[Congressional Record (Bound Edition), Volume 147 (2001), Part 3]
[Senate]
[Pages 3979-3981]
[From the U.S. Government Publishing Office, www.gpo.gov]



                                 RECESS

  The PRESIDING OFFICER. Under the previous order, the hour of 12:30 
p.m. having arrived, the Senate stands in recess until the hour of 2:15 
p.m.
  Thereupon, at 12:42 p.m., the Senate recessed until 2:15 p.m.; 
whereupon, the Senate reassembled when called to order by the Presiding 
Officer (Mr. Inhofe).


                           Amendment No. 117

  Mr. BENNETT. Mr. President, I send an amendment to the desk and I ask 
for its immediate consideration.
  The PRESIDING OFFICER. The clerk will report.
  The assistant legislative clerk read as follows:

       The Senator from Utah [Mr. Bennett] proposes an amendment 
     numbered 117.


[[Page 3980]]

  Mr. BENNETT. Mr. President, I ask unanimous consent reading of the 
amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment is as follows:

    (Purpose: To amend the Federal Election Campaign Act of 1971 to 
     prohibit separate segregated funds and nonconnected political 
 committees from using soft money to subsidize hard dollar fundraising)

       On page 37, between lines 14 and 15, insert the following:

     SEC. 305. PROHIBITING SEPARATE SEGREGATED FUNDS FROM USING 
                   SOFT MONEY TO RAISE HARD MONEY.

       Section 316(b)(2)(c) of the Federal Election Campaign Act 
     of 1971 (2 U.S.C. 441b(b)(2)(c)) is amended by inserting 
     before the period at the end the following: ``, except that 
     the costs of such establishment, administration, and 
     solicitation may only be paid from funds that are subject to 
     the limitations, prohibitions, and reporting requirements of 
     this Act''.

     SEC. 306. PROHIBITING CERTAIN POLITICAL COMMITTEES FROM USING 
                   SOFT MONEY TO RAISE HARD MONEY.

       Section 323 of the Federal Election Campaign Act of 1971, 
     as added by section 101, is amended by adding at the end the 
     following:
       ``(f) Other Political Committees.--A political committee 
     described in section 301(4)(A) to which this section does not 
     otherwise apply (including an entity that is directly or 
     indirectly established, financed, maintained, or controlled 
     by such a political committee) shall not solicit, receive, 
     direct, transfer, or spend funds that are not subject to the 
     limitations, prohibitions, and reporting requirements of this 
     Act.''.

  Mr. BENNETT. Mr. President, this is a very simple amendment. It is 
very short. I hope it is very much to the point. I refer to it as a 
consistency amendment; that is, it brings a degree of consistency to 
McCain-Feingold that has not been there before.
  I must confess I didn't read McCain-Feingold all that carefully in 
previous debates since I was opposed to it and I was convinced it was 
going to fail. I opposed it on constitutional grounds. I still feel 
that way about McCain-Feingold, but there is now a prospect that it 
might pass. That being the case, I think it appropriate we address some 
aspects that we perhaps did not look at before.
  The fundamental proposition within McCain-Feingold, as I understand 
it, is that soft money is evil, soft money must be banned, soft money 
leads to the appearance of corruption, and therefore McCain-Feingold is 
drafted to eliminate soft money.
  As we went through McCain-Feingold carefully, we discovered it does 
not eliminate all soft money. So my amendment, to be consistent, does 
eliminate all soft money. Let me be specific as to that which is not 
eliminated under McCain-Feingold and would be eliminated under my 
amendment; that is, the use of soft money to pay the administrative 
expenses of PACs, or political action committees.
  I have something of a history with PACs by virtue of the fact at one 
point in my career I worked for the late and legendary Howard Hughes. 
Mr. Hughes, or Mr. Hughes' executives, rather, constitute the fathers 
of PACs because in California, where Mr. Hughes had his operations, 
they initiated what was at the time a whole new idea in politics. Mr. 
Hughes' executives were tired of California politicians coming to them 
and saying: We want political contributions. So they said: Let's do 
something different. Come to our plant and address our employees, and 
when you have finished addressing our employees, we will pass out 
envelopes and pledge cards to our employees and they can pledge money 
to you or to your opponent, depending on how they received your 
presentation when they were there.
  To my knowledge--and I can be corrected on this--this was the 
beginning of a political action committee. I can remember when I was 
employed by the Hughes organization, every politician in California 
wanted to take advantage of this opportunity. They all wanted to come 
by the Hughes companies, address the Hughes employees, make their 
points, and then walk away when it was over with a single check that 
represented the aggregate of the commitments the employees had made to 
that particular candidate.
  It was considered at the time to be individual participation in 
politics at its finest, and it became, I believe, the pattern for the 
political action committee that we now have.
  But it is very different from what we now have in that now instead of 
simply inviting the candidates in and letting them speak to the 
employees and then inviting employees to make contributions in whatever 
fashion and whatever amount the employees may want to do it, in today's 
political action committee, the organization--be it a union or a 
corporation--goes out and actively raises the funds itself. It doesn't 
involve the candidate in any way except when it gets to the point of 
disbursing the funds.
  It has become a major business activity--I say ``business 
activity''--a major campaign activity on the part of corporations and 
unions.
  The administrative costs of running this activity are traditionally 
borne by the corporation and union. In other words, this is a soft 
money contribution on behalf of the corporation or the union which is 
not disclosed in any way.
  Let me share with you some numbers that come from the summary page of 
reports filed with the Federal Election Commission.
  The International Brotherhood of Electrical Workers Committee on 
Political Education reported that they raised in the calendar year 
$2,653,257.29. That is a high enough figure to get everybody's 
attention. What were their operating expenditures? Zero.
  Mr. President, you and I and every other person who is in this body 
knows that you don't raise $2.6 million without having any overhead. 
Indeed, the rule of thumb is that you spend a minimum of 25 percent of 
your receipts in raising the money, and sometimes it can go as high as 
45 percent.
  If we simply take that kind of rule of thumb and say a third of 
$2.650 million is $700,000, or $800,000, that means this report is 
prima facie evidence of an $800,000 soft money contribution to this PAC 
by the overhead of the union. It is not just unions. There are 
businesses that do it. I will give you some summary data with respect 
thereto.
  For example, Bank One had receipts of $2,378,211 on their FEC report, 
and they showed operating expenses of $259.46. Again, we know that 
couldn't possibly be true if you take the rule of thumb and apply it. 
It is somewhere, once again, between $700,000 and $800,000 that it 
would cost to raise that amount of money. This is an effective soft 
money contribution of between $700,000 and $800,000.
  Let me be clear. Based on my past history and my voting prospects, I 
do not object to Bank One doing that. I do not object to the soft money 
that they contributed.
  But McCain-Feingold, as a bill, does. If it passes, I believe it 
should be consistent because this soft money contribution, unlike the 
others that we have heard so much about on the floor, is not disclosed. 
This soft money contribution must be devised by the kind of 
mathematical analysis I have just applied to it. I could be completely 
wrong. I do not know that it is $700,000 to $800,000 that Bank One put 
into rates raising that much money because it is not disclosed in any 
way. This is not to imply any wrongdoing on Bank One's part because the 
present law does not require it. They are abiding by the present law in 
a perfectly legitimate and proper way.
  The same thing can be said of the International Brotherhood of 
Electrical Workers Committee on Political Education. The present law 
does not require them to disclose the amount of soft money they put 
into raising the $2.6 million that they report on their FEC report.
  But if we are going to be consistent, if we are going to say that 
soft money is bad, this amendment that I am offering will close a 
significant soft money loophole. It will close the loophole where soft 
money is currently being spent by both corporations and unions and is 
not being disclosed in any way.
  I don't know how controversial this might be. But I offer it because 
I think it shines an appropriate spotlight on an aspect of the McCain-
Feingold bill that has not been discussed in the past.
  I have no desire to take the full hour and a half. I see that there 
doesn't seem to be a great deal of interest one

[[Page 3981]]

way or the other on this. But I will be happy to yield for questions or 
comments by any Member of the Senate who wishes to discuss this 
amendment.
  Mr. McCONNELL. Will the Senator yield for a question?
  Mr. BENNETT. Certainly.
  Mr. McCONNELL. Is the understanding of the Senator from Kentucky 
correct that the principle involved in the amendment of the Senator 
from Utah is that if all Federal political parties, and State and local 
political parties in even numbered years have to operate in 100-percent 
hard dollars, then those organizing political action committees which 
are the possessors of 100 percent of the hard dollars must raise their 
money through 100 percent hard dollars as well? In other words, the 
administrative costs of the parties that engage in 100-percent hard 
dollars would also be applied to corporations and unions. Is that the 
principle established?
  Mr. BENNETT. The Senator from Kentucky is correct. All of us are 
familiar with the requirement to cover our administrative costs for 
fundraising out of the proceeds of that fundraising effort. The Senator 
is correct that this amendment would simply put PACs on the same course 
as individual candidates. A PAC could not raise money with the 
advantage of soft dollars any more than a candidate would.
  The Senator from Kentucky is further correct in that it has an impact 
on what happens at the State party level because I understand now that 
a State party can use soft dollars to do certain kinds of things 
unconnected with advertising or direct contributions to candidates. 
They would say: No, you can't do that if there is a fundraising effort. 
The fundraising expenses must be paid out of the fundraising receipts 
and cannot be solicited in soft dollars.
  Mr. McCONNELL. Is the principle of the Senator from Utah that even 
though he, like the Senator from Kentucky, does not oppose non-Federal 
money, if such a standard of Federal money only is established for the 
national political parties, and State and local parties in even 
numbered years, then that same principle should apply to everyone 
participating?
  Mr. BENNETT. The Senator from Kentucky is correct. That is exactly 
the position I have taken.
  In the interest of full disclosure of motive, I know there is some 
conversation on this floor about raising the limits for hard dollar 
solicitations. I am solidly and strongly in favor of raising the limits 
on hard dollar solicitations. I recognize if this loophole for soft 
dollars--as I have pointed out--is, in fact, closed it will increase 
the pressure when we get to the appropriate amendment to raise the hard 
dollar limit because it will shut off one significant source of soft 
dollar contributions that is currently in the bill.
  I don't want to fly under any false pretense. I am hoping that by the 
passage of my amendment we will not only achieve the intellectual 
consistency I have been discussing with the Senator from Kentucky, but, 
quite frankly, it would create some political pressure to raise the 
hard dollar limits because I think raising the hard dollar limits is a 
salutatory thing to do.
  So let there be no mistake that that agenda is in my mind as I offer 
this amendment. But nonetheless, I think the amendment has an 
intellectual sustaining consistency to it because it takes the position 
that if, as McCain-Feingold says, soft money is inherently corrupting, 
or gives the appearance of corruption, this is a form of soft money 
that is even more the appearance of corruption because under McCain-
Feingold it is, A, allowed and, B, not disclosed.
  Mr. McCONNELL. Then as a practical matter, just sort of putting it 
another way, the treasury funds of unions and corporations cannot be 
used to underwrite fundraising or administrative costs in political 
action committees?
  Mr. BENNETT. The Senator from Kentucky is exactly correct.
  If this amendment passes, treasury funds in the union, treasury funds 
in the corporation, cannot be used to pay the expenses of political 
fundraising in a political action committee that is organized by either 
the union or the corporation.
  Mr. McCONNELL. I thank the Senator from Utah for the answer.
  Mr. BENNETT. As I said, the amendment is very short. It is very 
straightforward. It does not require the kind of complex analysis that 
went into the amendment of the Senator from New Mexico, which required 
an entire evening to review and rewrite. I think it is very 
straightforward. I am not anxious to prolong the debate, but I will, of 
course, be here to respond to any comments anyone might have one way or 
the other.
  Mr. DODD addressed the Chair.
  The PRESIDING OFFICER. The Senator from Connecticut.
  Mr. DODD. Mr. President, at the appropriate time I am going to make 
some comments about the pending amendment. But as has been the custom 
over the years, our distinguished former leader, the distinguished 
senior Senator from West Virginia, makes it a point, at the change of 
the seasons in our country, to remind us of the importance of 
transition, hope, and promise.
  In the midst of this debate, I would like to yield whatever time the 
Senator from West Virginia may need for some remarks that do not 
pertain directly to this amendment but do pertain to the spirit in 
which this body ought to consider legislation in any season.
  So with that, Mr. President, I yield whatever time the senior Senator 
from West Virginia may need.
  Mr. BYRD. Mr. President, I thank my friend.
  The PRESIDING OFFICER. The Senator from West Virginia.

                          ____________________