[Congressional Record (Bound Edition), Volume 146 (2000), Part 1]
[House]
[Pages 1238-1243]
[From the U.S. Government Publishing Office, www.gpo.gov]



                 HMO REFORM AND CAMPAIGN FINANCE REFORM

  The SPEAKER pro tempore (Mr. Cooksey). Under the Speaker's announced 
policy of January 6, 1999, the gentleman from Iowa (Mr. Ganske) is 
recognized for 60 minutes as the designee of the majority leader.
  Mr. GANSKE. Mr. Speaker, I want to speak about HMO reform and about 
campaign finance reform today. Let me start out with HMO reform.
  A few years ago down in Texas, the Texas Legislature passed a series 
of HMO reform bills almost unanimously in their State legislature. 
These bills addressed issues like emergency room care. If you had a 
crushing chest pain and thought you were going to have a heart attack, 
you could go to the emergency room and then the HMO could not come back 
and say afterwards if the EKG was normal, well, we are not going to pay 
for this.
  The Texas legislature addressed issues like access to specialists. 
They addressed issues like when an HMO would say we do not think that 
that treatment that your doctor and your specialist have recommended is 
medically necessary and then deny that care just arbitrarily.
  So they held a big debate in Texas. This was now about 3 or 4 years 
ago. And the Texas legislature passed a series of bills, some of them 
almost unanimously, without dissenting vote I think in the Texas Senate 
and maybe with only two dissenting votes in the Texas House, sent those 
bills to the governor's desk, and he allowed them to become law.
  At that time, the HMO industry in Texas said the sky would fall, the 
sky would fall. You will see a plethora of lawsuits; you will see 
premiums go out of sight; you will see the HMO industry in Texas 
shrivel up and move away.
  Well, what has been the actual result? The actual result has been 
that, since Texas passed its law, there have only been about four 
lawsuits filed in the last several years; and those were primarily when 
the HMOs did not follow the law. The premiums did not go up 
significantly. There were 30 HMOs in Texas when the bills were passed, 
and there are over 50 now. That law is working.
  So we passed a bill here in the House that was modeled after that 
Texas legislation, legislation that Governor Bush, for instance, has 
said that he agrees with and thinks ought to be Federal law. We passed 
that bill. And, once again, the HMOs said, the sky will fall, the sky 
will fall; premiums will go out of sight; etcetera.
  Well, we got a score back from the Congressional Budget Office on the 
cost of the bill that we passed here on the floor by a vote of 275-151. 
And over 5 years, the Congressional Budget Office said the cost of that 
legislation would cause premiums to go up about 4.1 percent total, 
nothing in the first year probably, and then maybe about 1 percent each 
year for about 4 years and that would be it.
  The cost of that reflected in the average premium for a family would 
be about the cost of a Big Mac meal once a month. Not exactly the sky 
is falling, the sky is falling. In fact, the part of the bill that cost 
the most was the part that is designed to prevent lawsuits, and that 
was the internal and external reviews part.
  So I would call my colleagues' attention to the Congressional Budget 
Office. But be careful, because the HMO industry in the past has said 
that these percentage increases are annual percentage increases. That 
is wrong. When we see 4 percent, okay, that is 4 percent cumulative 
over 5 years. So be careful on that.
  Mr. SHAYS. Mr. Speaker, will the gentleman yield?
  Mr. GANSKE. I yield to the gentleman from Connecticut.
  Mr. SHAYS. Mr. Speaker, I have seen the gentleman from Iowa (Mr. 
Ganske) on the floor of the House so many times talking about this 
issue. And I have learned a lot. I have learned a tremendous amount, 
and it was ultimately why I was very happy to support his legislation.
  I represent a district with a lot of Democrats, a lot of Republicans, 
a lot of conservatives, a lot of moderates and liberals. It is a very 
mixed district. But in one town meeting I had in Greenwich, 
Connecticut, which is pretty much a more conservative area of my 
district, I had a number of people at a town meeting. They were young. 
They were old. I could tell from the very issues they were talking 
about that they were the whole range of the political spectrum. And I 
asked this question, I said, ``How many of you think that if an HMO 
causes the injury or death of someone that they should be held 
accountable or liable?''
  I expected about maybe two-thirds of the hands to go up. Every hand 
went up. In fact, in some cases both hands went up. And then there was 
story after story. And I also submitted to my constituents a 
questionnaire asking them about health care and there were various 
choices, and one of them was we should keep the health care system the 
way it is. Only 3.5 percent responded that we should keep it the way it 
is. This really kind of shocked me. Twenty-five percent wanted to 
eliminate HMOs.
  Now, I am a strong supporter of health maintenance organizations, but 
to have 25 percent of the 15,000 people who responded to my 
questionnaire wanting to get rid of HMOs for me was a big wake-up call. 
And it just spoke volumes about how we need to do what is in the 
legislation that my colleague has championed. To be able to have a 
process that would encourage people to get the proper health care that 
they need without going through a litigation process makes eminent 
sense. But, in the end, there always has to be that final hammer to try 
to encourage sometimes proper behavior.
  I want to thank my colleague for being such a fighter on this issue. 
And I know and I hope that we will eventually get to another issue that 
is near and dear to both him and me. But I appreciate what he has done 
for so long on this issue.
  Mr. GANSKE. Mr. Speaker, I appreciate my colleague from Connecticut 
(Mr. Shays) joining me for this special order because I think that we 
are going to have some fun with some of these issues.
  This is one of the reform issues that we are dealing with here in 
Congress. My colleague has been a leader on one of the other reform 
issues, and that is campaign finance reform; and I have been happy to 
work with him on that issue. I am glad that he is here. Because now 
that this issue, campaign finance reform, has really come to the front 
of the presidential campaigns, I hear things said by some candidates 
that make me concerned. It is almost like you could not be a Republican 
if you support campaign finance reform, even though there are a lot of 
Republicans who support campaign finance reform.
  There are a lot of Republicans who support campaign finance reform, 
and I worked with the gentleman from Connecticut (Mr. Shays) on this 
issue all across the political spectrum. I have a pretty darn 
conservative voting record, and there are lots of other conservatives 
who have joined with him on

[[Page 1239]]

this issue because we feel so strongly that this is so important to the 
honesty and integrity of our political system.
  I mean, we have a gentleman like the gentleman from Tennessee (Mr. 
Wamp) who is really a conservative Republican. We have a conservative 
Republican, the gentleman from South Carolina (Mr. Graham), who has 
stuck with us on this issue. And so I want to address the issue today.
  When we talk about campaign finance reform, let us do a little 
education of our colleagues on this. I wonder if the gentleman from 
Connecticut (Mr. Shays) can sort of share with us how this issue got 
started really full blast in 1995 and 1996. Why do we need campaign 
finance reform?
  Mr. SHAYS. Mr. Speaker, there are a number of reasons why we need it; 
and we need it more desperately as each year goes. But I would first 
say that we have needed to reform the system for many years.
  One of the things that is very clear is we have had a hard time 
finding consensus because we each have our own campaign finance reform 
bill. So one of the first key things to do was to see if we could build 
consensus amongst different groups.
  But in terms of why we need it, we need it because, in this 
democratic system of government, we need to make sure that decisions 
are being made based on merit and based on what is right for our 
country and not based on who gave me this campaign contribution or that 
campaign contribution.

                              {time}  1745

  When you had the abuses in 1974 centered around Watergate and all 
that was involved, the majority party made two decisions. One, they 
were going to hold President Nixon accountable and they were secondly 
going to reform the system. They did both. I have been hard pressed to 
know why we did not take the same tack as this new majority. We needed 
to hold President Clinton accountable, and we needed to reform the 
system. Our failure to reform the system then calls into question in 
the minds of some of our constituents, ``Well, you're just doing this 
to get the President.'' No, we needed to hold the President 
accountable, but then we needed to reform the system to make sure the 
decisions, to the best of our ability, are based on merit, not based on 
the kind of money that was contributed.
  Now, in 1974 they devised a system, you would limit what a candidate 
could spend and you would limit what a candidate could raise in terms 
of individual contributions, and you would have a system where both of 
them worked. The Supreme Court said it is constitutional to limit your 
overall individual contributions but you cannot limit what someone 
spends, so a wealthy person can spend whatever they want, and a wealthy 
person under the law can spend whatever they want helping a particular 
candidate as long as they do not work with that candidate. But once 
they begin to work in tandem with that candidate, then they come under 
the contribution limitations. Those contributions were $1,000 for an 
individual and $5,000 for PAC contributions.
  One of the confessions I would say as I worked on this issue, I 
thought the real problem were the political action committees because 
they were, quote-unquote, the ``special interests'' and so I looked to 
eliminate political action committee money. As I went around the 
country and around my State arguing on this issue and debating people, 
I felt I was losing the argument. I began to realize that people had a 
right to assemble under a political action committee for whatever 
special interest they want. And then a candidate has the right or not 
to accept it. But a political action committee contribution is $5,000. 
That is it. That is the limit.
  Soft money, which is the unlimited sums contributed by individuals, 
corporations, labor unions, and other interest groups have made 
political action committee money look saintly because it is unlimited, 
and it has brought in such incredible amounts of money that most 
reasonable people could concur, and concur rightfully, that Members' 
votes are affected by the large contributions that are given.
  Mr. GANSKE. Let us take an example from today. Governor Bush has 
raised $67 million. There is nothing wrong with that. That money that 
he raised was from individual donations under Federal law at $1,000 
maximum per individual.
  Mr. SHAYS. That was the maximum that he could receive.
  Mr. GANSKE. That was the maximum he received. He received millions of 
smaller contributions, just as all the presidential candidates have. 
That is the current law. We ought to be clear. There is nothing wrong 
with that. You do not think there is anything wrong with that. I do not 
think there is anything wrong with that. I do not think there is 
anything wrong with a political action committee working on an issue, 
getting people of a similar interest together, forming a political 
action committee and making a contribution under current law to a 
candidate.
  I would say that that is not what we are talking about, where the 
problem is. For goodness sakes, Governor Bush with $67 million, does 
anyone think that any one of those $25, $50, $500, or even $1,000 
donations is going to unduly influence the Governor from Texas? Of 
course not. Just like it does not influence anyone here in Congress. 
However, what we are talking about in the soft money area is not a 
maximum of $1,000. We are talking about donations of half a million 
dollars or one million dollars from individuals, or from labor unions, 
or from corporations, donations of that magnitude that are basically 
unregulated by the Federal Election Commission, that were originally 
designed for party building. We will talk about the issue ads.
  Mr. SHAYS. Let me if I could just say that the significance is that 
soft money creates a gigantic loophole. It allows corporate treasury 
money to be contributed, whereas the law in 1974, the individual 
contribution limits and the political action committee never allows for 
corporate treasury money to be contributed to a candidate. It allows 
for labor unions to get around the law because it is illegal for labor 
unions to contribute to political campaigns.
  Mr. GANSKE. Other than through their political action committee.
  Mr. SHAYS. They can set up a political action committee and they can 
advertise and their members can also contribute as individuals. But the 
1974 law made it illegal for foreign individuals, not citizens of the 
United States, not residents of the country, made it illegal for them 
to contribute, but they too can contribute soft money. It is the 
gigantic loophole.
  Let me just back up and give a little more detail. In 1907, Theodore 
Roosevelt got elected, he actually got elected before then, but he got 
elected using corporate treasury money. The public was outraged by it, 
and Theodore Roosevelt and Congress decided to ban any corporate 
treasury money from being contributed to campaigns. They did not mind 
individuals contributing. They thought it was wrong for corporations to 
contribute.
  In 1947, actually earlier during World War II, it was illegal for 
union dues money to be used in campaigns. And then Congress codified 
this executive order in 1947 in the Taft-Hartley law, making it illegal 
for union dues money to be contributed to campaigns. And in 1974, 
Congress and the President made it illegal for foreign money to be 
contributed to campaigns. Now, the amazing thing is it is illegal and 
yet all three things are happening.
  I know my colleague has his own personal experience as it relates to 
union dues money, but beforehand let me just introduce what I saw in 
the newspaper on February 13. This was an AP story. It said, ``The 
labor federation is committing $40 million to put Gore in the White 
House and to win back control of Congress for its allies, traditionally 
Democrats.'' I look at this and I say $40 million of union dues money, 
that is illegal. They cannot do it. Except they can do it with this 
soft money loophole.
  Mr. GANSKE. This brings back to me vivid memories of 1995 and 1996. 
Let me give the gentleman an example. In 1995, President Clinton 
started his White

[[Page 1240]]

House soirees and fundraising and the Lincoln Bedroom and all of that 
and helped the Democratic National Committee raise $44 million, 
basically through soft money, donations, large donations that came from 
individuals, corporations, and labor unions and went to the Democratic 
Party. Now, that money is supposed to go for party building. What did 
it go for? It went for this. Here was an ad that was run against 
Senator Bob Dole, paid for by soft money.
  ``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 health care cuts, Medicare slashed $67 
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.''
  Now, that is a campaign ad. I have seen a lot of campaign ads, and 
that was run all during the summer of 1996 when Senator Dole did not 
have any money. And it was raised from soft money.
  Mr. SHAYS. But there are really two parts to this.
  Mr. GANSKE. There are two issues here, I agree. One is the issue 
advocacy ad and the other is the soft money. But the funding for those 
ads came from soft money. Now, I do not have a problem with a labor 
union forming a PAC and using that PAC money, under the rules for those 
ads.
  Mr. SHAYS. The reason you do not have a problem is it is voluntary, 
the members can contribute or may not but it is not taken out of their 
union dues money.
  Mr. GANSKE. Let me give the gentleman another example. The Democratic 
National Committee ran this ad. Soft money again.
  ``Protect families. For millions of working families, President 
Clinton cut taxes. The Dole-Gingrich budget tried to raise taxes on 8 
million. The Dole-Gingrich budget would have slashed Medicare $270 
billion and cut college scholarships. The President defended our 
values, protected Medicare and now a tax cut of $1,500 a year for the 
first 2 years of college, most community college is free, helps adults 
go back to school. The President's plan protects our values.''
  Paid for by soft money.
  Here is one. This is a really interesting ad. This is from 1995-1996, 
paid for by soft money to Citizen Action from the Teamsters. We can 
talk about this connection. This is how corrupting the soft money can 
be, but here is the ad that Citizen Action put out:
  ``They've worked hard all their lives, but Congressman Cremeans voted 
five times to cut their Medicare, even their nursing home care, to pay 
for a $16,892 tax break he voted to give the wealthy. Congressman 
Cremeans, it's not your money to give away. Don't cut Medicare. They 
earned it.''
  Soft money paid for it.
  An investigation was done on this. The Teamsters set up a deal. They 
gave a big contribution from their union funds to Citizen Action, which 
is fine. They can give to charitable organizations. The deal was that 
Citizen Action would give back money to one of the candidates running 
for President of the Teamsters, and the Democratic Party was involved 
in this, also. But the point of this is that this is where these big 
chunks of money can be moved around behind the scenes. And we do not 
even know who gave the money to some of these organizations that run 
these ads. It is, quote, soft money. We do not know how the money is 
intermingled with legitimate contributions to parties and then with 
these huge soft money donations.
  Here is another example of a soft money donation. I know this one 
real well, because this one was run against me:
  ``It's our land, our water. America's environment must be protected. 
But in just 18 months, Congressman Ganske has voted 12 out of 12 times 
to weaken environmental protections.'' By the way, I sent a rebuttal on 
that to the Des Moines Register. ``Congressman Ganske even voted to let 
corporations continue releasing cancer-causing pollutants in our air.'' 
By the way, I helped pass one of the best environmental bills. ``Call 
Congressman Ganske. Tell him to protect America's environment, for our 
families, for our future.''
  Soft money. And also the issue ads.
  We need to think about what brought this on primarily. We saw in the 
1995-1996 election cycle an explosion of behind-the-scenes giving of 
huge contributions by individuals, corporations, and unions to parties; 
and then the parties took that money and they did not use it to just go 
out and get a voter registration guide, they used that money for issue 
ads on TV that were nothing less than full campaign attack ads. 
Independent surveys have shown that 80 percent of those, quote, issue 
ads were actually attack ads.
  Mr. SHAYS. I am torn by this feeling that I want to kind of clarify 
and be a little more precise between soft money and what I call sham 
issue ads, which are really good campaign ads, much like you might want 
to correct me in some of the intricacies of HMO reform.
  Mr. GANSKE. Some issue ads are funded by soft money.
  Mr. SHAYS. I am going to hope the gentleman will be patient with one 
aspect of this. Congress last year passed in early September campaign 
finance reform. It was a bipartisan effort.
  It dealt with four basic issues. First, it banned soft money, thereby 
getting rid of the loophole that allowed corporations, labor unions, 
and foreign money to filter itself into campaigns because soft money 
was not defined as campaign money even though you have clearly 
illustrated it is.
  Second, we called the sham issue ads what they are, campaign ads. We 
do not ban them. We call them campaign ads. As soon as you do that, out 
goes the corporate money, the union dues money, and foreign money. And 
really what you were faced with in a technical term, soft money goes to 
the political parties, and it goes to the leadership PACs.

                              {time}  1800

  You were faced with the unions taking, frankly, union dues money, and 
spending it on a sham issue ad, but because it was not called a 
campaign ad. The 1947 Taft-Hartley law did not come into effect. You 
were basically faced with this almost unlimited sum of money that kept 
coming in.
  The third thing that we did is we required FEC enforcement, Federal 
Elections Commission enforcement, right away, and we had disclosure on 
the Internet right away, filing on the Internet and disclosure on the 
Internet, so the FEC could hold you accountable before the election, 
rather than 6 years after.
  There is that wonderful memo, I call it wonderful, from Mr. Ickes to 
the President that said to the President, we are going to be fined 
about $1 million because of campaign violations. He said this while the 
campaign was going.
  The President, this is what I consider wonderful, the President wrote 
next to it, ``ugh,'' in his signature. He knew they were breaking the 
law, he was not happy about it, but he also knew it would be dealt with 
3 or 4 or 5 or 6 years later and the public would not be focused on it.
  The last thing we did was establish a commission to look at all the 
things we have not dealt with. Without getting into a lot of detail, 
maybe the individual contribution limit should be increased, maybe the 
amounts contributed to the political parties should be increased, maybe 
50 percent or more of your contribution should be in State or not. We 
did not deal with those issues, because when we started this 
conversation, we were trying to build a consensus on a bill we could 
pass.
  This bill went to the Senate, and this bill had more than 50 percent 
of the Members supporting it, 55. The bottom line to it was it needs 60 
percent. So you had 52 members supporting it, 53, 54, 55; but you need 
60 to break the closure, that would invoke closure, so you could then 
vote on the bill.
  So a majority in the Senate support campaign finance reform. I would 
love to get into this area that I just think is the reason why I am 
really out on

[[Page 1241]]

this floor today. You are a Republican; I am a Republican. We could 
have invited our Democrat colleagues to participate. But we supported 
this bill.
  One of the things we are hearing is quote-unquote ``This bill will 
hurt Republicans.'' Well, I would like to make a few comments. First 
off, that is truly an irrelevant statement if in the end we are doing 
what is right for the country. Now, it is not irrelevant that it should 
treat both parties fairly; one should not gain an advantage over the 
other. That is clearly the implication of the argument.
  But it is not really about that, and I believe that some of the 
opponents who say that really do not believe it. What I think they 
think is it will hurt certain people in the party. It will hurt those 
who have been able to amass great sums of money; and then they, some 
leaders, the national parties, get to dole it out to the candidate who 
is doing what they want.
  So not only are you seeing a corruption of this process with big 
corporate money and big union money and foreign money, which is made 
legal through the sham-issue ads and the soft money, not only have you 
seen that kind of corruption; but we are seeing another kind of 
corruption, because some people get this money, and then they are able 
to direct it to the people they want to have it.
  You know what, you may not get that money, Mr. Ganske, because you 
may not be in the image that they want you as a Republican. The 
Democrats may not see some money, certain Democrats, because they are 
not in their image, even though you are representing your constituents 
exactly the way you should.
  Let me get in more detail, if you would allow me.
  Mr. GANSKE. Let me just interject. The gentleman is right. I was 
talking about two issues at the same time. One was the issue of 
personal advocacy and the other was soft money. Some of these issue ads 
were run with millions and millions of dollars of soft money, i.e., the 
ads that President Clinton ran through the Democratic National 
Committee.
  It is reported, but it is in unlimited amounts.
  Mr. SHAYS. If it comes from the political parties, if it comes from 
some leadership PAC, it is probably soft money. But the union dues 
money and all the special interests, they do it primarily through the 
sham-issue ads.
  Mr. GANSKE. And the sham issue ads may be funded by soft money, i.e., 
if they are paid for by the national parties. But they may also be paid 
for by who knows who.
  Mr. SHAYS. Who knows.
  Mr. GANSKE. Who knows. Who knows. Then you have basically a lack of 
truth in labeling, because you could have some committee set up that 
sounds great, the Committee to Save Medicare or something like that.
  Mr. SHAYS. And you do not know who is a part of that.
  Mr. GANSKE. You do not know who is part of that. But, you know what? 
Maybe some of those funds were given to this ``charitable'' 
organization out of a national party, and those were soft money funds 
used by those donations from the national party.
  We have talked about the Democrats, okay, and the examples I have 
given were that. This occurs on both sides of the aisle.
  Mr. SHAYS. It is more fun to talk about the other side of the aisle. 
Is that what you are telling me?
  Mr. GANSKE. What I want to say is this: I agree with you. This should 
not be an issue decided on what is the best thing for my party, okay? I 
do not make that kind of decision when I look at this legislation. I 
think about what is best for the country.
  It looks to me like when everyone in the country knows that special 
interests here in Washington are giving millions of dollars at a time 
to gain access, to maybe put a bill on the floor or keep a bill off the 
floor and to influence legislation, then it really hurts the process.
  But I would also say this: the bill that we passed here in the House 
of Representatives, the Shays-Meehan bill, that was a fair bill. It was 
fair to both parties. Both parties have been involved in this soft 
money issue, both sides have used issue ads. In my opinion, this is a 
fair bill, and we ought to talk about that for a bit.
  Mr. SHAYS. I would love to just talk about the actual numbers. So you 
and I do agree that the first issue should not be does it help or hurt 
one party; it should be what is in the best interests of our country to 
save our democracy from these unlimited sums of corporate and union 
dues money and other special interest money, the unlimited sums. But I 
could ask it in reverse and say how would this have hurt our party?
  Well, you could say well, just take the 1996 presidential election. 
Republicans raised in soft money $138 million. Democrats raised $124 
million. Both raised a significant sum of money, which, by the way, 
certain people can direct just to the places they want to direct it to. 
So Republicans would have lost that $14 million advantage. But it is 
$14 million. When you are looking at numbers of $124 and $138 million, 
it is a small percent.
  By the way, right now our colleagues on the other side of the aisle 
have raised more soft money in the DNC, in their congressional 
committee, than Republicans have.
  Mr. GANSKE. If the gentleman would yield, we just saw a report in 
Roll Call, the newspaper that covers the Hill, that shows that the 
Democratic Congressional Committee has raised more in soft money than 
the National Republican Congressional Committee.
  Mr. SHAYS. Right. So some years we might raise more; some years they 
may. But just comparing 1996, what my side of the aisle does not want 
people to know, those people who oppose campaign finance reform, in 
hard money, this blows my mind, Democrats raised $221 million in hard 
money contributions.
  Mr. GANSKE. These are the maximum $1,000 donations.
  Mr. SHAYS. The difference between soft and hard money, soft money is 
unlimited, hard money is limited campaign contributions. The Supreme 
Court said clearly, they just affirmed it in the Missouri case just a 
few weeks ago, it is constitutional and proper to limit what 
individuals can contribute. In the limited dollars, which we do not 
impact, Democrats raised in 1996 $221 million. That is a lot of money. 
What do you think the Republicans raised? Democrats raised $221 
million. Republicans raised $416 million. So we saw $195 million raised 
more by Republicans than Democrats in hard money, and we do not change 
that law.
  Now, I will say what I think evens it out is my colleagues on the 
other side of the aisle have a lot of friends in Labor. While Labor 
cannot under our bill contribute soft money, and while they cannot have 
the sham-issue ads where they can use union dues money, they can still 
have ads; but they have to use political action committees. They still 
have a plethora of union workers to go to the polls and stand outside. 
So they have a clear advantage there.
  We have a clear advantage in the hard money contributions. They have 
a clear advantage in the number of workers they can get out on election 
day and make some calls beforehand.
  But our bill prevents all that. Corporate treasury money that goes to 
both parties, all the union dues money that goes, it is illegal. It has 
been against the law since 1907 for corporate treasury money to be 
contributed to campaigns; it has been against the law since 1947 for 
union dues money, and against the law since 1974 for foreign national 
money.
  Mr. GANSKE. If the gentleman would yield, because I think this is 
important, some people talk about paycheck protection as a part of 
campaign finance reform. By that they mean that every so often an 
employee who is in a labor union would have to give affirmative assent 
to having part of his dues used for political purposes. But tell me 
what the current law is on that?
  Mr. SHAYS. The current law is it is illegal, and I have a hard time 
understanding why my side of the aisle wants to legalize a process 
where if we are just talking now as Republicans who are being 
criticized for somehow

[[Page 1242]]

allowing unions to do something that Republicans do not want; it is 
against the law for union dues money to be contributed to campaigns.
  Mr. GANSKE. Is it not true that a member of a labor union can tell 
his union, I do not want any of my union dues used for that?
  Mr. SHAYS. That is another issue. I would just like to respond to 
that. Let me make this point, and I will get right to that point. I 
have a personal example to respond to your question.
  The point that I first want to make is, paycheck protection, I voted 
for it. But paycheck protection would allow a union member to use his 
union dues in campaigns when the 1947 law makes it illegal. I am hard 
pressed to understand why my side of the aisle, that professes not to 
want to see union dues money in campaigns, why they would want to allow 
union dues money to be used if a union member says fine, because it is 
not necessary. A union member can contribute to a PAC.
  Why would they want to overturn the 1947 law that makes it illegal? 
They should want to enforce it by banning the sham-issue ads, out goes 
the corporate and union dues money, and enforcing the 1947 law that 
says the corporate money goes out.
  What I am talking about is a very interesting issue, the Beck case. I 
can give you a real live example. Someone in my family, a 
schoolteacher, supported the Republican candidate. Before the 
Republican candidate could even be interviewed by the labor unions, her 
teachers' union, the CEA, the Connecticut Education Association, they 
had already endorsed the Democratic candidate.
  My wife was a Republican and supported the Republican. She was 
outraged that they did not, ``outraged'' is a strong word, she was 
unhappy. She voiced her unhappiness, rightfully so, and she learned 
that she did not have to have her union dues money go to this. She just 
simply said, Take me off as a union member; I will pay the agency fee.
  Now, that is the way the Beck law works. The problem is, and we have 
it in our bill that passed, we need the unions to proactively tell 
their employees that they do not have to see any money go for this.
  Mr. GANSKE. This is a very important point, because this is part of 
the bill that we passed in the House.
  Mr. SHAYS. Yes. And the bill that we passed in the House made it a 
proactive responsibility of the union to notify their members that if 
they did not want their union dues money to be going to any campaign 
through the soft money, that loophole, and the sham-issues ads, that 
other loophole, they could say they did not want it and withdraw as a 
member of the union and still pay the agency fee, which is the union 
dues money minus what goes for political purposes.
  My wife took advantage of it. She took advantage of it, and for a 
number of years her money was not contributed to places she did not 
want. The sad thing clearly was that she was forced to have to withdraw 
from the union.
  Mr. GANSKE. I think it is also true that some Departments of Labor 
under different Presidents more vigorously than others required that 
that Beck decision be made known to members of unions.
  Mr. SHAYS. And the Beck decision was this: it was a decision that if 
you were not a member of a union, you did not have to have your money 
go for political purposes. It was not a decision that said if you were 
a member of a union that you did not have your money go. You had to 
leave the union, and then your money did not go for political purposes.

                              {time}  1815

  Mr. GANSKE. Now, some people say that these issue ads, banning them 
would just protect incumbents. I disagree with that. Issue ads are run 
on both sides. They are run for incumbents, and they are run for 
challengers. Would the gentleman care to respond?
  Mr. SHAYS. Mr. Speaker, that is true. The point I need to make is 
issue ads can continue as campaign ads. It is a real surprise to me 
that people said, if we do not allow an issue ad, we have deprived 
people of their voice. No. They can still advertise. If one is a strong 
believer in right to life, one can raise as much money from one's 
members under the requirements of the law, and whatever one raises, one 
can spend.
  Does anyone doubt that the right to life organization has the ability 
to raise millions and millions and millions and millions and millions. 
A good example, actually, Right to Life right now is attacking one of 
the candidates who is supporting the bill that we support. They are 
saying that he has denied them their voice. The interesting thing is, 
this time, they are using PAC contributions.
  So they have affirmed that they can do exactly what we said they 
could do. They are right now campaigning against one of the candidates 
in South Carolina. This is an individual that they campaign against who 
is pro-life, but they do not like the fact that they support 
legislation to ban soft main and sham issue ads, campaign ads, and they 
are advertising against that person, not with sham issue ads, they are 
doing right up front. They are doing it with political action committee 
money.
  Mr. GANSKE. Mr. Speaker, this needs to be reemphasized. When we are 
talking about banning phoney issue ads, we are not talking about 
organizations that cannot put up those ads. We are just talking about 
the way they have to be financed.
  Mr. SHAYS. Exactly, Mr. Speaker. The key is that if one calls it a 
campaign ad, out goes that corporate treasury money and the union dues 
money, which is, it seems to me, what both sides of the aisle should 
want to have happen.
  Mr. GANSKE. Mr. Speaker, there are many proposals out there for 
campaign finance reform. One of the more interesting ones I have 
recently seen was a proposal that would prevent incumbents from 
transferring funds from one Federal campaign to another, i.e., let us 
say that a Member of the House had a campaign fund set up for his 
reelection to the House, but then he decided to run for the Senate. 
Under current law, one can roll that over, whatever amount one has in 
there over into one's Senate run.
  Now, I would suggest to my colleagues that the reason why whoever 
wrote this bill in the Senate did not think that that was a good idea 
was because if one was a Senator and one included a provision that 
said, nobody in the House could roll over their House congressional 
fund into a Senate fund, that would be a Senate incumbent protection 
act.
  Mr. SHAYS. Mr. Speaker, as we debate this issue, there are so many 
responses one can make as to why someone would support legislation or 
not. Actually, there is a part of me that thinks that makes sense and 
the gentleman does not. It is a wonderful illustration of how we came 
together on the four key points. Because there were a number of people, 
particularly on my side of the aisle, and I happen to agree with them. 
I think most of the money should be raised in State. I do not think one 
should raise most of the money out of State.
  Mr. GANSKE. Mr. Speaker, I agree with the gentleman.
  Mr. SHAYS. The challenge we had, there were others who came from 
districts that were very poor and had to reach out across district 
lines who were supporting the legislation where we were able to build 
consensus with our colleagues on both sides of the aisle. This truly 
was bipartisan, and with respect to my Democrat colleagues, there were 
more Democrats who supported this legislation than Republicans, but 
there was a large number of Republicans as well that did.
  Bipartisan bill: Ban soft money, call the sham issue ads what they 
are, campaign ads, and by doing that we eliminate the loophole and 
enforce the 1907 law that bans treasury corporate money, the 1947 law 
that bans union dues money, and the 1974 law that makes it illegal for 
foreign governments to contribute to campaigns. It just seems to me 
such a sensible way to proceed.
  One of the things, in closing; we do not have to use all of our 14 
minutes left, or now 10, but I would say to the

[[Page 1243]]

gentleman that I am excited by the fact that campaign finance reform 
has proved to be an issue the American people want debated. It is not 
just about the issue of campaign finance, it is about something a 
little deeper, and that is what do we do to protect the integrity of 
our democracy; what do we do to protect the integrity of the House and 
the Senate and the White House. These are very big issues.
  When I asked this question in my questionnaire, I made a statement, I 
asked my constituents to say whether they agreed or not and 15,000 
responded. In this number, a total of 82 percent of my constituents 
believe this statement: that our democracy is threatened by the 
unlimited sums contributed by corporations, labor unions, and other 
interest groups, and they are right.
  I am excited, because we are going to hear a debate tonight on our 
side of the aisle, and I think campaign finance reform is going to be a 
major factor. I hope both candidates will support banning soft money 
and calling the sham issue ads what they are and having people 
advertise campaign ads and pay for them as campaign ads. If we see that 
happen, I think we will see our democracy not under the thumb of so 
many special interests.
  If I could have the courtesy of my colleague just to say to him that 
some of our colleagues take offense by my suggesting that somehow, we 
have been compromised. But the fact is, when we get $100,000 or 
$500,000 or $1 million that goes to one group on one issue, one has 
been compromised. This system slowly corrupts everyone that is in it.
  Mr. GANSKE. Mr. Speaker, even if there is not wrongdoing, then there 
is certainly the appearance of wrongdoing.
  Let me give the gentleman an example. One of the largest contributors 
to the Democratic National Committee was the chairman of Loral. Now, 
Loral needed an authorization to sell satellite technology to China. 
The administration gave them that authorization even though it is 
possible that that technology is now being used on missiles from China, 
based in China that can target the United States with nuclear weapons.
  Now, I do not have the information to know exactly how that decision 
was made by the administration, to give Loral authorization to sell 
that technology to China, but I do know this: that when the public sees 
that this CEO gave $350,000 or some such similar very, very large 
amount in soft money to the Democratic Party, then the public starts to 
wonder whether, in fact, that type of huge soft money donation has 
influenced policy. I think that is very detrimental to our public 
process.
  Mr. SHAYS. So, Mr. Speaker, the bottom line is, we would like to 
restore some sanity to this process and a majority of Members in this 
House want to, a majority in the Senate want to, but not enough to end 
debate and to have an up or down vote on campaign finance reform.
  But the American people are being exposed to this issue and 
candidates, all four of the major candidates now are coming forward 
with their versions of campaign finance reform, and in every instance 
touching at least on soft money as it relates to corporations and union 
dues; some reluctant to deal with the sham issue ads.
  It is a healthy debate, it is one that the American people are paying 
attention to, contrary to what some of our colleagues here said that 
the public just does not care. They care a whole lot about this issue, 
of restoring integrity to our political system.
  I really thank my colleague for letting me join him in this colloquy 
and for the opportunity to speak, and I thank our Speaker for his 
patience in allowing us to have our full time.
  Mr. GANSKE. Mr. Speaker, I thank my colleague from Connecticut for 
being a leader on this issue, and I hope that Congress is able to 
proceed with actually getting some legislation signed into law.
  Mr. SHAYS. Mr. Speaker, I would be derelict in my duty if I did not 
acknowledge that the gentleman too has played a major effort in this, 
and in many cases more than I have in the gentleman's constant effort 
and his own personal experiences in dealing with the flawed campaign 
system.

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