of political influence.
       When the donations and refunds were revealed in December, 
     the defense funds and the White House said trustees needed 
     nine months to scrutinize the contributions.
       However, confidential congressional records, defense-fund 
     papers and meeting notes show an effort by the White House to 
     deal with the issue months earlier, the Times reported.
       White House special counsel Lanny Davis said there was no 
     attempt to withhold information about Trie's activities. And 
     the executive director of the trust, Michael Cardozo, said 
     its decisions were never influence by the White House or 
     steered by political motivations.
       Although the private trust is not subject to federal laws 
     governing political contributions, the Clintons imposed their 
     own rules, Individuals were limited to contributing $1,000 a 
     year, and foreigners, corporations, labor unions, political 
     organizations, lobbyists, and federal employees were 
     prohibited from making donations.
       Between March and May of last year, Trie made three trips 
     to the trust to deliver a total of $789,000 mostly in $1,000 
     and $500 checks and money orders. Some money was rejected 
     after some of the money orders were found to be in sequential 
     order and written in the same handwriting, the Times said, 
     and many contributors who appeared to be of Asian descent 
     shared the same surname.
       In May, a trust official told White House aides that the 
     Trie-related donors appeared to belong to Suma Ching Hai.
       Officials at the meeting were concerned about media 
     coverage of the origin of the donations, the Times reported. 
     Still, Davis insisted ``there was no discussion about whether 
     to disclose return of the checks or the effect of disclosure 
     on the election.''
       Trustees decided to return the money in June, settling on 
     two steps to keep the donations out of the public eye.
       First, the trust eliminated the line ``Less Ineligible 
     Contributions'' on the fund's public disclosure form released 
     last August. Notes taken by Ickes show a reference to ``Less 
     ineligibles,'' indicating the accounting procedure may have 
     been discussed as early as April 4.
       Second, if any sect members wanted to re-donate to the 
     legal fund, their names would not be disclosed until the next 
     reporting period---in early 1997, the Times reported.
  Mr. SPECTER. I thank the Chair.
  That, in a fairly abbreviated statement, Madam President, is the 
substance of legislation which I propose to offer.
  It is my hope that the hearings of the Governmental Affairs Committee 
will bring substantial public interest to this subject. I know that the 
Presiding Officer has cosponsored the McCain legislation, is very much 
in favor of campaign finance reform, and perhaps, if our hearings 
generate enough public interest, that kind of public demand will be 
created.
  It is worth noting that at an early stage in the Watergate hearings 
people were disinterested in campaign finance reform at that time. But 
as those hearings progressed more public interest was stimulated, and 
campaign finance reform was enacted in 1974. But I believe that this is 
very, very important if we are to bring back public confidence with 
what is done in Washington, DC.
  Madam President, in the absence of anyone on the floor seeking 
recognition, I again suggest the absence of quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. KYL. Madam President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.

                          ____________________