[Congressional Record Volume 147, Number 39 (Thursday, March 22, 2001)]
[Senate]
[Pages S2773-S2776]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. THOMPSON (for himself, Mr. Lieberman, Ms. Collins, Mr. 
        Leahy, and Mr. Jeffords):
  S. 600. A bill to amend the Federal Campaign Act of 1971 to enhance 
criminal penaltie for election law violations, to clarify current 
provisions of law regarding donations from foreign nationals, and for 
other purposes; to the Committee on Rules and Administration.
  Mr. THOMPSON. Mr. President, today Senator Lieberman and I are 
introducing a bill designed to clarify the existing criminal provisions 
of the Federal Election Campaign Act and strengthen their enforcement.
  Sen. Lieberman, myself, and the members of the Government Affairs 
Committee spent a year investigating some of the worst campaign finance 
abuses in our nation's history. Despite a number of obstacles, 
witnesses fleeing the country, people pleading the fifth amendment, 
entities failing to comply with subpoenas, our Committee uncovered 
numerous activities that were not only improper but illegal. But 
although we were able to demonstrate to the American people exactly 
what went on in the 1996 election, I was disappointed in the failure of 
the Justice Department to use that information to aggressively 
investigate and prosecute those that violated the law. After four years 
of investigation the many, wide-ranging abuses, only one person 
connected with the presidential election, Yogesh Gandhi, will spend any 
time in jail. The question we have to ask ourselves is ``why?''
  Unfortunately, the primary reason is that the Justice Department 
simply did not do its job. Leads were not pursued, subpoenas were not 
sought, suspects were ignored, agents were instructed not to ask 
questions about certain people, the law was misapplied, and no 
independent counsel was ever appointed to ensure a credible 
investigation. A hearing we held at the Governmental Affairs Committee 
provided just one example of how the Department ran its campaign 
finance probe. So impatient was the FBI with the Department's 
resistance to investigating Presidential friend and DNC fundraiser 
Charlie Trie that the Bureau's senior agent in Little Rock wrote an 
angry

[[Page S2774]]

letter to FBI Director Freeh complaining about Department incompetence 
and stalling. The plea bargains that were entered into also raise 
concern.
  However, we have also learned that, the federal election law itself 
also makes prosecution of violators more difficult than it should be. 
The bill that we are introducing today would ensure in the future that 
conscientious prosecutors can more effectively pursue those who violate 
existing law.
  This bill accomplishes the following five goals: First, the bill 
makes knowing and willful violations of the Federal Elections Campaign 
Act, FECA, involving at least $25,000 in a year a felony. Currently, no 
violations of FECA are felonies. The law does not differentiate between 
the donor that accidentally writes a check in excess of the $1,000 
limit and the fundraiser that launders $100,000 to a party or campaign. 
This bill will provide a deterrent and appropriate punishment for those 
who knowingly and willfully flaunt the campaign finance laws.

  Second, the bill will extend the statute of limitations from three to 
five years. Outside of the Internal Revenue Code, virtually every 
violation of federal law has a statute of limitations of at least five 
years. This provision brings FECA into conformity with the rest of the 
law.
  Third, the bill would require the Sentencing Commission to promulgate 
a guideline specifically for FECA violations. In addition, the bill 
provides specific factors for enhancement of sentences. Currently, 
without a specific guideline, judges are forced to turn to other 
guidelines, typically those intended to govern or set sentences for 
fraud. Unfortunately, because the donor makes the contribution with 
full knowledge of the scheme, the enhancement factors for fraud are 
basically useless. By providing judges with a specific election law 
sentencing guideline, they can impose appropriate sentences.
  Fourth, the bill prohibits foreign soft money contributions. Prior to 
the 1996 campaign, I think we all thought foreign soft money 
contributions were illegal. Thereafter, the Justice Department 
interpreted ``contribution'' as used in FECA to have two different 
meanings depending on how the contribution is used, raising the 
possibility that foreign soft money did not fall within the scope of 
FECA's prohibition on foreign ``contributions.'' Indeed, in two cases a 
Federal District Court Judge in D.C. ruled that foreign soft money was, 
in fact, legal. Subsequently, he was overruled by the Court of Appeals. 
However, in order to clarify the law, this bill was definitively 
prohibit foreign soft money contributions. Mr. President, last year the 
FEC wrote to Congress and asked for a clarification regarding the 
legality of foreign soft money. I believe we should provide that 
guidance.
  Finally, this bill would prohibit conduit soft money contributions. 
Under current law, it is illegal to give $500 of hard money in the name 
of another, but it is perfectly legal to give $500,000 of soft money in 
another person's name. This bill would close that loophole and provide 
what I think we all can support--more, full disclosure.
  Mr. President, I personally believe that we need to reform our 
campaign finance system. However, reform will mean nothing unless we do 
a much better job enforcing the law when it is violated. I believe this 
bill in the hands of prosecutors who are interested in enforcing the 
law will help ensure that in the future violators of the campaign 
finance laws will not walk away with a slap on the wrist.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 600

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. INCREASE IN PENALTIES.

       (a) In General.--Subparagraph (A) of section 309(d)(1) of 
     the Federal Election Campaign Act of 1971 (2 U.S.C. 
     437g(d)(1)(A)) is amended to read as follows:
       ``(A) Any person who knowingly and willfully commits a 
     violation of any provision of this Act which involves the 
     making, receiving, or reporting of any contribution, 
     donation, or expenditure--
       ``(i) aggregating $25,000 or more during a calendar year 
     shall be fined under title 18, United States Code, or 
     imprisoned for not more than 5 years, or both; or
       ``(ii) aggregating $2,000 or more (but less than $25,000) 
     during a calendar year shall be fined under such title, or 
     imprisoned for not more than one year, or both.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to violations occurring on or after the date of 
     enactment of this Act.

     SEC. 2. STATUTE OF LIMITATIONS.

       (a) In General.--Section 406(a) of the Federal Election 
     Campaign Act of 1971 (2 U.S.C. 455(a)) is amended by striking 
     ``3'' and inserting ``5''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to violations occurring on or after the date of 
     enactment of this Act.

     SEC. 3. SENTENCING GUIDELINES.

       (a) In General.--The United States Sentencing Commission 
     shall--
       (1) promulgate a guideline, or amend an existing guideline 
     under section 994 of title 28, United States Code, in 
     accordance with paragraph (2), for penalties for violations 
     of the Federal Election Campaign Act of 1971 and related 
     election laws; and
       (2) submit to Congress an explanation of any guidelines 
     promulgated under paragraph (1) and any legislative or 
     administrative recommendations regarding enforcement of the 
     Federal Election Campaign Act of 1971 and related election 
     laws.
       (b) Considerations.--The Commission shall provide 
     guidelines under subsection (a) taking into account the 
     following considerations:
       (1) Ensure that the sentencing guidelines and policy 
     statements reflect the serious nature of such violations and 
     the need for aggressive and appropriate law enforcement 
     action to prevent such violations.
       (2) Provide a sentencing enhancement for any person 
     convicted of such violation if such violation involves--
       (A) a contribution, donation, or expenditure from a foreign 
     source;
       (B) a large number of illegal transactions;
       (C) a large aggregate amount of illegal contributions, 
     donations, or expenditures;
       (D) the receipt or disbursement of governmental funds; and
       (E) an intent to achieve a benefit from the Government.
       (3) Provide a sentencing enhancement for any violation by a 
     person who is a candidate or a high-ranking campaign official 
     for such candidate.
       (4) Assure reasonable consistency with other relevant 
     directives and guidelines of the Commission.
       (5) Account for aggravating or mitigating circumstances 
     that might justify exceptions, including circumstances for 
     which the sentencing guidelines currently provide sentencing 
     enhancements.
       (6) Assure the guidelines adequately meet the purposes of 
     sentencing under section 3553(a)(2) of title 18, United 
     States Code.
       (c) Effective Date; Emergency Authority To Promulgate 
     Guidelines.--
       (1) Effective date.--The United States Sentencing 
     Commission shall promulgate guidelines under this section not 
     later than the later of--
       (A) 90 days after the date of enactment of this Act; or
       (B) 90 days after the date on which at least a majority of 
     the members of the Commission are appointed and holding 
     office.
       (2) Emergency authority to promulgate guidelines.--The 
     Commission shall promulgate guidelines under this section in 
     accordance with the procedures set forth in section 21(a) of 
     the Sentencing Reform Act of 1987, as though the authority 
     under such Act has not expired.

     SEC. 4. PROHIBITION ON CONTRIBUTIONS AND DONATIONS BY FOREIGN 
                   NATIONALS.

       (a) In General.--Section 319(a) of the Federal Election 
     Campaign Act of 1971 (2 U.S.C. 441e(a)) is amended to read as 
     follows:
       ``(a) Prohibitions on Contributions and Donations.--
       ``(1) In general.--Subject to paragraph (2), it shall be 
     unlawful for--
       ``(A) a foreign national, or an entity that is a domestic 
     subsidiary of a foreign national, to make, directly or 
     through any other person, any contribution of money or other 
     thing of value, or promise expressly or impliedly to make any 
     such contribution, in connection with an election to any 
     political office or in connection with any primary election, 
     convention, or caucus held to select a candidate for any 
     political office or make any donation, or promise expressly 
     or impliedly to make any such donation; or
       ``(B) any person to solicit, accept, or receive any such 
     contribution or donation from a foreign national.
       ``(2) Exception.--Paragraph (1) shall not apply to an 
     entity that is a domestic subsidiary of a foreign national if 
     the entity can demonstrate through a reasonable accounting 
     method that the entity has sufficient funds in the entity's 
     account, other than funds given or loaned by the foreign 
     national parent of the entity, from which the contribution or 
     donation is made.''.
       (b) Definition of Donation.--Section 301 of the Federal 
     Election Campaign Act of 1971 (2 U.S.C. 431) is amended by 
     adding at the end the following:
       ``(20) Donation.--
       ``(A) In general.--The term `donation' means a gift, 
     subscription, loan, advance, or deposit of money or anything 
     else of value made by any person to a national committee

[[Page S2775]]

     of a political party or a Senatorial or Congressional 
     Campaign Committee of a national political party for any 
     purpose, but does not include a contribution (as defined in 
     paragraph (8)).
       ``(B) Foreign national.--In the case of a person which is a 
     foreign national (as defined in section 319(b)), the term 
     `donation' includes a gift, subscription, loan, advance, or 
     deposit of money or anything else of value made by such 
     person to a State or local committee of a political party or 
     a candidate for State or local office.''.
       (c) Conforming Amendment.--Section 319 of Federal Election 
     Campaign Act of 1971 (2 U.S.C. 431 et seq.) is amended by 
     striking the heading and inserting ``RESTRICTIONS ON FOREIGN 
     NATIONALS''.

     SEC. 5. PROHIBITION ON DONATIONS IN NAME OF ANOTHER.

       Section 320 of the Federal Election Campaign Act of 1971 (2 
     U.S.C. 441f) is amended by inserting ``or donation'' after 
     ``contribution'' each place it appears.

  Mr. LIEBERMAN. Mr. President, I am pleased to join my colleague in 
offering this bill. Senator Thompson and I spent the better part of a 
year working on the Governmental Affairs Committee's investigation into 
fundraising improprieties in the 1996 federal election campaigns. That 
investigation sparked a lot of discussion about whether many things 
that happened in 1996 were illegal or just wrong--things like big soft 
money donations, attack ads run by tax-exempt organizations, 
fundraising in federal buildings and the like.
  But one thing I never heard argument about is whether it was illegal 
to knowingly infuse foreign money into a political campaign or to use 
unwitting straw donors to hide the true source of money that was going 
to candidates or parties. I, for one, had no doubt that the people who 
did those things in 1996 would be prosecuted and appropriately 
punished.
  Unfortunately, Mr. President, many of them were prosecuted, but I 
have grave doubts about whether they were appropriately punished. I 
know that there are many who blame the Justice Department for this, but 
when I first looked into it a couple of years ago, I was frankly 
surprised by what I learned--and that is that prosecutors just don't 
have the tools they need to effectively investigate, prosecute and 
punish people who egregiously violate our campaign finance laws. I 
think Charles LaBella, the former head of the Justice Department's 
Campaign Finance Task Force, put it best in a memo he wrote assessing 
the Department's campaign finance investigation. According to press 
reports, LaBella wrote that ``The fact is that the so-called 
enforcement system is nothing more than a bad joke.'' Unfortunately, 
it's a bad joke that has real consequences for the integrity of our 
campaigns and our democracy.
  Let me give you one example. Many people are understandably upset 
that Charlie Trie and John Huang didn't go to jail for what they did in 
'96. But the Federal Election Campaign Act, or FECA, doesn't authorize 
felony prosecutions. No matter how egregiously someone violates FECA, 
all they can be charged with is a misdemeanor. And people rarely go to 
jail for misdemeanors.
  To get around FECA's limits, prosecutors often charge campaign 
finance abusers with other federal crimes that are felonies, which is 
what they did with Trie and Huang. But that still often doesn't solve 
the problem. That's because when it comes time for sentencing, judges 
have to turn to the Federal Sentencing Guidelines, which still often 
bring light sentences because there is no guideline on campaign finance 
violations.
  The guidelines assign what's called a ``base offense level'' for each 
crime, and then they give a number of factors that, if present, tell 
the judge either to increase or decrease the offense level. The higher 
the offense level, the higher the sentence.
  Because the Guidelines don't have a provision on campaign finance 
violations, judges have to look for the next closest offense, and they 
often end up using the fraud guideline. But that guideline doesn't take 
into account the factors that make campaign finance violations so 
harmful, and the factors that are there often aren't particularly 
relevant to campaign finance violations. For example, there is nothing 
in the guideline that makes judges distinguish between a campaign 
finance violation involving $2,000 and one involving $2,000,000. So, 
when judges calculate the offense level of a defendant who funneled 
millions of foreign dollars into a US campaign, they don't end up with 
a high offense level, meaning that the defendant doesn't get a lengthy 
sentence. The prosecutors know this and the defendants know this, and 
that must be one of the reasons why prosecutors accepted plea bargains 
from John Huang and Charlie Trie--because they knew they wouldn't do 
much better even if they won convictions at trial.

  Our bill would solve these problems, by putting a felony provision 
into FECA and by directing the Sentencing Commission to promulgate a 
campaign finance guideline. If those two things happen, we will have 
greater confidence that those who violate the law will be appropriately 
punished.
  I understand that some who have looked at our bill worry that it 
criminalizes participating in the political process. That is neither 
the intent nor the effect of our bill. Our bill would allow felony 
prosecutions only if, first, the defendant knowingly and willfully 
violated the law, and second, if the offense involved at least $25,000. 
So, it would not punish the donor who inadvertently goes over his 
contribution limits, nor would it go after the Party Committee clerk 
who makes a recordkeeping mistake. Instead, our bill aims at the 
opportunistic hustlers who come up with broad conspiracies to violate 
the election laws--usually for personal gain--by funneling foreign 
money into our campaigns or using large numbers of straw donors to hide 
their identity or make contributions they aren't allowed to make--the 
people everyone says should be going to jail.
  There are three other provisions in our bill. The first would extend 
FECA's statute of limitations from three to five years to make it the 
same as virtually all other federal crimes. The second would make it 
clear that foreign soft money is as illegal as foreign hard money 
contributions. The third would make it clear that straw donations of 
soft money are as illegal as straw donations of hard money. All of them 
are important.
  Mr. President, this bill is about something that we all should be 
able to agree upon, which is that actions that are already criminal and 
that we all agree are wrong should be punished. None of our bill's 
provisions should be controversial, and I hope that we can see them 
enacted into law, so that we can go into the next election cycle with 
confidence that prosecutors have the tools necessary to deter and to 
punish those who would violate our election laws.
  Mr. LEAHY. Mr. President, I am pleased to join Senators Thompson and 
Lieberman in cosponsoring this legislation to improve the Federal 
Election Campaign Act, known as FECA. This legislation would increase 
criminal penalties for knowing and willful campaign finance violations, 
direct the Sentencing Commission to promulgate guidelines for 
violations, and clarify parts of FECA. This legislation is important to 
ensure that we have an enforcement structure that would deter knowing 
violations of the laws now on the books.
  Questions about the financing of the 1996 Federal elections have been 
the subject of multiple, expensive, overlapping, and repeated 
congressional hearings. In 1997, the Senate Committee on Governmental 
Affairs held 32 days of hearings, calling 70 witnesses, at a cost of 
$3.5 million to investigate campaign finance violations relating to the 
1996 Federal elections. The House Committee on Government Reform and 
Oversight has been investigating campaign finance violations since June 
1997, including over 45 days of hearings. The Senate Judiciary 
Committee held its own series of hearings in the 106th Congress on the 
1996 campaign finance investigations. Needless to say, all of these 
committees have spent countless hours investigating, collecting and 
reviewing documents, and holding hearings on alleged campaign finance 
abuses in the 1996 campaign. This legislation is one of the most 
constructive products to come out of those investigations.
  Indeed, in a report to then-Attorney General Reno, the former Chief 
of the Campaign Finance Task Force at the Department of Justice, 
Charles LaBella, recommended reforms in the campaign finance laws, 
including the increased penalties and clarifications

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to certain parts of the FECA embodied in this legislation.
  This bill would authorize felony prosecutions of knowing and willful 
FECA violations involving improper contributions aggregating $25,000 or 
more during a calendar year. It would also increase the statute of 
limitations to 5 years, which is the standard statute of limitation for 
Federal offenses. In addition, the bill would direct the Sentencing 
Commission to promulgate guidelines. Finally, the bill would clarify 
that foreign nationals who are not permanent residents may not donate 
to a candidate or political party as well as make clear that the FECA's 
prohibition on conduit contributions applies to any type of donation.
  I am glad to join in cosponsoring this legislation again, as I did in 
the last Congress, and urge its prompt passage.
  To the extent that we are frustrated by campaign finance abuses, I 
believe passage of this legislation is a better use of this body's time 
than the open-ended fishing expedition into open and closed cases.
                                 ______