[Senate Report 105-167]
[From the U.S. Government Publishing Office]



105th Congress                                            Rept. 105-167
                                SENATE

 2d Session                                                      Vol. 6
_______________________________________________________________________


 
     INVESTIGATION OF ILLEGAL OF IMPROPER ACTIVITIES IN CONNECTION
               WITH 1996 FEDERAL ELECTION CAMPAIGNS

                               __________

                              FINAL REPORT

                                 of the

                   COMMITTEE ON GOVERNMENTAL AFFAIRS

                          UNITED STATES SENATE

                             together with

                     ADDITIONAL AND MINORITY VIEWS

                             Volume 6 of 6





                 March 10, 1998.--Ordered to be printed


INVESTIGATION OF ILLEGAL OR IMPROPER ACTIVITIES IN CONNECTION WITH 1996 
                  FEDERAL ELECTION CAMPAIGNS--VOLUME 6


105th Congress                                            Rept. 105-167
                              SENATE

 2d Session                                                      Vol. 6
_______________________________________________________________________


                      INVESTIGATION OF ILLEGAL OR

                   IMPROPER ACTIVITIES IN CONNECTION

                       WITH 1996 FEDERAL ELECTION

                               CAMPAIGNS

                               __________

                              FINAL REPORT

                                 of the

                   COMMITTEE ON GOVERNMENTAL AFFAIRS

                          UNITED STATES SENATE

                             together with

                     ADDITIONAL AND MINORITY VIEWS

                             Volume 6 of 6





                 March 10, 1998.--Ordered to be printed


                   COMMITTEE ON GOVERNMENTAL AFFAIRS

                   FRED THOMPSON, Tennessee, Chairman
SUSAN COLLINS, Maine                 JOHN GLENN, Ohio
SAM BROWNBACK, Kansas                CARL LEVIN, Michigan
PETE V. DOMENICI, New Mexico         JOSEPH I. LIEBERMAN, Connecticut
THAD COCHRAN, Mississippi            DANIEL K. AKAKA, Hawaii
DON NICKLES, Oklahoma                RICHARD J. DURBIN, Illinois
ARLEN SPECTER, Pennsylvania          ROBERT G. TORRICELLI, New Jersey
BOB SMITH, New Hampshire             MAX CLELAND, Georgia
ROBERT F. BENNETT, Utah
          Hannah S. Sistare, Staff Director and Chief Counsel
                 Leonard Weiss, Minority Staff Director
                       Lynn L. Baker, Chief Clerk
                                 ------                                

                             MAJORITY STAFF

                   Michael J. Madigan, Chief Counsel

                  J. Mark Tipps, Deputy Chief Counsel

                   Donald T. Bucklin, Senior Counsel

                     Harold Damelin, Senior Counsel

                 Harry S. Mattice, Jr., Senior Counsel

                  John H. Cobb, Staff Director/Counsel

                        K. Lee Blalack, Counsel

                         Michael Bopp, Counsel

                        James A. Brown, Counsel

                        Brian Connelly, Counsel

                       Christopher Ford, Counsel

                        Allison Hayward, Counsel

                      Matthew Herrington, Counsel

                        Margaret Hickey, Counsel

                          Dave Kully, Counsel

                        Jeffrey Kupfer, Counsel

                          John Loesch, Counsel

                   William ``Bill'' Outhier, Counsel

                         Glynna Parde, Counsel

                          Phil Perry, Counsel

                          Gus Puryear, Counsel

                Mary Kathryn (``Katie'') Quinn, Counsel

                         Paul Robinson, Counsel

                         John S. Shaw, Counsel

                       David Hickey, Investigator

                     Stephen J. Scott, Investigator

                     Matthew Tallmer, Investigator

                     Darla Cassell, Office Manager

                   Mary D. Robertson, Office Manager

                       Kenneth Feng, GAO Detailee

                      Mark Kallal, Legal Assistant

                   John W. M. Claud, Legal Assistant

                     Mike Marshall, Legal Assistant

                   Michael Tavernier, Legal Assistant

                     Michael Vahle, Legal Assistant

                     Amy Alderson, Staff Assistant

                    Kim Bejeck, Executive Assistant

                  Deborah Collier, Executive Assistant

                    Daniel Donovan, Staff Assistant

                      Leanne Durm, Staff Assistant

                 Michele Espinoza, Executive Assistant

              Cheryl Ethridge-Morton, Executive Assistant

                    Heather Freeman, Staff Assistant

                      John Gilboy, Staff Assistant

                   Janat Montag, Executive Assistant

                 Kathryn O'Connor, Executive Assistant

                     Wayne Parris, Staff Assistant

                     Jason Parrott, Staff Assistant

                    Sahand Sarshar, Staff Assistant

                       Jerome Sikorski, Archivist

                  Loesje Troglia, Executive Assistant

                  Sandra Wiseman, Executive Assistant

                   GOVERNMENT AFFAIRS COMMITTEE STAFF

                   Frederick S. Ansell, Chief Counsel

                  Richard A. Hertling, Senior Counsel

              Curtis M. Silvers, Professional Staff Member

                 Paul S. Clark, Communications Director

                     Michal S. Prosser, Chief Clerk

                   Matthew Peterson, Assistant Clerk

              Christopher W. Lamond, Systems Administrator

                  Steve Diamond, Senator Susan Collins

                   Jim Rowland, Senator Sam Brownback

              Brian Benczkowski, Senator Pete V. Domenici

                  Michael Loesch, Senator Thad Cochran

                   Barbara Olson, Senator Don Nickles

                William J. Morley, Senator Arlen Specter

                   Rick Valentine, Senator Bob Smith

                Bill Triplett, Senator Robert F. Bennett

                             MINORITY STAFF

                   Alan Baron, Minority Chief Counsel

                  Pamela Marple, Deputy Chief Counsel

                   David McKean, Deputy Chief Counsel

                 Jeffrey Robbins, Deputy Chief Counsel

                         Alan Edelman, Counsel

                       Jonathan Frenkel, Counsel

                           Jim Lamb, Counsel

                        Deborah Lehrich, Counsel

                      Cassandra Lentchner, Counsel

                      Dianne Pickersgill, Counsel

                        Lisa Rosenberg, Counsel

                         Kevin Simpson, Counsel

                       Howard Sklamberg, Counsel

                          Beth Stein, Counsel

                     David Cahn, Assistant Counsel

                   Sarah Des Pres, Assistant Counsel

                   Peter Rosenberg, Assistant Counsel

                       Larry Gurwin, Investigator

                      Jim Jordan, Press Secretary

                          Holly Koerber, Clerk

                      Bill McDaniel, Investigator

                      Jay Youngclaus, Investigator

                  Caroline Badinelli, Staff Assistant

                     Ann Metler, Research Assistant

                   Jessica Robinson, Staff Assistant

                   Rachael Sullivan, Staff Assistant

                    Nichole Veatch, Staff Assistant

     Linda Gustitus, Governmental Affairs Committee, Senator Levin

       Elise Bean, Governmental Affairs Committee, Senator Levin

  Laurie Rubenstein, Governmental Affairs Committee, Senator Lieberman

      Nanci Langly, Governmental Affairs Committee, Senator Akaka

     Marianne Upton, Governmental Affairs Committee, Senator Durbin

 Matthew Tanielian, Governmental Affairs Committee, Senator Torricelli

    Bill Johnstone, Governmental Affairs Committee, Senator Cleland

                               FBI DETAIL

                       Anne Asbury, Investigator

             Jerome Campane, Investigator-FBI Detail Leader

                        Becky Chan, Investigator

                      Jeffrey Harris, Investigator

                    Steven Hendershot, Investigator

                       James Kunkel, Investigator

                       Kelli Sligh, Investigator

                     Vo ``Ben'' Tran, Investigator


                            C O N T E N T S

                              ----------                              
                                                                   Page
Chapter:
    1. Preface...................................................     1
    2. Procedural Background and Overview........................     5
    3. Summary of Findings.......................................    31
    4. The Thirst for Money......................................    51
    5. The White House Controlled the DNC and Improperly 
      Coordinated the Activities of the DNC and Clinton/Gore '96.   105
    6. The DNC Dismantled Its System for Vetting Contributions...   167
    7. DNC Fundraising in the White House: Coffees, Overnights, 
      and Other Events...........................................   191
    8. Fundraising Calls from the White House....................   499
    9. White House Vetting of Individuals with Access to the 
      President..................................................   751
    10. Johnny Chung and the White House ``Subway''..............   781
    11. The Contribution of Yogesh Gandhi........................   917
    12. Ted Sioeng, His Family, and His Business Interests.......   961
    13. John Huang's Years at Lippo..............................  1117
    14. John Huang at Commerce...................................  1153
    15. John Huang Moves from Commerce to the DNC................  1653
    16. John Huang's Illegal Fundraising at the DNC..............  1689
    17. The Hsi Lai Temple Fundraiser and Maria Hsia.............  1749
    18. The China Connection: Summary of Committee's Findings 
      Relating to the Efforts of the People's Republic of China 
      to Influence U.S. Policies and Elections...................  2499
    19. Charlie Trie's and Ng Lap Seng's Laundered Contributions 
      to the DNC.................................................  2517
    20. Charlie Trie's Contributions to the Presidential Legal 
      Expense Trust..............................................  2711
    21. The Saga of Roger Tamraz.................................  2905
    22. DNC Efforts to Raise Money in the Indian Gaming Community  3071
    23. The Hudson, Wisconsin Casino Proposal....................  3165
    24. The Cheyenne and Arapaho Tribes: Their Quest for the Fort 
      Reno Lands.................................................  3547
    25. The Offer of R. Warren Meddoff...........................  3623
    26. White House, DNC and Clinton-Gore Campaign Fundraising 
      Efforts Involving the International Brotherhood of 
      Teamsters..................................................  3655
    27. Compliance by Nonprofit Groups with Committee Subpoenas..  3833
    28. Role of Nonprofit Groups in the 1996 Elections...........  3993
    29. Allegations Relating to the National Policy Forum........  4195
    30. White House Document Production..........................  4277
    31. DNC Document Production..................................  4425
    32. Campaign Finance Reform Issues Brought to the Forefront 
      by the Special Investigation...............................  4459
    33. Recommendations..........................................  4503

                            Additional Views

    34. Additional Views of Chairman Fred Thompson...............  4511
    35. Additional Views of Senator Susan Collins................  4535
    36. Additional Views of Senator Arlen Specter................  4539
    37. Additional Views of Senator Robert Bennett...............  4545

                             Minority Views

    38. Additional Views of Senators Glenn, Levin, Lieberman, 
      Akaka, Durbin, Torricelli and Cleland......................  4557
    39. Additional Views of Senator Glenn........................  9507
    40. Additional Views of Senator Levin........................  9511
    41. Additional Views of Senator Lieberman....................  9525
    42. Additional Views of Senator Akaka........................  9559
    43. Additional Views of Senator Durbin.......................  9565
    44. Additional Views of Senator Torricelli...................  9571
  MINORITY VIEWS OF SENATORS GLENN, LEVIN, LIEBERMAN, AKAKA, DURBIN, 
                         TORRICELLI AND CLELAND
                           Table of Contents

                                                                   Page
Foreword.........................................................  4559
Executive Summary................................................  4561
Part 1  Foreign Influence........................................  4577
Chapter 1: Overview and Legal Analysis...........................  4577
    Findings.....................................................  4577
    Overview of Following Chapters...............................  4577
    Legal Analysis...............................................  4579
Chapter 2: The China Plan........................................  4619
    Findings.....................................................  4620
    Introduction.................................................  4621
    The Committee's Investigation................................  4623
    Background...................................................  4623
    The China Plan...............................................  4625
        Events Leading up to the China Plan......................  4625
        Information about the China Plan.........................  4626
        Implementation of the China Plan.........................  4627
        Legal Activities.........................................  4627
        Illegal Activities.......................................  4628
        Individuals Under Investigation and the China Plan.......  4628
        Ted Sioeng...............................................  4629
        John Huang and Maria Hsia................................  4630
        The Riadys...............................................  4630
        Intermediaries: Relation to the Committee's Public 
          Investigation..........................................  4631
        Political Contributions to Federal Elections.............  4632
        Political Contributions: Relation to the Committee's 
          Public Investigation...................................  4633
    Information not Pursued by the Committee.....................  4633
    Conclusion...................................................  4634
Chapter 3: The National Policy Forum.............................  4657
    Findings.....................................................  4657
    Introduction.................................................  4657
    Haley Barbour................................................  4659
    Ambrous Young................................................  4659
    Origin Of the National Policy Forum..........................  4660
     The Barbour-Baroody Split...................................  4661
    Funding the NPF..............................................  4661
    Baroody Resigns..............................................  4662
    The NPF Under John Bolton....................................  4663
    Barbour Solicits Ambrous Young...............................  4665
    The Loan Transaction.........................................  4666
    Funding the Contract With America............................  4668
    The Trip to Hong Kong........................................  4669
    The Trip to China............................................  4670
    The Default..................................................  4670
    Other Foreign Contributions..................................  4671
    Conclusion...................................................  4672
Chapter 4: John Huang............................................  4788
    Findings.....................................................  4788
    Huang's Early Career.........................................  4789
    Background on the Lippo Group................................  4790
    Huang's Activities on Behalf of the Lippo Group..............  4791
        Political Contributions..................................  4792
    Huang's Tenure at the Department of Commerce.................  4794
        Huang's Appointment......................................  4794
        Huang's Role at Commerce.................................  4796
        Huang's Security Clearance and Access to Classified 
          Information............................................  4798
        Granting of Top Secret Clearance.........................  4799
        Huang's Access to Classified Information.................  4800
        Huang's Use of the Stephens Office.......................  4802
        Huang's Post-Commerce Clearance..........................  4803
        No Evidence of Espionage.................................  4806
        Evidence of Solicitations of Contributions...............  4808
    Hiring Huang to Work at the DNC..............................  4811
        Huang's Understanding of Applicable Law..................  4813
        Huang's Fundraisers......................................  4814
        February 1996 Hay Adams APALC Events, Washington, D.C....  4814
        May 13, 1996 Sheraton Carlton Event, Washington, D.C.....  4816
        July 22, 1996 Century Plaza Hotel Event, Los Angeles.....  4816
        July 30, 1996 Jefferson Hotel Event, Washington, D.C.....  4817
        Other Huang Activities...................................  4818
        Hsi Lai Temple Event.....................................  4818
        The Vice President and the Temple Event..................  4819
        John Huang and the Temple Event..........................  4831
        John H. K. Lee and the Cheong Am America Contribution....  4832
        June 18, 1996, DNC Coffee at the White House.............  4836
        Rawlein Soberano.........................................  4838
        The DNC's Supervision of Huang...........................  4839
    Conclusion...................................................  4840
Chapter 5: Charlie Trie..........................................  5270
    Findings.....................................................  5270
    Background...................................................  5271
    Trie's DNC Contributions and Fundraising.....................  5272
        Trie's DNC Contributions.................................  5272
        Trie's DNC Fundraising...................................  5274
    Chu and Wang Contributions...................................  5275
    DNC Awareness of Trie's Activities...........................  5276
    Trie's Fundraising for the Presidential Legal Expense Trust..  5277
        Trie's March 21, 1996 Meeting with Cardozo...............  5278
        Investigation into the Contributions.....................  5279
        The Trust's Decision to Reject the Contributions.........  5281
        The Trust's Change in Accounting Procedures..............  5282
        Foreign Funds............................................  5283
        Analysis.................................................  5284
    Trie's Access to White House and DNC Events..................  5285
    Trie's Commission Appointment................................  5287
    Trie and Wang Jun at the White House.........................  5289
        Wang Jun's Invitation to the White House Coffee..........  5290
        Role of Ernest Green.....................................  5291
        Analysis.................................................  5292
    Trie and China...............................................  5293
Chapter 6: Michael Kojima........................................  5413
    Findings.....................................................  5413
    Contribution History.........................................  5415
    Kojima's Access to the White House and Other Perks...........  5415
    The Bush White House and Fundraising.........................  5418
    GOP Claimed No Duty to Investigate...........................  5423
    Foreign Funds................................................  5425
    Failure to Conduct a Federal Investigation...................  5427
    Conclusion...................................................  5428
Chapter 7: Ted Sioeng............................................  5573
    Findings.....................................................  5573
    Ted Sioeng's Background......................................  5573
    Sioeng's Connections to China................................  5574
    The ``China Plan'' and Ted Sioeng............................  5576
    The Sioeng Family's Contributions to Matt Fong in April 1995.  5576
    The Source of Sioeng's April 1995 Contributions to Fong......  5578
    Fong Arranges for Sioeng to Meet Speaker Gingrich............  5578
    The Sioeng Family's Contributions to the National Policy 
      Forum......................................................  5579
    The Sioeng Family's Contribution to Matt Fong in December 
      1995.......................................................  5580
    Jessica Elnitiarta's Contributions to the DNC................  5581
        The Hay Adams Fundraiser.................................  5581
        Hsi Lai Buddhist Temple Event............................  5582
        Sheraton Carlton Hotel Event.............................  5582
        Century City Event and Subsequent $50,000 Contribution...  5583
    Conclusion...................................................  5584
Chapter 8: Jay Kim...............................................  5683
    Findings.....................................................  5683
    The Korea Traders' Club......................................  5683
    Kim's Contribution From His Own Business in 1992.............  5684
    The Kim's Acceptance of Corporate Funds......................  5684
    Acceptance of Funds From Foreign Nationals...................  5685
    Alleged Violations During the Federal Investigation..........  5686
    The Conviction of Kim's Former Campaign Treasurer............  5686
    Possible Election Law Violations During the 1996 Cycle.......  5687
    Kim's Commitment to Compliance With U.S. Election Laws.......  5688
    The Kims' Book Deal..........................................  5689
    Conclusion...................................................  5690
Part 2  Independent Groups.......................................  5926
Chapter 9: Overview and Legal Analysis...........................  5926
    Findings.....................................................  5926
    Overview of Following Chapters...............................  5926
        1996 Election-Related Activities.........................  5927
    Legal Analysis...............................................  5928
        Categories of Independent Groups.........................  5929
        Disclosure...............................................  5930
        Coordination.............................................  5930
        Circumvention............................................  5933
        Third Party Contributions................................  5934
        Violations of Tax Law....................................  5934
Chapter 10: The Republican Party and Independent Groups..........  5967
    Findings.....................................................  5967
    Introduction.................................................  5967
    RNC Ties to Independent Groups...............................  5969
        Coalition Plans..........................................  5969
        Coordination during the 1996 Election Cycle..............  5973
        RNC Funding of Independent Groups........................  5974
        RNC Funding Schemes in the 1996 Election Cycle...........  5975
        RNC Contributions and Fundraising Help in 1996...........  5976
        Circumventing Campaign Finance Laws......................  5978
    The RNC's Front Organizations................................  5979
        The National Policy Forum................................  5980
        Coalition for Our Children's Future......................  5981
    Fronts For Conservative Donors...............................  5981
        CCF's Attack Ads.........................................  5981
        Triad's Attack Ads.......................................  5982
        Triad's Donors...........................................  5982
    Conclusion...................................................  5983
Chapter 11: Americans for Tax Reform.............................  6034
    Findings.....................................................  6034
    Background...................................................  6034
    Grover Norquist..............................................  6035
    The $4.6 Million October Surprise............................  6037
    ATR Televised Attack Ads.....................................  6041
    ATR Candidate Advocacy.......................................  6043
    ATR: Coordinated Efforts in 1996 to Elect Republicans To 
      Office.....................................................  6048
    RNC-Directed Contributions to ATR............................  6050
    ATR and RNC's Refusal to Cooperate...........................  6051
    Possible Civil, Criminal, and Tax Law Violations.............  6052
        Circumvention............................................  6052
        Coordination.............................................  6053
        Disclosure...............................................  6053
        Tax Laws.................................................  6054
    Conclusion...................................................  6055
Chapter 12: Triad and Related Organizations......................  6289
    Findings.....................................................  6289
    Introduction.................................................  6290
    Background...................................................  6290
    The Committee's Investigation of Triad.......................  6291
    The Political Operation of Triad Management..................  6293
        Triad is Not a Business..................................  6293
        Robert Cone's Financial Support of Triad.................  6293
        Corporate Contributions by Triad.........................  6294
        Triad and Political Action Committees....................  6297
    The Advertising Campaign.....................................  6301
        Creation of Citizens for Reform and Citizens for the 
          Republic...............................................  6301
        Improper Coordination of Triad's Advertising with 
          Political Candidates...................................  6303
        No Comparison Between Triad and the AFL-CIO..............  6306
        Financing the Advertising Campaign.......................  6307
        The Trusts Behind Triad..................................  6308
        Economic Education Trust.................................  6309
        Triad's Impact on the 1996 Elections.....................  6312
        Advertising by Other Triad Contributors..................  6312
    Conclusion...................................................  6313
Chapter 13: Coalition for Our Children's Future..................  6771
    Findings.....................................................  6771
    Background...................................................  6771
    RNC Ties to CCF..............................................  6772
        CCF's 1995 Advertising Campaign..........................  6774
        CCF and its Exempt Organization Status...................  6775
    CCF 1996 Advertising for Republican Candidates...............  6777
    The Secret Trust and CCF's 1996 Election Advertising.........  6780
        Did CCF's Secret Contributor Fund Triad Attack Ads?......  6781
    Conclusion...................................................  6782
Chapter 14: Christian Coalition..................................  6934
    Finding......................................................  6934
    Background...................................................  6934
    Pat Robertson and Ralph Reed.................................  6935
    Voter Guides Before the 1996 Election Cycle..................  6937
    Distortion of Candidates' Positions on Issues................  6937
    Voter Guides in the 1996 Election Cycle......................  6938
    Coalition Officials Endorsed Candidates......................  6941
    Coalition Ties to the Republican Party.......................  6944
    Coalition Activity in State Elections........................  6947
    FEC Action...................................................  6949
    Conclusion...................................................  6951
Chapter 15: Other Independent Groups.............................  7051
    Seniors Organizations........................................  7051
    Term Limits Groups as Fronts for GOP Donors..................  7053
    Nonprofit Groups Linked to Presidential Candidates...........  7055
    Conclusion...................................................  7055
Chapter 16: The Democratic Party and Independent Groups..........  7062
    Findings.....................................................  7062
Chapter 17: Warren Meddoff.......................................  7064
    Findings.....................................................  7064
    Warren Meddoff...............................................  7064
    Meddoff and the October 1996 Fundraiser......................  7065
    Ickes Conversations With Meddoff.............................  7066
    No Evidence of Illegal Coordination..........................  7067
    Ickes's Alleged Direction to Meddoff to Shred the Fax........  7068
    Meddoff's Credibility........................................  7068
    The DNC'S Refusal of the Contribution Offer..................  7071
    Fundraising on Federal Property..............................  7072
    Conclusion...................................................  7073
Chapter 18: Teamsters............................................  7102
    Findings.....................................................  7102
    Teamster Contributions.......................................  7102
        Martin Davis's Initial Contacts With DNC Officials.......  7103
        Judith Vasquez's Contribution to Vote Now '96............  7104
        Teamsters' Contributions.................................  7105
    Sullivan's Role..............................................  7106
    Proposed Contribution to Unity '96...........................  7107
        DCCC Executive Director Rejected the Proposal............  7107
        DCCC Chairman Rejected the Proposal......................  7108
        DSCC Deputy Executive Director Rejected the Proposal.....  7108
        DSCC Chairman Rejected the Proposal......................  7109
        The Proposal and Unity '96...............................  7109
    Conclusion...................................................  7109
Chapter 19: Other Independent Groups.............................  7235
    Findings.....................................................  7235
    Overview.....................................................  7235
    The DNC and Independent Groups...............................  7236
    Activities of Independent Groups.............................  7237
        The AFL-CIO..............................................  7237
        Vote Now '96.............................................  7238
        Citizen Action...........................................  7239
        National Council of Senior Citizens......................  7239
    Conclusion...................................................  7239
Part 3  Contribution Laundering/Third Party Transfers............  7241
Chapter 20: Overview and Legal Analysis..........................  7241
    Finding......................................................  7241
    Overview of Following Chapters...............................  7241
    Legal Analysis...............................................  7242
Chapter 21: Contributions to the Democratic Party................  7244
    Findings.....................................................  7244
    Keshi Zhan, Yue Chu, and Xiping Wang.........................  7246
    Pauline Kanchanalak..........................................  7248
    Yogesh Gandhi................................................  7249
    Hsi Lai Temple Monastics.....................................  7253
    Arief and Soraya Wiaridinata.................................  7256
    The Lum Family...............................................  7257
    Conclusion...................................................  7258
Chapter 22: Contributions to the Republican Party................  7372
    Findings.....................................................  7372
    Michael Kojima...............................................  7372
    Aqua Leisure Industries, Inc.................................  7375
    Empire Sanitary Landfill, Inc................................  7377
    Deluca Liquor and Wine, Ltd..................................  7378
    Conclusion...................................................  7379
Part 4  Soft Money and Issue Advocacy............................  7515
Chapter 23: Systemic Problems of the Campaign Finance System.....  7515
    Findings.....................................................  7515
    Introduction.................................................  7515
    Soft Money...................................................  7516
        Background on Soft Money.................................  7516
        Soft Money Finds a Way into Federal Elections............  7517
        Soft Money Creates the Appearance of Corruption and 
          Undermines Public Financing............................  7519
        Disclosure of Soft Money.................................  7520
    Issue Advocacy...............................................  7521
        Background on Issue Ads..................................  7522
    Proposals for Reform.........................................  7524
        Kassebaum-Baker/Mondale..................................  7525
        League of Women Voters...................................  7525
        Common Cause.............................................  7526
        Campaign Reform Project..................................  7526
        Public Campaign..........................................  7526
        Disclosure Only..........................................  7526
    Conclusion...................................................  7526
Part 5  Fundraising and Political Activities of the National 
  Parties and Administrations....................................  7540
Chapter 24: Overview and Legal Analysis..........................  7540
    Finding......................................................  7540
    Overview of Following Chapters...............................  7540
    Legal Analysis...............................................  7541
        Taking Official Action in Exchange for a Contribution....  7541
        Use of Federal Property..................................  7542
        Use of Federal Employees.................................  7544
        Spending Limits, Coordination and Issue Advocacy.........  7546
Chapter 25: DNC and RNC Fundraising Practices and Problems.......  7595
    Findings.....................................................  7595
    Introduction.................................................  7596
    Structure of the National Parties............................  7598
        The Democratic National Committee........................  7598
        The Republican National Committee........................  7599
    Fundraising Drives...........................................  7600
    Soliciting Contributions.....................................  7600
        Training Fundraisers.....................................  7601
        The DNC's Training Procedures and Problems...............  7601
        The RNC's Training Procedures and Problems...............  7602
        Contribution Compliance..................................  7602
        The DNC's Contribution Compliance and Problems...........  7602
        The RNC's Contribution Compliance and Problems...........  7603
        Telephone Solicitations from Federal Property............  7605
    Organizing Fundraisers and Other Events......................  7605
        DNC Events and Contributor Services......................  7605
        RNC Events and Contributor Services......................  7606
    Spending Party Funds.........................................  7607
    DNC'S Splitting Contributions Between Hard and Soft Money 
      Accounts...................................................  7608
    Conclusion...................................................  7609
Chapter 26: Telephone Solicitations From Federal Property........  7773
    Findings.....................................................  7773
    Presidential Telephone Calls.................................  7773
        Richard Jenrette.........................................  7774
    Vice Presidential Telephone Calls............................  7776
        Purpose of the Phone Calls...............................  7777
        Raising Soft Money.......................................  7780
        DNC Splitting Contributions Between Hard and Soft Money 
          Accounts...............................................  7781
        Applicability of the Pendleton Act.......................  7783
        The Contributors.........................................  7783
        Payment for the Phone Calls..............................  7783
        Payment for the Thank-You Notes..........................  7784
        No Other Costs to the Government.........................  7784
    Republican Phone Calls.......................................  7785
    Conclusion...................................................  7786
Chapter 27: White House Coffees and Overnights...................  7956
    Findings.....................................................  7956
    DNC Coffees at the White House...............................  7956
        The Coffees and Fundraising..............................  7957
        The Coffees as DNC Events................................  7959
        The Law and Precedent....................................  7960
    White House Overnights.......................................  7960
    Conclusion...................................................  7961
Chapter 28: Republican Use of Federal Property and Contributor 
  Access.........................................................  7968
    Findings.....................................................  7968
    Major Contributor Access to Elected Officials................  7968
        Republican Eagles........................................  7968
        Team 100.................................................  7970
        Other Republican Events and Meetings for Contributions...  7972
    Use of Federal Property For Fundraising......................  7975
    Political Appointments Awarded to Republican Contributors....  7977
    Conclusion...................................................  7978
Chapter 29: Democratic Contributor Access to the White House.....  8057
    Findings.....................................................  8057
    Introduction.................................................  8057
    The Secret Service...........................................  8058
    The White House Office of Political Affairs..................  8059
    The National Security Council................................  8060
        Previous NSC Procedures..................................  8061
        Current NSC Procedures...................................  8062
        Other Issues.............................................  8063
    Conclusion...................................................  8065
Chapter 30: Roger Tamraz.........................................  8095
    Findings.....................................................  8095
    Overview.....................................................  8095
    1970-1990: Tamraz's Business Ventures, Dealings With the CIA 
      and Political Contributions................................  8096
        Business Ventures........................................  8096
        Reported Contacts with the CIA...........................  8097
        RNC's Recommendation for a Reagan Administration Position  8097
        Tamraz Leaves Lebanon after Embezzlement Charges.........  8098
    1994-1995: The Commerce Department...........................  8098
    1995: The Caspian Sea Pipeline...............................  8099
        U.S. Policy on the Caspian Sea Pipeline..................  8099
        May-June 1995: Meetings with Executive Branch Officials..  8100
        Bob of the CIA...........................................  8101
    July-October 1995: Contributions to the Democratic Party.....  8103
        Contribution History.....................................  8103
        The DNC's Acceptance of Tamraz's Contributions...........  8103
    September 1995: Request For an Official Meeting With the Vice 
      President..................................................  8104
    Tamraz's Attendance at DNC Events............................  8105
        Summary of Events........................................  8105
        Fowler's Role............................................  8105
        No Effect on Policy......................................  8107
    April 1996: Department of Energy Official Talks to Heslin....  8107
        Tamraz's Attendance at March 27 and April 1, 1996 DNC 
          Events.................................................  8107
        Follow-Up on the Pipeline Project........................  8108
        The Request within the Department of Energy..............  8109
        Carter's Call to Heslin..................................  8110
        Heslin's Testimony.......................................  8110
        Carter's Testimony.......................................  8110
        The Department of Energy Responds to the Request for 
          Information Conclusions................................  8111
    Conclusion: Access Still for Sale in 1997....................  8113
Chapter 31: Other Contributor Access Issues......................  8250
    Findings.....................................................  8250
    Johnny Chung.................................................  8250
        Political Contributions..................................  8251
        Access to Administration Officials.......................  8251
        Link Between Contributions and Visits....................  8252
        Williams's Handling of Chung's $50,000 DNC Contribution..  8253
        The Pendleton Act........................................  8255
        The Hatch Act............................................  8256
    Other Individuals............................................  8256
        Jorge Cabrera............................................  8256
        Grigori Loutchansky......................................  8257
        Wang Jun.................................................  8258
        Yung Soo Yoo.............................................  8259
        Michael Kojima...........................................  8260
    Conclusion...................................................  8260
Chapter 32: Coordination Among the Democratic National Committee 
  and the Clinton/Gore Campaign and the White House..............  8281
    Findings.....................................................  8282
    Introduction and Summary.....................................  8282
    The Origin of the DNC's Issue Ads Campaign...................  8282
    The DNC and Rules Governing Issue Ads........................  8283
    The DNC Adhered to the Legal Rules Governing Issue Ads.......  8285
    The Clinton Campaign and the DNC Campaign....................  8286
    The Legality of Coordination Among the Clinton Campaign, 
      White House and DNC........................................  8286
        The President's Role in the Making of DNC Issue Ads......  8286
        Ickes's Role in Coordinating with the DNC................  8287
    Conclusion...................................................  8290
Chapter 33: Coordination Between the Republican National 
  Committee and the Dole for President Campaign..................  8294
    Findings.....................................................  8294
    Introduction.................................................  8294
    The Origin of the Pro-Dole Issue Ads.........................  8295
    Dole for President and the Dole/RNC Campaign.................  8296
    The Substance of Dole/RNC Issue Ads..........................  8297
    The Dole/RNC ``Issue Ads'' and Presidential Battleground 
      States.....................................................  8299
    Dole/RNC Issue Ads and Soft Money............................  8300
    Coordination of Fundraising and Political Efforts............  8301
    Dole for President and the RNC Impeded the Committee's 
      Investigation..............................................  8302
    Conclusion...................................................  8303
Part 6  Allegations of Quid Pro Quos.............................  8368
Chapter 34: Overview and Legal Analysis..........................  8368
    Legal Analysis...............................................  8368
    Overview of Following Chapters...............................  8369
Chapter 35: Hudson Casino........................................  8371
    Findings.....................................................  8371
    Overview.....................................................  8372
    Secretary Babbitt's Remarks to Lobbyist Eckstein.............  8372
        Eckstein's Affidavit.....................................  8372
        Secretary Babbitt's Letter to Senator McCain.............  8373
        Eckstein's Deposition....................................  8373
        Secretary Babbitt's Letter to Chairman Thompson..........  8374
        Secretary Babbitt's Hearing Testimony....................  8374
    Eckstein's Allegations.......................................  8376
    Eckstein's Interpretation....................................  8378
    Secretary Babbitt and Lobbyists for the Opposing Tribes......  8378
    Role of the White House......................................  8379
        Lobbyist Contacts with Harold Ickes......................  8379
        White House Requested Status Report from Interior........  8380
        White House Requested Second Status Report from Interior.  8381
        White House and Interior Confer on Response to 
          Congressional Inquiry..................................  8382
        Other Interior and White House Contacts..................  8382
    Eckstein's Access to Interior Officials......................  8383
        Eckstein's Telephone Contacts with Secretary Babbitt.....  8383
        The Tribal Applicants' May 1995 Meeting with Interior 
          Officials..............................................  8384
        Eckstein's July 14 Meeting with Secretary Babbitt........  8384
    The Merits of Interior's Decision on the Hudson Application..  8385
        The Hudson Casino and the Surrounding Community..........  8385
        The Surrounding Communities Opposed the Hudson Casino 
          Proposal...............................................  8386
        Interior Staff Recommended Denial........................  8387
        The Administrative Record................................  8388
        Allegations of Timing and Political Pressure.............  8389
        Interior's Final Decision-Maker Acted on the Merits......  8390
    Conclusion...................................................  8390
Chapter 36: Tobacco and the 1996 Election Cycle..................  8511
    Findings.....................................................  8511
    The Tobacco Industry's Political Contributions During the 
      1996 Election Cycle........................................  8511
    Republican Assistance to Tobacco Companies...................  8512
    Haley Barbour Assisted Tobacco...............................  8513
    Tobacco Settlement and the $50 Billion Tobacco Tax Credit....  8514
    Haley Barbour and Kenneth Kies...............................  8515
    Conclusion...................................................  8517
Chapter 37: Cheyenne-Arapaho Tribes of Oklahoma..................  8539
    Findings.....................................................  8539
    Overview.....................................................  8539
    The Battle Over the Closure of the Fort Reno ARS.............  8540
    The Tribes Increase Their Political Activities...............  8543
    The Tribes' Contribution to the DNC..........................  8545
    The White House Luncheon.....................................  8547
    The President's Birthday Fundraiser..........................  8552
    The Tribes Continue Their Lobbying Efforts...................  8553
    The Tribes' Dealings with Mike Copperthite, Nathan Landow, 
      and Peter Knight...........................................  8554
    The Tribes' Dealings with Cody Shearer and Terry Lenzner.....  8560
    The Tribes' Contribution is Returned.........................  8561
    Conclusion...................................................  8562
Part 7  Investigation Process....................................  8680
Chapter 38: Laying the Groundwork................................  8680
    Findings.....................................................  8680
    Introduction.................................................  8680
    Initial Floor Statements By Chairman Thompson and Senator 
      Glenn......................................................  8681
    Organizational Meeting.......................................  8683
        A. Budget................................................  8683
        B. Scope.................................................  8685
        C. Process...............................................  8686
        D. Termination Date......................................  8686
    First Public Debate On Issuance of Subpoenas.................  8687
    Alternative Resolution, S. Res. 61...........................  8687
    Rules Committee Appearances..................................  8687
    Final Floor Debate...........................................  8689
    The Majority Impeded a Fair Investigation....................  8689
        A. Subpoenas.............................................  8690
        B. Consideration of Grants of Immunity...................  8690
        C. Interviews............................................  8691
        D. Hearings..............................................  8692
    Conclusion...................................................  8693
Chapter 39: Democratic Compliance Issues.........................  8710
    Finding......................................................  8711
    DNC Cooperation and Compliance...............................  8711
        Attorney-Client Privilege Issue..........................  8712
        Late Production of Certain Files.........................  8713
    Conclusion...................................................  8713
Chapter 40: Republican Compliance Issues.........................  8775
    Findings.....................................................  8775
    Introduction.................................................  8775
    The First Subpoenas..........................................  8776
    RNC Compliance Issues........................................  8777
    Triad Compliance Issues......................................  8779
    The NPF Order................................................  8780
    NPF Compliance Issues........................................  8780
    ATR Compliance Issues........................................  8782
    Conclusion...................................................  8785
Chapter 41: The Breakdown of Compliance..........................  8938
    Finding......................................................  8938
    Introduction.................................................  8938
    Organizations Suggested for Subpoena by the Minority.........  8941
    Tax-Exempt Groups Linked to Presidential Campaigns...........  8941
        Republican Exchange Satellite Network and Lamar Alexander  8941
        Better America Foundation and Bob Dole...................  8942
        The American Cause and Pat Buchanan......................  8943
    Other Tax-Exempt Groups......................................  8943
        Citizens Against Government Waste........................  8943
        The Heritage Foundation..................................  8944
        The Coalition: Americans Working for Real Change.........  8944
        American Defense Institute/American Defense Foundation...  8945
        Citizens for a Sound Economy.............................  8945
        Women for Tax Reform.....................................  8946
        National Right to Life Committee.........................  8946
        The Christian Coalition..................................  8946
    Private Corporations Linked to Contribution Laundering.......  8947
        DeLuca Liquor & Wine and Empire Landfill, Danella Inc./
          USA Waste Services of Eastern Pennsylvania.............  8947
    Organizations Suggested for Subpoena by the Majority.........  8947
        National Council of Senior Citizens......................  8948
        Citizen Action...........................................  8949
        National Education Association...........................  8949
        Vote Now '96.............................................  8950
        Campaign to Defeat Proposition 209.......................  8950
        The Sierra Club..........................................  8950
        Democratic Leadership Council............................  8951
        EMILY'S List.............................................  8951
        National Committee for an Effective Congress.............  8951
        American Trial Lawyers Association.......................  8951
        Americans United for Separation of Church and State......  8951
    Conclusion...................................................  8952
Chapter 42: White House Tapes....................................  9331
    Findings.....................................................  9331
    Overview.....................................................  9331
    Video and Audio Taping in the White House....................  9332
    The White House Communications Agency........................  9333
    Videotape Procedures for Coffees.............................  9334
    The Initial Failure to Identify Responsive Videotapes........  9335
    White House Definition of Document...........................  9337
    White House Search Procedures................................  9339
    White House Responses to Committee Inquiries About Videotapes  9340
    Notifying the Department of Justice of the Existence of 
      Responsive Videotapes......................................  9344
    Deputy White House Counsel and the Videotapes................  9345
    Allegations Concerning Alteration of the Videotapes..........  9345
    Other Production Issues......................................  9346
        The Presidential ``Diary''...............................  9346
        WAVE Records Relating to Mr. Wu..........................  9347
        Lisa Berg documents......................................  9348
    Conclusion...................................................  9349
Part 8  Minority Recommendations.................................  9394
Part 9  Response to Majority Report..............................  9399
Senator Glenn's Additional Views.................................  9507
Senator Levin's Additional Views.................................  9511
Senator Lieberman's Additional Views.............................  9525
Senator Akaka's Additional Views.................................  9559
Senator Durbin's Additional Views................................  9565
Senator Torricelli's Additional Views............................  9571
PART 5  FUNDRAISING AND POLITICAL ACTIVITIES OF THE NATIONAL PARTIES 
        AND ADMINISTRATIONS
Chapter 29: Democratic Contributor Access to the White House
    From 1993 through 1996, the Democratic National Committee 
organized numerous events to which it invited supporters of the 
Democratic Party and their guests. Many DNC events were held 
inside the White House complex and were attended by the 
President or Vice President. For those events, the DNC 
generated guest lists and forwarded names of attendees to the 
White House Office of Political Affairs, which generally did 
not conduct an independent review of the list. On several 
occasions, the DNC asked for additional information about 
persons under consideration for invitations to White House 
events. In these situations, the White House Office of 
Political Affairs forwarded the request to the National 
Security Council (``NSC'') or other knowledgeable White House 
staff for recommendations regarding the individual's attending 
an event with the President or Vice President.
    The Committee investigated the procedures used by the White 
House to assess and approve individuals invited by the DNC to 
attend events in the White House.

                                FINDINGS

    (1) From 1993 through 1996, White House procedures for 
assessing and approving individuals invited by the DNC to 
attend events in the White House were similar to the procedures 
used by prior administrations, but such procedures were 
inadequate. The White House Office of Political Affairs relied 
on the DNC (and in prior administrations, the RNC) to assess 
the appropriateness of attendees at DNC (RNC) events at which 
the President was present. Unfortunately, from 1993 through 
1996, the DNC did not adequately perform that function.
    (2) When asked to provide information regarding the foreign 
policy implications arising from DNC-organized events, the 
National Security Council performed its function. 
Unfortunately, prior to 1997, the White House did not have a 
formal structure to adequately assess and approve all attendees 
at DNC events where the President was present.

                              INTRODUCTION

    For DNC events held in the White House, the Secret Service 
Agency and the White House Office of Political Affairs are 
responsible for assessing DNC guests in order to both guard the 
physical security of the President and to protect the integrity 
of the Office of the Presidency and the policies of the United 
States. Before an individual may enter the White House complex, 
Secret Service officials conduct a background check to 
determine whether the individual poses a physical threat to the 
President or White House staff. To determine whether an 
individual is otherwise appropriate to attend DNC events at the 
White House, the White House Office of Political Affairs is 
responsible for obtaining and approving DNC proposed guest 
lists. From 1993 through 1996, the White House Office of 
Political Affairs followed the practice of previous 
administrations and relied on the judgment of its national 
party to provide appropriate information about political 
supporters scheduled to attend White House events. According to 
the testimony of an 18-year career White House employee, 
administrations have handled invitations to RNC and DNC events 
at the White House in the same way as the current 
Administration handled similar invitations from 1993 through 
1996.1 When questions were raised by the party about 
possible negative implications of the event or specific 
attendees, the White House Office of Political Affairs sought 
relevant information from the NSC and other knowledgeable White 
House staff in order to make appropriate decisions.
---------------------------------------------------------------------------
    Footnotes at end of Chapter 29.
---------------------------------------------------------------------------
    This section discusses the Committee's investigation of the 
White House procedures used to assess and approve individuals 
invited by the DNC to attend events inside the White House 
complex, focusing on the functions of the Secret Service, the 
White House Office of Political Affairs and the National 
Security Council.

                           THE SECRET SERVICE

    The Secret Service is responsible for the physical security 
of the White House complex, which consists of the New Executive 
Office Building, the Old Executive Office Building, and the 
White House itself, as well as the physical security of certain 
White House officials, particularly the President and Vice 
President.
    Visitors to the White House complex, except for individuals 
on public tours, are screened by the Secret Service through a 
process known as ``WAVEs,'' which stands for Worker and Visitor 
Entrance System. In order for an individual to enter the White 
House complex under the WAVEs system, an employee of the White 
House must first submit a computer message to the Secret 
Service requesting that the individual be admitted to the 
complex on a specified day and time. In response, a Secret 
Service officer conducts a name check on the individual through 
the National Crime Information Center (``NCIC''), which 
contains criminal history and warrant information.2 
If the officer does not discover pertinent criminal information 
about the individual, the officer clears the individual for 
entrance through one of the secured gates of the complex.
    If the NCIC check does yield pertinent information on a 
requested individual, the officer conveys that information to a 
Secret Service supervisor.3 The supervisor is 
responsible for reviewing the information to determine whether 
the individual's entrance into the White House complex may pose 
a physical threat to the President or Vice President, or to the 
White House complex generally.4 In making this 
determination, the supervisor focuses on whether the 
information suggests that the individual may be violent, 
dangerous, or in other ways may present a physical or security 
threat.5 If the supervisor determines that the 
individual should not be admitted to the White House for these 
reasons, the supervisor prohibits clearance for the individual 
and notifies the White House employee who had requested that 
the individual be admitted that no clearance would be 
granted.6 The Secret Service does not convey the 
basis of this decision to White House staff.7 The 
Secret Service does not assess or make admittance 
determinations based on issues involving the general 
appropriateness of an individual entering the White House or 
meeting with the President or Vice President.8 These 
Secret Service procedures have been in effect since 
1984.9
    The responsibility of the Secret Service for screening 
potential White House visitors, including guests invited by the 
DNC, is therefore limited to an assessment of whether the 
individual may pose a physical threat to the White House 
complex or to the President or Vice President.10 
This narrow review is supplemented by other determinations made 
independently by the White House Office of Political Affairs 
and the NSC.

              THE WHITE HOUSE OFFICE OF POLITICAL AFFAIRS

    DNC officials seeking to organize events on the White House 
grounds coordinate with the White House Office of Political 
Affairs. From 1993 to 1997, the DNC organized these events by 
coordinating schedules and other logistics with the White House 
Office of Political Affairs, and by forwarding a list of 
proposed attendees for each event.11 During this 
time period, it is not clear what procedures were used inside 
the DNC for assessing the appropriateness of the list of event 
attendees before it was forwarded to the White House Office of 
Political Affairs. DNC Finance Chairman Richard Sullivan 
testified that it was his understanding that DNC staff within 
the Finance Division was responsible for compiling the lists 
and raising any potential problems with the White House at the 
time it forwarded the attendance list to the Office of 
Political Affairs.12 Although the evidence presented 
to the Committee demonstrates that the DNC staff did, on 
occasion, raise such questions with the White House, problems 
arose when the DNC did not raise questions about certain events 
or individuals with White House officials.13
    According to Karen Hancox, the Deputy Director of the White 
House Office of Political Affairs, the DNC normally forwarded 
the list of proposed attendees for DNC sponsored events via 
facsimile the night before the event.14 Hancox 
testified that the lists did not contain information about past 
or promised contributions by the invitees,15 and 
that her office generally did not conduct an independent 
assessment of the individuals for general appropriateness 
unless an issue about a particular individual or event was 
raised by the DNC staff.16
    If an issue was raised by the DNC, Hancox testified that 
her office would seek additional information on the matter from 
the NSC or other knowledgeable White House staff.17 
Hancox testified that she made approximately 12 such inquiries 
of the NSC.18 She also testified that her office 
strictly adhered to the NSC's response regarding whether there 
may be any negative implications if a particular person entered 
the White House or attended a DNC event with the President or 
Vice President. Hancox testified that, ``If [the NSC] said no, 
it was no.'' 19 The White House and the NSC made 
these determinations on an event by event basis, and did not 
compile a list of individuals who had previously been denied 
access to DNC events.
    Judith Spangler, a White House career employee testified 
that during her 18-year tenure, administrations have handled 
invitations to RNC and DNC events at the White House in the 
same way that the current Administration handled similar 
invitations from 1993 to 1997.20
    Ultimately, from 1993 through 1996, the procedures employed 
by the White House Office of Political Affairs permitted DNC 
staff to largely determine on its own who would attend White 
House events organized and sponsored by the DNC.21 
Unfortunately, the DNC did not have an adequate system of 
checking the appropriateness of individuals attending events 
with the President or Vice President and also did not raise 
questions about certain individuals or events that would have 
permitted the White House or the NSC to provide input on 
whether such attendees were advisable. For details regarding 
the specific incidents that derived from this system, see 
Chapters 25, 30 and 31 of this Minority Report.
    In 1997, both the DNC and the White House implemented 
policies to formalize their procedures for assessing potential 
guests at most DNC sponsored events. The DNC now requires that 
all individuals invited to DNC-sponsored events at the White 
House, or other DNC events where the President, Vice President 
or First Lady are in attendance, must be assessed and screened 
through the DNC's Compliance Division before their names are 
forwarded to the White House.22 The DNC also 
prohibits adding proposed guests to any event less than 24 
hours before the event is scheduled to occur, and prohibits 
attendance if an individual is not legally permitted to make a 
personal contribution to the DNC, unless he or she is an 
immediate family member of an individual who is permitted to 
contribute to the DNC.23
    The White House also formalized screening procedures in 
1997 which require White House staff to assess individuals the 
DNC proposes to invite to White House events.24 
These new procedures are addressed below.

                     THE NATIONAL SECURITY COUNCIL

    The National Security Council serves as the chief advisory 
institution to the President on matters relating to foreign 
policy and national security, coordinating foreign policy 
activities throughout the Administration.25 One 
responsibility of the NSC is to organize official meetings 
between the President and foreign officials and other 
individuals in order to advance the foreign policy goals of the 
Administration it serves.26 These events are 
carefully planned and organized by NSC staff.27
    The NSC's expertise in foreign policy has long been tapped 
by White House staff when other events are planned that involve 
the President meeting with outside individuals.28 
Although the NSC does not provide information about the 
physical risk or general appropriateness of the individuals who 
come in contact with the President, it does provide, when 
requested, information about any foreign policy that might be 
implicated by such contact.29
    On September 11, 1997, the Committee took public testimony 
of Samuel R. Berger, National Security Advisor to President 
Clinton since March of 1997. The Committee explored the NSC's 
procedures for responding to requests for information from 
other White House staff regarding DNC-organized events. The 
evidence presented to the Committee established that from 1993 
to 1997, the NSC's procedures in this regard followed those of 
previous administrations: the NSC appropriately responded to 
requests when they were made, but no formal structure for 
assessing DNC attendees was in place. During its investigation, 
the Committee also learned that in June 1997, the White House 
established a formal structure to assess individuals the DNC 
proposes to attend White House events where the President or 
Vice President will be in attendance.

Previous NSC procedures

    The NSC's primary function is to coordinate U.S. foreign 
policy for the President. As a result, the NSC and its staff is 
typically not aware of, or responsible for, meetings or events 
that are organized by the DNC, or any other entity unrelated to 
foreign policy. From 1993 to 1997, the NSC did, on occasion, 
assist in providing information about certain individuals who 
were scheduled to attend DNC events. However, the NSC's 
participation was sparked only when the White House staff 
informed the NSC of an event or specified an individual 
scheduled to attend an event and asked for information about 
any possible effect on foreign policy.30
    These contacts between White House staff and the NSC were 
ad hoc in nature and were largely driven by the White House 
staff's attempt to obtain information relevant to an upcoming 
DNC event. Typically, White House staff directly contacted the 
NSC staff person who was known to have the relevant expertise 
to provide the information sought. These contacts were 
facilitated by the fact that the NSC has a relatively small 
number of employees divided into geographic areas of 
expertise.31 Thus, White House staff often called or 
sent e-mail messages to Robert Suettinger, NSC's Director of 
Asian Affairs, to seek information about issues relating to 
events or individuals that may have an impact on U.S. foreign 
policy toward Asian countries.
    Berger explained to the Committee that this unstructured 
system within the White House and the NSC had been carried over 
from earlier practices of previous administrations. Berger 
testified that when he entered the Administration, the NSC 
procedures for providing information about non-NSC events were 
not formalized or structured, and that he had understood that 
these procedures dated back at least to the Nixon 
Administration.32 Berger also testified that he has 
studied a number of historical aspects of the NSC 
practices,33 which included speaking to several 
former National Security Advisors, and confirmed his 
understanding that this NSC practice had been in place for 
several administrations.34
    Berger also explained that this unstructured system is 
partly a result of the fact that the NSC is not the ultimate 
decision-maker on questions of access to the White House 
complex or to the President.35 Although the NSC 
performs important foreign policy functions for the President, 
Berger testified that the NSC's practice in assessing access to 
the President most often takes the form of providing 
information to White House staff, whose responsibility it is to 
make a final access determination after consideration of that 
information.36 On rare occasions, Berger explained 
that the NSC would actually make a recommendation that an 
individual not meet with the President. According to Berger, 
when the NSC issued such recommendations, they were accepted by 
the White House staff.37 Ultimately, Berger 
explained that it is the White House staff that is responsible 
for determining who sees the President.38
    Berger also testified that from 1993 to 1997, NSC vetting 
of non-NSC events was event-driven in that inquiries arose in 
the context of a specific event.39 Once the event 
was over, no ongoing log or record of the NSC's advice or 
determinations was maintained.40 These procedures, 
when combined with the Office of Political Affair's practice of 
not independently assessing individuals and the DNC's decision 
to invite a few large contributors to White House events 
despite recommendations that they not attend, were responsible 
for such incidents as Roger Tamraz's attendance at DNC events 
even after NSC staff had recommended against it.41 
See Chapter 30 of the Minority Report.

Current NSC procedures

    Based on the unstructured systems of the DNC and the White 
House Office of Political Affairs, the NSC did not always 
receive information about DNC events that enabled it to provide 
information or recommendations about the attendees. As a 
result, there were questions raised about the NSC's role in 
vetting non-NSC events and about how certain individuals were 
permitted to attend small gatherings with the 
President.42
    Berger testified that when asked to provide information, 
the NSC acted appropriately and that the NSC functioned in a 
nonpartisan manner.43 He also explained that in 
March of 1996, in anticipation of the upcoming election 
activities, the NSC issued a memorandum to all NSC staff that 
instructed them to treat requests and contacts with individuals 
from political organizations as they would any other outside 
individual.44
    However, Berger testified that there were structural 
problems with the NSC vetting procedures and that formal 
procedures were needed.45 Berger explained that part 
of the impetus for establishing formal procedures was to 
protect NSC officials, who had appropriately responded to 
requests for information from the White House, but did not have 
a structure in place to explain what had been 
done.46 He also stated that although a smallnumber 
of attendees at DNC events with the President generated controversy in 
1996,47 he had seen no adverse effect on U.S. foreign 
policy.48
    On January 21, 1997, Erskine Bowles, Chief of Staff to the 
President, requested that the NSC formulate and implement 
guidelines for vetting non-NSC meetings and events. 
49 From January to June 1997, Berger consulted with 
counsel, staff and former National Security Advisors about 
vetting procedures. He talked to former National Security 
Advisors Brent Scowcroft, Henry Kissinger and Zbigniew 
Brzezinski, who confirmed for him that the ``ad hoc'' structure 
was the way it had been done during their tenures.50 
On June 13, 1997, Berger issued a memorandum, setting forth a 
formal structure for NSC vetting.51 The new 
procedures require all relevant inquiries to go to one 
individual at the NSC and that tracking and follow-up 
procedures be implemented.52 In support of this 
memorandum, Bowles has instructed everyone at the White House 
to forward relevant questions to this particular 
individual.53 Finally, all requests for meetings 
with NSC staff are now forwarded to the Deputy National 
Security Advisor, who routes them to the NSC staff for their 
evaluation as to the appropriateness of the 
meeting.54 In routing such requests, the Deputy NSA 
is required to make every effort to remove ``any information 
indicating the individual's partisan political support or 
opposition to the Administration.'' 55

Other issues

    During the 1996 presidential race, while Berger was Deputy 
National Security Advisor, he attended several campaign 
strategy meetings held in the White House. The Committee 
explored this issue during Berger's public testimony on 
September 11, 1997.
    The Committee learned that Berger's attendance at campaign 
strategy meetings was not unprecedented.56 President 
Bush's National Security Advisor, Brent Scowcroft, was reported 
to be a regular attendee at campaign strategy meetings during 
the 1992 election.57 In 1992, Scowcroft also 
traveled to Dallas, Texas as part of a campaign team assigned 
to convince Ross Perot not to run for President. The New York 
Times noted that ``some historians said that Mr. Scowcroft's 
journey to Dallas would be little different from appearing on a 
political talk show or addressing a party convention. Others 
said his role debased the post of National Security Advisor.'' 
58
    Berger testified that, like Scowcroft, he had attended 
campaign strategy meetings during his President's election 
year, but noted that he had not engaged in other political 
activities in support of the President's re-election 
campaign.59 He explained his attendance at the 
strategy meeting by stating that he ``. . . wanted to make sure 
that in the discussion of a campaign . . . someone was there 
that was familiar with the President's foreign policy record so 
that if an ad mentioned a trade position, or a leadership in 
the world position there was someone there who knew whether it 
was accurate.'' 60 Berger also testified that his 
attendance at the meetings was ``partly dissuasive[], to make 
sure that there wasn't discussion of political issues in any 
serious way in those meetings, and to make sure there was no 
distortion of the President's foreign policy record.'' 
61 Berger explained that it was his opinion that ``. 
. . there ought to be somebody from the foreign policy side of 
the shop that had some general familiarity with the campaign, 
its basic themes, its basic message, because the President in 
1996 was both President and candidate.'' 62
    Berger also addressed the nature of the campaign strategy 
meetings. He testified that the weekly gatherings were not 
``small, close-hold decision making meetings'' where ``the 
small inner sanctum ma[de] decisions,'' but instead were large 
gatherings attended by ``the President and the Vice President, 
Mr. Panetta, senior domestic policy people, senior people on 
the White House staff on communications[, and a] good part of 
the senior White House staff. . . .'' 63 Berger 
characterized the meetings as ``basically a more general 
briefing on where the campaign was and where it was headed for 
the next week.'' 64 There was no evidence presented 
to the Committee that Berger's attendance at these meetings was 
anything but appropriate. Berger apparently functioned as an 
observer at the meetings, seeking to ensure that foreign policy 
issues were handled in an appropriate and objective manner.
    On September 19, 1995, Robert Suettinger, NSC Director of 
Asian Affairs, met with Hong Kong businessman Eric Hotung to 
discuss Hotung's opinions on issues relating to Hong Kong, 
Taiwan, and China.65 Hotung is a businessman and the 
head of the Hotung Institute, which has offices in Hong Kong, 
New York and Washington, D.C. The primary purpose of the Hotung 
Institute, according to documents presented to the Committee, 
is to promote a better understanding between the United States 
and China.66 Berger testified that meetings between 
NSA staff and outside individuals with insights on foreign 
policy issues are common and helpful in assisting the NSC to 
analyze foreign policy issues.67
    On September 20, 1995, DNC Chairman Donald Fowler sent a 
memo to Douglas Sosnik, White House Director of Political 
Affairs, requesting that a meeting be arranged between National 
Security Advisor Anthony Lake or Deputy NSA Berger and Mr. and 
Mrs. Eric Hotung.68 Berger testified that he 
requested Stanley Roth, the NSC's Senior Director for Asian 
Affairs, to review this request and advise him on whether it 
would be appropriate to meet with Hotung, and was advised that 
a brief meeting and photograph would be ``fine.'' 69 
According to documents presented to the Committee, the meeting 
lasted five minutes and took place on October 4.70
    During the public hearings, questions were raised regarding 
whether the DNC sought to facilitate Hotung's brief meeting 
with Berger in anticipation of a financial contribution from 
Mrs. Hotung, an American citizen. The evidence before the 
Committee, however, does not support the conclusion that Mrs. 
Hotung made her contributions to the DNC in exchange for a 
meeting between her husband and the NSC or that Berger agreed 
to the meeting in exchange for Mrs. Hotung's contribution. 
First, documents produced to the Committee indicate that Mrs. 
Hotung had already made a commitment to contribute $100,000 by 
September 14, and that the DNC expected to receive her check in 
mid-September, several weeks before the October 4 meeting with 
Berger took place.71 Second, Berger testified that 
at the time of the meeting, he ``was not aware that there was a 
Mrs. Hotung or of her financial relationship to the DNC or of 
Mr. Hotung's financial relationship to the DNC.'' 72 
Berger also testified that he was ``absolutely'' certain that 
no one asked him to meet with Mr. Hotung in order to facilitate 
a contribution to the Democratic Party.73
    Berger explained that Hotung ``has had a lot of contact 
with previous Presidents and with a number of prominent Members 
of the Senate. He's the head of a very well regarded institute 
on China [and was advised by staff that] he is probably more 
knowledgeable about China and Hong Kong affairs than almost 
anybody they've talked to.'' 74 Berger testified 
that he had ``no reason to believe that he [Hotung] would 
misuse a photo.'' 75 Indeed, the Committee learned 
that Hotung has never ordered or picked up the 
photo.76 Finally, Berger testified that the brief 
meeting did not have an impact on foreign policy, stating that 
``in no situation'' could he ``perceive in any way that any 
campaign contributor or campaign fund-raising consideration had 
any influence on [foreign] policy. I say that categorically.'' 
77

                               CONCLUSION

    The appropriate level of scrutiny to be applied to 
individuals who are invited to attend events with the President 
is a difficult issue which asks government officials to balance 
concerns of security and propriety against the desire to have a 
White House that is accessible to its citizens and open to a 
diversity of viewpoints. From 1993 to 1997, the combined DNC 
and White House procedures for assessing DNC events was 
unstructured and failed to prevent certain individuals from 
attending events, resulting in controversies publicized in 
1996. The inadequacies have been addressed within the DNC and 
the White House, both of which have implemented guidelines to 
ensure appropriate review of future DNC events and attendees.

                               FOOTNOTES

    \1\ Judith Spangler deposition, 5/9/97, pp. 39-40.

      Q: In the Reagan-Bush White House, did the Office of Political 
Affairs from time to time provide lists of people to be invited?
      A: Yes.
      Q: Did it do so frequently?
      A: May I explain?
      Q: Yes.
      A: That for almost every event, different offices within the 
White House submit names to the social secretary; names of people that 
they would like to have invited to a dinner or a luncheon or some type 
of reception, or an event.
      Q: Has that been so in every White House in which you have 
worked?
      A: Yes.
      Q: That for events, receptions, dinners, lunches, events of every 
kind, the Office of Political Affairs in those White Houses has 
submitted lists of invitees?
      A: Yes.
      Q: So that the Clinton-Gore White House is not the first White 
House which has done that?
      A: No.
      Q: In earlier administrations did it occasionally occur that the 
Republican National Committee would supply names of invitees?
      A: Yes, they did.
      Q: Was that so in the Reagan-Bush White House?
      A: Yes.
      Q: Was it so in the Bush-Quayle White House?
      A: Yes.

    Footnotes at end of Chapter 29.
    \2\ Exhibit 2000M: Affidavit of Colleen B. Callahan, 9/9/97, para. 
4(D).
    \3\ Exhibit 2000M: Affidavit of Colleen B. Callahan, 9/9/97, para. 
4(D).
    \4\ Exhibit 2000M: Affidavit of Colleen B. Callahan, 9/9/97, para. 
3.
    \5\ Exhibit 2000M: Affidavit of Colleen B. Callahan, 9/9/97, para. 
4(E).
    \6\ Exhibit 2000M: Affidavit of Colleen B. Callahan, 9/9/97, para. 
4(H).
    \7\ Exhibit 2000M: Affidavit of Colleen B. Callahan, 9/9/97, para. 
4(I).
    \8\ Exhibit 2000M: Affidavit of Colleen B. Callahan, 9/9/97, para. 
3.
    \9\ Exhibit 2000M: Affidavit of Colleen B. Callahan, 9/9/97, para. 
4(B).
    \10\ Exhibit 2000M: Affidavit of Colleen B. Callahan, 9/9/97, para. 
3.
    \11\ Karen Hancox deposition, 6/10/97, pp. 217-21.
    \12\ Richard L. Sullivan deposition, 6/4/97, p. 106.
    \13\ Richard L. Sullivan deposition, 6/4/97, pp. 105-108; Karen 
Hancox deposition, 6/10/97, pp. 58-59.
    \14\ Karen Hancox deposition, 6/9/97, pp. 52-53.
    \15\ Karen Hancox deposition, 6/10/97, pp. 217-21.
    \16\ Karen Hancox deposition, 6/9/97, pp. 52-53.
    \17\ Karen Hancox deposition, 6/10/97, p. 51; see also Doug Sosnik 
deposition, 6/20/97, pp. 167-68, 184; Cheryl Mills deposition, 8/19/97, 
pp. 147-49.
    \18\ Karen Hancox deposition, 6/9/97, p. 78.
    \19\ Karen Hancox deposition, 6/9/97, p. 80.
    \20\ Judith Spangler deposition, 5/9/97, pp. 39-40.
    \21\ Karen Hancox deposition, 6/10/97, pp. 9-10.
    \22\ Exhibit 1073: New DNC Compliance Procedures and Fundraising 
Manual.
    \23\ Exhibit 1073: New DNC Compliance Procedures and Fundraising 
Manual.
    \24\ Exhibit 1072: Memorandum from Erskine Bowles to All Executive 
Office of the President Staff, 1/21/97.
    \25\ Samuel Berger, 9/11/97 Hrg. P. 4
    \26\ Staff interview with Samuel Berger, 8/28/97.
    \27\ Staff interview with Samuel Berger, 8/28/97.
    \28\ Staff interview with Samuel Berger, 8/28/97.
    \29\ Staff interview with Samuel Berger, 8/28/97.
    \30\ Staff interview with Samuel Berger, 8/28/97.
    \31\ Samuel Berger, 9/11/97 Hrg. P. 33; Staff interview with Samuel 
Berger, 8/28/97.
    \32\ Samuel Berger, 9/11/97 Hrg. P. 6; Staff interview with Samuel 
Berger, 8/28/97.
    \33\ Samuel Berger, 9/11/97 Hrg. P. 5; Staff interview with Samuel 
Berger, 8/28/97.
    \34\ Samuel Berger, 9/11/97 Hrg. Pp. 8; Staff interview with Samuel 
Berger, 8/28/97.
    \35\ Staff interview with Samuel Berger, 8/28/97.
    \36\ Samuel Berger, 9/11/97 Hrg. P. 6; Staff interview with Samuel 
Berger, 8/28/97.
    \37\ Staff interview with Samuel Berger, 8/28/97.
    \38\ Staff interview with Samuel Berger, 8/28/97.
    \39\ Samuel Berger, 9/11/97 Hrg. P. 63; Staff interview with Samuel 
Berger, 8/28/97.
    \40\ Samuel Berger, 9/11/97 Hrg. P. 63; Staff interview with Samuel 
Berger, 8/28/97.
    \41\ Samuel Berger, 9/11/97 Hrg. Pp. 63-64.
    \42\ Washington Post, 4/2/97.
    \43\ Staff interview with Samuel Berger, 8/28/97.
    \44\ Samuel Berger, 9/11/97 Hrg. Pp. 33-35; Exhibit 1074: 
Memorandum from National Security Advisor Anthony Lake to all NSC 
staff, 3/96, p. 4, para. 4(d).
    \45\ Staff interview with Samuel Berger, 8/28/97.
    \46\ Samuel Berger, 9/11/97 Hrg. P. 9.
    \47\ Samuel Berger, 9/11/97 Hrg. P. 71.
    \48\ Samuel Berger, 9/11/97 Hrg. Pp. 8, 43, 70.
    \49\ Exhibit 1072: Memorandum from Erskine Bowles to all Executive 
Office of the President Staff, 1/21/97.
    \50\ Staff interview with Samuel Berger, 8/28/97.
    \51\ Exhibit 1071: Memorandum from Samuel Berger to all NSC Staff, 
6/13/97.
    \52\ Exhibit 1071: Memorandum from Samuel Berger all NSC Staff, 6/
13/97; Samuel Berger, 9/11/97 Hrg. P. 29.
    \53\ Staff interview with Samuel Berger, 8/28/97.
    \54\ Exhibit 1071: Memorandum from Samuel Berger to all NSC Staff, 
p. 4, 6/13/97.
    \55\ Exhibit 1071: Memorandum from Samuel Berger to all NSC Staff, 
p. 4, 6/13/97.
    \56\ Senator Glenn, 9/11/97 Hrg. Pp. 30-32.
    \57\ Exhibit 2002M: News reports discussed during Committee 
Hearing, 9/11/97 (reporting that former National Security Advisor Brent 
Scowcroft attended campaign strategy meetings and engaged in other 
political activities during the 1992 presidential race).
    \58\ New York Times, 9/28/92.
    \59\ Samuel Berger, 9/11/97, Hrg. P. 32.
    \60\ Samuel Berger, 9/11/97, Hrg. P. 18.
    \61\ Samuel Berger, 9/11/97 Hrg. P. 18.
    \62\ Samuel Berger, 9/11/97 Hrg. P. 18.
    \63\ Samuel Berger, 9/11/97 Hrg. P. 19.
    \64\ Samuel Berger, 9/11/97 Hrg. P. 19.
    \65\ Exhibit 1077: Memorandum from James W. Symington to 
Appointment Scheduler, 9/13/95.
    \66\ Exhibit 1081: Memorandum from Don Fowler to Doug Sosnik via 
Karen Hancox, 9/20/95, DNC 3140633.
    \67\ Samuel Berger, 9/11/97 Hrg. Pp. 36-37, 42-43.
    \68\ Exhibit 1081: Memorandum from Don Fowler to Doug Sosnik via 
Karen Hancox, 9/20/95, DNC 3140633.
    \69\ Exhibit 1082: E-mail from Stanley O. Roth to Sandy Berger, 10/
3/95.
    \70\ Exhibit 1083: Appointment Schedule for Samuel Berger, 10/04/
95, SUP 003038.
    \71\ Exhibit 2001M: Memorandum from DNC Chairman Fowler to David 
Mercer, 9/14/95; Minority Counsel, 9/11/97 Hrg. Pp. 41-42; Samuel 
Berger, 9/11/97 Hrg. Pp. 41-42.
    \72\ Samuel Berger, 9/11/97 Hrg. Pp. 39-40.
    \73\ Samuel Berger, 9/11/97 Hrg. P. 40.
    \74\ Samuel Berger, 9/11/97 Hrg. Pp. 23-24.
    \75\ Samuel Berger, 9/11/97 Hrg. P. 24.
    \76\ Sen. Lieberman, 9/11/97 Hrg. P. 66.
    \77\ Samuel Berger, 9/11/97 Hrg. P. 43.





PART 5  FUNDRAISING AND POLITICAL ACTIVITIES OF THE NATIONAL PARTIES 
        AND ADMINISTRATIONS

Chapter 30: Roger Tamraz

    Roger E. Tamraz is an American businessman involved in 
investment banking and international energy projects. In the 
mid-1990s, he sought to become a ``dealmaker'' in an oil 
pipeline project that would cross the Caspian Sea region of 
Central Asia. In the hope of obtaining U.S. Government support 
for his project, Tamraz used his past relationship with the 
Central Intelligence Agency, met with mid-level U.S. Government 
officials, and made political contributions to the Democratic 
Party.
    The Committee's investigation focused on whether officials 
of the Central Intelligence Agency, the National Security 
Council, the Democratic National Committee, the White House, or 
the Department of Energy improperly promoted Tamraz's pipeline 
proposal or gave him access to high-level government officials; 
why Tamraz was permitted to attend DNC events in the White 
House when staff had recommended that he not have any contact 
with high-level officials; and whether U.S. policy on the 
Caspian Sea pipeline changed as a result of Tamraz's political 
contributions or access to government officials.

                                findings

    (1) Roger Tamraz openly bought access from both political 
parties.
    (2) Tamraz's attendance at DNC events was based on his 
political contributions and was unwise given the warnings that 
he might misuse such attendance. DNC Chairman Donald Fowler 
endorsed Tamraz's attendance at these events, despite early 
warnings from DNC staff and opposition from NSC officials and 
Vice President Gore's staff.
    (3) A Central Intelligence Agency official promoted 
Tamraz's pipeline proposal in 1995, despite knowing that the 
NSC opposed it.
    (4) An Energy Department official promoted additional 
political access for Tamraz in 1996, despite knowing that the 
NSC and other officials opposed it.
    (5) U.S. policy in the Caspian Sea was not affected by 
Tamraz's lobbying, political contributions, or presence at DNC-
related events. This policy was solidified in early October 
1995 and did not incorporate any aspect of Tamraz's proposal.

                                overview

    Tamraz was born in 1940 in Cairo, Egypt. He attended the 
American University of Cairo, Cambridge University, and Harvard 
Business School. In 1967, Tamraz went to work for the 
investment firm of Kidder, Peabody & Co., first in New York 
City, then in Beirut. He left in 1973 to establish his own 
Beirut-based investment-banking firm, the First Arabian 
Corporation. In the mid-1980s, Tamraz was chairman of Bank Al-
Mashrek, Lebanon's second largest bank, as well as the head of 
Jet Holdings, which owned TransMediterranean Airway and Middle 
East Airlines. In 1989, Tamraz left Lebanon after being charged 
by the Lebanese government with embezzlement and negligence in 
connection with the failure of his Bank Al-Mashrek. He moved to 
the United States, became an American citizen, and founded 
TAMOIL, an oil company. Tamraz is currently President of Oil 
Capitol Limited.
    Beginning as early as 1973, Tamraz's business ventures have 
received significant media coverage. In the 1980s, Tamraz 
learned the value of making political contributions when, as a 
legal permanent U.S. resident living in Beirut, he became a 
contributor to the Republican Party. As a result, he was 
recommended by the chairman of the Republican National 
Committee for a position with the Reagan Administration. Since 
that time, Tamraz was also reported to have had significant 
contact with the Central Intelligence Agency (``CIA''), which 
apparently continued until shortly before this Committee's 
proceedings began in 1997.
    In the 1990s, Tamraz, who was then living in New York City 
and Paris, was promoting a pipeline venture in the Caspian Sea 
region. In May and June of 1995, Tamraz met with many foreign 
officials and mid-level U.S. government officials, generally 
attempting to use every possible avenue to gain support for his 
pipeline proposal. In June 1995, the U.S. officials informed 
Tamraz that his proposal would not gain Administration support. 
Beginning that same month, a mid-level CIA official began to 
advocate Tamraz's pipeline proposal to the NSC, despite knowing 
that the NSC opposed it.
    In July 1995, Tamraz began to contribute to the Democratic 
Party and concurrently to request official meetings with 
higher-level government officials. Tamraz never obtained an 
official meeting with the President or Vice President. Tamraz 
did, however, attend several DNC events where the President, 
Vice President or other Administration officials were present, 
despite opposition within the National Security Council and the 
Vice President office's to Tamraz's contact with high-level 
officials. DNC Chairman Donald Fowler supported Tamraz's 
attendance at DNC events, despite being aware of the objections 
to his attendance within the NSC and the Vice President's 
office.
    In April 1996, a mid-level Department of Energy official 
also promoted Tamraz's efforts to gain access to President 
Clinton during a telephone conversation with an NSC official.
    Despite all of these efforts, Tamraz was not successful in 
obtaining U.S. Government support for his Caspian Sea pipeline 
proposal. In fact, the proposal supported by the U.S.--a 
contract among several foreign governments and oil companies--
was signed on October 7, 1995, and did not involve Tamraz or 
his proposal.
    The Committee investigated these issues by conducting 
numerous depositions and interviews, reviewing documents, and 
hearing two days of public testimony.\1\
---------------------------------------------------------------------------
    Footnote at end of Chapter 30.
---------------------------------------------------------------------------

   1970-1990: TAMRAZ'S BUSINESS VENTURES, DEALINGS WITH THE CIA AND 
                        POLITICAL CONTRIBUTIONS

Business ventures

    In 1973, Fortune magazine reported that the Egyptian 
government had finally decided to build a pipeline from the 
Gulf of Suez to the Mediterranean Sea.2 According to 
Fortune, ``What was most startling about the announcement was 
that the Sadat government gave the job, not to the eleven-
nation consortium with which it had been negotiating for three 
years, but to the Wall Street firm of Kidder, Peabody & Co.'' 
3 The magazine highlighted the role of Tamraz, then 
34 and Kidder's vice president in Beirut, as the individual 
responsible for negotiating the deal.4 The deal was 
reportedly worth $345 million and Tamraz received a five 
percent share--worth $15 million at the time.5
    In 1974, Tamraz established the First Arabian Corporation, 
which was a syndicate made up of wealthy Kuwaiti and Saudi 
Arabian investors.6 In 1978, Newsweek reported that 
Tamraz ``has been involved in some of the most widely 
publicized international business transactions of recent 
years.'' 7 Tamraz himself summarized his approach: 
``I'm interested in things they say can't be done.'' 
8 Even then, Tamraz had detractors who saw him ``as 
a promoter who hasn't delivered the goods.'' 9

Reported contacts with the CIA

    According to Tamraz, it was during the early to mid-1970s 
that the CIA first turned to him for advice regarding the oil 
crisis.10 Thereafter, Tamraz apparently became a 
regular unofficial contact of the CIA--``the kind of guy who 
knew everybody and you had lunch with him every couple of 
months,'' according to one former U.S. intelligence 
official.11 Tamraz testified that since 1973, he has 
been in constant contact with CIA officials on a voluntary 
basis, estimating that in the past 25 years, he has probably 
had contact with roughly 20 to 25 different CIA 
employees.12
    Tamraz testified that in the 1980s, his contacts with the 
CIA continued.13 According to Tamraz and press 
reports, then-CIA Director William J. Casey called on Tamraz 
after the Israeli invasion of Lebanon in 1982.14 
Casey reportedly asked Tamraz to intercede with Prime Minister 
Menachem Begin because Casey was frustrated with the slow pace 
of U.S.-led negotiations and hoped that Tamraz could use his 
high-level contacts to accelerate an Israeli withdrawal 
fromLebanon.15 Throughout these years, Tamraz testified that 
he has also hired former CIA employees, enhancing his connections with 
the agency.16

RNC's recommendation for a Reagan administration position

    Tamraz began to make political contributions to the 
Republican Party in the 1980s. He testified that he contributed 
enough money to the RNC to qualify as a Republican 
Eagle.17 Federal Election Commission records show 
that Tamraz gave $32,000 to the Republican Party between 1981 
and 1992, but Tamraz told Congressional Quarterly that he 
thought he gave more than that, possibly in ``soft money'' 
donations, which were not recorded at the FEC until 
1991.18 Tamraz testified that he received a personal 
thank-you letter from President Ronald Reagan'' 19 
and an NSC official told the Committee that Tamraz had met 
twice with President Reagan.20
    In addition, then-RNC Chairman Frank Fahrenkopf, Jr., sent 
a letter on behalf of Tamraz to Robert Tuttle, Reagan White 
House Director of Presidential Personnel. Fahrenkopf 
recommended Tamraz for a position in the Reagan Administration, 
``on a committee or board connected with banking or petroleum, 
specifically relating to Arab countries.'' 21 In 
support of this recommendation, Fahrenkopf not only pointed out 
that Tamraz was from Beirut, he also stated that ``Mr. Tamraz 
is an Eagle, and a strong supporter of the Administration.'' 
Fahrenkopf then stated generally that Tamraz has expertise in 
banking and the petroleum industry.22 Tuttle replied 
to Fahrenkopf thanking him for his ``letter in [sic] behalf of 
Roger Tamraz'' and requesting that he forward Tamraz's resume 
for consideration.23
    Tamraz was never appointed to a position in the Reagan 
Administration, but the 1985 Fahrenkopf letter demonstrates 
that the recommendation was based on his political 
contributions. Upon learning that Tamraz had produced a copy of 
the letter to the Committee, Fahrenkopf stated in a letter to 
the Committee that during his tenure at the RNC he made many 
recommendations for similar appointments, although he does not 
believe he actually signed the Tamraz letter.24

Tamraz leaves Lebanon after embezzlement charges

    Tamraz testified that in late 1988, forces hostile to 
Tamraz came to dominate the Lebanese political 
scene.25 At that time, a run on Tamraz's Al-Mashrek 
Bank forced its collapse. Tamraz fled the country after 
claiming to have been kidnapped and later released in return 
for a multimillion-dollar ransom.26 Subsequently, 
Lebanese officials brought charges against him for embezzlement 
and mismanagement.27 Tamraz testified that these 
charges were politically motivated and were largely a result of 
his contacts with Israel.28 Tamraz also testified 
that he was found innocent of any crime.29 Lebanese 
authorities have sought his extradition through Interpol, but, 
according to Tamraz, ``a Lebanese court-appointed authority 
determined in 1990 that there was not criminal activity'' 
relating to his bank.30 In 1992, however, the 
Lebanese authorities convicted him in absentia and there is an 
outstanding Interpol warrant for his arrest.31

                   1994-1995: the commerce department

    During the Committee's investigation, allegations surfaced 
that the Clinton Administration's Commerce Department had 
selected individuals for Department trade missions based on 
their support of the Democratic Party. Although these 
allegations were not supported by the evidence presented to the 
Committee, see Chapter 26, the Committee obtained documents 
regarding the Department's contacts with Tamraz and his 
company, Oil Capital Limited. Documents and deposition 
testimony reveal that Tamraz was twice rebuffed by the 
Department of Commerce.
    Prior to any political contributions to the Democratic 
Party, which were first made in July of 1995, Tamraz submitted 
an application to attend a 1994 trade mission with Secretary 
Ronald Brown.32 Tamraz's name was initially placed 
on a list of potential participants, but was later removed by 
the Office of the General Counsel after its vetting process 
discovered information on Lexis-Nexis that disqualified 
Tamraz.33 Tamraz testified that he was told that he 
would not be invited to the trade mission because the 
department considered him unacceptable. Tamraz assumed that he 
was rejected because of the publicized embezzlement charges 
against him.34
    In October of 1995, Oil Capital Limited submitted a request 
to the Department seeking support for its attempt to purchase 
an energy concern in Hungary. The Commerce Department rejected 
this request as well. The Department's rejection was based 
again on Tamraz's questionable background and on uncertainties 
regarding Oil Capital's status as an American 
company.35

                     1995: the caspian sea pipeline

U.S. policy on the Caspian Sea pipeline

    The United States has pursued a consistent pipeline policy 
throughout most of the world: the support of multiple pipelines 
for the transit of energy resources in order to diversify 
political and economic risks and enhance energy 
security.36 U.S. policy in the Caspian Sea region of 
Central Asia was established in early 1995 and has two primary 
objectives: (1) support for multiple pipeline routes and (2) 
insistence that pipeline contracts be established and operated 
pursuant to commercially accepted principles.37 
Sheila Heslin, the NSC official in charge of implementing the 
U.S. Caspian Sea pipeline policy from April 1995 to November 
1996, testified that in June 1995 the U.S. policy in the 
Caspian Sea region was ``the development of multiple pipelines 
on commercially viable international terms.'' 38
    The crucial period for the implementation of U.S. policy 
was from the spring of 1995 to October 7, 1995.39 
During this time, U.S. and foreign officials, an international 
consortium of foreign governments and private oil companies, as 
well private businessmen like Tamraz were in a contest to 
determine early pipeline routes and the financial terms for 
constructing and operating those routes.40 Also 
during this time, Heslin chaired an interagency group on 
Caspian Sea pipeline policy, which according to Heslin, 
``coordinated policy very carefully . . . . We were very 
concerned to make sure U.S. policy was tightly coordinated 
because we feared that different agencies could easily be 
played off against each other.'' 41 Tamraz's 
pipeline proposal and his activities in the Caspian Sea region 
was a subject of discussion within the interagency group.
    In the spring of 1995, the interagency group was concerned 
because Tamraz apparently was traveling in the Caspian Sea 
region attempting to become a dealmaker between governments and 
oil companies who hoped to be involved in the construction of 
an oil pipeline in the region.42 The group had also 
heard that Tamraz was calling his pipeline proposal a ``peace 
pipeline'' because he believed that his proposed route would 
foster peace in the region. The group understood, however, that 
the real incentive behind Tamraz's pipeline proposal was the 
fact that he planned to retain five percent of the revenues in 
exchange for forging a deal. According to Heslin, Tamraz's 
proposal to become a dealmaker, if successful, would have 
resulted in personal profit to Tamraz of approximately $125 
million.43
    The interagency group determined that Tamraz's proposal to 
become a ``dealmaker'' in the Caspian Sea pipeline project was 
contrary to U.S. policy, which sought commercially viable 
contracts without the intervention of dealmakers.44 
According to Heslin, the group nonetheless decided ``that as an 
American, Roger Tamraz deserved a hearing in front of his 
Government, but that we should do so at a mid-level initially 
and then assess.'' 45 Agencies officials thereafter 
met with Tamraz to discuss his proposal and the CIA also became 
involved in the process.
    Ultimately, on October 7, 1995, a contract was signed that 
provided for multiple early pipeline routes pursuant to 
commercially viable terms, thereby implementing U.S. 
policy.46 Heslin testified that the success of U.S. 
policy was due in large part to the coordination within the 
executive branch of the Government, the importance placed on 
the policy by National Security Advisors Anthony Lake and 
Samuel R. Berger, and by President Clinton himself, who called 
President Heidar Aliyev of Azerbaiijan ``at the key moment'' in 
the negotiations.47
    The project announced on October 7, 1995 did not 
incorporate any aspect of Tamraz's proposal despite Tamraz's 
efforts to become part of the project.48 The 
Committee investigated some events surrounding the Caspian Sea 
pipeline issue, focusing on Tamraz's attempts to become part of 
the project.

May-June 1995: Meetings with executive branch officials

    In May and June of 1995, several mid-level executive branch 
officials met with Tamraz to discuss his proposal. During these 
meetings, Tamraz sought to persuade the officials to support 
or, at least, not object to, his ``peace pipeline'' 
proposal.49 This series of meetings was routine and 
proper, and occurred prior to any political contribution by 
Tamraz to the Democratic Party.50 Testimony 
establishes that the officials met to listen to Tamraz's 
proposal as they did with many private individuals and 
businesses. No evidence was presented to the Committee that the 
agencies offered support for Tamraz's commercial 
interests.51
    One of the meetings between Tamraz and executive branch 
meetings was with Sheila Heslin. According to Heslin, the 
meeting was scheduled after Ed Pechous, a former CIA official 
employed by Tamraz, called Heslin ``repeatedly'' requesting 
that she meet with Tamraz.52 Heslin agreed to meet 
with Tamraz and scheduled the meeting for June 2, 1995. Heslin 
testified that before the meeting, she ``tasked the interagency 
[group] to basically check out the representations he had made 
at the various departments with regard to support from various 
entities and governments.'' 53 After receiving 
information from a variety of sources, Heslin discovered that 
Tamraz's representations ``did not check out.'' 54
    Heslin had a 20-minute meeting with Tamraz and Pechous on 
June 2, 1995. According to Heslin, she explained U.S. policy 
and ``asked [Tamraz] a bunch of tough questions,'' including 
why he had misrepresented his support and whether he was 
seeking exclusive rights.55 Heslin testified that 
she did not get very satisfactory answers and that Tamraz told 
her that he was seeking to charge five percent of the overall 
costs of the deal. Heslin explained that that ``was the 
clincher'' against his deal, because such deals were against 
U.S. policy and were not ``economically viable.'' 56
    Tamraz testified that during this meeting, Heslin was in 
``listening mode'' only, and that she was skeptical of his 
proposal, as were the other mid-level officials with whom he 
met in May and June.57 According to Tamraz, the mid-
level officials during these meetings in the spring of 1995 
gave him ``the same song.'' 58 Tamraz had no other 
contact with Heslin or the other agency officials after June 
1995.59

Bob of the CIA

    In preparation for her June 2 meeting with Tamraz, Heslin 
requested information from the CIA's Directorate of 
Intelligence (``DI''), the CIA division that analyzes 
information.60 Heslin testified that just prior to 
her meeting, both a colleague at the CIA's DI and an official 
of the CIA's Directorate of Operations (``DO'')--the CIA 
division that gathers information, often undercover--told her 
that they would be sending her a report.61 The 
official from the DO was referred to during Committee 
proceedings as ``Bob of the CIA'' in order to protect his 
undercover identity. Heslin ``was very surprised'' that the DO 
would ``decide[] on its own'' to send a report on Tamraz, when 
she had not requested one.62
    Heslin did receive two separate CIA reports in May 1995, 
prior to her June 2, 1995 meeting with Tamraz--one report was 
from the DI and the other was from the DO. Heslin testified 
that ``there was a very big difference between the reports.'' 
63 According to Heslin, the DI report contained 
negative information about Tamraz, whereas the DO report, 
signed by Bob's supervisor William Lofgrin, ``was almost wholly 
positive.'' 64 Heslin testified that she did not 
understand this discrepancy.65 This CIA pattern of 
the DO providing positive information about Tamraz to the NSC 
continued in early June 1995, when Bob began to contact Heslin 
and promote Tamraz and his pipeline proposal.
    Heslin testified that shortly after her June 2 meeting with 
Tamraz, she received a call from Bob of the CIA. During that 
call, Bob apologized for the contents of the DO's report, 
telling Heslin that his boss Lofgrin (who later went to work 
for Tamraz) had ``asked him personally to call [Heslin] and 
review his history.'' 66
    According to Heslin, Bob knew details about her June 2 
meeting with Tamraz, and began to ``rebut every tough 
question'' she had posed to Tamraz in that 
meeting.67 Heslin testified that Bob ``was 
attempting to essentially provide [her] information to ease 
[her] concerns on the questions that [she] had raised with 
Tamraz.'' 68 Heslin found this ``strange.'' 
69 Heslin also testified that when talking about 
Tamraz, Bob had a real reverence in his voice about some of 
Tamraz's past involvement with the CIA.70
    Heslin testified that between early June and late October 
1995, Bob called her anywhere from three to five times in what 
she testified could ``only be characterized as lobbying in 
favor of Roger Tamraz.'' 71 Heslin testified that 
she was ``astonished'' when Bob told her specific details about 
Tamraz's pipeline deal, once even assuring her that the Turkish 
government was almost ``on board.'' 72 According to 
Heslin, Bob never mentioned Tamraz's political contributions, 
and the evidence establishes that Bob's calls began before 
Tamraz had begun to contribute to the Democratic Party in July 
of 1995.73
    Sometime in late August or early September 1995, evidence 
presented to the Committee indicates that Bob also contacted 
the Vice President's staff to discuss Tamraz.74 At 
this time, Tamraz had requested an official meeting with Vice 
President Gore and was waiting for a response.75
    The last telephone call Heslin received from Bob was in 
mid-October, after the Caspian Sea pipeline project had been 
signed and U.S. policy had been implemented. During this call, 
Heslin recalled that once again Bob urged her to support 
Tamraz's deal, stating that it was important that they ``get 
Tamraz back on board'' in the region.76
    It was also in mid-October 1995 that Bob initiated a 
telephone call to Donald Fowler, chairman of the DNC. Bob wrote 
in an October 20, 1995 memorandum provided to the Committee 
that ``[o]n October 19 Don Fowler called me at the behest of . 
. . Roger Tamraz.'' 77 However, during his 
deposition, portions of which have been declassified, Bob 
testified that in fact he had called Fowler first. Bob 
testified that he placed the first call to Fowler on October 
18, before Fowler ever contacted him.78 Fowler was 
not in, so Bob left his full name with a young man who answered 
the phone.79
    According to Bob, Fowler returned the call the next 
day.80 Fowler testified that he does not have any 
memory of this phone call, but according to Bob, Fowler told 
him that he understood that Bob was in contact with the Vice 
President's office.81 In response, Bob testified 
that he informed Fowler that he could not help with a meeting 
with the Vice President, referring Fowler to an individual 
inside the Vice President's office.82 Bob also 
testified that the conversation with Fowler was brief, that he 
was working undercover and that he never mentioned his CIA 
affiliation.83 Bob also testified that during the 
call he was ``not sure that Fowler [knew] who he [was] talking 
to.'' 84 (Bob and Fowler spoke one more time, in 
mid-December 1995. These calls are both reviewed fully below.)
    Bob's last contact with Heslin was at a dinner for federal 
and foreign officials in late October 1995. According to 
Heslin, after this dinner, Bob ``insisted'' that he drive 
Heslin home.85 During the ride, Bob again stated 
that he had more important information about Tamraz he wished 
to share with her. According to Heslin, it was her view by this 
point was that Bob was nothing more than a lobbyist for Tamraz, 
and that she did not want any additional 
information.86
    Although the majority of Bob's deposition testimony remains 
classified, it can be generally stated that Bob agreed with 
Heslin that he was the one who initiated all contacts with 
Heslin. Bob also testified, however, that contrary to Heslin's 
testimony, he only provided Heslin with negative information 
about Tamraz during those calls. Bob's testimony is contrary to 
Heslin's public testimony before the Committee. Based on Bob's 
deposition transcript as a whole, the testimony of Heslin, 
Lofgrin's positive position and the positive DO reports, Bob's 
assertion that he provided only negative information about 
Tamraz to Heslin is not credible. Instead, the opposite 
conclusion is warranted--that Bob of the CIA lobbied Heslin on 
behalf of Tamraz and his pipeline project.
    In sum, from June 1995 through October 1995, the evidence 
establishes that Bob, then an employee of the CIA's Directorate 
of Operations, lobbied the NSC on behalf of Tamraz and his 
pipeline proposal. The lobbying began in May of 1995, when Bob 
and his boss Lofgrin decided ``on their own'' to send a 
positive report about Tamraz to Heslin. Heslin had not 
requested this report and found it ultimately to be inaccurate. 
Bob's lobbying began before Tamraz had made any political 
contributions to the Democratic Party and there is no evidence 
that he ever mentioned political contributions to Heslin. Bob's 
lobbying seemed driven by a desire to promote the idea that the 
U.S. Government should support Tamraz's pipeline deal. Of 
significance is the fact that Bob's lobbying ended shortly 
after Tamraz had been excluded from the pipeline deal in 
October of 1995.
    Although the reasons behind Bob's lobbying are unclear, it 
is clear that Bob's lobbying was not tied to Tamraz's 
involvement with either Fowler or the Democratic Party. The 
Committee did not completely resolve these issues and further 
investigation of CIA involvement with Tamraz is warranted.

        JULY-OCTOBER 1995: CONTRIBUTIONS TO THE DEMOCRATIC PARTY

Contribution history

    Tamraz testified quite bluntly about his persistence in 
pursuing his business ventures with top officials in the U.S. 
government: ``[I]f they kicked me from the door, I will come 
through the window.'' 87
    Tamraz began to contribute to the Democratic Party in July 
1995, after the interagency group had given Tamraz the signal 
that his pipeline proposal would not gain Administration 
support. Tamraz's first substantial contribution to the 
Democratic Party was July 19, 1995 and his last was October 19, 
1995.88 Committee documents and FEC records show the 
following contributions by Tamraz:

July 19, 1995:
    to the DNC Federal Account................................   $20,000
    to Virginia Democratic Party..............................    25,000
    to Louisiana Democratic Party.............................    25,000
    to Richard Molpus for Governor of Mississippi.............    20,000
August 29, 1995: to Richard Molpus for Governor of Mississippi     5,000
September 10, 1995: to the DNC (for Tamoil Inc.)..............    50,000
October 19, 1995: to Virginia Democratic Party................    75,000
                    --------------------------------------------------------------
                    ____________________________________________________

      Total: from July to October 1995........................   220,000

    Interestingly, Tamraz made no substantial contributions to 
the Democratic Party after October 1995, which was the month 
the contract for the Caspian Sea pipeline was signed. 
Apparently, the mid-level U.S. officials had stopped Tamraz at 
the front door in June of 1995, Bob of the CIA was not able to 
help him, and thereafter Tamraz attempted to ``come through the 
window'' 89 by way of political contributions. 
Indeed, Tamraz testified that he had made political 
contributions in order to gain access to the White House and 
that one reason for seeking access was to promote his pipeline 
project.90 As discussed below, Tamraz's efforts to 
gain access to higher-level officials and promote his pipeline 
by way of political contributions met with limited success.

The DNC's acceptance of Tamraz's contributions

    According to Tamraz, sometime before July 1995, he received 
a DNC solicitation letter incorrectly addressed to ``Robert 
Tamraz.'' 91 In response, Tamraz stated that he 
contacted the DNC to discuss contributions. Documents produced 
to the Committee show that the DNC prepared a memorandum to 
Chairman Fowler in anticipation of Fowler meeting with Tamraz 
to discuss possible contributions.92 The memorandum, 
dated July 12, 1995, was prepared by Alejandra Y. Castillo, a 
DNC Finance Division employee. The memorandum explained that 
Tamraz had indicated he would like to give $300,000, but warned 
that accepting the contribution may ``generate considerable 
problems for the DNC.'' 93 The memorandum set forth 
in detail the controversies in Tamraz's past, including the 
Lebanese embezzlement charges and the Commerce Department's 
decision to bar Tamraz from participating in certain trade 
activities. The memorandum even warned Fowler about Tamraz's 
motivation, stating that ``Mr. Tamraz seeks political leverage 
to secure his oil ventures in the Russian Republics (Caspian 
Oil Project).'' 94
    The memorandum, which concluded with ``Pay attention to 
these warning signals!'', informed Fowler that the ``DNC 
Finance Department is pending [sic] your guidance on whether to 
continue our conversation with Mr. Tamraz and/or extend an 
invitation to participate in DNC events.'' 95 Fowler 
thereafter accepted contributions from Tamraz and supported his 
attendance at a variety of DNC events. While these activities 
were legal, Fowler's decision to support Tamraz's attendance at 
DNC events was unwise given the warnings that Tamraz might 
misuse his attendance at such events.

SEPTEMBER 1995: REQUEST FOR AN OFFICIAL MEETING WITH THE VICE PRESIDENT

    In August 1995, Haroun Sassounian, a wealthy business 
associate of Tamraz, requested that the Vice President have an 
official meeting with him and Tamraz to discuss a Caspian Sea 
pipeline venture.96 Tamraz testified that he never 
requested this meeting and that Sassounian may have wanted to 
push his pipeline proposal because it benefitted 
Armenia.97 Nonetheless, the Vice President's staff 
sought information in order to make a recommendation on whether 
the Vice President should meet with Tamraz.
    Heslin, who worked closely with the Vice President's 
National Security staff on energy issues, was contacted by 
Richard Grimes of the Vice President's National Security staff 
about Sassounian's request.98 Heslin provided Grimes 
with information about Tamraz and recommended against the 
meeting.99 After Grimes consulted with Heslin and 
other Vice Presidential staff members, Leon Fuerth, the Vice 
President's national security advisor, sent a memorandum on 
September 13, 1995 to the Vice President recommending that he 
not meet with Tamraz.100 On October 2 and 3, the 
Vice President's staff notified Sassounian and Tamraz that no 
official meeting would be scheduled.101
    Although Tamraz never had an official meeting with the Vice 
President, he did attend several DNC-related events where the 
President or Vice President were in attendance.

                   TAMRAZ'S ATTENDANCE AT DNC EVENTS

Summary of events

    As discussed above, from 1994 to April 1996, a variety of 
federal officials opposed Tamraz's efforts to have access to 
high-level U.S. Government officials. In 1994 and 1995, the 
Commerce Department twice decided not to support the business 
ventures of Tamraz or his company. In June 1995, the Caspian 
Sea pipeline interagency group decided that they would 
recommend to their superiors that Tamraz not receive access to 
higher-level federal officials. In September 1995, Fuerth 
recommended against a Tamraz meeting with the Vice 
President.102
    In September and October 1995, Tamraz nonetheless attended 
three DNC events. On September 11, he attended a Business 
Council Reception at the White House where 320 people were in 
attendance; on September 15, he attended a DNC Trustee Dinner 
at the White House, where 80 people were in attendance; and on 
October 2, he attended a fundraiser held at a private residence 
and sat at the head table with Vice President 
Gore.103
    After the October fundraiser, the Vice President's staff 
forwarded Fuerth's memo to the DNC, apparently in an attempt to 
prevent future contact between Tamraz and the Vice 
President.104 Thereafter, Tamraz was disinvited from 
an October 5, 1995, DNC coffee at the White 
House.105
    As noted previously, on October 7, 1995, the Caspian Sea 
pipeline contract was signed, and Tamraz was excluded from the 
project. Thereafter, according to Heslin's testimony, she was 
less concerned with Tamraz and his access to the federal 
government because he was less able to misuse his access to 
push for his Caspian pipeline deal.106
    After Tamraz was excluded from the project, his 
contributions to the Democratic Party dwindled. Perhaps in 
hopes of encouraging more contributions, the DNC invited Tamraz 
to a series of DNC events beginning on December 13, 1995. He 
attended a 300-person holiday reception at the White House on 
December 13, 1995; a 120-person DNC Trustee Dinner on March 27, 
1996; a DNC coffee on April 1, 1996 where approximately 15 
people were in attendance; and, finally, a showing of a movie 
at the White House on June 22, 1996 organized by the DNC, where 
approximately 50 people were in attendance.107
    Tamraz testified that he did not have any substantive 
conversations with the President or Vice President at these 
events.108 Nonetheless, Tamraz's attendance at these 
DNC events was contrary to the recommendations of federal 
officials and was of concern to those involved in the Caspian 
Sea pipeline project.

Fowler's role

    In early October 1995, after Tamraz was notified that the 
Vice President had declined to schedule a meeting with him and 
after he had been disinvited from an October 5, 1995 DNC 
coffee, Tamraz testified that he had a conversation with Fowler 
and suggested that Fowler ``pick up'' information about him, 
including information from the CIA, in order to clear his name 
with the White House.109 Tamraz stated that he gave 
to Fowler Bob of the CIA's name, most likely both his first and 
last name, as well as his telephone number.110 
Tamraz testified that he also spoke with Bob at this same time, 
as he often did during his trips to Washington.111 
In his deposition, Bob confirmed that he spoke to Tamraz in 
October and testified that Tamraz informed him that Tamraz had 
given his name and phone numbers to Fowler.112
    On October 18, 1995, Bob of the CIA called Fowler and left 
a message that he had called.113 On October 19, 
1995, according to Bob of the CIA, Fowler returned his call and 
the two discussed the issue of Tamraz meeting with the Vice 
President.114 Bob testified that he told Fowler that 
he could not assist with setting up any meetings, despite 
evidence that Bob had already contacted the Vice President's 
office on Tamraz's behalf.115
    Two months later, on December 13, 1995, Fowler called Bob 
again. According to Bob, Fowler repeated Tamraz's assertions 
that the NSC was a captive of the oil companies and was 
unfairly preventing Tamraz from attending DNC 
events.116 Bob testified that he declined to provide 
any information to Fowler.117 Bob also testified 
that during this phone call, like his first phone conversation 
with Fowler in October, he couldn't ``say for certain how 
[Fowler] knew who he was talking to because CIA was never 
mentioned.'' 118
    According to documents presented to the Committee, Fowler 
also telephoned Heslin in mid December 1995.119 
Heslin testified that this was her first and only phone 
conversation with Fowler.120 During that call, 
Heslin testified that Fowler told her that she would be 
receiving information about Tamraz from Bob of the 
CIA.121 Heslin complained about the call to her 
superior, Nancy Soderberg, Deputy Assistant to the President 
for National Security Affairs.122 Soderberg told the 
Committee during a staff interview that after talking to 
Heslin, she spoke to Fowler and told him not to call NSC 
staff.123
    After talking to Fowler, Soderberg told the Committee that 
she decided to check up on Tamraz herself. Soderberg and Heslin 
stated that, as Heslin sat in Soderberg's office, Soderberg 
called Randy Beers, senior director of intelligence at the NSC, 
and asked him to find out about Tamraz and his relationship 
with the CIA.124 Beers told the Committee that he 
subsequently requested information from the CIA regarding 
Tamraz.125 On December 29, 1995, the CIA faxed to 
Beer's assistant a report containing information about 
Tamraz.126
    The December 1995 report was the third report that the CIA 
had sent to the NSC regarding Tamraz. The first two reports 
were sent to Heslin in May 1995 to prepare her for her June 2 
meeting with Tamraz (one from the CIA's DI and the other from 
the CIA's DO). The third report, although using the same format 
as the reports in May, was faxed by the CIA directly to Beers's 
office in late December 1995.
    The Committee investigated whether it was Fowler who had 
influenced the CIA's decision to send a third report to the NSC 
and whether Fowler had any influence on the contents of that 
report. These issues arose because Fowler had contacted Bob in 
mid December before the report was sent, and because the report 
contained only positive information about Tamraz. It does not 
appear, however, that the CIA sent its third report in December 
in response to Fowler's call to Bob. Because the report was 
sent to Beers's office directly, following Beer's request to 
the CIA for information on Tamraz, it is more likely that the 
CIA sent the report in response to a request from Beers, not 
Fowler. It also does not appear that Fowler had any influence 
on the contents of the report. The third CIA report was drafted 
by Bob of the CIA, who had already sent a report to Heslin in 
May 1995 that, according to Heslin, had ``wholly positive'' 
information regarding Tamraz. Thus, it is no surprise, based on 
Bob's first report, as well as on Bob's promotion of Tamraz 
during calls to Heslin, that Bob's report in December contained 
only positive information about Tamraz. The Committee was also 
informed that the third report may have contained only positive 
information due to appropriate internal legal restrictions 
within the CIA itself. Fowler's contact with Bob was unwise 
although he testified that he could not remember telephone 
calls with anyone at the CIA.127

No effect on policy

    Although Tamraz's political contributions to the Democratic 
Party afforded him limited access to the President and Vice 
President, U.S. policy toward the Caspian Sea pipeline project 
was not affected by either Tamraz's contributions or his 
access. Indeed, when Tamraz was asked whether he regretted 
making his contributions to the Democratic Party, which 
totalled less than $300,000, Tamraz responded that ``I think 
next time, I'll give 600,000.'' 128

       APRIL 1996: DEPARTMENT OF ENERGY OFFICIAL TALKS TO HESLIN

Tamraz's attendance at March 27 and April 1, 1996 DNC events

    On March 27, 1996, Tamraz attended a DNC Trustee Dinner at 
the White House along with 120 other guests.129 
Tamraz testified that during a brief ``introduction to the 
President,'' he mentioned his pipeline project, but according 
to Tamraz, the President's reaction was to respond that he 
would ``like to see jobs coming to America.'' 130 
Tamraz also testified that he told the President that ``if 
somebody wants to hear me out, I'm available.'' 131 
At that same event, Tamraz testified that he also spoke to 
Thomas F. McLarty, Counselor to the President and Special Envoy 
for the Americas, in a reception line and, in very brief 
exchange, the two discussed the oil industry in 
general.132 According to McLarty, Tamraz talked 
about his pipeline project and then the two discussed more 
generally ``the importance of lessening the U.S. dependence on 
the Middle East for energy supplies, something that [McLarty] 
felt very strongly about for a number of years and conveyed on 
a number of occasions to the President and others.'' 
133
    During this dinner, Ann Stock, a social secretary at the 
White House, made notes about some of the President's 
conversations that evening. In a memorandum to the President 
the next day, March 28, Stock mentioned the President's brief 
conversation with Tamraz, writing that Tamraz ``wanted to 
discuss the pipeline that will go from the Caspian Sea to 
Turkey. You told him that someone would follow-up with him. He 
will be at the 4/1 breakfast.'' 134 The President 
wrote on the memo: ``Does Azer. Gov't want this'' and ``cc M 
McLarty.'' 135 Based on the President's notations, 
McLarty understood that he was being asked to obtain 
information about the pipeline proposal.136
    On April 1, McLarty and Tamraz attended a breakfast/coffee 
at the White House, along with approximately 13 other 
guests.137 Tamraz testified that he spoke to McLarty 
``for about 30 seconds before we sat down'' 138 and 
gave him a brochure from his company and business 
card.139 Tamraz said he did not expect to hear back 
from McLarty, but again told McLarty that ``[i]f anybody is 
interested to talk to me about it, I'm available.'' 
140 McLarty testified that he recalled attending the 
coffee and seeing Tamraz, but did not recall this brief 
exchange.141

Follow-up on the pipeline project

    Between March 27 and April 1, records indicated that 
McLarty sent a fax to Kyle Simpson, a senior advisor at the 
Energy Department.142 McLarty and Simpson both told 
the Committee that McLarty often contacted Simpson when he 
needed information about energy issues, and that the two had 
frequent contact with each other.143 The Committee 
does not have a copy of this fax, but McLarty testified that it 
``probably was just a brief note [on the pipeline project] 
asking for information or telling Kyle [Simpson] I would call 
him.'' 144
    Pursuant to Stock's March 28 memorandum, McLarty also sent 
brief notes to both the President and Simpson on April 2, 1996. 
To the President, he noted that he had seen Tamraz at the April 
1 coffee and would follow up with him ``in a supportive but 
prudent and appropriate way.'' 145 To Simpson, he 
faxed Tamraz's brochure and business card and wrote ``Please 
review and let's discuss the attached. (Relates to the fax I 
sent you last week.)'' 146
    Shortly thereafter, McLarty and Simpson talked on the 
telephone. Both testified that McLarty requested information 
about Tamraz's pipeline proposal. Specifically, McLarty 
testified that he called Simpson ``to inquire about the 
pipeline project. That was the assignment I had been given.'' 
147 Simpson also testified that McLarty wanted 
information about the ``pipeline project.'' 148 
Thus, after the President and McLarty had brief exchanges with 
Tamraz at DNC events, McLarty was asked by the President to 
find out whether there was any merit to the pipeline proposal 
that Tamraz claimed would bring peace to the region and jobs to 
Americans. Simpson explained generally that the U.S. Government 
often seeks this type of information because the Government 
sees value in U.S. companies building and owning projects 
outside the U.S., although the Government is ``not terribly 
particular'' about which U.S. company it is if more than one is 
vying for a project.149
    McLarty and Simpson both testified that when McLarty 
requested information about the Caspian Sea pipeline proposal, 
McLarty did not mention the issue of whether Tamraz should have 
a meeting with the President.150 In fact, Simpson's 
testimony reveals that he thought that Tamraz had already met 
with the President. He stated in his deposition that McLarty 
called and ``said the President had met with Mr. Tamraz and Mr. 
Tamraz had talked about his pipeline proposal and he . . . 
asked Mr. McLarty to find out'' if the pipeline was 
important.151
    It is also significant that the testimony establishes that 
McLarty's conversation with Simpson did not involve a 
discussion of political contributions. McLarty and Simpson 
testified in their depositions that not only did they not 
discuss political contributions, but that neither of them knew 
anything about Tamraz's contributions at that 
time.152 Tamraz himself testified that he never 
discussed political contributions with McLarty or Simpson and, 
in fact, noted that ``nobody at the White House has ever talked 
to me about contributions, ever.'' 153

The request within the Department of Energy

    Shortly after he received the call from McLarty, Simpson 
was approached after an Energy Department staff meeting 
sometime in early April 1996 by John ``Jack'' Carter, also a 
senior policy advisor at the Energy Department.154 
Carter had been a Department of Energy representative on the 
interagency group chaired by Heslin and was one of the mid-
level officials who met with Tamraz in the spring of 1995. 
Simpson testified that during this brief exchange, the issue of 
Tamraz arose. Simpson testified that he explained to Carter 
that he was seeking information on Tamraz's pipeline project 
and asked Carter to tell him ``what's going on with this 
pipeline.'' 155 He also testified that he most 
likely conveyed to Carter that the request had come from 
McLarty.156 Simpson testified that he did not 
mention anything about political contributions,157 
nor did he ask Carter to contact anyone in particular about 
this request.158
    This exchange between Simpson and Carter was, by both of 
their accounts, brief and informal. In fact, Carter testified 
that his only knowledge ``about Mr. McLarty's inquiry was from 
[this] brief conversation with Kyle Simpson on April 3rd, 
1996.'' 159 Based on this ``brief conversation,'' 
however, Carter testified that he thought that Simpson asked 
about a Presidential meeting.160 Carter also said 
that he ``thought'' that he saw ``handwritten notes'' with 
numbers on them, stating that ``there was a pad with some notes 
on it. . . . I can't remember distinctly. It might have had 
some numbers on it. I am just not sure.'' 161 
Finally, Carter testified that Simpson, ``either on the pad or 
mentioned that the fellow had made a contribution, was going to 
make more contributions apparently to somebody, political 
contributions.'' 162 Simpson, however, testified 
that he was not aware of Tamraz's political contributions and 
did not mention anything about political contributions during 
this conversation.163
    Carter also testified, however, that although he thought 
contributions were mentioned during this conversation, Simpson 
did not suggest to him that anyone thought that Tamraz should 
meet with the President because of Tamraz's political 
contributions.164 In fact, Carter testified that, 
during this brief exchange, he immediately told Simpson that he 
was aware of Tamraz's efforts in the Caspian Sea region, and 
that the President should have nothing to do with 
him.165 However, Carter testified that he offered to 
call Heslin and determine if there was an update regarding 
Tamraz's pipeline proposal.166 Carter agreed that it 
was his suggestion to call Heslin and that no one had suggested 
that he do so.167
     Based on this brief conversation, Carter called Heslin the 
next day.168 Carter testified that his only purpose 
in calling Heslin was to see whether the policy about the 
Tamraz project had changed.169

Carter's call to Heslin

            Heslin's testimony
    Carter called Heslin on April 4, 1996. At that time, 
according to Heslin, Carter was a colleague with whom she had 
worked for a year and who she knew was looking for a job in the 
White House.170 She also testified that by April of 
1996, she was not actively working on the Caspian Sea pipeline 
policy, but was instead ``simply monitoring and supporting the 
technical implementation of the deal that had been agreed [to] 
in October.'' 171
    Heslin testified that Carter began the phone conversation 
in early April by saying that he was calling ``at the behest of 
Mack McLarty who had recently met with Roger Tamraz and really 
liked his pipeline proposal.'' 172 Heslin then 
stated that Carter asserted that McLarty wantedTamraz to have a 
meeting with the President and that it ``would mean a lot of money for 
the DNC.'' 173 According to Heslin, Carter also told her 
that Tamraz had already given $200,000 and if he got a meeting with the 
President, he would give another $400,000. Heslin stated that Carter 
then asserted that both McLarty and the President wanted 
this.174 Heslin testified that she doubted some of Carter's 
statements, and told him ``this is just unbelievable. . . . I can't 
believe that, Jack.'' 175 When Heslin resisted the idea of a 
meeting, Heslin said that Carter ``was pretty aggressive'' and warned 
her that she shouldn't be ``such a Girl Scout.'' Heslin also testified 
that Carter warned her that McLarty might become Secretary of the 
Energy Department, implying that if she resisted this request, her 
long-term career in the energy field might suffer.176 Heslin 
testified that the phone call lasted about 25 minutes.177
            Carter's testimony
    Carter's recollection of the phone call was different than 
Heslin's. Carter testified that he called Heslin to see ``[i]f 
there had been any change in our policy, or view towards 
Tamraz, and whether there was any reason the President should 
meet with Tamraz.'' 178 He said that he remembered 
the call lasting only three to five minutes, and that during 
that time, he did not state that the President or McLarty 
wanted a meeting, nor that McLarty might become Secretary of 
Energy.179 Carter also testified in his deposition 
that he did not call Heslin a Girl Scout, although at the 
public hearing, he testified that he may have.180 
Although Carter remembered mentioning political contributions 
to Heslin, he testified that he did not tie the contributions 
to a meeting with the President.181 In sum, Carter 
testified that ``I would not try to bring any pressure on 
Sheila Heslin having to do with political matters. Moreover, I 
wouldn't do it with something that I opposed, which was a 
meeting with Tamraz and the President.'' 182
    Carter recognized, however, based on Heslin's public 
testimony the day before, that she had felt pressure during the 
call. He stated that at the time of the call, it hadn't 
``register[ed]'' with him that he was pressuring 
her.183 Carter's explanation for their different 
recollections was that Heslin ``read more into it certainly 
than I ever intended because there was no intention of mine to 
pressure her in any way.'' 184
    Carter's testimony also reveals that he was in no position 
to speak on behalf of McLarty, let alone the President. Carter 
testified that he had never spoken to McLarty about this 
particular request and, in fact, never worked closely with 
McLarty on anything. For example, in his two years at the 
Energy Department, Carter only talked to McLarty four or five 
times on the telephone about energy issues and never met with 
him in his office.185 Carter also testified that he 
had a total of two personal conversations with McLarty, during 
which he inquired about jobs at the White House, in an attempt 
``to get a little more visibility in the administration.'' 
186 In early 1996, Carter testified that McLarty 
informed him that he would not be hired.187
    Carter was, however, familiar with Heslin and Tamraz. He 
had been a member of the interagency group on Caspian Sea 
policy and had traveled with Heslin and other officials to the 
region in 1995. In May of that year, Carter was one of the mid-
level officials who met with Tamraz about his pipeline 
proposal, and was opposed to it. However, unlike Heslin, Carter 
thought that in the scheme of things, Tamraz ``was not an 
important factor'' in the region.188 After October 
1995, when the pipeline agreement was signed, Carter had little 
contact with Heslin.

The Department of Energy responds to the request for information

    After his call to Heslin, Carter testified that he reported 
back to Simpson that the Tamraz's pipeline proposal did not 
have merit and that the NSC had further information if McLarty 
wanted to pursue the matter.189 Simpson testified 
that he recalled conveying this information to McLarty, and an 
April 8, 1996, telephone message from him to McLarty contains 
the information.190 McLarty remembered Simpson 
conveying that the pipeline proposal did not have ``any 
uniqueness about it; there was nothing else that needed to be 
done that was not already being done, and he did raise, as I 
remember, . . . some caution flag about Mr. Tamraz.'' 
191 McLarty testified that, after receiving this 
information from Simpson, he believes he orally conveyed it to 
the President.192 The officials had no further 
contact with Tamraz after April 1996.193

Conclusions

    The evidence presented to the Committee establishes that in 
late March 1996, Tamraz caught the President's ear at a DNC 
function and told him that he was working on a supposedly 
important peace pipeline proposal in the Caspian Sea region 
that would bring jobs to Americans. The next day, the President 
wrote ``cc'd McLarty'' and ``does the Azerb. Gov't want this'' 
on a memorandum from his social secretary. McLarty understood 
this notation as a request to inquire about the merits of 
Tamraz's pipeline proposal. On April 1, McLarty met Tamraz 
briefly at a coffee, where he obtained Tamraz's business 
brochure.
    McLarty faxed the brochure to Simpson, his usual contact at 
the Energy Department, and asked for information about Tamraz's 
pipeline project. After an April 3 staff meeting within the 
Energy Department, Carter and Simpson spoke briefly and the 
issue of Tamraz and his pipeline arose. Simpson told Carter 
during this exchange that McLarty had asked for information 
about Tamraz's pipeline project. Carter offered to call Heslin 
to respond to McLarty's request. The Minority believes, 
however, that Carter did not accurately understand--or did not 
accurately testify to--his brief exchange with Simpson. 
Carter's testimony about the exchange, which he described as 
Simpson posing a question whether Tamraz should meet with the 
President, and some mention of political contributions, is full 
of ``maybe's'' and ``I don't remember distinctly's'' and ``I 
thought's.'' In contrast, Simpson and McLarty's testimony about 
the request, which was for information about Tamraz's pipeline 
proposal, is straightforward and follows logically from the 
President's notation on the March 28 memorandum asking about 
the pipeline. In his eagerness to respond to McLarty, Carter 
likely assumed that the request was for a meeting between 
Tamraz and the President, which would have been a logical 
assumption based on Carter's experience with the interagency 
group, where the subject of Tamraz and his attempts to meet 
with government officials had often been discussed.
    There is evidence that Carter also likely wanted to respond 
to this request from McLarty in order to gain higher visibility 
in the Administration, something he testified he was seeking at 
that time. Additionally, Carter probably did not obtain the 
contribution figures he conveyed to Heslin from Simpson. The 
figure of $200,000 of past contributions by Tamraz was 
generally correct, but had been reported in the energy 
community and discussed in the interagency task force 
meetings.194 In addition, press reports on Tamraz's 
political contributions were found in files of both Department 
of Energy and NSC officials, including Heslin. The second 
figure Carter purportedly conveyed to Heslin was that Tamraz 
was prepared to contribute an additional $400,000 to the DNC. 
That figure is not correct, nor had Tamraz promised to 
contribute more money at that time.195 Tamraz's last 
substantial contribution had been many months before, in 
October of 1995. Furthermore, Simpson and McLarty both 
testified unequivocally that political contributions and a 
potential meeting with the President were never discussed in 
relation to their request for information about Tamraz's 
pipeline proposal. In sum, Carter's testimony that Simpson 
mentioned political contributions or a meeting with the 
President is subject to question. Rather, it is likely that 
Carter assumed that a meeting was requested and determined on 
his own to aggressively respond to a request he had 
misunderstood.196
    Carter's testimony in that regard is also subject to 
additional scrutiny because of contradictions between his 
testimony and that of Heslin's regarding their phone 
conversation. Carter stated that he called Heslin only to ask 
her whether there had been a change in policy that would permit 
a meeting between the President and Tamraz. Carter testified 
that he never spoke to McLarty about the request, never 
intended to pressure Heslin to agree to a meeting based on 
political contributions, and never chastised her with names or 
warnings about her future career in the energy field. Heslin, 
however, testified that Carter invoked the names of McLarty and 
the President, did pressure her based on political 
contributions, and called her a Girl Scout and warned about 
McLarty becoming Secretary of Energy.197
    In the Minority's view, the evidence strongly supports a 
conclusion that Carter acted on his own in making certain 
statements to Heslin during their phone call, and that he did 
so inappropriately. In fact, Heslin's supervisor Nancy 
Soderberg came to this very conclusion when Heslin informed her 
about the telephone call.198 Carter likely thought 
he could win visibility in the Administration by putting some 
pressure on a friend, and, when she resisted, he dropped the 
matter. Heslin also probably reacted particularly strongly 
because she had already been contacted about Tamraz by Bob of 
the CIA several times, and Fowler once.

               conclusion: access still for sale in 1997

    In February 1997, Tamraz received letters from Republican 
Senators Trent Lott and Mitch McConnell inviting him to become 
a member of the Senatorial Inner Circle.199 Senator 
Lott encouraged Tamraz to join the Inner Circle, stating, ``I 
know you will enjoy meeting my Senate colleagues. . . . at the 
meetings we have scheduled this year.'' Senator McConnell was 
more specific. His letter stated that for a contribution to the 
Republican Party, Tamraz could discuss high-level policy issues 
at exclusive dinners with the Senate leadership.
    Tamraz attempted to take up this offer of access, but his 
contribution was returned. When asked why he had contributed 
this time, Tamraz responded, ``you set the rules, and we are 
following the rules. . . . [T]his is politics as usual. What is 
new?'' 200 In reply, Senator Carl Levin summarized 
the story of Tamraz:

          I think that is exactly the point. . . . I just hope 
        our colleagues will closely follow these hearings, 
        enough so that we can vote to change politics as usual 
        because that is exactly what the problem is. It is 
        politics as usual.201

                               footnotes

    \1\ Depositions were taken of Roger Tamaraz, John ``Jack'' Carter, 
Kyle Simpson, Thomas McLarty, Donald Fowler, Bob of the CIA, and 
several Department of Commerce officials. Interviews were conducted of 
a variety of NSC employees, including Samuel ``Sandy'' Berger, Sheila 
Heslin, Nancy Soderberg, Robert Suettinger, Randy Beers, Jamona 
Broadway, and Melanie Darby. Documents were produced by Tamraz, the 
Department of Commerce, the White House, the NSC, the CIA, the State 
Department, and the DNC. Pub.ic testimony was taken of Heslin, Tamraz, 
Carter and Simpson during Committee's hearings held on September 17 and 
18, 1997.
    \2\ Fortune magazine, 11/73.
    \3\ Fortune magazine, 11/73.
    \4\ See also Roger Tamraz deposition, 5/13/97, pp. 135-36 
(discussion of Fortune magazine article and Tamraz's role in the 1973 
pipeline deal).
    \5\ Washington Post, 9/9/97.
    \6\ New York Times, 5/4/78; Newsweek, 2/10/75.
    \7\ Newsweek, 2/10/75.
    \8\ Newsweek, 2/10/75.
    \9\ Newsweek, 2/10/75.
    \10\ Roger Tamraz deposition, 5/13/97, pp. 11-13; Washington Post, 
9/9/97.
    \11\ Washington Post, 9/9/97.
    \12\ Roger Tamraz deposition, 5/13/97, pp. 11-14.
    \13\ Roger Tamraz deposition, 5/13/97, pp. 3 & 12.
    \14\ Roger Tamraz, 9/18/97 Hrg., p. 4; Roger Tamraz deposition, 5/
13/97, pp. 123-24 ; Washington Post, 9/9/97.
    \15\ Roger Tamraz, 9/18/97 Hrg., pp. 3-4; Washington Post, 9/9/97. 
According to Tamraz, the U.S. also asked him to arrange for the safe 
passage into Lebanon of William Buckley, who was sent in to negotiate 
the release of American hostages. Roger Tamraz, 9/18/97 Hrg., p. 4. For 
additional information, see New York Times, 12/12/86, 12/11/86, 9/7/80; 
Washington Post, 12/11/86; Los Angeles Times, 12/12/86; Chemical Week, 
4/11/79.
    \16\ Tamraz testified that he had a pattern of hiring former CIA 
agents. Roger Tamraz, 9/18/97 Hrg., p. 42.
    \17\ Roger Tamraz deposition, 5/13/97, p. 36. Tamraz asserts that 
he was a permanent resident in the United States since 1967 and became 
a U.S. citizen in 1989, Statement of Roger Tamraz, 5/13/97, thus making 
him eligible to contribute to the RNC in 1985.
    \18\ Congressional Quarterly, 8/20/97; see also public FEC records.
    \19\ Congressional Quarterly, 8/20/97; Roger Tamraz, 9/18/97 Hrg., 
p. 65.
    \20\ Staff Interview with Sheila Heslin, 5/28/97.
    \21\ Exhibit 1064M: p. 1, Letter from Frank J. Fahrenkopf, Jr. to 
Robert Tuttle, Special Assistant to the President for Presidential 
Personnel, 6/25/85.
    \22\ Exhibit 1064M: p. 1, Letter from Frank J. Fahrenkopf, Jr. to 
Robert Tuttle, Special Assistant to the President for Presidential 
Personnel, 6/25/85.
    \23\ Exhibit 1064M: p. 2, Letter from Robert H. Tuttle, director of 
presidential personnel to Frank J. Fahrenkopf, Jr., chairman of the 
RNC, 7/10/85.
    \24\ Senator Levin, 9/18/97, Hrg., pp. 64-66 (discussing Frank 
Fahrenkopf's letter to the Committee regarding Roger Tamraz).
    \25\ Roger Tamraz, 9/18/97 Hrg., pp. 4-6; Roger Tamraz deposition, 
5/13/97, pp. 8-10; Washington Post, 9/19/97.
    \26\ Roger Tamraz, 9/18/97 Hrg., pp. 4-6; Roger Tamraz deposition, 
5/13/97, pp. 8-10; Washington Post, 9/19/97.
    \27\ Roger Tamraz, 9/19/97 Hrg., pp. 4-6; DNC 3234854-58 (Three 
articles describing the events found in DNC files: Financial Times, 9/
13/89; AP, 3/11/89; Reuters, 3/10/89).
    \28\ Roger Tamraz, 9/19/97 Hrg., pp. 5-6. In 1989, Tamraz was 
portrayed in the Lebanese media as an agent of Israel. Beirut 
Newspaper, 1/1/89; Roger Tamraz, 9/19/97 Hrg., p. 5.
    \29\ Roger Tamraz, 9/18/97 Hrg., p. 5.
    \30\ Roger Tamraz, 9/18/97 Hrg., p. 5.
    \31\ Department of Commerce Memorandum from Interpol, 4/11/97.
    \32\ Application submitted to Melissa Moss, director of Office of 
Business Liaison at Commerce, 3/1/94.
    \33\ Melissa Moss deposition, 6/11/97, pp. 190-93.
    \34\ Roger Tamraz deposition, 5/13/97, pp. 5-9. Tamraz admitted 
that if ``anyone puts my name in Nexus-Lexus [sic], you get a lot of 
horror stories. So I think it was justifiable, but they could have 
given me a chance to explain the circumstances.'' Roger Tamraz 
deposition, 5/13/97, p. 6.
    \35\ A series of memoranda circulated between the Commerce 
Department in Washington and the Commercial Service office in Hungary 
reveal that in October 1995, Commerce had once again reviewed Tamraz's 
questionable background and other issues concerning Oil Capital and 
determined that the U.S. should not advocate on behalf of Oil Capital. 
Memorandum from Jonathan Marks to Ann Ngo, 10/25/95; e-mail from Ira 
Sockowitz to Jonathan Marks, 10/27/95; e-mail from Jonathan Marks to 
Ira Sockowitz, 11/2/95.
    \36\ Statement of Lanny J. Davis, 6/3/97; Federal Clearinghouse 
(FDCH); FDCH Political Transcripts, 11/26/97.
    \37\ On February 2, 1995, Platt's Oilgram quoted an administration 
official as saying, ``we support multiple routes.'' On February 24, 
1995, a senior State Department official said that ``in the short-run 
there should be a variety of viable alternatives, and that in the 
medium- to long-run the resource based in the region should support 
pipelines.'' State Department press guidance on February 3, 1995 noted 
that ``we expect eventual production in the Caspian region to require 
multiple pipelines.'' A March 9, 1995 State Department message stated 
that ``the USG still believes multiple routes are necessary and that 
their development will provide additional security for oil companies as 
they proceed. To this day, the U.S. has not taken a position on which 
route the Baku-Ceyhan pipeline should take. The U.S. maintains that the 
routes chosen is a decision for private companies and should be based 
on commercial principle, non-discriminatory access, and market-based 
tariffs. And in May 1995, President Clinton delivered a letter to 
Azerbaijani President Heydar Aliyev. President Clinton wrote in the 
letter that ``[t]he U.S. will work actively with Azerbaijan, other 
governments in the region, the international financial institutions, 
and private companies to support the development and export of the 
Caspian Sea's vast energy reserves. Over the next several months, it 
will be important to ensure that early oil can be exported reliably and 
economically to the West.''
    \38\ Sheila Heslin, 9/17/97 Hrg., pp. 4, 49-50.
    \39\ Sheila Heslin, 9/17/97 Hrg., pp. 4; 50-51.
    \40\ Sheila Heslin, 9/17/97 Hrg., p. 51; Staff interview with 
Sheila Heslin, 5/28/97.
    \41\ Sheila Heslin, 9/17/97 Hrg., p. 6.
    \42\ Staff interview with Sheila Heslin, 5/28/97.
    \43\ Sheila Heslin, 9/17/97 Hrg., p. 10.
    \44\ Sheila Heslin, 9/17/97 Hrg., p. 8.
    \45\ Sheila Heslin, 9/17/97 Hrg., p. 7.
    \46\ Staff interview with Sheila Heslin, 5/28/97.
    \47\ Sheila Heslin, 9/17/97 Hrg., p. 52; see also pp. 5-6, 19-20, 
72.
    \48\ Sheila Heslin, 9/17/97 Hrg., pp. 5-6, 19-20, 50-51, 72; 
Senator Lieberman, 9/17/97 Hrg., p. 75.
    \49\ Roger Tamraz deposition, 5/13/97, pp. 22-28.
    \50\ Roger Tamraz, 9/18/97 Hrg., pp. 44-47. Tamraz first met with 
the DNC to discuss donations in July of 1995. Roger Tamraz, 9/18/97 
Hrg., p. 15. Tamraz began contributing to the Democratic Party on July 
19, 1995. A DNC Memorandum to Tamraz from Richard Sullivan of the DNC, 
dated March 28, 1996, states that Tamraz's contributions began on July 
19, 1995 and ended on September 10, 1995. Exhibit 1168.
    \51\ See Roger Tamraz deposition, 5/13/97, pp. 25-26; Roger Tamraz, 
9/18/97 Hrg., pp. 45-48.
    \52\ Sheila Heslin, 9/17/97 Hrg., pp. 7; 53.
    \53\ Sheila Heslin, 9/17/97 Hrg., p. 8.
    \54\ Sheila Heslin, 9/17/97 Hrg., p. 8, 33.
    \55\ Sheila Heslin, 9/17/97 Hrg., pp. 9-10.
    \56\ Sheila Heslin, 9/17/97 Hrg., pp. 10-11.
    \57\ Roger Tamraz deposition, 5/13/97, pp. 26-28.
    \58\ Roger Tamraz deposition, 5/13/97, p. 28.
    \59\ Roger Tamraz deposition, 5/13/97, p. 28; Roger Tamraz, 9/18/98 
Hrg., p. 47-48; John Carter, 9/18/97 Hrg., p. 155; Kyle Simpson, 9/18/
97 Hrg., pp. 53-54; Staff interview with Sheila Heslin, 5/28/97.
    \60\ Sheila Heslin, 9/17/97 Hrg., p. 54.
    \61\ Sheila Heslin, 9/17/97 Hrg., pp. 54; 56.
    \62\ Sheila Heslin, 9/17/97 Hrg., p. 54
    \63\ Sheila Heslin, 9/17/97 Hrg., pp. 54-55.
    \64\ Sheila Heslin, 9/17/97 Hrg., pp. 54-55; Staff interview with 
Sheila Heslin, 5/28/97.
    \65\ Sheila Heslin, 9/17/97 Hrg., pp. 55-57; Staff interview with 
Sheila Heslin, 5/28/97.
    \66\ Sheila Heslin, 9/17/97 Hrg., p. 12.
    \67\ Sheila Heslin, 9/17/97 Hrg., p. 12.
    \68\ Sheila Heslin, 9/17/97 Hrg., p. 57.
    \69\ Sheila Heslin, 9/17/97 Hrg., p. 12.
    \70\ Sheila Heslin, 9/17/97 Hrg., pp. 57-58; Staff interview with 
Sheila Heslin, 5/28/97.
    \71\ Sheila Heslin, 9/17/97 Hrg., p. 20.
    \72\ Sheila Heslin, 9/17/97 Hrg., pp. 58-59.
    \73\ Sheila Heslin, 9/17/97 Hrg., p. 60.
    \74\ Four pieces of evidence support this conclusion. In a 
Committee interview, Heslin stated that it was her understanding that 
Bob had also contacted someone in the Vice President's office to lobby 
for Tamraz, and that she thought it might have been Dana Marshall. 
Staff interview with Sheila Heslin, 5/28/97. Supporting Heslin's 
statement are two e-mails produced to the Committee by the Vice 
President's office. The first e-mail, dated September 6, 1995, was sent 
by Richard Grimes of the Vice President's office to Leon Fuerth, the 
Vice President's National Security Advisor. The e-mail discusses 
Tamraz's request for a meeting and sets forth negative information 
about Tamraz. Grimes had obtained this information about Tamraz from 
Heslin. Dana Marshall was copied on the e-mail. Exhibit 1124, EOP 
56535. The second e-mail is the one Marshall sent in response to 
Grimes's e-mail about Tamraz. Marshall replied, ``Let's discuss this, 
in light of my discussion with the individual I mentioned.'' 9/6/95 e-
mail from Richard Grimes to Leon Fuerth, EOP 56538. Marshall's response 
e-mail concerning ``the individual'' he spoke to about Tamraz, worded 
in such a secretive manner, suggests that Heslin was correct--Bob had 
called Marshall of the Vice President's office to discuss Tamraz. The 
fourth piece of information supporting this conclusion is a 
declassified memorandum dated 10/20/95, written by Bob himself. Bob 
stated that during a conversation with Donald Fowler, chairman of the 
DNC, ``Fowler said he understood that I was in contact with the Vice 
President's office concerning Tamraz.'' Memorandum for the Record, 
written by Bob of the CIA, dated 10/20/95 and produced in declassified 
form by the CIA. (The contacts between Bob and Fowler are reviewed more 
fully below.)
    Although the evidence does not definitely establish that Bob 
lobbied the Vice President's office on behalf of Tamraz, largely 
because the Committee never interviewed or deposed Grimes or Marshall, 
it appears that Bob did in fact contact Vice President staff employee 
Marshall in August or early September 1995 to discuss Tamraz's request 
to meet with Vice President Gore.
    \75\ Exhibit 1127: Memorandum to the Vice President from Leon 
Fuerth, 9/13/95, EOP 45766-67.
    \76\ Staff interview with Sheila Heslin, 5/28/97.
    \77\ Memorandum for the Record, written by Bob of the CIA, produced 
in declassfied form by the CIA, 10/20/95.
    \78\ Bob of the CIA deposition, 7/11/97, p. 3.
    \79\ Bob of the CIA deposition, 7/11/97, p. 3.
    \80\ Bob of the CIA deposition, 7/11/97, pp. 4-5.
    \81\ Memorandum for the Record, written by Bob of the CIA, produced 
in declassified form by the CIA, 10/20/95.
    \82\ Bob of the CIA deposition, 7/11/97, p. 7.
    \83\ Bob of the CIA deposition, 7/11/97, p. 6.
    \84\ Bob of the CIA deposition, 7/11/97, p. 6.
    \85\ Staff interview with Sheila Heslin, 5/28/97.
    \86\ Staff interview with Sheila Heslin, 5/28/97.
    \87\ Roger Tamraz, 9/19/97 Hrg., p. 66.
    \88\ Exhibit 1168; FEC records demonstrate that Tamraz's only other 
contribution was $2,000 in September of 1996 for tickets to the DNC 
Presidential Gala held at the Radio City Music Hall in New York City.
    \89\ Roger Tamraz, 9/18/97 Hrg., p. 66.
    \90\ Roger Tamraz, 9/18/97 Hrg., pp. 81-83.
    \91\ Roger Tamraz deposition, 5/13/97, pp. 36-37.
    \92\ Exhibit 1117: Memorandum to Fowler from Alejandra Y. Castillo, 
7/12/95, DNC 3116351-53.
    \93\ Exhibit 1117: Memorandum to Fowler from Alejandra Y. Castillo, 
7/12/95, DNC 3116351-53.
    \94\ Exhibit 1117: Memorandum to Fowler from Alejandra Y. Castillo, 
7/12/95, DNC 3116351-53.
    \95\ Exhibit 1117: Memorandum to Fowler from Alejandra Y. Castillo, 
7/12/95, DNC 3116351-53.
    \96\ EOP 5635, EOP 56539-40. Sassounian made this request at a DNC 
breakfast on 8/8/97.
    \97\ Roger Tamraz deposition, 5/13/97, pp. 53-54.
    \98\ E-mail from Grimes to Heslin, 8/11/95, EOP 56532.
    \99\ Staff interview with Sheila Heslin, 5/28/97; Exhibit 1200; 
Heslin notes from conversations with Grimes, EOP 25068; Grimes e-mail 
to Fuerth discussing information received from Heslin, 6/6/95, EOP 
56535.
    \100\ Exhibit 1127: Memorandum to the Vice President from Leon 
Fuerth, 9/13/95, EOP 45766-67.
    \101\ Handwritten notes from Scott Patrick to Jack Quinn regarding 
Tamraz saying ``hasn't been regretted'' and ``NSA said no,'' 10/2/95, 
EOP 25006-007; Notations on same page say ``10/2--left msg'' and ``10/
3--left msg.'', EOP 25004; Exhibit 1135: Memorandum to Jack Quinn and 
Kim Tilley from Richard Grimes, 10/2/95, attaching copy of Fuerth's 9/
13/95 Memorandum to the Vice President.
    \102\ Also in September 1995, Heslin checked the President's 
schedule for that month and was informed that no meeting with Tamraz 
was scheduled. Staff interview with Sheila Heslin, 5/28/97.
    \103\ Exhibit 1136: Schedule for Vice President Al Gore, 10/2/95, 
EOP 63857-68
    \104\ Exhibit 1137; EOP 045764-67; Fax to Richard Sullivan of the 
DNC from the Office of the Vice President dated 10/3/95.
    \105\ Roger Tamraz deposition, 5/13/97, pp. 34-35.
    \106\ Sheila Heslin, 9/17/97, Hrg., p. 20, 51-53.
    \107\ Statement of Lanny J. Davis, 3/3/97; EOP 024911-14 (White 
House WAVES records for Tamraz).
    \108\ Roger Tamraz, 9/18/97 Hrg., pp. 22-24. Tamraz also told CBS's 
Rita Braver that ``Maybe once, standing in line I said, ``I'm working 
on a pipeline and that it's going to bring a half million jobs to 
Americans'' and he said ``Good for you. Good luck,'' and that's about 
it.'' CBS Television Broadcast, 3/17/97. Tamraz told NBC ``There was 
never any one-on-one, it was with many other donors and you never had 
more than 30 seconds with the President.'' NBC television broadcast 3/
17/97. Both interviews were reported in Hotline, 3/18/97.
    \109\ Roger Tamraz, 9/18/97, Hrg., pp. 17-18.
    \110\ Roger Tamraz, 9/18/97 Hrg., pp. 18, 22, 55. Fowler never told 
Tamraz, however, that he had contacted Bob. Roger Tamraz, 9/18/97 Hrg., 
p. 21; Roger Tamraz deposition, 5/13/97, p. 65; Tamraz also doesn't 
recall Bob telling him that Bob had ever spoken to Fowler. Roger Tamraz 
deposition, 5/13/97, p. 65.
    \111\ Roger Tamraz deposition, 5/13/97, pp. 59-60, 63-64.
    \112\ Bob of the CIA deposition, 7/11/97, p. 2.
    \113\ Bob of the CIA deposition, 7/11/97, pp. 3--4, 16-17.
    \114\ Bob of the CIA deposition, 7/11/97, pp. 7, 17-19.
    \115\ See endnote 74
    \116\ Bob of the CIA deposition, 7/11/97, p. 11.
    \117\ Bob of the CIA deposition, 7/11/97, p. 10-11.
    \118\ Bob of the CIA deposition, 7/11/97, p. 11.
    \119\ Sheila Heslin, 9/17/97 Hrg., p. 23.
    \120\ Sheila Heslin, 9/17/97 Hrg., pp. 23, 60.
    \121\ Sheila Heslin, 9/17/97 Hrg., p. 23.
    \122\ Sheila Heslin, 9/17/97 Hrg., p. 24.
    \123\ Sheila Heslin, 9/17/97 Hrg., pp. 26-27; Staff interview with 
Nancy Soderberg, 5/30/97; Donald Fowler deposition, 5/21/97, p. 230.
    \124\ Sheila Heslin, 9/17/97 Hrg., pp. 63-64; Exhibit 1159; E-mail 
from Soderberg's assistant, Kenneth Baldwin, to Beers, 12/21/97, EOP 
056543; Staff interview with Nancy Soderberg, 5/30/97; Staff interview 
with Sheila Heslin, 5/28/97; Staff interview with Randy Beers, 5/23/97 
and 6/13/97.
    \125\ Staff interview with Randy Beers, Senior Director for 
Intelligence, NSC, 5/23/97 and 6/13/97.
    \126\ The CIA report faxed to Randy Beers, NSC's Senior Director of 
Intelligence, on December 29, 1995 is lodged in the Office of Senate 
Security.
    \127\ Don Fowler deposition, 5/21/87, p. 229.
    \128\ Roger Tamraz, 9/18/97, Hrg. p. 86. Senator Lieberman asked 
Tamraz whether he felt ``badly about having given the 300,000.'' FEC 
records indicate that Tamraz gave $220,000 to the Democratic Party from 
July to October, 1995.
    \129\ Exhibit 1164: 3/27/96 DNC Trustee Dinner invitation 
acceptance report, 10/20/96, EOP 031249-54.
    \130\ Roger Tamraz, 9/18/97 Hrg., pp. 22-23.
    \131\ Roger Tamraz, 9/18/97 Hrg., p. 24.
    \132\ Roger Tamraz, 9/18/97 Hrg., pp. 24, 28.
    \133\ Thomas McLarty deposition, 6/30/97, pp. 28-29.
    \134\ Exhibit 1165: Memorandum from Ann Stock to the President, 3/
28/96, EOP 046305.
    \135\ Exhibit 1166: Memorandum from Ann Stock to the President, 3/
28/96, with notations, EOP 046305.
    \136\ Thomas McLarty deposition, 6/30/97, p. 56.
    \137\ Exhibit 1170: DNC Memorandum re 4/1/96 coffee, 3/29/96; 
Exhibit 1171: List of 4/1/96 coffee attendees.
    \138\ Roger Tamraz, 9/18/97 Hrg., p. 25.
    \139\ Roger Tamraz, 9/18/97 Hrg., p. 27.
    \140\ Roger Tamraz, 9/18/97 Hrg., p. 27.
    \141\ Thomas F. McLarty deposition, 6/30/97, p. 44.
    \142\ Exhibit 1174: Memorandum from Mack McLarty to Kyle Simpson 
stating, ``Relates to the fax I sent you last week,'' 4/2/96, EOP 
024980-81.
    \143\ Thomas McLarty deposition, 6/30/97, pp. 42-43; Kyle Simpson 
deposition, 6/25/97, p. 26.
    \144\ Thomas McLarty deposition, 6/30/97, p. 39.
    \145\ Exhibit 1173: Memorandum from Mack McLarty to the President, 
4/2/96, EOP 041537; Thomas McLarty deposition, 6/30/97, pp. 50-51.
    \146\ Exhibit 1174: Memorandum from Mack McLarty to Kyle Simpson, 
4/2/96, EOP 024980-81.
    \147\ Thomas McLarty deposition, 6/30/97, p. 56.
    \148\ Kyle Simpson deposition, 6/25/97, pp. 43-48; Kyle Simpson, 9/
18/97 Hrg., pp. 49-51.
    \149\ Kyle Simpson deposition, 6/25/97, p. 54.
    \150\ Kyle Simpson deposition, 6/25/97, pp. 43, 46-48; Kyle 
Simpson, 9/18/97 Hrg., p. 50; Thomas McLarty deposition, 6/30/97, p. 
60.
    \151\ Kyle Simpson deposition, 6/25/97, p. 43.
    \152\ Thomas McLarty deposition, 6/30/97, pp. 30, 56-57; Kyle 
Simpson, 9/18/97 Hrg., pp. 50-51; Kyle Simpson deposition, 6/25/97, pp. 
43, 46-48.
    153 Roger Tamraz, 9/18/97 Hrg., p. 73. On March 28, 
Tamraz received two memoranda from the DNC which he had been requesting 
for months. Exhibit 1167: Memorandum from Richard Sullivan and Ari 
Swiller to Roger Tamraz, 3/28/96, DNC 3116355; Exhibit 1168: Memorandum 
from Richard Sullivan and Ari Swiller to Roger Tamraz, 3/28/96, DNC 
3116354. The memoranda list Tamraz's political contributions to date, 
one adding up to $300,000, the other adding up to $205,000. Tamraz 
testified that he had requested these memoranda for his records and 
never showed them to anyone. Roger Tamraz, 9/18/97 Hrg., p. 73. Simpson 
and another Energy Department official, John Carter, all testified that 
they had not seen the document until preparing for depositions in 1997. 
Kyle Simpson, 9/18/97, Hrg., p. 50; John Carter, 9/18/97, Hrg., p. 32. 
McLarty testified that he had no knowledge of Tamraz's political 
contributions at the time. Thomas McLarty deposition, 6/30/97, p. 30.
    154 Jack Carter, 9/18/97 Hrg., pp. 29-30; Jack Carter 
deposition, 6/23/97, p. 44.
    155 Kyle Simpson deposition, 6/25/97, p. 57.
    156 Kyle Simpson deposition, 6/25/97, p. 55; Kyle 
Simpson, 9/18/97, Hrg., p. 52.
    157 Kyle Simpson, Hrg., pp. 74-75, 91; Kyle Simpson 
deposition, 6/25/97, pp. 55-57; See also endnote 149.
    158 Kyle Simpson deposition, 6/25/97, p. 55-57.
    159 Jack Carter, 9/18/97 Hrg., pp. 60, 48.
    160 Jack Carter, 9/18/97 Hrg., pp. 30; 35; Jack Carter 
deposition, 6/23/97, pp. 44-45.
    161 Jack Carter deposition, 6/23/97, pp. 44-45.
    162 Jack Carter deposition, 6/23/97, p. 45.
    163 Kyle Simpson, Hrg., pp. 74-75, 91; Kyle Simpson 
deposition, 6/25/97, pp. 55-57.
    164 Jack Carter, 9/18/97 Hrg., pp. 31-32, 36-37; John 
Carter deposition, 6/23/97, p. 79.
    165 Jack Carter, 9/18/97 Hrg., p. 30.
    166 Jack Carter, 9/18/97 Hrg., p. 30.
    167 Jack Carter, 9/18/97 Hrg., pp. 130-31.
    168 Jack Carter, 9/18/97 Hrg., pp. 28-29.
    169 Jack Carter, 9/18/97 Hrg., pp. 30, 33, 37.
    170 Sheila Heslin, 9/18/97 Hrg., pp. 28, 44.
    171 Sheila Heslin, 9/17/97 Hrg., p. 28.
    172 Sheila Heslin, 9/17/97 Hrg., p. 29.
    173 Sheila Heslin, 9/17/97 Hrg., p. 29.
    174 Sheila Heslin, 9/17/97 Hrg., pp. 29-30.
    175 Sheila Heslin, 9/17/97 Hrg., p. 46.
    176 Sheila Heslin, 9/17/97 Hrg., pp. 30, 47; Staff 
interview with Sheila Heslin, 5/28/97.
    177 Sheila Heslin, 9/17/97 Hrg., pp. 31, 42.
    178 Jack Carter deposition, 6/23/97, p. 45.
    179 Jack Carter deposition, 6/23/97, p. 60-63; Jack 
Carter, 9/18/97 Hrg., pp. 126-27.
    180 Jack Carter deposition, 6/23/97, p. 64; Jack Carter, 
9/18/97 Hrg., pp. 125-26.
    181 Jack Carter deposition, 6/23/97, p. 79.
    182 Jack Carter, 9/18/97 Hrg., p. 92.
    183 Jack Carter, 9/18/97 Hrg., p. 37.
    184 Jack Carter, 9/18/97 Hrg., p. 93.
    185 Jack Carter deposition, 6/23/97, pp. 19-20.
    186 Jack Carter deposition, 6/23/97, pp. 20-21.
    187 Jack Carter deposition, 6/23/97, p. 21.
    188 Jack Carter deposition, 6/23/97, p. 42.
    189 Kyle Simpson deposition, 6/25/97, pp. 59-60.
    190 Kyle Simpson deposition, 6/25/97, pp. 62-63; Exhibit 
1182: Phone message slip, EOP 024962.
    191 Thomas McLarty deposition, 6/30/97, pp. 62-63.
    192 Thomas McLarty deposition, 6/30/97, pp. 67-69.
    193 Roger Tamraz deposition, 5/13/97, p. 28; Roger 
Tamraz, 9/18/97 Hrg., pp. 47-48; John Carter, 9/18/97 Hrg., p. 155; 
Kyle Simpson, 9/18/97 Hrg., pp. 53-54; Staff interview with Sheila 
Heslin, 5/28/97; Thomas McLarty deposition 6/30/97, p. 72.
    194 Jack Carter, 9/18/97 Hrg., p. 33.
    195 Hearing Exhibit 1158; Roger Tamraz, 9/18/97, Hrg., 
p. 51.
    196 Senator Domenici concluded after a morning of 
testimony that he believed that Carter was telling the truth about this 
exchange with Simpson, and that Simpson was not being truthful. Senator 
Domenici, 9/18/97 Hrg., pp. 101-02. This conclusion, however, is not 
supported by the record. It is quite clear that Carter's testimony was 
faulty on every count--it contradicts the sworn testimony of not only 
Simpson and McLarty, but also of Heslin. Considering that Heslin 
apparently was found by the Majority and Minority to be a highly 
credible witness, it is relevant that it is Carter's testimony that 
directly and specifically contradicts Heslin's.
    If Heslin's testimony was accurate regarding her telephone call 
with Carter, then it is necessary to conclude that Carter's testimony 
was not accurate. Thus, if Carter's testimony about his phone call with 
Heslin is not accurate, it is difficult to argue that Carter's version 
of his brief conversation with Simpson is accurate, particularly when 
it is also contradicted by two individuals.
    197 During her public testimony, Heslin speculated that 
Carter acted in the manner because he was acting on the behalf of 
someone else. However, this speculation is contradicted by the evidence 
before the Committee. For example, Carter himself testified that he was 
not trying to pressure Heslin based on political contributions and that 
one had even suggested that he do so. In addition, although Heslin 
thoughts that Carter was close to McLarty, and therefore might do 
something on his behalf, this was not the fact. In his two years at the 
Energy Department, Carter had spoken to McLarty on the phone a few 
times, but had never met with him personally. Furthermore, no one but 
Carter contacted Heslin in the spring of 1996 with any type of request 
that Tamraz have a meeting with the President. Finally, Heslin's 
speculaiton is contradicted by testimony establishing that Tamraz had 
not in fact requested a meeting with the President and that no one in 
the While House even contacted Tamraz after April of 1996. See full 
text of chapter for a full discussion of these issues as well as 
supporting citations.
    198 Staff interview with Nancy Soderberg, 5/30/97; 
Minority counsel, 9/17/97 Hrg., pp. 40-41.
    199 Roger Tamraz, 9/18/97 Hrg., pp. 67, 169; Exhibits 
1065 & 1066.
    200 Roger Tamraz, 9/18/97 Hrg., p. 170;
    201 Senator Levin, 9/18/97 Hrg., p. 170.





PART 5  FUNDRAISING AND POLITICAL ACTIVITIES OF THE NATIONAL PARTIES 
        AND ADMINISTRATIONS

Chapter 31: Other Contributor Access Issues

    Johnny Chung, a Taiwan-born American businessman, was a 
large contributor to the Democratic National Committee 
(``DNC'') during the 1996 election cycle and a frequent visitor 
to the White House. During some of these visits, he was 
accompanied by Asian business associates, for whom he arranged 
``photo opportunities.'' Many of his visits were to the office 
of Margaret Williams, then Chief of Staff for First Lady 
Hillary Clinton. During a March 1995 visit to Williams's 
office, Chung gave her a $50,000 check payable to the DNC, 
which she immediately forwarded to the DNC. The Committee 
investigated whether Chung's access to the White House was 
inappropriate and whether Williams acted appropriately in 
connection with a $50,000 donation by Chung.
    Chung did not cooperate with the Committee's investigation, 
citing his Fifth Amendment protection against self-
incrimination. Although he offered to testify in exchange for 
immunity, this offer was not accepted by the Committee. The 
Committee did not hold hearings on Chung, but it did take 
deposition testimony from Margaret Williams and her assistant 
Evan Ryan.
    This chapter of the Report also discusses other 
controversial individuals who were provided access to President 
Clinton and to former President Bush.
    (1) The evidence before the Committee shows that even 
though Chief of Staff to the First Lady, Margaret Williams, 
immediately placed the contribution from Johnny Chung to the 
DNC in the mailbox, it would have been more prudent for her to 
have refused to accept the check from Chung and told him to 
give it directly to the DNC.
    (2) Chung's access to the White House, which was based in 
part on his contributions to the Democratic Party, was 
excessive and inappropriate. On one occasion Chung was 
permitted to bring foreign business associates to view the 
President's delivery of a radio address without appropriate 
vetting by the DNC or the White House.

                              JOHNNY CHUNG

    Chien Chuen (``Johnny'') Chung1 is a California 
businessman who emigrated from Taiwan 2 and became a 
United States citizen. Chung, who is an engineer, established 
Automated Intelligent Systems Inc.3 (``AISI''), a 
company in the Los Angeles area. AISI sells a computer system 
that enables customers to broadcast thousands of copies of a 
fax simultaneously.4 In the mid-1990s, Chung became 
active internationally, doing business in China and other parts 
of Asia. For example, he sold part of his fax business to Asian 
investors and acted as a consultant to Asian businessmen.
---------------------------------------------------------------------------
     Footnotes at end of chapter 31.
---------------------------------------------------------------------------

Political contributions

    Chung has told reporters that he began courting politicians 
because he felt this would help him market AISI's fax service 
to government offices.5 He began making political 
contributions in August 1994.6 During the 1994 and 
1996 election cycles, according to Federal Election Commission 
records, Chung or his fax business contributed more than 
$360,000 to the DNC and to congressional campaigns.7 
Chung also raised money for the Democrats.

Access to administration officials

    From 1994 to 1996, Chung attended several fundraising and 
other events also attended by top U.S. officials. For example, 
the August 1994 contribution was connected with a birthday 
party for the President.8 In December of that year, 
Chung donated $40,000 in order to attend, with several guests, 
a fundraising luncheon attended by the First Lady.9 
During the 1996 cycle, according to a press report, Chung 
purchased several tickets to a ``$25,000-a-plate dinner at the 
California home of the film maker Steven Spielberg and a 
birthday bash for Mr. Clinton at Radio City Music Hall and 
brought several guests.''10 During the same period 
that Chung emerged as an important Democratic donor, he became 
a frequent visitor to the White House Complex, a term that 
refers to the White House itself and to a few nearby buildings, 
including the Old Executive Office Building (``OEOB''). 
Contrary to several press reports, most of these visits were 
not to the White House itself, but to the OEOB, where he 
visited the offices of Margaret Williams, then Chief of Staff 
to the First Lady.11 The First Lady does not 
maintain an office in the suite where these offices are 
located.12
    Some of Chung's White House visits were apparently aimed at 
impressing Asian business associates,13 who 
sometimes accompanied him. In December 1994, for example, Chung 
brought a group of mainland Chinese executives to the White 
House, including Chen Shizeng, chairman of Haomen, a beer and 
soft drink company.14 Chung and his guests posed for 
pictures with President and Mrs. Clinton.15 Without 
the White House's knowledge, and apparently without consulting 
Chung, the Haomen company later used the photos in China to 
promote its beer.16
    On March 11, 1995, Chung and five businessmen from China 
watched President Clinton deliver his weekly radio address in 
the Oval Office.17 Chung had arranged the visit with 
assistance from the DNC.18
    At these visits, Chung did not meet privately with the 
President or have an opportunity to engage in any lengthy 
conversations with him.
     National Security Council staff members were wary of 
Chung. On April 7, 1995, NSC staff member Melanie Darby sent an 
e-mail message to colleagues regarding the March 11 
presidential radio address. She asked whether they felt the 
visitors should be given copies of the photographs taken that 
day. She wrote that President Clinton ``wasn't sure we'd want 
photos of him with these people circulating around'' and that 
the DNC had arranged for the six businessmen to visit without 
``knowing anything about them except that they were D.N.C. 
contributors.'' But she added that ``these people are major 
D.N.C. contributors and if we can give them the photos, the 
President's office would like to do so.'' 19 
(Contrary to that statement, no evidence has emerged that 
Chung's guests donated to the DNC.)
    Later that day, Robert L. Suettinger, Director of Asian 
Affairs in the NSC, replied with a e-mail in which he advised 
``caution'' concerning Chung.

          My impression is that he's a hustler, and appears to 
        be involved in setting up some kind of consulting 
        operation that will thrive by bringing Chinese 
        entrepreneurs into town for exposure to high-level US 
        officials. My concern is that he will continue to make 
        efforts to bring his ``friends'' into contact with the 
        POTUS [the President] and FLOTUS [the First Lady]--to 
        show one and all he is a big shot, thereby enhancing 
        his business. I'd venture a guess that not all his 
        business ventures--or those of his clients--would be 
        ones the President would support. I also predict that 
        he will become a royal pain, because he will expect to 
        get similar treatment for future visits. He will be 
        persistent.20

    In the summer of 1995, Chung attempted to involve himself 
in assisting Harry Wu, an American labor activist who had been 
jailed in China.21 Chung sought a letter from 
President Clinton supporting his efforts to help release Wu but 
was rebuffed.22 DNC Chairman Donald Fowler did, 
however, sign a letter describing Chung as ``a friend and a 
great supporter of the DNC.'' 23 Chung's efforts to 
involve himself in this delicate matter provoked concern on the 
part of the NSC's Suettinger. In a note to then-National 
Security Adviser Anthony Lake, he described Chung's mission as 
``very troubling'' and said he feared that Chung could do 
``damage.'' He advised that ``we be very careful about the 
kinds of favors he is granted.'' 24 Ultimately, 
Chung's attempt to involve himself in this issue had no effect 
on the administration's handling of the Wu case. (Wu was later 
released.)
    Despite concerns about Chung, he was allowed to continue 
visiting the White House Complex. For example, Secret Service 
records show that he made 30 visits to the White House Complex 
in 1995, most of them to Margaret Williams's office in the Old 
Executive Office Building.

Link between contributions and visits

    Although Chung did not provide evidence to the Committee, 
he has told journalists (in unsworn statements) that his White 
House access was a direct quid pro quo for political 
contributions. ``I see the White House is like a subway,'' he 
said. ``You have to put in coins to open the gates.'' 
25 Chung has also stated that he and his associates 
attended the March 11, 1995, presidential radio address as a 
quid pro quo for a $50,000 donation he made to the DNC around 
that time--in the form of a check he handed to Margaret 
Williams.26
    The Committee found no evidence that access to the White 
House was sold in the crude manner described by Chung. 
Regarding the $50,000 contribution, the DNC's Fowler denied 
under oath that the invitation was provided in exchange for a 
specific donation.27 He also testified that he was 
not involved in getting Chung an invitation to the radio 
address,28 and that he was unaware that Chung had 
given a check to Williams for the DNC until the incident was 
reported in the media.29 Williams testified that she 
played no role in arranging the invitation to the radio 
address.30 She also testified that such invitations 
are not difficult to obtain.31
    Although Chung's ``subway'' analogy appears to be an 
exaggeration, his status as a contributor was probably the main 
reason he was allowed to visit so frequently. Testimony 
established that White House officials viewed Chung's visits as 
``irritating,'' but Williams permitted him to visit in her 
outer office, despite the fact that he had no obvious reason to 
be there.32 Williams stated that she expected every 
visitor, including Chung, to be welcomed by the staff. She 
tolerated him because she believed that he had been mistreated 
and ridiculed.33 She also stated, ``[T]here were 
many difficult days for Mrs. Clinton over this time period, and 
the idea that somebody adored her and wanted to be there was 
fine.'' 34 But Williams also acknowledged that she 
knew Chung was a large donor to the DNC,35 and that 
this was a factor in her decision to let him spend time in her 
office.36

Williams's handling of Chung's $50,000 DNC donation

    Chung's most controversial donation was a check for $50,000 
to the DNC, which he gave to Margaret Williams in March 1995. 
As noted above, Chung claimed that Williams solicited this 
check as as quid pro quo for attendance at a presidential radio 
broadcast.
    On March 8, Chung arrived at Williams's office at the OEOB 
without an appointment and spoke to Evan Ryan, Williams's 
assistant.37 Chung's lawyer has told Time magazine 
that Chung wanted to arrange lunch in the White House mess and 
a meeting with the First Lady for the five visiting Chinese 
executives. According to Time, ``[T]he subject turned to 
Democratic Party needs. Ryan remarked that the President's 
party had to cover the costs of political events held by the 
First Lady at the White House.'' 38 In interviews 
with the press, Chung has alleged that he wanted to ``help the 
First Lady'' defray some of the costs associated with Christmas 
parties the DNC held at the White House, and this was why he 
later made a $50,000 contribution.39
    The sworn testimony of both Ryan and Williams contradicts 
Chung's unsworn assertions to journalists. During the March 8 
conversation, according to Ryan, Chung mentioned a contribution 
he was planning to make.40 According to Ryan, Chung 
frequentlytalked about his contributions, and in this case she 
thought that he was boasting as he often did.41 Ryan 
testified that Chung also mentioned that he wanted to bring some 
visitors to the White House, and Ryan asked Williams what to do about 
the requests.42 Williams suggested that Ryan make some calls 
about setting up a White House tour and lunch in the White House 
mess.43 This was the extent of Williams's instructions to 
Ryan regarding Chung's requests, according to Ryan.44
     Ryan testified that she knows of no solicitation of money 
that ever occurred in the White House.45 Regarding 
the specific allegation that either she or Williams solicited 
the $50,000 contribution from Chung to help pay off debts, Ryan 
testified that she never had any discussion with Chung during 
which she suggested that he could help defray costs of events 
at the White House.46
    During testimony before the House Committee on Government 
Reform and Oversight, Williams confirmed Ryan's version, 
testifying that she had no knowledge of Ryan ever mentioning to 
Chung that he could make a $50,000 contribution to cover some 
of the DNC debt. She also testifed that she had never solicited 
$50,000 from Chung to help pay some of the money the DNC owed 
the White House to cover the costs of holiday parties the DNC 
threw at the White House.47 Williams also testified 
to the House Committee that she never told Ryan that if Chung 
were to ask how he could help the First Lady, Ryan should 
suggest to him that he help pay off the DNC's debt to the White 
House.48 Williams has stated, however, that Chung 
had asked in the past if he could give something to help Mrs. 
Clinton.49 On those occasions, Williams had 
suggested that he make a contribution to the DNC, or the 
Presidential Legal Expense Trust, but told him that he could 
not give money to Mrs. Clinton.50
    According to Ryan's testimony, there were no discussions 
between Ryan and Williams regarding Chung's contributions or 
regarding any connection between his contributions and actually 
fulfilling his requests for a lunch in the White House mess and 
a White House tour.51 Neither Williams nor Ryan 
suggested to Chung that his requests would be expedited if he 
contributed to the DNC.
    On March 9, according to several press reports, Chung 
visited the DNC to ask if he could bring a delegation of five 
executives from China to the White House to have a photo taken 
with the President. Although, as noted above, he has claimed 
that he offered to make a $50,000 contribution in exchange for 
such a visit, the Committee found no evidence to support this 
allegation.
    That same day, Chung appeared at the Old Executive Office 
Building, and Ryan gave permission for him to enter 
52 and visit Williams's office. Williams had not 
known that Chung was coming to her office that 
day.53 Ryan testified that Williams seemed 
perplexed, but dismissed this as ``well, whatever, . . . that's 
Johnny.'' 54
    Chung handed Williams a check, despite her 
protestations.55 Williams testified that she 
initially rejected the check, thinking that it was made out to 
Mrs. Clinton.56 When Chung stated that it was for 
the DNC, she decided that she ``just wanted to get out of 
[there]'' so she agreed to forward the check to the 
DNC.57 She then dropped the check into her outbox 
with no note to the DNC, and without telling anyone at the DNC 
that they should be expecting it.58 She estimated 
that the entire encounter lasted perhaps 60 to 90 
seconds.59 She said she did not even know the amount 
of the check.60
    Williams had never been handed a political contribution in 
the White House before,61 and there were no standard 
procedures about what to do in such a case.62 On 
several occasions, checks intended for the DNC had been mailed 
by mistake to the First Lady's office, and Williams simply 
forwarded them to the DNC.63 She decided to handle 
Chung's check in the same manner. She put it in her out box, 
64 did not tell anyone she had received it, and did 
not record her receipt of it anywhere.65 She 
testified:

          A: Just like any other check I might get, I'd put it 
        in the mail box, in my out box, and when the rest of 
        the things from my out box were collected or, you know, 
        whatever volunteer, would sort through it and send the 
        check where it needed to go.
          Q: Did you put a note on it, sent to DNC?
          A: No. I--I mean, I figure what I had always done is 
        just put the check in. I never take the time to write a 
        note.66

    Chung, in an unsworn statement to the Los Angeles Times, 
said that Ryan told him that Mrs. Clinton was aware of his 
contribution.67 This statement is directly 
contradicted by the sworn testimony of both Ryan and Williams. 
Ryan testified that she had no knowledge of whether the First 
Lady was aware of the contribution.68 She also 
testified that Chung never asked her if the First Lady knew 
that he had made a contribution to the DNC.69 
Williams also testified that she never told anyone about the 
contribution.70

The Pendleton Act

    Under the Pendleton Act, 18 U.S.C. Sec. 607, it is unlawful 
``for any person to solicit or receive any contribution'' on 
federal property. Although Chung, as discussed above, asserted 
to reporters that the check was solicited, the Committee found 
no evidence to corroborate that assertion. Morever, Williams 
and Ryan both testified that they did not solicit the 
contribution.
    Williams also does not appear to have violated Sec. 607 by 
``receiving'' Chung's contribution in her office at the OEOB. 
Under federal regulations, in order to violate Sec. 607 by 
``receiving'' a contribution, one must ``come into possession 
of something from a person officially on behalf of a candidate, 
a campaign, a political party, or a partisan political group'' 
[emphasis added].71 Regulations also provide that 
``ministerial acts'' are not covered by the 
statute.72 A 1995 Justice Department opinion 
concluded that the mere taking of custody of acontribution by 
someone who has no ``right of disposal'' cannot be considered 
``receipt'' of the contribution and is, therefore, not governed by the 
statute.73
    Under these circumstances, Williams was a mere custodian of 
the check Chung gave her. She handled the check for mere 
seconds, accepting it from him and then immediately putting it 
in her outbox. She did not even notice how much it was made out 
for. Williams never had the ``right of disposal'' discussed in 
the Justice Department opinion. Instead (using the language of 
the Justice Department opinion), she ``had no more to do with 
the transaction than a mere messenger would have had to whom 
the owner had handed it for delivery.'' 74 Thus, it 
appears that Williams never actually received the money within 
the meaning of 18 U.S.C. Sec. 607.
    Moreover, Williams's role as chief of staff to the First 
Lady gave her no authority to act officially on behalf of the 
DNC. She had only sporadic contact with the DNC.75 
Aside from scheduling the First Lady at events which were 
fundraisers, or had fundraising components, Williams was not 
involved with DNC fundraising.76 The only time she 
would intervene on behalf of a donor would be to pass his or 
her name along to the Office of the Social Secretary for 
possible inclusion in a White House event.77 By 
physically taking a check from Chung she was not then actually 
receiving it on behalf of the DNC, because she was not an agent 
of the DNC. She was merely performing a ministerial act.
    Finally, Sec. 607 does not apply to soft money 
contributions.78 According to Federal Election 
Commission records, the contribution Chung made went into the 
DNC's non-federal or ``soft'' money account.79 
Because it was soft money, soliciting or receiving the 
contribution even if it had occurred would not have violated 
Sec. 607.80

The Hatch Act

    Under the Hatch Act, 5 U.S.C. Sec. 7323, a federal employee 
may not ``knowingly solicit, accept, or receive a political 
contribution.'' Unlike the Pendleton Act, which does not apply 
to contributions not covered by the Federal Election Campaign 
Act, the Hatch Act does apply to soft money.
    As discussed above, however, the Committee received no 
evidence that Williams solicited the contribution. Moreover, 
the analysis of whether a contribution has been received or 
accepted is the same under the Hatch Act as the analysis for 
whether a contribution has been received under the Pendleton 
Act: The mere unofficial taking of custody is not covered by 
the act.81 As discussed above, Williams did not take 
the check from Chung on behalf of anyone else, nor did she have 
the authority to accept checks on behalf of the DNC. She simply 
performed a ministerial act by putting the check Chung gave her 
directly into her outbox to be sent to the DNC. Williams 
therefore did not receive or accept a contribution as defined 
by the Hatch Act.

                           OTHER INDIVIDUALS

Jorge Cabrera

    Jorge Cabrera, a Florida businessman, contributed $20,000 
to the DNC in order to attend a fundraising event in Miami in 
December 1995, where he met Vice President Gore and the First 
Lady.82 A few days later, Cabrera attended a White 
House Christmas party at which the First Lady was 
present.83
    In early 1996, Cabrera was arrested in Florida and charged 
with attempting to smuggle cocaine into the United States; he 
was later sentenced to 19 years in prison.84 After 
the arrest, there were reports in the press that Cabrera had a 
previous criminal record at the time he was invited to the 
White House in late 1995. In 1983, he pleaded guilty to 
conspiracy to bribe a grand jury witness and served 42 months 
in prison. In 1988, he was charged with overseeing a narcotics 
ring, but pleaded guilty to income tax evasion and served a 
year in prison. On another occasion, he was charged with 
racketeering and drug distribution, but not 
convicted.85 (Cabrera is also suspected of ties to 
Cuban leader Fidel Castro; 86 those alleged 
connections are being investigated by the House Government 
Reform and Oversight Committee.87)
    When Cabrera's criminal record was publicized, Leon 
Panetta, then Chief of Staff in the White House, asked other 
White House staff members to ``meet with Secret Service to find 
out how a decision was made to allow a convicted felon to `run 
round' the White House,'' according to notes taken by an 
aide.88
    The Secret Service responded that Cabrera had been allowed 
to enter the White House because the cases that turned up on a 
law enforcement database indicated that he did not pose a 
physical threat to the First Family.89 Secret 
Service procedures do not automatically call for the exclusion 
of visitors because they have criminal records (see Chapter 
26).90 Instead, the Secret Service determines 
whether criminal records of proposed visitors would suggest 
that the individual may pose a physical threat to the President 
or other White House officials. The Secret Service is 
prohibited by law from telling the White House staff about any 
proposed visitor's criminal record, and therefore did not 
inform the White House of the information they obtained 
regarding Cabrera.91
    The DNC, however, could have learned about Cabrera's 
background if it had conducted an on-line search of the press 
via Lexis-Nexis,92 but it apparently failed to do 
so. DNC spokeswoman Amy Weiss Tobe admitted, ``We were not 
doing the proper vetting of guests at our events. We regret 
that this happened, but we have a process in place now where 
the mistakes of the past will not be the mistakes of the 
future.'' 93

Grigori Loutchansky

    According to press reports, Grigori Loutchansky is the 
president of Nordex, a trading company in Vienna that 
specializes in doing business in the former Soviet Union. He 
was born and raised in the Soviet Union, but currently holds an 
Israeli passport. In October 1993, Loutchansky attended a 
Democratic Party dinner as the guest of Sam Domb, a New York 
real estate developer and DNC donor. The dinner was not held in 
the White House, but was attended by President Clinton and Vice 
President Gore. Loutchansky reportedly chatted briefly with the 
President and had his picture taken. Loutchansky later told 
reporters that the President asked him to convey a message to 
the president of Ukraine, asking him to reduce that country's 
nuclear stockpile.94 A senior official of the 
National Security Council, however, told the Committee that 
Loutchansky's assertions were not accurate.95
    In 1995, the DNC invited Loutchansky to a fundraising event 
at the Hay Adams Hotel in Washington, at the suggestion of Sam 
Domb. DNC Finance Director Richard Sullivan contacted Karen 
Hancox, Deputy Director of the White House Office of Political 
Affairs, and expressed concerns about Loutchansky. Hancox 
contacted the National Security Council, which recommended that 
Loutchansky not attend the event.96 Hancox passed 
this information on to Sullivan 97 and he asked Domb 
to rescind the invitation to Loutchansky, which he 
did.98
    In July 1996, Time magazine reported that Loutchansky was 
under investigation by law enforcement and intelligence 
agencies in the United States and other countries. He was 
suspected of involvement in arms-trafficking, money-laundering, 
and other crimes, but had not been charged.99 
Shortly before the November election, the Republican National 
Committee issued a press release based mainly on that article, 
criticizing the President for having met with Loutchansky three 
years earlier. The RNC press release failed to mention that the 
allegations against Nordex had not been reported in the press 
when Loutchansky was invited to the 1993 dinner, nor did it 
mention that he had never attended an event in the White House 
or any DNC event after 1993. The press release also insinuated, 
without any substantiation, that Loutchansky had contributed 
money to the DNC.100

Wang Jun

    Wang Jun is a Chinese citizen and the son of Wang Zhen, a 
high-ranking Chinese government official.101 Wang 
Jun is the chairman of China International Trust and Investment 
Corporation (``CITIC''), the chief investment arm of the 
Chinese government. He is also reportedly the chairman of the 
China Poly Group, an arms-manufacturer.
    On February 6, 1996, Wang attended a White House coffee at 
the invitation of Yah Lin ``Charlie'' Trie, at which President 
Clinton was in attendance.102 Shortly after the 
coffee, Poly Technologies was implicated in smuggling weapons 
into the United States and Wang was described in press reports 
as an ``arms dealer.'' 103
    Although the President and the DNC acknowledged that Wang's 
attendance at the coffee was ``clearly inappropriate,'' neither 
the DNC nor the White House notified the NSC about this 
invitation in order to receive information about Wang before he 
attended the event.104 Moreover, Wang's role in 
China Poly and its Poly Technologies unit is not clear, despite 
his title as chairman of China Poly, according to Robert 
Suettinger, Director of Asian Affairs in the National Security 
Council. Suettinger informed the Committee that Wang is 
generally associated with CITIC, not with Poly 
Technologies.105
    CITIC, a $20 billion conglomerate, serves as the chief 
investment arm of China's central government with ministry-
level status on the Chinese State Council.106 CITIC 
is guided by a 13-member CITIC International Advisory Council, 
whose board members include prominent Americans including 
former Secretary of State George Shultz and Maurice Greenberg, 
chairman of a American International Group, a major insurance 
firm.107 CITIC companies have received more than 
$200 million worth of financing from the Export-Import Bank of 
the United States. CITIC has forged business partnerships with 
a variety of U.S. firms, including Westinghouse, Bechtel, and 
Chase Manhattan. Two months after appearing at the White House 
coffee, Wang hosted a dinner in Beijing attended by former 
President Bush and Brent Scowcroft, President Bush's former 
national security advisor.108 Wang calls Henry 
Kissinger ``a good friend.'' 109 During the hearing, 
Senator Glenn observed that Wang was ``a key figure for 
virtually any U.S. company interested in major economic 
involvement in China.'' 110 Senator Glenn noted that 
former Secretary Shultz has been quoted as saying that he 
attended CITIC's advisory council meeting in 1996 and that he 
planned to attend the 1997 meeting as well. Senator Glenn 
described Secretary Shultz as ``one of the finest people to 
serve in Government . . .'' 111
    After the arms-dealing allegations were publicized, the 
White House determined that Wang Jun had not been vetted by the 
NSC (there had been only a ``summary background check'' by the 
DNC). The NSC was then asked what it would have recommended if 
it had performed a background check. Suettinger of the NSC 
stated in his interview that he believes that if he had been 
consulted he would have recommended against Wang attending a 
DNC event because of Wang's ``business connections, not his 
ties to the Communist government'' of China.112

Yung Soo Yoo

    Yung Soo Yoo is a Korean-born American 
citizen.113 He is a resident of New Jersey and owns 
Vitac Optical Inc., a company which imports optical 
lenses.114 In 1991, he attended a state dinner in 
the Bush White House. Throughout the 1990s, he contributed to a 
wide range of Republican committees and candidates.
    In 1977, Yoo testified before a House of Representatives 
subcommittee that he had worked with the Korean Central 
Intelligence Agency in an unsuccessful attempt to prevent 
Korean witnesses from cooperating with a congressional 
investigation into ``Koreagate.'' 115 This was a 
scandal involving attempts by the South Korean government to 
acquire influence in Washington by, for example, bribing 
members of Congress.
    In 1984, Yoo was found guilty under 18 U.S.C. Sec. 1014 of 
committing bank fraud.116 The scheme involved his 
sale of substandard coal to the South Korean government in 
1982, and making false statements to a U.S. bank to obtain $4 
million from an international letter of credit. Yoo's appeal of 
the conviction was rejected.117 He subsequently paid 
a $10,000 fine.118
    Yoo has been active in Republican circles for several 
years. In 1988, he contributed $1,000 to the Bush presidential 
campaign and $6,000 to the Republican National 
Committee.119 He gave $4,500 to the President's 
Dinner in 1990.120 He attended a 1991 State Dinner 
at the White House hosted by President Bush for South Korean 
President Roh Tae Woo, and was actively engaged in Republican 
fundraising during the 1992, 1994, and 1996 election 
cycles.121
    In 1992, Yoo raised campaign funds in the Korean-American 
community for President Bush and Senator Alfonse D'Amato of New 
York and held a fundraiser for Senator D'Amato which was 
attended by President Bush.122 He also raised money 
for Representative Jay Kim of California and, according to 
federal prosecutors, was the middleman in a scheme to funnel 
illegal corporate contributions to the Congressman (see Chapter 
8).123 In 1994, Yoo served on the transition team 
for George Pataki, the Governor-elect of New York, and as the 
chairman of the International Trade Subcommittee of New Jersey 
Governor Christine Todd Whitman's economic task 
force.124
    In 1994, Yoo donated $2,000 to Senator 
D'Amato.125 Two years later, at Yoo's suggestion, 
Chong Hwang, then the president of the Korean Apparel 
Manufacturers Association (``KAMA'') donated $5,000 in KAMA 
funds to Senator D'Amato and persuaded 23 KAMA members to 
purchase $11,500 worth of tickets to a fundraiser headed by 
D'Amato. As a result, Korean-American factory owners were able 
to meet with a Pataki aide and as well as Edward McElroy, a 
director of the Immigration and Naturalization 
Service.126 Hwang was later removed as president of 
KAMA because of the unauthorized contributions to Senator 
D'Amato.127
    Yoo and Senator D'Amato were scheduled to co-chair a 
fundraiser for Senator Jesse Helms of North Carolina on October 
11, 1996, but the event was abruptly canceled the morning it 
was to take place.128 Yoo and his wife did, however, 
donate $2,000 to Helms and $1,000 to the North Carolina Victory 
Committee in 1996.129

Michael Kojima

    Michael Kojima, a Japanese-born U.S. citizen, contributed 
$500,000 to the Republican Party in 1992--the largest 
contribution to that event--and was rewarded with a seat at the 
head table, next to President Bush, as discussed in Chapter 6 
of the Minority Report.
    After the 1992 dinner, news organizations published reports 
strongly suggesting that Kojima did not make the $500,000 
contribution from his own funds. His business was small and 
apparently struggling. He owed large sums of money to 
creditors, and he had failed to pay child support to two ex-
wives. The Republican Party eventually was forced to share some 
of the $500,000 with Kojima's creditors, but it insisted on 
keeping the rest, brushing aside evidence that Kojima was 
probably a conduit for other donors, most likely businessmen in 
Japan.
    The Republican Party not only provided Kojima with access 
to President Bush, but a party official wrote several letters 
on Kojima's behalf, helping him secure meetings with U.S. 
embassy and consular officials. The RNC even tried to help him 
get appointments with foreign heads of government.

                               CONCLUSION

    Johnny Chung has asserted in unsworn statements to 
journalists that he was provided with access to the White House 
as an explicit quid pro quo for political contributions. He 
specifically linked a $50,000 contribution to his attendance, 
with some foreign visitors, at a presidential radio address. 
Although the evidence presented to this Committee does not 
support those assertions, Chung's access was to the White House 
was inappropriate and was probably influenced by his status as 
a major DNC donor.
    The Committee found no evidence that Margaret Williams 
traded access for contributions or that her activities violated 
federal laws prohibiting the solicitation of contributors on 
federal property.
    Several individuals involved in controversial activities 
have been afforded access to senior administration figures in 
both the Clinton and Bush Administrations. This was largely the 
fault of inadequate vetting procedures used by the White House 
and the national political parties. This problem should 
diminish, since, as noted elsewhere in this Minority Report, 
the White House and DNC have now tightened their vetting 
procedures.

                               footnotes

    1 Los Angeles Times, 3/1/97; New York Times, 2/22/97.
    2 New York Times, 2/22/97.
    3 New York Times, 2/22/97.
    4 New York Times, 2/22/97.
    5 New York Times, 2/22/97, citing interviews Chung had 
given to Los Angeles business publications.
    6 New York Times, 2/22/97, citing FEC records.
    7 New York Times, 2/22/97, citing FEC records.
    8 New York Times, 2/22/97.
    9 New York Times, 2/22/97.
    10 New York Times, 2/22/97.
    11 Margaret Williams and Evan Ryan's offices were 
located in Room 100 of the Old Executive Office Building.
    12 Evan Ryan deposition, 8/7/97, pp. 11-12.
    13 New York Times, 2/22/97: ``Associates [of Chung] say 
he has used his impressive political access to cement business deals 
with investors from China, Taiwan and Hong Kong . . . .''
    14 New York Times, 2/22/97.
    15 New York Times, 2/22/97.
    16 New York Times, 2/22/97.
    17 Time, 3/3/97.
    18 Donald Fowler deposition, 5/21/97, pp. 154-55; see 
discussion infra.
    19 E-mail from Melanie B. Darby of the NSC, 4/7/97, EOP 
5438-40.
    20 E-mail from Robert L. Suettinger of the NSC, 4/7/97, 
EOP 05438-40.
    21 New York Times, 2/22/97.
    22 New York Times, 2/22/97.
    23 New York Times, 2/22/97.
    24 Time, 2/24/97.
    25 Los Angeles Times, 7/27/97.
    26 Time, 3/3/97.
    27 New York Times, 3/3/97.
    28 Donald Fowler deposition, 5/21/97, pp. 154-55.
    29 Donald Fowler deposition, 5/21/97, p. 323.
    30 Margaret Williams deposition, 5/29/97, p. 198. She 
reiterated this under oath to the Government Reform and Oversight 
Committee of the House of Representatives, testifying that she did not 
tell anyone at the DNC or in the President's office about Chung's 
contribution, and that she did nothing, ``no matter how 
insignificant,'' to help him secure an invitation to the presidential 
radio address. House Government Reform and Oversight Committee Hearing 
Transcript 11/13/97.
    31 Margaret Williams deposition, 5/29/97, p. 198.
    32 Margaret Williams deposition, 5/29/97, pp. 159-60.
    33 Margaret Williams deposition, 5/29/97, p. 167.
    34 Margaret Williams deposition, 5/29/97, p. 160.
    35 Margaret Williams deposition, 5/29/97, p. 163.
    36 Margaret Williams deposition, 5/29/97, p. 212.
    37 Evan Ryan deposition, 8/7/97, pp. 74-75.
    38 Time, 3/17/97, p. 20.
    \39\ Los Angeles Times, 7/27/97.
    \40\ Evan Ryan deposition, 8/7/97, pp. 74-75.
    \41\ Evan Ryan deposition, 8/7/97, pp. 76-77.
    \42\ Evan Ryan deposition, 8/7/97, p. 77.
    \43\ Evan Ryan deposition, 8/7/97, pp. 84-85.
    \44\ Evan Ryan deposition, 8/7/97, p. 150.
    \45\ Evan Ryan deposition, 8/7/97, p. 163.
    \46\ Evan Ryan deposition, 8/7/97, pp. 143-45.
    \47\ 11/13/97 House Government Reform and Oversight Committee 
Hearing transcript.
    \48\ 11/13/97 House Government Reform and Oversight Committee 
Hearing transcript.
    \49\ Margaret Williams deposition, 5/29/97, pp. 181-82.
    \50\ Margaret Williams deposition, 5/29/97, p. 182.
    \51\ Evan Ryan deposition, 8/7/97, p. 145.
    \52\ Summary of Secret Service WAVEs records relating to Chung, EOP 
004560-63.
    \53\ Margaret Williams deposition, 5/29/97, p. 230.
    \54\ Evan Ryan deposition, 8/7/97, p. 116.
    \55\ Margaret Williams deposition, 5/29/97 pp. 173-74; pp. 183-84.
    \56\ Margaret Williams deposition, 5/29/97, p. 184.
    \57\ Margaret Williams deposition, 5/29/97, p. 184. Ryan also 
testified that Chung was very persistent and that Williams, by taking 
the check from him, was saving herself from being stuck in a lengthy 
conversation with Chung. Evan Ryan deposition, 8/7/97, pp. 153-54.
    \58\ Margaret Williams deposition, 5/29/97, pp. 186, 233.
    \59\ Margaret Williams deposition, 5/29/97, p. 232; Evan Ryan 
deposition, 8/7/97, p. 155.
    \60\ Margaret Williams deposition, 5/29/97, p. 174.
    \61\ Margaret Williams deposition, 5/29/97, p. 184. During hearings 
held by the House Government Reform and Oversight Committee Williams 
reiterated that this was the first time anyone had ever come to the 
office and handed her a political contribution. House Government Reform 
and Oversight Committee hearing transcript, 11/13/97. No one has come 
to the office to deliver her a contribution since this incident. House 
Government Reform and Oversight Committee hearing transcript, 11/13/97.
    \62\ Margaret Williams deposition, 5/29/97, p. 185.
    \63\ Margaret Williams deposition, 5/29/97, pp. 185-86.
    \64\ Margaret Williams deposition, 5/29/97, p. 186.
    \65\ Margaret Williams deposition, 5/29/97, p. 232-33.
    \66\ Margaret Williams deposition, 5/29/97, p. 186.
    \67\ Los Angeles Times , 7/27/97.
    \68\ Evan Ryan deposition, 8/7/97, p. 110.
    \69\ Evan Ryan deposition, 8/7/97, p. 110. 
    \70\ Margaret Williams deposition, 5/29/97, p. 232.
    \71\ 5 C.F.R. 734.101.
    \72\ 5 C.F.R. 734.101.
    \73\ Memorandum for James B. King, director, Office of Personnel 
Management, from Walter Dellinger, Assistant Attorney General, Office 
of Legal Counsel, p. 14 (1995) (hereinafter ``1995 DOJ Memorandum'). 
This opinion deals with personnel who administer the Federal Payroll 
Allocation System, which permits federal employees to make voluntary 
salary allotments to political action committees. According to the 
opinion, those Office of Personnel Management staffers who administer 
the salary-allotment procedure for PAC contributions do not violate 18 
U.S.C. Sec. 607 because they are not actually receiving the money that 
employees allocate to PACs.
    \74\ 1995 DOJ Memorandum, p. 14 (quoting Contributions for 
Political Purposes, 21 Op. Att'y Gen., 298, 300-01 (1896)).
    \75\ Margaret Williams deposition, 5/29/97, p. 244.
    \76\ Margaret Williams deposition, 5/29/97, pp. 244-45.
    \77\ Margaret Williams deposition, 5/29/97, pp. 245-46.
    \78\ Soft money contributions are not covered by the Federal 
Election Campaign Act, and section 607 applies only to those 
contributions that are so covered. See Chapter 24.
    \79\ FEC Records.
    \80\ See Letter from Attorney General Reno to Senator Orrin Hatch, 
4/14/97 (regarding phone calls).
    \81\ 5 C.F.R. 734.101; 1995 DOJ Memorandum.
    \82\ Los Angeles Times, 12/10/96.
    \83\ Los Angeles Times, 12/10/96.
    \84\ New York Times, 3/22/97.
    \85\ Chicago Tribune, 10/28/96.
    \86\ Legal Times, 4/14/97.
    \87\ Legal Times, 4/1/97.
    \88\ USA Today, 12/10/96, citing notes taken by Janis Kearney.
    \89\ Washington Post, 10/26/96.
    \90\ Chicago Tribune, 10/28/96.
    \91\ USA Today, 10/28/96; Washington Post, 10/26/96: In a letter to 
Representatives Bob Livingston and Frank Wolf, Secret Service Director 
Eljay Brown wrote, ``No member of the White House staff was informed of 
Mr. Cabrera's criminal history as these records are for law enforcement 
use only. There are no letters, memoranda, transcripts, electronic 
mail, phone records, or other records detailing any communications from 
the Secret Service to the White House.''
    \92\ A Lexis-Nexis search would have turned up, among other things, 
a UPI report dated 12/15/83 which notes that ``Jorge Luis Cabrera . . . 
is charged with bribing a grand jury witness, smuggling marijuana and 
engaging in racketeering.''
    \93\ New York Times, 3/22/97.
    \94\ Washington Post, 4/8/97.
    \95\ Staff Interview with Nancy Soderberg, Advisor to the President 
for National Security Affairs, National Security Council, 5/30/97.
    \96\ Karen Hancox deposition, 6/9/97, p. 93.
    \97\ Karen Hancox deposition, 6/9/97, pp. 55-58; see also Doug 
Sosnik deposition, 6/20/97, p. 175.
    \98\ Washington Post, 4/8/97.
    \99\ Time, 7/8/96.
    \100\ Press statement issued by RNC Chairman Haley Barbour, 11/3/
96.
    \101\ Richmond Times Dispatch, 7/13/97.
    \102\ AP Online, 7/30/97; New York Times, 2/3/97.
    \103\ AP Online, 7/30/97.
    \104\ Tampa Tribune, 2/3/97; New York Times, 2/3/97.
    \105\ Staff Interview with Robert Suettinger, Director, Asian 
Affairs, National Security Council, 6/3/97.
    \106\ Austin-American Statesman, 3/30/97.
    \107\ Austin-American Statesman, 3/30/97.
    \108\ Austin-American Statesman, 3/30/97.
    \109\ Washington Post, 3/16/97.
    \110\ Senator Glenn, 7/9/97 Hrg., p. 154.
    \111\ Senator Glenn, 7/9/97 Hrg., p. 155.
    \112\ Staff Interview with Robert Suettinger, Director, Asian 
Affairs, National Security Council, 6/3/97.
    \113\ New York Daily News, 12/5/96.
    \114\ Los Angeles Times, 8/19/97.
    \115\ Los Angeles Times, 8/19/97; Washington Post, 12/1/97.
    \116\ Los Angeles Times, 8/19/97.
    \117\ United States v. Yung Soo Yoo, 833 F.2d 488 (3d Cir. 1987).
    \118\ Los Angeles Times, 8/19/97.
    \119\ FEC records.
    \120\ FEC records.
    \121\ Washington Post, 7/3/91; The Hill, 6/4/97; Star-Ledger, 4/15/
97.
    \122\ New York Daily News, 11/21/96; New York Daily News, 4/11/97; 
The Hill, 6/4/97.
    \123\ Los Angeles Times, 8/19/97.
    \124\ Albany (N.Y.) Times Union, 12/24/94; Bergen Record (Bergen 
County, N.J.), 9/15/94.
    \125\ FEC records.
    \126\ New York Daily News, 11/21/96.
    \127\ New York Daily News, 11/21/96.
    \128\ New York Daily News, 11/21/96.
    \129\ FEC records.





PART 5  FUNDRAISING AND POLITICAL ACTIVITIES OF THE NATIONAL PARTIES 
        AND ADMINISTRATIONS

Chapter 32: Coordination Among the White House, the Democratic National 
        Committee and the Clinton Campaign; Issue Ads

    Since 1976, presidential campaigns have been eligible to 
receive federal funds. Public financing was designed to free 
presidential candidates from the need to raise money and to 
assure voters that these candidates would not become beholden 
to contributors. In exchange for federal funds, presidential 
campaigns must agree to limit the amount of money they spend. 
One purpose in enacting our campaign finance law was to put in 
place expenditure limitations that would level the playing 
field on which presidential candidates compete.
    However, due to a series of court rulings, as explained in 
Chapter 24, an enormous loophole has been created that enables 
national party committees and presidential campaigns to 
circumvent this spending limit. In addition to the funds that 
presidential candidates may spend on their own campaigns, 
national party committees are permitted to spend unlimited 
amounts of money on ``issue ads.'' 1 An 
advertisement sponsored by a party qualifies as an issue ad as 
long as it does not contain an electioneering message 
advocating the election or defeat of a specific candidate. A 
cleverly worded ad can meet this standard even though it 
portrays a candidate in a positive (or negative) light. The law 
also permits a presidential candidate to help his party raise 
money for issue ads and to control the content and production 
of these advertisements.
---------------------------------------------------------------------------
    Footnotes appear at end of chapter 32.
---------------------------------------------------------------------------
    By running issue ads, political parties and presidential 
campaigns are legally able to circumvent the federal law 
mandating that a presidential candidate can raise and spend 
only hard money (contributions in small dollar amounts raised 
from individuals and political action committees) prior to the 
party's convention without violating the law.2 In 
contrast, during the 1996 election cycle, the political parties 
were free to pay for issue ads with a combination of hard and 
soft money.3 In the upcoming election cycle, it may 
be possible for parties to pay for issue advertisements with 
only soft money.4
    In 1996, both the Clinton campaign and the Dole campaign 
made use of the loophole allowing a national party committee to 
spend unlimited soft dollars on issue advertising. Both 
presidential candidates helped their parties to raise hard and 
soft money, which was used to pay for issue ads, and both 
presidential campaigns assisted the party committees in 
creating ads that were designed to bolster support for the 
party's presidential candidates. Although a number of RNC ads 
came close to not meeting the legal standard for issue 
advocacy, neither party's ads appeared to carry an 
electioneering message advocating the election or defeat of its 
presidential nominee and, thus, were not subject to the federal 
spending limits that apply to presidential campaigns. The 
Clinton and Dole for President campaigns were thus able to 
legally circumvent federal spending limits.

                                FINDINGS

    (1) Both the Clinton campaign and the Dole for President 
campaign benefited from spending by their respective parties in 
excess of the spending limits applicable to presidential 
candidates who accept public financing.
    (2) Coordination of issue advocacy between the Clinton 
campaign and the DNC and between the Dole for President 
campaign and the RNC was legal under current campaign finance 
laws.
    (3) Both presidential campaigns coordinated fundraising to 
pay for the issue advocacy of their respective parties.

                        INTRODUCTION AND SUMMARY

    During the 1996 election cycle, the DNC paid for a 
multimillion-dollar issue advocacy effort that was designed to 
build support for the Democratic Party's position on major 
legislative issues and to bolster support for President 
Clinton. The Clinton campaign organization and its consultants 
actively participated in all stages of this media effort. White 
House Deputy Chief of Staff Harold Ickes played a major role in 
the reelection effort, of which the ads were a key part.
    The activities of the DNC and the Clinton campaign were 
permissible. Federal law explicitly sanctions coordination 
between political parties and their presidential 
candidates.5 The law also permits parties to pay for 
and air issue ads that are intended to aid their presidential 
candidate as long as the ads do not carry an electioneering 
message advocating the election or defeat of a specific 
candidate. The DNC's ads, which all related to pending 
legislative issues, satisfied this issue-advocacy standard.

               THE ORIGIN OF THE DNC'S ISSUE AD CAMPAIGN

    The Clinton campaign and the DNC first considered the 
possibility of using issue ads to communicate the President's 
message in the first half of 1995.6 Democratic 
strategists felt that one of the reasons the party lost 
Congress in 1994 was that it had not been successful in 
communicating its message. After discussions involving the 
President and his advisers, a decision was made to conduct a 
major radio and television advertising effort in 1995 and 1996. 
Richard (``Dick'') Morris, the Clinton campaign's media 
consultant, suggested that the campaign not accept federal 
matching funds so that it would not be limited by the federal 
cap on campaign expenditures.7 In early 1995, the 
Clinton campaign organization rejected Morris's suggestion and 
agreed to accept federal funds. It is unclear whether, at the 
time this decision was made, the DNC and the Clinton campaign 
had planned to spend money on issue ads not subject to the 
expenditure cap.
    The first-1996 cycle televised ads ran in July 1995 when 
the Clinton campaign paid for a series of advertisements that 
addressed the crime issue.8 Dick Morris explained 
the original conception of the advertising campaign:

          [I] found out that you could run advertising that was 
        related to issues that did not explicitly urge the 
        election of a candidate, I realized that was precisely 
        what I had in mind anyway. . . . So it was not a 
        question of finding a loophole in which we could 
        restructure the advertising to achieve a different goal 
        in a different way in order to get under the DNC label. 
        . . . Specifically, I was not very concerned in the 
        early part of '95 or throughout most of ``95 with the 
        president's re-election per se, because I felt that for 
        the president to have a hope of being reelected, he 
        first had to win the fight over the budget. He first 
        had to defeat the agenda of the Gingrich-Dole Congress 
        and win the battle associated with the budget and tax 
        issues. . . . So that when I found out that there was a 
        kind of advertising . . . that could be done that was 
        congruent with my political purposes at that point, 
        which was to win an issue before the Congress, I was 
        thrilled.9

    In a September 1995 meeting, the President, the Vice 
President, the First Lady, Harold Ickes, Senator Christopher 
Dodd, DNC Chairman Donald Fowler, and White House aide George 
Stephanopoulos decided that the DNC should undertake an 
extensive media effort to communicate the message of the 
President and the party.10
    The televised ads, which aired steadily throughout the fall 
of 1995 and early 1996, focused on the President's refusal to 
support Republican budget proposals and the President's 
determination to protect Medicare.11 These issues 
were among the most important pending before the United States 
Congress at the time. Although Haley Barbour, then Chairman of 
the RNC, initially vowed not to spend Republican hard dollars 
on a similar advertising effort, in November 1995, the RNC 
began airing advertising attacking President Clinton and his 
position on the balanced budget.12 In addition, in 
mid-1995, the RNC helped create a tax- exempt organization, 
Coalition for Our Children's Future, to air balanced budget and 
Medicare advertising with entirely undisclosed and unregulated 
soft money, in contrast to the publicly disclosed combination 
of hard and soft money being used by the DNC (see Chapter 13).

                 THE DNC AND RULES GOVERNING ISSUE ADS

    Before the DNC began its million-dollar issue advertising 
effort, counsel for the DNC and the Clinton campaign advised 
their clients that the DNC's plan complied with existing law. 
Ickes explained, when he was questioned by Senator Akaka during 
a Committee hearing:

          Q: In response to questions earlier today, you 
        testified that you consulted counsel on the ability to 
        use soft money for issue ads during 1995, did you not?
          A: Certainly did.
          Q: What were you told were the parameters of the 
        advertising that could be done with soft money?
          A: I was concerned, Senator, because I wanted to make 
        sure that whatever advertising was done by the DNC 
        using both hard and soft money, because a mix is 
        required, would not be attributed to the spending 
        limits of the Clinton campaign. That is why I did 
        consult counsel, and I was told by counsel that under 
        the Federal Election Campaign Act, as amended by the 
        Congress in '78 or '79 and as interpreted by the FEC, 
        that these kinds of ads, the so-called issue ads, could 
        be run by the DNC and would not be attributed to the 
        campaign, that they were perfectly legal. . . . And, in 
        addition, we had lawyers looking at each script and 
        each ad as it was cut before it went on the air, with 
        the exception of one which we had to pull.
          Q: So soft money, which under current federal 
        election laws can be raised in unlimited amounts from 
        any type of contributor, including corporate 
        contributors, may lawfully be used to advertise the 
        president's message without much limitation. Is that 
        right?
          A: That's right, and it depends upon the content of 
        the ad. And, again, Senator Lieberman and I have had a 
        colloquy about this. I think this is something that has 
        to have a very sharp look-at.13

    As Chapter 24 details, counsel, along with Ickes were 
correct regarding the legal requirements for party issue ads. 
These ads are permissible and do not count against a 
presidential campaign's spending cap as long as they do not 
cross the line into advocating the election or defeat of a 
specific candidate. Courts disagree about where to draw the 
line between issue ads and candidate ads. Courts have held that 
an ad does not advocate the election or defeat of a candidate 
unless it uses words such as ``vote for,'' ``elect,'' 
``support,'' ``cast your ballot for,'' ``Smith for Congress,'' 
``vote against,'' ``defeat,'' or ``reject.'' One circuit has 
held that an ad that does not use these so-called magic words 
can nevertheless cross the line between an issue ad and 
candidate ad if it unmistakably urges voters to elect or defeat 
a specific candidate.
    Counsel placed limits on the types of ads that the DNC 
could run that were stricter than either of these legal 
standards. Counsel also attempted to ensure that the ads did 
not contain an ``electioneering message,'' a currently 
undefined standard, by ensuring that the advertsiments 
mentioned no campaign or election and were not run within six 
weeks of a state primary. No DNC advertsing was aired during 
the general election period. Dick Morris described these 
limits:

          Sandler and Utrecht . . . said that issue advocacy 
        advertising had to relate to an important . . . 
        legislative issue that was pending before the Congress, 
        that was actively in play and discussion before the 
        Congress. It had to express the view on that issue 
        which was held by the President, the administration in 
        general . . . and the leadership of the Democratic 
        Party; that it had to be an issue position in which the 
        Republican Party leadership took a generally different 
        point of view. . . . I further learned from Sandler and 
        Utrecht that the advertisements . . . could not overtly 
        urge the re-election of the President or the defeat of 
        any particular Republican candidate. I further learned 
        that there were constraints on the extent to which the 
        President's picture could be used in the advertisements 
        or the picture of possible Republican opponents could 
        be used in the advertisements. I further came to learn 
        that there were restrictions on the proximity to the 
        primary dates that such advertisement could be run in 
        different states.14

The rules established by counsel for the DNC and the Clinton 
campaign were stricter than the FEC opinions and court rulings 
distinguishing issue and candidate ads.

         THE DNC ADHERED TO THE LEGAL RULES GOVERNING ISSUE ADS

    The ideas for specific DNC issue ads originated in regular 
Wednesday evening strategy meetings at which the President, top 
White House staff, and the media consultants planned campaign 
activities, including the use of advertising.15 At 
the Wednesday meetings, President Clinton approved the concepts 
for DNC ads. ``Creative meetings'' attended by, among others, 
Dick Morris and DNC Counsel Joseph Sandler, took place the day 
after these strategy meetings. Participants at the ``creative 
meetings'' developed ad themes and scripted ads. On occasion, 
they changed ad themes that the President had approved in a 
strategy meeting, and final ads were often cut and aired 
without receiving the President's approval. DNC counsel, and on 
occasion, Clinton campaign counsel attended these creative 
meetings in order to ensure that every DNC ad adhered to the 
limits they had imposed and therefore fell within the legal 
definition of issue advocacy and did not contain an 
electioneering message.16
    Dick Morris testified that the DNC followed the guidelines 
established by counsel ``to the letter--to the comma.'' 
17 He complained that the lawyers were 
``obsessively'' concerned with following the law:

          [T]hey would bend over backward in ways that I 
        considered ridiculous to comply with what would have 
        been [an] overly conservative interpretation of the 
        law. As I mentioned, there was a time in which the 
        Republicans were running ads bashing Clinton, and 
        Utrecht and Sandler told us that we couldn't run ads 
        bashing Dole because he had retired from the Senate. 
        And I said you are disarming us unilaterally; this guy 
        is on the air, spending 3 million bucks a week savaging 
        Clinton, and you won't let us go on the air with our 
        measly million defending him, or attacking Dole, 
        because you're telling me that it's illegal. Well, if 
        it's illegal for us, why isn't it illegal for them? . . 
        . And constantly during this process, I felt that 
        Sandler and Utrecht were overly conservative in their 
        interpretation.18

    Morris was particularly angry that the Dole campaign and 
the RNC were not operating under the restrictions that counsel 
had imposed on the DNC:

          [T]he Republicans had a 60-second commercial which 
        was entirely positive about Bob Dole. It talked about 
        how he was born on a farm, and he grew up in Kansas, 
        and everybody in this town knew him and loved him, and 
        he was a war hero, and he'd been wounded; and it did 
        not in the course of the entire ad mention a single 
        public policy issue, whether or not the issue was 
        before Congress or not, to my recollection. And that 
        was paid for as an issue advocacy RNC ad.
          And when I asked Sandler and Utrecht permission to 
        run a positive Clinton commercial that related to 
        Clinton's personal life and background and all that, 
        they said we're going to have to do that with Clinton 
        money if we do it; and they were constantly editing out 
        of my manuscripts and my texts any references to 
        Clinton that were not within the direct four walls of 
        legislative advocacy.
          And when the Dole ad came on, I screamed bloody 
        murder, because I said they are violating every rule 
        you've made me follow. That was the most blatant 
        example. There was no issue content in the 
        ad.19

    Because the DNC's ads complied with counsel's guidelines, 
which were stricter than the legal requirement that issue ads 
refrain from advocating the election or defeat of a specific 
candidate, they were permissible under current law. As the next 
chapter discusses in greater detail, although the RNC's issue 
ads were also permissible, the ads came much closer to crossing 
the line between issue advocacy and candidate advocacy.

               THE CLINTON CAMPAIGN AND THE DNC CAMPAIGN

    Even though the DNC's ads were permissible, they were 
clearly designed to aid the Clinton campaign. As Harold Ickes 
testified at this Committee's hearings:

          Q: Would you say that people looking at the ads--and 
        I am sure you looked at the Dole spots as well--would 
        take the message, the average person, that this is very 
        good person who we should vote for next year?
          A: I would certainly hope so. If not, we ought to 
        fire the ad agencies.20

Because the cost of DNC issue ads did not count as expenditures 
by the Clinton campaign, theDNC's media effort allowed the 
Clinton campaign to benefit from favorable advertising without 
depleting its scarce, federally-capped campaign coffers. The DNC's 
advertisements were shown in states considered key to the President's 
reelection, and funds were transferred from the DNC to the state 
parties in order to take advantage of the state parties' ability to 
spend a larger percentage of soft money on the advertisements. While 
the transfers were made to take advantage of the state parties' greater 
ability to spend soft money, there are no restrictions on this type of 
transfer.21 As Chapter 33 explains, the RNC and Dole for 
President campaign engaged in similar activities. Although the 
practices engaged in by both parties are permissible, they violate the 
spirit of the campaign finance laws, which are designed to limit the 
spending of presidential campaigns.

 THE LEGALITY OF COORDINATION AMONG THE CLINTON CAMPAIGN, WHITE HOUSE, 
                                AND DNC

The President's role in the making of DNC issue ads

    President Clinton played a significant role in the DNC's 
issue-advocacy effort. He attended weekly strategy sessions 
with Senator Dodd and DNC Chairman Donald Fowler and he 
approved the concepts for a number of DNC issue ads. President 
Clinton and Vice President Gore also devoted a significant 
amount of time to raising money for the DNC's media effort. 
Some Committee Members have raised concerns that the 
President's involvement in the making of issue ads may have 
been illegal.22 They point in particular to a video 
tape in which, in discussing the DNC's issue-advocacy campaign, 
the President says: ``And then we realized we can run these ads 
through the Democratic Party.''
    However, the President is permitted to be involved in 
strategic decision making, and fundraising on behalf of the 
party. As discussed in Chapter 24, federal law not only 
permits, but explicitly sanctions this cooperation between 
candidates, including Presidential candidates, and their 
political parties. The Federal Election Campaign Act and its 
regulations recognize the unique role of President with regard 
to the party and allow a presidential candidate to go so far as 
to ``designate the national committee of [his or her] political 
party as his or her principal campaign committee.'' 
23 If President Clinton had exercised his right to 
choose the DNC as his campaign committee, then he would have 
been able not only to coordinate with the DNC or to control 
some of its activities, but the party and the President would 
have become one entity. The President is legally entitled to 
have a say in the activities and operation of the national 
party.
    Attorney General Reno correctly stated the current law in 
her April 1997 testimony before the Senate Judiciary Committee. 
She stated, ``one of the things I want to make clear--
coordination is never prohibited. And, in fact, issue 
advertising may be paid for in part by soft money with 
coordination, even with coordination.'' 24
    Republican election-law experts agree that President 
Clinton's involvement in the making of the DNC issue ads was 
permissible. Republican election law expert Jan Baran, stated 
that the courts have interpreted the law to allow political 
parties to coordinate with candidates and pay for issue ads 
with soft money. He dismissed the significance of the videotape 
in which the President admitted to running ``ads through the 
Democratic Party,'' stating that ``He [Clinton] is confirming 
the legally obvious. To me it has no legal significance.'' When 
asked about the possibility that the President could be accused 
of committing a crime for being involved in the issue ads 
placed by the DNC, Baran said, ``Are you going to throw 
somebody in jail for violating a law no three people can agree 
on?'' The answer is ``of course not.'' 25
    Senator Dole himself has stated clearly that parties and 
presidential candidates can coordinate their activities. Asked 
about the RNC's issue ads, he took the same position that 
President Clinton took with respect to DNC issue ads, and used 
almost identical language: ``[W]e can, through the Republican 
National Committee, through what we call the Victory '96 
program, run television ads and other advertising.'' 
26

Ickes's role in coordinating with the DNC

    Harold Ickes was heavily involved in the activities of the 
DNC while he was White House Deputy Chief of Staff. Ickes's 
actions were legal, as were similar activities by White House 
officials in Republican administrations.
    Ickes's involvement with the DNC traces back to the 
September 1995 meeting at which the DNC and Clinton campaign 
officials decided that the DNC would undertake an issue-
advocacy effort. At this meeting, the President and Vice 
President committed to devoting time to raise money for the 
DNC's media effort.27 Thereafter, the President and 
the Vice President spent more time on fundraising activities to 
assist the DNC's efforts to raise the soft money needed to pay 
for the issue advertisements. The President and the Vice 
President attended many fundraising events for the DNC and the 
Vice President made phone calls to help raise soft money for 
the media fund.
    Involving the President in fundraising for the DNC required 
the White House to maintain frequent contact with the party. 
Ickes was the primary White House-DNC liaison. Although he 
became involved in many DNC activities, his involvement was 
generally related to ``big picture'' issues, such as scheduling 
the President and monitoring the DNC's finances.28 
Ickes also took part in DNC personnel decisions, including 
those related to the transfer of staff between the DNC and the 
Clinton campaign. Donald Fowler, national chairman of the DNC, 
testified that he viewed the President as the leader of the 
party and Ickes as the person who communicated the President's 
views to DNC personnel.29 Accordingly, Ickes was 
expected to and did have involvement in campaign activities, 
including the coordination of the issue advocacy efforts of the 
DNC and the raising of soft money to pay for such ads.
    Beginning in the fall of 1995, Ickes attended weekly 
meetings with political and scheduling staff from the White 
House (including Doug Sosnik and Karen Hancox) and seniorDNC 
staff (including Donald Fowler, B.J. Thornberry, Marvin Rosen, Brad 
Marshall, Scott Patrick, and Richard Sullivan). Attendees discussed the 
DNC budget and the scheduling of the President's and Vice President's 
participation in fundraisers.
    The participation of a deputy chief of staff in such 
gatherings is hardly unprecedented. During the 1984 campaign, 
President Reagan's chief of staff, James Baker, III, 
participated in similar meetings. As Harold Ickes noted:

          In 1983, White House chief of staff, James Baker, 
        began holding weekly political meetings in his White 
        House offices, again, including White House staff, the 
        staff of the RNC, the re-election campaign, and 
        campaign consultants. Known as the Campaign Strategy 
        Group, its reported purpose was to guide President 
        Reagan's re-election campaign and to coordinate the 
        activities of the RNC and other Republican Party 
        resources.30

    Indeed, Ickes modeled his involvement with the DNC on the 
activities of Republican administrations. Ickes testified:

    [M]ost of the White House staff may participate in a broad 
range of political activities in their offices.
    In this regard, much has been made of my role with respect 
to the elections while I served as deputy chief of staff of the 
White House. Among my numerous duties, I served as the 
president's point man on both the DNC and the re-election 
campaign, and I met regularly with campaign and DNC officials. 
And the Office of Public--the Office of Political Affairs 
reported to me.
    This was the model established by my Republican 
predecessors. Indeed, it was President Reagan and his then 
Chief of Staff James Baker who officially established the 
Office of Political Affairs in the White House. Its functions 
were continued under President Bush and were inherited by the 
Clinton White House.
    According to the National Journal, the Reagan White House 
political office was, and I quote, ``structured along the lines 
of a miniature campaign organization.''
    Under its first director, Lyn Nofziger, the Office of 
Political Affairs had, and I quote, ``specific links to the 
Republican National Committee and the House and Senate GOP 
campaign units . . . [so] that all elements of the party 
apparatus [would] have a designated contact in the White House 
. . .''
    In late 1981, Mr. Nofziger announced he was leaving the 
White House, but not before the general election strategy had 
been planned for the 1982 elections.
    As Mr. Nofziger explained: ``The idea [was] to make sure 
that the White House bestowed its favors--campaign appearances, 
endorsements, coordination of grant announcements--in the most 
effective way possible.''
    And according to Mr. Nofziger, ``We had a full time team of 
political operatives working for us--essentially our consulting 
firm--the White House could respond quickly and decisively to 
problems as they cropped up.''. . .
    President Reagan's next director of the Office of Political 
Affairs, Ed Rollins, held regular weekly meetings in the Old 
Executive Office Building next to the White House, which 
included White House staff and top staff from the Republican 
National Committee, the National Republican Senate Committee, 
and the National Republican Congressional Committee. Their 
purpose was to obtain Republican victories in the 1982 
congressional elections.
    To this end, the National Journal reported, ``Rollins' 
office has been established as a place where Republicans in 
Congress can come to request Presidential favors. In the past 
16 months,'' according to Mr. Rollins, ``we worked very hard to 
produce the perks that members want. This has been the shop 
that has fought to get their appointments and their advisory 
commission people, the things that we feel are important to 
them for getting re-elected.''

           *         *         *         *         *

    During 1984, Mr. Baker established a second campaign group 
known as the Implementation Group, which he also chaired and 
which also met in his White House offices.
    It was reported, and I quote, ``Overall authority for 
directing the 1984 re-election campaign was clearly vested in 
White House chief of staff, James A. Baker, III, eliminating 
coordinating problems between the White House and campaign 
staffs, that plagues campaigns of prior, previous incumbents.''
    At that same time, Lee Atwater was the deputy director of 
the Reagan-Bush re-election campaign, but as he stated, Mr. 
Baker controlled the campaign. I quote Mr. Atwater, ``Having 
Jim Baker as the key domo in this whole operation is a big 
plus. Rollins and I do not question his supremacy. We are very 
loyal to him, and we all work very well together.''
    Mr. Baker went on to play this role as well in the 1992 
Bush re-election campaign. President Bush persuaded Mr. Baker 
to resign as Secretary of State and to assume the role of chief 
of staff to the President operating out of the White House. He 
was put in charge of both the White House staff and President 
Bush's re-election campaign, and Mr. Baker eventually chaired 
twice daily campaign meetings in his White House offices.
    According to reliable reports, President Bush's national 
security advisor, General Scowcroft, attended those meetings. 
Thus, in having the White House actively involved in campaign 
matters, the Clinton White House merely followed well-
established Republican precedent. . . .31

    Ickes's involvement with the DNC not only follows the 
precedent set by Republican administrations, but, more 
importantly, complies with federal law. Coordination between 
the party and the campaign is expected, and federal election 
law presumes that coordination occurs. Also, as Chapter 24 
explains, the Hatch Act's prohibition on federal employees' 
engaging in political activity does not apply to White House 
personnel, such as Harold Ickes, who are paid from 
appropriations for the Executive Office of the President. The 
law permitted Ickes to engage in political activity during 
working hours, in a federal building, and using federal 
property as long as the activity did not involve soliciting or 
accepting contributions and incurred no cost to the government. 
Ickes complied with these restrictions.32

                               CONCLUSION

    The fact that coordination of soft money spending and 
fundraising has become commonplace and expected should be 
examined by Congress. By permitting such coordinated efforts to 
raise soft money and spend it on political activities that 
advance the interests of presidential campaigns, the federal 
election laws create a tremendous loophole to both contribution 
limits and spending limits. As the Chairman has acknowledged:

          Acceptance of this activity would allow any candidate 
        and his campaign to direct and control the activities 
        of a straw man through which the campaign could draft, 
        revise, and place advertisements meant to benefit the 
        particular Federal campaign. For such activity, these 
        straw men could use funds subject to no limit and 
        derived from any source. . . . If the interpretation is 
        that this is legal and this is proper, then we have no 
        campaign finance system in this country 
        anymore.33

    The fact that the national parties and presidential 
campaigns can legally coordinate issue ads paid for, in part, 
by unlimited soft money undermines the system of regulating the 
financing of presidential elections. The spending limits 
applicable to presidential campaigns that accept matching funds 
are meaningless when unlimited party soft money can be spent on 
the campaign. During the 1996 election cycle, the irrelevance 
of the spending limits was demonstrated by the fact that 
hundreds of millions of dollars over and above the limits was 
spent on issue advocacy efforts that were designed to advance 
the presidential tickets. By reducing or, preferably, banning 
soft money, Congress could close this loophole and give meaning 
to the spending limits imposed on presidential campaigns.

                               Footnotes

    \1\ FEC Advisory Opinion 1995-25.
    \2\ Under the federal election laws, an individual is allowed to 
give a maximum of $2,000 to a candidate ($1,000 each for the primary 
and general election) during any one cycle. A political action 
committee (``PAC'') can give $5,000. Contributions from corporations 
and labor unions are forbidden. 2 U.S.C. sections 441a and 441b.
    \3\ FEC Advisory Opinion 1995-25.
    \4\ See Federal Election Commission Matter Under Review 4246, 
released 1997. But see Statement of Reasons issued by Commissioners 
McGarry and Thomas in MUR 4246.
    \5\ See Chapter 24.
    \6\ Richard Morris deposition, 8/20/97, p. 78.
    \7\ Richard Morris deposition, 8/20/97, pp. 98-100.
    \8\ Richard Morris deposition, 8/20/97, p. 131.
    \9\ Richard Morris deposition, 8/20/97, pp. 135-36.
    \10\ Donald Fowler deposition, 5/21/97, p. 292-95.
    \11\ See Annenberg Public Policy Center, ``Issue Advocacy 
Advertising During the 1996 Campaign: A Catalog,'' 9/16/97, p. 32.
    \12\ The Hotline , 11/17/95; The Hotline, 1/6/95.
    \13\ Harold Ickes, 10/8/97 Hrg., pp. 164-65.
    \14\ Richard Morris deposition, 8/20/97, pp. 143-44.
    \15\ Participants at these meetings included the president, the 
vice president, Leon Panetta, Harold Ickes, Evelyn Lieberman, George 
Stephanopoulos, Don Baer, Doug Sosnik, Ron Klain, Sandy Berger, Senator 
Chris Dodd, John Hilley, Maggie Williams, Mike McCurry, Henry Cisneros, 
Mickey Kantor, Mack McLarty, Peter Knight, Anne Lewis, Ron Brown, 
Erskine Bowles, Jack Quinn, Dick Morris, Doug Schoen, Mark Penn, Bob 
Squier, and Bill Knapp. Richard Morris deposition, 8/20/97, p. 76.
    \16\ Joseph Sandler deposition, 8/22/97, pp. 67-69; Richard Morris 
deposition, 8/20/97, pp. 76, 140-44.
    \17\ Richard Morris deposition, 8/20/97, p. 409.
    \18\ Richard Morris deposition, 8/20/97, p. 410.
    \19\ Richard Morris deposition, 8/20/97, pp. 411-12.
    \20\ Harold Ickes, 10/8/97 Hrg., p. 79.
    \21\ 2 U.S.C. section 441a(a)(4). The allocation regulations 
adopted in 1990, which determine how much hard and soft money national 
and state parties may use, place no restrictions on transfers between 
parties for any purpose.
    \22\ At this Committee's 10/22/97 hearing Chairman Thompson said: 
``The President acknowledges that spending on campaign advertising is 
limited by law, but he and his advisors, so he tells the assembled 
contributors who are being asked to pay for these ads, say that they 
have found a way that they could raise and spend money through the 
Democratic National Committee; that they could run these ads through 
the DNC. Indeed, the President credits his DNC advertising, which they 
and the White House directed and controlled, with having improved his 
performance by 10 to 15 points in key States where the President is 
hopeful of garnering additional Electoral College votes. We now know 
about how the President saw the DNC ads functioning as an integral part 
of his re-election strategy. . . . To allow the type of activity 
undertaken by the Clinton '96 campaign in conjunction with the DNC 
undermines the entire Federal election campaign regulatory system. 
Acceptance of this activity would allow any candidate and his campaign 
to direct and control the activities of a straw man through which the 
campaign could draft, revise, and place advertisements meant to benefit 
the particular Federal campaign. For such activity, these straw men 
could use funds subject to no limit and derived from any source. 
Furthermore, these straw men would not be subject to any overall 
expenditure limit. To tolerate such blatant manipulation of the system 
would perpetuate a ruse on the American taxpayer. Those taxpayers are 
being told that in return for over $233 million in their money, they 
got an open, above-board system of campaign finance prohibitions, 
limitations, and regulation. That simply was not the case in 1996.'' 
10/22/97 Hrg., pp. 9-11.
    \23\ 11 C.F.R. 102.12(c)(1).
    \24\ Senate Judiciary Committee hearing, 4/30/97, p. 106.
    \25\ Wall Street Journal , 10/17/97.
    \26\ Exhibit 2336M: Transcript of ABC News Interview of Bob Dole, 
6/6/96.
    \27\ Donald Fowler deposition, 5/21/97, pp. 294-95. As described in 
Chapter 26, this commitment led to the Vice President's making 
fundraising calls to raise some of the soft money needed to fund the 
media efforts.
    \28\ Harold Ickes testified: ``Again, the discussions I had with 
respect to my role in the White House as it related to both the DNC and 
the Clinton campaign, was basically to use--sort of an overused 
cliche--bottom line. I was looking at aggregates. And it was the DNC 
and Clinton-Gore campaign that were dealing with the particular 
specifics.'' Harold Ickes, 10/8/97 Hrg., p. 35.
    \29\ Donald Fowler, 9/9/97 Hrg., pp. 76-77.
    \30\ Harold Ickes, 10/7/97 Hrg., pp. 88-89.
    \31\ Harold Ickes, 10/7/97 Hrg., pp. 86-90. See also Samuel Berger, 
9/11/97 Hrg.
    \32\ See Chapter 24. The testimony and documents submitted to this 
Committee indicate that both the DNC and the White House took numerous 
steps to ensure that government resources were not used for political 
purposes. For example, there were separate fax machines, computers and 
other office equipment that were used for political purposes. See 
Jennifer O'Connor deposition, 10/6/97, pp. 149-50.
    \33\ 10/22/97 Hrg., p. 10.





PART 5  FUNDRAISING AND POLITICAL ACTIVITIES OF THE NATIONAL PARTIES 
        AND ADMINISTRATIONS

Chapter 33: Coordination Between the Republican National Committee and 
        the Dole for President Campaign During the 1996 Cycle; Issue 
        Ads

    Presidential campaigns that accept federal matching funds 
must limit their spending to $37 million in hard money during 
the primaries and $74 million in the general-election campaign. 
As explained in the previous chapter, the Clinton campaign 
legally coordinated with its political parties to spend 
unlimited sums of money on issue ads designed to aid their 
presidential candidates. These ads are legal as long as they do 
not carry an electioneering message advocating the election or 
defeat of a specific candidate. The law also permits political 
parties and presidential campaigns to work together in 
producing these issue ads.
    The Dole for President campaign and the Republican National 
Committee (``RNC'') also skirted the federal spending caps by 
launching a multimillion-dollar issue-advocacy campaign that 
was designed to support the Dole candidacy. Dole for President 
controlled the RNC's media budget as well as the content and 
production of the RNC's issue ads. Unlike the DNC's issue ads, 
which all related to pending legislative issues, a number of 
RNC ads did not discuss any substantive issues. Although these 
Dole/RNC issue ads complied with the letter of the law, they 
certainly violated the spirit of the law by permitting the Dole 
campaign to benefit from RNC ads that are virtually 
indistinguishable from the types of advertisements that a 
presidential campaign would run. Dole for President also 
circumvented federal spending limits by transferring to the RNC 
payroll key Dole staffers who continued to work directly to 
advance the Dole candidacy.

                                FINDINGS

    (1) Both the Clinton campaign and the Dole for President 
campaign benefited from spending by their respective parties in 
excess of the spending limits applicable to presidential 
candidates who accept public financing.
    (2) Coordination of issue advocacy between the Clinton 
campaign and the DNC and between the Dole for President 
campaign and the RNC was legal under current campaign finance 
laws.
    (3) Both presidential campaigns coordinated fundraising to 
pay for the issue advocacy of their respective parties.

                              INTRODUCTION

    The RNC spent approximately $24 million over and above the 
hard-money spending limit applicable to the Dole 
campaign.1 This massive expenditure was for an 
issue-advocacy campaign designed to inform voters about the 
Republican view on issues. The evidence clearly shows that this 
advertising effort was coordinated with the Dole campaign and 
was designed to promote Dole's candidacy.
---------------------------------------------------------------------------
    Footnotes at end of Chapter 33.
---------------------------------------------------------------------------
    According to documents produced to the Committee, Scott 
Reed, Dole's campaign manager, controlled the budget for this 
ad campaign. Moreover, the RNC ads were produced by Don Sipple 
and Tony Fabrizio, media consultants who were vendors to both 
the Dole campaign and the RNC. Therefore, the content of these 
ads, as well as the circumstances surrounding their creation, 
production, and distribution show that the RNC designed its 
issue- ad campaign for one purpose: to support the candidacy of 
Senator Dole.
    The DNC sponsored a similar effort during the 1996 election 
cycle--the White House, the Clinton campaign, and the DNC 
coordinated an extensive issue-advocacy effort that was 
designed to support the re-election of the current 
administration. (See Chapter 32.) There is nothing inherently 
illegal about such efforts. However, the RNC advertisements 
came closer to violating the legal test for issue advocacy than 
did the DNC's ads. For example, a number of RNC issue ads did 
not include any substantive discussion of legislative issues, 
but simply discussed Senator Dole's biography or leveled 
personal attacks against President Clinton. The DNC did not run 
ads of that sort and has brought a lawsuit against the RNC and 
the Dole campaign challenging several of the RNC issue ads.
    The Dole campaign was able to make use of loopholes in the 
campaign-finance law that essentially nullify the law's limits 
on presidential campaign spending.

              THE ORIGIN OF THE PRO-DOLE ISSUE-AD CAMPAIGN

    In April 1995, Dole for President applied for federal 
funding and pledged to spend no more than $37 million, limited 
to hard money, before the August 1996 Republican Convention. By 
March 1996, however, the Dole campaign had, by its own 
estimate, only $2 million left to spend.2 In April, 
Senator Dole conceded that his campaign was ``broke.'' 
3 In May--three months before the Republican 
National Convention--the Dole campaign had only $177,000 left 
to spend.4 As the New York Times explained, ``[n]o 
presidential campaign [had] reported coming this close to the 
spending limit this long before its convention.'' 5
    As early as January 1996, the RNC had foreseen that its 
nominee would emerge from the Republican primaries having 
exhausted his financial resources, and it planned to support 
the nominee's candidacy by running issue ads that would be paid 
for with a hard-soft money mix that was not subject to the $37 
million spending limit. The minutes of a January 17 RNC 
Executive Council and Budget Committee meeting show that party 
officials ``issued a request for [a] proposal to Republican 
consultants to solicit ideas for how we can insulate our 
nominee-to-be during the April-August interregnum.'' 
6 The party officials anticipated that ``[p]aid 
advertising [would] be the necessary component of [the party's] 
message management during this period, supplementing [its] 
bracketing and press efforts.'' 7 On March 5, RNC 
Chairman Haley Barbour wrote to Republican leaders:

          Our nominee is likely (but not certain) to be known 
        by the end of March. Because of provisions of the 
        federal election law, our nominee is likely to be broke 
        and to have reached the spending limit allowed by law 
        (unless it is Steve Forbes who hasn't accepted federal 
        funds and, therefore, is under no limit). Assuming our 
        nominee has reached the limit, he will not be able to 
        air radio and TV spots or conduct much in the way of 
        campaign activity until the convention in August.\8\

Barbour went on to explain how the Republican Party planned to 
aid its cash-strapped nominee: ``[T]he party (the RNC and our 
state party organizations) are allowed to run issue and generic 
party advertising, and we have a sizable (though it needs to be 
bigger) budget for that. We are scheduled to begin in April.'' 
\9\ The chairman also made it clear that ``the party [could] 
coordinate [its] generic advertising with anybody. . . .'' \10\
    On May 16, Barbour announced that the RNC would launch a 
$20 million advertising campaign. In the announcement, Barbour 
boasted that the RNC's ads were designed to aid the Dole 
campaign:

          Yesterday, with Senator Dole's announcement that he 
        will resign from the Senate to be a full-time candidate 
        for president, the 1996 presidential campaign began in 
        earnest. Consistent with that, the Republican National 
        Committee is announcing today that we will launch a $20 
        million issue-advocacy advertising campaign between now 
        and our convention in August to get the issues of this 
        campaign before the American people and to get the 
        truth out about these issues.

           *         *         *         *         *

          Yesterday, Bob Dole picked up the flag of our Party 
        to carry it to victory in the November elections 
        against Bill Clinton. Now the Republican National 
        Committee will rally behind his leadership and use this 
        issue-advocacy campaign to show the differences between 
        Dole and Clinton and between Republicans and Democrats 
        on the issues facing our country, so we can engage 
        full-time in one of the most consequential elections in 
        our history.\11\

              DOLE FOR PRESIDENT AND THE DOLE/RNC CAMPAIGN

    The Dole for President committee exercised full control 
over the budget for the RNC's issue-advocacy campaign as well 
as the production and content of the RNC's ads, as a June 5 
memo from Barbour to RNC Director of Campaign Operations Curt 
Anderson and Anderson's assistant, Ruth Kistler, demonstrates. 
Anderson and Kistler had suggested that the RNC spend $800,000 
on ``Unity Events,'' which were RNC-sponsored campaign events 
in which Senator Dole would appear. Barbour responded:

          I will reach out to [Dole campaign manager] Scott 
        Reed to ask him to consider whether the Dole campaign 
        would want us to 1) reduce other spending, such as 
        issue advocacy television advertising, by $800,000; 2) 
        significantly increase the number and lead time for 
        Victory '96 events in order to offset these costs 
        (although I am not convinced at this time that the 
        Victory '96 events will produce the revenue currently 
        anticipated and budgeted for expenditure); 3) not spend 
        the sum requested for Unity Events; or 4) consider some 
        other alternative.\12\

This memorandum indicates that Dole's campaign manager 
exercised control over not only the overall budget of the RNC's 
issue-advocacy campaign, but also oversaw the RNC's Victory '96 
project, a program run by long-time Dole aide Jo-Anne Coe and 
used to fund the media campaign.
    Dole for President also controlled the content of the RNC's 
issue ads. The ads were created, written, and produced by Don 
Sipple, Dole for President's media consultant, and Tony 
Fabrizio, Dole's pollster. While Sipple produced these RNC ads, 
he continued as Dole for President's media consultant. To plan 
the issue-ad campaign, Sipple and Fabrizio met frequently--
usually on Wednesday evenings--with Haley Barbour, House 
Speaker Newt Gingrich, Dole pollster Fred Steeper, RNC 
Communications Director Ed Gillespie, and Dole Campaign Manager 
Scott Reed.\13\ Although neither the RNC nor Dole for President 
produced to the Committee any notes or agendas from these 
meetings, the Committee does have an undated memo from Sipple 
asking for Barbour and Reed to approve an issue ad Sipple had 
proposed.\14\ The fact that Reed had the power to sign off on 
ads and that the ads were created, written, and produced by 
Dole operatives shows that Dole for President ran the RNC's 
issue-advocacy campaign.
    In a written submission to the Committee, Senator Dole 
points out that he personally ``did not direct and control the 
ads produced by the Republican National Committee. . . .'' \15\ 
Because the Committee did not depose a single witness about the 
activities of Dole for President, the Minority is unable to 
characterize Senator Dole's personal involvement in the RNC's 
media campaign. Whatever Senator Dole's personal role was, it 
is clear that his campaign manager, chief fundraiser, media 
consultant, and pollster controlled the RNC's media campaign.

                  THE SUBSTANCE OF DOLE/RNC ISSUE ADS

    In order to ensure that the Democratic National Committee's 
advertisements were, in fact, issue ads, counsel for the DNC 
and the Clinton campaign insisted that DNC ads ``had to relate 
to a legislative issue that was pending before Congress, that 
was actively in play and in discussion before Congress.'' \16\ 
The RNC and the Dole campaign did not have a similar policy, 
and ran ads with no apparent link to legislative issues. These 
ads praised Senator Dole and attacked President Clinton and 
included virtually no discussion of public-policy issues.
    The most notorious such Dole/RNC ad was entitled ``The 
Story.'' This ad, which was produced by Don Sipple, used video 
footage that had previously been used in ads made by Sipple for 
the Dole campaign.\17\ It was run after Senator Dole had 
resigned from the Senate. ``The Story'' merely recounted the 
story of Bob Dole's life with no substantive discussion of 
public-policy issues:

          Senator Dole. We have a moral obligation to give our 
        children an America with the opportunity and values of 
        the nation we grew up in.
          Voice Over. Bob Dole grew up in Russell, Kansas. From 
        his parents he learned the value of hard work, honesty 
        and responsibility. So when his country called . . . he 
        answered. He was seriously wounded in combat. 
        Paralyzed, he underwent nine operations.
          Senator Dole. I went around looking for a miracle 
        that would make me whole again.
          Voice Over. The doctors said he'd never walk again. 
        But after 39 months, he proved them wrong.
          Mrs. Dole. He persevered, he never gave up. He fought 
        his way back from total paralysis.
          Voice Over. Like many Americans, his life experience 
        and values serve as a strong moral compass. The 
        principle of work to replace welfare. The principle of 
        accountability to strengthen our criminal justice 
        system. The principle of discipline to end wasteful 
        Washington spending.
          Senator Dole. It all comes down to values. What you 
        believe in. What you sacrifice for. And what you stand 
        for.\18\

    Even RNC employees questioned whether ``The Story'' 
qualified as an issue ad. In a May 22, 1996, memo to Haley 
Barbour, RNC Campaign Operations Director Curt Anderson 
admitted, ``We could run into a real snag with the Dole Story 
spot. Certainly, all the quantitative and qualitative research 
strongly suggests that this spot needs to be run. Making this 
spot pass the issue advocacy test may take some doing.'' \19\
    Senator Dole himself admitted to ABC News that the RNC 
``The Story'' ad was intended to boost his presidential 
campaign and that viewers would regard ``The Story'' as a Dole 
campaign ad:

          Senator Dole. [W]e can, through the Republican 
        National Committee, through what we call the Victory 
        '96 program, run television ads and other advertising. 
        It's called generic. It's not Bob Dole for president. 
        In fact, there's an ad running now, hopefully in 
        Orlando, a 60-second spot about the Bob Dole story: Who 
        is Bob Dole? What's he all about? Pretty much the same 
        question that Ted Koppel asked me. So we'll do that. . 
        . . It never mentions the word that I'm--it never says 
        that I'm running for president, though I hope that it's 
        fairly obvious, since I'm the only one in the picture! 
        (Laughter).\20\

    ``The Story'' was not the only Dole/RNC issue ad that did 
not include any substantive discussion of public-policy issues. 
Don Sipple proposed to Haley Barbour and Scott Reed that ``we 
do a spot on the constellation of ethics problems facing 
Clinton and his administration. . . The purpose of doing this 
ad would be to connect the dots for the American people--to 
demonstrate a pattern of behavior.'' \21\ This ad does not meet 
the requirement followed by the DNC that issue ads must relate 
to a ``legislative issue that was pending before Congress, that 
was actively in play and in discussion before Congress.'' \22\ 
Indeed, Sipple himself explained that ``this is a spot that 
[Dole for President] shouldn't get to until late (if at all, in 
advertising),'' \23\ indicating that this supposed RNC issue ad 
was suitable for use by the Dole campaign.
    The Dole/RNC issue ads were carefully worded to comply with 
the letter of the law. As explained in Chapter 24, issue ads 
are legal and do not count against a presidential campaign's 
spending cap as long as they do not carry an electioneering 
message advocating the election or defeat of a specific 
candidate. Because the Dole/RNC ads did not tell viewers to 
vote for Senator Dole, they did not violate any campaign-
finance laws. They were, however, indistinguishable from ads 
that are typically run by a presidential campaign and were a 
clear attempt to circumvent federal spending limits.

    THE DOLE/RNC ``ISSUE ADS'' AND PRESIDENTIAL BATTLEGROUND STATES

    One of the strongest indicators that the purpose of the 
Dole/RNC issue ads was to support Senator Dole's candidacy is 
that Dole for President and the RNC ran the ads only instates 
where Clinton and Dole were close in the polls. In states where either 
candidate had an insurmountable lead, the Dole campaign and the RNC did 
not run issue ads. See Appendix.
    Documentary evidence also supports the conclusion that the 
criterion used by the RNC and the Dole campaign for deciding 
where to run issue ads was whether the ads would help Senator 
Dole win electoral votes. For example, Dave Hansen, an RNC 
aide, argued that issue ads should be run in Washington state 
because ``Washington is a very winnable state for Dole. Present 
polls show him down to Clinton by 16 points which is about 
where he is nationally. . . . For [Washington] to be left out 
of the first major media program would be devastating to the 
party and party faithful and, I believe would eliminate any 
chance for Senator Dole to come back and win the state.'' 
24 Curt Anderson agreed with Hansen, arguing that 
the omission of Seattle would ``cause us serious political 
heartburn in the state of Washington, which is a state that we 
could win Presidentially.'' 25 Anderson then 
described the purpose of the RNC's media campaign:

          The point that needs to be reiterated is that this 
        plan is based on the premise that right now we should 
        be targeting those markets that can not [sic] be 
        considered core partisan for either party. This assumes 
        that if, over the course of the summer, we raise the 
        water level of Dole support in the must win marginal 
        markets, the historically core Republican markets will 
        swing our way. Secondly, the targeted swing markets 
        represented are the most difficult must win voters. 
        This being the case, it makes sense to vie for these 
        votes now, in the hope that [Dole for President] can 
        close the deal in the fall. More to the point, playing 
        for the swing markets should keep them from moving to 
        core Clinton-Gore.26

    The Dole/RNC issue ads were run to support the cash-
strapped Dole for President campaign. The ads were designed and 
planned in content, timing, and location to assist the Dole 
candidacy. Even Senator Dole admitted that the ads were 
intended to aid his presidential bid. Because the law allows 
such ads to be run by national parties with a mix of hard and 
soft money that is not subject to federal spending limits, by 
running these ads in coordination with the RNC, the Dole 
campaign was able to bypass federal spending limits, while 
remaining within the letter, if not the spirit, of the campaign 
finance laws.

                   DOLE/RNC ISSUE ADS AND SOFT MONEY

    Federal law requires that no more than 35 percent of the 
money used to pay for party-building activities, such as 
running issue ads, be soft money.27 Thus, while a 
presidential campaign must raise and spend exclusively hard 
money, a national party can support the campaign with 
expenditures that are paid for in part with soft-money 
contributions. Moreover, because the law in many states permits 
parties to fund issue ads with more than 35 percent soft money, 
by transferring money to the state parties, more soft money can 
be used to pay for advertising. The RNC took advantage of this 
loophole to run Dole/RNC issue ads that were funded primarily 
with soft money.
    The RNC started planning to transfer money for issue 
advertising to state parties as early as March 18, 1996. On 
that date, Curt Anderson wrote a memo to Haley Barbour entitled 
``Ballot Allocation of Target States,'' which states that ``any 
media we place in the target presidential states should be 
placed through state parties. The average ballot allocation in 
the top 17 target states is 37% federal--63% non-federal, this 
obviously contrasts very well with our 65% federal--35% non-
federal allocation.'' 28 The memo also establishes 
that state parties acted as mere conduits, exercising no 
independent judgment over the ads:

          Some have voiced concern that buying through the 
        state parties could result in a loss of control on our 
        part. There is absolutely no reason to be concerned 
        about this. As was demonstrated in our efforts recently 
        in the CA and OR special elections, our field staff is 
        fully able to insure that state parties make good on 
        any arrangement we make with them. This is simply a 
        book keeping hassle, but not in anyway [sic] a reason 
        not to proceed.29

    On May 24, a week after the media campaign began, RNC 
Finance Director Albert Mitchler wrote a memorandum stating 
that the RNC needed ``to raise $2 million, minimum, in soft 
money that has to be transferred to the CA State Party.'' 
30 Mitchler then stressed ``how critical it is that 
this money be raised and assigned as quickly as possible so 
that we can get on the air and stay on the air for the next 
three months.'' 31
    Unsigned RNC notes entitled ``Proposed media markets'' list 
18 states in which Dole/RNC issue ads were to be run, and then 
says:

          --cash flow chart needed from Sipple
          --can't buy week at a time
          --thru state parties--as much as possible transfers 
        32

The author of this memo is not known to this Committee because 
RNC employees refused to be deposed. However, the memo makes 
clear that there was a coordinated plan to run ads that would 
be paid for with as much soft money as possible. These ads 
would be paid for with corporate contributions and other 
contributions that exceeded the limits applicable to 
presidential campaigns. By making use of this practice, a 
presidential campaign, which is not permitted to accept soft 
money in any amounts, may coordinate advertising efforts to 
communicate its message and arrange to have the ads paid for 
with up to 65 percent in soft-money contributions.

           COORDINATION OF FUNDRAISING AND POLITICAL EFFORTS

    The Dole campaign actively assisted the RNC in the party's 
efforts to raise soft moneyto pay for the Dole/RNC issue-
advocacy campaign. Dole was personally involved in these fundraising 
efforts. From May 28, 1996 through August 6, 1996 alone, at least 25 
RNC soft-money fundraisers were held at which Dole made an 
appearance.33 The coordination of fundraising efforts is 
legally permissible--a candidate is permitted to raise money for his or 
her party that will be spent to aid the candidate's campaign. See 
Chapter 24.
    Scott Reed, the campaign manager for Dole for President, 
acknowledged that part of the Republican strategy in 1996 
included fundraising to help defray the cost of issue ads that 
would help Bob Dole. Reed said, ``We went out in April and May 
and raised $25 million for the party, of which about $17, $18, 
or $19 million was put into party building ads, which were Bob 
Dole in nature.'' 34 Tony Fabrizio, a Dole pollster, 
echoed Reed's statement: ``We were coming off a primary where 
we were flat broke . . . We had a candidate who was very 
sensitive to not having all of the money potentially available 
to him post-convention. So to say that [fundraising] wasn't a 
driving factor, especially since we put him out on the road to 
raise $25 or $30 million for the party, would be unfair.'' 
35
    Another way in which the Dole campaign and the RNC were 
intermeshed involved staffing. In March and April 1996, the 
Dole campaign reduced its staff from 230 to 67.36 
Many of those who left the Dole payroll, including long-time 
chief fundraiser Jo-Anne Coe, were hired by the RNC. Although 
these individuals technically reported to the RNC, their job 
duties continued to be to assist Senator Dole's campaign.
    In a March 29, 1996, memo, Haley Barbour explained the 
details of the shift of personnel from the Dole campaign to the 
RNC payroll. He stated that the RNC had asked ``a number of 
former DFP [Dole for President] employees and consultants'' to 
work for the RNC's Surrogate Division and Campaign Operations 
Division.37 The Surrogate Division, a part of 
Victory '96, organized the travel of Dole and his wife to RNC-
sponsored campaign events, and Barbour designated Jo-Anne Coe 
as the ``trigger person on travel requests'' for the 
Doles.38 Nine other former Dole staffers were placed 
in the RNC Surrogate Division to coordinate the Doles' 
travel.39
    As Senator Dole explained, the aim of Victory '96 was ``to 
keep running honest, hard-hitting issue advertising,'' that is, 
the Dole/RNC media campaign.40 In an April 18, 1996, 
conference call with major Republican donors, Nancy Brinker, an 
RNC fundraiser, admitted that the ``purpose of Victory '96 is 
to elect Bob Dole as the next president of the United States.'' 
41 Barbour stated that the RNC assigned these former 
Dole staffers to run all aspects of the Victory '96 program:

          Update Victory '96 plans in light of our having a 
        presidential nominee; in states with GOP governors, 
        solicit and include the ideas and plans of the governor 
        and his political operation in the state plan; solicit 
        and include the ideas and plans of Republican senators 
        and governors in the state plan; hammer out the updated 
        Victory '96 plan by May 15; assist in raising the 
        revenue necessary and recruiting the leadership and 
        manpower necessary to implement the plan in the state. 
        . . .42

    Thus, while on the RNC payroll, Dole staffers arranged 
Senator Dole's travel and ran the program used to fund the 
Dole/RNC media campaign. In his March 29, 1996, memo, Barbour 
tried to camouflage the integration of the Dole and RNC staffs 
by insisting that ``all former DFP staff who come to the RNC 
must report in fact as well as on paper to the RNC. . . .'' 
43 The facts, however, are to the contrary.
    Jo-Anne Coe, who had worked for Senator Dole for many 
years, supervised the Dole staffers who joined the RNC payroll. 
As Barbour indicated, former Dole staffers aided Coe in 
arranging Dole's travel schedule--while the staffers and Coe 
were supposedly working for the RNC. Coe also ran the Victory 
'96 program. In fact, in an April 11, 1996, memo, Coe outlined 
``a very aggressive plan to raise $14 million'' for Victory 
'96.44 The plan called for fundraising appeals 
``over the Bob Dole signature which worked so well for us in 
the campaign.'' 45 It also relied on donations from 
long-time Dole contributors, such as Phil 
Anschutz.46
    In the April 18, 1996, conference call with major 
Republican donors mentioned above, the RNC's Brinker succinctly 
characterized the relationship between the Dole campaign and 
the RNC: ``The Dole for President campaign and the RNC have 
been integrating our efforts for the past two weeks. All facets 
of the transition have been smooth from fundraising and 
political operations to communications.'' 47 Under 
Coe's direction, former Dole staffers who were on the RNC 
payroll ran every aspect of the bankrupt Dole for President 
campaign, from planning campaign events for Dole to raising 
money for a multimillion-dollar ad campaign designed to boost 
the senator's candidacy.
    Senator Dole and his longtime staffers were intimately 
involved in planning and coordinating the RNC's efforts to 
assist the Dole campaign and to raise the money for the RNC to 
pay for the extra expenses. From the beginning, it was 
understood that the RNC could, with Dole's assistance, raise 
millions of dollars in soft money and spend it on political 
activities, including advertising, that would advance the Dole 
candidacy with money that was not subject to the hard-money 
spending limits on the Dole campaign.

  DOLE FOR PRESIDENT AND THE RNC IMPEDED THE COMMITTEE'S INVESTIGATION

    There is strong documentary evidence that Dole for 
President and the RNC worked together to find ways around the 
federal spending limits for presidential candidates and the 
hard-money requirements for parties. The Minority sought to 
depose a number of individuals who had first-hand knowledge of 
these activities, including:
           Scott Reed, who managed the Dole campaign, 
        controlled the budget of the Dole/RNC issue-ad 
        campaign, and oversaw Victory '96; 48
           Albert Mitchler, RNC finance director, who 
        was deeply involved in Victory '96 and the transferring 
        money from the RNC to state parties; 49
           Curt Anderson, RNC director of campaign 
        operations, who helped plan the Dole/RNC media campaign 
        50 and who said that making ``The Story'' 
        television ad ``pass the issue advocacy test may take 
        some doing;'' 51
           Jo-Anne Coe, Dole's longtime chief 
        fundraiser and later the RNC deputy finance chairman, 
        who ran Victory '96 and supervised the Dole staffers 
        who joined the RNC payroll; 52
           Don Sipple, media adviser to both the RNC 
        and Dole for President, who produced many of the Dole/
        RNC issue ads; and
           Tony Fabrizio, a Dole pollster who helped 
        create and produce the Dole/RNC issue ads.53
    In August, the Minority asked Martin Weinstein, legal 
counsel to the RNC, to schedule depositions for Reed, Mitchler, 
Anderson and Coe. Weinstein assured the Committee that there 
was no need to issue subpoenas because all of his clients would 
appear for depositions voluntarily, as DNC witnesses had 
done.54 In September, however, Weinstein told the 
Committee that his clients would not agree to be deposed 
without subpoenas. The Minority immediately requested the 
issuance of subpoenas for Reed, Mitchler, Anderson, and Coe. 
The Chairman refused to subpoena Mitchler and Anderson 
55 but did agree to issue deposition subpoenas for 
Reed and Coe. Reed and Coe chose to defy the Committee's 
subpoenas. They asserted no legal justification for refusing to 
comply with the Committee's lawful subpoenas; they simply 
refused to be deposed.56
    The Committee also issued a deposition subpoena to Tony 
Fabrizio, who had helped prepare the Dole/RNC issue ads. 
Fabrizio did appear for a deposition, but he refused to answer 
any questions, including:
          Did the RNC engage in any illegal or improper 
        activities during the 1996 federal election campaign?
          Did the Dole campaign engage in any illegal or 
        improper activities during the 1996 federal election 
        campaign?
          Were the polls you conducted for the RNC in 1996 
        designed to test the strength of Bob Dole's candidacy?
          Did the Dole campaign design the polls you conducted 
        for the RNC in 1996?
          In June and July of 1996, did the RNC run any ads 
        that were designed to boost the presidential candidacy 
        of Bob Dole? 57
Like Coe and Reed, Fabrizio offered no legal justification for 
defying the Committee's deposition subpoena. Apparently, the 
RNC had much to hide on these issues.

                               CONCLUSION

    Dole for President and the RNC worked together closely, 
coordinated their efforts, and implemented creative plans to 
get around federal spending limits on presidential candidates 
who accept public funds and federal hard-money requirements for 
parties engaged in issue advocacy. The centerpiece of this plan 
was a multimillion-dollar media campaign that was run by the 
Dole for President committee, which wrote and produced the ads, 
and which worked with the RNC to raise the necessary funds. The 
media effort was funded primarily with RNC soft money 
transferred to state parties. The campaign's purpose was to 
promote the candidacy of Senator Dole. The Majority's refusal 
to investigate these activities and the failure of Republican 
witnesses to comply with deposition subpoenas are two more 
examples of the failure of the Committee to conduct a 
bipartisan investigation. The Republican Party was unwilling to 
cooperate with the Committee's investigation and kept the 
public from learning the truth about the activities of the Dole 
for President campaign and the RNC.

                               footnotes

    \1\ The DNC spent about $44 million on issue ads, while the RNC 
spent about $24 million on issue ads. See FEC filings; see also, for 
example, Annenberg Public Policy Center, ``Issue Advocacy Advertising 
During the 1996 Campaign: A Catalog,'' Report Series No. 16, 9/16/97, 
pp. 32, 53.
    \2\ Exhibit 2323M: Washington Post, 5/4/96.
    \3\ New York Times, 4/19/96.
    \4\ New York Times, 5/18/96.
    \5\ New York Times, 5/18/96.
    \6\ RNC Executive Council and Budget Committee Meeting minutes, 1/
17/96.
    \7\ RNC Executive Council and Budget Committee Meeting minutes, 1/
17/96.
    \8\ Exhibit 2324M: Memorandum from Haley Barbour to Republican 
Leaders, 3/5/96.
    \9\ Exhibit 2324M: Memorandum from Haley Barbour to Republican 
Leaders, 3/5/96.
    \10\ Exhibit 2324M: Memorandum from Haley Barbour to Republican 
Leaders, 3/5/96.
    \11\ RNC News Release, R 044102, 5/16/96.
    \12\ Memorandum from Haley Barbour to Curt Anderson and Ruthie 
Kistler, R 001687, 6/5/96.
    \13\ Washington Post, 5/26/96.
    \14\ Memorandum from Don Sipple to Haley Barbour and Scott Reed, R 
000445. The ad was ``a spot on the constellation of ethics problems 
facing Clinton and his administration.''
    \15\ Statement submitted for the record by Senator Bob Dole, 1/12/
98, p. 3.
    \16\ Richard Morris deposition, 8/20/97, p. 142.
    \17\ CNN Broadcast, 7/8/96 (text reprinted at http://
www.allpolitics.com /1996/news/9607/08/complaints.jackson/).
    \18\ Transcript of ``The Story.'
    \19\ Exhibit 2329M: Memorandum from Curt Anderson and Wes Anderson 
to Haley Barbour, 5/22/96, R 044639-41.
    \20\ Exhibit 2336M: Transcript ABC News Interview of Bob Dole, 6/6/
96.
    \21\ Memorandum from Don Sipple to Haley Barbour and Scott Reed, R 
000445 (emphasis added).
    \22\ Richard Morris deposition, 8/20/97, p. 142.
    \23\ Memorandum from Don Sipple to Haley Barbour and Scott Reed, R 
000445.
    \24\ Memorandum from Dave Hansen to Haley Barbour, 5/22/96, R 
044642-43.
    \25\ Exhibit 2329M: Memorandum from Curt Anderson and Wes Anderson 
to Haley Barbour, 5/22/96, R 44639-41.
    \26\ Exhibit 2329M: Memorandum from Curt Anderson and Wes Anderson 
to Haley Barbour, 5/22/96, R 44639-41.
    \27\ FEC Adv. Op. 1995-25.
    \28\ Memorandum from Curt Anderson to Haley Barbour, 3/18/96, R 
055196-97.
    \29\ Memorandum from Curt Anderson to Haley Barbour, 3/18/96, R 
055196-97.
    \30\ Exhibit 2372M: Memorandum from Al Mitchler to Howard Leach et 
al., 5/24/96, R 057192.
    \31\ Exhibit 2372M: Memorandum from Al Mitchler to Howard Leach et 
al., 5/24/96, R 057192 (emphasis in original).
    \32\ Notes, R 044659.
    \33\ Victory '96 Schedule of Events, R 1533-36, 1747-50, 2129-32.
    \34\ Campaign for President '96, p. 117.
    \35\ Campaign for President '96, p. 117.
    \36\ Exhibit 2323M: Washington Post, 5/4/96.
    \37\ Memorandum from Haley Barbour to Scott Reed, 5/29/96, R 17118-
21.
    \38\ Memorandum from Haley Barbour to Scott Reed, 5/29/96, R 17118-
21.
    \39\ Memorandum from Haley Barbour to Scott Reed, 5/29/96, R 17118-
21.
    \40\ Memorandum from Senator Dole to Haley Barbour, 6/3/96, R 1135.
    \41\ Notes of Team 100 Conference Call, Thursday, 4/18/96, R 49284-
87.
    \42\ Memorandum from Haley Barbour to Scott Reed, 5/29/96, R 17118-
21.
    \43\ Memorandum from Haley Barbour to Scott Reed, 5/29/96, R 17118-
21.
    \44\ Memorandum from Jo-Anne Coe to Haley Barbour, 4/11/96, R 3828.
    \45\ Memorandum from Jo-Anne Coe to Haley Barbour, 4/11/96, R 3828.
    \46\ On April 18, 1996, one week after Ms. Coe drafted her Victory 
'96 proposal, the Anschutz Corporation donated $250,000 to the 
Republican National Committee. FEC Records.
    \47\ Notes of Team 100 Conference Call, Thursday, 4/18/96, R 49284-
87.
    \48\ Memorandum from Haley Barbour to Curt Anderson and Ruthie 
Kistler, 6/5/96, R 001687.
    \49\ Exhibit 2372M: Memorandum from Al Mitchler to Howard Leach et 
al., 5/24/96, R 057192.
    \50\ Exhibit 2329M: Memorandum from Curt Anderson and Wes Anderson 
to Haley Barbour, 5/22/96, R 044639-41.
    \51\ Exhibit 2329M: Memorandum from Curt Anderson and Wes Anderson 
to Haley Barbour, 5/22/96, R 044639-41.
    \52\ Memorandum from Jo-Anne Coe to Haley Barbour, 4/11/96, R 3828; 
Memorandum from Haley Barbour to Scott Reed, 3/29/96, R 17118-21.
    \53\ Memorandum from Don Sipple to Haley Barbour and Scott Reed, 
cc: Tony Fabrizio, R 000445.
    \54\ Letter from Martin Weinstein to Majority and Minority Chief 
Counsels, 8/14/97.
    \55\ Chairman Thompson purported to issue a subpoena for Curt 
Anderson on September 19. The subpoena, however, asked Mr. Anderson to 
appear for a deposition on September 17--two days before the subpoena 
was served. The Minority asked for this error to be corrected, but it 
was not.
    \56\ Letter from Martin Weinstein to Majority Chief Counsel, 10/22/
97.
    \57\ Tony Fabrizio deposition, 9/22/97, p. 10; Tony Fabrizio 
deposition, 9/22/97, Exhibit 1: Questions Fabrizio refused to answer.





PART 6  ALLEGATIONS OF QUID PRO QUOS

Chapter 34: Overview and Legal Analysis

    Allegations concerning ``quid pro quos,'' or favors 
received from government officials in return for financial 
contributions, go to the heart of public concern over campaign 
finance. One of the most discouraging aspects of the present 
campaign finance system is that even public policy decisions 
undertaken in the utmost good-faith can take on an appearance 
of impropriety in the context of a system where so many of the 
individuals or entities likely to be affected by government 
actions are able to make the kind of large campaign 
contributions presently permitted by our system.
    It is instructive to note at the outset what some federal 
courts have stated as the underlying purpose of the bribery and 
illegal gratuities law, that is, to prevent the sale of better 
government services to those who can afford to pay for it:

          All sections of the bribery statute are aimed at 
        preventing the evil of allowing citizens with money to 
        buy better public service than those without money . . 
        . ``[e]ven if corruption is not intended by either the 
        donor or the donee, there is still a tendency in such a 
        situation to provide conscious or unconscious 
        preferential treatment of the donor by the donee, or 
        the inefficient management of public affairs.'' United 
        States v. Biaggi, 853 F.2d 89, 101 (2d Cir. 1988), 
        cert. denied, 109 S.Ct. 1312 (1989).

                             LEGAL ANALYSIS

    The primary consideration under federal criminal law would 
be the federal bribery statute. That statute provides criminal 
penalties for anyone who, directly or indirectly, corruptly 
offers to a public official something of value, or promises to 
give something of value to ``any other person or entity,'' with 
the intent to ``influence any official act.'' 18 U.S.C. 
Sec. 201(b)(1)(A). The statute also reaches the public official 
who corruptly seeks or agrees to receive something of value for 
himself or ``for any other person or entity'' in return for 
being influenced in any official act. 18 U.S.C. 
Sec. 201(b)(2)(A).
    The bribery statute requires that the thing of value being 
sought by the public official be ``in return for being 
influenced'' in the performance of any official act. This is 
part of the corrupt intent which is characteristic of a bribe. 
This element of the offense, that the thing of value sought or 
received is ``in return for being influenced'' in an official 
act, requires that there be some express or implied quid pro 
quo involved in the transaction. United States v. Arthur, 544 
F.2d 730, 734-735 (4th Cir. 1976); United States v. Brewster, 
506 F.2d 62, 72 (D.C. Cir. 1974). That is, the bribe must be 
shown to be the ``prime mover or producer of the official act'' 
performed or promised to be performed. Brewster, 506 F.2d at 
72, 82. So-called ``goodwill'' payments or general 
contributions, which are given to create a favorable atmosphere 
or feeling of gratitude in the recipient, or with the hope or 
expectation of some possible future, undefined benefit, but 
which are neither given nor received in the context of any 
express or implied agreement to perform some identified 
official act, that is, without a specific quid pro quo, are not 
considered ``bribes'' under the statute. Arthur, 544 F.2d at 
734, 735.

                     OVERVIEW OF FOLLOWING CHAPTERS

    As the preceding legal discussion demonstrates, a finding 
of an illegal quid pro quo requires much more than simply 
pointing out that an individual or entity made a campaign 
contribution some time before or after a government action was 
taken which benefitted that individual or entity. Instead, the 
Committee looked to the nature of the contacts between the 
contributors and the decision makers, whether the contributions 
were unique or singular in the history of the contributor at 
issue, and whether the decision or action at issue seemed 
unsupported by the facts. Unfortunately, many of the 
allegations of illegal quid pro quos leveled against Democratic 
contributors and fundraisers ignored these evidentiary issues 
in favor of simplistic and cynical interpretations of 
government decision making.
    On the final day of the Committee's hearings, Interior 
Secretary Babbitt, along with a former colleague who had 
unsuccessfully lobbied Secretary Babbitt to approve an Indian 
trust application for the purpose of building a casino near 
Hudson, Wisconsin, were called to testify about allegations 
that Interior's denial of the Hudson casino proposal was 
undertaken in response to political pressure brought to bear by 
opposing tribes who were also Democratic Party supporters. 
Significantly, the original allegations of improper political 
influence in this case were generated in the context of a 
still-unresolved lawsuit brought by the gaming interests who 
seek to run the casino in partnership with the Indians. 
Although much of the hearing was devoted to the particulars of 
a comment made to Eckstein at one point by Secretary Babbitt 
which referenced Harold Ickes, the Committee largely ignored 
the extensive evidentiary record it had created which found no 
evidence that Babbitt had played any role in the decision or 
that the Interior officials who did make the decision had any 
knowledge of either campaign contributions by the opposing 
tribes or alleged ``pressure'' from the White House or the DNC 
to deny the casino proposal. These simple points, along with 
the ample factual record that supported the merits of 
Interior's decision, did not receive sufficient attention.
    These same defenses were not available to Haley Barbour 
with respect to his vigorous advocacy of tobacco interests 
which donated millions of dollars to the Republicans during the 
1996 election cycle. The Committee's investigation uncovered 
detailed evidence of overtures Barbour made personally to 
Republican elected officials on behalf of tobacco interests. It 
is difficult to argue the merits of some of the pro-tobacco 
positions urged by Barbour and apparently impossible to do so 
with respect to the $50 billion tax credit granted to the 
tobacco interests as part of the 1997 budget bill due, in part, 
to Barbour's efforts. Barbour declined the Committee's 
invitation to explain these actions and, perhaps as a result, 
the Committee never found evidence that the contributions were 
made with the intent of effecting such a huge giveaway. 
Although the Committee's investigation did not uncover 
illegality on Barbour's part, the relationship between the 
Republican Party and monied tobacco interests is a prime 
example of the kind of story that feeds public disillusionment 
about our political system.
    Allegations of a quid pro quo arrangement were also 
levelled with respect to a $100,000 contribution made by the 
Cheyenne-Arapaho Tribes (the ``Tribes'') to the DNC in 1996. At 
the time the Tribes made their donation they were involved in a 
lobbying campaign to reacquire certain tribal lands in Oklahoma 
that had been taken by the Federal government. There was no 
evidence presented to the Committee, however, that anyone 
within the DNC or the Administration made any promises to the 
Tribes concerning the return of their lands in exchange for 
their contribution. Indeed, the President had supported 
legislation which would have assisted the Tribes in asserting 
their claim to the lands almost two years prior to the Tribes' 
contribution. The Tribes had also succeeded in obtaining access 
to officials in the appropriate federal agencies well before 
their contribution. There has been no evidence presented to the 
Committee that any official in a decision-making capacity with 
respect to these lands was even aware of the Tribes' 
contribution.
PART 6  ALLEGATIONS OF QUID PRO QUOS

Chapter 35: Secretary Babbitt and the Hudson Casino

    On October 30, 1997, the Committee took testimony from 
Secretary of the Interior Bruce Babbitt and Paul Eckstein, an 
attorney-lobbyist from Phoenix, Arizona. Eckstein is a former 
law school classmate and law partner of Secretary Babbitt's. At 
issue was the July 14, 1995, decision by the Department of the 
Interior (``Interior'') denying the request of three northern 
Wisconsin Indian tribes that the United States take land in the 
western Wisconsin city of Hudson ``into trust.'' The tribes 
made this request to enable them and their partner, Galaxy 
Gaming, Inc., to open a casino at a failing greyhound track 
owned by Galaxy Gaming that was located on the proposed trust 
site. Eckstein, hired as a lobbyist for the applicants, spoke 
with Secretary Babbitt concerning the trust application on 
several occasions between April and July 1995, including a 
conversation with Babbitt on July 14, 1995--the day Interior 
issued the decision denying the application. During that 
conversation, according to Eckstein, Secretary Babbitt declined 
to delay the issuance of the decision because Deputy White 
House Chief of Staff Harold Ickes had instructed him to issue 
the decision that day. During his testimony before the 
Committee, Secretary Babbitt sought to explain apparent 
contradictions between accounts he had given of this 
conversation in two separate letters to Sen. McCain and 
Chairman Thompson. On February 11, 1998, Attorney General Reno 
petitioned for the appointment of an independent counsel to 
investigate whether Secretary Babbitt ``committed a violation 
of federal criminal law in connection with his sworn 
testimony'' before this Committee.\1\
---------------------------------------------------------------------------
    Footnotes at end of Chapter 35.
---------------------------------------------------------------------------

                                FINDINGS

    (1) The evidence before the Committee supports the 
conclusion that Secretary Babbitt did not act improperly with 
respect to the Department of Interior's decision to deny the 
Hudson trust application. The evidence shows that Secretary 
Babbitt played no role in the Hudson trust decision, that he 
did not hear from, or talk to, Harold Ickes about the decision, 
and that the Interior officials who recommended denying the 
trust application had no knowledge of either campaign 
contributions by the opposing tribes or the alleged 
``pressure'' from the White House or the DNC to deny the trust 
application.
    (2) However, Secretary Babbitt's actions with respect to 
Eckstein, his letters to Senators McCain and Thompson, and his 
testimony to this Committee regarding his conversations with 
Eckstein were confusing. Secretary Babbitt's letter to Senator 
McCain omitted the fact that Secretary Babbitt had invoked 
Ickes' name to Eckstein even though that allegation was at the 
center of Senator McCain's earlier letter to Secretary Babbitt. 
The Secretary's subsequent letter to Senator Thompson 
acknowledged that he did invoke Ickes' name with Eckstein, but 
said that he did so only as a means to terminate his 
conversation with Eckstein. Secretary Babbitt then testified to 
this Committee that, even though he had not spoken to Ickes 
about the trust application, he did not technically mislead 
Eckstein when invoking Ickes' name because the White House 
naturally wanted him to issue decisions in a timely way. These 
statements, when taken together, are confusing, but they are 
not directly inconsistent with the facts.

                                OVERVIEW

    The St. Croix Meadows Greyhound Racing Track (``the dog 
track'') is located in Hudson, Wisconsin, a small city near the 
border of Wisconsin and Minnesota, approximately 25 miles east 
of Minneapolis. Three northern Wisconsin Indian tribes, the Lac 
Courte Oreilles Chippewa, the Red Cliffe Chippewa, and the 
Sokaogon Chippewa, and their partner, Galaxy Casinos, Inc., 
formed the Four Feathers Casino Joint Venture (``Four 
Feathers'') in early 1993 in order to open a gaming facility at 
the dog track. The Lac Courte Oreilles Chippewa reservation, 
located 85 miles from the greyhound racetrack, is the closest 
of the three tribes' reservations to Hudson.
    In November 1994, the partnership gained the recommendation 
of the Minneapolis regional office of the Bureau of Indian 
Affairs (``BIA'') that the Interior Department take the dog 
track into trust on behalf of the three tribes and approve the 
opening of a casino at the dog track. However, the Washington 
headquarters of BIA, after performing further evaluation of the 
proposal, recommended that this request be denied. Pursuant to 
the recommendation of BIA's gaming staff, Deputy Assistant 
Secretary for Indian Affairs Michael Anderson denied the 
request in a letter dated July 14, 1995.
    Four Feathers subsequently filed suit in U.S. District 
Court in the Western District of Wisconsin, claiming that the 
request that the dog track be taken into trust was denied by 
Interior because of ``improper political pressure'' placed on 
the department by White House Deputy Chief of Staff Harold 
Ickes, DNC Chairman Donald Fowler, and others closely connected 
to the national Democratic Party.

            secretary babbitt's remarks to lobbyist eckstein

    The primary evidence of supposed political ``interference'' 
in Interior's decision to deny the Hudson casino proposal are 
remarks attributed to Secretary Babbitt by Eckstein during the 
course of a last-ditch, unsuccessful appeal by Eckstein for 
Interior to delay the issuance of its denial letter. Given the 
issues that have been raised concerning the timing of some of 
Eckstein's revelations and the consistency of Secretary 
Babbitt's statements, the history of how these allegations came 
to light merits close scrutiny.

Eckstein's affidavit

    During the course of the litigation, the tribes filed a 
motion to expand discovery beyond the administrative record 
compiled by Interior, arguing that the evidence of improper 
political pressure justified plaintiffs' request for discovery 
into the reasons for Interior's decision. In support of that 
motion, the tribes filed the affidavit of Paul Eckstein, a 
lawyer-lobbyist hired by the tribes who recounted his 
involvement in the Hudson casino matter in extensive detail. 
Included in this affidavit was the allegation that Secretary 
Babbitt told him on the day the application was rejected ``that 
the decision could not be delayed because Presidential Deputy 
Chief of Staff Harold Ickes had called the Secretary and told 
him that the decision had to be issued that day.'' 2

Secretary Babbitt's letter to Senator McCain

    Notwithstanding these allegations, the U.S. District Court 
denied the applicants' request to take discovery outside the 
administrative record. The Wall Street Journal published an 
article on July 12, 1996, reporting on the contents of 
Eckstein's affidavit concerning the Ickes comment and the 
plaintiffs' allegations that the Interior Department denied the 
Hudson casino application because of White House pressure. 
After reading the Wall Street Journal article, Senator John 
McCain, Chairman of the Indian Affairs Committee, wrote to 
Secretary Babbitt to ask him about the veracity of the 
allegations contained in the article.3 Specifically, 
Senator McCain asked Secretary Babbitt whether it was true 
``that you told Eckstein that Ickes had called you and told you 
the decision in favor of Mr. O'Connor's client tribes had to be 
issued that day without delay. ''4 Secretary 
Babbitt, in a letter dated August 30, 1996, responded to that 
specific inquiry as follows:

          I must regretfully dispute Mr. Eckstein's assertion 
        that I told him that Mr. Ickes instructed me to issue a 
        decision on this matter without delay. I never 
        discussed the matter with Mr. Ickes; he never gave me 
        any instructions as to what this Department's decision 
        should be, nor when it should be made.5

Eckstein's deposition

    In his deposition to this Committee on September 30, 1997, 
Eckstein significantly expanded on his affidavit testimony 
concerning his July 14 conversation with Secretary Babbitt. 
Specifically, Eckstein alleged that at the end of their July 
14, 1995, conversation, he objected to a letter that he had 
seen from Patrick O'Connor, a lobbyist representing neighboring 
tribes opposed to the Hudson casino, to Harold Ickes. This 
letter requested assistance in receiving an unredacted copy of 
an Arthur Andersen report commissioned by the tribal applicants 
which found that the proposed casino would have no adverse 
financial impact on the neighboring tribes with existing 
casinos. In addition, the letter alleged, incorrectly, that the 
greyhound race track on the proposed trust site was owned by a 
Buffalo, NY company called Delaware North, which supposedly 
enjoyed the support of Senator Alfonse D'Amato (R-
N.Y.).6 The letter also mentioned that the leader of 
one of the applicant tribes was active in Republican party 
politics and that the opposing tribes had been financial 
supporters of the DNC and the 1992 Clinton-Gore 
campaign.7 Eckstein recalled that he objected to the 
contents of the letter, specifically the allegations concerning 
Delaware North and the party affiliation of the chairman of the 
lead applicant tribe.8 Although Secretary Babbitt 
did not indicate to Eckstein that he had seen the O'Connor 
letter, Eckstein claimed that at some point after he raised the 
issue of the O'Connor letter, Secretary Babbitt asked him 
rhetorically, ``Do you know how much . . . `these tribes' . . . 
had contributed to either the Democratic party or Democratic 
candidates or the DNC.'' Eckstein alleges that Secretary 
Babbitt then answered his own rhetorical question by remarking, 
``Well, it's on the order of half a million dollars, something 
like that.'' 9

Secretary Babbitt's Letter to Chairman Thompson

    On October 8, approximately one week after Eckstein's 
deposition, Eckstein's confidential deposition testimony 
concerning the remarks attributed to Secretary Babbitt were the 
subject of news reports by the Minneapolis Star Tribune, the 
Wisconsin State Journal and the NBC Nightly News.
    In response to the request of the Committee that he submit 
to a deposition, Secretary Babbitt wrote to Chairman Thompson 
and explained that he would not appear for a deposition due to 
press leaks of the Eckstein deposition but that he was willing 
to testify voluntarily before the Committee. Secretary Babbitt 
reiterated in this letter that Ickes never instructed him in 
any way on the Hudson matter and offered the following 
elaboration on his earlier statement to Senator McCain 
concerning his conversation with Eckstein:

          I do believe that Mr. Eckstein's recollection that I 
        said something to the effect that Mr. Ickes wanted a 
        decision is correct. Mr. Eckstein was extremely 
        persistent in our meeting, and I used this phrase 
        simply as a means of terminating the discussion and 
        getting him out the door. It was not the first time 
        that I have dealt with lobbyists by stating that the 
        Administration expects me to use my good judgment to 
        resolve controversial matters in a timely fashion, nor 
        do I expect it to be the last.10

Secretary Babbitt's Hearing Testimony

    During his hearing testimony, Secretary Babbitt 
consistently disputed two key elements of the ``Ickes comment'' 
attributed to him by Eckstein. First, Secretary Babbitt denied 
ever making a reference to Ickes ``instructing'' or 
``ordering'' him to do anything with respect to the Hudson 
casino proposal. More substantively, Secretary Babbitt denied 
ever speaking with ``Harold Ickes or anyone else at the White 
House'' or with ``Donald Fowler or anyone else at the 
Democratic National Committee'' concerning the Hudson casino 
proposal.11 Instead, Secretary Babbitt allowed that 
he may have made a reference to Ickes, who was the Department's 
point of contact with the White House on many matters, as 
``wanting'' or ``expecting'' prompt action on the Hudson casino 
proposal. Secretary Babbitt explained that his general 
references to Ickes' expectations was meant to convey to 
Eckstein that ``this decision has got to be made. It is 
overdue, and now is the time to make it.'' 12 
Secretary Babbitt testified that he hoped the reference to 
Ickes would allow him to end the discussion and ``express in a 
way some sympathy toward his point of view.'' 13 
Although Secretary Babbitt testified that he had had no 
contacts with Ickes concerning the Hudson casino matter, he 
disagreed with the suggestion that his general reference to 
Ickes misled Eckstein, arguing that ``I think it's fair to say 
that my superiors expect me to make decisions.'' 14
    Second, Secretary Babbitt denied that he ever characterized 
Ickes' generic expectations of Interior to include issuance of 
a denial of the Hudson casino proposal on the day of his 
conversation with Eckstein. The following colloquy between 
Chairman Thompson and Secretary Babbitt captures the two 
essential points of Secretary Babbitt's differences with 
Eckstein:

    Secretary Babbitt. [I]t is my recollection that I may well 
have said to him, Mr. Ickes expects me to make a decision or 
Mr. Ickes wants me to make a decision.

           *         *         *         *         *

    Chairman Thompson. Could you have said that Mr. Ickes 
wanted you to make the decision that very day?
    Secretary Babbitt. No, sir.
    Chairman Thompson. You definitely remember you did not say 
that?
    Secretary Babbitt. I do, and I represented that much in my 
letter to Senator McCain.15

Secretary Babbitt was definite in his recollection that, 
although he might have generally suggested that Ickes 
``wanted'' or ``expected'' a decision to be issued ``promptly'' 
or ``without delay,'' he would not have told Eckstein that 
Ickes wanted a decision on that particular day. This is 
unsurprising in light of Secretary Babbitt's testimony that he 
never discussed the matter with Ickes, therefore making it 
impossible for Ickes to suggest a particular date for the 
decision. When Senator Collins reformulated Thompson's inquiry 
to ask whether Secretary Babbitt's general reference to Ickes 
might have been to the effect that Ickes had ``instructed'' 
Secretary Babbitt to promptly deny the trust application, 
Secretary Babbitt again denied that he could have made any 
reference to an ``instruction'' from Ickes.

    Secretary Babbitt. I think my response to Senator McCain to 
this question, were there--did you have communications with the 
White House or Harold Ickes, and the response is I dispute any 
assertion that there were such contacts or instructions because 
there were not.
    Senator Collins. I agree that your letter clearly says that 
there was not contact for Mr. Ickes, but it also clearly says, 
``I must regretfully dispute Mr. Eckstein's assertion that I 
told him that Mr. Ickes instructed me to issue a decision in 
this matter without delay.''
    Secretary Babbitt. . . . I didn't tell Mr. Eckstein that.
    Senator Collins. . . . What part isn't true? The ``without 
delay'' part? Secretary Babbitt: I did not tell Mr. Eckstein 
that Mr. Ickes had instructed me to make a 
decision.16

    Secretary Babbitt defended the accuracy of his response to 
Senator McCain's inquiry about his conversation with Eckstein, 
pointing out that Senator McCain's main concern was whether 
Harold Ickes had given him instructions concerning the Hudson 
casino matter. Secretary Babbitt responded to Senator McCain's 
specific inquiry by stating that he had never told Eckstein 
that Ickes had instructed him to issue a decision that day. 
Secretary Babbitt's letter immediately goes on, however, to 
specifically address the underlying issue of improper political 
pressure from the White House on a pending policy matter. ``I 
never discussed the matter with Mr. Ickes; he never gave me any 
instructions as to what this Department's decision should be, 
nor when it should be made.'' 17 Secretary Babbitt's 
testimony confirms that his focus in responding to Senator 
McCain's inquiry was the contention that the White House had 
directed Interior to deny the Hudson casino proposal.
    Part of the confusion surrounding Secretary Babbitt's 
statements arises from the fact that, in his letter to 
Thompson, he stated that he believed Eckstein's recollection to 
be ``correct,'' whereas he had ``regretfully dispute[d]'' 
Eckstein's statements in his letter to Senator McCain. 
Secretary Babbitt's letter to Thompson characterizes Eckstein's 
recollection very broadly, however, as ``something to the 
effect that Mr. Ickes wanted a decision.'' 18 The 
substance of the statements contained in the two letters are 
consistent. In the first letter to McCain, Secretary Babbitt 
denied a specific allegation that he told Eckstein that Ickes 
had instructed him to issue a decision that day. In the second 
letter to Thompson, Secretary Babbitt confirms that Ickes did 
not direct him to issue a decision but offers his recollection 
of what was actually said by him with reference to Ickes. As 
Secretary Babbitt testified, ``I believe those statements are 
consistent. They both reflect my best recollection of what I 
said and what I didn't say.'' 19 Nevertheless, 
Secretary Babbitt might have avoided creating the initial 
confusion if the more expansive account of his reference to 
Ickes had been offered in response to Senator McCain's original 
inquiry.

                         eckstein's allegations

    Secretary Babbitt testified that he had no recollection of 
any discussions with Eckstein concerning the O'Connor letter or 
campaign contributions by the Indian tribes as alleged by 
Eckstein.20 The first time Eckstein alleged on the 
record that Secretary Babbitt had commented during their July 
14, 1995, meeting about campaign contributions was in his 
deposition before the Committee on September 20, 1997. This was 
more than two years after Interior's denial of the Hudson 
application. During that two-year period, Eckstein's client had 
filed suit in federal court claiming that the denial decision 
was politically influenced. To prove political influence, 
Eckstein's client filed a motion for discovery, which motion 
was supported in large part by an affidavit from Eckstein 
describing his conversation in July 1995 with Secretary 
Babbitt.21 Nowhere in that affidavit does Eckstein 
mention the alleged comment by Secretary Babbitt about campaign 
contributions.22 Nor did Eckstein seek to amend his 
affidavit to include such allegations even when U.S. District 
Judge Barbara Crabb denied the initial motion.
    Senator Richard Durbin questioned Eckstein on this failure 
to include the contributions statement in his affidavit and 
underlined the difficulty faced by the Committee in reconciling 
Eckstein's allegations with his affidavit.23

          Here you are, the attorney for the losing Indian 
        tribes in this case. They are now going to court to try 
        to reverse the Department's decision. You have joined 
        in an effort to help them by signing a sworn affidavit, 
        and you leave out one of the most critical questions 
        and pieces of evidence that's being considered by this 
        Committee.'' 24

Eckstein testified in his deposition that he did not include 
any reference to Secretary Babbitt's alleged comment about 
campaign contributions by the tribes in his affidavit to the 
court because ``I didn't want to put it in.'' 25
    The Minority could find no credible evidence that Eckstein 
ever told anyone off the record about Secretary Babbitt's 
alleged campaign contributions comment prior to his deposition 
before the Committee. Eckstein claimed that he told casino 
publicist Mark Goff about the alleged comment immediately after 
Eckstein's July 14 meeting with the Secretary.26 And 
Eckstein claims he also may have told former Congressman Jim 
Moody, another lobbyist for the tribes, as well as Fred 
Havenick, the head of Galaxy Gaming.27 But despite 
two years of comments by both sides about the case to the 
press, the Minority could find no public comment by anyone, 
including Goff, Moody and Havenick that ever mentioned the 
alleged contributions comment by Secretary 
Babbitt.28 In fact, when Eckstein's deposition was 
leaked to the news media in October 1997, Goff was quoted as 
stating, ``We consider this report to be the biggest piece of 
news in two years.'' 29 During their investigation, 
the Majority did not take the sworn testimony of Goff, Moody or 
Havenick. And in an interview with Committee staff, George 
Newago, the former chairman of one of the applicant tribes, 
stated that he had never heard about Secretary Babbitt's 
alleged comments concerning contributions prior to October 
1997.30 These facts call into question Eckstein's 
credibility on the other matters to which he testified. As 
Senator Torricelli pointed out, these circumstances engender 
considerable skepticism about the veracity of this part of 
Eckstein's testimony:

          [T]his Committee really is left with nothing other 
        than . . . Babbitt's failure to recollect it and a 
        recollection which seems to have come to you without 
        any contemporaneous affirmation for a considerable 
        period of time. . . . I think you'd have to concede to 
        me that [given the evidence] . . . you would at least 
        be very unclear about the state of the circumstances . 
        . .31

The Justice Department's preliminary investigation into these 
allegations confirmed that ``Eckstein's allegations that 
Secretary Babbitt commented about Indian contributions was 
first made public in October, 1997, more than two years after 
the conversation occurred.'' 32 Although Attorney 
General Reno eventually petitioned for the appointment of an 
independent counsel to investigate Secretary's Babbitt's 
account of his reference to Harold Ickes, the Justice 
Department's investigation ``developed no evidence that 
Secretary Babbitt testified falsely when he stated that he does 
not recall whether he commented that Indian tribes had 
contributed approximately half a million dollars to the 
Democratic National Committee or other entities.'' 
33 Attorney General also concluded that ``no further 
investigation is warranted with respect to the perjury in 
connection with Secretary Babbitt's stated failure to recall 
his alleged comment about political contributions by Indian 
tribes.'' 34

                       eckstein's interpretation

    Even if Eckstein's allegations are fully credited, Eckstein 
himself did not understand the comments he ascribed to 
Secretary Babbitt to signify that the casino proposal had been 
denied due to political pressure from the White House or the 
DNC. Specifically, Eckstein testified that he did not 
understand Secretary Babbitt's reference to Ickes's desire for 
a prompt decision during their July 14, 1995, meeting to mean 
that the White House had directed Interior as to the substance 
of the Hudson decision.35 Instead, Eckstein 
testified that his understanding of the comments he ascribed to 
Secretary Babbitt was that the White House had, at the most, 
pressured Interior as to the ``timing'' of the issuance of the 
decision.36 Likewise, when pressed for his 
understanding of the remarks concerning contributions by Indian 
tribes which Eckstein ascribed to Secretary Babbitt, Eckstein 
testified that he did not interpret the remark to suggest that 
contributions by the tribes opposing the application had 
determined the outcome of the agency's decision.37

        secretary babbitt and lobbyists for the opposing tribes

    O'Connor, one of the lobbyists for the opposing tribes, has 
testified that, while he has met Secretary Babbitt on several 
occasions and has spoken with him concerning other matters 
during his tenure as secretary, they never spoke about the 
Hudson casino.38 Secretary Babbitt corroborated this 
recollection in his hearing testimony.39
    Secretary Babbitt also testified that he does not recall 
ever seeing the May 8, 1995, letter O'Connor sent to Harold 
Ickes urging support for his clients' position until well after 
the July 14, 1995, decision was rendered.40 John 
Duffy also does not recall seeing the O'Connor letter prior to 
commencement of the federal court litigation in Wisconsin in 
the fall of 1995.41 Documents produced by Interior 
confirm that they did not receive the letter until November 9, 
1995, when an assistant U.S. attorney from the Western District 
of Wisconsin faxed the letter to the Office of the Secretary, 
following commencement of the litigation.42
    O'Connor's sole contact with the Department of the Interior 
occurred in March 1995, when he met with Secretary Babbitt's 
chief of staff, Tom Collier, and John Duffy's special 
assistant, Heather Sibbison. Sibbison, who did not recall 
O'Connor's name, said she and Collier met with a lobbyist who 
requested that Interior delay its decision until the opponents 
of the Four Feathers project could submit an economic impact 
study demonstrating the detrimental impact the Hudson casino 
would have on their tribes.43 Collier recalled that 
he was asked to attend the meeting at the last 
minute.44 He also recalled that O'Connor's major 
concern was that Interior delay the decision until after his 
clients could submit their report,which would be by the end of 
April 1995. Collier testified that--either when O'Connor was still in 
the room, or directly after he left--Collier called the Indian Gaming 
Management Staff office to ask about O'Connor's request. A staff member 
said that the office would not reach its decision until after the end 
of April, and thus the office did not object to keeping the record open 
for additional public comment until that time.45
    No career or political appointees from Interior recall any 
further meetings or telephone conversations with O'Connor or 
any of his lobbying partners concerning the Hudson casino 
matter after the March 1995 meeting between Collier, Sibbison, 
and O'Connor. The only request made by the tribes opposing the 
casino proposal was that they be allowed to submit additional 
comments concerning the detrimental impact the proposal would 
have on their on-reservation casinos that employ hundreds of 
Native Americans. Interior's accommodation of this request was 
entirely appropriate and consistent with Departmental 
procedures. In summary, Secretary Babbitt met personally only 
with the supporters of the Hudson casino proposal and never met 
once with the lobbyists hired by the casino's opponents.

                        ROLE OF THE WHITE HOUSE

    Much has been made of the allegation that the White House 
directed Interior to deny the Hudson application at the urging 
of lobbyists for the tribes and the DNC. However, the Minority 
found no evidence that White House personnel attempted to 
influence the timing or substance of Interior's decision in 
this matter. Instead, the only contacts between the White House 
and Interior concerning the Hudson casino proposal were status 
reports relayed from Interior staffers to junior White House 
staffers.

Lobbyist contacts with Harold Ickes

    O'Connor and his lobbying colleagues did make numerous 
attempts to convince Ickes to get involved in advocating on 
behalf of the opponents of the Hudson casino. First, Ickes and 
O'Connor apparently exchanged several telephone messages on 
April 25 and 26, 1995, but O'Connor testified that they never 
actually spoke with one another during that 
period.46 Ickes testified that, to his recollection, 
he never met with O'Connor nor any representatives of the 
tribes.47 Next, O'Connor, his Native American 
colleague Larry Kitto, and several tribal leaders met with DNC 
Chairman Fowler on April 28, 1995, and told him about their 
concerns about the Hudson proposal.48 As a result, 
Fowler said he talked to Ickes on the telephone about the 
tribes' concerns and wrote Ickes a follow-up memo concerning 
what these ``DNC supporters'' had emphasized in their 
meeting.49
    Patrick O'Connor followed up Fowler's efforts with his own 
letter to Ickes, dated May 8, 1995, in which he unjustifiably 
claimed that the Hudson casino proposal was a partisan wedge 
issue in which Democrats opposed the proposal, and Republicans 
favored it.50 In addition, one of O'Connor's 
Washington-based law partners, Tom Schneider, mentioned 
O'Connor's concerns regarding Hudson to Ickes at a DNC 
fundraiser on May 14, 1995, and Schneider said Ickes told 
Schneider, ``I'll follow through on it.'' 51
    O'Connor's datebook entries corroborate that he was 
unsuccessful in scheduling a White House meeting to present his 
clients' concerns. Entries for May 15, 17, 19, and 24 indicate 
that O'Connor's clients asked him about setting up a meeting 
with Ickes on each of those dates.52 The datebook 
reflects that, on the evening of May 24, O'Connor attended an 
event for the Vice President at which he mentioned to Peter 
Knight, a lobbyist and former campaign manager for then-Senator 
Al Gore in 1992, and David Strauss, Vice President Gore's 
deputy chief of staff, his problems with the Hudson 
casino.53 On June 6, 1995, the datebook also 
reflects that he mentioned to Clinton/Gore Finance Chair Terry 
McAuliffe that he wanted to set up a meeting with 
Ickes.54
    The failure of O'Connor to arrange a meeting with Ickes is 
not surprising, given the memo sent to Ickes by Loretta Avent 
of the White House Office of Intergovernmental Affairs on April 
24, 1995. In this memo, Avent, who handled relations with 
Indian tribes for the White House, recounted that she had been 
contacted that day by Bruce Lindsey concerning why she hadn't 
returned a telephone call from Patrick O'Connor. In her memo to 
Ickes, Avent emphasized that it was White House policy not to 
communicate with lawyers or lobbyists for Indian tribes but 
rather to deal directly with the tribal chairpersons as 
governmental leaders. She emphasized that, because Indian 
gaming is an area rife with controversy, it was best for the 
White House to stay as far as possible from involvement with 
the issue.55

White House requested status report from Interior

    Shortly thereafter, Ickes asked Jennifer O'Connor, a staff 
assistant, to find out the status of the Hudson casino 
issue.56 Jennifer O'Connor wrote a memorandum to 
Ickes on May 18, 1995, in which she reported that Interior was 
in the process of making a decision and that the application 
was likely to be denied. Ickes testified that it was his 
responsibility to become aware of issues in a particular 
inquiry and then make a decision about whether he should become 
involved. When Ickes found out that Interior was handling the 
matter, he testified that ``the best of my recollection is I 
think that was the end of it as far as my office was 
concerned.'' 57
    Jennifer O'Connor testified that she contacted the office 
of John Duffy and spoke with Heather Sibbison, Duffy's special 
assistant; she has no recollection of speaking with anyone else 
at Interior concerning the status of the Hudson 
casino.58 Ms. O'Connor testified that, whenever she 
made a status inquiry of an agency about a policy matter, she 
would start ``with a disclaimer that roughly said, you know, 
I'm looking for a status, I don't want you to tell me anything 
I'm not supposed to know, I don't want to influence anything, 
so just tell me what you can about this issue.'' 59 
She recalled Sibbison's comments as follows:

          And she sort of explained the context of it, that a 
        tribe wanted the Department of the Interior to approve 
        their ability to turn a dog track into a casino, and 
        that the community where the dog track was [located] 
        was pretty universally united against it and that they 
        were in the process of making a decision on it and 
        hearing from members of Congress and community leaders 
        and governors, and you name them, everybody seemed to 
        have an opinion on it; and that the department was not 
        yet done with its decision-making process, but she--it 
        was her personal opinion that based on all of the 
        negative information they were getting from communities 
        that they were most likely going to eventually deny it. 
        And I think she told me that none of this was public. I 
        think that's about the extent of the 
        conversation.60

    Jennifer O'Connor wrote a May 18, 1995, memo to Ickes that 
summarized the status of the Hudson casino issue at the 
Interior Department. She verified in her deposition that the 
information must have come about as a result of the 
conversation she remembers having with Sibbison.61 
In the memo, O'Connor states that the Interior staff had met on 
the issue ``last night'' and had come up with a preliminary 
decision to deny the application. According to this memo, 
Interior's decision was likely to be based upon the following 
factors:
           the applicant tribes' existing reservations 
        were located far from the proposed casino site;
           the local officials in Hudson and the local 
        (Republican) Congressman Gunderson opposed the project 
        based upon concerns that it would have an adverse 
        impact on the local community;
           the Minnesota congressional delegation 
        opposed it because of the negative impact upon on-
        reservation gaming facilities of tribes located near 
        Hudson in eastern Minnesota; and
           ``It is likely that a decision to approve 
        this proposal would result in a spotlight being shone 
        on the Indian Gaming Regulatory Act, which is under 
        some legislative pressure at the moment. The Department 
        wants to avoid this kind of negative attention to the 
        Act.''
The memorandum reflects that Interior staff were aware of the 
possible influence of the ``bigger lobbyists'' of the wealthier 
tribes influencing the process, but thought that such concerns 
did not negate ``the uniform opposition from the local 
community.'' The bottom line is a status report: ``the 
Department is reviewing the comments received during the 
comment period which ended April 30. It has committed to making 
a final decision within a month.'' 62

White House requested second status report from Interior

    A fax sent from Patrick O'Connor to Ickes's office on June 
1, 1995, attached a newspaper article from a Madison, 
Wisconsin, newspaper discussing another Wisconsin dog track 
near Madison that was being purchased for conversion to an off-
reservation Indiancasino.63 In his fax cover sheet, 
O'Connor made the point that allowing the Hudson casino to go forward 
would be a bad precedent concerning off-reservation casinos, as was 
indicated by the fact that other tribes were going forward with similar 
proposals right in Wisconsin.64 Jennifer O'Connor did not 
recall reading the article attached to this fax.65 She did 
recall John Sutton, a staff person in Ickes's office, passing the fax 
cover sheet to her and asking if she wanted to meet with Patrick 
O'Connor.66 Ms. O'Connor testified that she never met with 
Patrick O'Connor at any time.67 Ms. O'Connor subsequently 
asked an intern in her office, David Meyers, to call Sibbison to find 
out whether Interior had announced a decision concerning the 
casino.68
    Meyers contacted Sibbison and wrote a memo to Jennifer 
O'Connor on June 6, 1995, recounting the conversation between 
himself and Sibbison. He confirmed that Interior would make an 
announcement concerning the Hudson matter in the next two weeks 
and that the department was 95 percent certain that the 
application would be turned down.

          She [Sibbison] explained that there is significant 
        local opposition. Much of the opposition, however, is a 
        by-product of wealthier tribes lobbying against the 
        application. Therefore, they still want to receive 
        public comment in making a fair determination regarding 
        the application. . . . [S]he stated that they will 
        probably decline without offering much explanation, 
        because of their ``discretion'' in this matter. She 
        asked that if you have any feedback please call her 
        with your thoughts.69

Ms. O'Connor was confident that she never shared her thoughts 
on the issue with Sibbison, stating, ``I had no need to because 
they were about to make a decision, they were about to turn it 
down. I had no reason to think there was anything wrong with 
that.'' 70

White House and Interior confer on response to congressional inquiry

    On June 26, 1997, Jennifer O'Connor faxed to Heather 
Sibbison a copy of a June 12 letter from Minnesota's Democratic 
congressional delegation to Ickes opposing the trust 
acquisition, explaining the grounds for their opposition, and 
asking him to explain their concerns to Secretary 
Babbitt.71 The accompanying fax sheet contains, Ms. 
O'Connor requests that Sibbison ``[p]lease have someone draft a 
response.'' 72 On June 27, 1995, Sibbison faxed Ms. 
O'Connor draft responses.73 The accompanying cover 
memo from Sibbison to O'Connor explained that, in light of the 
fact that the Department's decision to deny the trust 
acquisition proposal might be made later that week, Sibbison 
drafted two letters.74 The first draft could be sent 
immediately acknowledging the concerns expressed by the 
congressional delegation and advising them that the issue was 
still under consideration.75 The other draft 
contemplated that the decision denying the application had 
already been released and simply advised the congressional 
delegation of that fact.76 O'Connor's recollection 
of her response, which is supported by a note she wrote on the 
cover page of Sibbison's return fax, was that she decided to 
send neither letter and simply asked Interior to respond on 
behalf of the White House.77
    In summary, when Jennifer O'Connor first contacted 
Secretary Babbitt's office on behalf of Ickes, Heather Sibbison 
told her that Interior was likely to deny the application, and 
Ms. O'Connor's contemporaneous memo demonstrates that the 
reasons for denial that Sibbison referred to were similar to 
those actually used by Michael Anderson in his July 14, 1995 
denial letter. Subsequent contacts between the White House and 
Interior were routine and non-substantive. There is no evidence 
that the White House influenced the substance of the decision.

Other Interior and White House contacts

    Secretary Babbitt testified that he had no contact with any 
White House staff, elected officials, or DNC personnel 
concerning the Hudson casino proposal.78 Although 
Secretary Babbitt mentioned Ickes to Eckstein during their July 
14, 1995 meeting, Secretary Babbitt testified that Ickes was 
the White House official who was the ``general point of 
contact'' on Department of Interior matters, and thus Ickes was 
a shorthand way for him to state that the White House expected 
the Department to decide sensitive matters 
promptly.79 Also, prior to the July 14, 1995, 
decision in this matter, Secretary Babbitt testified that he 
had no knowledge of any contact by his staff with White House 
personnel concerning the Hudson casino.80 In 
addition, Secretary Babbitt testified that no one told him 
about the specific campaign contributions made by Indian tribes 
to Democratic candidates or party organizations.81
    John J. Duffy, Counselor to the Secretary, testified that 
he had no recollection of having contact with Ickes or with 
anyone in Ickes's office concerning the Hudson 
matter.82 Duffy has no recollection of speaking with 
Fowler or any DNC staff on the Hudson matter, nor did he ever 
hear about any Interior employees speaking with Fowler or DNC 
staff concerning this issue.83 Sibbison, the Special 
Assistant to Secretary Babbitt, does not recall speaking with 
Fowler or hearing about anyone speaking with the DNC or the 
Clinton campaign about the Hudson issue.84
    George Skibine, the director of the Indian Gaming 
Management staff, stated that Heather Sibbison never told him 
about inquiries she received from the White House on the 
matter. Moreover, when Skibine was shown Ms. O'Connor's memo 
concerning her conversation with Sibbison, Skibine agreed that 
the opposition of Wisconsin officials based upon detriment to 
the Hudson-area community and the opposition of the Minnesota 
Democratic congressional delegation due to impact on nearby 
tribes' on-reservation gaming facilities were integral reasons 
for the denial of the application.85
    Therefore, aside from the contacts between Sibbison and 
either Jennifer O'Connor or White House intern David Meyers, 
there is no evidence that Interior officials had any direct 
contacts with Ickes or anyone else at the White House 
concerning the Hudson casino proposal.

                ECKSTEIN'S ACCESS TO INTERIOR OFFICIALS

    According to the evidence collected by the Committee, 
Eckstein, unlike Patrick O'Connor and other lobbyists hired by 
the opposing tribes, was the only lobbyist who spoke 
extensively to Secretary Babbitt, to John Duffy, the 
secretary's counselor for Indian affairs, and to career Indian 
Gaming Management Staff employees concerning the Hudson matter.

Eckstein's telephone contacts with Secretary Babbitt

    Eckstein testified that he had one and perhaps two or three 
telephone conversations with Secretary Babbitt of a substantive 
nature after he was retained by the casino partnership in April 
1995, and that he and Secretary Babbitt discussed the 
grassroots opposition in the Hudson area, the opposition by 
elected officials in Wisconsin and Minnesota, and the concerns 
of nearby Indian tribes in Wisconsin and 
Minnesota.86 Eckstein testified that he met with 
Secretary Babbitt at the Interior Department, either around May 
17 or shortly after Memorial Day, 1995. He stated that they met 
for about a half-hour, after which time Secretary Babbitt gave 
him a ride to his office, and they discussed many of the same 
issues they had gone over in telephone 
conversations.87

The tribal applicants' May 1995 meeting with Interior officials

    Eckstein testified that Secretary Babbitt made it clear in 
their telephone conversations that John Duffy was his counselor 
in charge of monitoring Indian gaming issues. Eckstein 
thereafter met on May 17, 1995, with Duffy and George Skibine, 
the director of the Indian Gaming Management Staff. In addition 
to Eckstein, Jim Moody, a former U.S. representative from 
Wisconsin, attended on behalf of the partnership, as did Fred 
Havenick, the owner of Galaxy Casinos, Inc., and 
representatives of the three tribes involved in this casino 
partnership.
    According to Eckstein, Secretary Babbitt's office sent a 
letter to Senator Tom Daschle on June 7, 1995, regarding Moody 
and Havenick's continuing requests to meet with Secretary 
Babbitt on this issue. The letter offers a revealing glimpse of 
Interior's efforts to listen to the concerns of Eckstein's 
clients and Eckstein's aggressiveness in seeking to lobby 
Interior officials on behalf of his clients:

          [T]he Department already has afforded Mr. Moody and 
        Mr. Havinick [sic] ample opportunity to express their 
        views. John [Duffy] personally met with Mr. Moody and 
        Mr. Havinick [sic] on this issue, and indeed, went out 
        of his way to accommodate them. On the morning of May 
        17, 1995, they arrived at the Department with no 
        scheduled meeting. John offered to carve out a fifteen-
        minute block of time in an already over-booked morning 
        to see them, and arranged to have George Skibine, 
        Director of the Indian Gaming Management Staff, be 
        present. John allowed Mr. Moody and Mr. Havinick [sic] 
        to continue the meeting for a full forty-five minutes, 
        even though allowing this extension forced leaders from 
        another tribe, who had a scheduled appointment, to wait 
        half an hour beyond their meeting time.
          After Mr. Moody and Mr. Havinick [sic] left John's 
        office, they continued the unscheduled meeting for 
        nearly two additional hours with George Skibine and his 
        staff. Additionally, as recently as last week, Mr. 
        Moody and Mr. Havinick [sic] met again with 
        George.88

Eckstein's July 14 meeting with Secretary Babbitt

    Eckstein called Secretary Babbitt on July 11, 1995, to 
request another opportunity to plead his clients' case since he 
had heard rumors that the Department was about to make a 
decision.89 Secretary Babbitt called Duffy to ask 
him to meet with Eckstein again. In his deposition, Duffy 
recalled, ``I said we are pretty far along and I think there 
are very good reasons to get this out. And I think he 
[Secretary Babbitt] said, ``Well, I would like you to make an 
effort to meet with Paul and explain the decision to him and 
hear what he has to say.'' And I think that is consistent with 
the Secretary's desire to make sure that all sides are heard.'' 
90
    Duffy then called Eckstein and they agreed to meet on the 
morning of Friday, July 14.91 The draft decision was 
finalized during that week.92 When Eckstein and 
Moody presented their arguments to Duffy on the morning of July 
14, Duffy said he felt that they simply repeated the arguments 
that they had raised in the May 17 meeting.93 He 
said he told them the decision would be issued denying the 
application.94 Duffy explained the key reasons as 
listed in the decision letter issued by Michael Anderson: (i) 
the long distance of the applicant tribes from Hudson; (ii) the 
opposition of the local community, as represented by the 
statements of opposition of their local, state and federal 
representatives; (iii) and the opposition of the nearby Indian 
tribes with on-reservation casinos, specifically the St. Croix 
Chippewa in Wisconsin.95
    After Duffy informed Eckstein that the Department was 
planning to deny the casino request, Eckstein contacted 
Secretary Babbitt's office and requested an immediate, one-on-
one meeting with Secretary Babbitt.96 Secretary 
Babbitt agreed to Eckstein's request and met with him later 
that day for approximately a half-hour.97 During 
that meeting, Secretary Babbitt did not grant Eckstein's 
requests for additional delay in the issuance of the 
Department's decision.98

      THE MERITS OF INTERIOR'S DECISION ON THE HUDSON APPLICATION

    Secretary Babbitt, John Duffy, Heather Sibbison, and 
Michael Anderson all testified that the denial of the Hudson 
application was consistent with a departmental policy that 
casino projects not be approved if the applicant tribe's 
current reservation is located far from the proposed site, the 
host community is not supportive of the project, and the 
project would have a detrimental impact on tribes whose 
reservations were near the proposed site.99 George 
Skibine, who wrote the draft letter denying the 
application,100 testified that, with the exception 
of Interior's reliance on the applicant tribes' distance from 
Hudson, he was completely supportive of the reasoning and 
language of the July 14, 1995, final decision 
letter.101 Contrary to assertions in the October 30, 
1997, hearing, George Skibine, the career civil servant charged 
with recommending a decision agreed that the Hudson casino 
application should be denied.102 The Minority's 
formal request to depose Skibine before the Committee's October 
30 hearing was declined by the Majority without explanation, 
but it later took place, at the Minority's request, on November 
17, 1997.103

The Hudson Casino would have been detrimental to the surrounding 
        community

    As Secretary Babbitt emphasized in his testimony before the 
Committee,104 the Indian Gaming Regulatory Act 
105 requires that, when Indian tribes request that 
Interior acquire land ``in trust'' on the Tribes' behalf for 
gaming purposes, the Secretary must find that the new casino 
would not be detrimental to the surrounding community, 
following consultation with state and local officials, 
including nearby Indian tribes. Even after the secretary makes 
that determination, the land cannot be taken into trust until 
``the Governor of the State in which the gaming activity is to 
be conducted concurs in the Secretary's determination.'' 
106 The legal standard for taking off-reservation 
land into trust for gaming purposes is much more rigorous than 
when the land is within or contiguous to an existing 
reservation.107
    At the beginning of his tenure as Secretary of the 
Interior, Secretary Babbitt made his position absolutely 
clear.108 He favored on-reservation Indian casinos 
without restrictions by host states but would endeavor to keep 
Indian gaming on existing reservation lands unless an off-
reservation casino was clearly supported by the host 
community.109 When the Mayor and the City Council of 
Detroit publicly supported the ``Greektown'' casino proposed by 
the Sault Ste. Marie Chippewa Tribe of Michigan, Secretary 
Babbitt, after a staff determination that the casino would not 
be detrimental to the Detroit community, sent a letter 
requesting the concurrence of Michigan Governor John Engler to 
the proposed land acquisition.110 Similarly, in 
1997, both the Northwest Regional Office of the Bureau of 
Indian Affairs (``BIA'') and the Washington-based Indian Gaming 
Management Staff performed an extensive canvassing of opinions 
in nearby towns and tribal governments before Interior 
determined that an off-reservation casino proposed by the 
Kalispal Indians near Spokane, Washington, would not be 
detrimental to the surrounding community, and therefore 
requested that Governor Gary Locke concur in this 
determination.111

The surrounding communities opposed the Hudson Casino proposal

    In stark contrast to the Michigan and Washington state 
applications, extensive public comment by private citizens, 
elected officials and leaders of Indian tribes located within a 
50-mile radius of Hudson indicated that the proposed casino 
would have caused social, economic, and environmental harm to 
the surrounding communities. In early 1995, Interior received 
complaints from Congressmen in both Wisconsin and Minnesota 
that the Minneapolis regional office of the Bureau of Indian 
Affairs had failed to consider adequately the detriment 
thecasino would cause to the surrounding community.112 Even 
in the June 8, 1995, memorandum of Tom Hartman,113 in which 
the economic analyst on the Indian gaming management staff argued that 
the Hudson casino proposal would not be detrimental to the surrounding 
community, the author admitted the following important fact:

          There has been no consultation with the State of 
        Wisconsin. . . . On January 2, 1995, the Minneapolis 
        Area Director was notified by the Acting Deputy 
        Commissioner for Indian Affairs that consultation with 
        the State must be done at the Area level prior to 
        submission of the Findings of Fact on the transaction. 
        As of this date, there is no indication that the Area 
        Director has complied with this directive for this 
        transaction.114

    This failure to consult with the state was significant, 
because consultation would have revealed that a large majority 
of Wisconsin voters, including 65 percent in St. Croix County, 
had voted ``Yes'' in a 1993 statewide referendum proposing a 
state constitutional amendment to restrict the growth of casino 
gambling in the state. In October 1994, while running for 
reelection as Wisconsin's governor, Tommy Thompson promised 
``I'm not in any way going to expand Indian gambling beyond 
what it is today.'' 115 An aide to Thompson 
confirmed that the governor's position meant that Thompson had 
``shut the door on'' the Hudson casino proposal.116 
Even after the election, when asked whether he supported the 
expansion of gaming to raise funds for a new stadium for the 
Milwaukee Brewers baseball team, Thompson stated the following: 
``There is no expansion of Indian gaming. How many times do I 
have to announce it?'' 117 In addition, the 
Wisconsin State Senate's Republican Majority Leader, Michael 
Ellis, had announced his opposition to the Hudson casino in 
July 1994, as did the State Senate's Minority Democratic 
Leader, Bob Jauch; Wisconsin's Democratic Attorney General, 
James Doyle, wrote Secretary Babbitt in opposition in April 
1995; and the Republican State Assemblywoman from Hudson, 
Sheila Harsdorf, led a coalition of 29 Wisconsin Assembly 
members who wrote to Secretary Babbitt and Thompson in March 
1995 to express their joint opposition to the Hudson proposal 
as detrimental to both the Hudson area and the entire state of 
Wisconsin.118
    In addition, the Congressman from the Hudson area, 
Republican Steve Gunderson, forwarded to Interior evidence that 
his constituents in the Hudson area widely opposed the casino. 
For example, he sent a resolution in opposition passed on 
December 12, 1994 by the Town of Troy which surrounds the St. 
Croix Meadows Greyhound track on three sides; 119 a 
resolution in opposition passed by the City of Hudson on 
February 6, 1995; and a full-page advertisement signed by 25 
Hudson-area business leaders opposing the casino because of 
specific fiscal and social damage to the Hudson-area 
community.120 Based upon the detrimental effects to 
his district, and the dangerous national precedent of approving 
an off-reservation casino over vigorous opposition of the local 
community, Gunderson wrote to Secretary Babbitt on April 28, 
1995 and urged the Department to deny the Hudson 
application.121
    Gunderson, who retired from the House of Representatives at 
the end of the 104th Congress, expressed his recollection of 
the Hudson casino issue in a letter to the Committee dated 
October 19, 1997:

          The Committee should be aware of significant and 
        intense opposition to any extension of gambling in 
        Wisconsin during this time. . . . I know of no 
        legislator in the area who endorsed the potential 
        casino--Republican or Democrat. . . . It is important 
        for the Committee to understand the depth of feeling in 
        opposition to the casino at that time. It is also my 
        impression that the opposition would be greater today. 
        The only merit in expanding the reservation for casino 
        purposes was to try and salvage something for the huge 
        investment in the dog track facility.122

Interior staff recommended denial

    The Indian Gaming Management Staff (``IGMS'') also 
identified numerous inadequacies in the environmental 
assessment that had been prepared for the casino, particularly 
concerning the St. Croix National Scenic Riverway located near 
the greyhound track, raising another area of concern that the 
casino would cause specific harm to the Hudson area community. 
In January 1995, prior to George Skibine's assignment as 
director of the IGMS, an IGMS staff member created an initial 
``Findings of Fact'' document analyzing the Hudson casino 
application. Referring to and attaching that document, IGMS 
Environmental Protection Specialist Edward S. (``Ned'') Slagle, 
a career civil servant, wrote Skibine a memorandum expressing 
his views regarding supplementary materials received by IGMS 
between January and May 1995, including the following:

          The main additional environmental information which 
        was provided in the supplemental documents concerned 
        the St. Croix Scenic Riverway. The fact that the nearby 
        riverway has received a special designation was not 
        revealed in the environmental document which had been 
        submitted in connection with the other documents in 
        support of the proposed casino. The potential impact, 
        if any, of the proposed casino on the riverway was also 
        not adequately addressed. These deficiencies augment 
        the many others which were described earlier in the 
        environmental analysis sections of the Findings of 
        Fact.123
          With regard to the other deficiencies, Slagle had 
        noted in the January 1995 document,
          The environmental impacts of this proposed project 
        are analyzed insufficiently, and the plans for the 
        reduction and mitigation of adverse impacts are 
        insufficient. The Environmental Assessment (EA) of this 
        action is largely irrelevant because the existing 
        conditions are inadequately described. The EA is seven 
        years old, for a different proposed project, and for an 
        environment that has changed drastically during the 
        intervening years.124

    In addition, in a letter to Skibine, four alderman, and the 
mayor of Hudson, pointed to detrimental impacts to their 
community's environment that would be caused by the large 
increase in attendance at St. Croix Meadows accompanying a 
casino. Among those documented detriments were ``harm to the 
City's waste water treatment'' and ``problems with solid waste 
due to the fact that the county's incineration facility is 
permanently closed.'' 125 The National Parks and 
Conservation Association also wrote a letter to Wisconsin 
Governor Thompson and Secretary Babbitt expressing its concern 
about the likely detriment to the St. Croix National Scenic 
Riverway and the watershed surrounding that 
waterway.126
    With regard to these comments, Skibine testified, ``I 
certainly agreed that the EA was deficient because the impact 
on the St. Croix River Waterway was not addressed.'' 
127 Skibine testified that the environmental impact 
of the project was a factor in his consideration of this 
application.128 Thus, based upon Slagle's written 
comments on the Hudson application, it is inaccurate to state 
that the Indian Gaming Management Staff supported this 
application.

The Administrative Record

    Skibine testified that in June 1995 he read the entire 
record on the Hudson casino proposal, including the staff memos 
written by Hartman and Slagle, and discussed the matter with 
other staff members such as Paula Hart, Leroy Chase, and Larry 
Scrivner.129 Following this review, Skibine drafted 
a letter denying the application based upon the secretary's 
discretionary authority under Section 5 of the Indian 
Reorganization Act of 1934 (``IRA'').130 The letter 
based this rejection primarily upon the specific opposition of 
the neighboring communities of Hudson and Troy, Wisconsin, 
which were based upon (1) increased law enforcement expenses 
due to potential exponential growth in crime and traffic 
congestion; (2) testing [sic] waste water treatment facilities 
up to remaining operational capacity; (3) problems with solid 
waste; (4) adverse effect on the communities'' future 
residential, industrial and commercial development plans; and 
(5) difficulties for current Hudson businesses to find and 
retain employees.'' Skibine's letter referred to the objections 
of both Wisconsin's St. Croix Chippewa and Minnesota's Shakopee 
Mdewakanton Sioux as neighboring Indian tribes with concerns 
about the ``potential harmful effects of this acquisition on 
their gaming establishments.'' Skibine also referred to the 
objections of a number of elected officials, including the 
state and United States representatives from the Hudson area. 
Finally, the location of the proposed casino within a half-mile 
from the St. Croix National Scenic Riverway was noted as a 
potentially harmful impact in this letter. Skibine testified 
that this letter was based upon the record compiled in the 
case, and there were no other matters that he could think of 
that were important in his decision-making 
process.131

Allegations of Timing and Political Pressure

    An e-mail from Skibine to the Indian Gaming Management 
Staff dated July 8, 1995, reveals that Skibine edited the 
Hudson letter, ``per Duffy and Heather's instructions,'' and 
that he wanted it brought up to Heather Sibbison first thing 
Monday morning (July 10, 1995). According to the e-mail, this 
was because ``[t]he Secretary wants this to go out ASAP because 
of Ada's impending visit to the Great Lakes Area.'' 
132 Ada Deer, the Assistant Secretary forIndian 
Affairs, was scheduled to visit Wisconsin later in July. A note in 
Interior's files from Sibbison to Tona LaRocque of the Indian Gaming 
Management Staff, dated July 10, 1995, stated, ``Please let me know as 
soon as the letters are signed. They should be faxed out to the Tribes, 
so that they will have some time to digest the information before Ada 
arrives later in the week.'' 133 Skibine verified that he 
and Deputy Assistant Secretary for Indian Affairs Michael Anderson 
discussed the revised decision letter together on either July 10 or 
July 11, while they were out of town on other business, and that 
Anderson wanted some changes made to the letter.134
    While Anderson did testify that he was asked by Deer's 
special assistant, Michael Chapman, to sign the letter by July 
14, he stated that this request likely was made because he was 
going to be out of the office until July 24, and the matter was 
clearly ripe for decision.135 As indicated by the 
internal memoranda of the Department of Interior dated July 8 
and July 10, 1995 as well as Eckstein's own testimony that he 
had heard ``rumors that the application was going to be 
denied,'' it clearly was in the best interests of the 
department that the decision be issued prior to a visit to a 
Wisconsin ``pow-wow'' by Deer on July 15 and 16, 1995, so that 
she would not be bombarded with further lobbying efforts and 
inter-tribal arguments on the matter.

Interior's Final Decision-Maker Acted on the Merits

    Anderson, who had the final decision authority, also 
testified about the absence of political considerations from 
his decision-making process.136 Anderson said that 
he had reviewed the relevant legal standards and the analyses 
of the staff (which he described as the ``driving force'' 
behind the decision), and he felt that he had a ``competent 
understanding of what the facts were.'' 137 
Anderson's decision, however, was not influenced by any 
conversations with Secretary Babbitt concerning this matter. 
Anderson testified that, prior to making the decision denying 
the Hudson casino proposal, he had never discussed the matter 
with Secretary Babbitt and, indeed, had ``never heard the 
Secretary's position stated at all on this matter.'' 
138 This was confirmed by Secretary Babbitt himself, 
who testified that he ``did not personally make the decision to 
deny the Hudson application, nor did I participate in 
Department deliberations relating to that application.'' 
139 Moreover, Anderson testified that he was not 
aware of the status reports that had been requested from 
Interior by Ickes's assistant.140 Likewise, Anderson 
said that he had no knowledge, direct or indirect, of any 
contacts between the DNC and Interior.141

                               CONCLUSION

    It is clear from the evidence in the record, including the 
testimony taken by this Committee, that the decision by the 
Department of the Interior to deny the Hudson casino 
application was based upon legitimate concerns about detriment 
to the communities surrounding the Hudson greyhound track and 
to neighboring Indian communities with pre-existing, on-
reservation casinos. The bipartisan opposition from federal, 
state, and local elected officials demonstrates that approval 
of the Hudson casino project would have been contrary to the 
best interests of the surrounding communities. Allegations that 
the White House and the DNC caused the Interior Department to 
deny this application are unsupported by the evidence before 
this Committee.

                               footnotes

    \1\ Application To The Court Pursuant to 28 U.S.C. Sec. 592(c)(1) 
For The Appointment Of An Independent Counsel, (D.C. Cir. Feb. 11, 
1998), p. 1.
    \2\ Exhibit 1588: Affidavit of Paul Eckstein.
    \3\ Exhibit 1578: Letter from Senator McCain to Secretary Babbitt 
re: Wall Street Journal article, 7/19/96; Exhibit 1582: Letter from 
Senator McCain to Harold Ickes re: Wall Street Journal article, 7/19/96 
[EOP 64386]; Exhibit 1584: Letter from Senator McCain to President 
Clinton re: Wall Street Journal article, 7/19/96, [EOP 64390].
    \4\ Exhibit 1578: Letter from Senator McCain to Secretary Babbitt 
re: Wall Street Journal article, 7/19/96.
    \5\ Exhibit 1580: Letter from Secretary Babbitt to Senator McCain 
re: Wall Street Journal article, 8/30/96.
    \6\ Exhibit 1560: Letter from Patrick O'Connor to Harold Ickes re: 
Hudson casino proposal, 5/8/95. [EOP 64262-3]
    \7\ Exhibit 1560: Letter from Patrick O'Connor to Harold Ickes re: 
Hudson casino proposal, 5/8/95. [EOP 64262-3]
    \8\ Paul Eckstein deposition, 9/30/97, pp. 59-60.
    \9\ Paul Eckstein deposition, 9/30/97, p. 53.
    \10\ Exhibit 1587: Letter from Secretary Babbitt to Chairman 
Thompson, 10/10/97.
    \11\ Secretary Babbitt, 10/30/97 Hrg., pp. 116-117.
    \12\ Secretary Babbitt, 10/30/97 Hrg., p. 185.
    \13\ Secretary Babbitt, 10/30/97 Hrg., p. 137.
    \14\ Secretary Babbitt, 10/30/97 Hrg., p. 138.
    \15\ Secretary Babbitt, 10/30/97 Hrg., pp. 126-127.
    \16\ Secretary Babbitt, 10/30/97 Hrg., pp. 187-188.
    \17\ Exhibit 1580: Letter from Secretary Babbitt to Senator McCain 
re: Wall Street Journal article, 8/30/96.
    \18\ Exhibit 1587: Letter from Secretary Babbitt to Chairman 
Thompson, 10/10/97.
    \19\ Secretary Babbitt, 10/30/97 Hrg., p. 136.
    \20\ Secretary Babbitt, 10/30/97 Hrg., p. 130.
    \21\ Exhibit 1588: Affidavit of Paul F. Eckstein.
    \22\ Exhibit 1588: Affidavit of Paul F. Eckstein.
    \23\ Paul Eckstein, 10/30/97 Hrg., pp. 93-96.
    \24\ Senator Durbin, 10/30/97 Hrg., pp. 91-92.
    \25\ Paul Eckstein deposition, 9/30/97, p. 63.
    \26\ Paul Eckstein deposition, 9/30/97, p. 105; Paul Eckstein, 10/
30/97 Hrg., p. 65.
    \27\ Paul Eckstein deposition, 9/30/97, p. 105; Paul Eckstein, 10/
30/97 Hrg., p. 65.
    \28\ Wall Street Journal, 7/12/96; Wisconsin State Journal, 7/28/
96; Wisconsin State Journal, 4/1/97; Wisconsin State Journal, 8/16/97.
    \29\ Wisconsin State Journal , 10/8/97.
    \30\ Staff interview with George Newago, 10/29/97.
    \31\ Senator Torricelli, 10/30/97 Hrg., pp. 102-103.
    \32\ Application To The Court Pursuant to 28 U.S.C. Sec. 592(c)(1) 
For The Appointment Of An Independent Counsel, (D.C. Cir. Feb. 11, 
1998), p. 7.
    \33\ Application To The Court Pursuant to 28 U.S.C. Sec. 592(c)(1) 
For The Appointment Of An Independent Counsel, (D.C. Cir. Feb. 11, 
1998), p. 7.
    \34\ Application To The Court Pursuant to 28 U.S.C. Sec. 592(c)(1) 
For The Appointment Of An Independent Counsel, (D.C. Cir. Feb. 11, 
1998), pp. 7-8.
    \35\ Paul Eckstein deposition, 9/30/97, p. 90.
    \36\ Paul Eckstein deposition, 9/30/97, p. 90.
    \37\ Paul Eckstein deposition, 9/30/97, p. 115.
    \38\ Exhibit 2512M: Patrick O'Connor deposition in Four Feathers 
Casino Joint Venture Partnership v. City of Hudson, Case No. 95-CV-540, 
St. Croix County., WI Circuit Court, 4/18/97, pp. 107-108.
    \39\ Secretary Babbitt, 10/30/97 Hrg., p. 150-151.
    \40\ Secretary Babbitt, 10/30/97 Hrg., p. 150.
    \41\ John Duffy deposition, 9/29/97, pp. 79-80.
    \42\ Exhibit 2515M: Letter from Sue Ellen Sloca, Office of the 
Secretary of the Interior, FOIA officer, to Glenn R. Simpson and Jill 
Abramson, Wall Street Journal, 4/25/97.
    \43\ Heather Sibbison deposition, 9/26/97, pp. 50.
    \44\ Tom Collier deposition, 9/29/97, pp. 11-12.
    \45\ Tom Collier deposition, 9/29/97, pp. 11-13.
    \46\ Exhibit 2512M: Patrick O'Connor deposition in Four Feathers 
Casino Joint Venture Partnership v. City of Hudson, Case No. 95-CV-540, 
St. Croix County., WI Circuit Court, 4/18/97, pp. 107-108.
    \47\ Harold Ickes deposition, 9/22/97, p. 34.
    \48\ Exhibit 1559: Memorandum from Don Fowler to Harold Ickes re: 
Indian Gaming Issue, 5/5/95. [DNC 3245524].
    \49\ Exhibit 1559: Memorandum from Don Fowler to Harold Ickes re: 
Indian Gaming Issue, 5/5/95. [DNC 3245524]
    \50\ Exhibit 1560: Letter from Patrick O'Connor to Harold Ickes re: 
Hudson casino proposal, 5/8/95. [EOP 64262-3]
    \51\ Chairman Thompson, 10/30/97 Hrg., p. 7, referencing Exhibit 
1592: Tom Schneider deposition, 9/9/97, taken in Four Feathers Casino 
Joint Venture Partnership v. City of Hudson, Case No. 95-CV-540, St. 
Croix County, WI Circuit Court.
    \52\ Exhibit 1557: Entries from Patrick O'Connor's datebook. [OC 4, 
31, 49, 62, 68, 69, 73, 74, 76-81, 83-89 & 93]
    \53\ Exhibit 1557: Entries from Patrick O'Connor's datebook. [OC 
80].
    \54\ Exhibit 1557: Entries from Patrick O'Connor's datebook. [OC 
83].
    \55\ Exhibit 1597: Memo from Loretta Avent to Harold Ickes re: call 
from Bruce Lindsey concerning O'Connor, 4/24/95. [EOP 069071]
    \56\ Jennifer O'Connor deposition, 10/6/97, pp. 37-38.
    \57\ Harold Ickes deposition, 9/22/97, pp. 35-36, 38-39.
    \58\ Jennifer O'Connor deposition, 10/6/97, pp. 39-40.
    \59\ Jennifer O'Connor deposition, 10/6/97, p. 40.
    \60\ Jennifer O'Connor deposition, 10/6/97, pp. 40-41.
    \61\ Jennifer O'Connor deposition, 10/6/97, p. 57, referencing 
Exhibit 1562: Memo from Jennifer O'Connor to Harold Ickes re: ``Indian 
Gaming in Wisconsin,'' 5/18/95. [EOP 64394]
    \62\ Exhibit 1562: Memo from Jennifer O'Connor to Harold Ickes re: 
``Indian Gaming in Wisconsin,'' 5/18/95. [EOP 64394]
    \63\ Exhibit 1566: Fax from Patrick O'Connor to Harold Ickes/John 
Sutton, 6/1/95. [EOP 64251].
    \64\ Exhibit 1566: Fax from Patrick O'Connor to Harold Ickes/John 
Sutton, 6/1/95. [EOP 64251].
    \65\ Jennifer O'Connor deposition, 10/6/97, pp. 66-67.
    \66\ Jennifer O'Connor deposition, 10/6/97, p. 67.
    \67\ Jennifer O'Connor deposition, 10/6/97, p. 66.
    \68\ Jennifer O'Connor deposition, 10/6/97, p. 53.
    \69\ Exhibit 1599: Memo from David Meyers, White House intern, to 
Jennifer O'Connor, special assistant to Harold Ickes re: ``Wisconsin 
Dog Track,'' 6/6/95. [EOP 64250]
    \70\ Jennifer O'Connor deposition, 10/6/97, p. 56.
    \71\ Exhibit 1569: Fax from Jennifer O'Connor, aide to Harold 
Ickes, to Heather Sibbison, special assistant to Interior counselor 
John Duffy, asking for a draft response to an enclosed 6/12/95 letter 
from Minnesota's Democratic congressional delegation expressing 
opposition to the Hudson casino plan, 6/26/95. [02893, EOP 064257-8].
    \72\ Exhibit 1569: Fax from Jennifer O'Connor, aide to Harold 
Ickes, to Heather Sibbison, special assistant to Interior counselor 
John Duffy, asking for a draft response to an enclosed 6/12/95 letter 
from Minnesota's Democratic congressional delegation expressing 
opposition to the Hudson casino plan, 6/26/95. [02893, EOP 064257-8].
    \73\ Exhibit 1570: Fax from Heather Sibbison, special assistant to 
Interior counselor John Duffy, to Jennifer O'Connor, aide to Harold 
Ickes, enclosing draft responses to a 6/12/95 letter from Minnesota's 
Democratic congressional delegation expressing opposition to the Hudson 
casino plan, 6/27/95. [EOP 64253-6].
    \74\ Exhibit 1570: Fax from Heather Sibbison, special assistant to 
Interior counselor John Duffy, to Jennifer O'Connor, aide to Harold 
Ickes, enclosing draft responses to a 6/12/95 letter from Minnesota's 
Democratic congressional delegation expressing opposition to the Hudson 
casino plan, 6/27/95. [EOP 64253-6].
    \75\ Exhibit 1570: Fax from Heather Sibbison, special assistant to 
Interior counselor John Duffy, to Jennifer O'Connor, aide to Harold 
Ickes, enclosing draft responses to a 6/12/95 letter from Minnesota's 
Democratic congressional delegation expressing opposition to the Hudson 
casino plan, 6/27/95. [EOP 64253-6].
    \76\ Exhibit 1570: Fax from Heather Sibbison, special assistant to 
Interior counselor John Duffy, to Jennifer O'Connor, aide to Harold 
Ickes, enclosing draft responses to a 6/12/95 letter from Minnesota's 
Democratic congressional delegation expressing opposition to the Hudson 
casino plan, 6/27/95. [EOP 64253-6].
    \77\ Jennifer O'Connor deposition, 10/6/97, pp. 49-51, referencing 
Exhibit 1570, Fax from Heather Sibbison, special assistant to Interior 
counselor John Duffy, to Jennifer O'Connor, aide to Harold Ickes, 
enclosing draft responses to a 6/12/95 letter from Minnesota's 
Democratic congressional delegation expressing opposition to the Hudson 
casino plan, 6/27/95. [EOP 64253-6]
    \78\ Secretary Babbitt, 10/30/97 Hrg., p. 147-148.
    \79\ Secretary Babbitt, 10/30/97 Hrg., p. 121.
    \80\ Secretary Babbitt, 10/30/97 Hrg., p. 119-120.
    \81\ Secretary Babbitt, 10/30/97 Hrg., p. 121.
    \82\ Exhibit 2510M: John Duffy deposition, 9/29/97, p. 57.
    \83\ John Duffy deposition, 9/29/97, pp. 68-71.
    \84\ Heather Sibbison deposition, 9/26/97, pp. 42 & 44.
    \85\ George Skibine deposition, 11/17/97, p. 48-50.
    \86\ Paul Eckstein deposition, 9/30/97, pp. 22-25.
    \87\ Paul Eckstein deposition, 9/30/97, p. 26-28.
    \88\ George Skibine deposition, 11/17/97, pp. 54-55.
    \89\ Paul Eckstein deposition, 9/30/97, p. 43.
    \90\ John Duffy deposition, 9/29/97, p. 107.
    \91\ Paul Eckstein deposition, 9/30/97, p. 44-45.
    \92\ John Duffy deposition, 9/29/97, pp. 107.
    \93\ John Duffy deposition, 9/29/97, p. 107.
    \94\ John Duffy deposition, 9/29/97, p. 105-107.
    \95\ John Duffy deposition, 9/29/95, p. 104-105.
    \96\ Paul Eckstein deposition, 9/30/97, p. 51.
    \97\ Paul Eckstein deposition, 9/30/97, p. 52.
    \98\ Paul Eckstein deposition, 9/30/97, p. 53.
    \99\ Secretary Babbitt, 10/30/97 Hrg., pp. 120-122; John Duffy 
deposition, 9/29/96, pp. 23-25; Heather Sibbison deposition, 9/26/95, 
pp. 24-26; Michael Anderson deposition, 9/19/96, pp. 18- 20, 43-45.
    \100\ Exhibit 2508M: Draft letter from Interior Assistant Secretary 
for Indian Affairs Ada Deer to tribal leaders denying the Hudson casino 
request, 6/29/95. [3211-14]
    \101\ George Skibine deposition, 11/17/95, pp. 152-153.
    \102\ George Skibine deposition, 11/17/95, pp. 152-153.
    \103\ ``Silent Witness: Senate investigators never called the one 
man who could clear up the Babbitt case,''Washington Monthly, December 
1997; ``The Non-Case Against Bruce Babbitt,'' Wall Street Journal, 12/
4/97.
    \104\ Secretary Babbitt, 10/30/97 Hrg., p. 121.
    \105\ 25 U.S.C. Sec. 2719 (1997).
    \106\ 25 U.S.C. Sec. 2719(b)(1)(A).
    \107\ 25 U.S.C. Sec. 2719(a)(1) (gaming is not to be conducted by 
tribes on land acquired in trust by the Department of Interior after 
1988, unless the land is within or contiguous to the tribes'' existing 
reservation.)
    \108\ Indian Country Today, 2/11/93 (Secretary Babbitt tells group 
of western governors that Indian tribes should have some degree of 
latitude from state gaming laws on federally recognized reservation 
bases); The Economist, 5/29/93 (Secretary Babbitt negotiated an 
agreement in his native Arizona between tribal and state government 
that the tribes' casino gambling would be restricted to their 
reservations).
    \109\ Indian Country Today, 2/11/93 (Secretary Babbitt tells group 
of western governors that Indian tribes should have some degree of 
latitude from state gaming laws on federally recognized reservation 
bases); The Economist, 5/29/93 (Secretary Babbitt negotiated an 
agreement in his native Arizona between tribal and state government 
that the tribes' casino gambling would be restricted to their 
reservations).
    \110\ George Skibine deposition, 11/17/97, p. 72.
    \111\ George Skibine deposition, 11/17/97, pp. 74-75.
    \112\ For example, Rep. Steve Gunderson, then-U.S. Representative 
for the Hudson area of western Wisconsin, sent letters to Secretary 
Babbitt (Exhibits 2522M, 2523M) asking about the truth of reported 
allegations that the Interior's Minneapolis area office had recommended 
approval of the trust application in the face of local opposition. Rep. 
Gunderson enclosed expressions of opposition from within his district, 
of which the following comment from Hudson resident Bob Bastian is 
representative:

With 3200 signatures against the proposal, the majority of the business 
community, and all the Indian tribes within a 100 miles of here dead set 
against [the proposed casino in Hudson], the BIA in Minneapolis in all its 
bureaucratic wisdom decided that wasn't sufficient opposition and OK'd the 
proposal.

We've been through this before with overwhelming opposition (2-1 ratio) in 
1988-89 we got the dog track shoved down our throats. Now it's happening 
again. When does the majority's will ever count anymore other than in an 
election?

    \113\ Exhibit 1567: Draft memo from Tom Hartmann, Indian gaming 
management staff, Interior Department, to George Skibine, director, 
Indian gaming management staff, Interior Department re: Hudson casino 
trust application, 6/8/95. [3194-3209]
    \114\ Exhibit 1567: Draft memo from Tom Hartmann, Indian gaming 
management staff, Interior Department, to George Skibine, director, 
Indian gaming management staff, Interior Department re: Hudson casino 
trust application, 6/8/95. [3194-3209]
    \115\ Exhibit 2519M: St. Paul Pioneer Press, 10/4/94.
    \116\ Exhibit 2519M: St. Paul Pioneer Press, 10/4/94.
    \117\ Associated Press, 2/7/95. Beginning in early 1994, Gov. 
Thompson had clearly and publicly expressed his opposition to any 
expansion of gaming, including the Hudson proposal. Exhibit 2519M: St. 
Paul (MN) Pioneer Press, 10/4/94.
    \118\ Exhibit 2524M: several letters of opposition from state and 
federal elected officials in Wisconsin.
    \119\ Exhibit 2522M: Letter from Rep. Gunderson to Secretary 
Babbitt re: local opposition to Hudson casino proposal, 1/25/95.
    \120\ Exhibit 2523M: several letters of opposition from state and 
federal elected officials in Wisconsin.
    \121\ Exhibit 2524M: several letters of opposition from state and 
federal elected officials in Wisconsin.
    \122\ Exhibit 2521M: Letter from Steve Gunderson, former U.S. 
Representative from Hudson, Wisconsin, to Ranking Minority Member Glenn 
re: local opposition to Hudson casino proposal, 10/29/97.
    \123\ George Skibine deposition, 11/17/97, Exhibit 10.
    \124\ George Skibine deposition, 11/17/97, Exhibit 10.
    \125\ George Skibine deposition, 11/17/97, p. 60.
    \126\ George Skibine deposition, 11/17/97, Exhibit 9.
    \127\ George Skibine deposition, 11/17/97, p. 43.
    \128\ George Skibine deposition, 11/17/97, p. 39-40.
    \129\ George Skibine deposition, 11/17/97, pp. 61-65.
    \130\ 25 U.S.C. 465; George Skibine deposition, 11/17/97, p. 65.
    \131\ George Skibine deposition, 11/17/97, pp. 66-67.
    \132\ E-mail from George Skibine, director of the Indian gaming 
management staff, to Miltona R. Wilkins, Tom Hartman, Paula Hart, and 
Tona LaRocque, 7/8/95.
    \133\ Department of the Interior Central Office Routing Slip, 7/8/
95.
    \134\ George Skibine deposition, 11/17/97, p. 68.
    \135\ Michael Anderson deposition, 9/19/97, pp. 58-59.
    \136\ Michael Anderson deposition, 9/19/97, p. 43-46.
    \137\ Michael Anderson deposition, 9/26/97, p. 67-68.
    \138\ Michael Anderson deposition, 9/19/97, p. 40-41.
    \139\ Secretary Babbitt, 10/30/97 Hrg, p. 117.
    \140\ Michael Anderson deposition, 9/19/97, p. 48.
    \141\ Michael Anderson deposition, 9/19/97, p. 48-49.





PART 6  ALLEGATIONS OF QUID PRO QUOS

Chapter 36: Tobacco and the 1996 Election Cycle

    On August 5, 1997, President Clinton signed into law a 
landmark balanced budget agreement passed by the 105th 
Congress.1 This agreement actually incorporated two 
bills, a tax relief bill and the balanced budget 
bill.2 Buried in the tax bill's ``miscellaneous 
provisions'' section was a little-noticed, one-sentence, 46-
word provision that stated that tobacco companies would be 
entitled to claim a tax credit of $50 billion based on a 
settlement agreement in a major anti-tobacco civil litigation 
matter. In that settlement agreement, tobacco campanies have 
agreed to pay $368.5 billion over the next 25 years to settle 
anti-tobacco lawsuits, compensate people injured by smoking, 
and finance health programs. In return, the companies would 
reduce their exposure in future lawsuits. This settlement has 
not yet been approved by Congress or the President.3
---------------------------------------------------------------------------
    Footnotes at end of chapter 36.
---------------------------------------------------------------------------
    The Minority was interested in investigating how this 
billion-dollar-a-word provision wound up in the balanced budget 
agreement, particularly in light of the tobacco industry's 
substantial political contributions to the Republican Party and 
the tobacco industry connections to Haley Barbour, former 
chairman of the Republican National Committee (``RNC''). 
Tobacco companies gave more than $10 million overall in the 
1996 election cycle, about $8.5 million to Republicans. During 
the period when Barbour was chairman of the RNC, he attempted 
to block unfavorable tobacco legislation at the federal and 
state levels and lobbied against anti-tobacco litigation 
brought by private individuals and state agencies. Just two 
days after one of Barbour's interventions, one tobacco company 
donated a half-million dollars to the RNC. After leaving the 
RNC to return to his lobbying firm in early 1997, Barbour was 
immediately retained as a lobbyist for the five largest tobacco 
firms.
    The Minority looked at the role tobacco played in the 1996 
elections.

                                FINDING

     During the 1996 election cycle, tobacco companies 
contributed roughly $8.5 million in soft money to the 
Republicans, much of which was raised by Haley Barbour. There 
are grounds for suspecting that Barbour assisted the industry 
in exchange for campaign money, but the Committee did not 
investigate these troubling allegations.

THE TOBACCO INDUSTRY'S POLITICAL CONTRIBUTIONS DURING THE 1996 ELECTION 
                                 CYCLE

    The tobacco industry gave roughly $10.1 million overall in 
political contributions in the 1996 election cycle. According 
to the nonpartisan Center for Responsive Politics, the industry 
gave a total of $6.8 million in soft money to both parties, 
most of it to the Republican Party.4 Tobacco PACs 
and company employees contributed another $3.3 million to 
federal candidates in the 1996 cycle, again most of it to 
Republicans.5 In fact, Philip Morris Companies, Inc. 
(``Philip Morris'') was the number one overall campaign 
contributor in the entire 1996 election cycle with $4.2 million 
in hard and soft money, with nearly 80 percent contributed to 
Republicans.6 In addition to these campaign 
contributions, tobacco firms in 1996 spent nearly $27 million 
lobbying Congress and federal agencies. Philip Morris led the 
way again, spending $19.6 million, according to federal lobby 
disclosure forms.
    In previous election cycles, the industry divided its 
campaign contributions equally between the parties, but in the 
1996 election cycle over 80 percent of tobacco's $10.1 million 
in political donations went to Republicans. The GOP collected 
$5.8 million in soft money from tobacco interests and tobacco 
PACs and company executives contributed $2.5 million to 
Republican candidates at the federal level. The two largest 
soft-money donors to national Republican party committees were 
Philip Morris with $2.5 million and RJ Reynolds/RJR Nabisco 
(``RJR'') with $1.2 million.7
    There are several likely reasons for the industry's 
dramatic shift of support to the Republican Party. Shortly 
after President Clinton took office, Administration officials 
proposed sharp increases in cigarette taxes as a way of 
financing the expansion of health care. Later, the President 
proposed that the Food and Drug Administration (``FDA'') be 
given the authority to regulate tobacco as a drug. In Congress, 
Representative Henry Waxman (D-Calif.) chaired a subcommittee 
that held hearings on the tobacco industry. Senator Richard 
Durbin (D-Ill.), a House member from 1983 until winning 
election to the Senate in 1996, clashed with the industry when 
he pushed for smoking to be banned on all domestic flights.
    On the state level, many Democrats were also supportive of 
efforts to curb smoking in public places. State government 
became the arena for one of the biggest threats to the 
industry: a lawsuit by state attorneys general against tobacco 
companies to recoup medical costs the states have incurred in 
treating smokers.
    Apparently, as part of an effort to thwart these and other 
initiatives, the major tobacco companies contributed millions 
of dollars on the Republican Party. Tobacco companies not only 
gave directly to the RNC, they contributed to Speaker Newt 
Gingrich's GOPAC, a political action committee; Senator Bob 
Dole's Better America Foundation (``BAF''), a nonprofit think 
tank; and to the Dole Foundation, a charitable entity linked to 
the Senator. (Philip Morris and RJR each gave $100,000 to BAF.) 
After Haley Barbour launched the National Policy Forum, a 
Republican Party think tank, in the spring of 1993, tobacco 
companies were among the biggest backers, contributing a total 
of $445,000; the biggest contributions included $200,000 from 
Philip Morris and $100,000 from RJR.

               REPUBLICAN ASSISTANCE TO TOBACCO COMPANIES

    According to published reports, the tobacco companies have 
received valuable benefits in exchange for their political 
``investments.'' Common Cause Magazine, citing a 1994 study 
published in the Journal of the American Medical Association, 
noted: ``House membersreceiving the most tobacco money were 
14.4 times as likely to vote with the industry as members receiving the 
least; in the Senate the number was 42.2.'' 8 Other examples 
of Republican efforts on the industry's behalf include:
           For nearly three years after the Republicans 
        took control of Congress in 1994, there was not a 
        single congressional hearing on cigarettes and 
        health.9 It was not until late 1997, after 
        the tobacco settlement was announced, that such 
        hearings were held. Even one long-time industry 
        advocate, Representative Thomas Bliley (R-Virginia), 
        began to criticize the industry, and his committee 
        subpoenaed hundreds of documents from tobacco companies 
        that, according to press reports ``apparently contain 
        more evidence that cigarette makers deliberately misled 
        the public about smoking's dangers.'' 10
           In the 104th Congress, pro-tobacco lawmakers 
        defeated efforts to strip funding for tobacco farmers 
        from the Agriculture Department's budget in both 1995 
        and 1996 11 and fought off attempts to raise 
        tobacco taxes and preserved millions of dollars in 
        federal subsidies, including the ability to take tax 
        deductions for advertising costs.12 In 1994, 
        the tobacco industry spent nearly $5 billion on 
        advertising.13
           Other tobacco-related legislation in the 
        104th Congress never came to a vote. For example, 
        Representative Scotty Baesler (D-Ky.) bill, that would 
        have codified the federal government's authority to 
        regulate tobacco, died in committee.14
           During the 1996 presidential campaign, GOP 
        candidate Bob Dole made clear that he also was opposed 
        to giving the FDA increased authority to regulate 
        tobacco. Dole stated that he did not regard smoking as 
        an addiction. In his view, it was merely a habit--like 
        drinking milk.15 Even after Dole was widely 
        criticized for that statement, he repeated his 
        assertion that smoking was not addictive.16
           After Dole's statement, Barbour was asked if 
        he thought smoking was addictive, but he refused to be 
        pinned down. In the words of a press report, the RNC 
        chairman ``effectively dodged a reporter's insistent 
        questioning on whether he believes cigarette smoking is 
        addictive.'' 17 Barbour explained that he 
        couldn't answer the question because he was not a 
        scientist or a chemist.18

                     HALEY BARBOUR ASSISTED TOBACCO

    Haley Barbour became RNC chairman in January 1993 and 
served a four-year term. During his tenure, he was 
unquestionably the party's top fundraiser. Documents obtained 
by the Committee indicate that Barbour was heavily involved in 
raising money from the tobacco industry.
    One RNC document the Committee received is a handwritten 
note from Barbour to Craig Fuller, the Philip Morris official 
in charge of lobbying. In the note, Barbour thanked Fuller for 
a $50,000 contribution and mentioned that he was ``working on a 
replacement for John Moran''--the RNC finance chairman--which 
suggests that he wanted Fuller to propose someone for the 
job.19 Barbour and Fuller had worked together in the 
Reagan Administration: Barbour served in the White House 
political affairs office while Fuller was Vice President Bush's 
chief of staff.20
    At the same time Barbour was collecting millions of dollars 
from Fuller and other tobacco-industry executives, he was 
contacting state-level politicians on the industry's behalf, 
according to press reports. In the spring of 1995, Mark 
Killian, a conservative Republican who served as speaker of the 
Arizona House of Representatives, received a telephone call at 
his home from Barbour. Killian later said he thought Barbour 
might be calling ``to congratulate us on Arizona's ability to 
bring forth the revolution on tax cuts and welfare reform and 
medical savings accounts.'' 21 However, according to 
Killian, the real purpose of Barbour's call was to push a piece 
of legislation that was supported by the tobacco 
industry.22 This was a so-called ``pre-emption'' 
bill that would have prevented cities from imposing smoking 
rules more restrictive than those enacted at the state level. 
Barbour apparently urged Killian to let the bill go to a vote. 
Barbour later claimed ``that he was simply making routine 
checks on the status of legislation, not attempting to impose 
pressure,'' according to a press report.23
    Killian, a longtime opponent of smoking, said he was 
angered by Barbour's call. ``It made me mad,'' he said. ``And I 
said no.'' 24 According to a press report, Killian 
``said he ended up blocking the bill because he thinks `cities 
ought to be able to make their own rules and regulations.' But 
he said another factor in his decision was his anger that Mr. 
Barbour got involved in the matter.'' 25 In March of 
1996, Killian ``joined with Democrats in urging [Arizona] 
Attorney General Grant Woods to join the lawsuit initiated by 
Mississippi against such tobacco giants as Philip Morris and 
RJR Nabisco.'' 26 Killian said: ``I think it's a 
great idea. I think the tobacco companies have been ripping off 
this country for years.'' 27
    Also in the spring of 1995, Barbour telephoned Republican 
Governor George W. Bush of Texas ``to check on a bill to 
prevent cities from adopting strict smoking restrictions,'' 
according to the Wall Street Journal. ``He was told the bill 
would be vetoed, and it was.'' 28 A story in the 
Arizona Republic on that incident stated that Barbour had 
called Bush to encourage Texas ``to drop legislation opposed by 
the tobacco industry.'' 29
    On October 16, 1996, Barbour flew to Arizona to attend a 
Republican fundraising event and he met with Governor Fife 
Symington. The next day, Governor Symington ordered Arizona 
Attorney General Grant Woods, a fellow Republican, to drop his 
lawsuit against the major tobacco companies.30 Woods 
ignored the order and continued pursuing the 
lawsuit.31 One day after Governor Symington issued 
the order, Philip Morris contributed $500,000 in soft money to 
a Republican party committee, according to FEC records.
    Although spokesmen for both Governor Symington and Barbour 
denied that the tobacco litigation came up during the October 
16 meeting,32 there are grounds for skepticism. Ron 
Motley, a lawyer involved in the tobacco litigation, told a 
reporter that Barbour ``just runsaround the country trying to 
stop these lawsuits.'' 33 Symington's credibility was 
damaged on September 3, 1997 when he was convicted on federal criminal 
charges.34

       TOBACCO SETTLEMENT AND THE $50 BILLION TOBACCO TAX CREDIT

    The tobacco companies are currently seeking congressional 
approval of a proposed settlement of the multi-state litigation 
and have contributed large sums of money to the party most 
likely to take a pro-industry line. During the month of June 
1997--just before the settlement was announced--Philip Morris 
and RJR each donated $100,000 in soft money to the RNC. Between 
January 1 and June 30, the two companies gave a total of 
$575,000 to the RNC.
    The tobacco companies have also mounted a major lobbying 
campaign to win support for the settlement. One of their 
lobbyists is Haley Barbour, whose firm was retained in early 
1997 ``for six figures per month by the nation's five biggest 
tobacco companies--including Philip Morris'' according to a 
press report.35 Barbour's firm was hired just weeks 
after Barbour stepped down from his post as RNC chairman.
    On September 29, 1997, Time magazine reported that Barbour 
was behind the $50 billion tobacco tax break. Citing anonymous 
Republican Party officials as sources, the magazine stated that 
Barbour persuaded Speaker Newt Gingrich and Senate Majority 
Leader Trent Lott to put the tax break in the balanced-budget 
agreement ``just minutes before it was inked.'' 36 
When the provision was uncovered by freshmen Senators Richard 
Durbin (D-Ill.) and Susan Collins (R-Maine), it was defeated by 
vote in both the Senate and House and stripped from the bill.
    USA Today reported on August 29, 1997 that the provision 
had been written by tobacco industry representatives. Kenneth 
Kies, staff director of the Joint Committee on Taxation, was 
quoted as saying: ``The industry wrote it and submitted it, and 
we just used their language.'' 37 Kies, as discussed 
below, denies making that statement.

                     HALEY BARBOUR AND KENNETH KIES

    In an effort to learn more about the tax break, Minority 
Counsel wrote letters to Barbour's attorney and to Kenneth Kies 
on September 10, 1997.
    The letter to Barbour's attorney, Terrence O'Donnell, 
included ten interrogatories for Barbour that the Minority 
sought to have answered by September 19. Interrogatories were 
sent because Barbour would not agree to a continuation of his 
deposition that had been limited to the issue of foreign 
contributions to the National Policy Forum. The interrogatories 
asked Barbour about his fundraising from and lobbying 
activities for the tobacco industry in general and the 
companies Philip Morris and RJR in particular. Barbour was also 
asked about his lobbying of state and local officials regarding 
legislation or regulation affecting the tobacco industry. Most 
importantly, Barbour was asked about his alleged role in 
inserting a provision in the balanced budget agreement of 1997 
that would give tobacco companies a $50 billion tax credit in 
connection with the tobacco settlement.38
    On September 19, O'Donnell replied with a letter in which 
he noted that Barbour had already testified. He also questioned 
the legal authority of the Minority's request and how the 
interrogatories related to the Committee's mandate 
39 Minority Counsel responded on September 24 with a 
letter clarifying the Minority's request and noted that former 
White House Deputy Chief of Staff Harold Ickes was deposed 
twice for a total of over two and a half days, thus the request 
for more information from Barbour was not unusual. The letter 
also explained that the interrogatories were within the scope 
and mandate of the Committee because the tobacco industry was a 
major contributor of soft money during the last election, 
especially to the Republican Party. Finally, the letter 
suggested that answering these interrogatories would provide 
Barbour with a forum to rebut the Time magazine assertion that 
he was directly involved in the $50 billion tax credit for the 
tobacco industry. Without a response, the letter stated that 
the Minority ``will assume the article to have been correct.'' 
40
    The Minority received no response.
    The September 10 letter to Kies asked him to agree to a 
brief interview with Committee staff to discuss the statement 
attributed to him by USA Today and more importantly ``to 
identify the lobbyist who presented the provision as well as 
the company he represented.'' 41
    On September 30, after receiving no response from Kies, 
Minority Counsel sent a follow-up letter to Kies asking again 
for a brief interview to discuss the $50 billion tax credit for 
the tobacco industry and its possible connection to numerous 
campaign contributions by the industry during the 1996 election 
cycle.42 On October 7, Kies responded with a letter 
to Senator Glenn in which he stated that he had submitted a 
letter to the editor of USA Today that was published on 
September 19.43 In the USA Today letter, Kies 
disavowed the quotes attributed to him in the original article: 
``Contrary to the erroneous quote attributed to me, [the 
statutory language] was drafted by the legislative drafting 
staff of the House and Senate.'' 44 Furthermore, 
Kies stated in his USA Today letter that he ``did not meet with 
any representative of the tobacco industry during any time that 
the tax bill was under consideration.'' 45 He 
suggested that ``inquiries concerning the so-called tobacco 
credit provision'' should go to ``the conferees on the 1997 tax 
bill.'' 46 Kies did not comment on whether a tobacco 
industry representative could have written the language for the 
provision and gotten it submitted without meeting with Kies. 
Moreover, USA Today did not publish either a retraction or a 
correction of its story.
    While no one openly acknowledges all of the details 
surrounding the attempt to secure the $50 billion tobacco tax 
credit, the evidence clearly suggests that top Republicans were 
involved. The Washington Post reported that ``at least two days 
before most people realized it--the Gingrich-controlled House 
Republican Conference posted on the Internet a list of 
congressional `Republican Wins' in the budget and tax bills. 
Included among them was the $50 billion credit provision for 
the tobacco industry.'' Furthermore, according to the Post, not 
only were the GOP leaders ``among Congress's top recipients of 
tobacco industry funds [over the last ten years]: Lott got 
$50,250 and Gingrich $72,750,'' but ``some in Congress'' 
suggest ``the lobbying firm of former Republican national 
chairman Haley Barbour and R.J. Reynolds pushed'' for the 
provision.47 Finally, Washingtonian magazine 
directly linked Barbour and the $50 billion tax break by citing 
``insiders'' who say that Barbour ``slipped it into the bill 
himself while working with awed legislative staffers who were 
drafting the measure.'' 48
    As with most other avenues of the Minority's investigation, 
the tobacco inquiry encountered several obstacles. Barbour, 
through his attorney, failed to respond to the Minority's 
interrogatories and refused to continue his deposition or 
otherwise clarify his role in the $50 billion tax credit. 
Committee Chairman Thompson also rejected the Minority's 
request to issue a second hearing subpoena to Barbour to 
explain publicly his role in obtaining the $50 billion tobacco 
tax credit.

                               CONCLUSION

    The tobacco industry is a major funder of the Republican 
Party through hard and soft money. Former RNC Chairman Haley 
Barbour, who raised much of this money, has by all accounts 
used his influence to assist the industry on the state and 
federal levels. Perhaps the biggest payoff for tobacco's $8.5 
million investment in the Republican Party during the 1996 
election cycle was the effort to include a $50 billion tax 
credit for the tobacco industry in the 1997 balanced budget 
agreement.

                               FOOTNOTES

    \1\ This legislation is actually two laws, Public Law 105-33 and 
Public Law 105-34. Public Law 105-33 is the Balanced Budget Act of 
1997. Public Law 105-34 is the Taxpayer Relief Act of 1997. Both were 
signed into law on August 5, 1997.
    \2\ The tax relief bill was H.R. 2014, the Revenue Reconciliation 
Act of 1997. The balanced budget bill was H.R. 2015, the Balanced 
Budget Act of 1997.
    \3\ Washington Post, 8/17/97.
    \4\ Keen, Jennifer and John Daly. Beyond the Limits. Washington, 
D.C.: Center for Responsive Politics, 2/97.
    \5\ Makinson, Larry. The Big Picture: Money Follows Power Shift on 
Capitol Hill. Washington, D.C.: Center for Responsive Politics, 11/97.
    \6\ Makinson.
    \7\ Keen and Daly. One of the $100,000 corporate ``sponsors'' of 
the Republican presidential nominating convention in San Diego was 
Philip Morris. Additionallly, the company contributed about $200,000 to 
help stage the presidential debates. Tobacco firms also sprinkle 
contributions among Washington think tanks and advocacy organizations 
that support their views, mostly libertarian or free-market oriented 
groups that lobby against government interference in the economy. These 
include Citizens for a Sound Economy, the Competitive Enterprise 
Institute, the Progress and Freedom Foundation, and the American Civil 
Liberties Union. Philip Morris made headlines in 1996 when reporters 
discovered the company was the major funder of Contributions Watch, a 
non-profit group that conducted state-level research on money and 
politics. The group released a major study on contributions from trial 
lawyers. (Watzman, Nancy; James Youngclaus; and Jennifer Shecter. 
Cashing In: A Guide to Money, Votes, and Public Policy in the 104th 
Congress. Washington, D.C.: Center for Responsive Politics, 1/97, p. 
39.)
    \8\ Common Cause Magazine, Winter 1995.
    \9\ New York Times, 6/27/96.
    \10\ Wilmington Star-News, 12/7/97.
    \11\ Watzman, et al, p. 39.
    \12\ Watzman, et al, p. 39.
    \13\ Watzman, et al, p. 39.
    \14\ Watzman, et al, p. 39.
    \15\ Washington Post, 6/22/96.
    \16\ Reuters North American Wire, 6/28/96.
    \17\ Roll Call, 7/8/96.
    \18\ Roll Call, 7/8/96.
    \19\ RNC documents R050910-R050911.
    \20\ Washington Post, 8/3/91; National Journal, 6/28/86.
    \21\ Wall Street Journal, 2/20/96.
    \22\ Wall Street Journal, 2/20/96.
    \23\ Washington Post, 7/6/96.
    \24\ Arizona Republic, 2/15/96.
    \25\ Wall Street Journal, 2/20/96.
    \26\ Arizona Republic, 3/23/96.
    \27\ Arizona Republic, 3/23/96.
    \28\ Wall Street Journal, 3/1/96.
    \29\ Arizona Republic, 10/23/96.
    \30\ Arizona Republic, 10/23/96.
    \31\ Arizona Republic, 10/23/96.
    \32\ Arizona Republic, 10/23/96.
    \33\ Arizona Republic, 10/23/96.
    \34\ Arizona Republic, 9/4/97.
    \35\ National Journal, 3/29/97.
    \36\ Time, 9/29/97.
    \37\ USA Today, 8/29/97.
    \38\ Letter from Minority Counsel to Terrence O'Donnell, 9/10/97.
    \39\ Letter from Terrence O'Donnell to Minority Counsel, 9/19/97.
    \40\ Letter from Minority Chief Counsel to Terrence O'Donnell, 9/
24/97.
    \41\ Letter from Minority Counsel to Kenneth Kies, 9/10/97.
    \42\ Letter from Minority Chief Counsel to Kenneth Kies, 9/30/97.
    \43\ Letter from Kenneth Kies to Senator Glenn, 10/7/97.
    \44\ USA Today, 9/19/97.
    \45\ USA Today, 9/19/97.
    \46\ USA Today, 9/19/97.
    \47\ Washington Post, 8/17/97.
    \48\ Washingtonian, 1/98.





PART 6  ALLEGATIONS OF QUID PRO QUOS

Chapter 37:  Cheyenne-Arapaho Tribes of Oklahoma

    The Committee investigated allegations that the DNC 
solicited $100,000 from a politically naive and poor Native 
American tribe; improperly granted tribal members access to the 
President of the United States; and illegally promised the 
return of historic tribal lands currently used by the federal 
government in a quid pro quo exchange for a contribution from 
the Tribes' ``welfare'' fund. The evidence discovered in the 
course of the investigation, however, shows that the DNC did 
not solicit a contribution from the Tribes; the Tribes were 
very active in state and federal elections in 1996; they did 
not have a ``welfare'' fund; and neither the Administration nor 
the DNC acted improperly or illegally in response to the 
Tribes' efforts to regain the Fort Reno, Oklahoma tribal lands.

                                FINDINGS

    (1) No arrangement existed, or was ever contemplated, 
between the Cheyenne-Arapaho Tribes of Oklahoma and the 
Democratic National Committee or the Administration to return 
tribal lands held by the federal government to the Tribes in 
exchange for a political contribution to the DNC.
    (2) The evidence before the Committee supports the 
conclusion that the DNC and the Administration acted properly 
and legally throughout the course of their dealings with the 
Tribes.

                                OVERVIEW

    To fully understand the significance of the events that 
took place with respect to the Cheyenne-Arapaho Tribes of 
Oklahoma (the ``Tribes'') during the 1996 election cycle, and 
to put each of these events in their proper context, it is 
important to understand the Tribes' efforts over the past 
fifteen years to obtain the subsurface mineral rights for the 
historic tribal lands located in Fort Reno, Oklahoma, that are 
currently used by the federal government.
    In the 1800's, the federal government carved approximately 
10,000 acres out of land held by the Cheyenne and Arapaho 
Tribes and established a military reservation known as Fort 
Reno. The Fort Reno lands are located in Canadian County, 
Oklahoma, and there is ``ample evidence of oil and gas deposits 
under much of the area.''\1\ The Department of Agriculture 
currently utilizes the bulk of the Fort Reno lands for an 
agriculture research station (``ARS'') and the Department of 
Justice also operates a prison on a portion of the site.
---------------------------------------------------------------------------
    Footnotes at end of chapter 37.
---------------------------------------------------------------------------
    In 1975, Congress created a legislative mechanism known as 
the Surplus Property Act \2\ that allows Native American tribes 
to seek recovery of former tribal lands from the federal 
government.\3\ Under the Surplus Property Act, tribes are 
entitled to the restoration of their lands if those lands are 
declared excess federal property. For the past fifteen years 
the Cheyenne-Arapaho Tribes have aggressively lobbied Congress, 
as well as the Reagan, Bush, and Clinton Administrations, in an 
effort to obtain the subsurface rights to the Fort Reno lands 
under the Surplus Property Act.
    In 1990, Eddie F. Brown, President Bush's Assistant 
Secretary for Indian Affairs in the U.S. Department of the 
Interior, confirmed in a letter to Senator Daniel Inouye that 
``the Fort Reno property, were it declared excess federal 
property, would satisfy the requirements of the Oklahoma 
provision of the Surplus Property Act'' and could be 
transferred to the Department of the Interior to be held in 
trust for the benefit of the Tribe.\4\ In 1993, the Tribes 
enlisted the services of Patton, Boggs & Blow to make their 
case that the lands should be declared excess. The firm wrote 
to the General Counsel of the U.S. Department of Agriculture, 
``as you know, the Cheyenne and Arapaho Tribes have requested 
that the [USDA] declare excess to its needs the subsurface 
rights to an area known as the Fort Reno Lands.'' \5\ The firm 
explained that the Tribes sought to ``develop the subsurface 
minerals without undue disturbance to the surface'' which would 
allow the USDA to continue operation of its agriculture 
research station on the surface of the Fort Reno lands.\6\
    On November 19, 1993, George B. Farris, Acting Director, 
Office of Trust Responsibilities, Bureau of Indian Affairs, 
United States Department of the Interior, stated in a letter 
that the Bureau of Indian Affairs supported the return of the 
Fort Reno lands to the Tribes if the requirements of the 
Surplus Property Act were satisfied. Mr. Farris wrote:

          As you know, it is the position of the Bureau of 
        Indian Affairs that if the Fort Reno lands are declared 
        excess Federal property by the Department of 
        Agriculture, the property would satisfy the 
        requirements of the Oklahoma provision of the Surplus 
        Property Act [40 U.S.C. Sec. 483(a)(2)(1982)] and the 
        lands should be returned to the tribes. We are 
        certainly in support of the subsurface rights to these 
        lands being returned to the Cheyenne and Arapaho 
        Tribes.\7\

    Up to 1993, the Tribes' efforts had focused on obtaining 
use of the subsurface rights of the Fort Reno lands in a manner 
which would not disturb the ARS operated by the USDA or the 
federal prison. By gaining the right to drill oil on the Fort 
Reno lands, the Tribes would have reaped substantial financial 
rewards. In 1994, however, the Tribes saw an opportunity to 
obtain the surface rights to the lands as well.

            THE BATTLE OVER THE CLOSURE OF THE FORT RENO ARS

    In early 1994, the Clinton Administration released its 
proposed budget for fiscal year 1995. This budget proposal 
called for the closure of the USDA's agriculture research 
station operated on the Fort Reno lands because it was outdated 
and inefficient compared to other similar research facilities. 
The Congressional Research Service (``CRS'') had reviewed the 
productivity of the five scientists working at the Fort Reno 
ARS, and after comparing it to other research facilities, had 
found that there were similar research facilities located in 
Miles City, Montana and Clay Center, Nebraska that proved to be 
more modern and more productive than the Fort Reno facility 
which it termed ``outdated.'' \8\
    Closure of the research station would likely have resulted 
in the Fort Reno lands being declared excess federal property 
and consequently returned to the Tribes pursuant to the Surplus 
Property Act. However, the Oklahoma congressional delegation 
opposed the Clinton Administration's proposal to close the ARS. 
On February 7, 1994, Congressman Frank Lucas wrote to the 
chairman of the subcommittee of the Appropriations Committee 
responsible for the USDA budget and urged him to preserve 
funding for the Fort Reno agriculture research station.\9\ 
According to tribal attorney Rick Grellner, during a May 1994 
meeting with representatives of the Tribes, a staff member for 
Lucas argued that Congress had to restore funding for the Fort 
Reno ARS or the Tribes would get the land.\10\
    In the summer of 1994, tribal representatives traveled to 
Washington, D.C. a dozen times to lobby Members of 
Congress.\11\ They received no support, however, from the 
Oklahoma delegation. According to Archie Hoffman, a Cheyenne-
Arapaho tribal leader, Ryan Leonard, an aide to Senator Don 
Nickles, told the Tribes at that time that they did not get 
attention because they were not involved politically.\12\ The 
New York Times reported Hoffman's account of one of these 1994 
trips:

          Tribal leaders went to Mr. Nickles's office in 
        Washington, but they said a Nickles aide denied them an 
        opportunity to meet with the Senator. Mr. Hoffman said 
        that was when they decided to form a political action 
        committee and register thousands of American Indians to 
        vote.\13\

The Philadelphia Enquirer reported that the Tribes were told 
that the reason their issues were not addressed was because 
``Indians don't vote.'' \14\ In response, the Tribes registered 
7,000 tribe members to vote and ``set out to make Oklahoma's 
biggest donation to the Democrats.'' \15\
    Although the Tribes did win an initial victory when the 
Senate voted 76-23 in favor of closure of the Fort Reno ARS, 
the Oklahoma congressional delegation continued to work to 
restore $1.7 million in the House-Senate budget conference bill 
to keep the station open. On July 25, 1994, Congressman Lucas, 
Senator Nickles and Senator David Boren, co-signed a letter to 
the Senate-House conferees on the fiscal year 1995 Agriculture 
and Related Agencies Appropriations bill, urging them to 
support an effort to restore funding for the Fort Reno 
facility.\16\ These efforts ultimately proved successful, and 
funding for the Fort Reno ARS was restored in the fiscal year 
1995 budget.\17\
    In a letter to a constituent, Senator Nickles described the 
steps taken to save the Fort Reno ARS:

          As you know, the Fort Reno research facility was 
        targeted for termination by President Clinton in his 
        1995 budget proposal. After the House agreed to the 
        President's proposal, I managed to amend the 
        agriculture funding bill to save the station from 
        closure. Then, regrettably, my amendment to fund Fort 
        Reno failed to survive Senate consideration.
          Following Senate action on the agriculture funding 
        bill, I joined with Senator David Boren and Congressman 
        Frank Lucas in asking the joint House-Senate conference 
        committee to reinstate funding for this important 
        research facility . . . I then followed this letter up 
        with phone calls to the chief negotiators on the 
        bill.\18\

    The Fort Reno ARS supporters won the 1995 budget battle, 
but the Administration continued its effort to streamline the 
government by eliminating an inefficient, outdated research 
facility and the Tribes continued their effort to regain 
control of the subsurface and surface rights to the Fort Reno 
land on which the research station idled.
    On November 8, 1994, less than two months after the Fort 
Reno ARS was rescued from President Clinton's budget cuts, a 
delegation from the Tribes met with officials at the Department 
of Agriculture to propose a compromise that would enable the 
Tribes to use the Fort Reno land, yet still keep the research 
facility open, and allow the Veterans Department to establish a 
national cemetary on part of the land.\19\ Elwood Patawa, 
Director of Native American Programs for the Department of 
Agriculture, drafted a memorandum for the Deputy Secretary in 
which he outlined the compromise proposed by the Tribes. Patawa 
explained:

          This approach (the Tribes' proposal) satisfies the 
        Tribes, the veterans, the President's directives to 
        reinvent government, the [Agriculture] Department's 
        evaluation of the ARS station, the congressional 
        interest expressed in the FY95 Appropriation Act, the 
        Executive Order regarding arrangements of comity and 
        cooperation with tribal governments, the Surplus 
        Property Act, the Veterans Department process in citing 
        [sic] a cemetery in Oklahoma . . . \20\

    At the same time, the Cheyenne-Arapaho obtained the help of 
other Native American tribes in lobbying for the return of the 
Fort Reno lands. Members of the Upper SiouxCommunity in Granite 
Falls, Minnesota wrote to the Bureau of Indian Affairs in support of 
the proposed transfer of the Fort Reno lands to the Tribes.
    Throughout 1995, the Tribes continued to lobby local and 
national government agencies and officials. Their efforts, 
however, met with little success. Despite renewed attempts by 
the Clinton Administration to delete funding for the Fort Reno 
ARS in the fiscal year 1996 budget, Congress once again 
restored the funding. Even the Tribes' effort to have the El 
Reno, Oklahoma city council pass a resolution of support proved 
unsuccessful. Although the vote on the resolution was 4-3 in 
favor, the resolution failed because two council members did 
not attend the meeting and because the council's operating 
procedures required a resolution to receive at least 5 votes to 
be official.
    Several council members indicated that Senator Nickles had 
intervened to ensure that the city council resolution would 
fail. Council member J.P. Fitzgerald, who voted against the 
resolution, and another council member who did not attend the 
meeting, had agreed to support the resolution just a few days 
earlier, before they were contacted by a member of Senator 
Nickles' staff.\21\ According to press reports, council member 
Fitzgerald said he voted against the resolution ``because U.S. 
Sen. Don Nickles' staff told him that the Tribes' land claim 
could not be intertwined with any cemetery resolution.'' \22\ 
Another council member, Matt White, who also voted against the 
resolution, said, ``We gave Nickles what he asked for'' when 
the council passed an earlier resolution that merely supported 
the national cemetery and did not address the Tribes' land 
claim.\23\
    On December 11, 1995, ABC News aired a segment on the 
Clinton Administration's effort to cut waste from the federal 
budget, including ending the ``charmed life'' of the Fort Reno 
ARS:

          Peter Jennings: For our weekly look at how the 
        government spends your money, we look tonight at a 
        particular program that seems to have a charmed life. 
        Despite a decision by agriculture department officials 
        to shut this project down--it just keeps going on. . . 
        .
          Senator Patrick Leahy (D-VT): What happens is that 
        they're strapped for money because the money is being 
        spent just propping up aging, decaying, obsolete 
        facilities in other parts of the country. Example: Fort 
        Reno, built in the 1880's, the USDA says it will cost 
        too much to modernize, $8 million.
          John Martin: Everybody says they want to save money. 
        So why hasn't Congress closed Fort Reno and the others? 
        Well each of the stations has at least one die hard 
        patron who insists his station is too important to 
        close. So they stay open. Fort Reno's patron is Don 
        Nickles.
          Senator Don Nickles (R-OK): We haven't put a lot of 
        money into building. What we have done is put research 
        in the ground.\24\

    Restoration of funding for the Fort Reno ARS effectively 
blocked the Tribes' effort to have the land declared ``excess'' 
by the departments of Agriculture and Interior. After losing 
the budget battles in 1994 and 1995, the Tribes took a more 
aggressive approach, deciding to hold political rallies and run 
issue ads on the Fort Reno land issue.

             THE TRIBES INCREASE THEIR POLITICAL ACTIVITIES

    The Tribes, disappointed that funding for the Fort Reno 
facility was restored by the Republican-controlled Congress, 
planned a protest rally to be held at the ARS gates. According 
to news reports, tribal member Archie Hoffman, ``said the rally 
is to protest the proposed budget cuts in the Bureau of Indian 
Affairs, U.S. Sen. Don Nickles' changing position on the 
proposed national veterans cemetery, and the government's 
unwillingness to return the Fort Reno land'' to the Tribes.\25\ 
Hoffman, according to the reports, stated that ``The state's 
veterans need and deserve a national cemetery and the tribes 
deserve their land back.'' \26\ Senator Nickles, through an 
aide, responded to the proposed rally by saying, ``I am 
disappointed the tribes are not willing to approve clear title 
to the 130 acres for the national cemetery without a lot of 
conditions.'' \27\
    In November 1995, the Tribes spent over $100,000 to run two 
60-second television advertisments on the Fort Reno issue.\28\ 
The text of the two ads illustrates the harsh tenor of the Fort 
Reno dispute:

Ad One--Text
    They call it a research station but little research is done 
here and the Agriculture department wants it closed. Most of 
the buildings sit empty. So does most of the land except the 
part used by a handful of ranchers allowed to fatten their 
cattle here. All this costs taxpayers $1.6 million a year. It's 
a prime example of wasteful federal spending that Frank Lucas 
and Don Nickles claim they're against. But Lucas and Nickles 
keep voting for it. Taxpayers keep paying for it. And 
somebody's cows keep getting fat.\29\
Ad Two--Text
    7,000 acres near El Reno sit mostly unused. There's a run 
down federal government research station that the Agriculture 
Department would like to close. There's a historic cavalry fort 
that few people visit. But there's an old Army graveyard that 
the Veterans' Administration would like to make the center of a 
new National Cemetery.
    The cemetery would serve and honor Oklahoma veterans. The 
old fort could be turned into a tourist attraction. The land 
could provide jobs in ranching and energy. But all this 
progress is being stopped by Senator Don Nickles and 
Congressman Frank Lucas.
    The Cheyenne-Arapaho Tribes claim rightful title to this 
land but they've offered to give enough up for the cemetery if 
the rest of it will be returned to the tribes. Veterans support 
the idea. So does a majority of the El Reno city council. But 
Nickles and Lucas keep saying no.
    Tell Nickles and Lucas to stop playing politics and do 
what's right for Oklahoma.\30\

    In late November or early December 1995, members of the 
Tribes' leadership met with former Oklahoma Attorney General 
Mike Turpen to seek his help in lobbying for the return of the 
Fort Reno lands.\31\ Rick Grellner, the Tribes' attorney, 
suggested that the Tribes hire Turpen to lobby on their behalf 
in Washington, D.C.\32\ Turpen told the Tribes he could not 
make any guarantees, but he agreed to help set up meetings on 
their behalf with federal agencies in Washington, D.C.\33\ 
According to Tribal chairman Charles Surveyor, Turpen made ``a 
lot of contacts'' for the Tribes in Washington.\34\
    In the spring of 1996, tribal representatives met with 
Agriculture Department officials Larry Ellsworth, Mary McNeel, 
Floyd Horn, Jim Snow, Michael Darrien and Richard Romniger for 
one hour to discuss the Tribes' claims.\35\ Ironically, Horn 
was the director of the Fort Reno ARS for the USDA before he 
was transferred to Washington, D.C.\36\ The meeting with 
Ellsworth and McNeel apparently went well but, according to 
Turpen, he and Grellner had a confrontation with Horn in the 
hallway after the meeting was finished. According to Turpen, 
Horn said, ``Nickles will never let you have [the land].'' \37\
    The tribal representatives also met with Justice Department 
officials, including Craig Alexander (Tribal Affairs) and Kay 
Lin Free (Native American Resources) to discuss the Tribes' 
claims. The Tribes were advised to draft a letter to Bob 
Anderson in the Solicitor General's Office at the Department of 
the Interior laying out their legal claim to the land and the 
argument that they had not been compensated by the U.S. 
government.\38\
    In late April or early May 1996, Grellner sent a letter and 
a legal brief on the issues to Anderson.\39\ Anderson assigned 
Brad Grenham to work with Grellner on this matter and they 
spoke approximately twenty times during the Summer of 1996 
about the Tribes' legal claims.\40\

                  THE TRIBES' CONTRIBUTION TO THE DNC

    It appears that in early 1996 the Tribes also began to 
consider getting involved in the political process by making a 
contribution to the DNC. According to transcripts of a June 3, 
1996 tribal meeting, the Tribes' contribution to the DNC was 
first considered by tribal leaders in February 1996--three 
months before they actually contacted the DNC. The transcript 
quotes Tyler Todd as saying, ``back on February 12th [1996] was 
the first time the Business Committee discussed giving a 
donation to someone.'' 41 Hoffman, Todd, Tabor, 
Surveyor and Grellner discussed the possible contribution many 
times in February and March 1996 and during one of these 
meetings, Hoffman said, ``why don't we make a $100,000 
donation'' to the DNC.42 Although there have been 
allegations that the Tribes were encouraged or even solicited 
to make this contribution by Turpen, both Grellner and Todd 
have stated that Turpen was not part of these discussions and 
did not participate in the decision-making 
process.43 Moreover, Turpen himself stated that the 
contribution was entirely the Tribes' idea.44
    On April 30, 1996, the Tribes' Business Committee 
formalized their decision to contribute $100,000 to the 
DNC.45 The Tribes' decision was re-affirmed in a 
resolution passed by the leadership on July 9, 1996. The 
resolution read, in part:

          A majority of the Business Committee of the Cheyenne 
        and Arapaho Tribes on the previous occasions as far 
        back as of April 30, 1996, had agreed that the Tribes 
        should be involved in a positive manner in the 
        political process and as a result to contribute 
        $100,000 to the Democratic National Committee for the 
        exclusive purpose of voter outreach and voter education 
        for Native American voters.46

    The deliberative steps the Tribes took before finalizing 
their decision to contribute to the DNC indicates that they 
were not a politically naive group, but rather, a politically 
savvy organization which intended to bring attention to their 
cause by making the largest political contribution in Oklahoma. 
According to news reports, tribal leaders maintained that:

        they knew exactly what they were doing, that they 
        approached the Democrats about giving money, that the 
        funds were in a savings account that hadn't been 
        earmarked for any other purposes, that they weren't 
        under any illusions it would automatically get the land 
        for them and that they were just doing what many other 
        groups do to get people here (Washington, D.C.) to 
        listen. ``It costs to get involved in the process,'' 
        said Archie Hoffman, secretary of the tribes' business 
        committee.

    Contrary to allegations that the Tribes were pressured into 
contributing to the DNC by advisors or Democratic operatives, 
interviews with members of the Tribes revealed that they had 
very clear reasons of their own for wanting to contribute to 
the DNC. According to Surveyor, the Tribes contributed to the 
Democratic party because tribal members believed that Democrats 
supported issues important to Native Americans, while 
Republicans opposed them.47 As an example, Surveyor 
cited a 1995 effort by the Republican-controlled Congress to 
cut funding for many Native American programs, an effort which 
was vetoed by President Clinton.48
    Todd stated that the Tribes contributed to the DNC, in 
part, because Republican Members of Congress had opposed their 
efforts to regain the Fort Reno lands.49 The Tribes 
also cited the need to counter the campaign donations that 
Republican Members of Congress received from individuals and 
organizations who supported the Fort Reno ARS as another reason 
that they decided to contribute to the DNC. The Daily Oklahoman 
reported on March 17, 1997:

          Farmers and ranchers--whose political action 
        committees have given generously to Nickles and other 
        Oklahoma lawmakers--successfully lobbied to keep the 
        Agricultural Research Service station at Fort Reno, 
        despite Clinton Administration efforts to close it. . . 
        . Hoffman, the secretary of the Tribes' business 
        committee, said last week supporters of the research 
        station ``donate heavily'' to the campaigns of some 
        Oklahoma lawmakers. Lucas, who received donations last 
        year from a wide range of agriculture-related political 
        action committees, said he does, ``in a sense,'' get 
        campaign contributions from people who support the 
        research station, ``whether they're from El Reno or 
        farmers and ranchers across the district.'' 
        50

    Contrary to inaccurate press reports that the Tribes 
contribution came from a ``welfare fund . . . normally used to 
help tribal members who can't pay such things as heating-oil 
bills,'' the evidence establishes that the Tribes do not have a 
``welfare'' fund.51 The source of the funds used by 
the Tribes for the DNC contribution was in fact accumulated 
monthly fees paid to the Tribes for their management of a bingo 
hall.52 The Tribes are paid $5,000 per month by the 
Southwest Casino and Hotel Corporation to manage the bingo 
games held at the Lucky Star Bingo Hall in Concho, 
Oklahoma.53 The first $5,000 payment was paid to the 
Tribes in July 1994.54 The Tribes deposited the 
monthly management fees into certificates of deposit (``CDs''). 
By February 1997, they had received over $140,000.55 
The contribution to the DNC was the first time this revenue 
source was used for any purpose by the Tribes.56
    The Tribes' attorney confirmed in an interview with 
Majority and Minority counsel that the Tribes did not have a 
welfare fund and that the bingo management money had not 
previously been used for anything by the Tribes.57 
Both Surveyor and Todd also confirmed in their interviews that 
the Tribes did not have a ``welfare fund'' and that the source 
of the money contributed to the DNC was bingo management fees 
that were deposited in CDs.58
    There is no dispute that per capita income among tribal 
members is very low and that unemployment is very high. Nor is 
there any dispute that the money received by the Tribes from 
the bingo operations could have been used for other purposes. 
That, however, is adecision that belongs to the Tribes 
themselves--and a decision apparently made by the Tribes themselves. 
Moreover, it appears that the decision was made after the Tribes had 
learned that they would be receiving more than $1 million in early 1996 
from the settlement of a lawsuit.59
    In May 1996, Surveyor, Todd, and Grellner met in Turpen's 
law office in Oklahoma City where they informed Turpen that the 
Tribes had decided to contribute $100,000 to the 
DNC.60 Turpen then called Jason McIntosh, a friend 
and staff person who worked at the DNC. Contrary to allegations 
that the DNC had solicited the Tribes, McIntosh testified that 
he learned for the first time of the Tribes' decision to 
contribute money during this conference call.61 
During the course of the conversation, McIntosh asked if the 
Tribes could afford to make the contribution, and was informed 
by the Tribes' leadership that they could.62 He 
subsequently provided Turpen with instructions on how the 
Tribes could wire their contribution directly to the 
DNC.63 McIntosh testified that ``[i]n no way 
whatsoever did I know anything about the tribe, their income 
levels or anything of that nature until well into '97'' when he 
read the March 1997 Washington Post article that broke the 
story publicly.64 McIntosh also testified that he 
did not recall any discussion about the Fort Reno land during 
the course of the May 1996 phone conversation with Turpen and 
the tribal leaders.65

                        THE WHITE HOUSE LUNCHEON

    On or about June 10, 1996, Turpen was invited to attend a 
small luncheon with the President at the White 
House.66 According to McIntosh, Turpen was invited 
because he was an ``active supporter.'' 67 Turpen 
did not, however, make a political contribution in connection 
with the White House luncheon.68 Terry McAuliffe 
explained in his deposition that ``[a]t this time we were 
trying to do some outreach to people who had been active and 
wanted to be active.'' 69 McIntosh testified in his 
deposition that it was indeed Turpen--not tribal members--who 
was originally invited to attend the luncheon.70
    When McIntosh informed Turpen that he was invited to attend 
the White House luncheon, Turpen asked if two representatives 
from the Tribes could attend in his place. In his deposition, 
McIntosh explained:

          Mr. Turpen basically just requested an accommodation 
        for him; that they be allowed to attend; that they were 
        active supporters or whatever and were going to be 
        politically involved and he wanted to make that request 
        [that tribal representatives attend the luncheon 
        instead of him]. . . .71 He just wanted 
        their name to be suggested instead of his. Instead of 
        him going, they go.72

    According to McIntosh, when Turpen requested that tribal 
leaders attend the lunch in his place, Turpen's name was 
withdrawn from the guest list, and McIntosh then forwarded the 
names of the tribal representatives to the White 
House.73 McIntosh was not aware that the tribal 
officials intended to talk to the President about the Fort Reno 
land issue when he sent their names to the White House in mid-
June 1996.74
    On June 12, 1996, Turpen called Grellner to inform him, for 
the first time, that two tribal representatives could attend a 
luncheon with the President at the White House on June 17, 
1996.75 The Tribes accepted the invitation 
immediately and decided to send Surveyor and Todd as their 
representatives to the White House luncheon.76 The 
tribal leaders had not known that they would be invited to the 
White House for a luncheon with the President when they decided 
to contribute $100,000 to the DNC in early 1996. 
Surveyor,77 Grellner,78 and Hoffman 
79 all confirmed this in interviews with the 
Committee staff. Grellner also stated that there had been no 
discussion of a White House luncheon during the Tribes' 
conversation with McIntosh.80
    On the morning of June 17, 1996, Surveyor, Todd and 
Grellner met with McIntosh before they were escorted by 
McAuliffe to the White House luncheon.81 An 
assertion was made in the course of the Committee's 
investigation that McIntosh demanded a check from the Tribes 
during this meeting. Such a demand makes no sense, however, in 
light of McIntosh's previous arrangements with Turpen to have 
the money wired to the DNC. This assertion is also contradicted 
by Surveyor, who said in his interview that McIntosh did not 
ask for a check.82 McIntosh himself testified in his 
deposition that, ``I asked them did they have any difficulty 
wiring it [the contribution], because I knew since given wiring 
instructions, they were going to transmit it that way.'' 
83 The tribal representatives told McIntosh that 
they would be sending the contribution to the DNC by wire 
transfer at a later date.84
    The tribal representatives met with McIntosh for about five 
minutes before he introduced them to McAuliffe for the first 
time.85 The Tribes' attorney told the Committee 
staff that McAuliffe did not appear to know anything about the 
Tribes' contribution or the Fort Reno land issue when they 
spoke with him.86 The Tribes gave McAuliffe a large 
package of documents that included news clips, copies of 
letters, and other background information regarding the Fort 
Reno land.
    After the brief meeting with McIntosh and McAuliffe, 
Surveyor and Todd traveled by taxi with McAuliffe and another 
staff person to the White House for the luncheon.87 
After being admitted to the White House, Todd and Surveyor were 
taken to the Green Room where they waited with a few other 
people for the President to arrive.88 After 
approximately 30 minutes, the President entered the room with a 
photographer and chatted briefly with the guests about the 
history of the Green Room before escorting the group to the 
Blue Room for the luncheon.89 There were no assigned 
seats at the table and Surveyor, who was the last person to sit 
down, took the last vacant seat next to the 
President.90
    The President spoke briefly about world affairs, the 
weather, and then, according to Surveyor, ``sat around and 
listened to what everybody had to say.'' 91 Each 
guest was given an opportunity to speak. When it was Todd's 
turn, he deferred to the Tribes' chairman andpolitely declined 
the President's invitation. Surveyor, who was the last to speak, 
focused on Native American issues, health care, and 
education.92 He also gave the President a brief history of 
the Fort Reno land controversy.93
    After listening to Surveyor, the President asked a staff 
person present in the room, ``do we have anything on Fort 
Reno?'' 94 The staff person pulled out the package 
of documents the Tribes had given to McAuliffe earlier in the 
day to show the President that they did have some information 
on the issue.95 According to Surveyor, the President 
said ``we'll see what we can do to help you,'' but made ``no 
promises.'' 96 Todd did not think that the President 
would take any action, but hoped that his interest would help 
open some doors within the Administration.97 
Surveyor said that there was no discussion about contributions 
with the President or any of the other guests before, during, 
or after the luncheon.98
    Surveyor and Todd were escorted out of the White House by 
McAuliffe. The press has reported misleading characterizations 
offered by unnamed ``Senate aides'' of a post-luncheon 
conversation between McAuliffe, Surveyor and Todd as apparent 
evidence of a quid pro quo arrangement involving the Tribes' 
contribution for the return of the Fort Reno land. The 
Associated Press reported on October 13, 1997, that ``Senate 
aides, speaking on condition of anonymity, said tribal 
representatives told investigators that Terence McAuliffe, 
Clinton's chief campaign fundraiser, assured Surveyor as they 
left the luncheon, ``When the president makes a promise, he 
keeps it.' '' 99 There is no evidence before the 
Committee that substantiates this description of the 
conversation. Tribal attorney Barry Coburn explained that 
McAuliffe merely told Surveyor and Todd that if the President 
says he will do something, he will do it.100 
According to Coburn, Surveyor and Todd understood McAuliffe to 
mean that the Administration would look into the matter, not 
that their land would be returned.101
    For his part, McAuliffe did not recall the post-luncheon 
conversation with Surveyor and Todd, but he did testify that he 
probably did say something positive.102 He further 
stated that he had no further contact with the Tribes after the 
lunch. ``Once we walked out of the White House, I never spoke 
to these people again,'' he testified.103 He also 
testified that he never spoke to anyone at the DNC, the White 
House, the Clinton campaign, the Interior Department, the 
Agriculture Department or anywhere else about the Tribes or the 
Fort Reno land.104
    There was no evidence presented to the Committee of any 
quid pro quo arrangement involving the Tribes' contribution in 
exchange for the return of the Fort Reno land. Indeed, in a 
press release issued on June 28, 1996--almost a year before the 
story first appeared on the front page of the Washington Post--
the Tribes made it clear that the President had made no 
promises to the Tribes.
    The press release indicated that the tribal representatives 
had met with the President ``to discuss, Native-American 
issues, the importance of the up-coming election in November 
[1996] and how we as Native Americans and specifically the 
Cheyenne and Arapaho Tribes can be pro-actively involved in the 
process to help re-elect President Clinton and elect Democrats 
to office.'' The press release also stated:

          When asked about the content of the meeting Surveyor 
        responded, ``We discussed a lot of policy issues such 
        as the recent attack by the Republican Congress on the 
        Indian Child Welfare Act, Welfare Reform, cuts to 
        Native American programs and his positive support for 
        funding for the Indian Health Service.
          ``We discussed at great length the recent logjam over 
        the National Cemetery that has been created by Senator 
        Nickles and his willingness to pit the interests of 
        Native Americans regarding Fort Reno against the 
        community and voters support for the National Cemetery 
        without seeking common ground.''
          The question Surveyor fielded was in regards to 
        anything specifically promised by the Administration 
        for the Tribes participation. In response Surveyor 
        snapped, ``Absolutely nothing. We simply wish to 
        support the cause and be involved in the process. I am 
        always a little skeptical at the reporter who is so 
        willing to attribute some sort of sinister motive to 
        our legal, ethical and proactive involvement in the 
        political process. Why don't they ask the executives of 
        the local financial institutions what they get for 
        supporting their Republican candidates. This is about 
        leadership, citizenship and our votes that need to be 
        counted. Nothing more, nothing less.'' 105

    The evidence clearly shows that neither the President nor 
McAuliffe made an explicit or implied promise that the Tribes 
would obtain any benefit in exchange for their contribution to 
the DNC. The Tribes' contribution was not discussed with the 
President, and Surveyor and Todd confirmed that no promises 
were made by either the President or McAuliffe during or after 
the luncheon.
    After the luncheon, McIntosh called Grellner approximately 
three times to follow up on the Tribes' 
contribution.106 According to McIntosh, Grellner 
kept telling him that the money was on its way and he, in turn, 
``would follow up each time that indication was given.'' 
107 On June 26, 1996, the DNC received a wire 
transfer from the Tribes in the amount of $87,671.74. Upon 
wiring the money to the DNC, Grellner told McIntosh, ``we'll 
send more later.'' 108 McIntosh, however, did not 
have any further contact with Grellner or the Tribes regarding 
additional contributions.

          Minority Counsel: Now the tribes' donation was 
        approximately $87,000 to the DNC. Did you ever follow 
        up to make sure that they contributed the original 
        $100,000 that they indicated that they would 
        contribute?
          McIntosh: No, once that was done and once I told Mike 
        [Turpen] that, you know, hey, it's been received, that 
        was it. That was the end of my involvement with 
        Cheyenne-Arapaho Indians.109

    Allegations have been made that the DNC and the 
Administration somehow pressured or took advantage of the 
Tribes. One news report stated that a Senator:

        said in a prepared statement that it was unsettling to 
        learn that prominent figures in the administration's 
        campaign ``may have been engaged in what amounts to a 
        shakedown. And secondly, I am concerned that certain 
        tribal leaders may have used $107,000 from a fund 
        intended for needy tribal families as a payoff for 
        political favors. That's unconscionable.'' 
        110

Surveyor and Todd, however, said that they did not believe the 
Tribes were ``shaken down'' by the DNC.111 Todd 
said, ``we made a decision and went after it. We're not going 
to stop being politically involved.'' 112 ``We 
didn't ask for anything, and we weren't promised anything,'' 
Todd said, adding that he never felt pressured to give money at 
any time.113 Todd felt that ``the Cheyenne and 
Arapaho Tribes [had] been more hurt by Senator Nickles' actions 
than by the DNC.'' 114
    Minutes from tribal meetings support the tribal 
representatives' statements that the contribution was not the 
result of any pressure from the DNC. On June 20, 1996, the 
Tribes held a business committee meeting to discuss Surveyor 
and Todd's trip to Washington to meet with the President. 
During the course of this meeting, the Tribes discussed their 
past political involvement and their goals for the future. One 
unidentified speaker discussed the importance of being involved 
in the political process:

          We live in a world where things beyond our control 
        affect us. Unless we are willing to engage and be 
        involved in the process, however, imperfect as it has 
        been given to us, then we can't expect to be at the 
        table when those issues are determined, and that's how 
        it has been for the last several years, and that is how 
        it continues to be, unless we decide that we are going 
        to be involved.115

Another speaker agreed, ``we have to get involved in this 
political process if we want to get anything done.'' 
116
    One member of the Tribes asked Surveyor what kind of 
commitment he had received from the President. Surveyor 
responded, ``Well, in the first place, you don't go in and make 
deals with the President. We go in and talk to him.'' 
117
    Members of the Tribes discussed the impact that the 
contribution would have in the future. One member stated, ``I 
don't think anyone disputes that a contribution this large 
would help the Tribes politically.'' 118 Others 
cited the Cherokees who had been politically active for a long 
time and were ``doing good'' as an example.119 This 
statement was followed by the observation of one attendee who 
said, ``I don't want to dispute that making a donation has an 
impact, but I think it is the years of political influence that 
they've had with Congress that has more to do with what the 
Cherokees are receiving than any one donation that was made 
recently.'' 120
    The June 20, 1996 tribal meeting shows that the Tribes 
understood the importance of their political activity and were 
not political neophytes. They had a great deal of experience 
interacting with the Oklahoma Congressional delegation and 
federal agencies over the years. The television ads and voter 
registration drives in 1995 and their political contributions 
in 1996 illustrate their active political involvement.
    The fact that the Tribes understood what they were doing is 
reinforced by another business committee meeting held on July 
9, 1996. During that meeting the members discussed the Tribes' 
ability to afford the large contribution to the DNC, the 
similarity between the Tribes and corporate contributors, and 
another resolution re-affirming their commitment to contribute 
to the DNC.
    One unidentified speaker re-assured the members that they 
could afford to make a large contribution to the DNC. He 
reminded them that the Tribes knew in January 1996 that they 
would receive close to $2 million from the ``Woods 
settlement.'' 121 Another speaker discussed how the 
Tribes contribution was similar to those made by corporations 
and the perceived impact such contributions have on the 
political process. He said:

          You know, you talk about businesses and corporations. 
        You wonder why these large corporations you see in the 
        papers [inaudible]. I'll tell you what, dinero talks. 
        Any time you make large contributions when the state 
        governor sees that all these small tribes are better 
        off opposing this Bill 2208--because this contribution 
        to the Democratic Party is going to make him sit back 
        and say, ``Hey, now these guys are serious. We need to 
        reconsider some of these things.'' But that is the key. 
        Whenever you want recognition and you want to get into 
        any organization, when you pay your dues, you become 
        part of that. You have a voice.122

    Hoffman stated during the meeting that the Tribes had 
committed to making a $100,000 contribution to the DNC 
previously but that they wanted to re-authorize the commitment 
with another resolution. Another member of the Tribes expressed 
a concern that they could not afford to make the contribution, 
but Hoffman reassured them, again, that the ``Woods 
settlement'' enabled the Tribes to make the 
contribution.123 The July 1996 resolution passed by 
the Tribes stated, in part:

          Now, therefore be it resolved that, the Tribes have 
        previously located funds that have been received from 
        Tribal businesses for the accomplishment of this goal 
        and that a majority of the 30th Business Committee 
        hereby re-authorizes such expenditure and hereby 
        formalizes such support for the donation.124

                  the president's birthday fundraiser

    The DNC used President Clinton's birthday as a centerpiece 
for raising money at satellite events around the country in 
August 1996. The Oklahoma satellite birthday event was 
underwritten by the Tribes.
    In the last week of July 1996, the Tribes were contacted by 
Turpen, who asked if they were interested in sponsoring a 
satellite birthday fundraiser in Oklahoma for the 
President.125 Grellner told Turpen that the Tribes 
would contribute $20,000 to be a sponsor of the birthday 
event.126 The business committee voted to use 
$15,000 more from the bingo management fees and borrow $5,000 
from another corporate account.127
    The invitations to the satellite birthday fundraiser state 
that the event was ``underwritten by the Cheyenne and Arapaho 
Tribes of Oklahoma.'' 128 Approximately 600 people 
attended the satellite fundraiser at an Oklahoma City hotel. As 
a thank you for their contribution, the Tribes were given floor 
passes at the Democratic National Convention in Chicago, 
Surveyor was invited to a reception for Vice President Gore, 
and Todd attended a dinner with the Vice 
President.129
    When the Tribes decided to contribute $20,000 to pay for 
the satellite fundraiser they did not know that they would be 
invited to a dinner with the Vice President.130 That 
dinner was held in July 1996 in Washington, D.C.131 
Approximately 80 people attended the dinner. Todd represented 
the Tribes and was seated at the Vice President's 
table.132 Todd talked about health care and Indian 
sovereignty issues during the dinner. During the dinner, the 
Vice President reminisced about a family vacation he had taken 
to Oklahoma when he was a small boy.133 He also 
introduced Todd to Mitchell Berger, a Democratic activist who 
was also seated at their table. Todd did not discuss the Fort 
Reno land issue with either the Vice President or 
Berger.134
    In early August 1996, Surveyor attended an outdoor 
reception with three busloads of people held at the Vice 
President's residence in Washington.135 Surveyor 
shook hands with the Vice President in a receiving line but had 
no conversation with him about the Fort Reno land issue, or any 
other matters.136
    In late August 1996, Surveyor, Todd and Grellner attended 
the Democratic National Convention held in 
Chicago.137 In January 1997, Berger contacted Todd 
to request a contribution from the Tribes to help pay for the 
Inauguration ceremonies.138 Todd informed him that 
he could not commit to a contribution, but that the Tribes 
would have more moneylater.139 Todd did not feel 
pressured to contribute to the DNC and told the Committee staff in an 
interview that, ``If someone gave me $100,000, I'd call them again, 
too.'' 140

               the tribes continue their lobbying efforts

    In addition to political contributions, the Tribes 
continued to pursue their claim to the Fort Reno lands with the 
appropriate federal agencies. In September 1996, Grellner met 
with Anderson and Grenham at the Department of Interior offices 
in Washington, D.C. to discuss the Tribes' claim that they had 
not been compensated for the Fort Reno lands taken by the 
federal government.141 The Interior Department 
officials informed Grellner that there was a statute of 
limitations problem barring any action, but that the Tribes did 
have a meritorious claim.142 Anderson and Grenham 
advised Grellner to address the statute of limitations problem 
in a legal brief and to present equitable arguments for them to 
consider also. Grellner stated in his interview that he 
``never'' talked about the Tribes' contribution to the DNC with 
Anderson and Grenham and that he never felt that he got 
``special treatment'' from them.143 Surveyor 
confirmed that the federal agencies he met with did not know 
about the Tribes' contribution either.144
    In October 1996, Grellner met with Anderson and Grenham of 
the Interior Department, McNeel from the Agriculture 
Department, and Free of the Justice Department to further 
discuss the Tribes' legal claim.145 Anderson 
reiterated the statute of limitations problem precluding any 
legal action, but said that the Tribes did have a meritorious 
equitable claim that they had not been compensated by the U.S. 
government for the Fort Reno land.146 Anderson 
agreed to prepare an Interior Department legal opinion 
outlining their position for the Agriculture Department's 
consideration.
    In November 1996, Bart Miller replaced Grenham at the 
Interior Department and Grellner met with Miller to discuss the 
Tribes' claim.147 Miller was assigned the task of 
drafting the legal opinion and he also expressed to Grellner 
his belief that the Tribes had not been compensated for the 
Fort Reno land.148 On February 21, 1997, Surveyor 
and Grellner met with Ada Deer, the Assistant Secretary for 
Indian Affairs, and Bart Miller to discuss the Tribes' legal 
claim that they had not been compensated for the Fort Reno 
land.149 Miller informed Grellner and Surveyor that 
the Interior Department would have the long anticipated legal 
opinion regarding this matter finished within two 
weeks.150 As with all other meetings with 
Administration officials, the Tribes' did not discuss their 
contribution to the DNC with Deer.151

 the tribes' dealings with mike copperthite, nathan landow, and peter 
                                 knight

    In October 1996, Mike Copperthite, a campaign manager for a 
congressional candidate in Arkansas, contacted Grellner and 
solicited a contribution from the Tribes.152 
Grellner conveyed Copperthite's request to Todd, who told him 
that the Tribes' money was too tight to make a contribution to 
Copperthite's candidate.153 Grellner, however, 
contacted Copperthite and told him that the Tribes could ``come 
up with $5,000 to $10,000.'' 154 The Tribes did not 
themselves contribute to Copperthite's candidate, but, 
according to FEC records, on November 13, 1996, Grellner 
personally contributed $10,000 to the Arkansas Democratic Party 
pursuant to Copperthite's request.155 Apparently in 
exchange for the contribution, Copperthite told Grellner that 
he would help the Tribes in their efforts to regain the Fort 
Reno land after the campaign.156
    Copperthite developed a close relationship with Grellner, 
and the Tribes used him to set up meetings with people in 
Washington after the election. One of the first meetings he 
arranged was with real estate developer Nathan Landow. Landow 
testified that he was first contacted by Copperthite in the 
early part of October 1996.157 During that 
conversation, Copperthite told Landow that he was representing 
the Tribes and that he was interested in Landow's help. Landow 
testified:

          [Copperthite] told me that he had a client 
        representing the Cheyenne-Arapaho Indian Tribes and 
        that there was an interesting real estate development 
        that he thought I would be interested in. He suggested 
        to them that I was a person that they should talk to 
        and asked me if I would meet with them.158

    After this initial conversation in October, approximately a 
month and a half or two months passed before Copperthite called 
again. After the November elections, Copperthite became 
``pretty persistent'' to set up a meeting between the Tribes 
and Landow.159 A phone message from Copperthite to 
Landow dated November 15, 1996 states, ``some people are coming 
in from out of town next week that he [Copperthite] wants you 
[Landow] to meet.'' 160 A meeting eventually was 
held on November 24, 1996, according to information included on 
a phone message sheet from Copperthite to Landow.161
    That meeting was attended by Surveyor, Grellner, Hoffman, 
Copperthite and Landow.162 Copperthite testified 
that he ``introduced Nate Landow to the tribe as a very dear 
friend of the Vice President's.'' 163 Landow 
testified that he understood that the Tribe wanted to meet with 
him to discuss development of the Fort Reno 
property.164 Landow learned, however, that the 
Tribes did not own the land at that time and that they were 
taking steps to regain it on a ``parallel but different 
track.'' 165
    During the meeting, the Tribes asked for help and 
suggestions regarding their effort to regain the Fort Reno 
land. Landow testified that he ``made it very clear that not 
being a lobbyist, never having been involved with any business 
or other issue in dealing with the Federal Government, that is 
something that I certainly wouldn't undertake.'' 166 
He didsuggest a few Washington lobbying firms that might help, 
including ``Tommy Boggs's firm, J.D. Williams, Peter Knight's firm as 
ones that I felt had the experience and the credibility and might be 
able to help them.'' 167
    The tribal representatives apparently knew from Copperthite 
that Landow was close to Peter Knight and they asked Landow to 
help set up a meeting with Knight's firm, Wunder, Diefenderfer, 
Cannon & Thelen (``Wunder Diefenderfer'').168 Landow 
testified:

        they decided amongst themselves that that was one they 
        would like to talk to and asked if I would help set 
        that up, and I did. I made a call, and I agreed to 
        introduce them there. They said that they had other 
        appointments; that they might be talking to other 
        people.169

    As the press has reported, ``everyone agrees that Landow 
made no guarantees about doing anything to get the Fort Reno 
land to the tribe. He offered to help develop the land if the 
tribe got it.'' 170 There was no discussion during 
the meeting with Landow about the Tribes' contribution to the 
DNC.171
    After the meeting, Landow contacted Wunder Diefenderfer to 
set up a meeting with the Tribes the next day. Landow called 
Grellner at his hotel that evening and told him that Jody 
Trapasso at Wunder Diefenderfer was interested in meeting with 
the Tribes to discuss how his firm could help them regain the 
Fort Reno land.172 Landow told him that the firm was 
very good and that they would not take the case if they could 
not help the Tribes.173 Surveyor and Grellner met 
with Landow and Trapasso at the Wunder Diefenderfer office in 
Washington, D.C.174
    The tribal representatives were told at the meeting that 
Knight was not willing to commit to personally taking their 
case at that time, but the firm would look into 
it.175 Grellner was subsequently told that if Wunder 
Diefenderfer did take on the case, their fee would include a 
$100,000 retainer and $10,000 per month.176 
Subsequent events suggest that this fee was too much for the 
Tribes, but that Copperthite apparently continued to try to 
interest the parties in doing business with each other.
    From his first meeting with the Tribes in November 1996, 
through the beginning of February 1997, Landow focused on the 
need for a written agreement with the Tribes before he would 
begin to perform work for them. Landow stated:

          At every meeting, what I tried to get across was that 
        there had to come a time when any suggestions that they 
        had or interest that they had concerning getting me 
        involved would have to be reduced to writing, and my 
        track was that I was always moving in that direction, 
        to come to an agreement in writing so that there was 
        clear understanding between both parties as to show 
        their responsibilities would be, and I think that the 
        same thing was happening with Wunder 
        Diefenderfer.177

    A meeting was scheduled for February 5, 1997, at the Wunder 
Diefenderfer offices with the principles from the Tribes, 
Wunder Diefenderfer, and Landow to finalize written agreements 
with the Tribes.178 Ken Levine, Jody Trapasso, and 
Peter Knight attended from Wunder Diefenderfer. The Tribes were 
represented by Copperthite and Grellner.179 Landow 
was upset to learn that Surveyor, the Tribal chairman, would 
not be at the meeting.180 Landow testified:

          I said, ``I thought I made it extremely clear that at 
        this meeting, it was critical that the chairman 
        [Surveyor] be there to finish the negotiations and 
        discuss the final terms of my agreement?'' And as late 
        as the day before, [Copperthite] had suggested to me 
        the chairman would be there.181

    After learning that Surveyor would not be at the meeting, 
Landow told Knight, Levine and Trapasso that it made no sense 
for them to stay.182 According to Grellner, after he 
learned that Surveyor was not going to attend the meeting, 
Trapasso said he thought it was all a ``hoax'' and that the 
Tribes were not interested in hiring the firm.183 
Landow apparently had the same reaction.184
     After Knight, Trapasso and Levine left the room, Grellner, 
Copperthite, and Landow again discussed the details of a 
written agreement. One of the details that apparently concerned 
Grellner was the incorporation of the Bureau of Indian Affairs' 
requirement that all contracts with tribes be approved by the 
Bureau. Copperthite testified that Grellner had proposed a way 
for Landow to circumvent the Bureau of Indian Affairs' 
requirement.

          Copperthite: Rick was trying to explain that because 
        of the Bureau of Indian Affairs' rules and regulations 
        that it would be much easier for Wunder Diefenderfer to 
        be retained under Rick's contract with the Bureau of 
        Indian Affairs than it would be to put together a 
        separate contract, then negotiate it with the tribe and 
        then have the BIA put their rubber stamp on it.
          Counsel: The Bureau of Indian Affairs has to approve 
        contracts that tribes enter into?
          Copperthite: All tribes. So--and I don't know that to 
        be true. I just know based on that conversation in that 
        room that day. It made sense to me. So Rick tried to 
        show him in his contract. Landow looked at Rick's 
        contract and said this is a piece of garbage, we can't 
        do this.185

    During this meeting, Grellner, Copperthite and Landow also 
discussed fees.186 Grellner agreed to draft a 
contract and incorporate the terms proposed by 
Landow.187 Landow confirmed that he discussed the 
terms of the agreement with Grellner andCopperthite during 
their meeting and that he spoke to Surveyor later in the day to discuss 
the proposed agreement with him.188 Landow testified:

          Up until that time, I had done nothing, not a phone 
        call, not a visit, nothing but stay on the same track, 
        ``Let's negotiate. Let me hear where you're coming 
        from. Let me hear the terms that you would find 
        acceptable to have me involved and I will tell you mine 
        and the end result may be you don't want me, you don't 
        need me, not for what I'm asking for, but this is what 
        I think is a reasonable offer.'' 189

     Landow testified that during this conversation 
``[Surveyor] said he would prepare an agreement.'' 
190 Landow denied that he negotiated Wunder 
Diefenderfer's fees, but he said he was aware of the amount 
they were seeking.191
    After the February 5, 1997 meeting with Landow, Grellner 
prepared an agreement that included the terms they discussed, 
and on February 14, 1997 he faxed it to Landow for his review 
and consideration. The Tribes, however, apparently never 
intended the agreement with Landow or Wunder Diefenderfer to be 
enforceable. Coburn, another attorney for the Tribes, confirmed 
to the Committee staff that Grellner purposefully drafted the 
proposed agreement so that it would not be a valid or 
enforceable contract.192 Surveyor, according to 
Coburn, had said he would never sign the agreement even though 
it was drafted by Grellner and faxed on behalf of the Tribes to 
Landow.193 In his interview, Surveyor confirmed that 
there was ``no way we would agree to that contract.'' 
194
    When Landow received the proposed agreement he contacted 
Surveyor to discuss the problems with the document drafted by 
Grellner.195 Landow stated:

          What I told him was the agreement was unacceptable in 
        its form and its terms . . . The main objection as to 
        the form was the fact that he lumped together the 
        consultants, Landow, and the terms of the agreement 
        with Wunder, Diefenderfer, which was totally 
        unacceptable . . .196

    Landow was also concerned that the Tribes' proposed 
agreement did not satisfy the Bureau of Indian Affairs 
requirements. According to Landow:

          There was a major concern, additional major concern 
        in this Consulting Services Agreement that Ken Levine 
        raised and that was pertaining to the fact that it 
        didn't conform, in his opinion, to the requirements of 
        the Bureau of Indian Affairs . . . A consulting 
        agreement or when they hire legal counsel, it's got to 
        be approved by the Bureau of Indian 
        Affairs.197

    Landow met with Dan Press, an attorney familiar with the 
Bureau of Indian Affairs requirements, to discuss the proposed 
agreement with the Tribes. He testified that:

          I met with him so that I could outline to him the 
        terms of what I wanted this agreement to say and we 
        could begin to negotiate, and that he was to build in 
        all of the requirements of the Bureau of Indian Affairs 
        so that if they agreed to it, we were pretty well 
        assured that the Bureau of Indian Affairs would agree 
        to it as well. . . .198
          In order for it ever to become hard and firm, it 
        would have to be approved by them and that was 
        something that we did. The Indians never, as you can 
        see from their agreement, never addressed it, which 
        leads me to believe maybe they never thought it would 
        be placed in a position to be effective.'' 
        199

    The documentary evidence, deposition testimony, and witness 
interviews suggest that tribal representatives, including 
Grellner and Copperthite, misled Landow and Wunder Diefenderfer 
throughout the negotiations. The tribal representatives were 
informed very early in the negotiation process as to the amount 
of money that Landow and Wunder Diefenderfer would request for 
their services, and apparently objected to the fees as too 
high; however, they never made that clear to either Landow or 
Wunder Diefenderfer.
    In a final attempt to obtain a binding agreement with the 
Tribes, Landow's attorney redrafted a proposed contract, had 
Landow sign it, and sent it to the Tribes for their 
consideration on March 4, 1997. Landow explained that the 
Tribes were persistent in their efforts to get him to act and 
he was persistent in his efforts to formalize their agreement. 
Landow testified:

          They were very persistent--when I say they, 
        Copperthite calling--very persistent on proceeding, 
        trying to get me to do something. My persistence was in 
        trying to get them to reduce any understanding to 
        writing.200

    Landow explained in his March 4, 1997 cover letter to 
Surveyor that he had to separate Grellner's proposal into two 
different contracts and include the Bureau of Indian Affairs 
requirement that they approve the contract. The Tribes did not 
sign Landow's proposed contract, however, and they never 
entered into an agreement with him to develop the Fort Reno 
land.
    Copperthite later alleged that Landow had said that the 
Tribes would never get the Fort Reno land back if they did not 
finalize the deal with Landow and Wunder 
Diefenderfer.201 Landow denied this allegation under 
oath.

          Minority Counsel: Did you indicate to them 
        [Copperthite and Grellner] in any way that if they [the 
        Tribes] didn't do a deal with you, they'd never get 
        their land back?
          Landow: Absolutely not.202

Copperthite's credibility in making such allegations must be 
evaluated in light of documentary evidence that, without 
informing the Tribes, Copperthite had proposed a private deal 
with Landow to share any ``commissions, payments, revenue, or 
compensation from the Tribes.'' 203
    On February 2, 1997, Copperthite had written a memorandum 
to Landow in which he stated:

          I would like to split with you equally any 
        commissions, payments, revenue, or compensation from 
        the Tribes, and I could go to work full time 
        representing the Tribes Land development. I would also 
        like to be the person who is the go-between the Tribes 
        and the DNC or any democrat seeking contributions.
          I would like our agreement be between you and I for 
        now. I have gained the Tribes trust by not accepting 
        any remuneration (to date) and by being honest and 
        effective.204

    Copperthite had suggested that Landow have the term of his 
agreement extend for 25 years and that it be ratified by a 
tribal resolution ``so that this deal is good no [matter] who 
is the Chairman of the Tribes.'' 205 Landow 
testified that he rejected Copperthite's proposal to enter into 
a private agreement.206 Landow testified that he 
already had been concerned with Copperthite's integrity, and 
that the memorandum had raised even more questions. With regard 
to Copperthite's memorandum, Landow testified:

          . . . [I]t's pretty obvious that Mr. Copperthite had 
        a pretty deep and distinct self-serving interest in 
        this project, and I think this also backs up my 
        concerns of dealing with people that were of 
        questionable character and integrity and more or less 
        loose cannons. . .207

    With regard to Knight's role, the evidence indicates that 
his involvement with the Tribes was very limited. He attended 
one meeting with tribal representatives on February 5, 1997 in 
the Wunder Diefenderfer offices. Knight, Levine and Trapasso, 
of Wunder Diefenderfer, were present at that meeting for only a 
short period of time. Knight testified that he attended this 
meeting because Landow asked him if he would stop in and say 
hello to Surveyor. 208 Knight was at the meeting 
roughly 4 minutes, when it was learned that Surveyor would not 
be attending. When Landow said it wasn't worth their time, 
Knight left.209
    Knight also testified that he had no other conversations 
with Grellner 210 and one other conversation with 
Copperthite on a different subject matter.211 Knight 
never spoke toTurpen 212 and he never talked to 
officials at the DNC about the Tribes.213
    In December 1996--about two or three weeks after his 
original conversation with Landow regarding the Tribes--Knight 
spoke with Trapasso in his firm and came to the conclusion that 
he was too busy and that he did not have the expertise 
necessary to work on the issue, but that the Wunder 
Diefenderfer firm could handle it.214 Knight stated:

          After I made a decision that I was not going to be 
        involved in the representation of the Indians--of the 
        Tribe--the question at that time was, is there anyone 
        else in my firm that would be interested in pursuing 
        that representation, or is this a matter that I should 
        attempt to refer to someone outside. And as with other 
        clients or prospective clients that have come in and 
        asked for representation, I try to make it a habit to 
        try to put them in hands that I think will be capable.
          In this case, Mr. Trapasso and I indicated that 
        perhaps we should ask someone in the firm if they would 
        like to be part of this representation, and in fact we 
        did. We had a short conversation with Mr. Levine. He 
        indicated that he was interested in pursuing that, and 
        from that point forward, I don't believe I had--and I 
        don't believe that Mr. Trapasso had any further 
        dealings with this issue.215

    Kenneth Levine did in fact prepare and sign a proposed 
contract describing the terms under which the firm would assist 
the Tribes in their effort to recover the Fort Reno 
land.216 The Tribes did not sign Levine's proposed 
contract, however, and they never entered into an agreement 
with Wunder Diefenderfer to assist in their effort to recover 
the Fort Reno land.

        the tribes' dealings with cody shearer and terry lenzner

    On March 10, 1997, the Washington Post published a lengthy 
article regarding the Tribes, Fort Reno, the Tribes' DNC 
contribution and dealings with Wunder Diefenderfer. It alleged 
that the Tribes were led to believe that, in return for a 
contribution, the Fort Reno lands would be returned to them. It 
also alleged that they were being pressured into consulting 
agreements with Landow and Wunder Diefenderfer. On March 12, 
1997, Al Cilella, a Chicago oil man, contacted Tyler Todd of 
the Cheyenne-Arapaho Tribe (who was an old acquaintance of 
Cilella), and asked if he could help.217
    Two months later, in late May or early June 1997, Cilella 
contacted Cody Shearer 218 and asked if he could 
introduce the Tribes to Shearer.219 A week or ten 
days later, Cilella called back to invite Shearer to a lunch 
meeting with the Tribes.220 The evidence is unclear 
what, if anything, Cilella thought Shearer could do for the 
tribes.
    The luncheon in Washington, D.C. was attended by 
approximately 14 people 221 including Surveyor, 
Grellner, Cilella, Hoffman, Copperthite, Bob Musgrove, Shearer, 
and Susan Arjoe, a lobbyist on Native American 
issues.222 Shearer testified that he spent the whole 
time at the lunch talking with Cilella, not the tribal 
representatives.223 The lunch meeting was unfocused 
and disorganized, so Cilella asked Shearer if he could bring 
the Tribes' members to Shearer's house the next day. Shearer 
agreed.224
    The day after the luncheon meeting, approximately 12 people 
arrived at Shearer's house for a meeting. During this meeting, 
the tribal representatives explained the Fort Reno issue. 
According to Shearer, he was told that Senator Nickles ``has 
supporters that are interested in some mineral rights to our 
lands'' and together, they were blocking the Tribes' efforts to 
regain the Fort Reno lands.225 Shearer did not 
believe he could be of assistance to the Tribes in this matter; 
he suggested that the Tribes meet with Terry Lenzner of the 
Investigative Group International (``IGI'').
    Shearer contacted Lenzner's office and set up a meeting for 
the next day.226 Lenzner confirmed during his 
appearance in public hearings before the Committee that ``I 
received a call from Mr. Shearer asking if we would be 
interested in meeting with a group of Indians who had an 
interesting problem. It was so complex that he could not 
describe it to me telephonically.'' 227 Lenzner 
explained to the Committee that he gets ``calls all the time 
with people, would you meet with this group, they have a 
problem, they think they need a factual investigation.'' 
228
    Surveyor, Hoffman, Grellner, Shearer, and Arjoe met with 
Lenzner and his partner Steven Green at IGI.229 
Lenzner told the Committee that the meeting lasted 
approximately an hour to an hour and a half.230 The 
Tribes' representatives explained the history of the Fort Reno 
land battle.231 Lenzner stated:

          And then at some point, they raised the focus of the 
        inquiry they wanted me to pursue, and as we do with any 
        client, I said I would think about the problem that 
        they posed, and we would give them, as is standard 
        operating procedure, a memo, what we call in our office 
        a proposed investigative to-do list, which, Senator 
        Specter, is basically a list of investigative issues, a 
        menu of investigative issues that the clients can 
        review and choose to pursue or not to pursue, based on 
        their judgment of how effective they might be in 
        achieving the goal they seek, and we'd give them a 
        guesstimated budget to cover those investigative 
        issues.232

    The cost of such an investigation was discussed and 
Surveyor believed it was too much and that it was unlikely that 
the Tribes would pursue this course of action.233 
However, the Tribes did ask Lenzner to put together a proposal 
and forward it to Grellner for the Tribes' 
consideration.234
    IGI prepared a proposal for the Tribes' consideration and 
sent a copy to them. When they received Lenzner's investigation 
proposal, Surveyor, Grellner and Hoffman agreed that it was too 
broad and that they would not pursue this course of 
action.235 Grellner nevertheless forwarded a copy of 
Lenzner's proposal to Copperthite, who then contacted Newsweek 
magazine, according to Grellner.236 Lenzner 
testified that after the proposal was sent to the Tribes, ``we 
never heard another word from this group'' or about their story 
until an article describing Lenzner's proposal to the Tribes 
appeared in the August 1, 1997 issue of Newsweek 
magazine.237

                  THE TRIBES' CONTRIBUTION IS RETURNED

    In March 1997, after publication of the Washington Post 
article, Governor Roy Roemer, Chairman of the DNC, contacted 
Surveyor to discuss the return of the Tribes' contribution. 
Surveyor told Roemer that the Tribes did not want the money 
back.238 According to Surveyor, they had made the 
contribution in good faith because they supported the party and 
the President.239 One week later, the DNC contacted 
Surveyor again and told him that they wanted to return the 
Tribes' contribution. Surveyor finally agreed that if the DNC 
returned the money, the Tribes would not refuse it, but he 
wanted to be clear that he was not asking for it 
back.240
    In an interview with Committee staff, Surveyor stated that 
he did not believe the Tribes were hurt by the DNC, and that 
the Tribes might contribute to the party in the 
future.241 Surveyor explained that the Tribes had 
received $1.6 million from a lawsuit in 1996 and he showed a 
copy of a $5 million check the Tribes had received on May 28, 
1997 as payment for another legal victory in which the Tribes 
won the right to tax non-Native American business activity on 
tribal lands.242 Todd explained that the Tribes had 
contributed more money to local, state and congressional 
candidates than they had to the DNC in 1996. He also said that 
the Tribes intended to continue to be politically active.

                               CONCLUSION

    There was no evidence presented to the Committee to support 
the allegation that the DNC or the Administration entered into, 
or ever contemplated, a quid pro quo arrangement to return the 
Fort Reno land to the Tribes in exchange for a contribution to 
the DNC. Surveyor and Todd, who attended the White House 
luncheon with the President, each stated that the President 
made no promises whatsoever to return the Fort Reno land to the 
Tribes. Coburn, the Tribes' attorney, confirmed in his meeting 
with the Committee staff that there was no promise made by the 
DNC or the Administration to return the Fort Reno land to the 
Tribes. The June 1996 press release issued by the Tribes more 
than a year before the investigation of this matter quoted 
Surveyor as denying that any promises were made by the 
President. Newspaper reports consistently quoted tribal 
representatives who stated unequivocally that there was no quid 
pro quo arrangment or a Presidential promise.
    There was similarly no evidence presented to the Committee 
to support the allegation that the Tribes were pressured into 
contributing to the DNC. The Tribes made the decision to 
contribute on their own without being solicited by the DNC. 
That decision was motivated by a desire to become involved in 
the political process. The Tribes' subsequent reluctance to 
accept the DNC's return of their contribution only serves to 
underscore the Tribe's own belief that they had been neither 
pressured nor taken advantage of by the DNC or the 
Administration.
    The money used for the contribution was not taken from a 
tribal welfare fund, and the amount contributed was carefully 
considered and decided upon in light of expected legal 
settlements that ultimately provided the Tribes with more than 
$6 million.
    While some tribal representatives may not have been 
satisfied with their dealings with Copperthite, Landow, Knight, 
Shearer, or Lenzner, there was no evidence presented to the 
Committee that any of those individuals in any way were acting 
on behalf of, at the behest of, or even with the knowledge of 
the DNC or the Administration.

                               footnotes

    \1\ Daily Oklahoman, 10/30/83.
    \2\ 40 U.S.C. Sec. 483(a)(2)(1982).
    \3\ Public Law No. 93-599, amending the Federal Property and 
Administrative Services Act, January 21, 1975.
    \4\ Letter from Assistant Secretary for Indian Affairs, Eddie F. 
Brown to U.S. Senator, Daniel K. Inouye, 9/7/90.
    \5\ Jason McIntosh deposition, 10/29/97, Exhibit 7: Letter from 
Katharine R. Boyce to Jeffrey T. Vail, United States Department of 
Agriculture, Office of the General Counsel, 10/15/93.
    \6\ Jason McIntosh deposition, 10/29/97, Exhibit 7: Letter from 
Katharine R. Boyce to Jeffrey T. Vail, United States Department of 
Agriculture, Office of the General Counsel, 10/15/93.
    \7\ Jason McIntosh deposition, 10/29/97, Exhibit 8: Letter from 
George B. Farris, Acting Director, Office of Trust Responsibilities, 
Bureau of Indian Affairs to Katharine R. Boyce, 11/19/93.
    \8\ Jason McIntosh deposition, 10/29/97, Exhibit 11: Jean M. 
Rawson, Specialist in Agricultural Policy, Environment and Natural 
Resources Division, Congressional Research Service memorandum, 
``Grazinglands Research Facility at El Reno, Oklahoma, 7/7/94.
    \9\ Jason McIntosh deposition, 10/29/97, Exhibit 9: Letter from 
Congressman Frank Lucas to Congressman Joe Skeen, Chairman, Committee 
on Appropriations, Subcommittee on Agriculture, Rural Development, Food 
and Drug Administration, and Related Agencies, 2/7/94.
    \10\ Staff interview with Richard Grellner, 8/21/97.
    \11\ Staff interview with Richard Grellner, 8/21/97.
    \12\ Staff interview with Archie Hoffman, 8/21/97.
    \13\ New York Times , 8/12/97.
    \14\ Philadelphia Inquirer , 3/10/97.
    \15\ Philadelphia Inquirer , 3/10/97.
    \16\ Jason McIntosh deposition, 10/29/97, Exhibit 13: Letter co-
signed by U.S. Senator Don Nickles, U.S. Senator David Boren, and U.S. 
Representative Frank D. Lucas to U.S. Representative Joe Skeen, 7/25/
94.
    \17\ Jason McIntosh deposition, 10/29/97, Exhibit 15: El Reno 
Tribune, 9/21/94.
    \18\ Jason McIntosh deposition, 10/29/97, Exhibit 16: Letter from 
U.S. Senator Don Nickles to unidentified person at the Peoples National 
Bank in El Reno, Oklahoma, 10/11/94.
    \19\ Jason McIntosh deposition, 10/29/97, Exhibit 17: Elwood 
Patawa, Director of Native American Programs, U.S. Department of 
Agriculture, Informational Memorandum for Deputy Secretary regarding 
11/8/94 meeting with Cheyenne and Arapaho Tribes of Oklahoma 
delegation, 11/8/94.
    \20\ Jason McIntosh deposition, 10/29/97, Exhibit 17: Elwood 
Patawa, Director of Native American Programs, U.S. Department of 
Agriculture, Informational Memorandum for Deputy Secretary regarding 
11/8/94 meeting with Cheyenne and Arapaho Tribes of Oklahoma 
delegation, 11/8/94.
    \21\ Jason McIntosh deposition, 10/29/97, Exhibit 20: El Reno 
Tribune, 9/13/95.
    \22\ Jason McIntosh deposition, 10/29/97, Exhibit 20: El Reno 
Tribune, 9/13/95
    \23\ Jason McIntosh deposition, 10/29/97, Exhibit 20: El Reno 
Tribune, 9/13/95
    \24\ Jason McIntosh deposition, 10/29/97, Exhibit 26: News Release, 
Cheyenne and Arapaho Tribes of Oklahoma, with attached transcript of 
ABC NEWS story on the Fort Reno agriculture research station, 12/11/95.
    \25\ Jason McIntosh deposition, 10/29/97, Exhibit 21: El Reno 
Tribune , 10/1/95. The El Reno Tribune described the rally:

Rally coordinator Archie Hoffman told the approximately 150 people who 
attended the event that the Tribes have tried to work with Nickles, but 
have received little support in return. ``We took a plan to Washington, 
D.C. and tried to get Nickles to back us up on the plan,'' Hoffman said. 
``He said he would. When we got up there, he changed his stance.''

    \26\ Jason McIntosh deposition, 10/29/97, Exhibit 21: El Reno 
Tribune, 10/1/95.
    \27\ Jason McIntosh deposition, 10/29/97, Exhibit 21: El Reno 
Tribune, 10/1/95.
    \28\ Hoffman stated that ``when Senator Nickles sabotaged the 
council vote, the Tribes decided to run the t.v. ads.'' Staff interview 
with Archie Hoffman, 8/21/97.
    \29\ Jason McIntosh deposition, 10/29/97, Exhibit 24.
    \30\ Jason McIntosh deposition, 10/29/97, Exhibit 24.
    \31\ Staff interview with Barry Coburn, 9/16/97.
    \32\ Staff interview with Tyler Todd, 8/21/97.
    \33\ Staff interview with Barry Coburn, 9/16/97.
    \34\ Staff interview with Charles Surveyor, 8/21/97.
    \35\ Staff interview with Richard Grellner, 8/21/97.
    \36\ Staff interview with Barry Coburn, 9/16/97.
    \37\ Staff interview with Michael Turpen, 8/21/97.
    \38\ Staff interview with Richard Grellner, 8/21/97.
    \39\ Staff interview with Richard Grellner, 8/21/97.
    \40\ Staff interview with Richard Grellner, 8/21/97.
    \41\ Cheyenne-Arapaho Tribes of Oklahoma, Working Session 
transcript, 6/30/96, p. 32.
    \42\ Staff interview with Tyler Todd, 8/21/97.
    \43\ Staff interview with Richard Grellner, 8/21/97; Staff 
interview with Tyler Todd, 8/21/97.
    \44\ Staff interview with Michael Turpen, 8/21/97.
    \45\ Staff interview with Barry Coburn, 9/19/97.

    \46\ Jason McIntosh deposition, 10/29/97, Exhibit 29: Cheyenne-
Arapaho Tribes of Oklahoma, Resolution No. 07099S167, 7/9/96.

    \47\ Staff interview with Charles Surveyor, 8/22/97.

    \48\ Staff interview with Charles Surveyor, 8/22/97.

    \49\ In a March 11, 1997 article in the Daily Oklahoman, Todd was 
quoted as saying that tribal officials began discussing ways ``to get 
involved in the political process early last year [1996],'' and ``. . . 
[Nickles] was a direct cause of it.'' Daily Oklahoman, 3/11/97. Todd 
also told the Philadelphia Inquirer that ``[the Tribes] probably 
wouldn't have done this in the first place if it weren't for Sen. 
Nickles, because he is the one that has thwarted all our attempts to 
get Fort Reno back.'' Philadelphia -Inquirer, 3/11/97.
    \50\ Daily Oklahoman, 3/17/97.
    \51\ Washington Post, 3/11/97.
    \52\ Staff interview with Barry Coburn, 9/16/97.
    \53\ Jason McIntosh deposition, 10/29/97, Exhibit 28: Memorandum 
from Tyler Todd, Chairman, Business Development Corporation to Charles 
Surveyor, Chairman, Cheyenne and Arapaho Tribes of Oklahoma Business 
Committee, 4/23/97.
    \54\ Jason McIntosh deposition, 10/29/97, Exhibit 28: Memorandum 
from Tyler Todd, Chairman, Business Development Corporation to Charles 
Surveyor, Chairman, Cheyenne and Arapaho Tribes of Oklahoma Business 
Committee, 4/23/97.
    \55\ Jason McIntosh deposition, 10/29/97, Exhibit 28: Memorandum 
from Tyler Todd, Chairman, Business Development Corporation to Charles 
Surveyor, Chairman, Cheyenne and Arapaho Tribes of Oklahoma Business 
Committee, 4/23/97.
    \56\ Staff interview with Barry Coburn, 9/16/97.
    \57\ Staff interview with Barry Coburn, 9/16/97.
    \58\ Staff interview with Tyler Todd, 8/21/97; Staff interview with 
Charles Surveyor, 8/22/97.
    \59\ Staff interview with Charles Surveyor, 8/21/97.
    \60\ Staff interview with Barry Coburn, 9/16/97.
    \61\ Staff interview with Barry Coburn, 9/16/97.
    \62\ Staff interview with Richard Grellner, 8/21/97; Staff 
interview with Barry Coburn interview, 9/16/97.
    \63\ Jason McIntosh deposition, 10/29/97, p. 25.
    \64\ Jason McIntosh deposition, 10/29/97, p. 23.
    \65\ Jason McIntosh deposition, 10/29/97, p. 25.
    \66\ Staff interview with Michael Turpen, 8/21/97.
    \67\ Jason McIntosh deposition, 10/29/97, p. 32.
    \68\ Jason McIntosh deposition, 10/29/97, p. 33.
    \69\ Terence McAuliffe deposition, 9/18/97, p. 24.
    \70\ Jason McIntosh deposition, 10/29/97, p. 28.
    \71\ Jason McIntosh deposition, 10/29/97, p. 29.
    \72\ Jason McIntosh deposition, 10/29/97, p. 29.
    \73\ Jason McIntosh deposition, 10/29/97, p. 138.
    \74\ Jason McIntosh deposition, 10/29/97, p. 137.
    \75\ Staff interview with Barry Coburn, 9/19/97.
    \76\ Staff interview with Barry Coburn, 9/19/97.
    \77\ Staff interview with Charles Surveyor, 8/21/97.
    \78\ Staff interview with Richard Grellner, 8/21/97.
    \79\ Staff interview with Archie Hoffman, 8/21/97.
    \80\ Staff interview with Richard Grellner, 8/21/97.
    \81\ Staff interview with Barry Coburn, 9/16/97.
    \82\ Staff interview with Charles Surveyor, 8/21/97.
    \83\ Jason McIntosh deposition, 10/29/97, p. 41.
    \84\ Staff interview with Barry Coburn, 9/16/97.
    \85\ Staff interview with Barry Coburn, 9/16/97.
    \86\ Staff interview with Barry Coburn, 9/16/97.
    \87\ Staff interview with Barry Coburn, 9/16/97.
    \88\ Staff interview with Barry Coburn, 9/16/97.
    \89\ Staff interview with Barry Coburn, 9/16/97.
    \90\ Staff interview with Barry Coburn, 9/16/97.
    \91\ Philadelphia Inquirer, 3/10/97.
    \92\ Staff interview with Charles Surveyor, 8/21/97.
    \93\ Staff interview with Charles Surveyor, 8/21/97.
    \94\ Staff interview with Barry Coburn, 9/16/97.
    \95\ Staff interview with Barry Coburn, 9/16/97.
    \96\ New York Times, 8/12/97.
    \97\ Staff interview with Tyler Todd, 8/21/97.
    \98\ Staff interview with Charles Surveyor, 8/21/97.
    \99\ Newsday, 10/13/97.
    \100\ Staff interview with Barry Coburn, 9/16/97.
    \101\ Staff interview with Barry Coburn, 9/16/97.
    \102\ Terence McAuliffe deposition, 9/18/97, p. 28.
    \103\ Terence McAuliffe deposition, 9/18/97, p. 29.
    \104\ Terence McAuliffe deposition, 9/18/97, p. 30.
    \105\ Jason McIntosh deposition, 10/29/97, Exhibit 32: Cheyenne-
Arapaho Tribes of Oklahoma, press release, 6/28/96.
    \106\ Staff interview with Barry Coburn, 9/16/97.
    \107\ Jason McIntosh deposition, 10/29/97, p. 45.
    \108\ Jason McIntosh deposition, 10/29/97, p. 48.
    \109\ Jason McIntosh deposition, 10/29/97, p. 142.
    \110\ Daily Oklahoman, 3/11/97.
    \111\ Staff interview with Charles Surveyor, 8/22/97; Staff 
interview with Tyler Todd, 8/21/97.
    \112\ Staff interview with Tyler Todd, 8/21/97.
    \113\ Daily Oklahoman, 3/11/97.
    \114\ Daily Oklahoman, 3/11/97.
    \115\ Cheyenne-Arapaho Tribes of Oklahoma, Working Session 
transcript, 6/20/96, p. 18.
    \116\ Cheyenne-Arapaho Tribes of Oklahoma, Working Session 
transcript, 6/20/96, p. 29.
    \117\ Cheyenne-Arapaho Tribes of Oklahoma, Working Session 
transcript, 6/20/96, p. 41.
    \118\ Cheyenne-Arapaho Tribes of Oklahoma, Working Session 
transcript, 6/20/96, p. 42.
    \119\ Cheyenne-Arapaho Tribes of Oklahoma, Working Session 
transcript, 6/20/96, p. 43.
    \120\ Cheyenne-Arapaho Tribes of Oklahoma, Working Session 
transcript, 6/20/96, p. 43-44.
    \121\ Cheyenne-Arapaho Tribes of Oklahoma, Working Session 
transcript, 7/3/96, p. 15.
    \122\ Cheyenne-Arapaho Tribes of Oklahoma, Working Session 
transcript, 7/3/96, pp. 3-32.
    \123\ Cheyenne-Arapaho Tribes of Oklahoma, Working Session 
transcript, 7/3/96, p. 44.
    \124\ Jason McIntosh deposition, 10/29/97, Exhibit 29: Cheyenne-
Arapaho Tribes of Oklahoma, Resolution No. 070996S167, 7/9/96.
    \125\ Staff interview with Barry Coburn, 9/16/97.
    \126\ Staff interview with Barry Coburn, 9/16/97.
    \127\ Staff interview with Barry Coburn, 9/16/97.
    \128\ Jason McIntosh deposition, 10/29/97, Exhibit 3.
    \129\ Philadelphia Inquirer, 3/10/97.
    \130\ Staff interview with Tyler Todd, 8/21/97.
    \131\ Staff interview with Barry Coburn, 9/16/97.
    \132\ Staff interview with Barry Coburn, 9/16/97.
    \133\ Staff interview with Tyler Todd, 8/21/97.
    \134\ Staff interview with Tyler Todd, 8/21/97.
    \135\ Staff interview with Barry Coburn, 9/16/97.
    \136\ Staff interview with Barry Coburn, 9/16/97.
    \137\ Staff interview with Richard Grellner, 8/21/97.
    \138\ Staff interview with Barry Coburn, 9/16/97.
    \139\ Staff interview with Barry Coburn, 9/16/97.
    \140\ Staff interview with Tyler Todd, 8/21/97.
    \141\ Staff interview with Richard Grellner, 8/21/97.
    \142\ Staff interview with Richard Grellner, 8/21/97.
    \143\ Staff interview with Richard Grellner, 8/21/97.
    \144\ Staff interview with Charles Surveyor, 8/21/97.
    \145\ Staff interview with Richard Grellner, 8/21/97.
    \146\ Staff interview with Richard Grellner, 8/21/97.
    \147\ Staff interview with Richard Grellner, 8/21/97.
    \148\ Staff interview with Richard Grellner, 8/21/97.
    \149\ Staff interview with Richard Grellner, 8/21/97.
    \150\ Staff interview with Richard Grellner, 8/21/97.
    \151\ Staff interview with Richard Grellner, 8/21/97.
    \152\ Staff interview with Barry Coburn, 9/16/97; Michael 
Copperthite deposition, 9/3/97, p. 20.
    \153\ Staff interview with Barry Coburn, 9/16/97.
    \154\ Staff interview with Barry Coburn, 9/16/97.
    \155\ Staff interview with Barry Coburn, 9/16/97; Federal Election 
Commission records.
    \156\ Staff interview with Barry Coburn, 9/16/97.
    \157\ Nathan Landow deposition, 9/17/97, p. 19.
    \158\ Nathan Landow deposition, 9/17/97, p. 20.
    \159\ Nathan Landow, deposition, 9/17/97, p. 20.
    \160\ Nathan Landow deposition, 9/17/97, Exhibit 4: Record of Phone 
Message from Michael Copperthite to Nathan Landow, 11/15/96, NL 024.
    \161\ Nathan Landow deposition, 9/17/97, p. 23; Nathan Landow 
deposition, 9/17/97, Exhibit 4.
    \162\ Staff interview with Barry Coburn, 9/16/97.
    \163\ Michael Copperthite deposition, 8/27/97, p. 17.
    \164\ Nathan Landow deposition, 9/17/97, p. 26.
    \165\ Nathan Landow deposition, 9/17/97, p. 25.
    \166\ Nathan Landow deposition, 9/17/97, pp. 25-26.
    \167\ Nathan Landow deposition, 9/17/97, pp. 25-26.
    \168\ Nathan Landow deposition, 9/17/97, p. 26.
    \169\ Nathan Landow deposition, 9/17/97, pp. 38-39.
    \170\ Philadelphia Inquirer, 3/10/97.
    \171\ Nathan Landow deposition, 9/17/97, pp. 31-32.
    \172\ Staff interview with Richard Grellner, 8/21/97.
    \173\ Staff interview with Richard Grellner, 8/21/97.
    \174\ Staff interview with Barry Coburn, 9/16/97.
    \175\ Staff interview with Barry Coburn, 9/16/97.
    \176\ Staff interview with Barry Coburn, 9/16/97.
    \177\ Nathan Landow deposition, 9/17/97, p. 43.
    \178\ Staff interview with Barry Coburn, 9/16/97.
    \179\ Staff interview with Barry Coburn, 9/16/97.
    \180\ Staff interview with Barry Coburn, 9/16/97.
    \181\ Nathan Landow deposition, 9/17/97, p. 81.
    \182\ Nathan Landow deposition, 9/17/97, p. 82.
    \183\ Staff interview with Richard Grellner, 8/21/97.
    \184\ Michael Copperthite deposition, 8/27/97, p. 52.
    \185\ Michael Copperthite deposition, 8/27/97, p. 53.
    \186\ Staff interview with Barry Coburn, 9/16/97.
    \187\ Staff interview with Barry Coburn, 9/16/97.
    \188\ Nathan Landow deposition, 9/17/97, p. 82-83.
    \189\ Nathan Landow deposition, 9/17/97, p. 85.
    \190\ Nathan Landow deposition, 9/17/97, p. 83.
    \191\ Nathan Landow deposition, 9/17/97, p. 51-54.
    \192\ Staff interview with Barry Coburn, 9/16/97.
    \193\ Staff interview with Barry Coburn, 9/16/97.
    \194\ Staff interview with Charles Surveyor, 8/21/97.
    \195\ Nathan Landow deposition, 9/17/97, Exhibit 6.
    \196\ Nathan Landow deposition, 9/17/97, p. 104.
    \197\ Nathan Landow deposition, 9/17/97, p. 107-108.
    \198\ Nathan Landow deposition, 9/17/97, p. 108.
    \199\ Nathan Landow deposition, 9/17/97, p. 149-150.
    \200\ Nathan Landow deposition, 9/17/97, p. 44-45.
    \201\ Staff interview with Barry Coburn, 9/16/97.
    \202\ Nathan Landow deposition, 9/17/97, p. 88.
    \203\ Nathan Landow deposition, 9/17/97, Exhibit 11.
    \204\ Nathan Landow deposition, 9/17/97, Exhibit 11.
    \205\ Nathan Landow deposition, 9/17/97, Exhibit 11.
    \206\ Nathan Landow deposition, 9/17/97, p. 141.
    \207\ Nathan Landow deposition, 9/17/97, p. 140.
    \208\ Peter Knight deposition, 9/17/97, p. 172.
    \209\ Peter Knight deposition, 9/17/97, p. 183.
    \210\ Peter Knight deposition, 9/17/97, p. 174.
    \211\ Peter Knight deposition, 9/17/97, p. 176.
    \212\ Peter Knight deposition, 9/17/97, p. 177.
    \213\ Peter Knight deposition, 9/17/97, p. 181.
    \214\ Peter Knight deposition, 9/17/97, p. 181; pp. 171-172.
    \215\ Peter Knight deposition, 9/17/97, pp. 187-188.
    \216\ Nathan Landow deposition, 9/17/97, Exhibit 8.
    \217\ Staff interview with Barry Coburn, 9/16/97.
    \218\ Cody Shearer deposition, 9/16/97, pp. 13-14.
    \219\ Cody Shearer deposition, 9/16/97, p. 12.
    \220\ Cody Shearer deposition, 9/16/97, p. 20-25.
    \221\ Cody Shearer deposition, 9/16/97, p. 15.
    \222\ Staff interview with Richard Grellner, 8/21/97.
    \223\ Cody Shearer deposition, 9/16/97, p. 15.
    \224\ Cody Shearer deposition, 9/16/97, p. 17.
    \225\ Cody Shearer deposition, 9/16/97, p. 19.
    \226\ Cody Shearer deposition, 9/16/97, p. 20.
    \227\ Terry Lenzner, 7/31/97 Hrg., p. 51.
    \228\ Terry Lenzner, 7/31/97 Hrg., p. 53.
    \229\ Staff interview with Richard Grellner, 8/21/97.
    \230\ Terry Lenzner, 7/31/97 Hrg., p. 55.
    \231\ Staff interview with Richard Grellner, 8/21/97.
    \232\ Terry Lenzner, 7/31/97 Hrg., p. 59.
    \233\ Staff interview with Charles Surveyor, 8/21/97.
    \234\ Staff interview with Richard Grellner, 8/21/97.
    \235\ Staff interview with Richard Grellner, 8/21/97.
    \236\ Staff interview with Richard Grellner, 8/21/97.
    \237\ Terry Lenzner, 7/31/97 Hrg., p. 59.
    \238\ Staff interview with Charles Surveyor, 8/21/97.
    \239\ Staff interview with Charles Surveyor, 8/21/97.
    \240\ Staff interview with Charles Surveyor, 8/21/97.
    \241\ Staff interview with Charles Surveyor, 8/22/97.
    \242\ Staff interview with Charles Surveyor, 8/21/97.





PART 7  INVESTIGATION PROCESSES

Chapter 38: Laying the Groundwork for the Investigation

                                FINDINGS

    (1) The Committee's investigation was not bipartisan. The 
Committee's investigation focused predominantly on persons and 
entities associated with the Democratic Party. The Majority 
devoted virtually no resources to exploring a variety of 
serious allegations against those affiliated with the 
Republican Party. Moreover, it refused to issue or enforce many 
of the Minority-requested subpoenas related to the Committee's 
mandate, simply because those subpoenas sought information from 
Republican-related persons and entities. When the Minority 
accumulated substantial evidence of Republican wrongdoing 
despite these significant limitations, the Majority refused to 
schedule hearings to allow for the public airing of this 
information. As a result, virtually all of the Majority's 
investigatory resources and Committee hearings focused upon 
activities involving the Democratic Party and its associates.
    (2) Although the Committee's investigation provided insight 
on the serious shortcomings in our campaign finance system, the 
failure to fully and impartially investigate wrongdoing in the 
1996 federal elections, regardless of party, kept the Committee 
from fulfilling its mandate and eliminated the ability to 
produce a bipartisan report. The Committee's hearings did make 
a contribution to the public's understanding of the ways in 
which money influenced the 1996 elections. As a consequence of 
the investigation's partisanship, the Committee cannot credibly 
claim that it offered the American people a complete picture of 
the illegal or improper activity that occurred during the 1996 
federal elections. The Committee virtually ignored at least 
half of the story of those elections, and the partisan 
framework in which it presented and interpreted the evidence it 
did uncover diminishes the Committee's ultimate findings and 
conclusions.

                              INTRODUCTION

    Shortly before the 1996 federal elections, several news 
organizations reported that the Democratic National Committee 
may have received illegal contributions of foreign money and 
engaged in other fundraising improprieties. These reports 
prompted the Senate early in the 105th Congress to order an 
investigation into possible illegal and improper campaign 
finance activities during the 1996 federal election cycle. 
Responsibility for conducting the investigation was given to 
the Senate Governmental Affairs Committee, which has the 
broadest oversight jurisdiction of any Senate committee and a 
long history of amicable working relationships between the 
Majority and Minority membership.
    The importance of this assignment cannot be overstated. 
Clean and fair elections lie at the very heart of our 
democratic system of government, and the American people are 
entitled to know whether the electoral process was compromised 
or corrupted during the 1996 election cycle. This was not only 
an important assignment, it was an extremely delicate one: A 
committee of the Senate would be investigating the process by 
which the Senate's own members and the sitting President and 
vice President had been elected. In addition, assurances from 
the Chairman seemed to guarantee that the Committee would be 
investigating allegations against both national parties and 
their candidates.
    In such circumstances, the temptation to use the Committee 
for partisan purposes is enormous. There is, for example, the 
risk that the Majority might use the vast powers of the 
Committee to inflict damage on political opponents--while 
shielding the Majority's own political allies. Although the 
temptations are great, they are not irresistible. For example, 
when a Senate Committee probed the Watergate affair, Chairman 
Sam Ervin and the ranking Republican member Howard Baker, 
worked as partners--preventing the investigation from becoming 
overly partisan. The same was true of the Iran-Contra 
investigation, which Senator Glenn, the Governmental Affairs 
Committee Ranking Minority Member, hoped would be a model for 
the investigation into campaign finance activities in 1997.
    The Committee did not follow these models of 
bipartisanship. The Majority focused almost exclusively on 
Democratic-affiliated individuals and organizations, issuing 
every subpoena that was proposed if it sought information about 
Democratic activities but declining to approve dozens of 
subpoenas seeking legitimate information about Republican 
activities. There was an even greater imbalance in allocation 
of hearing days: nearly 90 percent of the hearing days 
addressed allegations of wrongdoing by Democrats. As a result, 
the investigation soon lost credibility with the public, and 
the country was denied the opportunity for a fair and balanced 
look at the conduct of both Democrats and Republicans during 
the 1996 election cycle.
    The story of how the Committee was used for partisan 
purposes is demonstrated by the Committee's choice of 
procedures: the issuance and enforcement of subpoenas, the 
selection and questioning of witnesses, and the allocation of 
public hearing time. By examining these procedural choices, the 
public may be able to understand how the Committee's 
investigation into campaign finance activities failed to 
fulfill its potential for informing the American people and 
improving our democratic system.

    INITIAL FLOOR STATEMENTS BY CHAIRMAN THOMPSON AND SENATOR GLENN

    On January 28, 1997, Senator Fred Thompson, Chairman of the 
Governmental Affairs Committee, spoke on the Senate floor to 
outline his Committee's upcoming investigation into campaign 
abuses and irregularities in the 1996 election 
cycle.1 He laid out the parameters and principles by 
which he envisioned the investigation would be conducted. The 
Chairman discussed several general themes. First, he 
anticipated using the forum of the investigation and its 
hearings to advance the reform of campaign finance 
laws.2 He also stated that ``those of us with 
responsibilities in this area, whether it be the President or 
members of Congress, cannot let the 
call for reform serve to gloss over serious violations of 
existing laws.'' 3
    Second, Chairman Thompson proposed that the investigation 
include an examination of improper activities--not just illegal 
ones. While the Chairman viewed the scope of activities to be 
investigated as those in the 1996 federal election cycle, he 
stated that the Committee should also investigate ``facts that 
may have occurred before the 1996 campaign that are relevant to 
or shed light upon that campaign or the operation of our 
government . . .'' 4 This statement suggested that 
the Committee would conduct a meaningful investigation of the 
fundraising activities of the Democratic National Committee and 
the current President because those activities would be placed 
in proper perspective by also investigating comparable 
activities of the Republican National Committee and previous 
administrations.
    Chairman Thompson described the work of the Committee in 
this way:

          [I]t is an inquiry into illegal or improper campaign 
        finance activities in the 1996 Presidential campaign 
        and related activities. . . . Certainly, our work will 
        include any improper activities by Republicans, 
        Democrats, or other political partisans. It is of 
        extreme importance that our investigation and our 
        hearings be perceived by the American people as being 
        fair and evenhanded. . . . It simply means letting the 
        chips fall where they may. We are investigating 
        activities here, not political parties.5

The Chairman also indicated a desire to work with Senator 
Glenn, the Committee's Ranking Democrat, and to seek consensus 
on important issues. He stated:

          We hope that in all cases the work of the Committee 
        can be done by the staff in a cooperative fashion. 
        Consensus should emerge on which issues are the most 
        serious and those matters which will receive the 
        greatest consideration. But if legitimate disagreement 
        arises as to priorities, the Majority will in no way 
        limit the Minority's rights to investigate any and all 
        parties within the jurisdiction of the Committee. 
        Moreover, the Minority will be given the opportunity to 
        call witnesses in for public hearings if we cannot 
        agree upon a joint witness list.6

    Senator Glenn also spoke on the Senate floor on January 28, 
1997. In response to Chairman Thompson's comments that the 
Committee's investigation should be used to promote meaningful 
campaign finance reform, Senator Glenn agreed that the hearings 
were imperative for discovering problems and fixing the 
laws.7 Recognizing that reform was unlikely until 
public pressure becomes ``overwhelming,'' Senator Glenn 
expressed hope that the hearings would provide impetus for such 
change by stirring the necessary interest in the American 
people.8
    Senator Glenn also offered his views on how the Committee's 
investigation should be conducted. He noted that bipartisanship 
was crucial to a meaningful investigation and publicly pledged 
support for Chairman Thompson's efforts to conduct such an 
investigation.9 He also suggested that the Chairman 
``establish objectives for the investigation without making the 
inquiry too narrow and thereby risk[ing] at least a perceived 
partisan approach.'' 10 Senator Glenn recommended 
laying out certain binding ground rules pertaining to scope, 
duration, process, and resource allocation 11 and 
proposed that ``soft money,'' one of the most pervasive 
problems in the campaign finance system, be a focus of the 
investigation.12
    Addressing the relationship between the Majority and the 
Minority with respect to the investigation, Senator Glenn said, 
``[T]o assure that the Committee's investigation is fair, 
bipartisan, and legislatively productive, I think it is vital 
[that] the Senate define the scope and procedures and duration 
of the investigation in the omnibus committee funding 
resolution.'' 13 He later described his specific 
suggestions for ensuring a bipartisan investigation:

          There should . . . be a specification of even-handed 
        procedural ground rules for the investigation. For 
        example, the majority and minority should have 
        contemporaneous access to all documentary evidence 
        received by the Committee. The majority and minority 
        should have the right to be present at and participate 
        equally in all depositions and investigatory 
        interviews. And the majority and minority should have 
        equal opportunity to obtain and present relevant 
        testimonial and documentary evidence on the subjects of 
        the committee's inquiry.
          These are just safeguards for a fair and bipartisan 
        inquiry which is in keeping with contemporary Senate 
        practice. This is the way the last several Senate 
        investigations have been done, and Senate practice from 
        investigations of this kind dictate that it should be 
        expressly spelled out before the actual investigating 
        begins so we do not get into an unpleasant disagreement 
        in the middle of the hearings.14

    These remarks, made by Chairman Thompson and Senator Glenn 
on January 28, 1997, were in anticipation of the Committee's 
first public meeting where the issues raised on the Senate 
floor would be discussed and debated among Committee members.

                         ORGANIZATIONAL MEETING

    On January 29 and 30, 1997, the Governmental Affairs 
Committee held a two-day meeting to organize its activities for 
the 105th Congress. The Committee's organizational meeting 
focused on the Special Investigation and the members discussed 
four issues relevant to that investigation: budget, scope, 
procedures, and deadline.

A. Budget

    On January 29, 1997, Chairman Thompson announced his 
proposal to spend $6.5 million ``for a one-time non-recurring 
budget for 1997 . . . for the investigation . . . into 
foreigncampaign contributions and fund-raising activities emanating 
from the 1996 Presidential campaign and related matters.'' 
15 Because the Majority had not, as required by Committee 
rules,16 provided the Minority with advance notice of this 
unprecedented budget request, Senator Glenn objected to approving the 
budget on procedural grounds.17
    Senator Glenn and the other Minority Members also objected 
to Chairman Thompson's budget proposal on substantive grounds. 
The request for $6.5 million to devote to the investigation was 
$2 million more than the entire Committee's recurrent budget 
that is provided for the Committee to carry out all of its 
other functions in 1997.18 The Minority also noted 
that the Chairman provided no justification for his sizable 
request; although the request was far in excess of any other 
initial request for a major Senate investigation, including the 
Watergate and Whitewater investigations, even when inflation 
was taken into account.19 And finally, the Democrats 
noted that although the proposed budget was divided into line 
items for salary, hearings, travel and equipment, no basis for 
these figures was provided.20
    During the second day of the organizational meeting, held 
on January 30, 1997, Senator Glenn offered a substitute 
amendment to the Committee funding resolution. Senator Glenn 
proposed that instead of the $6.5 million budget requested by 
the Chairman, that the Committee instead request $1.8 million 
for one year.21 If the $1.8 million proved 
insufficient, Senator Glenn suggested that the Committee could, 
at the appropriate time, vote to authorize additional funds. In 
response to this proposal, Senator Cochran stated that $1.8 
million would only allow an investigation of a few months 
duration.22 Senator Glenn then clarified his 
suggestion by stating, ``What I am proposing is that we start 
out with a reasonable amount of money, and I will be the first 
to join my distinguished colleague from Mississippi in voting 
for more money if we see that that is what is needed to 
continue the investigation.'' 23 Chairman Thompson 
stated that he believed Senator Glenn's proposal was 
``inadequate'' 24 and that his $6.5 million figure 
should be forwarded to the Rules Committee for approval. The 
Chairman suggested that if any of the $6.5 million was not 
expended during the investigation, those funds would be 
returned to the United States Treasury. This suggested 
procedure prompted Senator Glenn to note that the Committee 
does not traditionally fund any project or federal program, 
such as child care or the Head Start program, by providing more 
funds than are justified and assuming that additional funds 
will be returned. He explained that the Congress does not 
stipulate that:

          We will give you more money than you want, and if you 
        do not need it, turn it back. . . [I]n this Committee, 
        we have tried to get efficiencies of government, and we 
        do not normally put out more money than we know we need 
        for whatever the purpose is.25

    Despite the agreement of most Members that each side should 
produce specific information on their respective requests, 
Chairman Thompson called for a vote.26 The Committee 
defeated Senator Glenn's substitute amendment and passed 
Chairman Thompson's proposal for $6.5 million to fund the 
investigation along party lines.27

B. Scope

    During its organizational meetings, the Committee also 
discussed the appropriate scope of activities to investigate. 
Here, the Committee members were able to find some common 
ground.
    All Members of the Committee agreed that the investigation 
would include exploring any ``illegal or improper'' activities 
of Democratic fundraising surrounding the 1996 Presidential 
election. The Minority also sought to ensure that the Committee 
had the opportunity to explore similar Republican fundraising 
activities as well as allegations against Members of Congress--
such as improper access for contributors--and against previous 
administrations in order to put current fundraising practices 
in perspective.28 The Minority Members also stated 
that the Committee should investigate allegations against 
possible partisan activities of tax-exempt groups during the 
1996 federal election cycle.29 As an example, 
Senator Levin mentioned investigating a questionable ``issue 
advocacy'' campaign conducted on behalf of the Republican Party 
by Americans for Tax Reform (``ATR'') just before the 1996 
election. ATR paid for this with a $4.6 million donation from 
the Republican National Committee.30 See Chapter 11 
of this Minority Report.
    Chairman Thompson seemed to accept the Democratic proposal 
31 and assured Committee Democrats that these areas 
would be included, but he questioned how Democrats could on the 
one hand want to expand the scope, but on the other want to 
limit the budget.32 Committee Democrats responded 
that they only sought to control the initial funding of the 
investigation because it was dramatically higher than any 
previous high-profile investigation since Watergate and that if 
additional funds were needed to conduct a truly bipartisan 
investigation, they would support such funding.33
    During the discussion of the scope of the Committee's 
investigation, Chairman Thompson stated that the scope could be 
an informal understanding and that he would be willing to 
broaden the investigation to encompass issues the Democrats 
thought were important to investigate.34 Upon 
Senator Lieberman's suggestion, however, the Committee agreed 
to memorialize the scope of the investigation within the 
authorizing resolution.35 Having agreed to commit 
the scope of the investigation to writing, the Committee 
Members met the next day to consider voting on a scope 
document.
    The next day, January 30, 1997, the Committee considered a 
document establishing the scope of the investigation, drafted 
jointly by the Majority and Minority staffs. The most 
significant provisions in the scope document provided that the 
Committee would investigate (1) all federal elections, 
including both presidential and congressional races; (2) 
improper as well as illegal campaign finance activities; and 
(3) certain specified substantive areas. The Committee also 
agreed that there would be leeway to look at matters that might 
have occurred before the 1996 cycle.36
    The Committee approved this scope proposal unanimously, 
which called for aninvestigation of all improper or illegal 
campaign finance activities, regardless of party 
affiliation.37 Some Members cited the passage of the 
Committee's scope proposal as an indication that the investigation 
would be a bipartisan one, despite other disagreements.38 
While this was an important first step, matters of procedures, budget, 
and duration were left unresolved.

C. Process

    During the January 29, 1997 organizational meeting, Senator 
Lieberman raised the issue of procedural safeguards, suggesting 
that the Committee agree to an internal process agreement that 
would govern the operations of the Majority and Minority 
staffs.39 Such an agreement would ensure that the 
entire Committee had access to the same documents as well as 
sufficient notice and opportunity to be present at all witness 
interviews and depositions.
    Chairman Thompson responded that if the Committee followed 
its standing rules, that would be a starting point for fair 
treatment. He also stated that the Majority would not take 
advantage of the Minority and would do its best to ensure 
bipartisan attendance at depositions as the Committee rules 
provide.40 Chairman Thompson did not make the same 
assurances with respect to Committee interviews except to state 
that both staff should have ``equal access to [interview] 
results, [and] that these things will be written up and made 
available immediately to each side.'' 41 Lastly, the 
Chairman chose to abide by the regular division of Committee 
budgets in the Senate, providing two-thirds of any budgeted 
funds to the Majority and one-third to the 
Minority.42
    When the meeting resumed the following day, January 30, 
1997, there was some discussion about voting on an agreement 
regarding investigative procedures, but the Committee decided 
to allow staff to continue to work out several unresolved 
matters such as bipartisan attendance at all 
interviews.43 On this issue, Chairman Thompson 
agreed ``to make a best-faith effort with regard to significant 
interviews, and people are just going to have to show a little 
. . . common sense and good faith as to what is significant.'' 
44 He also offered access to anything committed to 
writing from an interview which the other side might have 
missed.45 Senator Glenn suggested, and Chairman 
Thompson agreed, to allow more time for consideration of a 
process agreement. Chairman Thompson said: ``I think we are 
making progress on it, and if there is a chance that we can 
reach agreement on it, then I want to take that chance. So I 
will agree to heed your suggestion on that, and let us not take 
that up.'' 46 In the meantime Chairman Thompson 
again offered that the Committee rules would serve as a good 
basis for procedures to be followed.

D. Termination Date

    The final area addressed at the meetings on January 29 and 
30 was whether the investigation should have a fixed date upon 
which it would terminate. Chairman Thompson was opposed to 
setting a termination date, referring to a book about the Iran-
Contra investigation by former Senators George Mitchell and 
William Cohen in which they recommended against an end date for 
such a large-scale investigation.47 Senator Glenn 
considered this a critical area for the structure of the 
investigation to ensure against an ``open-ended inquiry.'' 
48 The Chairman again suggested that Majority and 
Minority counsel and their staffs try to resolve some of these 
procedural issues.49

              first public debate on issuance of subpoenas

    On February 7, Majority staff presented 31 document 
subpoenas to the Minority staff for approval by Senator Glenn. 
All but four of the subpoenas were for Democratic-related 
entities or individuals.50 On February 10, the 
Majority gave 25 more document subpoenas to the Minority, 
making the subpoenas forwarded to the Minority within four days 
total 56.51
    Under Committee rules, the Ranking Member must be afforded 
72 hours to consider the subpoenas and either approve or oppose 
them.52 If the Ranking Member opposes them, the 
Chairman may call a Committee meeting and put the subpoenas to 
a Committee vote. If a Majority of the Committee members vote 
for the subpoenas, they are issued. Concurrent with the 
delivery of the proposed subpoenas, Chairman Thompson announced 
a business meeting of the Committee to be held on February 13, 
1997, at the end of the 72 hour period, anticipating Minority 
objections to the subpoenas.
    At the business meeting on February 13, Senator Glenn noted 
his objections to the Majority's submission of the 56 
subpoenas. First, he noted that all but four of the subpoenas 
were for individuals and entities connected with Democratic 
fundraising.53 Second, he objected to the fact that 
the Minority was never consulted regarding the subject or the 
substance of the subpoenas before they were submitted to the 
Minority.54 Third, he explained that the sheer 
number of subpoenas for review by the Minority at one time with 
no notice was a monumental task. Fourth, Senator Glenn queried 
why the Majority had provided no substantiation for the 
subpoenas.55 And, finally, Senator Glenn stated that 
these activities had been undertaken despite the fact that the 
Committee did not yet have an approved budget or mandate. 
Ultimately, Senator Glenn stated that he would give the 
subpoenas fair consideration and asked only that the Minority 
be given an adequate opportunity to review the proposed 
subpoenas.56
    Notwithstanding these objections, the Minority voted to 
approve the issuance of 47 of the 56 subpoenas during the 
February 13 Committee meeting in order to move the 
investigation forward. The Committee approved the remaining 
nine subpoenas over the Minority's objections, but agreed to 
hold them for further discussion.57

                   alternative resolution, s. res. 61

    On March 4, Senator Glenn introduced on the Senate floor S. 
Res. 61, which was an alternative resolution for the 
Committee's investigation. S. Res. 61 incorporated the scope 
agreement unanimously voted on the Governmental Affairs 
Committee, but also set forthprocedures to provide equal and 
contemporaneous access to witnesses as well as documents, a proposed 
budget of $1.8 million, and provisions for submission of a final report 
no later than December 31, 1997, and consideration of the McCain-
Feingold legislation, S. 25, by May 1, 1997.58 This 
alternative resolution was ultimately not adopted by the Senate.

                      rules committee appearances

    At the beginning of each Congress, all Senate committee 
chairmen and ranking members routinely appear before the Senate 
Rules and Administration Committee (``Rules'') to present and 
support the budget requests for their Committees. The Rules 
Committee must then vote to authorize each Committee's budget. 
Chairman Thompson and Senator Glenn appeared before the Rules 
Committee on February 6 and March 6, 1997 to discuss the Senate 
Governmental Affairs proposed budget, including its proposed 
budget of $6.5 million to conduct an investigation into 
campaign finance activities. Also before the Rules Committee 
was the Governmental Affair's proposed scope of its 
investigation, which was voted out unanimously by its Members 
and which proposed an investigation of all ``improper and 
illegal'' campaign activities during the 1996 federal election 
cycle.59
    During the February 6 Rules Committee meeting, Senator 
Glenn stated that he opposed Chairman Thompson's budget of $6.5 
million as ``excessive and unjustified,'' especially in light 
of the many other campaign finance investigations occurring in 
different parts of government.60 Additionally, 
Senator Glenn noted that the Minority Members of the Rules 
Committee also generally supported an incremental approach to 
funding of the investigation.61 Chairman Thompson 
argued that the Committee required $6.5 million for the 
investigation, stating that the investigation would cover 
numerous allegations of fundraising practices, as exposed in 
the press.62 The Chairman also remarked that the 
Committee would be exploring activities of an ``unprecedented 
scope.'' 63 The Rules Committee adjourned without 
resolving the issue.
    On March 6, 1997, Chairman Thompson and Senator Glenn again 
appeared before the Rules Committee to discuss the funding 
resolution for the Governmental Affairs Committee's 
investigation. During this meeting, Rules Committee Chairman 
John Warner offered a resolution which proposed to decrease 
Chairman Thompson's proposed budget of $6.5 million for the 
investigation to a budget of $4.35 million.64 
Chairman Warner's proposal also included provisions terminating 
the investigation on December 31, 1997, with a final report due 
on January 31, 1998, a month later.65 These 
provisions represented an important effort at compromise. 
Chairman Warner's provisions, however, proposed to alter the 
scope of the investigation by eliminating allegations of 
``improper activities,'' and leaving the Committee only able to 
investigate ``illegal activities.'' 66 Both Senator 
Glenn and Chairman Thompson opposed this narrow definition of 
scope and maintained their support for the fuller scope which 
had been unanimously approved by the Governmental Affairs 
Committee.67
    Senator Wendell Ford, Ranking Democrat on the Rules 
Committee, also proposed a resolution during the Rules 
Committee meeting. His proposal included the ``improper and 
illegal'' scope language agreed to by the Governmental Affairs 
Committee and was identical to Senator Glenn's resolution 
introduced on March 4, S. Res. 61, except that it proposed an 
increase in the investigation budget from $1.8 million to $3 
million.68
    After debate on the proposals, the Rules Committee passed 
Chairman Warner's amendment and defeated Senator Ford's by a 
party line vote.69 In taking this action, the Rules 
Committee undid the unanimous decision of the Governmental 
Affairs Committee to define the scope of its investigation to 
include both improper and illegal activities. The Senate Rules 
Committee's reversal of another standing committee's unanimous 
scope decision was highly unusual.70

                           final floor debate

    On March 10 and 11, 1997, the full Senate debated S. Res. 
39, the resolution governing the Governmental Affairs Committee 
investigation, as proposed by Chairman Warner and approved by 
the Rules Committee.71 On March 11, after a 
contentious floor debate in which Democrats argued vociferously 
against narrowing the original scope of the investigation, the 
full Senate considered and unanimously approved a compromise, 
in the form of a substitute resolution offered by Majority 
Leader Trent Lott.72 This resolution restored the 
original scope unanimously approved by the Governmental Affairs 
Committee to investigate ``illegal or improper'' activities in 
connection with 1996 federal elections. It also reduced the 
budget from Chairman Thompson's $6.5 million to $4.35 million, 
and stipulated a termination date for the investigation of 
December 31, 1997, with a reporting date of January 31, 
1998.73
    During the debate on the resolution, Democrats sought 
specific assurances that Chairman Thompson intended to conduct 
a bipartisan inquiry. Until the Chairman provided certain 
assurances, several members were not prepared to agree to S. 
Res. 39.74
    Senator Glenn discussed the meaning of ``improper'' to 
ensure that certain issues would not be precluded from inquiry. 
Senator Thompson agreed to a broad interpretation of 
``improper'' and committed to discussing with the Minority 
whether an issue fell inside or outside the Committee's 
scope.75
    Senator Levin also engaged Chairman Thompson in a colloquy 
on procedures. During this discussion, Chairman Thompson agreed 
to conduct bipartisan depositions, joint investigative 
interviews ``where feasible, . . . equal and contemporaneous 
access to all documents . . . and . . . adequate notice of 
filing these documents.'' 76 Senator Levin and 
Chairman Thompson also agreed that an effort should be made to 
work together on developing proposals for subpoenas instead of 
presenting the Minority with a predetermined list of subpoenas 
for issuance. Chairman Thompson acknowledged that the Committee 
had ``got off on a bit of a wrong foot with regard to 
subpoenas.'' 77 In addition to making specific 
assurances about procedure, Chairman Thompson promised that 
``we will have an opportunity for full discussion on any area 
the Senator brings up.'' 78 He also offered to work 
together with Democrats to set the agenda and priorities for 
the investigation.
     The procedures discussed on the Senate floor were never 
finalized in writing, nor were many of them followed.

               THE MAJORITY IMPEDED A FAIR INVESTIGATION

    Despite earlier discussions of an internal process 
agreement that would govern the procedures of the 
investigation, as well as repeated requests and drafts 
forwarded by the Minority, a formal process agreement was never 
signed. The Minority, therefore, had to rely on informal, 
unwritten assurances made by the Chairman during the 
negotiation of the resolution. For the most part, the Majority 
kept to its oral assurances that the Minority would have 
contemporaneous access to documents, per a signed document 
protocol, 79 and to witnesses for purposes of 
deposition.80
    However, there were serious problems with other Committee 
procedures. Indicia of the partisan nature of the Committee's 
investigation can be found in the Committee's treatment of 
immunity requests, notice to staff of interviews, consideration 
of subpoenas, and scheduling of public testimony.

A. Subpoenas

    The procedures the Committee employed to draft, issue, and 
enforce its investigation subpoenas was an unfortunate one that 
may have a lasting and detrimental effort on future Senate 
investigations.81 On January 28, 1997, when Chairman 
Thompson addressed the Senate chambers, he referred to a 70-
year-old Supreme Court decision in which the Court held,

          A legislative body cannot legislate wisely or 
        effectively in the absence of information respecting 
        the conditions which the legislation is intended to 
        affect or change; and where the legislative body does 
        not possess the requisite information--which not 
        infrequently is true--recourse must be had to others 
        who do possess it.82

    By the end of the investigation, the Committee had issued 
420 subpoenas for documents and testimony. Of the subpoenas, 
328 were issued to obtain information about Democrats and 
Democratic entities. When the Committee issued these subpoenas, 
the Minority was often not provided its mandated 72 hour review 
period. 83 Some were even served on the subpoenaed 
parties before the Minority was informed that they had been 
issued. These were unauthorized and invalid. The Committee's 
procedures often deprived the Minority of the right to publicly 
discuss subpoenas at a Committee meeting, much less to object 
to them.
    On the other hand, the Committee issued only 89 subpoenas 
requested by the Minority--and over half of those were to 
require deposition of individuals who would not cooperate with 
the Committee. Of these 89 subpoenas, nearly half went ignored 
by the recipient and unenforced by the Committee.
    As detailed in Chapters 40 and 41 of this Minority Report, 
numerous entities did not meaningfully respond to the 
Committee's subpoenas. The Committee's failure to enforce its 
subpoenas, particularly with respect to activities during the 
1996 election, has created a precedent that may jeopardize the 
Senate's future ability to obtain information necessary to 
carry out its legislative responsibilities. By failing to 
enforce those subpoenas, we relinquished one of the most 
important tools available to us to govern: the ability to 
compel testimony.

B. Consideration of Grants of Immunity

    Under 18 U.S.C. Sec. 6005(b)(2), two-thirds of the 
Committee must vote to immunize a witness against use of his or 
her Committee testimony in future criminal proceedings. This 
rule is intended to guard against grants of immunity that the 
Committee might be tempted to consider in order to receive 
colorful and sensational testimony, despite any negative impact 
on important criminal prosecutions. The Committee rules 
regarding the grant of immunity are intended to ensure that 
this important power is shared by members of both parties.
    On a few occasion, the Minority delayed proposed grants of 
immunity in order to obtain more information about the 
relevance of an individual's testimony, clearer proffers from 
attorneys, and briefings from the Department of Justice as to 
its view of the impact of granting immunity on its own parallel 
investigation.84 Despite resistance from the 
Majority, these steps seemed only prudent: Congress should 
carefully consider whether its immunity grant may interfere 
with or prevent a potentially important prosecution. The case 
of Oliver North demonstrates that after an immunized witness 
has testified publicly, it is difficult to uphold a 
successfully prosecution of that witness for serious crimes.
    The Minority also delayed a few proposed grants of immunity 
for another purpose as well: to ensure the issuance of Minority 
requested subpoenas. When immunity was requested in June, at 
least a dozen subpoenas requested by the Minority had yet to be 
issued or even voted upon by the full Committee--an opportunity 
afforded all Majority requested subpoenas. In order to focus 
the attention on these concerns, the Minority conditioned their 
votes on immunity to satisfactory resolution of the long-
standing Minority-requested subpoenas. While the Minority was 
partially successful--some of the bank subpoenas it had 
requested were issued--many of its subpoena requests continued 
to be ignored.
    Ultimately, the Minority did join the Committee and vote in 
favor of the majority of immunity proposals. Where the immunity 
proposals were not granted, the Majority did not pursue 
testimony from those witnesses.85

C. Interviews

    Despite earlier assurances, the Majority staff conducted 
several interviews withouteither prior, or subsequent, notice 
to the Minority. This was particularly disturbing in light of 
representation on the floor of the Senate and in public session that 
the Chairman would make every accommodation to give the Minority the 
opportunity to participate in ``significant interviews.'' 86
    One interview that was conducted without notice to the 
Minority bears special mention. On September 4, 1997 the 
Minority heard from outside sources that Michael Mitoma, former 
mayor of Carson, California, might be a hearing witness the 
following day. At the time of this discovery, Mitoma--to the 
Minority's knowledge--had been neither interviewed nor deposed 
by the Committee. Upon inquiry to Majority staff, Minority 
staff learned that Mitoma was in Washington, D.C. to appear 
before the Committee and had recently been interviewed by 
Majority staff.87 Only after this discovery did the 
Minority staff have the opportunity to convince Mitoma that an 
additional interview with both staffs was necessary.
    Listed in an appendix to the Minority Report are other 
interviews the Minority staff is aware were conducted by the 
Majority without notice to the Minority.

D. Hearings

    A final indicia of the Committee's partisan investigation 
was the Committee's failure to provide to the Minority 
reasonable notice of hearing witnesses or to schedule 
reasonable hearings days for Minority witnesses.
    During the March 11 meeting, Senators Glenn and Levin 
raised the issue of notification of hearing topics and 
witnesses. Senator Glenn said, ``Obviously we would like to 
know as far in advance as possible what the subject of a 
hearing is going to be so that we can prepare for it also, 
right along with the Majority. . . . And . . . who the 
witnesses are going to be . . .'' Chairman Thompson replied, 
``I think we ought to give you as much as you feel like you 
need that is reasonable to us. . .  I think we could strive 
toward a Wednesday notice'' for the following 
week.88
    In practice, the Majority consistently failed to provide 
even 24 hour advance notice of hearing subjects and witnesses 
to the Minority. On July 2, 1997, six days before the first 
hearing day, the Majority did provide a list of potential 
witnesses.89 The list, however, contained 30 names 
of individuals who fell into several different categories, and 
the Majority gave no indication of when it proposed to call 
whom. At the time the list was issued, several of the listed 
individuals had neither been deposed or even interviewed by the 
Committee. During July, the Majority often provided less than 
24 hours notice on who on the list would appear the next day. 
By the end of July, the Majority had called 11 of the 30 listed 
witnesses to testify before the Committee.90
    When the hearings continued in the fall, this pattern 
continued. The Minority was most often provided the names of 
witnesses the night before they were to testify, and other 
times was not provided with names until the morning the 
testimony was to be taken. This notification was clearly 
contrary to both Committee rules as well as to fair and 
reasonable practice of conducting a Senate investigation.
    The failure of the Majority to provide notice about its 
public hearings was coupled with the failure of the Majority to 
abide by Committee rules ensuring that the Minority be afforded 
time to present its own witnesses and evidence. The Minority 
attempted to bring balance to the investigation by calling 
witnesses to explore Republican fundraising activities. 
Although Chairman Thompson explicitly stated on numerous 
occasions--beginning with his first public statement on January 
28--that he intended to allow a fair inquiry into Republican 
campaign activities,91 only three of the 31 hearing 
days were devoted to investigating Republicans during the 
entire course of the hearings. This represented less than 10 
percent of the total hearing days.
    This gross imbalance in hearing days was a matter of 
serious contention. Time after time, promises were made that 
the Minority would have an opportunity to put on evidence about 
Republican campaign activities during the 1996 cycle. In 
October 1997, an arrangement was reached to end the 
investigative hearings and conduct three weeks of public policy 
hearings on campaign finance reform. Under this arrangement, 
the Minority agreed to temporarily relinquish its right to call 
witnesses for three hearing days. However, Chairman Thompson 
reserved the right to reopen the investigative hearings if 
evidence arose to warrant such an action. If that were to 
occur, the Committee agreed that the Minority's three hearing 
days would be restored. After two weeks of hearings featuring 
academics and activists on campaign finance reform, the 
Majority exercised its option to resume its investigative 
hearings but did not permit the Minority one, much less three, 
days of hearings, despite the Committee's previous agreement. 
No justification was ever provided.

                               CONCLUSION

    Over the years, the Senate has used its authority to 
conduct many significant investigations, often focusing on the 
operations of governmental institutions or alleged wrongdoing 
by specific individuals associated with the government. In 
1997, the Senate authorized the Governmental Affairs Committee 
to conduct such an investigation, investing it with a 
significant opportunity to conduct a bipartisan inquiry into 
campaign finance activities surrounding the 1996 federal 
elections. Despite this opportunity, the Committee conducted a 
narrow examination of the campaign finance system, focusing 
primarily on selected activities of the Democratic Party. 
Nonetheless, the Committee did examine, to varying degrees, the 
two major political parties, a number of individuals involved 
in campaign finance activities and the inner workings of our 
electoral system. Although it was inherently a ``political'' 
investigation, it could have been conducted in a much less 
partisan manner. As detailed above, the Minority lacked the 
power to ensure that the Committee abided by certain procedural 
safeguards. In the end, the Committee's choice of procedures 
severely damaged the effectiveness of the investigation and may 
have damaged the ability of the Committee to conduct future 
investigations.

                               footnotes

    \1\ Congressional Record, 1/28/97, p. S716-718.
    \2\ Congressional Record, 1/28/97, p. 718 (Thompson).
    \3\ Congressional Record, 1/28/97, p. S718 (Thompson).
    \4\ Congressional Record, 1/28/97, p. S716 (Thompson).
    \5\ Congressional Record, 1/28/97, p. S716 (Thompson).
    \6\ Congressional Record, 1/28/97, p. S717 (Thompson).
    \7\ Congressional Record, 1/28/97, p. S719 (Glenn).
    \8\ Congressional Record, 1/28/97, p. S719 (Glenn).
    \9\ Congressional Record, 1/28/97, pp. S718-719 (Glenn).
    \10\ Congressional Record, 1/28/97, p. S718 (Glenn).
    \11\ Congressional Record, 1/28/97, p. S719 (Glenn).
    \12\ Congressional Record, 1/28/97, p. S718 (Glenn).
    \13\ Congressional Record, 1/28/97, p. S719 (Glenn).
    \14\ Congressional Record, 1/28/97, p. S719 (Glenn).
    \15\ Governmental Affairs Committee, 1/29/97 Org. Mtg., p. 5:18-22. 
The exact amount Chairman Thompson requested was $6,517,121.
    \16\ Rule 5(C), ``Full Committee subpoenas.'' S. Prt. 105-05, Rules 
of Procedure of the Committee on Governmental Affairs, United States 
Senate, March 1997.
    \17\ Governmental Affairs Committee, 1/29/97 Org. Mtg., p. 6:21-22 
(Glenn).
    \18\ Chairman Thompson requested $4,533,660 for the Committee's 
annual recurring budget. Governmental Affairs Committee, 1/29/97 Org. 
Mtg., p. 5.
    \19\ Governmental Affairs Committee, 1/29/97 Org. Mtg., p. 71 
(Glenn).
    \20\ Draft United States Senate Committee on Rules and 
Administration Senate Committee Budget Forms reported by Governmental 
Affairs Committee listing requests for 1997 and 1998.
    \21\ This amount equaled all of the money that the Chairman 
investigating Whitewater received over a two-year period to conduct the 
Whitewater investigation. Governmental Affairs Committee, 1/30/97 Org. 
Mtg., pp. 22-23 (Glenn).
    \22\ Governmental Affairs Committee, 1/30/97 Org. Mtg., p. 40 
(Cochran).
    \23\ Governmental Affairs Committee, 1/30/97 Org. Mtg., p. 42:19-23 
(Glenn).
    \24\ Governmental Affairs Committee, 1/30/97 Org. Mtg., p. 29 
(Thompson).
    \25\ Governmental Affairs Committee, 1/30/97 Org. Mtg., p. 42:11-18 
(Glenn).
    \26\ Governmental Affairs Committee, 1/30/97 Org. Mtg., p. 35 
(Levin, Thompson), 37 (Specter).
    \27\ Governmental Affairs Committee, 1/30/97 Org. Mtg., pp. 43-47.
    \28\ Governmental Affairs Committee, 1/29/97 Org. Mtg., pp. 10-11 
(Glenn), pp. 27-28 (Levin).
    \29\ Governmental Affairs Committee, 1/29/97 Org. Mtg., p. 57 
(Torricelli).
    \30\ Governmental Affairs Committee, 1/29/97 Org. Mtg., p. 27 
(Levin).
    \31\ Governmental Affairs Committee, 1/29/97 Org. Mtg., p. 22 
(Thompson).
    \32\ Governmental Affairs Committee, 1/29/97 Org. Mtg., p. 72 
(Thompson).
    \33\ Whitewater: Comparisons of Cost and Other Selected Data with 
Previous Investigations, CRS Report for Congress, 96-209 GOV, January 
15, 1996. Governmental Affairs Committee, 1/30/97, Org. Mtg., p. 17 
(Glenn).
    \34\ Governmental Affairs Committee, 1/29/97 Org. Mtg., p. 21.
    \35\ Governmental Affairs Committee, 1/29/97 Org. Mtg., pp. 34-35 
(Lieberman).
    \36\ Governmental Affairs Committee, 1/30/97 Org. Mtg., pp. 1-12.
    These areas included: foreign contributions and their effect on the 
American political system; conflicts of interest involving Federal 
officeholders and employees, as well as the misuse of Government 
offices; failure by Federal Government employees to maintain and 
observe legal barriers between fund-raising and official business; the 
independence of the Presidential campaigns from the political 
activities pursued for their benefit by outside individuals or groups; 
the misuse of charitable and tax-exempt organizations in connection 
with political or fund-raising activities; unregulated (soft) money and 
its effect on the American political system; promises and/or the 
granting of special access in return for political contributions or 
favors; the effect of independent expenditures (whether by 
corporations, labor unions or others) upon our current campaign finance 
system, and the question as to whether such expenditures are truly 
independent; contributions to and expenditures by entities for the 
benefit or in the interest of public officials; and to the extent that 
they are similar or analogous, practices that occurred in previous 
Federal campaigns.'' Governmental Affairs Committee, 1/30/97 Org. Mtg., 
pp. 5:10-6:5.
    \37\ Governmental Affairs Committee, 1/30/97 Org. Mtg., p. 12.
    \38\ Governmental Affairs Committee, 1/30/97 Org. Mtg., pp. 14-15 
(Glenn), 32 (Levin), 35 (Nickles), 43 (Lieberman).
    \39\ Governmental Affairs Committee, 1/29/97 Org. Mtg., pp. 35-36 
(Lieberman).
    \40\ Governmental Affairs Committee, 1/29/97 Org. Mtg., p. 48 
(Thompson).
    \41\ Governmental Affairs Committee, 1/29/97 Org. Mtg., p. 49:7-8 
(Thompson).
    \42\ Governmental Affairs Committee, 1/29/97 Org. Mtg., p. 47 
(Thompson).
    \43\ Governmental Affairs Committee, 1/30/97 Org. Mtg., p. 15 
(Glenn).
    \44\ Governmental Affairs Committee, 1/30/97 Org. Mtg., p. 13:13-17 
(Thompson).
    \45\ Governmental Affairs Committee, 1/30/97 Org. Mtg., p. 14 
(Thompson). While the Minority is aware of several instances in which 
unilateral interviews were conducted, no member of the Minority staff 
received such a memo from any member of the Majority staff. The only 
interview memoranda which were exchanged were drafted by FBI 
investigators detailed to the Committee under a protocol that provided 
for the sharing of all work product of such detailees.
    \46\ Governmental Affairs Committee, 1/30/97 Org. Mtg., pp. 15:24-
16:2 (Thompson).
    \47\ Governmental Affairs Committee, 1/29/97 Org. Mtg., p. 77 
(Thompson).
    \48\ Governmental Affairs Committee, 1/30/97 Org. Mtg., p. 18. See 
also, 1/27/97 letter from Senator Glenn to Chairman Thompson.
    \49\ Governmental Affairs Committee, 1/29/97 Org. Mtg., pp. 75-78.
    \50\ Subpoena 000067 (RNC), 000069 (Dole for President). The other 
two subpoenas went to a former Finance Chairman of the Dole for 
President campaign, Simon Fireman, Subpoena 000032, and his company, 
Aqua Leisure, Subpoena 000033. Fireman was convicted of laundering 
political contributions through his business to the Dole campaign 
Washington Post, 10/9/97.
    \51\ Two subpoenas were eliminated from consideration which left a 
total of 52 on the table. There was a duplicate subpoena going to the 
Hsi Lai Buddhist Temple and the International Buddhist Progress 
Society, both at the same address, and a subpoena to the Presidential 
Legal Expense Trust which did not meet the Committee's 72-hour rule. 
Governmental Affairs Committee, 2/13/97 Mtg., p. 30.
    \52\ Rule 5(C), ``Full Committee subpoenas''; S. Prt. 105-05, Rules 
of Procedure of the Committee on Governmental Affairs, United States 
Senate, March 1997.
    \53\ Governmental Affairs Committee, 2/13/97 Mtg., p. 2. Only 
subpoenas to the Republican National Committee, Dole for President, 
Simon Fireman and Aqua Leisure (Fireman's company) were served on 
Republican entities or individuals.
    \54\ Governmental Affairs Committee, 2/13/97 Mtg., pp. 1-7 (Glenn). 
Majority staff did discuss problems with the subpoenas with Minority 
staff after they were submitted to the Minority and even adopted some 
of their changes.
    \55\ In Senator Glenn's experience as a member on the Committee 
with 22 years in the Senate, such subpoenas, regardless of their 
numbers or origin, were always accompanied by supporting documentation, 
whether or not from a public source. Governmental Affairs Committee, 2/
13/97 Hrg., p. 2 (Glenn).
    \56\ Governmental Affairs Committee, 2/13/97 Mtg., p. 1.
    \57\ Governmental Affairs Committee, 2/13/97 Mtg., pp. 30-39. The 
first vote was on a group of 43 subpoenas unanimously approved for 
service as soon as possible. The second group of nine subpoenas were 
also approved, though only members of the Majority voted for them. It 
was mutually agreed that the Majority would work with the Minority on 
this second group to try to resolve any concerns the Minority had with 
the language of the requests. Whether the concerns were resolved or 
not, though, the subpoenas would be issued the following week.
    \58\ Congressional Record, 3/4/97, pp. S1927-1928. In his statement 
upon introduction of the resolution, Senator Glenn stated that its 
purpose was to let ``. . . the public know precisely what Democrats 
have been proposing for this investigation, and he emphasized the need 
``. . . for a fair, bipartisan investigation. . . .'' Congressional 
Record, 3/4/97, p. S1928 (Glenn).
    \59\ On January 30, 1997, Chairman Thompson reported the original 
resolution authorizing expenditures by the Committee on Governmental 
Affairs. The resolution was referred to the Senate Committee on Rules 
and Administration.
    \60\ Senate Rules Committee, 2/6/97 Hrg., pp. 85-86 (Glenn) .
    \61\ Senate Rules Committee, 2/6/97 Hrg., pp. 109-11 (Inouye); 118 
(Feinstein); 128 (Torricelli); 150-151 (Ford).
    \62\ Senate Rules Committee, 2/6/97 Hrg., p. 96 (Thompson).
    \63\ Senate Rules Committee, 2/6/97 Hrg., p. 99 (Thompson).
    \64\ Chairman Warner explained how he arrived at this figure: (1) 
The FBI agreed to detail agents to the Committee to assist in the 
investigation. Chairman Thompson estimated that this accounted for 
$800,000 and, therefore, lowered his request to $5.7 million. (2) 
Thompson's request was based on a budget for one year and since over 
two months of the year had already passed, the budget was reduced on a 
pro rated basis. Senate Rules Committee, 3/6/97 Hrg., p. 3 (Warner).
    \65\ Senate Rules Committee, 3/6/97 Hrg., p. 4 (Warner).
    \66\ Further provisions were made to refer only illegality found on 
the part of a senator to the Senate Ethics Committee. A final section 
provided that the Rules Committee would continue to hear matters 
relating to campaign finance reform. Senate Rules Committee, 3/6/97 
Hrg., pp. 4-5 (Warner).
    \67\ Senate Rules Committee, 3/6/97 Hrg., pp. 25 (Glenn), 61-62 
(Thompson).
    \68\ Senate Rules Committee, 3/6/97 Hrg., p. 78 (Ford).
    \69\ This included Senators Cochran, Stevens, and Nickles, members 
of both Governmental Affairs and Rules, who were now casting their vote 
for a resolution which would override their original vote on the 
Governmental Affairs resolution. (Senator Stevens, along with Senator 
Roth, left the Governmental Affairs Committee early in the 
investigation and were replaced by Senators Bennett and Smith.)
    Also, by voting for this resolution, Chairman Thompson finally 
seemed to have succumbed to the idea of an end date for the 
investigation once he received assurances that further funds would be 
authorized if deemed appropriate:

      I have resisted a cut-off date. But it is clear the members of 
this Committee understand that we need to--I would love to finish by 
the end of the year. . . . But if we do not, I think the Committee 
understands and the Congress now understands that we will be right 
back, and for good cause you will extend our time and our money. Am I 
not correct? Senate Rules Committee, 3/6/97 Hrg., p. 64:5-13 
(Thompson).

    Chairman Thompson also confirmed that with the approval of his 
Ranking Member, Senator Glenn, this investigation could be conducted 
out of the Committee's recurring budget already approved by the Senate, 
and the Rules Committee would have no say in the subjects or standards 
of such investigation. Senate Rules Committee, 3/6/97 Hrg., p. 73 
(Thompson).
    \70\ Senate Rules Committee, 3/6/97 Hrg., pp. 6-7 (Ford).
    \71\ Congressional Record, 3/10/97, pp. 2057-2078. In addition to 
the debate being managed by Rules Committee Chairman Warner and 
Governmental Affairs Committee Ranking Member Senator Glenn, Senators 
Hatch, Wellstone, Cochran, Levin, Nickles and Feingold also made 
statements on the Senate floor. Congressional Record, 3/10/97, pp. 
2057-2078.
    \72\  Congressional Record Vote No. 29, pp. S2124-2125. The vote 
was 99-0; Senator Dodd, as immediate past General Chairman of the 
Democratic National Committee, voted ``present''.
    \73\ See S. Res. 39, 105th Cong., 1st Sess.
    \74\ Congressional Record, 3/11/97, p. S2119 (Levin). Senator Levin 
was prepared to offer an amendment on procedures but held a colloquy 
with Chairman Thompson instead. Congressional Record, 3/11/97, pp. 
S2119-2121.
    \75\ Congressional Record, 3/11/97, pp. S2118-2119 (Glenn).
    \76\ Congressional Record, 3/11/97, p. S2119-2121 (Thompson, 
Levin).
    \77\ Congressional Record, 3/11/97, p. S2118 (Thompson).
    \78\ Congressional Record, 3/11/97, p. S2119 (Thompson).
    \79\ United States Senate Governmental Affairs Committee Security 
Procedures and Other Protocols, 4/1/97.
    \80\ As far as the Minority knows, the Minority was given notice of 
and participated in all depositions, though not always in a timely 
manner. Approximately two-thirds of the way through the main 
investigation, a Majority staff began to electronically mail the next 
day's schedule to the entire investigation staff, both Majority and 
Minority. Though this was an enormous help, it was often the first 
notice the Minority received of a deposition or interview to be held 
the following day.
    \81\ These issues are discussed in more detail in Chapter 38, 
``Republican Compliance Issues''.
    \82\ Congressional Record, 1/28/97, S716 (Thompson) (quoting 
McGrain v. Daugherty, 273 U.S. 135, 175 (1927)).
    \83\ See Rule 5(C), ``Full Committee Subpoenas.''
    \84\ Governmental Affairs Committee, 6/12/97 Mtg.
    \85\ For example, on June 12, the Committee rejected grants of 
immunity for 15 Hsi Lai Temple monastics, all proposed by the Majority. 
Governmental Affairs Committee, 6/12/97 Mtg. By the time the Committee 
reconsidered these requests, the Majority unilaterally reduced the 
list. Governmental Affairs Committee, 6/27/97 Mtg.
    \86\ Congressional Record, 3/11/97, p. S2120 (Thompson).
    \87\ There was always an understanding that if it was not feasible 
to advise the other side, the interview would go ahead. After the 
public hearings had been concluded, Minority Counsel was advised that 
Steve Young, son of Ambrous Young, was in town and available to meet at 
Union Station late one evening. Minority Counsel conducted an informal 
interview.
    \88\ Governmental Affairs Committee, 6/27/97 Mtg., pp. 43-44. On 
another occasion, Senator Glenn said, ``. . . (W)e would hope that we 
would be able to be informed of what the subject of the hearing is and 
the witness list at the same time that the hearing is called, a week in 
advance. I think that is only fair, and it puts everybody on the same 
footing.'' Chairman Thompson replied, ``We will do our best to do 
that.'' Governmental Affairs Committee, 6/27/97 Mtg., p. 45:15-20.
    \89\ 7/2/97 Memo from Majority Counsel to Minority Counsel with 
attached ``Hearing Subpoena List''.
    \90\ Richard Sullivan (July 9, 10); Juliana Utomo, Harold Arthur, 
James Alexander (July 15); Gary Christopherson, Paul Buskirk, Jeffrey 
Garten, Robert Gallagher, John Dickerson (July 16); Paula Green, 
Timothy Hauser, William Ginsberg (July 17). In addition, three 
witnesses were called who were not on the July 2 list: Thomas Hampson, 
summary witness on the Lippo Group (July 15); William McNair, Central 
Intelligence Agency (July 16); John Cobb, Counsel to Special 
Investigation (July 17). Special Investigation Witness List, http://
www.senate.gov/gov__affairs/witness.htm.
    \91\ Congressional Record, 1/28/97, p. S716 (Thompson).





PART 7  INVESTIGATION PROCESSES

Chapter 39: Democratic Compliance Issues

    During its investigation, the Committee issued over 400 
document and deposition subpoenas to a variety of organizations 
and individuals. Of those subpoenas, 320 were issued at the 
request of the Majority and sought information regarding 
Democratic fundraising and political activities. Subpoenas were 
issued to the White House, the Democratic National Committee 
(``DNC''), the Clinton/Gore Campaign, a wide variety of 
Executive Branch agencies, banks, private companies and 
government and private individuals. Beginning in March 1997, 
the Committee began to receive documents and depose 
individuals. By the end of the investigation, the Committee had 
received thousands of boxes of documents, deposed over 200 
individuals, and taken 31 days of public testimony.
    During the Committee's investigation, media reports 
highlighted a number of problems the Committee encountered in 
moving forward with its investigation. Although there were 
problems with obtaining some information, the number of 
documents produced to the Committee and the number of 
individuals who voluntarily cooperated with the Committee 
demonstrates that most organizations and individuals assisted 
the Committee in conducting its investigation. As detailed in 
Chapter 42 of the Minority Report, the White House produced 
120,000 pages of documents 1 and provided, on a 
voluntary basis, 40 former and current White House employees 
for testimony.2 As detailed below, other Democratic 
affiliated organizations, particularly the DNC, by and large, 
cooperated fully with the Committee investigation. The DNC 
produced over 450,000 pages of documents to the Committee and 
provided former and current DNC officials who testified in 
depositions lasting a total of 38 days.
---------------------------------------------------------------------------
    Footnotes appear at end of chapter 39.
---------------------------------------------------------------------------
    Similarily, the number of documents produced by, and the 
number of cooperative witnesses affiliated with, the Republican 
Party is also testiment to that party's lack of cooperation 
with the Committee. The numbers are telling. Entities 
affiliated with the Republican party produced only a small 
fraction of the documents produced by comparable Democratic 
entities. For example, in response to similar documents 
subpoenas, the DNC produced over 450,000 pages of unredacted 
documents whereas the RNC produced 70,000 pages of documents--
20 percent of which were heavily redacted, without explanation. 
The individuals associated with the two parties also responded 
differently to requests for testimony. Former and current DNC 
officials voluntarily agreed to depositions, providing over 38 
days of depositions testimony to the Committee. Former and 
current RNC officials, by contrast, did not agree to 
depositions, insisting on Committee subpoenas before they would 
cooperate. Ultimately, even when subpoenas were issued, those 
RNC officials largely ignored them, ultimately providing only 
two half days of deposition testimony to the Committee (see 
Chapter 40).
    This chapter discusses the DNC's cooperation and compliance 
with the Committee's investigation. Chapter 40 discusses the 
response of the RNC and other pro-Republican organizations to 
the Committee's investigation. Chapter 41 details the breakdown 
of compliance with the Committee's requests. Finally, Chapter 
42 discusses the White House cooperation and compliance with 
the Committee's requests.

                                FINDING

    The DNC made a good faith effort to comply with Committee 
requests. To this end, the Committee conducted 38 days of 
depositions, 14 interviews, and five days of public hearings of 
DNC witnesses. The DNC also produced over 450,000 pages of 
documents and hired over 30 additional staff to review and 
prepare documents for production to the Committee.

                     DNC COOPERATION AND COMPLIANCE

    On April 9, 1997, the Committee issued a document subpoena 
to the DNC requiring it to produce documents relevant to the 
Committee's investigation. The Committee did not issue 
depositions subpoenas for DNC testimony because all DNC 
witnesses voluntarily appeared for deposition and public 
testimony.
    In response to the Committee's requests for documents and 
testimony, the DNC expended significant time and resources, 
reviewing over 9 million documents and providing 230 boxes of 
documents--exceeding 450,000 pages--to the 
Committee.3 In August 1997, to meet the demands 
placed upon it by the Committee and other investigations, the 
DNC doubled the number of employees dedicated to document 
production and review from 17 to 34.4
    By the end of the year, the DNC had incurred logistical, 
technical, and staff costs of $4.75 million responding to 
various investigations. That figure does not include legal 
fees, which significantly increases the total expenditures made 
by the DNC in response to Committee and other investigative 
demands.5 In a July 17, 1997 letter to Chairman 
Thompson, DNC Chairman Roy Romer concluded that the scope and 
attendant cost of document production would rival or exceed the 
costs associated with the largest civil cases in U.S. history, 
``cases brought against huge corporations with thousands of 
employees and resources vastly exceeding the limited funds of 
the DNC.'' 6
    Repeated requests to the Committee by the DNC to ``narrow'' 
the broad document subpoena, so that the DNC could best use its 
limited resources to address the needs of the Committee, were 
ignored.7 Nevertheless, the DNC appears to have made 
efforts to adjust to the shifting deposition schedules, 
document demands, and priorities of the Committee.
    The DNC also made efforts to ensure that knowledgeable DNC 
staff were available to the Committee. During the course of the 
investigation, Committee staff conducted 38 days of depositions 
and 14 interviews of current and former DNC staff, all of whom 
appeared voluntarily, many more than once.8 Four 
former/current DNC staff appeared as witnesses before the 
Committee, testifying in five days of public 
hearings.9 Despite the considerable efforts of the 
DNC to cooperate with the Committee, the Majority continued to 
complain publicly about DNC document production.10
    In an August 28, 1997 deposition, Joseph Birkenstock, a DNC 
attorney involved in the DNC production process, testified 
about the DNC's efforts to comply with the Committee's document 
subpoena.11 Regarding document production, 
Birkenstock stated that he was instructed to carry it out as 
expeditiously as possible, and there was no apparent deviation 
from those instructions. Specifically, Birkenstock testified 
that there was no DNC practice or policy to delay production of 
documents for any reason, nor did the DNC establish different 
document production priorities from those established by the 
Committee. In addition, he stated that the political or legal 
sensitivity of particular documents or categories of documents 
was not a factor in determining when they would be produced to 
the Committee.12
    From March to November 1997, the DNC produced over 450,000 
pages of unredacted documents to the Committee. During this 
time period, issues arose concerning the assertion of the 
attorney-client privilege in one DNC deposition and the DNC's 
late production of files from Richard Sullivan's office and 
those issues are addressed below.

Attorney-client privilege issue

    On May 15, 1997, DNC General Counsel Joseph Sandler was 
deposed by staff of the Committee. Sandler's attorney refused 
to allow his client to testify about conversations with White 
House and Democratic party officials, citing attorney-client 
privilege.13 After the DNC submitted a written 
explanation of the privilege,14 Majority counsel 
called the White House and was informed that the White House 
had not, and would not, assert any common interest (or joint 
defense) privilege, even though such a privilege assertion 
might be valid.15 The next day, on May 30, 1997, 
Sandler appeared for another day of deposition testimony, and 
the DNC informed the Committee that it would voluntarily be 
waiving protections it could claim based on attorney-client 
privilege with respect to communications with the White 
House.16 Sandler answered all questions posed by the 
Committee.
    On June 6, a week after the DNC had officially waived the 
privilege and answered questions in Sandler's second 
deposition, Chairman Thompson issued an order regarding 
Sandler's attorney-client privilege assertions. The order 
essentially memorialized the position that the DNC had already 
adopted. This order purported to ``overrule'' the ``common-
interest'' privilege--an assertion which had already been 
rescinded by the DNC--while upholding other privilege 
assertions that had been made.17
    In a June 11 letter to Chairman Thompson, DNC Chairman 
Romer noted that at the second day of Sandler's deposition on 
May 30, the attorney-client privilege was not invoked in 
response to any question. Romer opined that this simple fact 
made the Order appear to be issued to gain partisan publicity. 
Romer additionally noted that none of Sandler's notes or other 
documents relating to discussions with any White House official 
or employee were withheld on grounds of privilege or for any 
other reason.18
    Similarly, after the DNC attempted to establish a framework 
that would permit future disputed documents to be reviewed in 
camera by Committee counsels, Nonetheless, the Chairman issued 
an order demanding that the DNC produce all documents for which 
it was asserting a privilege for in camera review by Committee 
counsels. In a September 2, 1997 response letter to Chairman 
Thompson, DNC Chairman Romer explained that the DNC's assertion 
of the attorney-client privilege as to certain documents 
remained consistent with the terms of the Chairman's Order of 
June 6.19

Late production of certain files

    In August 1997, the Committee received 4,000 pages of 
documents from the files of former DNC Finance Director Richard 
Sullivan. This production included 1,500 pages of handwritten 
notes. Apparently, these and other documents--totaling 
approximately 12,000 pages--were not reviewed for production 
until August, even though they apparently were in a file 
cabinet in the office Sullivan occupied while finance 
director.20 According to DNC Chairman Romer, this 
oversight occurred because the documents were not among those 
that Sullivan identified to the DNC as being his files, and the 
files in question were believed to be ``generic'' Finance 
Department or staff files. When they were determined to be 
Sullivan's documents, Romer immediately personally informed 
Chairman Thompson of their existence. Thereafter, the documents 
were reviewed over a weekend by DNC staff and produced to the 
Majority on August 4, in accordance with Romer's commitment to 
Chairman Thompson.21

                               CONCLUSION

    The Democratic National Committee has responded 
appropriately to subpoenas issued by the Committee and to 
requests for information and staff interview depositions and 
public testimony. At great expense, the DNC has produced 
hundreds of thousands pages of documents and made over 30 
witnesses available for depositions and public testimony. These 
numbers largely speak for themselves regarding the DNC's 
cooperation with the Commitee's investigation, particularly 
when compared to the RNC's production of a very small number of 
unredacted documents and no cooperative witnesses. In sum, 
there was no evidence presented to the Committee that the DNC 
improperly withheld documents or witnesses during the course of 
the Committee's investigation.

                               Footnotes

    \1\ Lanny Breuer, 10/29/97 Hrg., p. 108.
    \2\ Exhibit 2417M.
    \3\ Letter from Chairman Thompson to DNC General Chairman Roy 
Romer, 7/23/97; telephone conversation with Paul Palmer of Debevoise & 
Plimpton, counsel to the DNC, 12/15/97; letter from Chairman Romer and 
Steve Grossman, DNC National Chairman, to Chairman Thompson, 9/2/97; 
telephone conversation with Paul Palmer of Debevoise & Plimpton, 
counsel to the DNC, 1/7/98.
    \4\ Letter from Roy Romer, DNC General Chairman and Steve Grossman, 
DNC National Chairman, to Chairman Thompson, 9/2/97. The 34 staff 
operate out of the Office of General Counsel (``OGC''). Joseph 
Birkenstock deposition, 8/28/97, pp. 9-10.
    \5\ Washington Post, 1/19/98.
    \6\ Letter from Roy Romer, DNC General Chairman and Steve Grossman, 
DNC National Chairman, to Chairman Thompson, 7/17/97.
    \7\ Letter from Roy Romer to Chairman, 6/11/97; letter from Peter 
Kadzik of Dickstein, Shapiro, Morin & Oshinsky, to Majority Counsel, 7/
29/97; letter from Roy Romer, DNC General Chairman and Steve Grossman, 
DNC National Chairman, 9/2/97.
    \8\ Minority document, ``Interviews and Depositions By Minority 
Staff''; only one DNC individual required a subpoena for deposition 
testimony--and that was only after he had already voluntarily provided 
two full days of testimony.
    \9\ See http://www.senate.gov/gov__affairs/witness.htm, 
listing witnesses who publicly testified before the Committee.
    \10\ Letter from Peter Kadzik of Dickstein, Shapiro, Morin & 
Oshinsky, to Majority Cheif Counsel, 5/29/97; letter from Roy Romer, 
DNC General Chairman and Steve Grossman, DNC National Chairman, 6/26/
97; letter from Robert Bauer and Marc Elias of Perkins Coie to 
Chairman, 10/16/97; letter from Richard Ben-Veniste of Weil, Gotshal & 
Manges to Chairman, 10/20/97.
    \11\ Joseph Birkenstock deposition, 8/28/97, pp. 131-133.
    \12\ Joseph Birkenstock deposition, 8/28/97, pp. 131-133.
    \13\ Joseph E. Sandler deposition, 5/15/97, p. 174:18-21.
    \14\ A legal research memorandum provided to the Committee on May 
21, 1997, by DNC attorney Judah Best, concluded that disclosing 
privileged information to a person with a common interest does not 
waive the attorney-client privilege. Best asserted that ``under the law 
of the District of Columbia, the exchange of privileged information 
among lawyers representing separate clients and the disclosure of 
privileged communications by one client to another's attorney does not 
waive the attorney-client privilege where the clients have a common 
interest and the communications relate to the matter of common 
interest.'' Similarly, Best found that the privilege is not waived by 
disclosure of confidential information between two clients represented 
by a single attorney where the clients, at the time the information was 
shared, had common interests. Judah Best Legal Opinion Memorandum, 5/
21/97.
    \15\ Letter from Majority Counsel to White House Counsel Breuer, 5/
29/97; Letter from Breur to Majority Counsel, 6/2/97.
    \16\ Joseph E. Sandler deposition, 5/30/97, pp. 63-64, 106-110.
    \17\ The Order permitted, in part, the privilege to be asserted 
with respect to the substance of certain conversations Sandler had with 
DNC staff. Under the Order, such conversations would be privileged only 
to the extent that they were for the specific and sole purpose of 
Sandler's being able to render legal advice and if Sandler received or 
provided the information with the clear expectation that the 
information or advice would remain confidential. Similarily, the 
assertion of attorney work product privilege with respect to any 
conversation Sandler had in the period of September through November 
1996, in the presence of any third party was overruled. Finally, the 
DNC was ordered and directed to produce all documents in Sandler's 
files including all his notes that were responsive to the subpoena and 
a log of all documents in his files withheld from production on the 
ground of privilege. Chairman's Order, 6/6/97.
    \18\ Letter from Roy Romer to Chairman, 6/11/97.
    \19\ Letter from Roy Romer to Chairman, 9/2/97.
    \20\ Joseph Birkenstock deposition, 8/28/97, pp. 107-127.
    \21\ Letter from Paul C. Palmer of Debevoise & Plimpton 
representing the DNC to Majority Counsel, 8/4/97. This production 
exemplifies the uneven treatment afforded by the Majority staff to the 
Minority during this investigation. While the DNC produced these 
documents to the Majority on August 4, despite repeated requests, the 
Majority did not give the Minority a copy of the production for over 
two weeks.





PART 7  INVESTIGATION PROCESSES

Chapter 40: Republican Compliance Issues

     During its investigation, the Committee issued over 400 
document and deposition subpoenas to a variety of organizations 
and individuals. Of those subpoenas, 89 were issued at the 
request of the Minority and sought documents and testimony 
regarding Republican fundraising activities. Approximately half 
of the 89 subpoenas sought documents from pro-Republican 
organizations or from banks that possessed relevant 
information. Unfortunately, the other half of the 89 were 
deposition subpoenas issued to officials affiliated with the 
Republican Party. The Committee was forced to issue these 
deposition subpoenas because officials affiliated with the 
Republican Party, unlike most officials affiliated with the 
Democratic Party, see Chapters 39 and 42, refused to 
voluntarily cooperate with the Committee's request for 
deposition testimony. By the end of the investigation, although 
the Committee had received hundreds of thousands of documents 
and taken 240 depositions, the Committee received from these 
Republican affiliated groups combined--including the RNC and 
all pro-Republican groups subpoenaed by the Committee--less 
than 100,000 pages of documents and only 36 depositions.

                                FINDINGS

    (5) The RNC impeded the investigation. The RNC unilaterally 
redacted documents and appears to have intentionally withheld 
material documents. RNC witnesses failed to cooperate in 
scheduling depositions, and, in the instances where depositions 
were scheduled, they were unilaterally canceled.
    (6) Entities supportive of the Republican party impeded the 
investigation. Entities including the National Policy Forum, 
Americans for Tax Reform, and Triad intentionally impeded the 
investigation by failing to produce documents and witnesses 
under subpoena.

                             INTRODUCTION .

     On April 9, 1997, the Committee issued document subpoenas 
to several organizations associated with the Republican Party, 
including the Republican National Committee (RNC), the National 
Policy Forum, Americans for Tax Reform, and Triad Management 
Services, Inc. (Triad). Beginning late April 1997, the entities 
made clear to the Committee that they would resist the 
Committee's subpoenas and other requests for information. For 
example, although the DNC began its documents production in 
March 1997, even before it received a Committee subpoena, the 
RNC did not make a meaningful production to the Committee until 
late June 1997. In addition, despite the fact that the RNC and 
DNC received similar subpoenas on April 9, the RNC produced 
only 70,000 pages of redacted documents, compared to the DNC's 
production of over 450,000 unredacted documents. The other 
Republican-affiliated groups subpoenaed in April provided less 
information to the Committee than the RNC. Some of the groups 
even claimed that the Committee subpoena was ``not applicable'' 
to their organizations.
    Beginning in the spring of 1997, the Minority urged 
Chairman Thompson to enforce the subpoenas against these 
entities. Although Chairman Thompson ultimately issued an order 
of compliance in July 1997 to the National Policy Forum, that 
organization flagrantly ignored the order and refused to 
comply. This defiance sent an unfortunate message to other 
Republican affiliated groups, and perhaps even groups that were 
later subpoenaed by the Committee, that the subpoenas could be 
ignored with no consequences.
    In fact, after the Committee later issued additional 
subpoenas to 26 organizations, many of those organizations on 
both sides of the political aisle ultimately banded together 
and did no respond to the Committee mandate. See Chapter 41. 
This issue turned the Senate investigative process into a 
``paper tiger.'' The enforcement power of the Committee, and of 
the Senate, could have been preserved had the Majority acted 
decisively against those organizations--most of them 
Republican--that first challenged the Committee's authority in 
the spring of 1997. The groups discussed in this chapter were 
all subpoenaed in early April, which was near the beginning of 
the investigation so that ``running the clock'' on the 
investigation was not an issue. Moreover, Senator Glenn and 
other Democrats publicly stressed on numerous occasions their 
willingness to vote contempt against any entity that refused to 
comply with a valid Senate subpoena.

                          THE FIRST SUBPOENAS

    On April 9, 1997, the Committee issued subpoenas to the 
Republican National Committee (``RNC''), Dole for President, 
Triad and its affiliates, Coalition for Our Children's Future, 
the National Policy Forum (``NPF'') and Americans for Tax 
Reform (``ATR''). The return date for these subpoenas was April 
30. In order to understand the extent to which the 
investigation deteriorated, it is important to fully review the 
context of the events as they unfolded. By the middle of June--
just three weeks before the hearings were scheduled to begin--
the production of documents by most of the Republican-
affiliated organizations under subpoena remained woefully 
incomplete, and in some cases, non-existent:
     By April 30, the Republican National Committee had 
produced only an internal telephone directory and some 
organizational charts. By June 10, the RNC had provided only 
four boxes of heavily redacted documents. The Minority 
estimates that on this date, it received 15,000 documents, 20 
percent of which had been redacted and another 20 percent 
consisting of publicly available information. This record was 
in sharp contrast to the DNC, which by this date had produced 
61 boxes containing over 150,000 pages of unredacted documents.
     During the course of the investigation, Dole for 
President provided the Committee with only three boxes of 
material. In contrast, Clinton/Gore produced five boxes 
containing 11,930 pages of material.
     Triad and its affiliates provided one box of 
documents by June 10, the majority of which, it appeared, were 
provided by Triad's affiliates. It is noteworthy that Carolyn 
Malenick, Triad's president, had a company policy that required 
the ``cleaning'' of Triad's computer files on a regular 
basis.1
---------------------------------------------------------------------------
    Footnotes appear at end of chapter 40.
---------------------------------------------------------------------------
     Americans for Tax Reform adopted the unsupportable 
position that since it played no role in the 1996 election, the 
subpoena was not applicable.2 By June 10, it had 
produced no documents.
     The National Policy Forum, represented by the same 
lawyer as ATR, also took the position that since, in its view, 
it played no role in the 1996 election, the subpoena was not 
applicable. On June 6, NPF did provide the Committee with some 
documents, which were simultaneously provided to the news 
media. NPF expressly stated that this production did not 
constitute compliance with the Committee's 
subpoena.3
     These organizations together--the RNC and all 
Republican groups combined--only provided 36 days of deposition 
testimony, with many individuals refusing to appear or answer 
questions before and after the Committee had issued deposition 
subpoenas demanding their appearance. The Committee took a 
total of 240 depositions during its investigation.
    Below is a discussion of the cooperation and compliance of 
the RNC, Triad, NPF and ATR in response to the Committee's 
investigation.

                         RNC COMPLIANCE ISSUES

    The RNC's initial response to the Committee's April 9, 1997 
subpoena was to produce only an internal telephone book. 
Finally, on May 23, the RNC began to produce documents. 
Unfortunately, as Chairman Thompson wrote to RNC Chairman Jim 
Nicholson on June 11, ``the RNC . . . in many cases . . . 
unnecessarily redacted the documents produced.'' 4 
To date, the RNC has offered no explanation for any of the 
redactions to several thousand documents.
    The RNC also failed to produce a number of inculpatory 
subpoenaed documents. The Committee's document subpoena asked 
the RNC to produce, among other things:

          All documents referring or relating to the following, 
        including but not limited to communications between the 
        RNC and officers, agents, or employees of any of the 
        following: . . . (21) American Defense Institute and 
        Foundation,  . . . (23) National Right to Life 
        Committee; . . . (26) Americans for Tax Reform; . . . 
        (28) Grover Norquist.5

    On October 17, the Dole for President committee produced a 
number of documents that had been stored in the computer hard 
drive of Jo-Anne Coe, who served as RNC deputy finance director 
in 1996. One of those documents was an October 17, 1996, memo 
from Coe to RNC Chairman Haley Barbour, RNC Executive Director 
Sanford McAllister, and RNCDirector of Campaign Operations Curt 
Anderson. In this document, Coe wrote:

          Today I have also sent $100,000 to National Right to 
        Life and $100,000 to Americans for Tax Reform--both 
        from Carl Lindner. In addition, the following checks 
        for ADI are en route to me: $100,000 [from] Jack 
        Taylor, $100,000 [from] Max Fisher, $50,000 [from] Don 
        Rumsfeld, $30,000 [from] Pat Rutherford. The $100,000 
        check from Lincy Foundation (Kirk Kerkorian) for ADI is 
        still MIA. With the $100,000 from Lincy, this will 
        bring the total for ADI to $510,000--plus the $500,000 
        Haley obtained from Philip Morris.6

This document refers to Americans for Tax Reform, the National 
Right to Life Committee, and the American Defense Institute--
three organizations specifically mentioned in the Committee's 
subpoena. Considering that the document was stored in the hard 
drive of the RNC's deputy finance director and addressed to 
three top RNC officials, the failure of the RNC to produce it 
raises a compelling inference that the RNC willfully withheld 
material evidence which had been subpoenaed.
     Coe's hard drive contained a number of other responsive 
documents that the RNC failed to produce. One example is the 
text of an October 21, 1996 letter from Coe to ATR President 
Grover Norquist. The letter asked Norquist to write a thank-you 
note to Carl Lindner, who had, at the RNC's request, written a 
$100,000 check to ATR.7 Coe also wrote a letter to 
the executive director of the National Right to Life Committee, 
asking that he also send a thank-you note to Lindner for a 
$100,000 contribution that the RNC had engineered. 8 
Another responsive document contained in Coe's hard drive 
listed the amounts of money the RNC directly controlled and 
contributed to the American Defense Institute, National Right 
to Life Committee, and Americans for Tax Reform.9 
Every single one of these documents is responsive to the 
Committee's subpoena. Yet, the RNC failed to produce any of 
these documents, and has refused to explain its failure to 
comply with the Committee's document subpoena. Whoever was 
responsible for this declaration on the part of the RNC should, 
in the view of the Minority, be investigated for possible 
obstruction of justice.
    The RNC's record of making witnesses available for 
interview or deposition was another indication of the 
organization's planned activity to impede the Committee's 
investigation. On April 28, the Minority provided the RNC with 
a list of 16 individuals the Minority wished to interview. The 
RNC stated numerous times to Commitee staff that each of these 
witnesses would appear voluntarily for interviews.10 
Unfortunately, despite repeated attempts to schedule these 16 
interviews, only five ultimately agreed to talk to Committee 
staff.
    Majority and Minority Chief Counsels requested in a joint 
letter to the RNC that it promptly schedule depositions for 15 
witnesses. The letter told the RNC that ``[i]f a schedule 
cannot be worked out between you and counsel for the Committee 
by August 12, 1997, the Committee will find it necessary to 
subpoena [these] individuals.'' 11 The RNC assured 
the Committee that all of these witnesses would appear 
voluntarily for depositions by the end of October.12 
Despite these assurances, and again despite repeated attempts 
to schedule deposition dates, the RNC did not allow the 
Committee to depose a single one of these witnesses.
    The refusal of RNC witnesses to appear voluntarily for 
depositions prompted the Committee to issue deposition 
subpoenas for Dole for President Campaign Manager Scott Reed 
and RNC Deputy Finance Director Coe, both of whom were 
represented by RNC counsel Martin Weinstein.13 The 
subpoenas were served on September 19, 1997. RNC counsel 
earnestly assured the Committee that it would comply with the 
Committee's subpoenas, and then cancelled several deposition 
dates. Ultimately, in October, the RNC informed the Committee 
that Coe and Reed would in fact not appear for depositions or 
otherwise comply with the Committee's subpoena.14 
Coe and Reed asserted no legal basis to explain their refusal, 
nor did they challenge the validity of the Committee's 
subpoenas. In stark contrast to the DNC officials who all 
voluntarily appeared for depositions, these RNC officials 
simply refused to respond to the Committee's requests for 
information and, when subpoenas were finally issued to require 
them to cooperate, they proceeded to ignore the Committee's 
mandate.

                        TRIAD COMPLIANCE ISSUES

    The subpoenas issued to Triad Management Services, Inc. 
(Triad), a for-profit company, and its affiliates, Citizens for 
Reform (``CFR'') and Citizens for the Republic Education Fund 
(``CREF''), called for the production of documents under a 
total of 56 separate paragraphs.15 Although the 
return date for the production of documents was April 30, Triad 
did not begin to make any significant production until early 
June. Ultimately, Triad produced no more than a few hundred 
documents. In fact, Triad's affiliate organizations, discussed 
below, provided the Committee with more documents than did 
Triad itself and provided several documents that originated at 
Triad, but were not produced by Triad. Several of the documents 
strongly suggest that Triad withheld responsive documents from 
the Committee. One possible, albeit extremely troubling, 
explanation may be that Triad destroyed documents in 
anticipation of the Committee's subpoena. Triad produced a 
memorandum dated February 20, 1997, in which Triad's president, 
Carolyn Malenick, informed employees of the company's 
``cleaning of the computers.'' 16
    Triad, through its lawyer, Mark Braden, maintained that it 
provided the Committee with all documents called for under the 
subpoena. Although the Minority cannot prove that any documents 
were either intentionally destroyed or withheld, the Minority 
believes it is likely that additional responsive documents 
exist which have not been produced. For instance, there was 
incomplete information about advertising planned, produced, or 
paid for by Triad, CFR, and CREF. There were no scripts or 
invoices for ads produced by CREF. There were no internal 
memoranda from CREF such as communication between vendors and 
the CREF's chairman, Lyn Nofziger. Curiously, there was no 
application for tax-exempt status produced by CREF, even though 
its attorney claimed it was a 501(c)(4).
    Another example of a document that may have been withheld 
was a ``fee schedule'' which was referred to in the deposition 
of Meredith O'Rourke, Triad's finance director,17 
and which should have been produced under paragraph 10 of the 
subpoena.18 Additionally, it is clear from Triad's 
marketing video that company officials met with elected 
officials to plan strategy and fundraising. Yet, Triad produced 
no information about any meetings at which elected officials to 
federal office were present.
    The Minority was interested in exploring the issue of 
document production with several Triad witnesses but, with a 
few exceptions, the witnesses were extremely uncooperative. For 
example, Carolyn Malenick, Triad's president, Lyn Nofziger, 
Citizens for the Republic chairman, and Carlos Rodriquez, 
Triad's campaign consultant, were all subpoenaed for deposition 
testimony.19 Initially, they all ignored their 
respective dates for deposition and failed to appear. After the 
Minority requested that the Chairman hold them in contempt, 
they each appeared, but refused to answer 
questions.20 Other witnesses critical to the Triad 
story, including Mark Braden, David Gilliard, Kathleen McCann, 
Richard Dresner, and James Farwell were under subpoena, but 
failed to appear for their depositions.21 Peter 
Flaherty, the Chairman of Citizens for Reform, did appear for 
his deposition, but chose to adopt an openly hostile attitude 
by frequently answering questions ``None of your business.'' 
22
    On July 3, 1997, five days before the hearings began, 
Chairman Thompson wrote a letter to Jim Nicholson, chairman of 
the Republican National Committee, in which he warned the RNC 
against ``shielding'' witnesses and failing to produce 
documents. 23 More importantly, on that same day, 
the Chairman issued an Order to the National Policy Forum to 
produce documents.24

                             THE NPF ORDER

    An order is essentially a command by the Chairman that the 
individual or entity must comply with the Committee's requests 
and demands or face the legal consequences--presumably 
contempt. The Chairman had previously issued an order to the 
DNC with which the DNC complied. The National Policy Forum, on 
the other hand, completely ignored the order. In fact, the 
NPF's lawyer, Thomas Wilson, responded in a letter to the 
Majority Chief Counsel that ``The Committee's subpoena cannot 
change the limits of the Committee's jurisdiction; neither can 
a letter purporting to be an order issued by the Committee's 
Chairman.'' 25
    Wilson's defiance of the order was a decisive moment in the 
investigation. A subpoena to the AFL-CIO had only been issued a 
few weeks before and the scope of that subpoena was still being 
negotiated. Other organizations, such as the RNC, were clearly 
in violation of their subpoenas, but only the NPF was under an 
order.
    Regrettably, after Wilson's letter, the Chairman took no 
action. The Minority was forced to conduct its three days of 
hearings on NPF without ever having that organization even 
partially comply with the subpoena. More importantly, the NPF 
episode likely sent asignal to other organizations that the 
chairman would not exercise the contempt option and that the 
Committee's processes, particularly when directed at Republican 
entities or individuals, could be ignored with impunity. As a result, 
most of the Republican-affiliated organizations under subpoena 
abandoned any pretense of cooperation with the Committee's inquiry.

                         npf compliance issues

    The subpoena issued to the National Policy Forum on April 
9, 1997 called for the production of documents under 27 
separate paragraphs.\26\ After several delays, NPF provided a 
limited number of documents on June 6, 1997. Many of the 
materials had already been provided voluntarily to the 
Committee by the attorney for Young Brothers Development (USA) 
and most were also provided by the NPF to members of the media 
at the same time they were delivered to the Committee. The next 
limited production from NPF came on June 30. Accompanying the 
documents was a transmittal letter that stated:

          Nevertheless, in the same spirit of cooperation that 
        motivated the Forum to provide voluntarily to the 
        Committee documents regarding the Signet Bank loan 
        transaction on June 6, 1997, the Forum is today 
        voluntarily providing 30 boxes of additional materials. 
        These materials--like the loan materials--are not 
        responsive to the Committee's subpoena. They have 
        nothing to do with the 1996 Federal election campaigns 
        and the Forum has no obligation to produce them. The 
        Forum, however, has decided voluntarily to provide the 
        Committee with materials that will give the Committee a 
        better understanding of the Forum's purposes and 
        activities.\27\

    Due to its position that it was not producing documents 
pursuant to subpoena, NPF failed to categorize or relate the 
documents it provided to specific paragraphs of the subpoena, 
or to make any representation as to whether there were certain 
paragraphs of the subpoena for which it had no responsive 
documents. As noted in Chapter 3 on NPF, because the Committee 
received important and responsive documents from other sources 
and it became clear that NPF was willfully withholding 
documents. As noted above, Chairman Thompson issued an order on 
July 3, 1997, that stated, ``The National Policy Forum is 
ORDERED and DIRECTED to produce all documents in its files that 
are responsive to the NPF subpoena . . . by 9 a.m. on Monday, 
July 14, to Committee staff. . . .'' \28\ Not only did NPF's 
counsel ignore the July 14 deadline, but on July 15, he 
responded by providing a limited number of additional documents 
along with a letter stating: ``As with the June 30 production, 
the Forum has not provided these materials in response to the 
Committee's subpoena or because it is obligated to do so.'' 
\29\
    NPF also ignored paragraph (2) of the subpoena, which 
requested ``All documents referring or relating to NPF 
obtaining or maintaining tax-exempt status.'' \30\
    A letter to NPF (and RNC) Chairman Haley Barbour from 
former NPF President Michael Baroody, in which Baroody 
expressed concern that NPF could be endangering its tax exempt 
status was never provided to the Committee by NPF, in direct 
contravention of paragraph (2) of the subpoena and of the 
Chairman's order.\31\ In addition, NPF further obstructed the 
Committee's investigation by refusing to turn over other 
documents responsive to paragraph (2) of the subpoena until its 
July 15 ``voluntary'' production, when it finally turned over 
one Internal Revenue Service (``IRS'') document denying NPF's 
tax-exempt status.\32\
    NPF ignored paragraph (20) of the subpoena, which 
requested:

          All documents referring or relating to, or containing 
        information about, any conferences, receptions, 
        briefings, or meetings organized by, or through, NPF at 
        which any official elected to federal office and any 
        donor to NPF were present.\33\

     NPF violated paragraph (20) of the subpoena by failing to 
provide at least two documents that were ultimately provided to 
the Committee by other sources. One was a memo to Haley Barbour 
from NPF fundraiser Grace Wiegers regarding ``Recruiting 
Members of Congress to Raise Money for NPF.'' \34\ The second 
was a memorandum to NPF President John Bolton from Grace 
Wiegers and Dianne Harrison regarding ``Megaconference 
Sponsorship.'' \35\ Both are fundraising memos which anticipate 
NPF donors meeting with elected officials. (Appearances by 
elected officials were a feature of NPF megaconferences.)
     NPF ignored paragraph (23) of the subpoena, which 
requested:

          All documents referring or relating to, or containing 
        information about, communications by any director, 
        officer, employee, or agent of NPF and any director, 
        officer, employee or agent of a registered political 
        committee, including, but not limited to, a national 
        party committee.\36\

    NPF violated paragraph (23) by withholding from the 
Committee a memorandum from RNC official Scott Reed to NPF 
officials Haley Barbour, Michael Baroody, and Kenneth Hill.\37\ 
The Committee received this document from another source.
    In addition to withholding documents in defiance of the 
Committee's subpoena and Chairman Thompson's order, NPF's 
attorney, Thomas Wilson, may have obstructed the Committee's 
investigation by making false statements to the Committee. 
Wilson repeatedly claimed that NPF was not required to comply 
with the subpoena because ``the Forum had nothing to do with 
the 1996 Federal election campaigns, or any other election 
campaigns.'' \38\ In hearings on NPF, the Committee established 
that NPF was nothing more than a front for the Republican 
National Committee, that foreign money was funneled from the 
NPF to the RNC, and that the money was ultimately used in 
federal and state elections in 1994 and 1996.\39\ In addition, 
the Internal Revenue Service denied tax-exempt status to NPF on 
the ground that the group engaged in partisan political 
activity.\40\ Wilson knew or should have known of the election 
activity engaged in by his client, and he willfully misled the 
Committee.
    It is clear that NPF refused to comply with the Committee's 
subpoena and order, and that its agent misled the Committee by 
making a false statement of material fact. What is unclear is 
how many other responsive documents NPF failed to produce that 
the Committee was unable to acquire through other sources. 
NPF's actions were taken knowingly and willfully, and as such 
constitute an obstruction of the Committee's investigation.

                         atr compliance issues

    The subpoena issued to Americans for Tax Reform on April 9 
called for the production of documents under 29 separate 
paragraphs.\41\ After several delays, ATR provided certain 
documents to the Committee on June 11, 1997. The transmittal 
letter accompanying these documents, however, stated:

          ATR makes the production of the documents which 
        accompany this transmittal letter voluntarily and 
        purely as a matter of grace, not because ATR believes 
        that any of the documents produced are called for by 
        the subpoena, when that subpoena is read in conjunction 
        with the jurisdictional limitations placed upon the 
        Committee's investigation by S. 39 [sic--S. Res. 
        39].\42\

    ATR also stated in its letter that ``ATR has virtually no 
documents that relate to the 1996 Federal election campaign, 
and, we believe, no documents at all that relate to ``illegal 
or improper activities in connection with 1996 Federal election 
campaigns'. . .'' \43\
    Due to its position that it was not producing documents 
pursuant to a subpoena, ATR--like NPF--failed to categorize or 
relate the documents it provided to specific paragraphs of the 
subpoena, or to make any representation as to whether there 
were certain paragraphs of the subpoena for which it had no 
responsive documents. As a result, it was difficult at first 
for the Committee to know in certain instances whether ATR was 
willfully withholding responsive documents or whether it merely 
had no such responsive documents. In a letter to ATR dated 
August 15, 1997, and signed jointly by Majority and Minority 
Chief Counsels, the Committee identified 12 specific paragraphs 
for which it determined ATR failed to produce documents and 
asked ATR to provide the Committee with an affidavit stating 
whether ATR had withheld any documents responsive to these or 
any other specifications of the subpoena.\44\ ATR's affidavit 
failed to provide such a statement; rather, it merely 
reiterated the positions taken by ATR in its original 
transmittal letter.\45\
    Among the subpoena requests identified in the Committee's 
August 15 letter were paragraphs 9 and 25 which read as 
follows:

          All documents referring or relating to, or containing 
        information about, any contribution, donation, 
        transfer, loan, or grant, or funds or services, made to 
        ATR from any registered political committee.\46\

           *         *         *         *         *

          All documents referring or relating to, or containing 
        information about, communications by any director, 
        officer, employee, or agent of ATR and any director, 
        officer, employee or agent of a registered political 
        committee, including, but not limited to, a national 
        party committee.\47\

It is an established fact, publicly admitted by ATR President 
Grover Norquist, that the Republican National Committee 
``donated'' $4.6 million to ATR in October 1996. Any and all 
documents relating to this donation would certainly be 
responsive under both paragraphs 9 and 25. Despite this, ATR 
failed to produce to the Committee any documents relating to 
this transaction. The Committee now knows, however, that 
certain documents relating to this transaction do exist because 
they were subsequently produced to the Committee by the 
RNC.\48\ Among these documents are four separate letters from 
Haley Barbour to ATR's executive director, each of which notify 
her of the RNC's donations ``through its non-federal component, 
the Republican National State Elections Committee.'' \49\ This 
clearly evidences the RNC's contribution to ATR of soft money 
for partisan political purposes. ATR withheld these documents 
from the Committee. The failure to produce these documents by 
whomever was responsible for ATR's production may well amount 
to obstruction of justice.
    It is also an established fact, publicly admitted by ATR's 
Norquist, that the money ATR received from the RNC was used to 
conduct a direct mail and phone bank campaign addressing the 
Medicare issue.\50\ The RNC produced another document, 
``Memorandum for the Field Dogs,'' which was created shortly 
before ATR began its direct mail campaign.\51\ The document 
refers to an attached copy of one of the direct mailings that 
was to be sent out by ATR. The document also refers to an 
attached map of the 150 congressional districts to which the 
mailings were to be directed. It is obvious from this document 
that there was communication between ATR and the RNC concerning 
ATR's direct mail campaign--how else does one explain how the 
RNC had an advance copy of ATR's mailing, as well as a map of 
the exact districts to which the mailing would be sent? Despite 
the fact that such communications would fall squarely under 
subpoena paragraph 25, ATR withheld from the Committee 
documents pertaining to such communication. The failure to 
produce this material may also constitute obstruction of 
justice.
    Documents pertaining to this direct mail and phone bank 
campaign would also fall squarely under subpoena paragraph 17. 
This paragraph called for the production of:

          All documents referring or relating to, or containing 
        information about, any voter education activity, 
        including telephone banks and direct mail, planned, 
        produced or paid for by ATR. Documents include, but are 
        not limited to, communications with regard to such 
        activity, copies of such mailings or telephone scripts 
        including drafts, billing invoices and other documents 
        relating to the cost of production, and memoranda or 
        other documents containing dates, amounts, and 
        locations of mailings, and the number of calls placed, 
        dates of calling, and area codes to which calls were 
        made.\52\

While ATR did produce some documents pertaining to its direct 
mail and phone bank campaign, it withheld from the Committee 
any documents identifying the congressional districts to which 
the mailings were directed (information it apparently provided 
to the RNC) or the area codes to which phone bank calls were 
directed. As a result, the Committee to this day still does not 
know where ATR directed its direct mail and phone bank efforts.
    Finally, we know that ATR also withheld from the Committee 
documents called for under subpoena paragraph 15. That 
paragraph read as follows:

          All documents referring or relating to, or containing 
        information about, advertising that was planned, 
        produced or paid for by ATR. Documents include, but are 
        not limited to, communications with any media 
        consultant or buyer, transcripts, drafts, video copies, 
        billing invoices, and memoranda or other records 
        containing times, dates and locations of 
        broadcast.53

It is undisputed that ATR produced and paid for a 30-second 
television advertisement aimed at New Jersey senatorial 
candidate Robert Torricelli.54 Some invoices 
pertaining to this advertisement were among the documents 
produced by ATR; 55 however, ATR did not produce to 
the Committee either a transcript or a video copy of the 
advertisement. ATR also failed to produce to the Committee 
complete records of the dates and locations of distribution of 
the advertisement. The Committee did obtain a video copy of the 
advertisement from Senator Torricelli's office, the content of 
which makes it clear that this was no issue ad--the 
advertisement had nothing to do with tax reform, but rather was 
a direct attack on Torricelli's voting record as a Congressman. 
Had ATR provided the Committee with the content of the 
advertisement and complete records of the dates and locations 
of the advertisement's airing, it certainly would have 
contradicted its own statement in its June 11 transmittal 
letter that ATR ``has never run political advertising on any 
subject.'' 56 The failure to produce this material 
may well constitute obstruction of justice.
    The examples cited above demonstrate that documents exist 
which were called for under the Committee's subpoena and which 
were directly relevant to the core issues under investigation 
by the Committee. Not only did ATR withhold such documents, but 
the statements in ATR's transmittal letter of June 11, 1997, 
calling into question the jurisdiction of the Committee, make 
it clear that ATR's actions were taken consciously and 
willfully. As such, these actions constitute willful 
obstruction of this Committee's investigation.

                               CONCLUSION

    The Senate investigation into the 1996 campaign represented 
a missed opportunity for a number of reasons as outlined in the 
Executive Summary to this Minority Report. Of more long-term, 
institutional concern, however, is the fact that the 
investigation has potentially jeopardized future congressional 
investigations. Entities on both sides of the political aisle 
openly resisted the Committee's investigative powers, but 
certain GOP-affiliated entities actively engaged in impeding 
and defying the inquiry. The Republican National Committee, the 
National Policy Forum, Americans for Tax Reform, and Triad 
failed to respond to deposition subpoenas, and their employees 
blithely refused to appear for depositions or, if they did 
appear, declined to answer questions. The Majority took no 
meaningful enforcement action against any of these 
organizations. This may have set a damaging precedent for 
future Senate probes.
    It is also extremely troubling that some of the lawyers who 
represented these organizations may have used unethical tactics 
in dealing with the Committee and thereby achieved the result 
they sought. It appears that certain counsel may have withheld 
documents that were responsive to Committee subpoena. None of 
the lawyers mentioned in this chapter were cooperative in 
providing witnesses for deposition, even when these witnesses 
were under subpoena. One lawyer may have deliberately misled 
the Committee about which witnesses he represented 
57 and may have directly approached a witness to 
sign an affidavit even though he knew that witness to be 
represented by counsel.58 Clearly, the stakes were 
high for many of the entities and individuals involved in this 
investigation, but nothing can justify the kind of behavior 
that the Committee experienced with certain counsel. In future 
congressional investigations, these tactics should not be 
tolerated.

                               footnotes

    \1\ Memorandum to ``TRIAD Employees'' from ``Carolyn'' (Malenick) 
regarding ``Office Computers and Files,'' 2/21/97, TR 20 000005.
    \2\ Letter to Michael Madigan from Thomas Wilson regarding 
Americans for Tax Reform, 6/11/97.
    \3\ Additional documents were provided on June 30, 1997. In the 
transmittal letter to Michael Madigan from Thomas Wilson regarding the 
National Policy Forum, Wilson stated that neither the June 6 nor the 
June 30 productions were to be construed as compliance with the 
Committee's subpoena, 6/30/97.
    \4\ Letter to RNC Chairman Jim Nicholson from Chairman Fred 
Thompson requesting that Nicholson investigate complaints by the 
Minority that the RNC was not fully complying with the terms of its 
subpoena and, with respect to witnesses, urging him to instruct counsel 
``not to attempt to shield important facts . . .,'' 6/11/97.
    \5\ Subpoena to Republican National Committee, # 67, Request # 14 
of Schedule A, 4/9/97.
    \6\ Confidential Memorandum to Haley Barbour, Sanford McCallister, 
and Curt Anderson from Jo-Anne Coe regarding the American Defense 
Institute, 10/17/96, DFP-004240.
    \7\ Letter to Grover Norquist from Jo-Anne Coe including a check in 
the amount of $100,000 for Americans for Tax Reform from Carl Lindner, 
10/21/96, DFP-004241.
    \8\ Letter to David O'Steen from Jo-Anne Coe including a check in 
the amount of $100,000 for the National Right to Life Committee, 10/21/
96, DFP-004243.
    \9\ Document listing money distributed to three 501(c)(4) 
organizations and two 501(c)(3) entities, DFP-004244.
    \10\ Letter to Minority Counsel from Martin Weinstein demonstrating 
Weinstein's ``effort to efficiently produce all current and former RNC 
employees with whom the Committee wishes to speak . . .,'' 5/20/97.
    \11\ Letter to Martin Weinstein from Majority and Minority Chief 
Counsels regarding the Committee's intention to depose certain 
individuals, 8/5/97.
    \12\ Letter to Majority and Minority Chief Counsels from Martin 
Weinstein regarding the scheduling of deponents in connection with the 
RNC, 8/14/97.
    \13\ Subpoenas to Scott Reed, # 392, and Jo-Anne Coe, # 396, 9/18/
97.
    \14\ Letter to Majority Chief Counsel from Martin Weinstein 
regarding the Republican National Committee, 10/22/97.
    \15\ Subpoenas to Triad Management Services, Inc., #72 (22 
paragraphs under Schedule A); Citizens for the Republic Education Fund, 
#74 (25 paragraphs under Schedule A); and Citizens for Reform, #75 (9 
paragraphs under Schedule A); 4/9/97.
    \16\ Memorandum to ``TRIAD Employees'' from ``Carolyn'' (Malenick) 
regarding ``Office Computers and Files,'' 2/21/97, TR 20 000005.
    \17\ Meredith O'Rourke deposition, 9/3/97, pp.30-31.
    \18\ Subpoena to Triad Management Services, Inc., # 72, Request # 
10 of Schedule A, 4/9/97.
    \19\ Subpoenas to Carolyn Malenick, # 255; Lyn Nofziger, # 248; and 
Carlos Rodriguez, # 249; 7/11/97.
    \20\ Carolyn Malenick deposition, 9/16/97, p. 17; Lyn Nofziger 
deposition, 9/16/97, pp. 10-11; Carlos Rodriguez deposition, 9/17/97, 
p. 8.
    \21\ Subpoenas to Mark Braden, # 256, 7/11/97; David Gilliard, # 
250, 7/11/97; Kathleen McCann, # 346, 8/21/97; Richard Dresner, # 375, 
9/4/97; and James Farwell, # 377; 9/4/97.
    \22\ Peter Flaherty deposition, 8/22/97, p.9.
    \23\ Letter to RNC Chairman Jim Nicholson from Chairman Fred 
Thompson requesting that Nicholson investigate complaints by the 
Minority that the RNC was not fully complying with the terms of its 
subpoena and, with respect to witnesses, urging him to instruct counsel 
``not to attempt to shield important facts...'' 6/11/97.
    \24\ Order to National Policy Forum from Chairman Fred Thompson to 
produce all documents responsive to the National Policy Forum subpoena, 
7/3/97.
    \25\ Letter to Majority Chief Counsel from Thomas Wilson regarding 
``National Policy Forum--Response to July 3 Committee Communication,'' 
7/15/97.
    \26\ Subpoena to National Policy Forum, # 71, Schedule A, 4/9/97.
    \27\ Letter to Majority Chief Counsel from Thomas Wilson regarding 
the National Policy Forum, 6/30/97.
    \28\ Order to National Policy Forum from Chairman Fred Thompson to 
produce all documents responsive to the National Policy Forum subpoena, 
7/3/97.
    \29\ Letter to Majority Chief Counsel from Thomas Wilson regarding 
``National Policy Forum--Response to July 3 Committee Communication,'' 
7/15/97.
    \30\ Subpoena to National Policy Forum, # 71, Request # 2 of 
Schedule A, 4/9/97.
    \31\ Exhibit 273, Memorandum to RNC Chairman Haley Barbour from NPF 
President Michael Baroody regarding ``Some Reasons for Resignation [-] 
A Confidential Memorandum to Accompany My June 26 Letter of Resignation 
as President of NPF,'' 6/28/94.
    \32\ Exhibit 353, Letter to National Policy Forum from Internal 
Revenue Service notifying NPF of its disqualification for exemption 
under Section 501(c)(4) of the Internal Revenue Code, 2/21/97, NPF 
003375 through 003387.
    \33\ Subpoena to National Policy Forum, # 71, Request # 20 of 
Schedule A, 4/9/97.
    \34\ Exhibit 305, Memorandum to Haley Barbour from Grace Wiegers 
regarding ``Recruiting Members of Congress to Raise Money for NPF,'' 2/
13/95.
    \35\ Exhibit 308, Memorandum to John Bolton from Grace Wiegers and 
Dianne Harrison regarding ``Megaconference Sponsorship,'' 5/23/95.
    \36\ Subpoena to National Policy Forum, # 71, Request # 23 of 
Schedule A, 4/9/97.
    \37\ Exhibit 258, Memorandum to Haley Barbour, Mike Baroody, and 
Ken Hill from Scott Reed regarding ``NPF Action,'' 6/2/93.
    \38\ Letter to Majority Counsel from Thomas Wilson regarding the 
National Policy Forum, 6/30/97. See also, Wilson's letter to Majority 
Chief Counsel dated 7/15/97, in which he repeated the claim that 
``[t]he Forum had nothing to do with the 1996 Federal election 
campaigns....''
    \39\ See Chapter 3
    \40\ Exhibit 353, Letter to National Policy Forum from Internal 
Revenue Service notifying NPF of its disqualification for exemption 
under Section 501(c)(4) of the Internal Revenue Code, 2/21/97, NPF 
003375 through 003387.
    \41\ Subpoena to Americans for Tax Reform, # 70, Schedule A, 4/9/
97.
    \42\ Letter to Majority Chief Counsel from Thomas Wilson regarding 
Americans for Tax Reform, 6/11/97.
    \43\ Letter to Majority Chief Counsel from Thomas Wilson regarding 
Americans for Tax Reform, 6/11/97.
    \44\ Letter to Thomas Wilson from Majority and Minority Chief 
Counsels ``Committee Subpoena 000070,'' 8/15/97.
    \45\ Letter to Majority Chief Counsel from Thomas Wilson containing 
affidavit of Peter Ferrara, Document Custodian for Americans for Tax 
Reform, 9/3/97.
    \46\ Subpoena to Americans for Tax Reform, # 70, Request # 9 of 
Schedule A, 4/9/97.
    \47\ Subpoena to Americans for Tax Reform, # 70, Request # 25 of 
Schedule A, 4/9/97.
    \48\ See, e.g., R 014844, R 046264, R 046260, R 046261, R 046265, R 
046252, R 046248, R 046249, R 046253, R 046270, R 046266, R 046267, R 
046271, R 046258, R 046254, R 046255, R 046259.
    \49\ Letters from Haley Barbour to the Executive Director of ATR--
R046265, R046253, R046271, and R046259.
    \50\ See Chapter 11.
    \51\ ATR ``Memorandum for the Field Dogs'' regarding ``Outside Mail 
and Phone Effort,'' R014844
    \52\ Subpoena to Americans for Tax Reform, # 70, Request # 17 of 
Schedule A, 4/9/97.
    \53\ Subpoena to Americans for Tax Reform, # 70, Request # 15 of 
Schedule A, 4/9/97.
    \54\ See Chapter 11. A videotaped copy of the advertisement is 
maintained in the Committee's files.
    \55\ ATR invoices for ``Torricelli/Missing,'' ATR 000101, 000102, 
000106, 000107, 000108.
    \56\ Letter to Majority Chief Counsel from Thomas Wilson regarding 
Americans for Tax Reform, 6/11/97.
    \57\ Letter to Martin Weinstein from Alan Baron regarding RNC 
depositions, 9/30/97.
    \58\  Letter to Alan Baron from Benton L. Becker regarding 
affidavit of Richard Richards, 12/16/97.





PART 7  INVESTIGATION PROCESSES

Chapter 41: The Breakdown of Compliance

    As explained in Chapter 40, the Committee encountered 
significant problems in enforcing outstanding subpoenas to 
certain Republican groups beginning in April 1997. 
Nevertheless, in May and late July the Democratic members of 
the Committee requested that several other subpoenas be issued 
to tax-exempt entities. On May 23, the Committee issued a 
subpoena to the AFL-CIO and on July 30, the Committee issued 26 
subpoenas to other independent organizations. Many of these 
organizations did not comply with the Committee's subpoenas, 
primarily objecting to their broad scope.

                                finding

     The Committee's failure to pursue enforcement actions 
against those who failed to comply with the Committee's 
subpoenas threatens to have lasting impact on the success and 
credibility of future Senate investigations. The Committee's 
acceptance of the refusal of groups and individuals to comply 
with the Committee's subpoenas will make objective 
investigations in the future much more difficult by emboldening 
persons and entities to ignore future Senate subpoenas.

                              introduction

    As the investigation progressed during the summer of 1997, 
the Republican National Committee, Triad and its affiliates, 
Americans for Tax Reform, and the National Policy Forum all of 
which received subpoenas in April 1997 continued to seriously 
impede the Committee's requests for information. Despite the 
problems the Minority encountered in enforcing existing 
subpoenas to these groups, the Democratic members of the 
Committee requested that several other subpoenas be issued to 
tax-exempt entities. Some of the requests for subpoenas had 
originally been made in April, when for example, the Minority 
first proposed issuing a subpoena to the Christian Coalition. 
On May 23, the Committee issued a subpoena to the AFL-CIO and 
on July 30, the Minority was able to secure subpoenas long-
sought for 13 entities. These were issued in conjunction with 
12 proposed by the Majority, bringing to 26 the total of new 
subpoenas issued primarily to tax-exempt entities.1
---------------------------------------------------------------------------
    Footnotes appear at end of chapter 41.
---------------------------------------------------------------------------
    Each subpoena required the organization to produce a 
significant amount of information to the Committee, including 
organizational, financial, and political records created during 
the 1996 election cycle. The subpoenas also demanded sensitive 
information such as membership lists, contributions, and lists 
of political donations. Even where the demands fell within the 
scope of the Committee's mandate, the organizations complained 
that complying with the subpoenas would have been very time-
consuming and exorbitantly expensive.
    The Majority and the Minority had agreed earlier in the 
investigation to provide supporting information for each of the 
subpoenas they requested. As was the case with the subpoenas 
issued in April, the Minority was primarily interested in 
investigating whether any of the entities in question misused 
their tax-exempt status, illegally coordinated issue 
advertising with the GOP, or improperly used voter guides. The 
Majority's rationale for many of its subpoenas was less 
obvious, but the main goal was clearly to isolate information 
relating to any participation in a coordinated campaign 
strategy to advocate a Democratic victory in the elections.
    Subpoena compliance became a contentious issue during the 
hearings. Many of the organizations lodged a number of 
objections relating to the scope of the Committee's subpoenas 
and the type of information demanded. As earlier undertaken by 
the National Policy Forum and other Republican entities, 
several entities subpoenaed later joined together in refusing 
to provide documents to the Committee without a narrowing of 
the subpoenas' scope.2 Eventually the entire 
subpoena process broke down, and virtually none of these 
entities fully complied with a subpoena. Some, like the 
Christian Coalition, showed nothing less than contempt for the 
Committee when they refused to provide copies of voter guides 
even though millions of copies had been distributed to the 
public.3
    This chapter provides background information on the 
subpoenaed groups, the allegations against them, and the degree 
to which they complied with the Committee's document, 
deposition, and hearing subpoenas. Since circumstances 
surrounding the AFL-CIO subpoena distinguish it from the rest 
of the entities, it is addressed first.
    Allegations against the AFL-CIO are discussed in Chapter 19 
of this Minority Report. The fundamental allegations against 
the AFL-CIO were (1) that by spending a substantial amount of 
money on issue ads and other advocacy activities in 1996, the 
organization had an impermissible effect on the 1996 federal 
elections and (2) that the organization improperly coordinated 
its issue ads with the White House and the DNC.
    On May 30, the Committee served a 17-page subpoena to the 
AFL-CIO with a June 15 return date for all materials described 
in the subpoena. The subpoena requested an inordinate amount of 
information from the organization. The Committee requested all 
information from 46 different categories, including:
           all documentation regarding the operating 
        structure of the AFL-CIO;
           all documents filed by the AFL-CIO with the 
        U.S. Department of Labor;
           all financial records of the organization, 
        including audits performed by outside groups;
           all employee information relating to 
        political activities;
           membership lists of the organization;
           all telephone records for which AFL-CIO paid 
        the bills;
           all information regarding any contribution 
        of funds or services received or made by the AFL-CIO 
        with respect to federal political activity; and
           all documents responsive to political 
        activity between the AFL-CIO and several specific 
        political entities, including the DNC, Clinton/Gore, 
        the National Education Association and EMILY's 
        List.4
    After voicing objections about the breadth and 
consitutional implications of the subpoena, the AFL-CIO met 
with both Majority and Minority counsels in June to discuss the 
matter. Although the Majority agreed to allow for a rolling 
production of documents, it would not agree to address the 
constitutional issues raised by the AFL-CIO attorneys, nor 
would it agree to issue a new subpoena narrowing the breadth of 
the May 30 subpoena. In early August, the Majority submitted to 
the Minority a list of individuals the Majority intended to 
depose, including AFL-CIO President John Sweeney. The 
Committee, however, never contacted those individuals or 
scheduled the depositions.
    On August 20, the AFL-CIO made a document production to the 
Committee, but informed Committee staff that problems with its 
subpoena would have to be resolved before it would produce 
additional documents. The AFL-CIO also submitted to the 
Committee a 75-page memorandum explaining the legal bases for 
its objection. The AFL-CIO thus became the third organization, 
after the National Policy Forum and Americans for Tax Reform, 
to challenge the Committee's subpoenas.5
    In its memorandum, the AFL-CIO claimed that the document 
subpoena exceeded the scope of the Committee's mandate and, 
more importantly, infringed upon the organization's First 
Amendment rights. It also stated objections based on attorney-
client privilege; individual privacy rights of employees, 
members, and others; and proprietary interests, such as the 
production of computer programs. The appendix to the AFL-CIO's 
``Memorandum of Points and Authorities in Support of AFL-CIO's 
Objections to Document Subpoena'' contained a line-item list of 
objections to producing documents under each of the 46 
categories of requested information. Fundamental to the 
objections was the assertion that the document subpoena was 
``overly broad, burdensome and oppressive'' on several fronts, 
given the volume of the documents that the AFL-CIO would have 
had to produce in each area, sometimes hundreds of thousands of 
documents for a single category alone.6
    The Chairman accused the AFL-CIO of obstructing the 
Committee's process by failing to provide all information 
requested by the subpoena. He also accused the organization of 
failing to provide witnesses to the Committee.7 In 
fact, the Majority staff failed to schedule these depositions. 
Although the AFL-CIO attorneys had been told by Majority staff 
that no employees or officers of the federation would be 
deposed, late on the night of September 19--a Friday--the 
Majority faxed to counsel for the AFL-CIO three deposition 
subpoenas for individuals associated with the AFL-CIO 
compelling them to testify the following week. TheMajority did 
not provide notice to the Minority.8 The AFL-CIO attorneys 
informed the Majority that the witnesses were attending the AFL-CIO 
annual convention in Pittsburg and would not be available on such short 
notice. Over the next four months of the investigation the Majority 
never contacted AFL-CIO counsel to reschedule the depositions. In 
September, the Majority did propose to the Minority to call AFL-CIO 
Secretary-Treasurer Richard Trumka as a hearing witness, but never did.
    Even before the AFL-CIO filed its August 20 objection, 
several other groups that had been subpoenaed by the Committee 
on July 30 announced they would object to the Committee's 
subpoenas. On September 3, five organizations notified the 
Committee that they had adopted the position of the AFL-IO and 
joined the Christian Coalition in signing a letter to the 
Committee objecting to the scope of their subpoenas. The letter 
asserted that the subpoenas exceeded the investigative 
authority of the Committee, demanded the production of 
sensitive documents protected under federal law due to their 
confidentiality, were ``overly broad, unduly burdensome, and 
oppressive,'' and ``violate[d] the First Amendment rights of 
the subject organizations and their members.'' 9 The 
Chairman did not enforce the subpoenas.

          organizations suggested for subpoena by the minority

    In the Minority's view, several organizations should have 
been the subjects of intensive investigation by the Committee, 
based on indications that these groups may have violated 
federal laws during the 1996 election cycle. A few of these 
organizations were subpoenaed, but the Committee did not 
further investigate the allegations against them.
    These organizations, all subpoenaed on July 30, fell into 
three broad categories: (1) tax-exempt organizations associated 
with Republican Presidential candidates, (2) other tax-exempt 
groups and (3) private corporations linked to contribution 
laundering.

           tax-exempt groups linked to presidential campaigns

           Republican Exchange Satellite Network, a 
        group associated with Lamar Alexander;
           The Better America Foundation, which was 
        connected to former Senator Bob Dole; and
           The American Cause, which was linked to 
        commentator Pat Buchanan.
    These nonprofit organizations allegedly served as shadow 
campaign vehicles by providing crucial support to presidential 
campaigns. The organizations reportedly provided travel 
expenses, polling research, speech-writing, and paid staff 
salaries for persons affiliated with, but not directly employed 
by, presidential campaigns. It is alleged, therefore, that 
these groups were almost entirely political in nature and yet 
failed to register with the FEC as political organizations.
    Based on press accounts and other publicly available 
material, the Minority believes these entities may have engaged 
in some or all of the following prohibited partisan activities: 
participated in prohibited political campaign activities; 
failed to register as political committees; improperly 
coordinated expenditures; violated express advocacy 
requirements; improperly advocated for political candidates 
using independent expenditures; and circumvented federal limits 
on spending.

Republican Exchange Satellite Network and Lamar Alexander

    The Republican Exchange Satellite Network (``RESN'') was a 
nonprofit organization established by Lamar Alexander, former 
Governor of Tennessee who served as President George Bush's 
Secretary of Education. Alexander was a candidate for the 
Republican presidential nomination in 1996.
    Alexander established RESN within days of leaving President 
Bush's cabinet in January 1993. At least one press report 
contained allegations that RESN was used to pay for travel and 
other campaign-related activities on behalf of 
Alexander.10 RESN even employed a full-time 
organizer in Iowa and most of its employees were later listed 
as employed by the Alexander presidential 
campaign.11 RESN was disbanded on March 9, 1995, a 
few weeks after Alexander launched his presidential campaign, 
and its assets were transferred to the National Policy Forum, 
an organization chaired by Haley Barbour, who was also chairman 
of the Republican National Committee.12
    RESN ultimately raised over $5.5 million during its short 
life, largely from major Alexander contributors.13 
RESN's activities and its funding sources prompted allegations 
that it was a campaign committee promoting Lamar Alexander's 
presidential campaign. 14 Alexander admitted he used 
this nonprofit organization ``to develop a political and 
financial base . . . and develop my message for where we're 
going to take the country.'' 15
    RESN made only a token production of documents by the 
return date which was supplemented by productions on November 4 
and 6--11 weeks beyond the required return date and after 
Chairman Thompson announced that the investigative phase of the 
Committee hearings had concluded.
    The documents contained little information that was not 
publicly available. Included in the production were news 
articles, RESN publications, and corporate by-laws.

Better America Foundation and Bob Dole

    The Better American Foundation (``BAF'') was established in 
1993 by Senator Bob Dole, who won the Republican Party's 
presidential nomination three years later. He disbanded BAF in 
June 1995, just as he was launching his official campaign 
organization. According to numerous published reports, BAF was 
actually a Dole campaign organization created and used to aid 
his 1996 presidential efforts. If true, this would constitute 
violations of federal campaign law.16 The 
allegations arose because:
           (1) BAF's founding president, Jo-Anne Coe, 
        had worked for Dole since 1967, served as executive 
        director of his leadership PAC from 1988 to 1995, and 
        was the national finance director for his 1996 
        presidential campaign;17
           (2) BAF was initially run by Coe out of the 
        offices of Dole's leadership PAC, Campaign 
        America;18
           (3) BAF commissioned several polls; 
        19
           (4) BAF paid for TV ads featuring Dole; 
        20 and
           (5) BAF had regular contact with Dole 
        campaign staff. 21
These activities strongly suggest coordination of activities 
and funding between a nonprofit organization and a political 
candidate, which is prohibited by federal election law. 
22
    From 1993 to the end of 1994, the foundation raised over 
$4.9 million from anonymous donors.23 One of its 
brochures noted that, ``there are no limits on the amounts an 
individual or corporation may contribute'' and that ``there is 
no requirement for public disclosure of contributors . . . and 
names of the donors will not be disclosed.'' 24 
Later, after much press criticism, the foundation released a 
list of its donors.25 It has also been alleged in 
the press that the foundation ``provided a legal way for 
corporations to win favor with the Republican Party's leading 
presidential candidate without any limits on their 
contributions or detailed reporting requirements.'' 
26
    Dole closed the foundation only after it was revealed that 
the foundation spent more than $1.5 million of its total $4.9 
million budget on expenditures which benefitted Dole's 
presidential effort, including an opinion poll, a TV commercial 
featuring Dole, and a fundraising brochure.27
    The Better America Foundation provided a small, incomplete 
production of documents on November 14, 12 weeks after the 
required due date and after Chairman Thompson announced that 
the investigative phase of the Committee's hearings had 
concluded.

The American Cause and Pat Buchanan

    The American Cause was established by Pat Buchanan in 1993 
and closed down in March 1995. It raised more than $2 million, 
most of which was allegedly used to support Buchanan's 
presidential bid, which would violate federal campaign law. For 
example, American Cause compiled a donor list which it rented 
to the Buchanan campaign, it rentedoffice space from the 
campaign, and it provided ``volunteers'' to the campaign who were 
actually American Cause employees.28 Further, numerous press 
reports contain allegations that Buchanan ran afoul of federal election 
funds by using $8,000 of Federal matching money to pay for computers 
and other equipment for American Cause.29
    The American Cause provided a small, incomplete production 
on September 16, more than three weeks beyond the due date.

                        other tax-exempt groups

     Other tax-exempt organizations that may have engaged in 
improper and/or illegal campaign activities:
           Citizens Against Government Waste;
           The Heritage Foundation;
           The Coalition: Americans Working for Real 
        Change;
           American Defense Institute/American Defense 
        Foundation;
           Citizens for a Sound Economy;
           Women for Tax Reform;
           The National Right to Life Committee;
           The Christian Coalition.

Citizens Against Government Waste

    Citizens Against Government Waste (``CAGW'') is a 501(c)(3) 
organization.30 It has been reported to be under 
investigation by the IRS for allegedly engaging in improper 
political activities.31 The Minority believes CAGW 
may have engaged in partisan activity, exceeded limits on 
nonpartisan campaign activity, misled the IRS in its 
application for tax- exempt status, failed to register as a 
political committee, improperly coordinated expenditures, and 
circumvented federal campaign spending limits.
    CAGW, like a number of other not-for-profit organizations, 
apparently paid for mailings and provided the Dole campaign 
with donor lists after Dole signed a fundraising letter for the 
group.32 In addition to the potential violation of 
the tax laws, such activities might also constitute an illegal 
in-kind contribution to the Dole campaign. An estimated ten 
million letters were mailed by Heritage, CAGW, and a small 
number of other groups at a reported postage cost of $80,000 
per million letters.33 Additionally, the donor lists 
may have been worth $40,000 or more to the Dole 
campaign.34
    Citizens Against Government Waste made two small, 
incomplete productions on September 8 and 9--three weeks beyond 
the due date.

The Heritage Foundation

    The Heritage Foundation is registered with the IRS as a 
501(c)(3) charitable organization, meaning that contributions 
to it are tax-deductible and that the organization is strictly 
forbidden to engage in partisan campaign activity. Heritage is 
being investigated by the IRS for allegedly engaging in 
improper political activities.35 The Minority 
believes that Heritage may have exceeded limits on political 
activity, misrepresented facts to obtain tax exempt status, 
failed to register as political committee, improperly 
coordinating expenditures, and circumvented federal campaign 
spending limits.
    As noted above, Heritage, like a number of other not-for-
profit organizations, apparently paid for mailings and provided 
the Dole campaign with donor lists after Dole signed a 
fundraising letter. The letter was mailed in 1995 on Dole's 
letterhead at Heritage's expense. In it, Dole said, ``I want to 
get Washington off your back and out of your pocket.'' 
36 In addition to the potential violation of the tax 
laws, such activities might also constitute an illegal in-kind 
contribution to the Dole campaign. As noted earlier, an 
estimated ten million letters were mailed by Heritage, CAGW, 
and several other groups at a reported postage cost of $80,000 
per million letters.37 Additionally, the donor lists 
may have been worth $40,000 or more to the Dole 
campaign.38
    On August 15, one week early, the Heritage Foundation 
produced two volumes of documents consisting primarily of 
publicly available material. Heritage supplemented this 
production on August 25.

The Coalition: Americans Working for Real Change

    The Coalition: Americans Working for Real Change 
(``Coalition'') is composed of approximately 30 business 
organizations, including the U.S. Chamber of Commerce and the 
National Association of Manufacturers.39 The 
Minority believes the Coalition may have engaged in partisan 
activity, failed to register as a political committee, 
improperly coordinated expenditures, improperly engaged in 
issue advocacy, and circumvented federal campaign spending 
limits.
    According to its spokesman, the Coalition was formed to 
counterbalance issue ads run by the AFL-CIO.40 To do 
so, it reportedly spent at least $4.5 million, supported 23 
Republican incumbents, and criticized the voting records of 
four Democrats in tight races.41 The Coalition's ads 
also contained nearly identical language to that used in ads 
broadcast by the National Republican Congressional Coalition 
(``NRCC''), a division of the RNC. In addition, the Coalition's 
ads were run at the same time as the NRCC's ads and in 
districts where the Republican incumbent's seat was 
vulnerable.42 Although the Coalition's ads avoided 
the so-called ``magic words'' of express advocacy, the ads are 
a prime example of partisan activities by a nonprofit 
organization.43 In addition, there are indications 
that the Coalition was primarily engaged in political 
activities, meaning that it should have complied with the 
registration and reporting requirements of the Federal Election 
Campaign Act (``FECA'').44
    The Coalition and the U.S. Chamber of Commerce forwarded 
written objections to the Committee's subpoena on September 16, 
three weeks beyond the return date on the subpoena. They never 
complied with the subpoena.45

American Defense Institute/American Defense Foundation

    The American Defense Institute (``ADI'') and the American 
Defense Foundation (``ADF'') are tax-exempt organizations 
operated from the same offices under the same management. The 
difference between the organizations is that ADI is a 501(c)(3) 
and ADF is a 501 (c)(4).46 Press reports indicate 
these organizations have both received large sums of money from 
the RNC and the National Republican Senatorial Committee 
(``NRSC''), a division of the RNC, shortly before election 
cycles, including special elections.47
    ADI and ADF conduct get-out-the vote drives aimed at 
military personnel through mailings and ``public service 
announcements.'' ADI received $600,000 from the RNC in the last 
election cycle.48 ADI had received similar 
contributions in 1992 and been criticized for its assistance to 
Republican candidates, leading it to return the money, but not 
until just after it had received $530,000 from six individual 
donors funneled through the RNC.49 In short, the 
allegation is that the ADI/ADF were used by the RNC during the 
1996 election cycle to conduct election-related activities 
after the RNC has ``maxed out'' in a particular state.
    ADI/ADF requested clarification instructions on September 
5, two weeks beyond the required due date, but never produced 
any documents.50

Citizens for a Sound Economy

    Citizens for a Sound Economy (``CSE'') is a 501(c)(4) 
chaired by C. Boyden Gray, former White House Counsel in the 
Bush Administration. CSE was founded in 1984 as a think tank 
and grass-roots organization, and while the group has a number 
of members, most of its funding comes from a few major 
corporations, including foundations associated with the Koch 
family of Kansas. Koch interests gave more than $8 million to 
CSE and contribute on average $750,000 annually.51 
The Minority also believes that the Kochs have been important 
supporters of Triad, which is discussed in Chapter 12 in this 
Minority Report.
    CSE also reportedly cultivated close ties with the 
Republican leadership. According to press reports, former 
Majority Leader Bob Dole's Better America Foundation gave CSE 
$50,000 in 1995. Dole also signed a fundraising letter for the 
group. In return, CSE provided Dole with its contributors'' 
names.52 CSE also joined forces with House Majority Leader 
Richard K. Armey on the flat-tax bill in 1995 who ``estimated CSE would 
spend about $2 million on the campaign.'' 53
    Citizens for a Sound Economy made two small, incomplete 
productions on September 12 and 15--three weeks beyond the due 
date.

Women for Tax Reform

    Women for Tax Reform (``WTR'') was formed in August 1996 as 
an affiliate of Americans for Tax Reform, a nonprofit 
organization run by Republican activist Grover Norquist (see 
Chapter 11). The Minority believes that WTR may have engaged in 
partisan activity, exceeded limits on nonpartisan campaign 
activity, misrepresented facts to obtain tax-exempt status, 
failed to register as a political committee, improperly 
coordinated expenditures, and engaged in express advocacy on 
behalf of Republican candidates.
    The Minority's investigation of ATR produced evidence that 
WTR worked in concert with ATR to organize its activities to 
evade election laws in violation of ATR's and WTR's tax-exempt 
status. WTR has the same office address and some of the same 
officials as Americans for Tax Reform.54
    On April 1, the Minority submitted a draft subpoena for WTR 
documents. A final subpoena was issued on July 30. On October 
3, WTR made a limited production of 149 pages of documents 
along with a letter stating that the documents were produced 
``voluntarily and purely as a matter of grace, not because WTR 
believes that any of the documents produced are called for by 
the subpoena. . . .'' 55 The attorney, Thomas 
Wilson, used similar language when he produced ATR documents. 
WTR made a small, incomplete production on October 3--six weeks 
beyond the due date.

National Right to Life Committee

    The National Right to Life Committee (``NRLC'') is a tax-
exempt organization which received $650,000 in 1996 from the 
Republican National Committee 56 and may have 
received additional donations in previous cycles that were 
apparently used for political activity (e.g. voter guides, 
GOTV). For example, in November, 1994, Senator Phil Gramm 
authorized a $175,000 donation from the National Republican 
Senatorial Committee to the NRLC in order to ``help activate 
pro-life voters in some key states where they would be pivotal 
to the [1994] election.'' 57 Furthermore, Senator 
Dole's Better America Foundation donated $125,000 to the NRLC 
one day before the 1994 elections.58
    NRLC produced three boxes of documents, but did not fully 
comply with the subpoena. On September 3, the group joined six 
others to object to its subpoena.59

The Christian Coalition

    The Christian Coalition has operated for nearly a decade as 
a 501(c)(4), although the IRS has not granted final approval 
for its tax-exempt status. The Christian Coalition is 
ostensibly operated as a social welfare organization dedicated 
to informing the public about Christian values. In fact, it 
actively strongly support the conclusion that it is in fact a 
partisan political organization that operates on behalf of 
Republican candidates, as discussed in Chapter 14 of the 
Minority Report.
    The Minority first proposed a subpoena for the Christian 
Coalition on March 3, but issuance was not approved by the 
Committee until July 30. The Christian Coalition did not comply 
with the subpoena and joined several other organizations in 
September in objecting to Committee subpoenas.60

         private corporations linked to contribution-laundering

    Private corporations linked to illegal schemes to launder 
contribution to Republican candidates:
          DeLuca Wine & Liquors, and
          Empire Landfill.

DeLuca Liquor & Wine and Empire Landfill, Danella Inc./USA Waste 
        Services of Eastern Pennsylvania

    Various Republican donors involved in schemes to launder 
contributions through employees, including DeLuca Liquor and 
Wine (``DeLuca'') and Empire Landfill (``Empire'), which are 
discussed in Chapter 22, led the Minority to recommend that 
these entities be further investigated by the Committee.
    The Committee issued a subpoena to DeLuca, which produced a 
single folder containing 27 pages of documents on August 25--
three days beyond the due date.61 The folder 
contained a corporate organizational chart as well as copies of 
canceled checks from DeLuca to five employees and canceled 
checks from those employees and their wives payable to ``Dole 
for President.'' Although the production was limited, the 
materials raise numerous questions which are explained in 
Chapter 22 of the Minority Report.
    The Committee subpoenaed Empire Landfill's former 
president, Renato Mariani. Mariani did not produce documents to 
the Committee upon asserting his Fifth Amendment right against 
self incrimination.

          organizations suggested for subpoena by the majority

    The groups that the Majority subpoenaed on July 30 comprise 
three broad categories:
          1. Those affiliated in some way with the labor 
        movement or linked in some way to allegations against 
        the labor movement:
                  National Council of Senior Citizens;
                  Citizen Action; and
                  National Education Association.
          2. Those named by Harold Ickes in a memo to Warren 
        Meddoff (see Chapter 17):
                  Vote Now ``96, and
                  Campaign to Defeat 209.
          3. Those traditionally affiliated with Democratic 
        causes or issues:
                  The Sierra Club;
                  Democratic Leadership Council;
                  EMILY's List;
                  The National Committee for an 
                Effective Congress;
                  American Trial Lawyers'' Association; 
                and
                  Americans United for the Separation 
                of Church and State.
    The subpoenas to groups in the first two categories were 
justified, but at least some of the groups in the third 
category were apparently targeted by the Majority simply 
because they have historically been more philosophically 
aligned with the Democratic Party. The Minority is aware of no 
evidence that any of these organizations were involved in 
illegal or improper activities in the 1996 election.
    Among other things, all of the subpoenas demanded 
organizational and financial information; documentation of the 
organizations'' tax-exempt status; membership lists; telephone 
numbers; information on get-out-the-vote activities, issue and 
campaign advertising, and public opinion polls; information on 
money transfers to and from foreign principals; information on 
transfers of or solicitations for anything of value to or from 
federal candidates, campaigns, or political parties; 
information on how the organizations allocated their funds to 
candidates; information on any interaction with any combination 
of other entities subpoenaed by this Committee; and anything 
relating to communications with the FEC. Some subpoenas also demanded 
information on certain events held by organizations; refunds of fees or 
dues for political or voter education activities; and records of 
election activities.62

National Council of Senior Citizens

    Federal prosecutors alleged that the National Council of 
Senior Citizens (``NCSC'') was linked to a scheme to launder 
money to the reelection campaign of Teamsters'' President Ron 
Carey. The prosecutors made this allegation in a criminal 
information filed in United States District Court for the 
Southern District of New York in connection with the guilty 
plea of Martin Davis, a political consultant who provided 
services to Teamsters For A Corruption Free Union (``TCFU'). 
Davis, a central figure in the scheme, headed a firm called the 
November Group.63 According to prosecutors, Davis 
and Jere Nash, a political consultant for TCFU who provided 
direct-mail services, and Michael Ansara, another political 
consultant for TCFU, all arranged for the Teamsters to 
contribute $85,000 to the NCSC, which then sent the sum to the 
November Group, a company responsible for executing the Carey 
direct mail campaign. Part of the money paid to the November 
Group by the NCSC was funneled by Davis into the Carey campaign 
in order to finance the direct mail campaign.
    In response to the Committee's subpoena, NCSC produced a 
small number of documents. However, it joined with other 
nonprofit organizations on September 3 in filing a formal 
objection to the Committee subpoena.64
    NCSC provided a list of the documents that were and were 
not produced, as well as justifications for its refusal to 
produce certain documents, including the assertion that the 
subpoena violated the First and Fourth Amendments and was 
beyond the mandated scope of the investigation. Information 
sent to the Committee pursuant to the subpoena included: 
organizational and financial materials; telephone and 
communications records and directories; Internal Revenue 
Service materials pertaining to organization's tax-exempt 
status; and Federal Election Commission reports.
    NCSC did not produce information on communications with the 
Political Action Transition Work Group of the AFL-CIO, other 
tax-exempt entities, and the FEC; information relevant to the 
allocation of funds for political purposes; information related 
to political advertising and advocacy; and copies of the 
organization's political mailings and documents related to get-
out-the-vote drives.

Citizen Action

    Citizen Action is a grassroots consumer advocacy group 
registered with the IRS as a 501(c)(4). In October 1997, it 
closed its Washington, D.C. national office, but it continues 
to operate field offices in several states. The allegations 
against Citizen Action are summarized in Chapter 19 of this 
Report. Beyond issuing a document subpoena, the Committee did 
not investigate Citizen Action. Citizen Action joined with 
seven other non-profit organizations and filed a formal 
objection to Committee subpoenas on September 3. The letter 
listed the following grounds for objection: the subpoenas 1) 
exceeded the investigative authority of the Committee; 2) 
demanded the production of sensitive documents that are 
protected under federal law due to their confidentiality; 3) 
were ``overly broad, unduly burdensome, and oppressive''; and 
4) ``violate[d] the First Amendment rights of the subject 
organizations and their members.'' 65
    After filing this objection, Citizen Action produced 
approximately 70 to 80 pages of material. The documents 
included information on the organizational structure of Citizen 
Action and copies of voter education materials distributed 
during the 1996 campaign cycle, including voting records of 
candidates and newspaper articles. No one affiliated with 
Citizen Action was deposed by the Committee.

National Education Association

    The National Education Association (``NEA'') is one of the 
largest labor organizations in the United States and is a 
member of the AFL-CIO. It has generally backed Democratic 
candidates, including President Clinton in his bid for re-
election in 1996. There were no clear allegations made against 
the NEA by the Majority.
    The NEA sent a letter to the Committee on August 11, 
stating that it would be unable to meet the August 22 return 
date in the Committee's subpoena, although the letter noted 
that the NEA had begun the process of attempting to locate 
responsive documents. The letter also asserted the NEA's 
``serious concerns'' about the scope of the subpoena, including 
possible infringement of the organization's First Amendment 
rights of free speech and free association. The NEA requested a 
meeting with the Committee to address these issues, but the 
Majority's lawyers never scheduled one.66
    On August 20, the general counsel to the NEA sent a letter 
to the Committee joining the legal objections filed by other 
groups, stating that the NEA would not comply further with the 
subpoena until its objections--and the joint objections--were 
addressed by the Committee.67 The Majority did not 
respond to that letter. Pursuant to the position it stated in 
its August 20 letter, the NEA did not produce any documents to 
the Committee. The Committee did not seek to schedule the 
depositions of any witnesses affiliated with the NEA.

Vote Now 96'

    Vote Now 96' is a Florida-based project of Citizen Vote, 
Inc., a 501(c)(3) organization headquartered in New York that 
spearheads voter registration drives, especially in minority 
communities.68 Vote Now 96' raised money and made 
grants to other 501(c)(3) organizations involved in voter 
registration drives.69 In 1996, it raised and 
distributed $3 million for voter registration.70 
There were a number of allegations concerning Vote Now 96' 
which are explained in Chapter 19. In general, however, the 
allegations were that DNC and White House officials improperly 
directed money to Vote Now 96'.
    Vote Now 96' is the only one of the 501(c)(3) and 501(c)(4) 
entities subpoenaed that appears to have fully complied with 
the demands of the Committee. It produced 726 pages of 
documents which were responsive to the subpoena,71 
and two members of the Vote Now 96' board voluntarily appeared 
for depositions.72 Vote Now 96', under the name of 
its parent group Citizens Vote, also produced two small sets of 
documents to the Committee in compliance with the subpoena.
    The documents indicate that Vote Now 96' complied with 
applicable laws. The activities it undertook were nonpolitical 
voter registration activities that were appropriate for a 
501(c)(3) organization. Review of the documents, corroborated 
by deposition testimony, indicates that in evaluating grant 
proposals from 501(c)(3) organizations that conducted voter 
registration, Vote Now 96' properly denied grants to 
organizations that acted in a partisan fashion.73 No 
evidence of partisan activity appears in any of the awarded 
grant documents.

Campaign to Defeat Proposition 209

    Campaign to Defeat 209 is a nonprofit organization that 
lobbied to defeat the California Civil Rights Initiative 
(``CCRI''). It was one of three organizations suggested by 
Harold Ickes to Warren Meddoff as a possible recipient of 
contributions from Meddoff's business associate, William Morgan 
(see section on Vote Now 96', above, and Chapter 17). Campaign 
to Defeat 209 produced a small, incomplete number of documents 
to the Committee.

The Sierra Club

    The Sierra Club is a well-known nonprofit entity that 
advocates environmental protection and resource conservation 
and lobbies for pro-environment legislation. Its causes have 
been historically supported by Democrats, and it continues to 
be an active participant in the political process. During the 
1996 cycle it spent more than $7.5 million on media and 
grassroots electoral activity, targeting primarily anti-
environmental members of Congress.74 There were no 
clear allegations leveled against the Sierra Club by the 
Majority.
    The Sierra Club produced several boxes of material, 
including video and audio tapes, magazines, personal 
correspondence and posters, but did not attempt to produce all 
documentation requested. Little attention was paid to the 
Sierra Club during the investigation, as it did not appear that 
it was an especially important entity in the 1996 federal 
election campaign cycle. No representatives of the Sierra Club 
were interviewed or deposed by the Committee.

Democratic Leadership Council

    The Democratic Leadership Council (``DLC'') is a nonprofit 
organization that is identified with the moderate wing of the 
Democratic Party. During the course of the investigation, no 
allegation was made that the DLC has ever been involved in 
improper or illegal conduct in connection with the federal 
elections of 1996.
    The DLC produced a relatively small number of documents, 
but did not respond completely to the subpoena, and the 
Committee did not pursue the issue.

EMILY'S List

    EMILY's List is a political action committee (``PAC'') that 
contributes mainly to female Democratic candidates. In response 
to the subpoena, EMILY's List did not fully respond to the 
subpoena, but did produce two sets of documents contained in 14 
boxes. The Majority never made any clear allegations against 
EMILY's List.

National Committee for an Effective Congress

    The National Committee for an Effective Congress (``NCEC'') 
is a ``Democratic political action committee that primarily 
supplies sophisticated voter targeting information to the 
party's congressional candidates.'' 75 In response 
to the subpoena, the NCEC produced one box of documents, 
including copies of mailings and other related materials 
produced during the 1996 election cycle. There were no clear 
allegations leveled against the NCEC by the Majority.

American Trial Lawyers Association

    The American Trial Lawyers Association (``ATLA'') is a 
nonprofit, 501(c)(4) organization that also functions as a 
political action committee, donating mainly to Democratic 
candidates. In fact, it serves as one of the largest Democratic 
political action committees. It received explicit permission in 
FEC Advisory Opinion 96-02 (1996) to endorse congressional 
candidates and request that members make campaign contributions 
to the endorsed candidates while identifying themselves as ATLA 
members. There were no clear allegations made against ATLA made 
by the Majority.
    ATLA produced documents to the Committee on two occasions. 
It provided the Committee with contribution lists, telephone 
records, and other documentation regarding the political 
activities of the organization with respect to both Democratic 
and Republican candidates. These documents contain no 
indications that the organization engaged in illegal or 
improper activities during the 1996 election cycle. On 
September 3, ATLA joined the group of entities that had 
previously objected to the Committee's subpoenas.76 
After this objection was filed, ATLA no longer complied with 
the Committee's requests for information.

Americans United for Separation of Church and State

    Americans United for the Separation of Church and State 
(``Americans United'') is a 501(c)(4) organization which styles 
itself as a national church-state watchdog group.77 
Americans United complied with the Committee's subpoena and 
produced a small set of documents.
    There is no indication of any kind of coordination between 
Americans United and any other organizations to influence the 
outcome of the elections during the 1996 federal election 
cycle. It appears that Americans United was targeted by the 
Majority in order to conduct a fishing expedition into the 
activities of organizations that support Democratic issues.

                               conclusion

    The Majority's unwillingness to grant Minority subpoenas--
and its steadfast refusal to enforce the limited number that 
were eventually granted--call into question the Majority's 
pledge to conduct a bipartisan investigation.
    Allowing witnesses to continually flout the Committee's 
process with impunity sets a troubling precedent for future 
Senate investigations. As Senator Joseph Lieberman noted: ``We 
are the people's representatives. We are the people's 
opportunity to find the facts to search for the truth, and when 
parties that we subpoena are asked for information, do not 
cooperate, it is an insult to the Congress, and it sets a 
precedent that is not one that we should accept.'' 
78
    Beginning in April 1997, when Republican affiliated groups 
began to openly defy the Committee's subpoenas, more entities 
followed suit in August and September. In total, well over 30 
organizations refused to comply to subpoenas validly issued by 
the Committee. The Minority repeatedly appealed to the Majority 
to enforce the outstanding subpoenas to no avail. For example, 
when on October 9, Senator Carl Levin asked the Committee to 
enforce outstanding subpoenas, Chairman Thompson replied: ``I 
am not going to entertain that today.'' 79 Two days 
earlier, the Chairman opined:

          It's well known that the Senate imposed a cut-off 
        date on this Committee. It's also been a very badly 
        kept secret that people are now systematically 
        thwarting our subpoenas, not responding to this 
        Committee because they know that by the time we get 
        through the contempt proceedings and into court, our 
        cut-off date will have arrived. That is the sad truth, 
        but it must be acknowledged.80

Furthermore, the Chairman said the following day, ``We will 
make an additional effort to [enforce the Minority subpoenas] 
when you get the AFL-CIO to comply with the subpoenas we issued 
them.'' 81
    These rationales do not justify the Majority's consistent 
failure to enforce the outstanding subpoenas issued by this 
Committee. First, the entire Senate, not simply the Democratic 
members, voted 99-0 to impose the December 31 deadline. The 
mere fact that a deadline exists does not per se mean that 
enforcement is unrealistic. To do nothing assures failure.
    Second, the statement about the AFL-CIO's lack of 
compliance is a red herring. The Minority was willing to order 
all organizations, including the AFL-CIO, to comply. The AFL-
CIO did produce ten boxes of documents. If the Majority was 
dissatisfied with the quality of this production the remedy was 
not abdication of the Committee's responsibilities but rather 
institution of contempt proceedings. The Minority agreed to 
vote to impose contempt on any group or individual that 
thwarted the Committee's valid authority process, but the 
Majority declined to take any action.82

                               footnotes

    \1\ Subpoenas requested by the Minority: Republican Exchange 
Satellite Network, #301; Better America Foundation, #299; American 
Cause, #300; Citizens Against Government Waste, #307; the Heritage 
Foundation, #306; U.S. Chamber of Congress (Coalition for Change), 
#304; American Defense Institute and American Defense Foundation, #'s 
294 & 295; Citizens for a Sound Economy, #297; Women for Tax Reform, 
#305; National Right to Life Committee, #296; Christian Coalition, 
#298; DeLuca Liquor and Wine, Ltd., #302; Renato Mariani (Empire 
Sanitary Landfill), #303. Subpoenas requested by the Majority: AFL-CIO, 
#95; National Council of Senior Citizens, #285; Citizen Action, #286; 
National Education Association, #283; Vote Now, #282; Campaign to 
Defeat 209, #288; Sierra Club, #287; Democratic Leadership Council, 
#289; EMILY's List, #290; National Committee for an Effective Congress, 
#291; American Trial Lawyers Association, #292; Americans United for 
the Separation of Church and State, #293.
    \2\ Letter to Majority and Minority Chief Counsels from the 
Association of Trial Lawyers of America, Christian Coalition, Citizen 
Action, Citizens Against Government Waste, International Brotherhood of 
Teamsters, National Council of Senior Citizens, and National Right to 
Life Committee declaring their objections to subpeonas issued by the 
Committee, 9/3/97.
    \3\ Letter to attorneys James Bopp, Jr. and Alan Dye from Minority 
Counsel, following up on a September 3 meeting with the Christian 
Coalition attorneys concerning the Christian Coalition's response to 
the Committee's July 30 subpoena, 9/8/97.
    \4\ Subpoena to the AFL-CIO, #95.
    \5\ Simultaneously, the AFL-CIO produced two boxes of documents 
containing what it said were copies of public records that the 
organization had filed with the Internal Revenue Service, the Federal 
Election Commission, and the U.S. Department of Labor, as well as a 
variety of materials generated by the AFL-CIO for political purposes, 
including tapes of advertisements sponsored by the organization. Letter 
to Senators Thompson and Glenn from counsel for AFL-CIO enclosing a 
``memorandum of legal authorities and principles in support of the AFL-
CIO's objections to the document subpoena,'' 8/20/97.
    \6\ Appendix to Memorandum of Points and Authorities in Support of 
AFL-CIO's Objections to Document Subpoena, 8/20/97.
    \7\ Chairman Thompson, 10/9/97, Hrg. pp. 198-199.
    \8\ Subpoenas to Gerald Shea, #399; Richard Trumka, #400; and Steve 
Rosenthal, #401.
    \9\ Letter to Majority and Minority Chief Counsels from the 
Association of Trial Lawyers of America, Christian Coalition, Citizen 
Action, Citizens Against Government Waste, International Brotherhood of 
Teamsters, National Council of Senior Citizens, and National Right to 
Life Committee declaring their objections to subpoenas issued by the 
Committee, 9/3/97.
    \10\ Washington Post, 12/30/95.
    \11\ Washington Post, 12/30/95.
    \12\ Washington Post, 12/30/95.
    \13\ Chattanooga Free Press, 6/22/95; Washington Post, 12/30/95.
    \14\ Chattanooga Times, 2/28/95.
    \15\ Chattanooga Times, 2/28/95.
    \16\ Washington Post, 6/18/95, 8/20/96; Kansas City Star, 6/22/95; 
2 U.S.C. 433 & 434 (1997).
    \17\ New York Times, 1/28/96; USA Today, 2/28/96.
    \18\ Roll Call, 11/7/94.
    \19\ Associated Press, 11/2/95.
    \20\ Associated Press, 11/2/95.
    \21\ Chicago Tribune, 5/26/95; see e.g., letter to Jo-Anne Coe from 
Yong Kim, Chairman of Y.Y.K. Enterprises, Inc., concerning a refund 
check Kim received from Better America Foundation, 8/17/95.
    \22\ 2 U.S.C. 441b (1997).
    \23\ Kansas City Star, 6/22/95.
    \24\ Brochure for Better America Foundation.
    \25\ Washington Post, 6/21/95.
    \26\ Washington Post, 6/18/95.
    \27\ Washington Post, 6/7/95.
    \28\ AP Online, 4/19/96.
    \29\ New York Times, 3/4/96.
    \30\ 501(c)(3) organizations are tax-exempt and are incorporated as 
charitable entities and barred by law from participating in political 
campaigns. They may engage in lobbying as defined by statutory 
limitations and can establish 501(c)(4) organizations to lobby freely. 
26 U.S.C. 501(c)(3) & (4) (1997); 2 U.S.C. 441b (1997).
    \31\ Chicago Tribune, 1/12/97.
    \32\ Orange County Register, 5/25/96.
    \33\ Orange County Register, 5/25/96.
    \34\ Orange County Register, 5/25/96.
    \35\ Chicago Tribune, 1/12/97.
    \36\ Chicago Tribune, 1/12/97.
    \37\ Orange County Register, 5/25/96.
    \38\ Orange County Register, 5/25/96.
    \39\ Advertising Age, 10/14/96; Pittsburgh Post-Gazette, 11/3/96.
    \40\ Washington Post, 11/23/97.
    \41\ Washington Post, 11/23/97; U.P.I., 10/28/96.
    \42\ U.P.I., 10/28/96.
    \43\ Examples of phrases constituting express advocacy were 
provided by the Supreme Court in footnote 52 of the Court's landmark 
decision in Buckley v. Valeo . The terms are commonly referred to as 
the ``magic words'' and include `` `vote for,' `elect,' `support,' cast 
your ballot for, `Smith for Congress,' `vote against,' `defeat,' 
`reject.' '' 424 U.S. 1, 44 (1976).
    \44\ 2 U.S.C. 431(4), 433, and 434 (1997).
    \45\ Letter to Majority and Minority Chief Counsels from Jan Witold 
Baran, representing the Coalition: Americans Working for Real Change, 
enclosing a ``Memorandum of Points and Authorities in Support of the 
Coalition's Objections to Document Subpoena,'' 9/16/97.
    \46\ 501(c)(4) organizations are incorporated as social welfare 
organizations. Contributions to these organizations are not tax-
deductible, however, the organization's revenues are tax-exempt. These 
organizations have no limitations on the amount of lobbying in which 
they can engage, and can participate in politics so long as the 
organization does not expressly advocate the election or defeat of a 
candidate. 26 U.S.C. 501(c)(4).
    \47\ Atlanta Journal, 12/21/97; Hotline, 10/23/97.
    \48\ Washington Post, 10/23/97.
    \49\ Washington Post, 12/10/96 and 10/23/97.
    \50\ Letter to Chairman Fred Thompson from Richard Hauser regarding 
the ``American Defense Institute/American Defense Foundation,'' 9/5/97.
    \51\ National Journal, 7/13/96.
    \52\ National Journal, 7/13/96.
    \53\ National Journal, 7/13/96.
    \54\ See Chapter 11.
    \55\ Letter to Majority Chief Counsel, from Thomas Wilson, Council 
for Women for Tax Reform, regarding WTR's response to the Committee's 
subpoena, 10/2/97.
    \56\ Washington Post, 12/10/96.
    \57\ New York Times, 3/1/95.
    \58\ Associated Press, 6/21/95.
    \59\ Letter to Majority and Minority Chief Counsels from the 
Association of Trial Lawyers of America, Christian Coalition, Citizen 
Action, Citizens Against Government Waste, International Brotherhood of 
Teamsters, National Council of Senior Citizens, and National Right to 
Life Committee declaring their objections to subpoenas issued by the 
Committee, 9/3/97.
    \60\ Letter to Majority and Minority Chief Counsels from the 
Association of Trial Lawyers of America, Christian Coalition, Citizen 
Action, Citizens Against Government Waste, International Brotherhood of 
Teamsters, National Council of Senior Citizens, and National Right to 
Life Committee declaring their objections to subpoenas issued by the 
Committee, 9/3/97.
    \61\ Letter to Minority Counsel from Kenneth A. Gross of Skadden 
Arps, attorney for DeLuca Liquor & Wine, Ltd., in response to subpoena, 
8/21/97.
    \62\ Such information is requested in subpoenas to Vote Now (#282), 
the National Council of Senior Citizens (#285), Sierra Club (#287), 
Democratic Leadership Council (#289), and National Committee for an 
Effective Congress (#291).
    \63\ See United States v. Davis, U.S.D.C., S.D.N.Y.
    \64\ Letter to Majority and Minority Chief Counsels from the 
Association of Trial Lawyers of America, Christian Coalition, Citizen 
Action, Citizens Against Government Waste, International Brotherhood of 
Teamsters, National Council of Senior Citizens, and National Right to 
Life Committee declaring their objections to subpoenas issued by the 
Committee, 9/3/97.
    \65\ Letter to Majority and Minority Chief Counsels from the 
Association of Trial Lawyers of America, Christian Coalition, Citizen 
Action, Citizens Against Government Waste, International Brotherhood of 
Teamsters, National Council of Senior Citizens, and National Right to 
Life Committee declaring their objections to subpoenas issued by the 
Committee, 9/3/97.
    \66\ Letter to James Brown and Pam Marple from Richard Wilkof, 
Counsel for NEA, regarding National Education Association's response to 
the subpoena, 8/11/97.
    \67\ Letter to Senators Thompson and Glenn from Robert Chanin, 
General Counsel for NEA, regarding National Education Association's 
response to the subpoena, 8/20/97.
    \68\ Washington Post, 11/22/97.
    \69\ Hugh Westbrook deposition, 9/29/97, p. 13.
    \70\ New York Times, 9/20/97.
    \71\ Subpoena for Vote Now, #282.
    \72\ Former Vote Now 96' Executive Director Gary Barron was deposed 
by the Committee on September 30. Hugh Westbrook, former chairman of 
the organization, was deposed by the Committee on September 29. Mention 
of this organization and its ties to Meddoff, organized labor, and the 
DNC also appears in sworn deposition testimony of Harold Ickes, Warren 
Meddoff, Karen Hancox, Richard Sullivan, Marvin Rosen, Mark Thomann, 
and Donald Fowler. Information linking Vote Now 96' to the Judith 
Vasquez contribution appears in the deposition testimony of Noah 
Novorodsky, a summer associate at the law firm at Jackson, Tufts, Cole 
& Black, the firm that represented Vasquez, and the interview of Twyla 
Foster, a partner at the same firm that supervised Novorodsky. Both 
were involved in the transaction.
    \73\ Gary Barron deposition, 9/30/97, pp. 26-27.
    \74\ The Annenberg Public Policy Center, ``Issue Advocacy During 
the 1996 Campaign: A Catalogue,'' 9/16/97.
    \75\ National Journal, 7/1/95.
    \76\ Letter to Majority and Minority Chief Counsels from the 
Association of Trial Lawyers of America, Christian Coalition, Citizen 
Action, Citizens Against Government Waste, International Brotherhood of 
Teamsters, National Council of Senior Citizens, and National Right to 
Life Committee declaring their objections to subpoenas issued by the 
Committee, 9/3/97.
    \77\ Richmond Times Dispatch, 7/3/97.
    \78\ Senator Lieberman, 10/7/97, Hrg. p. 41.
    \79\ Senator Thompson, 10/9/97, Hrg., p. 196.
    \80\ Senator Thompson, 10/7/97, Hrg., p. 4.
    \81\ Senator Thompson, 10/8/97, Hrg., p. 65.
    \82\ Senator Glenn, 10/8/97, Hrg., p. 73.





PART 7  INVESTIGATION PROCESSES

Chapter 42: White House Production Issues

    Over the course of the Investigation, the Committee 
subpoenaed or voluntarily requested documents from over 200 
groups and individuals. The greatest number of formal and 
informal requests for documents were directed to the White 
House. Over 120,000 documents were produced by the White House, 
many of which shed important light on the fundraising practices 
being examined by the Committee. Over the course of the 
Committee's investigation, however, the White House came under 
frequent criticism for belatedly responding to requests for 
documents. In some of these instances, it was suggested that 
the White House's tardy productions compromised the 
effectiveness of the Committee's investigation. Some members of 
the Majority went further and suggested that the White House 
Counsel's office was deliberately obstructing the work of the 
Committee. These frustrations reached a head in July 1997 when 
the White House failed to produce entry records relating to Ng 
Lap Seng prior to Committee hearings concerning his access to 
the White House. In response, the Committee issued a subpoena 
to the White House.
    In early October, the White House produced to the Committee 
and the Department of Justice numerous videotapes and audio 
recordings of Presidential events, including videotape footage 
of the opening minutes of 44 White House coffees. Materials 
relevant to these coffees, including videotapes, had been 
requested earlier by the Committee in April 1997. The belated 
production raised concerns about the effectiveness of the White 
House's document production procedures and prompted allegations 
by some members of the Majority that the White House had 
deliberately sought to conceal the existence of these 
materials. The Committee devoted two days of hearings to these 
matters in an attempt to resolve the issue of whether the White 
House counsel's office intentionally delayed the production of 
responsive videotapes to the Committee.

                                FINDINGS

    (1) The White House Counsel's Office took appropriate and 
reasonable steps to discover the existence of responsive 
videotapes in response to the Committee's April 1997 document 
request. There is no evidence before the Committee to suggest 
that the White House Counsel's Office intended to obstruct the 
work of the Committee.
    (2) The evidence before the Committee is conclusive, based 
on exhaustive technical analysis, that none of the videotapes 
or audiotapes produced by the White House to the Committee have 
been altered in any way.

                                OVERVIEW

    Staff members of the Committee's Special Investigation 
first met with staff members of the White House Counsel's 
Office in February 1997. Most issues of how documents would be 
produced and stored were quickly resolved, and the White House 
made it clear from the outset that it would respond to document 
requests made by the Committee voluntarily, obviating the need 
for a subpoena. On April 9, 1997, the first formal document 
request was issued by the Majority.1 Although the 
request was reduced to 28 line-items, it required a search of 
all White House records for references to over 50 separate 
individuals and organizations.
---------------------------------------------------------------------------
    Footnotes appear at end of Chapter 42.
---------------------------------------------------------------------------
    On May 21, 1997, the Majority issued a second formal 
request for documents.2 This request consisted of 42 
line-items, one of which required a search for all documents 
referring to 61 individuals and entities. Two supplemental 
requests for additional materials were made on June 9, and June 
11, 1997.3 Over 100,000 pages of materials were 
delivered to the Committee in response to these 
requests.4 In addition to its formal requests, the 
Committee made at least 200 additional, but informal requests, 
to the White House, leading Committee and White House staff to 
be in daily contact. The White House chief counsel, Charles 
Ruff, offered his personal assurance that the ``White House 
w[ould] continue its efforts to honor the Committee's requests 
for information,'' and pledged continued timely production of 
all information requests as well as prompt responses to the 
many informal requests which were being made since early April 
by the Majority almost daily.5
    On July 31, 1997, prompted by concerns arising out of the 
belated production of records relating to access to the White 
House by Charlie Trie's associate, Ng Lap Seng (see below, ``Ng 
Lap Seng's WAVE Records''), the Committee unanimously voted to 
issue a subpoena repeating previous requests for production and 
seeking numerous additional documents relating to many 
specified individuals and entities.6 Despite the 
burdensomeness of the search required by the subpoena, the 
response date was set for August 12. As the White House worked 
to respond to the subpoena, the Majority sent a ``supplementary 
request'' for additional documents on August 18, 
1997.7
    On October 2, the White House Counsel's office advised the 
Committee that the existence of videotapes containing material 
responsive to several of the Committee's information requests, 
including the initial April 28 request, had been discovered. By 
October 4, the Committee was provided with videotapes of the 
opening minutes of 44 coffees held at the White House. The 
Committee subsequently received over 100 additional videotapes 
of White House events and events outside the White House 
attended by President Clinton which were responsive to the 
Committee's prior requests. The circumstances of this belated 
discovery and production of responsive materials focused 
intense scrutiny on both the White House Counsel's Office and 
the organization that created and maintained these videotapes: 
the White House Communications Agency (``WHCA'').

               VIDEO AND AUDIO TAPING IN THE WHITE HOUSE

    The White House Communications Agency (``WHCA'') is funded 
by the Department of Defense and staffed by career military 
personnel. Its primary mission is to provide communications 
support to the president in his official capacity.8 
WHCA performs a number of services in this regard, from 
ensuring that the President has secure lines of communication 
while travelling, to supplying Secret Service agents with 
wireless communications equipment. The WHCA staff, numbering 
approximately 850 individuals, is primarily located at the 
Anacostia Naval Air Station in Washington, D.C.
    An important, but relatively small, aspect of WHCA's 
operations is the video and audio recording of the president's 
constitutional, statutory and ceremonial duties pursuant to the 
Presidential Records Act, 44 U.S.C. Sec. 2201-07.9 
Photographic support has been provided to the Office of the 
President since 1949.10 The exact nature and scope 
of this support has varied over the years, but since 1960, a 
military film crew has been responsible for the official film 
or videotape record of each presidency.11
    A wide variety of events are videotaped by WHCA, including 
speeches, public addresses, meetings with Cabinet members, and 
foreign dignitaries, the president's weekly radio address, 
official phone calls, media interviews, holiday receptions, 
receiving lines, bill signings, and as much of the president's 
personal life as he desires.12 The range of events 
at which presidential remarks would be audiotaped by WHCA is 
somewhat more circumscribed, consisting almost entirely of more 
formal events where the press is already present and the 
president requires a microphone for amplification of his 
remarks (the WHCA tape recording is made through a control box 
connected to the president's microphone in these 
situations).13 Shortly after the audio or video 
recordings are made, they are catalogued and delivered to the 
National Archives, which stores them pending the establishment 
of a presidential library.14

                    WHITE HOUSE COMMUNICATION AGENCY

    The Committee sought an understanding of why certain 
Presidential events are videotaped in their entirety, some for 
only a few minutes, and some not at all. Specifically, the 
Majority speculated that the abbreviated nature of the 
``coffee'' videotapes was the result of politically motivated 
instructions given by members of the president's staff. Based 
on the uncontradicted testimony of both WHCA career military 
personnel and White House staff members, the Committee found 
that the decisions concerning the scope of WHCA's videotaping 
activities were non-political in nature and consistent with the 
practices of past administrations.
    The Committee deposed White House staff member Steve 
Goodin, who has worked as a special assistant to the staff 
secretary since late 1994.15 His responsibilities 
include interacting with the WHCA videotape camera crew on a 
daily basis and instructing them about the extent to which the 
president's activities will be videotaped each 
day.16 In making these decisions, Goodin relies on 
four criteria: (i) the inherent historical value of the event, 
e.g. bill-signings; (ii) the potential for future historic 
value, such as a meeting with youth groups; (iii) the degree to 
which videotaping would help to present ``a historical snapshot 
of what the president's day is like'; and (iv) the level of 
intrusiveness involved in having the videotape crew 
present.17 Goodin also acknowledged that he probably 
would have asked WHCA personnel about their past videotaping 
practices.18 Over time, as Goodin and WHCA personnel 
worked together on a daily basis, they acquired a mutual 
understanding about the desired extent of videotape coverage 
forparticular kinds of events, thereby making it unnecessary 
for Goodin to explicitly direct them with respect to each event. 
Instead, WHCA personnel would make assumptions about the desired extent 
of videotape coverage based on the nature of the event.19 As 
WHCA Director of Operations Steve Smith put it, ``they can tell by type 
of events, like recurring events, routine events.'' 20 For 
example, Goodin expected that WHCA personnel would generally tape all 
events where the press was already present, such as press conferences, 
but because the WHCA video crew would be situated with numerous other 
cameramen from the media, he could not state definitively that WHCA was 
always present at such events.21 In general, Goodin asked 
them to tape the President's remarks at all public events, all events 
open to the press, and larger meetings where the president was 
scheduled to make remarks.22

                    VIDEOTAPE PROCEDURES FOR COFFEES

    For events such as coffees, Goodin would instruct WHCA 
personnel to ``take the top'' or ``take a spray'' of the 
coffee, meaning that the video crew would follow the president 
into the room, stay long enough for him to greet everyone in 
the room and to take his seat at the table and then exit the 
room so the meeting could begin.23 Goodin did not 
make discretionary determinations about the scope of videotape 
coverage for each individual coffee.24 With respect 
to small, closed-press meetings like coffees, Chief McGrath, 
head of WCHA's Videotaping Unit, explained that ``it is not 
that Steve Goodin necessarily decides top of or not. We all 
sort of know from past . . . we can read the schedule and have 
a feel for whether it's the top of or whether it's the whole 
thing.'' 25 WHCA videotaped only ``the top'' of 
numerous other events at the White House besides coffees, such 
as Cabinet meetings or bipartisan meetings of members of 
Congress in the Cabinet Room.26 The basic 
considerations underlying the decision not to tape such small, 
closed-press meetings in their entirety were the physical 
intrusiveness of having a videotape crew present in such small 
gatherings and the absence of scheduled, formal remarks.
    Goodin testified that space limitations in the Map Room, 
where most of the coffees were held, were one factor in the 
decision to only ``take the top'' of the coffees.27 
McGrath confirmed that the Map Room ``doesn't have a whole lot 
of room  . . . we were sort of intrusive.'' 28
    In addition, it has been WHCA's long-standing practice not 
to videotape entire closed-press meetings where the president 
is not scheduled to make formal remarks. Although President 
Clinton spoke with coffee attendees, Goodin testified that such 
informal remarks were distinguishable from fundraisers that 
were videotaped in their entirety since ``he's not going to 
stand up and deliver a speech.'' 29 McGrath 
confirmed that ``if the President is going to make remarks, 
we're going to be there for the whole thing, but remarks are 
different than meetings.'' 30 WHCA's Steve Smith 
testified that it has been the consistent practice since at 
least the Bush Administration to only videotape the beginning 
of an event that is closed to the press and for which no audio 
support has been requested (i.e., no lectern, no microphone, no 
amplification).31
    More importantly, Goodin was never instructed by the 
president or by other members of the White House staff 
concerning the extent to which coffees or other events should 
be videotaped.32 McGrath explained that Goodin's 
instructions to the videotape crew were limited to the 
commencement and termination of videotaping 33 and 
never included specific directions about what should or should 
not be filmed during a particular event. ``[I]t is strictly 
left up to the videographer to do the best he can to document 
what the president is saying, and that's it. There's no design. 
. . . There's no direction along those lines.'' 34 
Smith further explained that, consistent with the archival 
nature of WHCA's videotaping, any footage taken of attendees at 
White House events was entirely incidental. ``Their focus is 
the presidency, not . . . who he was having meetings with or 
whatever. They just don't do that.'' 35
    Goodin also testified that private meetings between the 
president and his staff were not typically 
videotaped.36 As a result, such staff members would 
not be aware of the extent of WHCA's videotaping activities 
except to the extent they attended events videotaped by 
WHCA.37

         THE INITIAL FAILURE TO IDENTIFY RESPONSIVE VIDEOTAPES

    Chairman Thompson summarized the evidence accurately with 
respect to why responsive videotapes were not discovered in 
response to the Committee's original request for production. 
``We learned from the people at WHCA what happened in April. 
Basically, they received the so-called Ruff directive that 
[White House Counsel] Ruff prepared, and that somewhere between 
the Military Office and the White House and the WHCA people, 
the page that delineated fund-raisers and coffees got lost.'' 
38 The Committee's investigation fully confirmed 
White House Counsel Lanny Breuer's assessment that the primary 
reason for the belated production was ``a slipup of the most 
routine and the most innocent sort . . . the kind of mistake 
that happens every day in complicated litigation throughout the 
nation.'' 39
    On April 9, 1997, Majority Counsel sent to White House 
Counsel Lanny Breuer 28 separate requests for production of 
documents from the White House, including any materials related 
to three specified coffees.40 Pursuant to this 
request, and several others from other investigations, White 
House Counsel Charles Ruff issued a four-page memo to the 
employees of the Executive Office of the President asking them 
``to conduct a thorough and complete search of ALL of your 
records (whether in hard copy, computer, or other form) . . . 
for materials responsive to the requests below.'' 41 
The second page of the memorandum consisted of five numbered 
paragraphs, each with at least one subpart, containing specific 
document requests, including a request for all documents 
``referring or relating to White House coffees.'' 42 
In addition, the first paragraph asked for the production of 
documents ``referring or relating to any of the individuals or 
entities on Attachment A,'' which listed 99 individuals and 
entities on the last two pages of the Ruff memo.43
    The Committee took deposition testimony from Alan P. 
Sullivan, director of the White House Military Office 
(``WHMO''). Sullivan has headed the WHMO since November 1994, 
prior to which time he was a colonel in the Marine 
Corps.44 There are ten operating components of the 
WHMO (including for example, Air Force One, Camp David, and 
WHCA) and a combined staff of approximately 1800 
personnel.45 Sullivan recalled receiving the Ruff 
memo and processing it exactly as the office had processed 
numerous other document requests from the White House Counsel's 
Office: ``disseminate it [the request] to each of the 10 
operating units, request them to do a file search, respond to 
us in time so we could formulate a consolidated response to 
counsel by the due date.'' 46 According to the WHMO 
staffer who faxed the memos to the operational units, the Ruff 
memo was scanned by the fax machine just once and then pre-
programmed to transmit to each of the WHMO command units 
directly from memory.47 Four of these operational 
units--the Air Operations, U.S. Army Transportation Agency, Air 
Force One, and the Presidential Contingency Planning unit--were 
able to locate in their files a complete copy of the four-page 
Ruff memo faxed to them by WHMO. According to the fax-generated 
header information on each page, these fax transmissions 
occurred within less than an hour, further supporting the 
testimony that the Ruff memo was faxed in its entirety to WHCA 
at the same time it was faxed to other operational units. Five 
of the other operational units did not retain copies of the 
original fax transmission from WHMO.48
    The WHCA official responsible for receiving and processing 
the document requests faxed from the White House Military 
Office was Colonel Charles Campbell, deputy commander of WHCA, 
who is now serving his second tour of duty in WHCA having 
previously served (in a different capacity) from 1986 to 1989 
under the Reagan and Bush administrations.49 
Campbell testified that he recalled receiving a fax from the 
White House Military Office forwarding the April 28 Ruff memo. 
This document was placed on his desk by one of the four staff 
sergeants who constitute his administrative staff. He recalls 
seeing the first page of the Ruff memo and the two-page 
attachment, but not the second page, which contained the five 
numbered requests, including the request for documents related 
to ``coffees.'' Asked to explain the missing second page, 
Campbell speculated that it had been lost or missorted with 
other fax traffic before it arrived on his desk.50 
Three of the four people working on the administrative staff in 
April 1997 subsequently left WHCA.51 Campbell 
questioned the remaining individual about the missing fax page, 
but the individual had no recollection of the 
document.52 Campbell also defended his staff: ``Our 
administrative section is a hard-working group of young people. 
They process a lot of paperwork and do a lot of typing and that 
sort of thing. They do a very good job in support of [WHCA 
commander] Colonel Simmons and me. They're soldiers, airmen, 
and, you know, mistakes are made. And I don't know where this 
second page was mishandled. . . . But I don't believe that any 
of these administrative people did any intentional mishandling 
or held anything back from me regarding that April 29th package 
from the Military Office, which included the 28 April memo from 
the Counsel's office.'' 53
    Campbell's explanation that he had a good-faith belief that 
he had a complete copy of the fax despite the fact that a page 
was missing, was convincing. The first page of the Ruff memo 
specifically referred to Attachment A, by instructing 
recipients as follows: ``Because this has been an ongoing 
process, some of the names listed on Attachment A are similar 
or identical to previous requests. Therefore, if you are 
certain that you have previously provided a document in 
response to a Counsel's Office request, please do not provide 
it again.'' 54 The first page of the Ruff memo, 
however, made no reference to the requests contained in the 
five numbered paragraphs on the second page, leading Campbell 
to believe that the request related entirely to the names 
contained in Attachment A. Indeed, previous requests in 
December 1996 and January 1997 from the White House Counsel's 
Office had consisted entirely of lists of names. Moreover, the 
first page is self-contained, ending with a concluding paragraph and 
providing no clue that there is a second page. Campbell reasonably 
concluded that WHCA had been asked only to search for all documents 
related to the names appearing on Attachment A.
    Campbell distributed the request by scanning Attachment A 
into his computer system to create a WordPerfect file and 
attaching the resulting document to an e-mail message that he 
sent to all WHCA personnel. The e-mail message summarized the 
first page of the Ruff memo and directed WHCA personnel to 
respond to the counsel's request with ``a thorough search of 
all records (regardless of media) on file that were created 
from 20 Jan 93 to present relating to certain individuals and 
entities. They are listed on the 3-page attachment to this 
note.'' 55 Campbell expected the video and audio 
tape databases to be searched pursuant to this request and, in 
fact, they were searched.56 The databases, however, 
are not indexed according to the names of individuals present 
at the recorded events. As a result, these searches failed to 
identify any responsive video or audio tapes.

                   WHITE HOUSE DEFINITION OF DOCUMENT

    During the October 29th hearing, the Majority spent a great 
deal of time criticizing White House counsel for directing the 
White House staff, through the April 28 Ruff memo, to search 
``ALL of your records (whether in hard copy, computer, or other 
form) . . . for materials responsive to the requests below.'' 
The Majority argued that White House counsel may have intended 
to obstruct the Committee's investigation because the Ruff memo 
failed to forward the following lengthy definition of 
``document,'' contained in the Committee's April 9 document 
request, to White House staff:

          The term ``document'' means any written, recorded, or 
        graphic matter of any nature whatsoever, regardless of 
        how recorded, and whether original or copy, including 
        but not limited to the following: memoranda, reports, 
        expense reports, books, manuals, instructions, 
        financial reports, working papers, records, notes, 
        letters, notices, telegrams, receipts, interoffice and 
        intra office communications, electronic mail (E-mail), 
        contracts, notations of any type of conversation, 
        telephone call, meeting or other communication, 
        bulletins, printed matters, computer printouts, 
        teletypes, invoices, transcripts, diaries, analyses, 
        summaries, minutes, bills, accounts, projections, 
        comparisons, messages, correspondence, press releases, 
        financial statements, opinions, and investigations, 
        (and all drafts, preliminary versions, alterations, 
        modifications, revisions, changes, and amendments of 
        any of the foregoing, as well as any attachments or 
        appendices thereto), and graphic or oral records or 
        representations of any kind (including, without 
        limitation, photographs, charts, graphs, microfiche, 
        microfilm, videotape, compact discs, tape recordings 
        and motion pictures), and electronic, mechanical, and 
        electric records and representations of any 
        kind.57

During both his deposition and his hearing testimony, Breuer 
explained that condensing this densely-worded, labyrinthine 
definition into a simple direction to search ``ALL records 
(whether in hard copy, computer or other form)'' was intended 
to ensure the fullest possible response from the numerous 
offices that make up the Executive Office of the President. 
``The reason is that the more complicated the definition, the 
more difficult it is for people who are not lawyers to 
understand the definition and to find responsive materials . . 
. [B]y saying we want all documents in whatever form, that is 
intended to be the most reasonable way of capturing such a long 
definition.'' 58
    Further complicating the task of the White House was that 
the Ruff memo was an attempt to search for documents responsive 
to requests from both this Committee and other investigations, 
each of which promulgated its own definition of ``document.'' 
As Breuer explained in his deposition, ``if I were to include 
your definition, then I would have to also include the House 
definition and the Justice Department definition. . . . I can't 
just sort of pick and choose.'' 59 Taking the 
Majority's position to its logical extreme, the boilerplate 
definitions of ``document'' generated by each entity requesting 
documents from the White House should have been distributed to 
White House staff in their entirety--a result that would appear 
to guarantee confusion.
    The Majority's implied premise that the scope of the 
document production from the White House turned on sharing the 
Majority's exact definitional language with the entire White 
House staff is untenable. For example, WHCA personnel produced 
six responsive classified cables in response to the Committee's 
April 9 request. The Committee, however, did not specifically 
define ``document'' to include ``cables'' until the July 31 
subpoena was issued. The language of the Ruff memo was adequate 
to identify and secure the production of a broader range of 
responsive documents than those specifically identified in the 
Committee's April 9 request, despite that request's lengthy 
definition of ``document.'' Given this result, it is difficult 
to credit the suggestion that the White House Counsel's failure 
to forward the Committee's definition of document to all White 
House staff was motivated by a desire to obstruct the 
Committee's investigation. Breuer persuasively testified that 
``people, when they are looking for responsive material, don't 
parse definitions, and 13-lined definitions are not 
particularly helpful to them.'' 60
    The White House counsel's rewording of the Committee's 
definition was not only reasonable as a general principle, but 
was demonstrably adequate to identify the existence of 
responsive videotapes. The omission of the specific term 
``videotape'' was of no moment in light of the fact that WHCA 
did not retain the videotapes themselves, but transmitted them 
to the National Archives. The only records, therefore, of the 
existence of responsive videotapes, was contained in WHCA's 
computer databases, a form of record specifically identified by 
the Ruff memo's directive to search ``ALL records (whether in 
hard copy, computer or other form).'' Moreover, in response to 
the Ruff memo's directive, WHCA personnel did, in fact, search 
the videotape and audiotape databases for responsive materials. 
No responsive materials were identified at that time because of 
the way the databases were organized.
    Col. Campbell, and other WHCA personnel who were deposed, 
were clear that if they had seen the second page of the Ruff 
memo, responsive materials would have been identified and 
produced. The critical word which would have elicited a 
response--``coffees''--appeared on page two of the Ruff memo. 
Col. Campbell testified that he would have scanned the second 
page of the Ruff memo into his computer system, as he did with 
Attachment A, and e-mailed it to the WHCA 
personnel.61 In addition, due to the different 
nature of the requests on page two, keyed as they were to 
categories of events rather than specific names, Col. Campbell 
testified that he would have initiated discussions with the 
responsible persons in the Audiovisual Unit to assess the 
existence of responsive materials.62 Likewise, Chief 
McGrath, the person actually responsible for querying the 
videotape databases in response to the Ruff memo, testified 
that if he had seen the second page of the Ruff memo, he would 
have queried the database on ``coffees,'' identified responsive 
materials, and had discussions with his superiors about which 
of the resulting ``coffee tapes'' were being requested by the 
Counsel's office.63 The evidence is clear that, but 
for the unintentional mishandling of page two of the Ruff memo 
by the career military personnel in the White House 
Communications Agency, the White House Counsel's document 
search procedures were adequate to identify the existence of 
responsive videotapes.
    The Majority contended that the testimony of WHCA Director 
of Operations Steve Smith established that the White House 
counsel's condensation of the various Committee document 
requests concerning ``coffees'' was inadequate, assuming the 
second page of the Ruff memo had been distributed to WHCA 
personnel, to elicit the production of responsive 
videotapes.64 This was a distortion of Smith's 
testimony. Smith simply testified that if he had received the 
second page of the Ruff memo in the spring of 1997, he would 
not have thought about identifying responsive videotapes 
because the audio-visual unit was not his responsibility at 
that time. ``At the time I was in the Operations Division, not 
in the operational chain of command at the audiovisual unit. In 
the context of the tasking I got, I was thinking of documents 
in the true sense as file-type copies. Had I gotten this second 
page with the word ``coffee'' in it, it would have meant 
nothing to me at the time.'' 65

                     white house search procedures

    The Majority's criticisms of the White House production 
effort must be viewed in the context of the size of the task 
confronting the White House staff. This Committee alone 
forwarded over 280 formal and informal requests for documents 
to the White House and received 120,000 pages of documents in 
response.66 These documents frequently required 
time-consuming pre-production review to protect against the 
disclosure of personal, confidential or classified information. 
White House counsel Breuer made the point that the Committee's 
document production priorities would frequently shift along 
with the Committee's plans for who would be deposed or be 
called to testify on a given day.67 Breuer further 
explained that these last-minute requests frequently resulted 
in last-minute or belated productions of relevant 
materials.68 The Minority's own experience during 
the life of this Committee confirms Breuer's observation that 
numerous depositions of White House personnel were taken with 
very little advance notice and that decisions on who would 
testify on any given hearing day were frequently not stated 
until the preceding day.
    Breuer testified that White House counsel took reasonable 
steps to respond to all document requests, including: (i) 
issuing directives to the employees of the Executive Office of 
the President to search their files for relevant materials; 
(ii) designating members of the White House Counsel's office as 
available contact persons to answer any questions arising from 
the search directives; (iii) personally visiting and assisting 
in the search of offices which were most likely to have 
responsive materials pertaining to a specific request; and (iv) 
maintaining open lines of communication with Committee counsel 
to permit them to prioritize their document requests and to 
keep them informed as to the progress of the document 
production process.69
    The Majority argued that White House counsel acted in bad 
faith by failing initially to interview WHCA personnel about 
the possible existence of videotapes of coffees and other White 
House events.70 As Breuer testified, however, the 
possible existence of videotapes was not an issue raised by the 
Committee until the inquiries from Majority Counsel Bucklin in 
August 1997. ``I think it's a fiction, Mr. Madigan, in all due 
respect, to say that there was some remarkable concern back in 
April about videotapes or recordings as much as some may think 
there was.'' 71 It is difficult to fault the White 
House Counsel's office in this regard given that the Committee 
itself, in its numerous depositions of individuals who attended 
the coffees, never once inquired of any of these witnesses 
about the presence of audio or videotaping 
equipment.72

     white house responses to committee inquiries about videotapes

    On August 7, at the end of a meeting attended by White 
House counsels Lanny Breuer and Michael Imbroscio, Majority 
Counsel Bucklin and Minority Counsel, Bucklin took Imbroscio 
aside (after all other attendess had departed) and told him 
that he had information, the reliability of which he could not 
attest to, that all meetings in the Oval Office were 
surreptitiously taped either by videotape or 
audiotape.73 Imbroscio was skeptical, but agreed to 
look into the issue.74 This conversation, which 
lasted less than two minutes, left Imbroscio with the 
impression that Bucklin was asking him to look into whether 
there was clandestine taping in the Oval Office.75 
Bucklin did not mention the White House Communications Agency 
by name, but he did indicate that a ``unit of the Department of 
Defense'' might be responsible for the 
videotaping.76 Bucklin did not request an immediate 
response or otherwise indicate that this was a priority 
request.77 Either that day or the following day, 
Imbroscio reported Bucklin's inquiry to Breuer, who confirmed 
in his deposition testimony that he understood Bucklin's 
initial inquiry to concern the possibility of clandestine 
taping in the Oval Office.78 Breuer, while also 
expressing skepticism, instructed Imbroscio to follow up on the 
matter.79 Sometime during the following week, 
Imbroscio also informed Chief White House Counsel Ruff about 
Bucklin's inquiry concerning clandestine taping.80
    Eleven days later, Bucklin sent a letter to Breuer raising 
several issues, including a complaint about the lack of 
response to Bucklin's verbal inquiry of August 7. To the best 
of Imbroscio's recollection, Bucklin's August 19 letter 
inaccurately describes parts of their August 7 
conversation.81 Specifically, Bucklin's letter 
claimed that he had asked Imbroscio to ascertain immediately 
whether the entity which provided audio and visual taping 
services to the White House, which Bucklin identified in this 
letter for the first time as the White House Communications 
Agency, would require a separate subpoena in light of the fact 
that it was part of the Department of Defense.82 
Imbroscio has no recollection that this issue arose during 
their August 7 colloquy or that Bucklin had asked for an 
immediate response to any request he had made of Imbroscio at 
that meeting.83 In addition, Bucklin's letter now 
characterized the audio and video taping as ``routine,'' rather 
than the clandestine taping that was the subject of the initial 
inquiry.84 In light of these differing 
recollections, the Minority proposed that Majority Counsel 
Bucklin be deposed concerning his initial inquiry to Imbroscio, 
but this request was rejected by the Majority.
    Although taken aback by the inaccuracies in the letter, 
Imbroscio was entirely willing to address this somewhat broader 
request for information about video and audio taping activities 
within the White House.85 The specific subject of 
videotapes of ``coffees,'' however, was not raised either by 
this letter or in the contemporaneous discussions that Bucklin 
had with Imbroscio.86 Moreover, Bucklin's inquiry 
was only one of numerous requests to the White House that the 
Committee was pressing. Most significant of these was the 
Committee's desire for prompt action on its August 1 subpoena 
to the White House, which consisted of 29 subparts and 
requested information on over 50 individuals and 
entities.87 In addition, in the two months from the 
August 1 subpoena through the end of September, the Committee 
presented approximately 20 formal and informal requests for 
information to the White House.88 During this same 
time period, from August through September, approximately 
18,000 pages of documents were produced by the White House to 
the Committee.89
    In order to respond to Bucklin's inquiry, Imbroscio 
personally visited the only WHCA office listed in the White 
House phone book--the office that provides pagers to White 
House personnel--and secured the name of WHCA Director of 
Operations Steven Smith.90 Imbroscio made an 
appointment to meet with Smith on August 29.91 Smith 
and Imbroscio have differing recollections of this discussion, 
but both agree that the topic of clandestine taping was raised 
by Imbroscio and quickly dismissed by Smith.92 Both 
men also agree that Imbroscio asked in general about the kinds 
of events for which WHCA provided video and audio support and 
that Smith advised Imbroscio that WHCA would typically film 
political fund-raisers attended by the President off the White 
House grounds.
    Imbroscio also asked Smith whether WHCA would film small, 
private meetings in the Oval Office or the Map Room. He recalls 
Smith advising him that such ``closed'' events (a term of art 
used by WHCA to designate meetings closed to the public and the 
press) would not typically be filmed.93 Smith, on 
the other hand, recalls informing Imbroscio that ``it is very 
normal for us to be there video-wise for a closed press 
event.'' 94 Smith volunteered that Imbroscio's 
differing recollection may have resulted from confusing WHCA's 
video support with its audio support, which would not 
ordinarily be provided to a ``closed press'' meeting. Smith 
testified: ``What I told him--and this is what I think got 
confused or . . . miscommunicated or understood or whatever it 
was the audio piece. I told him, that is, that we would not be 
there for a closed press, private-meeting type audio. We just 
don't do that . . . I suspect he got that all confused. There 
was a lot of information that went across the table to him, he 
and I, over a . . . 20-30 minute period. . . . He looked kind 
of glazed over. I mean, that's my personal opinion. I thought 
he was overwhelmed with information.'' 95
    Imbroscio left the meeting with the understanding that 
Smith would inquire into the existence of a comprehensive log 
of videotaped and audiotaped events that Imbroscio could 
review.96 Majority Counsel Bucklin, prompted by a 
September 3 story appearing in the Washington Post, made 
another inquiry concerning WHCA, asking Imbroscio to determine 
whether WHCA kept a log of vice-presidential phone calls. 
Unlike the possible existence of videotapes, Bucklin placed a 
high priority on receiving a prompt response to this inquiry.
    On September 9, at a meeting with Majority and Minority 
Counsel, Imbroscio reported on his meeting with Smith. 
Specifically, Imbroscio related that there was no clandestine 
taping in the White House, that the president's remarks at 
political fund-raisers were videotaped, but that it was his 
understanding that closed-press events would not be videotaped. 
However, Imbroscio also said that he had asked Smith to get 
back to him about the existence of a log of videotaped and 
audiotape events, that he would inquire further on the issue of 
such videotapes by reviewing the log, and committed to provide 
the Committee with access to such a log when it was 
located.97 Imbroscio's testimony during the hearing 
was extremely clear on this point: ``I said very clearly there 
were videotapes of fund-raising events and that--but to my 
understanding there were not videotapes of coffees, but that I 
would inquire further. . . . I did not have complete confidence 
that Mr. Smith knew precisely on a day-to-day basis what WHCA 
did, and so that is why I couched it in the terms I did, which 
is my understanding they were not filmed, but I wanted to 
satisfy myself on a first-hand basis whether or not they, in 
fact, existed.'' 98 Imbroscio also reported on his 
findings concerning the possible existence of a log of vice-
presidential phone calls. It bears noting that, although the 
Majority was informed on September 9 that videotapes of fund-
raisers existed, they made no immediate demand for expedited 
production of these tapes. Ultimately, these videotapes of 
public fund-raisers constituted the vast majority of the 
videotapes responsive to the Majority's request and produced to 
the Committee.
    The final sequence of events leading to the discovery of 
the videotapes began on September 25, when Imbroscio contacted 
Smith again to discuss both the videotape/audiotape logs and a 
lingering issue concerning the vice-presidential phone 
calls.99 Smith informed Imbroscio that a paper or 
``hard-copy'' log did not exist, and that all available 
information on the video and audio tapes was stored in computer 
databases. At Imbroscio's request, Smith had his staff prepare 
a description of the data fields for both the video and audio 
databases.100 On Friday, September 26, this document 
was delivered to Imbroscio's office just before noon and 
reviewed briefly by him before he left at noon to visit family 
in North Carolina.101 Upon his return to the office 
on Monday, September 29, Imbroscio began exchanging phone calls 
with Mr. Smith and arranged another meeting with him on 
Wednesday, October 1, to which Imbroscio brought a notepad with 
information concerning several of the specific events 
identified by the Committee.102 [Smith recalls his 
initial meeting with Imbroscio occurring on September 30, but 
their accounts are otherwise substantially similar.] Smith 
arranged for Imbroscio to meet with Chief McGrath of the Audio/
Visual unit in order to permit Imbroscio to actually query the 
relevant databases.103
    During his meeting with Chief McGrath at 2:00 p.m. that 
afternoon (both Smith and Imbroscio agree that this meeting 
occurred on October 1), Imbroscio learned that there were two 
separate video databases. One was a database of events recorded 
in their entirety with only one event recorded per 
videotape.104 The other databases, referred to as a 
photo-op databases, contained footage of events for which only 
the first few minutes had been recorded.105 A week's 
worth of these events would be recorded on a single videotape, 
with the result being that these tapes were listed with date 
ranges, rather than specific dates.106 Imbroscio 
queried the databases and ascertained that at least some of the 
coffees had been partially videotaped.107 By his own 
account, Imbroscio was ``surprised'' and ``stunned'' by this 
discovery.108 Chief McGrath confirmed in his 
testimony to the Committee that upon making this discovery, 
Imbroscio expressed shock and surprise.
    Imbroscio asked that the videotapes identified by his 
search be retrieved from the National Archives so that he could 
review their contents. Imbroscio then informed Breuer, who was 
preparing to leave the office for Rosh Hashanah, that 
responsive videotapes of some coffees existed. Breuer 
instructed Imbroscio to find out everything he could. That same 
evening, Imbroscio reviewed the five or six tapes that Chief 
McGrath had successfully retrieved from the National Archives. 
Before leaving for the evening, Imbroscio left a voice-mail 
message with Majority Counsel Bucklin which, among other 
things, alerted Bucklin that Imbroscio had an updated status 
report on the WHCA issues.109 Imbroscio and Bucklin 
finally spoke the next day at approximately 4:30 p.m., at which 
time Imbroscio informed him that, contrary to his prior 
understanding, there appeared to be approximately 30-40 partial 
videotapes of White House coffees and, consistent with his 
previous reports to Bucklin, approximately 100 videotapes of 
fund-raisers.110 By Saturday, October 4, video 
footage of 44 White House coffees had been produced to the 
Committee.111 By the following Tuesday and 
Wednesday, October 7th and 8th, The White House delivered an 
additional 66 DNC-related videotapes, as well as audiotapes, to 
the Committee.112

  NOTIFYING THE DEPARTMENT OF JUSTICE OF THE EXISTENCE OF RESPONSIVE 
                               VIDEOTAPES

    The White House Counsel's Office has been criticized for 
failing to communicate its discovery of responsive videotapes 
to the Department of Justice until October 4. This was one day 
after the Department issued a response to Rep. Hyde, Chairman 
of the House Judiciary Committee, declining to initiate a 
preliminary investigation under the Independent Counsel Act. 
Rep. Hyde's request for an investigation had raised a range of 
issues relating to alleged illegal activity by both President 
Clinton and Vice-President Gore, including issues involving 
White House ``coffees.'' Both Ruff and Breuer acknowledged that 
the two-day delay in notifying the Department of Justice was 
unfortunate, but the record shows that this delay was not 
willful and did not impede the Department's campaign finance 
investigation in any material respect.
    Ruff met with the Attorney General on Thursday, October 2, 
as he does every Thursday, to discuss legislation, policy, 
appointment issues and other issues of mutual 
concern.113 Both parties, however, treat 
investigative matters regarding the White House as off-limits. 
Ruff testified that ``[T]he one rule we have, not only in those 
meetings but across the board in my relations with the Attorney 
General, is we do not talk about investigative matters at all. 
. . . I think both of us believe that the integrity of the 
process is best preserved by not having those discussions at 
our level.'' 114 Although Ruff was generally aware 
that the Justice Department was preparing a response to 
Chairman Hyde, he did not focus on the fact that this response 
was expected from the Department the next day.115 
Instead, his primary focus was on the Attorney General's 
upcoming decision concerning the Department's preliminary 
inquiry into allegations concerning the Vice President's fund-
raising phone calls.116 Ruff, however, did not see 
the newly-discovered videotapes as being relevant to the 
Department's inquiry into the phone calls.117 
Nevertheless, Ruff testified to his ``personal regret that I 
did not take steps to communicate this information to the 
Department on that day.'' 118
    As noted previously, Imbroscio personally spoke with 
Bucklin late in the day on Thursday, October 2, to inform him 
about the discovery of responsive videotapes. Later that same 
day, Imbroscio called Breuer on his car phone as he was 
returning with his family from celebrating Rosh Hashanah, 
briefed him on his conversation with Bucklin, and relayed the 
Majority's desire to have a meeting the following day to 
explain the belated production. The next morning, Friday, 
October 3, the White House Counsel ``investigations'' team, 
including Ruff, Breuer and Imbroscio, had a meeting to discuss 
how to gather, identify and produce all responsive videotapes 
and audiotapes as quickly as possible.119 During 
that meeting, Breuer advised Ruff that he would be contacting 
his counterpart at the Department of Justice to advise them of 
the discovery of responsive videotapes.120 Breuer 
met with Bucklin and Chief Minority Counsel Baron at 2:30 that 
afternoon to discuss the discovery of the videotapes and the 
steps being taken to ensure prompt production.121 
While these events were occurring, Breuer traded voice-mail 
messages with his counterpart at the Department of Justice, but 
was not able to speak with him until Saturday 
morning.122 Attorney General Reno publicly voiced 
her displeasure about the delayed notification, but concluded 
that the tapes did not change her assessment that the coffees 
were lawful.123

             DEPUTY WHITE HOUSE COUNSEL AND THE VIDEOTAPES

    The Majority seemed intent on establishing that White House 
Deputy Counsel Mills had actual knowledge that partial 
videotapes of the White House coffees existed. This was based 
solely on her involvement in drafting memos in 1996 concerning 
limits on the scope of audio or video services that WHCA could 
provide to the President in the context of political events 
occurring outside of the White House complex. While the 
circumstances surrounding the belated production of the 
videotapes certainly merited investigation, the Majority's oft-
stated suspicions in this regard were not vindicated by the 
evidence. Mills testified during her deposition that she was 
generally unaware what WHCA was videotaping.124 She 
was not involved with the coffees during the time they were 
occurring, did not attend any coffees, and did not even know 
there was a coffee ``program.'' 125
    Mills' prior involvement with WHCA focused on advising them 
about the limits on their support activities during campaign-
related travel, in order to ensure that the government was not 
paying for campaign activity in violation of the Hatch 
Act.126 These discussions, however, focused on 
communication support being provided by WHCA during 
Presidential campaign trips, not on videotaping activities 
during small, closed-press events in the White 
House.127 WHCA Director of Operations Smith, the 
main contact for Mills on these issues, confirmed during his 
testimony to the Committee that ``I never discussed video, 
audiotaping with Ms. Mills at any time.'' 128 This 
is unsurprising since, at the time Mills had these discussions 
with Smith, the activities of the Audio-Visual Unit were not 
one of Smith's responsibilities.129 Mills also had 
meetings with WHCA Commander Joseph Simmons concerning Hatch 
Act issues, who also testified that ``videotaping was just not 
a subject that was brought up'' in these 
meetings.130 Even if the topic had come up, Col. 
Simmons did not have detailed knowledge of the scope of WHCA's 
videotaping activities. Indeed, it was his personal 
understanding at the time of his meetings with Mills that 
closed-press events such as ``coffees,'' would not be 
videotaped by WHCA.131 Accordingly, there is no 
basis to conclude that Mills had any specific knowledge of the 
extent to which closed-press meetings occurring within the 
White House, such as the coffees, would be videotaped by WHCA.

          ALLEGATIONS CONCERNING ALTERATION OF THE VIDEOTAPES

    Approximately two weeks after the belated production of the 
tapes, Rep. Dan Burton (R-Ind.) appeared on CBS's ``Face the 
Nation'' and alleged that the tapes had been altered in some 
way. ``We think some of these tapes may have been cut off 
intentionally, you know, altered in some way'' because some 
``cut off very abruptly.'' 132 The Majority of this 
Committee hired a technical expert, Paul Ginsburg, to examine 
the originals of the videotapes produced by the White House for 
evidence of alteration or editing prior to the videotapes 
having been produced. Ginsburg concluded that there was no 
evidence of any alterations whatsoever, but had been instructed 
by the Majority not to divulge his conclusions. As weeks went 
by without disclosure, Senator Glenn wrote several letters to 
Chairman Thompson pointing out the unfariness of not clearing 
these career military personnel of any suspicion. Eventually, 
Chairman Thompson stated publicly that there had been no 
tampering.133
    Suspicions about ``alterations'' were also initially 
aroused by the apparent lack of audio for a coffee attended by 
John Huang on June 18, 1996.134 The Committee found 
that the apparent absence of sound on the tape of the coffee 
attended by Huang was a result of a technical mistake in the 
dubbing process. According to Smith's deposition testimony, the 
tape provided to the Committee did have sound, but it was 
mistakenly recorded onto the second audio channel normally used 
to record part of a stereo signal, rather than the first audio 
channel on which the mono sound from the videotape camera 
microphone is typically recorded, resulting in an apparent 
absence of sound when played on the non-stereo video players 
available to the Committee.135

                        OTHER PRODUCTION ISSUES

    By the second day of the hearings on this topic, the 
Committee had already heard from WHCA personnel concerning the 
administrative mistake which had resulted in the failure to 
identify responsive videotapes in response to the Committee's 
earlier request. Since the recordhad already established that 
WHCA was responsible for the belated production, the Majority treated 
the appearance of White House Counsels Ruff, Breuer and Imbroscio as an 
opportunity to raise several other charges of failure to respond 
promptly to the Committee's document requests. Many of these charges 
were exceedingly unfair, while some raised issues of concern to the 
Committee as a whole about the effectiveness of White House document 
search and production procedures. In no instance, however, did the 
evidence support a conclusion that the White House deliberately 
delayed, concealed, or withheld documents from the Committee.

The Presidential ``Diary''

    During his opening statement on October 29, Chairman 
Thompson charged that, during the investigation into the 
belated production of the videotapes, the Majority had 
discovered the existence of a presidential ``diarist'' and that 
the ``diary'' she was responsible for maintaining had not been 
produced in response to the Committee's request for such 
materials.136 White House Counsel Ruff, in lieu of 
an opening statement, immediately took issue with Chairman 
Thompson's ``misleading assessment'' and explained that the 
``diarist'' to whom Thompson referred was an employee of the 
National Archives whose duties included collecting the 
President's ``schedules, briefing papers, phone logs, guest 
lists, and other records'' for archival purposes.137 
The ``diary'' referred to by the Chairman is actually a 
computer database utilized by the diarist to index the 
collected presidential materials.138 It strains 
common-sense for the Majority to argue that this computerized 
index maintained by a professional archivist is a ``diary'' 
within the meaning of the Committee's definition of 
``document.'' Moreover, using this index, over a thousand pages 
of responsive documents being held by the diarist had already 
been identified and produced.139 White House 
document productions on March 20, May 20, June 13 and August 
18th each clearly listed ``the diarist'' as the source of some 
of the documents produced.140 Since the information 
in the index is drawn from the underlying documents themselves, 
production of the corresponding sections of the index would 
have provided the Committee with no additional 
information.141
    By the end of the day, Chairman Thompson conceded that 
White House counsel had not failed to respond to the 
Committee's requests in this regard, but suggested that 
Committee counsel conduct a review of the diarist's index ``to 
let us see whether or not there may be some dates there that 
would jump out at us that we know are relevant that you may not 
know is relevant.'' 142 Although the Majority 
continually emphasized the potential relevance of the diarist's 
work materials, no member of the Majority staff even called the 
White House to arrange to review these materials until late in 
December.143 The Majority staff never followed up on 
this initial contact and the review was never conducted, 
although the offer to review the records was renewed as late as 
January 9 in a letter from Breuer.144 Given that the 
Majority made no attempt to review these documents, it is 
difficult to credit their complaints that the belated 
``discovery'' of the diarist impeded the Committee's 
investigation in any way.

WAVE records relating to Mr. Wu

    The Committee's August 1 subpoena to the White House was 
precipitated by the White House's failure to produce White 
House entry records (known as ``WAVE records'') relating to an 
associate of Charlie Trie named Ng Lap Seng (also known as 
``Mr. Wu'') until after the Committee had heard testimony 
concerning his contacts with Trie.145 During the 
October 29 hearing, some members of the Committee suggested 
that the White House deliberately withheld the documents in 
question until after the public hearings concerning Trie had 
concluded.
    Although the timing of the production of Wu's WAVE records 
was regrettable, the circumstances do not support the inference 
that the White House attempted to conceal the existence of the 
records from the Committee until after public hearings on this 
topic had concluded. First, in response to the Majority's 
request to expedite the production of specific categories of 
documents, the White House Counsel's office had put the 
Committee on written notice that they had not yet received the 
White House responses to their request for Wu's WAVE 
records.146 In his testimony before the Committee, 
White House Counsel Breuer was very specific in his 
recollection that he had provided the Committee with detailed 
information about the White House's progress in responding to 
the Committee's requests for expedited production contained in 
its letter of May 21.

          [A]s you know, I discussed this with [Majority 
        Counsels] Mr. Bucklin and with Mr. Tipps. In fact, Mr. 
        Tipps brought me out of a deposition because he knew 
        that it was our position that we couldn't get you the 
        May 21 information right away. It was my decision prior 
        to--after the May 21 request, to meet with your staff 
        so we could go over what you had and didn't have. It 
        was at that time, Mr. Madigan, with all due respect, 
        that the Committee knew what you had and what you 
        didn't have. We worked out a schedule with you to 
        complete those requests.147

Second, the Majority did not advise the White House of the 
upcoming hearings concerning Wu, which would have put them on 
notice that the Wu production was a priority.148 
Charles Ruff testified in his deposition that the Wu records 
were retrieved by a member of the White House press office in 
response to a press inquiry. When the Counsel's office learned 
that documents relevant to the Committee's ongoing hearings had 
been located, these WAVE records were produced to the Committee 
first before being given to the press.149 During his 
deposition, Michael Imbroscio, one of the staff attorneys in 
the White House Counsel's Office, described a meeting wherein 
Breuer explained to Bucklin the circumstances surrounding the 
production of Wu's WAVE records and said that Bucklin 
``expressed, in essence, some sadness that he had not been 
communicated [the] explanation before, and that so much had 
been made of it.'' 150 Breuer also remembered 
Bucklin saying ``something to the effect that if I had had the 
opportunity to explain to everyone exactly why we produced the 
Ng Lap Seng [Wu] document when we did, it may well have been 
that a lot of the uproar would have been unnecessary.'' 
151

Lisa Berg documents

    Another issue concerning the timing of document productions 
arose on July 29 when the Committee received documents relevant 
to the deposition of Lisa Berg, a former Director of Advance 
for Vice President Gore, three hours after her deposition had 
concluded.152 This deposition, however, was 
scheduled on very short notice with the Committee issuing a 
notice of deposition dated Friday, July 25, seeking Berg's 
appearance on Tuesday, July 29.153 As Breuer 
testified before the Committee, such short lead times presented 
substantial challenges to the White House in producing all 
relevant documents in a complete and timely manner:

          I realize to some of the members sitting here, when 
        you get something in the last minute, it appears like 
        there is a pattern of obstruction or delay. I suggest 
        to you that a fair reading is that often when you get 
        documents in the last minute, it is a direct response 
        to this Committee saying we are talking the deposition 
        of Mr. Smith in three days, please drop everything and 
        do whatever you can to get those documents to us as 
        quickly as possible, and we have done 
        that.154

Despite these circumstances, Majority Counsel Madigan suggested 
in public hearings that this lapse was a deliberate attempt by 
the White House to frustrate the Committee's work. This 
suggestion is untenable, however, in light of the White House's 
subsequent offer to make her available for additional 
questioning about the specific documents in 
question.155

          Mr. Madigan, time and again when in the public eye 
        there have been complaints about getting documents 
        later, we have said to you, if you truly feel 
        disadvantaged by not getting a document, you can 
        redepose or interview or have witnesses. Lisa Berg is 
        an example where publicly you complained that you 
        didn't have the Lisa Berg document. . . . we have 
        promptly and in private, not to make it a public 
        spectacle, said, Would you like the opportunity to 
        speak to her about the documents . . . that you have 
        received? And you have not taken us up on that offer.

As was the case with so many other allegations of supposed 
White House obstruction, the Majority declined the White House 
invitation to re-depose or re-interview Berg,156 
thereby casting substantial doubt on the Majority's assertion 
that the belated production of the Berg documents seriously 
compromised the Committee's investigation.

                               CONCLUSION

    The Committee's hearings have produced numerous revelations 
about the Administration's fund-raising practices that have 
invited substantial criticism. The Minority has addressed the 
specifics of these issues in other parts of this report. It 
bears noting, however, that most of these stories were based in 
large part on documentary and testimonial evidence provided by 
the White House. Against this backdrop, accusations that the 
White House intermittently departed from its policy of 
cooperativeness in order to conceal material of questionable 
significance to the Committee's investigation are wholly 
unpersuasive.
    During the questioning of White House counsels Ruff, Breuer 
and Imbroscio, the Majority frequently challenged the 
reasonableness of the procedures utilized by their office to 
identify and produce documents responsive to the Committee's 
numerous requests. The record is clear, however, that the White 
House search procedures were reasonable under the 
circumstances. The fact that these procedures sometimes failed 
to immediately identify and produce all relevant documents did 
not come close to supporting the inference that the White House 
acted with the intent to obstruct the Committee's 
investigation.

                               Footnotes

    \1\ Exhibit 1488: Letter to Lanny Breuer from Majority Counsel, 
regarding ``a request for production of documents,'' 4/9/97.
    \2\ Exhibit 1489: Letter to Lanny Breuer from Majority Counsel 
regarding ``Second Request for Documents,'' 5/21/97.
    \3\ Two letters to Lanny Breuer from Majority Counsel regarding 
supplemental requests for documents, 6/9/97 and 6/11/97.
    \4\ Letter to Majority Chief Counsel from Charles Ruff, Counsel to 
the President, 7/25/97.
    \5\ Letter to Chief Counsel from Charles Ruff, Counsel to the 
President, regarding a summary of the status of the White House's 
production and ``the understandings'' reached between the White House 
and Committee staff concerning outstanding production of documents, 7/
25/97.
    \6\ Exhibit 1490: Subpoena to the Custodian of Documents, The White 
House, issued by the Committee on Governmental Affairs for ``all 
documents and other things identified or described in Schedule A,'' 7/
31/97.
    \7\ Exhibit 1509: Letter to Lanny Breuer from Majority Counsel 
regarding ``Supplemental Request for Documents,'' 8/19/97.
    \8\ Exhibit 2435M: Memorandum from Jack Quinn, Counsel to the 
President, to White House Staff re: Appropriate Use of Resources, 4/8/
96.
    \9\ Exhibit 2433M: Memorandum from Antonio Lopez, Director, White 
House Military Office, to White House Staff re: White House Video 
Documentation Office, 5/8/89.
    \10\ Exhibit 2433M: Memorandum from Antonio Lopez, Director, White 
House Military Office, to White House Staff re: White House Video 
Documentation Office, 5/8/89.
    \11\ Exhibit 2433M: Memorandum from Antonio Lopez, Director, White 
House Military Office, to White House Staff re: White House Video 
Documentation Office, 5/8/89.
    \12\ Exhibit 2433M: Memorandum from Antonio Lopez, Director, White 
House Military Office, to White House Staff re: White House Video 
Documentation Office, 5/8/89.
    \13\ Exhibit 2433M: Memorandum from Antonio Lopez, Director, White 
House Military Office, to White House Staff re: White House Video 
Documentation Office, 5/8/89.
    \14\ Steven Smith deposition, 10/10/97, pp. 85/86.
    \15\ Stephen Goodin deposition, 10/21/97, p. 11.
    \16\ Stephen Goodin deposition, 10/21/97, pp. 15/16.
    \17\ Stephen Goodin deposition, 10/21/97, pp. 16 & 55/56.
    \18\ Stephen Goodin deposition, 10/21/97, pp. 17/18.
    \19\ Stephen Goodin deposition, 10/21/97, pp. 24/25.
    \20\ Steve Smith deposition, 10/10/97, p. 53.
    \21\ Stephen Goodin deposition, 10/21/97, pp. 23 & 77.
    \22\ Stephen Goodin deposition, 10/21/97, pp. 24-25.
    \23\ Stephen Goodin deposition, 10/21/97, p. 28.
    \24\ Chief Charles McGrath deposition, 10/20/97, p. 216.
    \25\ Chief Charles McGrath deposition, 10/20/97, p. 206.
    \26\ Chief Charles McGrath deposition, 10/20/97, p. 207; Stephen 
Goodin deposition, 10/21/97, p. 28.
    \27\ Stephen Goodin deposition, 10/21/97, pp. 32 & 35.
    \28\ Chief Charles McGrath deposition, 10/20/97, p. 175.
    \29\ Stephen Goodin deposition, 10/21/97, p. 35.
    \30\ Chief Charles McGrath deposition, 10/20/97.
    \31\ Steve Smith deposition, 10/10/97, pp. 185-186.
    \32\ Stephen Goodin deposition, 10/21/97, pp. 40.
    \33\ Chief Charles McGrath deposition, 10/20/97, pp. 26-27.
    \34\ Chief Charles McGrath deposition, 10/20/97, pp. 52-53.
    \35\ Steven Smith deposition, 10/10/97.
    \36\ Stephen Goodin deposition, 10/21/97, p. 77.
    \37\ Stephen Goodin deposition, 10/21/97, p. 78.
    \38\ Chairman Thompson, 10/29/97 Hrg., p. 91.
    \39\ Lanny Breuer, 10/29/97 Hrg., p. 106.
    \40\ Exhibit 1488: Letter to Lanny Breuer from Majority Counsel 
regarding ``a request for production of documents,'' 4/9/97.
    \41\ Exhibit 2423M: Memorandum from Charles F.C. Ruff, Counsel to 
the President, to Executive Office of the President re: Document 
Request, 4/28/97.
    \42\ Exhibit 2423M: Memorandum from Charles F.C. Ruff, Counsel to 
the President, to Executive Office of the President re: Document 
Request, 4/28/97.
    \43\ Exhibit 2423M: Memorandum from Charles F.C. Ruff, Counsel to 
the President, to Executive Office of the President re: Document 
Request, 4/28/97.
    \44\ Alan P. Sullivan deposition, 10/16/97, pp. 5-8.
    \45\ Alan P. Sullivan deposition, 10/16/97, p. 10.
    \46\ Alan P. Sullivan Deposition, 10/16/97, p. 62.
    \47\ Col. Charles Kenneth Campbell deposition, 10/21/97, p. 109.
    \48\ Col. Charles Kenneth Campbell deposition, 10/21/97, p. 57.
    \49\ Col. Charles Kenneth Campbell deposition, 10/21/97, p. 11.
    \50\ Col. Charles Kenneth Campbell deposition, 10/21/97, p. 78.
    \51\ Col. Charles Campbell, 10/23/97 Hrg., p. 69.
    \52\ Col. Charles Campbell, 10/23/97 Hrg., p. 69.
    \53\ Col. Charles Kenneth Campbell deposition, 10/21/97, pp. 107-
108.
    \54\ Exhibit 2423M: Memorandum from Charles F.C. Ruff, Counsel to 
the President, to Executive Office of the President re: Document 
Request, 4/28/97.
    \55\ Exhibit 2428M: E-mail message from Col. Charles Kenneth 
Campbell to WHCA personnel re: HOT SUSPENSE--Document Search, 4/29/97.
    \56\ Col. Charles Kenneth Campbell deposition, 10/21/97, p. 105.
    \57\ Exhibit 1488: Letter from Majority Counsel to White House 
Counsel Lanny Breuer, 4/9/97.
    \58\ Lanny Breuer, 10/29/97 Hrg., p. 177.
    \59\ Lanny Breuer deposition, 10/17/97, p. 41.
    \60\ Lanny Breuer deposition, 10/17/97, p. 42.
    \61\ Col. Charles Kenneth Campbell deposition, 10/21/97, p. 83.
    \62\ Col. Charles Kenneth Campbell deposition, 10/21/97, p. 84.
    \63\ Deposition of Chief Charles McGrath, 10/20/97, pp. 89-90.
    \64\ Majority Counsel, 10/29/97 Hrg., p. 138.
    \65\ Steven Smith, 10/23/97 Hrg., p. 93.
    \66\ Lanny Breuer, 10/29/97 Hrg., p. 108.
    \67\ Lanny Breuer, 10/29/97 Hrg., p. 109.
    \68\ Lanny Breuer, 10/29/97 Hrg., p. 109.
    \69\ Lanny Breuer, 10/29/97 Hrg., pp. 110-111.
    \70\ Michael Madigan, 10/29/97 Hrg., p. 139.
    \71\ Lanny Breuer, 10/29/97 Hrg., p. 145.
    \72\ Lanny Breuer, 10/29/97 Hrg., p. 180.
    \73\ Michael Imbroscio deposition, 10/17/97, pp. 60-61.
    \74\ Michael Imbroscio deposition, 10/17/97, p. 61.
    \75\ Michael Imbroscio deposition, 10/17/97, pp. 63 & 67.
    \76\ Michael Imbroscio deposition, 10/17/97, pp. 64-66.
    \77\ Michael Imbroscio deposition, 10/17/97, p. 73.
    \78\ Lanny Breuer deposition, 10/17/97, p. 54.
    \79\ Lanny Breuer deposition, 10/17/97, p. 56.
    \80\ Michael Imbroscio deposition, 10/17/97, pp. 74-75.
    \81\ Michael Imbroscio, 10/29/97 Hrg., p. 118; Michael Imbroscio 
deposition, 10/17/97, pp. 79-81.
    \82\ Exhibit 1509: 8/19/97 letter from Majority Counsel to White 
House Counsel Lanny Breuer.
    \83\ Michael Imbroscio deposition, 10/17/97, p. 81.
    \84\ Michael Imbroscio deposition, 10/17/97, p. 79.
    \85\ Michael Imbroscio deposition, 10/17/97, p. 83.
    \86\ Michael Imbroscio, 10/29/97 Hrg., p. 118.
    \87\ Michael Imbroscio deposition, 10/17/97, p. 78.
    \88\ Michael Imbroscio, 10/29/97 Hrg., p. 117; Michael Imbroscio 
deposition, 10/17/97, p. 121.
    \89\ Michael Imbroscio, 10/29/97 Hrg., p. 117; Michael Imbroscio 
deposition, 10/17/97, p. 122.
    \90\ Michael Imbroscio deposition, 10/17/97, pp. 76-77 & 85-86.
    \91\ Michael Imbroscio deposition, 10/17/97, p. 85.
    \92\ Michael Imbroscio deposition, 10/17/97, p. 88.
    \93\ Michael Imbroscio deposition, 10/17/97, p. 91.
    \94\ Steven Smith deposition, 10/10/97, p. 138.
    \95\ Steven Smith deposition, 10/10/97, pp. 139-140.
    \96\ Michael Imbroscio deposition, 10/17/97, pp. 103 & 105-106.
    \97\ Michael Imbroscio deposition, 10/17/97, pp. 111-112.
    \98\ Michael Imbroscio, 10/29/97 Hrg., pp. 163 & 190.
    \99\ Michael Imbroscio deposition, 10/17/97, pp. 139-140.
    \100\ Michael Imbroscio deposition, 10/17/97, p. 137; Steven Smith 
deposition, 10/10/97, p. 151.
    \101\ Michael Imbroscio deposition, 10/17/97, p. 140.
    \102\ Michael Imbroscio deposition, 10/17/97, pp. 146-148.
    \103\ Michael Imbroscio deposition, 10/17/97, p. 150.
    \104\ Michael Imbroscio deposition, 10/17/97, pp. 151-152.
    \105\ Michael Imbroscio deposition, 10/17/97, pp. 151-152.
    \106\ Michael Imbroscio deposition, 10/17/97, pp. 151-152.
    \107\ Michael Imbroscio deposition, 10/17/97, p. 153.
    \108\ Michael Imbroscio deposition, 10/17/97, p. 158.
    \109\ Michael Imbroscio deposition, 10/17/97, p. 156.
    \110\ Michael Imbroscio deposition, 10/17/97, pp. 163-164.
    \111\ Lanny Breuer deposition, 10/17/97, p. 99.
    \112\ Lanny Breuer deposition, 10/17/97, p. 99.
    \113\ Charles F.C. Ruff, 10/29/97 Hrg., p. 223; Charles F.C. Ruff 
deposition, 10/27/97, p. 34.
    \114\ Charles F.C. Ruff, 10/29/97 Hrg., pp. 223 & 225.
    \115\ Charles F.C. Ruff deposition, 10/27/97, p. 38.
    \116\ Charles F.C. Ruff, 10/29/97 Hrg., p. 224.
    \117\ Charles F.C. Ruff's deposition, 10/27/97, p. 37.
    \118\ Charles F.C. Ruff, 10/29/97 Hrg., p. 224.
    \119\ Charles F.C. Ruff's deposition, 10/27/97, p. 56; Lanny 
Breuer's deposition, 10/17/97, p. 74.
    \120\ Charles F.C. Ruff's deposition, 10/27/97, p. 56.
    \121\ Lanny Breuer's deposition, 10/17/97, pp. 99-100.
    \122\ Charles F.C. Ruff's deposition, 10/27/97, p. 38.
    \123\ 1Washington Post , 10/10/97.
    \124\ Cheryl Mills deposition, 10/18/97, pp. 57-59.
    \125\ Cheryl Mills deposition, 10/18/97, pp. 54-57.
    \126\ Cheryl Mills deposition, 10/18/97, p. 58.
    \127\ Cheryl Mills deposition, 10/18/97, pp. 65-73.
    \128\ Steve Smith, 10/23/97 Hrg, p. 90.
    \129\ Steve Smith, 10/23/97 Hrg., p. 90.
    \130\ Col. Joseph Simmons IV's deposition, 10/16/97, p. 45.
    \131\ Col. Joseph Simmons IV deposition, 10/16/97, p. 125.
    \132\ Washington Post, 10/20/97.
    \133\ 12/5/97 letter from Ranking Minority Member Senator John 
Glenn (D-Ohio) to Chairman Thompson (R-Tenn.) (urging that Ginsburg's 
findings be made public and referencing earlier letter dated 11/19/97 
to the same effect).
    \134\ New York Times, 10/7/97.
    \135\ Steven Smith's deposition, 10/10/97, pp. 157-158.
    \136\ Chairman Thompson, 10/29/97 Hrg., pp. 93-94.
    \137\ Charles Ruff, 10/29/97 Hrg., p. 99.
    \138\ Charles Ruff, 10/29/97 Hrg., p. 100.
    \139\ Charles Ruff, 10/29/97 Hrg., p. 101.
    \140\ Michael X. Imbroscio, 10/29/97 Hrg., pp. 114-115.
    \141\ Charles Ruff, 10/29/97 Hrg., p. 199.
    \142\ Chairman Thompson, Hrg., p. 219.
    \143\ Letter from Lanny Breuer, Special Counsel to the President, 
to Majority Counsel, 1//9/98.
    \144\ Letter from Lanny Breuer, Special Counsel to the President, 
to Majority Counsel, 1//9/98.
    \145\ The Washington Post, 7/31/97.
    \146\ Lanny Breuer, 10/29/97 Hrg., p. 151.
    \147\ Lanny Breuer, 10/29/97 Hrg., p. 151.
    \148\ The Washington Post, 7/31/97.
    \149\ Charles Ruff deposition, 10/27/97, p. 31.
    \150\ Michael Imbroscio deposition, 10/17/97, p. 62.
    \151\ Lanny Breuer, 10/29/97 Hrg., pp. 183-184.
    \152\ Majority Counsel, 10/29/97 Hrg., p. 150.
    \153\ Lisa Berg deposition, 7/29/97, Exhibit 1: Notice of Senate 
Deposition.
    \154\ Lanny Breuer, 10/29/97 Hrg., p. 109.
    \155\ Lanny Breuer, 10/29/97 Hrg., pp. 160-161.
    \156\ Lanny Breuer, 10/29/97 Hrg., pp. 160-161.





PART 8  MINORITY RECOMMENDATIONS

               issues that warrant further investigation

    The U.S. Department of Justice, Internal Revenue Service 
and Federal Election Commission are already engaged in civil 
and criminal enforcement actions related to the 1996 and prior 
federal elections. Examples include the Justice Department's 
recent criminal convictions of the Kims and Lums and recent 
indictments of Charlie Trie and Maria Hsia; the IRS's rejection 
of the National Policy Forum's application for tax-exempt 
status; and the FEC's 1996 civil suit against the Christian 
Coalition for coordinating election-related activities with 
candidates. Many of the persons and organizations discussed in 
this Report are already under investigation by one or more of 
these federal agencies. The Minority hereby refers this Report 
to all three agencies to provide them with the Minority's 
analysis and to allow evaluation and commencement of 
investigations of violations of the applicable laws where 
warranted.
    Based upon the evidence before the Committee, and the 
evidence contained in the Minority report, the Minority also 
recommends additional investigation by the Department of 
Justice of individuals and entities that appear to have engaged 
in the obstruction of this investigation, or willfully provided 
testimony that they did not believe to be true to the 
Committee.

                            recommendations

    By Constitutional design, investigations undertaken by the 
U.S. Senate are not law enforcement efforts, but inquiries made 
``in aid of the legislative function.'' The investigation 
undertaken by the Senate Committee on Governmental Affairs has 
exposed numerous flaws in existing law rendering the federal 
campaign finance system vulnerable to circumvention and 
exploitation. If the vulnerabilities so starkly revealed are 
not a catalyst for reform of the campaign finance system, then 
the Committee's investigative efforts will have failed in a 
principal purpose. Accordingly, the following section offers 
legislative recommendations to repair and strengthen the 
campaign finance system. Many of these proposals are included 
in S. 25, the McCain-Feingold campaign finance reform bill. The 
consideration by the Senate of that legislation, as well as 
other proposed campaign finance reforms, will be a measure of 
the lessons learned from the 1996 elections.

Legislative recommendations on campaign finance reform

     Eliminate Soft Money: Eliminating unrestricted 
contributions to political parties from individuals, 
corporations and unions is the most important step towards 
reducing the influence of money in the campaign finance system. 
The McCain-Feingold proposal would ban soft money contributions 
to political parties. If the flow of soft money is not halted, 
the campaign finance abuses and loss of public confidence that 
tainted the 1996 elections are likely to worsen by the year 
2000.
     Address Issue Advocacy: A soft money ban, however 
fundamental to reform, must be coupled with reforms addressing 
candidate advertisements masquerading as issue ads. The McCain-
Feingold proposal contains provisions which will bring 
advertisements that function as candidate ads, but use 
technicalities to avoid disclosure and contribution limits, 
within the same laws that govern other candidate ads. One of 
these provisions would require any communication that mentions 
a federal candidate within 60 days of a general election to 
comply with disclosure requirements and restrictions on the use 
of union and corporate funds. This provision would not prevent 
or ban any advertisement; it would provide limits on how 
certain ads may be financed.
     Strengthen and clarify the statutory prohibitions 
against foreign contributions and contributions in the name of 
another. Currently, neither prohibition clearly applies to soft 
money donations, and the foreign money prohibition does not 
explicitly prohibit foreign nationals from participating in a 
campaign through direct expenditures.
     Give the Federal Election Commission the resources 
it needs to do its job. Any reform, from the most modest 
improvements in disclosure to the most comprehensive revision 
of campaign financing, will not be complete if the agency 
charged with enforcing the law lacks the resources to do so.
     Give the Federal Election Commission the authority 
needed to enforce the law. The Commission's enforcement 
authority should be strengthened and Commission procedures 
streamlined. Needed changes include:
         Increase the size of the Commission to an odd 
        number of Commissioners to avoid voting deadlock;
         Grant the Commission the power to seek 
        injunctions in federal court;
         Streamline the process for initiating 
        investigations by eliminating requirements for a formal 
        Commission vote and formal finding that a violation 
        occurred; and
         Permit the Commission to assess automatic 
        fines for late disclosure reports.
     Improve public disclosure. Disclosure is 
fundamental to informing voters and deterring corruption in the 
political process. Advances in technology make electronic 
disclosure of campaign reports a viable option that would make 
information about candidates'' funding available to the widest 
possible audience in a timely manner.
         Mandate electronic filing for all candidates 
        and political committees to speed the disclosure 
        process and allow more disclosure to voters. Such a 
        provision is contained in the McCain Feingold proposal 
        and includes a waiver for candidates raising less than 
        a certain threshold amount;
         Require that disclosure reports of Senate 
        candidates be filed directly with the FEC rather than 
        with the Secretary of the Senate;
         Require that all reports be electronically 
        filed by the due date of the report;
         Require committees raising in excess of 
        $100,000 per calendar year to file a monthly report;
         Develop a constitutionally acceptable means to 
        improve public disclosure of election-related issue 
        advertising; and
         Require all issue advertising which identifies 
        a specific federal candidate in an election year to 
        include a disclaimer identifying the ad sponsor, and 
        require the ad sponsor to provide additional 
        information identifying any individual or organization 
        providing significant funding for the communication.
     For all contributions over $1,000, require 
certification, under penalty of perjury, that a contribution 
meets the requirements of federal law, including that the 
contributor is a citizen or legal permanent resident and that 
the contribution was made from the funds of the contributor.
     Reduce the costs of campaigns. During the 1996 
campaign, federal candidates spent $400 million on television 
advertising. Congress should consider mandating some free time 
from broadcasters as one way to decrease the amount candidates 
buy and parties are required to spend to get out their message.
     Clarify and strengthen applicable tax law. Tax 
exempt organizations have become increasingly influential in 
federal elections, while operating under legal requirements 
that provide insufficient guidance on permissible campaign 
activity and disclosure obligations.
         Clarify campaign restrictions applicable to 
        organizations operating under section 501(c)(4) of the 
        tax code. The current restrictions appear primarily in 
        IRS regulations and require clarification regarding 
        what social welfare organizations are legally permitted 
        to do;
         Ensure public disclosure of all organizations 
        whose primary purpose is to influence elections by 
        requiring that all organizations claiming an exemption 
        from taxes under Section 527 also file with the FEC or 
        the applicable state body. This limitation would ensure 
        that issue advocacy organizations claiming a section 
        527 exemption from taxation for the purpose of 
        influencing federal elections do not circumvent the 
        public disclosure requirements now applicable to other 
        organizations established to influence federal 
        elections; and
     Consider requiring the IRS to approve or 
disapprove all applications for tax exempt status within one 
year, and requiring that an application for exempt status be 
approved before an organization may hold itself out as tax-
exempt.

Recommended procedures for future Senate investigations

     Special investigations by the Senate into 
potentially serious misconduct by high level executive branch 
officials should be given a bipartisan structure similar to 
that of the Watergate and Iran-Contra committees. The Committee 
undertaking such an investigation should consider the elevation 
of the Ranking Member to Vice Chair, and the hiring of a single 
chief of staff assisted by a nonpartisan staff to carry out the 
investigation.
     The Senate should establish uniform protocols and 
procedures to govern special investigations. Such process rules 
should mandate offering both Minority and Majority staff the 
opportunity to be present at all investigative interviews and 
depositions, establish notice requirements for the taking of 
depositions and calling witnesses at hearings, and establish 
procedures for the issuance of subpoenas. At a minimum, notice 
requirements should guarantee all witnesses and Committee 
Members at least 72 hours notice of persons being called to 
testify at a Committee hearing. Procedures concerning the use 
of classified information at public hearings should also be 
provided.
     Procedures should be established for the 
consideration of requests for immunity. Before a Committee vote 
is held on a grant of immunity, Committee Members should be 
fully informed of any proffer of testimony by the person 
requesting immunity and of the position of the Justice 
Department regarding the immunity request.

Other recommendations

     Democratic and Republican Parties: Both parties 
should improve their procedures for ensuring the legality and 
propriety of the contributions they accept.
     Republican Party: To the extent the following 
foreign funds have not already been refunded, the Republican 
Party and its affiliate, the National Policy Forum, should 
immediately refund $800,000 resulting from a 1996 loan default 
involving a foreign national and foreign dollars from Hong 
Kong; $215,000 from a 1992 contribution by Michael Kojima 
utilizing foreign funds from Japan; $50,000 from a 1996 
contribution by Panda Industries, Inc., a company owned by a 
foreign national; and $25,000 from a 1996 contribution by the 
Pacific Cultural Foundation, a foreign organization based in 
Taiwan.
     Department of Commerce: While the Department of 
Commerce has made changes to its procedures granting security 
clearances, the operation of the Commerce Department Security 
Office should be restructured to enhance communication between 
the divisions and establish better procedures for tracking 
employee clearances.
     Federal Bureau of Investigation: The FBI should 
review its current provisions regarding security clearance 
procedures granted to legislative and executive branch 
employees and appointees and report its findings to the 
Committee.
     Central Intelligence Agency:
         The CIA should consider establishing enhanced 
        procedures and guidelines to maintain records of 
        classified documents shown to executive branch 
        officials. This investigation did not provide any 
        evidence that the CIA improperly disseminated 
        classified information to John Huang. However, the 
        investigation did demonstrate that the CIA does not 
        maintain complete records of all materials shown to 
        individuals in the executive branch. Enhanced records 
        would serve to protect the CIA from allegations of 
        impropriety as well as function as an aid in 
        investigating the merits of future allegations.
         The CIA should consider establishing enhanced 
        procedures and guidelines for the provision of 
        information to other executive branch agencies. During 
        this investigation, there was controversy over the 
        National Security Council's request for, and the CIA's 
        distribution of, information regarding Roger Tamraz. 
        The Minority could not determine why reports from two 
        CIA divisions were not consistent or complete or why 
        one CIA division contacted the NSC for the purpose of 
        providing information over the telephone that appeared 
        to be inaccurate and unwanted. It is important for 
        executive branch agencies to make use of information 
        obtained by the CIA, but the general restrictions and 
        determinations regarding that information should be 
        known to both the CIA and the requesting agencies.
PART 9  RESPONSE TO MAJORITY REPORT

                              introduction

    The Senate Resolution establishing the Special 
Investigation into the 1996 elections stated that the Committee 
on Governmental Affairs was to examine allegations of 
impropriety and illegality by both political parties. Despite 
the language of the Resolution, the investigation was conducted 
in a highly partisan fashion: The hearings focused almost 
entirely on allegations relating to Democrats, while largely 
ignoring allegations relating to Republicans. It is thus not 
surprising that the Majority Report on the investigation is a 
highly partisan document. The partisan bias is manifested in 
many ways, including questionable interpretations of the 
evidence, the use of double standards when discussing similar 
conduct by Democrats and Republicans, and even outright 
misstatements of the facts and the law.
    This part of the Minority Report provides an introduction 
to the Minority's critique of the Majority's Report. In 
pointing out the rather egregious errors, omissions, 
misstatements, and unsupported allegations in the Majority 
Report, we do not mean to suggest that we are defending the 
system used by both the Democratic and Republican parties to 
raise campaign funds in 1996. It is one thing to defend against 
a false allegation that a fundraising practice is illegal. It 
is another to say that the practice should continue to be 
legal. That distinction is clear in the Minority Report.
    Much of the evidence presented to the Committee was open to 
widely varying interpretations. When the evidence is unclear, 
it is unfair for the Committee to pretend otherwise by hurling 
accusations either directly or by innuendo that may result in 
unfairly damaging the reputations of innocent people. This 
Committee had an unfortunate history in the early 1950's in 
this regard, and it would be shameful to repeat it.
    Unfortunately, the Majority has repeatedly chosen to 
interpret facts in such a way that Democrats are portrayed in 
the most unfavorable light while Republicans are given the 
benefit of the doubt. A case in point is the contrast between 
the Majority's treatment of Harold Ickes, former Deputy Chief 
of Staff in the Clinton White House, and its treatment of Haley 
Barbour, the former chairman of the Republican National 
Committee. The Majority refuses to accept Ickes's denial of 
accusations made against him by Warren Meddoff despite the lack 
of any supporting evidence for these accusations and despite 
numerous facts which undermine Meddoff's credibility. By 
contrast, the Majority accepts Barbour's testimony about the 
National Policy Forum's loan transaction even though it 
conflicts with testimony from several credible sources and a 
great deal of documentary evidence.
    This double standard in the treatment of witnesses is also 
evident in the Majority's chapter on the White House coffees. 
That chapter contains a lengthy discussion of the allegation by 
Karl Jackson that a solicitation was made at a coffee he 
attended. Jackson had been a White House aide during the Bush 
Administration and later went into business with former Vice 
President Dan Quayle (the latter fact is omitted from the 
Majority Report). Jackson's GOP ties have utterly no bearing on 
his credibility, in the Majority's view, and yet the Democratic 
ties of witnesses who contradict him are given overwhelming 
importance. Moreover, the Majority includes a completely 
baseless insinuation that the Democratic witnesses misled the 
Committee, by stating that they ``claim'' not to have recalled 
the alleged solicitation.
    The Majority Report also applies a double standard to the 
two political parties when the parties have engaged in similar 
conduct. While Democratic examples are highlighted, comparable 
Republican examples are downplayed or simply ignored. Thus, for 
example, the Majority criticizes the Democratic National 
Committee's coordination with the Clinton White House, ignoring 
similar coordination by the Republican National Committee with 
the Dole for President campaign and former Republican 
Presidential campaigns. Similarly, in the discussion of the use 
of access to elected officials as a fundraising tool, the 
Majority strongly criticizes the White House coffees organized 
by the Democratic National Committee (``DNC'), while ignoring 
egregious practices on the Republican side, such as charging 
specific prices for access to Republican officials.
    Partisan bias is evident throughout the Majority's chapter 
on Ted Sioeng, which either minimizes--or simply omits--
Sioeng's Republican connections. For example, the Sioeng 
chapter mentions $100,000 in contributions to California State 
Treasurer Matt Fong but fails to mention that Fong is a 
Republican. The chapter also notes that political contributions 
afforded Sioeng access to President Clinton and Vice President 
Gore, but fails to mention that Newt Gingrich, the Republican 
Speaker of the House, was the guest of honor at a Sioeng-
organized luncheon the day after a Sioeng family company gave 
$50,000 to a Republican think tank. Nor does the chapter 
mention that the donation was solicited by a top adviser to 
Speaker Gingrich and that the think tank was, according to the 
Internal Revenue Service, essentially an arm of the Republican 
National Committee.
    The Majority Report not only contains dubious 
interpretations of the facts, it often misstates the facts. The 
Majority also misstates the facts by supplying partial 
evidence. For example, in the Majority's Charlie Trie chapter, 
the Majority states that Xiping Wang testified that the DNC did 
not reimburse her for her contribution, implying that the 
contribution was not returned by the DNC. Actually, the DNC did 
return the contribution--to the United States Treasury, as was 
appropriate for a contribution that had been made by a conduit 
who was not legally entitled to the money. Similarly, in the 
Majority Report's chapter on DNC/White House coordination, 
there are citations to the testimony of former DNC Chairman 
Donald Fowler to support conclusions regarding the knowledge 
and activities of DNC officials Marvin Rosen and Richard 
Sullivan without any reference to Rosen's and Sullivan's own 
testimony on these subjects.
    The misleading character of the Majority's factual 
assertions is also illustrated by internal contradictions 
within the Majority Report itself. Evidence used to support one 
claim is often used to support a contradictory assertion in 
another chapter--sometimes even in the same chapter. Similar 
inconsistencies are apparent in the Majority's treatment of 
witnesses who are deemed credible when they support the 
Majority's position but are deemed not credible when they 
dispute the Majority's conclusions. Thus, throughout the 
Majority'schapter on John Huang at the DNC, the testimony of 
Richard Sullivan is cited and relied upon as an honest recitation of 
the practices and beliefs of all DNC employees during the 1996 election 
cycle. Yet, in the Majority's chapter on the Teamsters, the Majority 
discredits Sullivan's testimony. Similar inconsistencies are apparent 
in the Majority's treatment of Donald Fowler, whose testimony is 
credited and relied upon with respect to his disagreements with Ickes, 
but deemed dishonest in the Majority's Tamraz chapter.
    The mishandling of evidence is one of the most disturbing 
aspects of the Majority Report. Again and again, evidence that 
undermines or contradicts the Majority's theories and 
allegations is downplayed, mischaracterized, or more often 
ignored, while disproved allegations are perpetuated. For 
example, a great deal of evidence gathered by the Committee 
undermines the theory that John Huang engaged in espionage when 
he was employed at the Commerce Department. This exculpatory 
evidence is largely absent from the Majority Report. As noted 
in Chapter 4 of the Minority Report, Huang failed on many 
occasions to exploit his post to obtain classified information. 
Moreover, he offered to testify to the Committee under a grant 
of immunity that would not have shielded him from prosecution 
for espionage-related offenses; his offer was not mentioned in 
the Majority Report. In the Minority's view, the most neutral 
interpretation of the facts is that Huang was probably not 
engaged in espionage. The Majority Report also repeats the 
baseless suggestion that the President was involved in a 
criminal conspiracy with a consultant to the International 
Brotherhood of Teamsters, in spite of the fact that Chairman 
Thompson admitted at a hearing that the Committee now had 
evidence that disproved such an allegation.
    Similarly, the Majority's chapter on Johnny Chung includes 
his allegation (made in unsworn statements to journalists) that 
a $50,000 contribution he made to the DNC had been solicited by 
Margaret Williams, then Chief of Staff to First Lady Hillary 
Clinton. The Majority Report fails to mention that Williams 
denied this allegation, under oath, when she was deposed by 
this Committee, and when she testified before a House 
committee. And the Majority ignores a host of other witnesses 
whose testimony before that committee supported Williams's 
testimony. By publishing the allegation and not the denial, the 
Majority creates the false impression that the allegation is 
not only unchallenged, but unquestionably true.
    Because of the Majority's questionable use of evidence, 
sourcing is an extremely important issue. Every assertion that 
might be in dispute should be attributed to a source, such as 
testimony to the Committee or a document produced in response 
to a Committee subpoena. In a number of cases, dubious 
assertions in the Majority Report are not footnoted. In some 
other cases, the footnotes show that questionable sources were 
used, such as staff interviews at which the Minority staff was 
not present.
    The most important task of the Special Investigation was to 
probe allegations of improper or illegal activity, and, thus, a 
clear understanding of the campaign finance laws is 
fundamental. It is thus surprising to find that the Majority 
Report contains many allegations of illegality based on 
misstatements of the law. A few examples will suffice:
     The Majority's chapter on Clinton White House 
coordination with the DNC alleges that this coordination was 
illegal and yet fails to cite a single statute, court decision, 
or regulation to support its position in this chapter. As 
demonstrated in the Minority Report, coordination of an issue 
advocacy advertising campaign between a party and its 
candidates does not appear to violate provisions of the 
existing campaign finance laws.
     Allegations in the Sioeng chapter are based on a 
misstatement of the law governing foreign contributions. 
Contributing ``foreign money'' is not illegal so long as the 
donor is legally entitled to give and is not acting as a 
conduit for someone else. In Sioeng's case, the issue was not 
whether he used funds from foreign bank accounts, but whether 
he directed or participated in contribution decisions (which 
would have been illegal given his status as a foreign 
national). On the basis of its misstatement of the law, the 
Majority analyzes the $100,000 in Sioeng-related money 
contributed to Matt Fong and concludes that most of these funds 
were donated legally, because only $16,000 could be traced to 
foreign sources. In fact, Fong's deposition testimony to this 
Committee--which is not mentioned in the Majority Report--
strongly indicates that Sioeng was the donor. If Sioeng was the 
donor, the entire $100,000 was contributed illegally, 
regardless of whether domestic or foreign funds were used.
    A major shortcoming of the Majority Report is its failure 
to acknowledge the fact that some of the most scandalous 
conduct in federal elections is perfectly legal. The campaign 
finance laws are so riddled with loopholes that legal 
restrictions are largely meaningless. Because of the soft-money 
and issue-advocacy loopholes, large corporations and wealthy 
individuals are free to spend vast sums of money on behalf of 
specific candidates. In both the hearings and in the Majority 
Report, the Majority has given short shrift to these systemic 
problems.
    One of the most disturbing aspects of the Majority Report 
is that it suggests, on the basis of inconclusive evidence, 
that certain named individuals were spies or foreign agents. 
These serious charges are supported solely by weak 
circumstantial evidence and speculation--as acknowledged by the 
Majority's use of phrases like ``may'' and ``if true.'' 
Allegations of espionage are grave charges and should not be 
made without specific credible evidence. Such serious 
allegations can inflict irreparable damage to the reputations 
of innocent people, and to do so without having sufficient 
evidence is irresponsible.
    The remainder of this Response consists of detailed 
comments on the Majority Report. It is organized both 
thematically and on a chapter-by-chapter basis.

            RESPONSE TO ISSUES INVESTIGATED BY THE COMMITTEE

                           foreign influence

    The Majority Report addresses the issues of foreign 
influence and foreign money in the 1996 election by focusing 
almost exclusively on the alleged role of the Chinese 
government. The report includes a declassified chapter 
describing efforts by the Chinese government to influence the 
U.S. government. The Majority Report also includes a chapter on 
Indonesian-born businessman Ted Sioeng, four chapters on John 
Huang, and one on Maria Hsia. Taken together, these chapters 
are designed to suggest that the so-called China Plan involved 
efforts to influence the 1996 presidential election and that by 
using Sioeng, Huang, and Hsia as intermediaries, the Chinese 
government succeeded in infiltrating the Democratic Party's 
fundraising operations.
    The Majority's analysis of foreign influence is deeply 
flawed. It weaves together conspiracy theories by taking 
unrelated facts and occurrences and giving them the most 
sinister possible interpretation. The Majority also uses facts 
in a highly selective manner. For example, classified 
information that contradicts the Majority's theories is simply 
disregarded.
    Moreover, the Majority fails to acknowledge foreign money 
that flowed to Republicans. As discussed in Minority Chapter 3, 
the Republican National Committee received hundreds of 
thousands of dollars from a Hong Kong businessman who provided 
backing for a loan to an RNC affiliate. The Minority also found 
strong indications that businessman Michael Kojima, who gave a 
half-million dollars to the RNC, acted as a conduit for 
Japanese businessmen (see Minority Chapter 6). The Majority 
Report makes no mention at all of Representative Jay Kim, a 
California Republican, who pleaded guilty to violating the 
campaign finance laws because he had accepted illegal foreign 
contributions (see Minority Chapter 8).

                           independent groups

    The 1996 campaign saw a surge in activity by organizations 
which are not registered with the Federal Election Commission 
as political committees. These groups were typically nonprofit 
organizations, registered with the Internal Revenue Service as 
tax-exempt, social-welfare organizations. These supposedly 
``nonpartisan'' groups spent tens of millions of dollars on 
behalf of candidates and political parties. Many of them ran 
political attack ads--under the guise of ``issue advocacy''--
during the closing weeks of the campaign, and some of the ads 
appear to have determined the outcome of close races. Despite 
the importance of this phenomenon, the Majority failed to 
conduct a serious investigation of these groups.
    In its Report, the Majority asserts that it was impossible 
to form ``meaningful conclusions'' about nonprofit groups 
because of obstruction by several organizations that were 
served with Committee subpoenas. While the Majority cited the 
AFL-CIO as the prime example of obstruction, several 
conservative groups also failed to comply with 
Committeesubpoenas, including the Christian Coalition, Americans for 
Tax Reform, the National Policy Forum, and two tax-exempt organizations 
controlled by Triad Management Services.
    The Majority's assertion that it could form no meaningful 
conclusions about such groups is questionable on several 
grounds. First, such an obstacle did not stop the Majority from 
forming conclusions about other investigatory targets who 
failed to cooperate, including Democratic fundraisers John 
Huang and Charlie Trie. Second, as far as the nonprofit groups 
are concerned, the Committee obtained a great deal of 
information about conservative groups in spite of those groups' 
lack of cooperation--sufficient information to conclude that 
several such groups engaged in improper and likely illegal 
activity during the 1996 cycle. See Minority Chapter 3 on the 
National Policy Forum and Minority Chapters 10 through 13 and 
Chapter 15 on other nonprofit groups.
    The activity by these and other organizations in the 1996 
election cycle sounded only a warning note of what is to come. 
As several experts testified in the Committee's hearings on 
proposals for campaign finance reform, the use of nonprofit and 
other independent organizations to air ``issue advertising'' 
that is simply disguised advertising on behalf of candidates 
will only continue to grow. Given an opportunity for a 
watershed examination of the direction that the election system 
is heading, the Majority chose not to address any of the 
substantial wrongdoing by these groups and actively prevented 
the Minority from presenting hearings on the evidence it had 
developed.

             contribution laundering/third-party transfers

    The federal election laws require that contributors donate 
their own funds. Thus, it is illegal for a donor to channel 
funds through a conduit, for an individual to act as a conduit, 
and for a donor to be reimbursed by a third party after having 
made a donation. The laws help to ensure that the public knows 
who is really paying for elections and also discourage 
contributions from individuals who are not legally entitled to 
donate, such as foreign nationals who do not have permanent 
resident status.
    The Majority Report addresses several cases in which there 
were allegations that political contributions were made in the 
names of third parties during the 1996 election cycle. These 
included contributions made in the names of Yogesh Gandhi, Hsi 
Lai Temple monastics, and Yue F. Chu and Xiping Wang.
    Although these Democratic examples are discussed at length, 
the Majority Report ignores several Republican examples, 
including some cases where laundering schemes have been 
acknowledged by the donors or proven in court. Several 
Republican examples involving Simon Fireman (a national Vice 
Chair of the Dole campaign), officers and employees of Empire 
Landfill, and DeLuca Liquor and Wine are mentioned in Chapter 
22 of the Minority Report.
    The Majority Report also fails to discuss third-party 
contributions as a systemic problem that could perhaps be 
addressed through legislative reform, regulatory reform, or 
improved vetting of contributions by political parties and 
candidates.

   fundraising and political activities of the national parties and 
                            administrations

    Although the national political parties play a central role 
in the federal election process, the Majority Report does not 
contain a detailed, balanced discussion of the two parties. 
Instead, it is largely a diatribe against the Democratic 
National Committee. Using evidence in a highly dubious manner, 
it examines coordination of election activities among the White 
House, the Democratic National Committee (``DNC''), and the 
Clinton Campaign (Chapter 2), the DNC's system to check the 
legality and appropriateness of contributions, fundraising in 
the White House, fundraising phone calls made from the White 
House, the vetting of individuals with access to the President, 
DNC donor Johnny Chung, and DNC donor Roger Tamraz.
    A fundamental problem with many of these chapters is that 
they characterize certain activities as illegal without citing 
any legal authorities for this position. In fact, many of the 
practices--notably coordination between the White House and the 
DNC--appear to be acceptable under the current campaign finance 
laws.
    Moreover, the Majority Report states and implies that many 
activities were unique to the Democrats. As shown in the 
Minority Report, the Republican National Committee similarly 
coordinated with the Dole for President campaign. See Minority 
Chapter 33. The Minority Report also discusses how Republicans 
have used access to public officials as a fundraising tool and 
have used federal property for fundraising purposes (see 
Minority Chapter 28). Regarding the vetting issue, the Minority 
Report notes that in the 1992 and 1994 election cycles the 
Republican National Committee took the position that it had no 
legal duty to review contributions (see Minority Chapter 25). 
The Minority Report also presents evidence that a number of 
controversial individuals met with Republican Presidents at the 
White House and at other events (see Minority Chapters 6 and 
31). Finally, the Minority Report contains detailed discussions 
of the Republican Party's close coordination with--and 
financial support to--several supposedly ``independent'' and 
``nonpartisan'' nonprofit groups (see Minority Chapters 10 and 
11).

                      allegations of quid pro quo

    A major goal of our campaign finance laws is to curb 
corruption and the appearance of corruption, as the Supreme 
Court recognized in Buckley v. Valeo. When political campaigns 
are financed with private money, there is always a risk of quid 
pro quos. Examples of alleged quid pro quos to Democratic 
contributors are discussed in Majority chapters regarding the 
DNC and Indian Gaming, the Hudson Casino, and the Cheyenne-
Arapaho contributions.
    It is seldom easy to prove a quid pro quo, and inquiries 
into alleged quid pro quos tend to rely heavily on 
circumstantial evidence. Nonetheless, the extent to which the 
Majority Report reaches its conclusions by marrying innuendo to 
coincidence is startling. In its chapter detailing the DNC's 
efforts to raise money from the Indian gaming community, the 
Majority candidly acknowledges that, except for two instances--
the Hudson casino matter and the Cheyenne Arapaho matter--it 
was unable to investigate whether ``there was any connection 
between the financial support to the Democratic party and the 
Interior decisions. . . .'' Nevertheless, the Majority goes on 
to imply that numerous contributions received from Indian 
tribes involved in gaming were all given in expectation of 
specific government actions and that these expectations were 
fulfilled. The factual bases for these conspiratorial 
suspicions, by the Majority's own admission, amount to nothing 
more than ``troubling coincidences.'' Indeed, this chapter is 
so insubstantial that it resembles nothing so much as an 
outline created at the beginning of an investigation rather 
than a final product purchased at a cost of well over $3 
million in taxpayer money.
    One chapter of the Majority Report deals with Interior 
Secretary Bruce Babbitt's supposed involvement in the decision 
to deny an application to take land into trust for a gambling 
casino in Hudson, Wisconsin--a community which strongly opposed 
such a use. That community opposition--a crucial factor in 
Interior's decision--is scarcely mentioned in the Majority 
report, along with the fact that the tribes who sought to 
locate the casino in Hudson lived on reservations located 80 to 
190 miles away. Even more disturbing is the Majority's 
insistence on interpreting evidence and documents in ways that 
are uniformly contradicted by the sworn testimony of the career 
Interior employees and officials involved. The Majority not 
only fails to resolve these contradictions, it does not even 
mention the great weight of testimony that contradicts the 
Majority's interpretation of events.
    Finally, in its chapter on political contributions made by 
the Cheyenne-Arapaho Tribes, the Majority reaches the 
condescending conclusion that these tribes' expressions of 
political support, including contributions, for the Democratic 
Party were the result of their naivete and political 
gullibility at the hands of manipulative Democratic 
fundraisers. In spinning this tale, the Majority Report 
studiously ignores the ample evidence that these tribes were 
sophisticated, politically aware, and made a hard-headed 
calculation that the Democratic Party would likely assist them 
in prevailing over Republican politicians who, in siding with 
powerful oil and gas interests, consistently obstructed the 
tribes' efforts to regain lands that they considered to be 
rightfully theirs.
    The Minority Report's chapters on the Hudson Casino and the 
Cheyenne-Arapaho Tribes demonstrate that the evidence does not 
support the quid pro quo allegations contained in the Majority 
Report (see Minority Chapters 35 and 37). The Minority Report 
also discusses the Republican Party's ties to one of its 
biggest sources of funds: the tobacco industry (see Minority 
Chapter 36).

                                process

    The Majority Report covers the origins and procedures of 
the Committee's investigation into the 1996 election by 
focusing almost exclusively on document production by the White 
House and the Democratic National Committee, which are the 
subjects of two separate chapters. A third chapter of the 
Majority Report discusses the compliance of nonprofit groups 
that were subpoenaed by the Committee. Although the Majority 
castigates all entities that did not comply with subpoenas, the 
most pointed criticism is directed at the AFL-CIO. There is no 
particular overarching theme that ties these chapters together, 
except for a general refrain that Democratic individuals, 
entities, organizations, and sympathizers tried to thwart the 
Committee's investigation.
    While the Majority discusses the history and debate over 
Senate Resolution 39, which clearly stipulated that the Special 
Investigation was to be conducted on a bipartisan basis, the 
Majority spends the bulk of its chapter on procedural issues 
lamenting the deadlines imposed unanimously by the full Senate 
as the reason the Committee was not able to pursue enforcement 
of its subpoenas. Moreover, while the Majority's chapter on 
compliance by nonprofit groups does mention some of the 
Republican entities that failed to comply with subpoenas, it 
fails to discuss the Republican National Committee, the Dole 
campaign, the National Policy Forum, Americans for Tax Reform, 
and Triad, all of which were among the first entities 
subpoenaed by the Committee and all of which failed to comply 
fully with subpoenas. Several individuals associated with 
conservative groups failed to appear for depositions; others 
appeared but refused to answer any substantive questions. The 
Majority does not even mention that the Republican National 
Committee--alone among the dozens of entities subpoenaed--
unilaterally redacted as much as one third of all the documents 
it produced.
    The massive obstruction of the Committee's investigation 
should never have been tolerated; indeed, the damage done to 
this body's investigative authority as a result of that failure 
may be the longest standing legacy of this investigation. 
Obstruction of the Committee began, however, not with the AFL-
CIO, as the Majority has often asserted, but in July when the 
National Policy Forum willfully refused to obey an order issued 
by the Chairman to produce documents pursuant to subpoena. No 
effort was made to hold the National Policy Forum in contempt 
of the Senate, and on September 3, eight groups, including the 
Christian Coalition and the National Right to Life Committee, 
notified the Committee that they would not produce documents. 
On September 8, Triad Management and its affiliated 
organizations notified the Committee that its employees, 
officers, and directors who were under personal subpoenas to 
appear and answer questions would refuse to do so. While 
Ranking Minority Member Glenn repeatedly expressed a 
willingness to support a finding of contempt against all 
entities not in compliance with Committee subpoenas, no motion 
for contempt was ever brought before the Committee by the 
Chairman.
    A detailed response to each Majority chapter follows.

Majority Report Chapter 2: Procedural Background and Overview

    The Majority Report lays out a procedural chronology and an 
overview of the investigation. The Majority also presents its 
view of the conduct of the investigation and the impact the 
Majority believes the deadline had on the investigation as a 
whole. Finally, the Majority summarizes the issues addressed in 
testimony the Committee received in public hearings and issues 
addressed in its Report.
    While addressing the procedural history of the Committee's 
investigation, the Majority seizes yet another opportunity to 
highlight its version of ``Democratic obstruction'' including 
harsh criticism of the White House and DNC for what the 
Majority calls ``poor'' productions. In addition, the Majority 
claims the Committee's deadline for ending the investigation--
unanimously agreed upon by the full Senate--precluded 
procedural enforcement proceedings regarding Committee 
subpoenas.
     The Majority Report states that one of the main 
purposes of the investigation was to let the public ``know what 
went on during the 1996 campaign,'' when, in fact, the Majority 
only investigated what happened in Democratic fundraising 
circles during that time. The Majority neglects to mention that 
the Minority requested only six of the 32 days of public 
hearing time to present evidence of Republican fundraising 
transgressions and was granted only three. Had the Minority 
been allowed the additional three days it repeatedly requested, 
the American people would have received a fuller picture of 
``what went on during the 1996 campaign.''
     While the Majority Report complains numerous times 
about the deadline imposed on the investigation, it fails to 
mention statements by Democrats that consideration of 
reauthorization of the budget of the Committee would be 
appropriate if the investigation had not been completed by the 
end date, December 31, 1996. Every Member of the Committee--
Republican and Democrat--voted for S. Res. 39, the Resolution 
authorizing the investigation, which included the 
deadline.1 Committee Democrats also stated publicly 
that they would have voted for enforcement of all of our 
subpoenas and orders, including those against Democrats, if 
enforcement was sought regarding all Committee 
subpoenas.2 However, such motions were never brought 
to a Committee vote.
---------------------------------------------------------------------------
    \1\ Congressional Record vote No. 29, pp. S2124-2125. The vote was 
99-0.
    \2\ Senator Glenn, 10/8/97, hrg., pp. 73-74.
---------------------------------------------------------------------------
     The Majority Report claims that the decision not 
to enforce the Committee's subpoenas was at least partially 
based on a dearth of resources. While the Minority respects the 
Majority's wish not to waste taxpayer monies, nearly $1 million 
of the original $4.35 million authorized by the Senate remained 
at the end of the investigation.
     The Majority Report claims that ``Committee staff 
. . . conducted over 200 witness interviews'' yet fails to 
mention that at least 20 of these interviews were conducted 
unilaterally by the Majority. Some of these unilateral 
interviews were with witnesses who later testified at Committee 
hearings and some witness affidavits were received that were 
never shared with the Minority.3
---------------------------------------------------------------------------
    \3\ See Appendix of Unilateral Interviews Conducted by the 
Majority.
---------------------------------------------------------------------------

Response to Majority Chapter 4: ``The Thirst for Money''

    In this chapter, the Majority places blame for all 
problematic contributions received by the DNC on an insatiable 
``thirst for money'' emanating from the White House. The 
ability to raise funds, however, is clearly an essential factor 
in any election campaign. During the 1996 elections, a 
Democratic President was running for re-election confronted by 
a Republican Party that had outraised and outspent the 
Democratic Party in all recent election cycles. Consequently, 
the Majority's conclusion that the Democratic Party felt 
pressure to raise funds for the 1996 election is a statement of 
the obvious. In reaching its conclusion, the Majority alleges 
violations of law without providing supporting facts or legal 
citations, ignores the costs of federal elections, and ignores 
the fact that the Republican Party again out-raised and out-
spent the Democratic Party in 1996.
     The Majority asserts that the DNC and the Clinton 
campaign violated campaign laws in their coordinated effort to 
raise money, but provides no facts or legal citations to 
support such a conclusion.
     The premise of this chapter--that the need to 
raise advertising money caused the ``panoply of DNC fundraising 
irregularities''--rests on a single incorrect statement. The 
Majority claims that ``[d]ue to the DNC's need to feed the 
advertising beast [that was planned following the November 1994 
Democratic losses in Congressional elections], it dismantled 
its process for vetting contributions.'' In fact, the DNC's 
system for checking contributions was changed in May of 1994, 
five months before the November 1994 elections and over a year 
before the idea for a large scale DNC advertising campaign was 
first conceived.
     The Majority focuses entirely on fundraising by 
the Democratic Party, and fails to mention that the Republican 
Party also broke all previous records in 1996, raising almost 
$100 million more than Democrats. The Majority ignores the fact 
that in the 1996 election cycle, the RNC out-raised (and out-
spent) the DNC by nearly $100 million, with the RNC raising 
$306 million and the DNC raising $212 million.4
---------------------------------------------------------------------------
    \4\ Federal Election Commission press release FEC Reports Major 
Increase in party fundraising, 3/17/97, available at www.fec.gov.
---------------------------------------------------------------------------
     The Majority ignores the across-the-board 
explosion of money raised in the 1996 election. The Majority 
also ignores the fact that in 1996, the national parties 
together raised and spent almost 900 million dollars, a 43 
percent increase over the 1992 presidential election 
cycle.5 The Majority's characterization of the 
Democratic Party as having a ``thirst for money,'' fails to 
take into account that in the 20 years since the campaign 
finance laws took effect, total hard money raised by both 
parties has jumped from $110 million to $658 
million.6
---------------------------------------------------------------------------
    \5\ Federal Election Commission press release FEC Reports Major 
Increase in Party Fundraising, 3/17/97, available at www.fec.gov.
    \6\ Federal Election Commission press release FEC Reports Major 
Increase in Party Fundraising, 3/17/97, available at www.fec.gov.
---------------------------------------------------------------------------

Response to Majority Report Chapter 5: ``Coordination Among the White 
        House, DNC and Clinton Campaign''

    In this chapter, the Majority purports to present a 
detailed chronology of coordination among the White House, the 
Democratic National Committee (``DNC''), and the Clinton 
campaign during the 1996 elections and concludes that this 
coordination was illegal. The Majority, however, fails to 
provide legal support for this conclusion. The Majority also 
makes no reference to a virtually identical advertising 
campaign coordinated between the RNC and the Dole campaign.
     The Majority incorrectly claims that coordination 
between the White House, DNC, and the Clinton campaign 
organization violated the law. Despite the unsupported 
conclusions drawn by the Majority, federal statutes, 
regulations, and legal precedent establish that coordination 
between a political party and the party's candidates and 
campaigns is legal, appropriate, and expected.7 For 
example, the Majority spends several pages on the sharing of 
polling information between the party and the campaign when FEC 
regulations specifically permit the allocation of the costs of 
polling after a poll is conducted, and multiple campaigns and 
organizations routinely share the costs of polling.8 
The FEC has also issued an opinion that parties may create and 
air issue advertisements that do not count as spending on 
behalf of particular candidates if the advertisements ``focus 
on national legislative activity and promote the . . . party,'' 
and that advertisements that name particular federal candidates 
may still qualify as issue advertisements.9
---------------------------------------------------------------------------
    \7\ For a detailed legal analysis see Chapters 24 and 32 of the 
Minority Report.
    \8\ 11 CFR section 106.4.
    \9\ FEC Advisory Opinion 1995-25.
---------------------------------------------------------------------------
     The Majority asserts that coordination between 
White House staff and both the Clinton campaign and the DNC was 
``unprecedented,'' when, in fact, similar coordination occurred 
in previous Republican administrations. President Clinton's 
former Deputy Chief of Staff Harold Ickes testified at length 
about the roles played by White House staff in both re-election 
campaigns and party affairs during both the Bush and Reagan 
Administrations.10 Ickes noted that in 1992, 
President Bush appointed James Baker as White House chief of 
staff and also charged him with running the Bush-Quayle re-
election effort.11 Bush campaign manager Fred Malek 
said at the time, ``[Baker] knows how to run a campaign, and he 
knows how to run a White House, and I think he'll bring the two 
together in a very good fashion.'' 12 Outgoing White 
House Chief of Staff Samuel Skinner said, ``Jim is the logical 
choice to be chief of staff if he's also going to be the 
national campaign manager.'' 13 Baker held twice 
daily campaign meetings in his White House office. Baker did 
the same in 1988, serving as White House chief of staff while 
running then Vice President Bush's campaign for the presidency.
---------------------------------------------------------------------------
    \10\ Harold Ickes Opening Statement, Hrg. 10/7/97.
    \11\ See Minority Chapter 32; Harold Ickes, 10/7/97 Hrg., pp. 86-
90.
    \12\ Christian Science Monitor, 8/19/92.
    \13\ Chicago Sun-Times, 8/18/92.
---------------------------------------------------------------------------
     The Majority mistakenly asserts that political 
consultants involved in the DNC advertising campaign were given 
insufficient legal guidance. DNC General Counsel Joseph Sandler 
and Clinton-Gore counsel Lyn Utrecht not only personally 
approved every advertising script and sat in on meetings to 
draft advertising, they also provided detailed guidelines to 
consultants working on the advertising. The guidelines ensured 
that the advertising did not contain express advocacy, required 
that advertising relate to important legislative issues, and 
required that the advertising express the view of the 
Administration and the Democratic Party. The guidelines also 
set restrictions on the timing of advertisements, precluded 
advertising during the general election, and forbade 
advertising in a state within six weeks of a primary, and set 
restrictions on use of the likeness or image of Republican 
candidates.14 Campaign consultant Dick Morris 
complained that the lawyers were ``obsessively'' concerned with 
following the law: [T]hey would bend over backward in ways that 
I considered ridiculous to comply with what would have been 
[an] overly conservative interpretation of the 
law.15
---------------------------------------------------------------------------
    \14\ Richard Morris deposition, 8/20/97, pp. 143-44. The guidelines 
established by counsel were presumably directed at ensuring that the 
advertising did not contain an electioneering message, a currently 
undefined standard.
    \15\ Richard Morris deposition, 8/20/97, p. 410.
---------------------------------------------------------------------------
     The Majority fails to note that the RNC conducted 
a virtually indistinguishable ad campaign that had the intended 
effect of promoting the Presidential campaign of former-Senator 
Bob Dole, and was closely coordinated with Dole campaign 
officials and consultants. See Minority Report Chapter 33.

Response to Majority Report Chapter 6: ``The DNC Dismantled Its System 
        for Vetting Contributions''

    In this chapter, the Majority attempts to paint a picture 
of a DNC which consciously disregarded the law. The Majority 
asserts that the DNC's vetting system was fatally flawed 
because ``the fundraisers did not understand that they were to 
be the first line of defense against illegal contributions'' 
and because there was a conflict of interest for fundraisers 
due to the fact that ``fundraisers want to raise money, not 
reject it.'' The Majority, however, ignores contrary evidence 
before the Committee.
     The Majority falsely implies that the DNC 
completely abandoned its system for vetting contributions. 
Although the DNC did stop conducting LEXIS/NEXIS searches on 
contributors to determine their ``appropriateness,'' the DNC 
continued to successfully vet the vast majority of 
contributions to determine their legality.
     The Majority Report unfairly concludes that ``no 
one thought to restore the vetting process, as that might slow 
or limit the money flowing to the DNC.'' The Majority cites no 
testimony or documentary evidence to support this conclusion 
which implies that the DNC purposely dismantled its vetting 
system to allow receipt of illegal contributions. In fact, the 
conclusion ignores testimony that the DNC general counsel's 
office consistently vetted for legality and that contributions 
were, in fact, not accepted by the DNC.16
---------------------------------------------------------------------------
    \16\ Joseph E. Sandler deposition, 5/15/97, pp. 75-76; Joseph E. 
Sandler deposition, 5/30/97, pp. 130-132.
---------------------------------------------------------------------------

Response to Majority Report Chapter 7: ``DNC Fundraising in the White 
        House: Coffees, Overnights and Other Events''

    In this chapter, the Majority is harshly critical of the 
Democratic National Committee for organizing ``coffees'' at the 
White House and other events for supporters of the President. 
The coffees are characterized as fundraising events, and the 
Majority repeats the allegation by one coffee attendee that 
funds were solicited at one of the coffees. The Majority also 
criticizes the DNC and White House for inviting some campaign 
contributors to stay overnight at the White House.
    The Majority's treatment of these subjects is seriously 
flawed. For one thing, it fosters the false impression that 
these practices were unprecedented. The Majority condemns the 
coffees and overnights without ever saying these practices were 
illegal. Nor does it allege that they were improper because 
they involved providing access to contributors or the use of 
federal property for fundraising purposes. If the Majority had 
made that point, it might have been forced to condemn the 
Republican National Committee and a series of Republican 
candidates on the same grounds.
     The Majority Report incorrectly concludes that 
because ``almost one-third'' of those who attended White House 
coffees contributed within a month, the coffees were 
fundraisers. Although this statistic is used to make the case 
that the coffees were fundraising events, a more logical 
inference is that they were not fundraisers. After all, more 
than two-thirds of the attendees contributed nothing to the DNC 
within a month of the coffee. In addition, the Majority fails 
to mention that several coffee attendees contributed nothing to 
the DNC during the entire 1996 election cycle. 17
---------------------------------------------------------------------------
    \17\ Exhibit 2049M: Minority-created chart detailing the finding 
that a number of attendees at a November 9, 1995 coffee never 
contributed to the DNC during the 1996 election cycle.
---------------------------------------------------------------------------
     The Majority condemns the coffees and overnights 
and implies that these practices were unprecedented when, in 
fact, they were not. The Majority fails to mention that donors 
were frequently invited to the Reagan White House and Bush 
White House to motivate them to contribute to the Republican 
National Committee and Republican campaigns. These events are 
discussed in more detail in Chapter 28 of the Minority Report.
     The Majority fails to mention that of the over 
1,000 people who attended coffees at the White House, Karl 
Jackson stands alone in his accusation of a solicitation at a 
coffee.
     The Majority unfairly asserts that Karl Jackson's 
Republican ties have no bearing on his credibility while 
asserting that the Democratic ties of witnesses who contradict 
him make those witnesses less credible. The Majority barely 
mentions that Karl Jackson--the only coffee attendee to claim 
that he was solicited--is a Republican with strong ties to the 
Bush White House and business ties to former Vice President Dan 
Quayle. From 1991 to early 1993, Jackson served as Quayle's 
National Security Advisor and he currently is connected with 
Quayle in private business.18 The Majority credits 
the testimony of this one former Bush Administration official 
but explains away the contradictory testimony of other 
attendees with ties to the Democratic Party. The Majority 
states that these individuals ``claimed not to recall hearing 
Huang solicit DNC contributions'' because ``their memory may be 
influenced by their strong affiliations with the DNC, the White 
House, or both.'' The Majority's statement that the witnesses 
who contradict Jackson ``claimed not to recall'' Huang's 
solicitation mischaracterizes their testimony. In fact, all the 
witnesses listed above testified that they were not solicited 
at this or any other coffee.
---------------------------------------------------------------------------
    \18\ See Los Angeles Times, 10/10/94; Financial Times, 9/6/93; 
Business Times, 6/28/94.
---------------------------------------------------------------------------

Response to Majority Report Chapter 8: ``Fundraising Calls From the 
        White House''

    The Majority concludes that the Vice President violated the 
law by making fundraising phone calls to raise money for the 
DNC's issue advocacy campaign in 1995. The Majority asserts 
that the Vice President violated the Pendleton Act, an 1883 law 
that prohibits certain solicitation on federal property, 
because he made calls from his office in the White House 
complex and because the DNC deposited a portion of the funds he 
solicited into hard money accounts.
     The Majority incorrectly asserts that the Vice 
President violated the Pendleton Act which prohibits 
solicitation of contributions within the meaning of the Federal 
Election Campaign Act (``FECA'') on federal property, and 
condemns the failure to appoint an independent counsel on this 
basis.19 The Pendleton Act was enacted in 1883 to 
protect federal workers from coerced campaign contributions. 
The government has not prosecuted a case under the act since 
1954 and have never prosecuted a case in a situation, like that 
of the Vice President's, where fundraising calls were placed to 
a non-federal employee outside the workplace.20 
After a thorough examination of the facts surrounding these 
calls and the applicable law, the Attorney General issued a 
lengthy opinion finding that there was insufficient evidence 
that the Vice President had violated the Pendleton 
Act.21 The Majority's contrary conclusion--based on 
less information--and virtually no analysis of the applicable 
law is unpersuasive.
---------------------------------------------------------------------------
    \19\ The Pendleton Act, 18 U.S.C. Sec. 607.
    \20\ Washington Post, 10/2/97.
    \21\ See In Re Albert Gore Jr., Notification to the Court Pursuant 
to 28 U.S.C. Sec. 592(b) of Results of Preliminary Investigation, Dec. 
2, 1997.
---------------------------------------------------------------------------
     Even though the Pendleton Act does not apply to 
the solicitation of soft money, the Majority nonetheless 
attempts to argue that the Vice President's solicitation of 
soft money violated the Act. It is undisputed that in 1995, the 
Vice President made calls to contributors asking for donations 
of soft money for the DNC's issue advocacy campaign. Under the 
Federal Election Campaign Act, contributions of soft money are 
not considered ``contributions'' as defined under FECA and 
therefore the Pendleton Act does not apply to the solicitation 
of such contributions. The Majority claims, however, that soft 
money contributions should now be considered ``contributions'' 
under the Federal Election Campaign Act. However, the law is 
clear that the term ``contribution'' as defined by 2 U.S.C. 
Sec. 431(8)(A)(i) is exactly equivalent to ``hard money,'' 
money raised and spent pursuant to the requirements and 
restrictions of federal law.
     The Majority asserts that the Vice President 
actually solicited hard money contributions, despite the 
evidence to the contrary. The Majority relies on an FEC 
regulation that states that if a federal ``campaign'' is 
mentioned in a solicitation, it is presumed that the solicited 
funds will be used for federal election purposes through ``hard 
money,'' unless the presumption is rebutted.22 In 
the case of the Vice President, this presumption is easily 
rebutted by the facts gathered by the Committee. The Committee 
interviewed 45 individuals who likely received phone calls from 
the Vice President. Of those, none ``state[d] that the Vice 
President explicitly or implicitly asked them to give money to 
the DNC's federal account [hard money] or to any federal 
political campaign.'' 23 In fact, most of those 
interviewed stated that if any specific purpose of the money 
was mentioned at all, it was the DNC's soft money issue 
advocacy campaign. Furthermore, the evidence establishes, and 
the Majority acknowledges, that during the phone calls, the 
Vice President solicited amounts of funds that could only be 
soft money because they exceeded the limit on the amount any 
individual may contribute in hard dollars.
---------------------------------------------------------------------------
    \22\ 11 CFR Sec. 102.5(a)(3).
    \23\ FBI Interviews.
---------------------------------------------------------------------------
     The Majority unfairly insists that, even if the 
Vice President did not solicit hard money, he may have known 
that a portion of some contributions he solicited would be 
deposited by the DNC into its hard money contribution account. 
It is established that the DNC at times deposited the first 
$20,000 of contributions received from a variety of 
contributors into hard money accounts without notifying or 
receiving permission from the contributors. The Majority 
alleges that the Vice President may have known about this 
practice because one DNC memorandum that was attached to 
another memorandum and forwarded to his office stated generally 
that contributors are permitted to give their first $20,000 in 
contributions in hard money. There is no evidence, however, 
that the Vice President personally reviewed this memorandum or 
that he would have any reason to know of this practice at the 
DNC.24 The Attorney General also concluded in 
determining not to appoint an independent counsel that the Vice 
President did not have independent detailed knowledge regarding 
how the DNC processed and deposited contributions.25
---------------------------------------------------------------------------
    \24\ In an interview with the Attorney General, the Vice President 
stated that he did not recall seeing a memo that stated the DNC would 
treat the first $20,000 of any contribution as hard money. See In Re 
Albert Gore Jr., Notification to the Court Pursuant to 28 U.S.C. 
Sec. 592(b) of Results of Preliminary Investigation, Dec. 2, 1997.
    \25\ See In Re Albert Gore Jr., Notification to the Court Pursuant 
to 28 U.S.C. Sec. 592(b) of Results of Preliminary Investigation, Dec. 
2, 1997.
---------------------------------------------------------------------------
     The Majority generally asserts that the Vice 
President violated the law by soliciting contributions from his 
White House Office. The Majority fails to note that the Hatch 
Act specifically exempts both the President and the Vice 
President, as well as Members of Congress, from the general 
prohibition on solicitation of campaign contributions 
26 and that former and current Republican presidents 
and leaders have also solicited funds from federal property. 
The Majority also ignores the facts that at least one 
Republican President, Ronald Reagan, made solicitation phone 
calls from the White House and that other Republicans have 
acknowledged that they have raised funds from federal property. 
See Chapter 28 of this Minority Report.
---------------------------------------------------------------------------
    \26\ 5 U.S.C. Sec. 7323.
---------------------------------------------------------------------------

Response to Majority Report Chapter 9: ``White House Vetting of 
        Individuals With Access to the President''

    In this chapter the Majority addresses the alleged failure 
of the White House to appropriately screen visitors invited to 
attend events at the White House with the President and Vice 
President from 1993 to 1997. Although the Majority makes a 
number of valid observations, its inclination to engage in 
unfounded speculation and to ignore evidence of similar 
procedures in Republican administrations undercuts its 
credibility on this issue.
     Without presenting any evidence, the Majority 
Report speculates that the problems with the White House 
vetting procedures from 1993 to 1997 might have been a 
``conscious design for fundraising purposes.'' There is no 
evidence to support this speculative assertion, and the 
Majority does not cite any such evidence.
     The Majority ignores evidence obtained by the 
Committee establishing that the procedures for screening 
political functions at the White House have been in effect for 
several administrations. A career White House employee 
testified that during her 18-year tenure at the White House, 
the procedures for screening political guests were the 
same.27 The National Security Advisor similarly 
testified that NSC procedures for providing information as part 
of the screening process have been in place since the 
1970s.28
---------------------------------------------------------------------------
    \27\ Judith Spangler deposition, 5/9/97, pp. 39-40.
    \28\ Samuel R. Berger, 9/11/97 Hrg., p. 6.
---------------------------------------------------------------------------
     The Majority ignores that the system in place for 
years has also resulted in a variety of individuals with 
controversial backgrounds meeting with Republican Presidents. 
Although the Committee's investigation of Republican vetting 
was limited due to the Committee's focus on the Democratic 
Party, it did uncover several examples where individuals with 
controversial backgrounds were provided access to President 
Bush. See Minority Report Chapter 28.
     The Majority omits the fact that both the White 
House and the DNC have implemented policies to formalize and 
improve their procedures for assessing potential guests at most 
DNC events.29
---------------------------------------------------------------------------
    \29\ Exhibit 1073: New DNC Compliance Procedures and Fundraising 
Manual; Exhibit 1072: Memorandum from Erskine Bowles to All Executive 
Office of the President Staff, 1/21/97; Exhibit 1071: Memorandum from 
Samuel R. Berger to all National Security Council staff, 6/13/97.
---------------------------------------------------------------------------

Response to Majority Report Chapter 10: ``Johnny Chung and the White 
        House Subway''

    In this chapter, the Majority alleges that Chung's status 
as a DNC donor afforded him extraordinary access to the White 
House, including ``access to the President and the First Lady'' 
and to ``the First Lady's office.'' The chapter devotes 
considerable space to a $50,000 contribution to the DNC which 
Chung gave to Margaret Williams, then-Chief of Staff to the 
First Lady. The Majority alleges that the $50,000 contribution 
was solicited by Williams and that Chung was provided with 
access to the White House as an explicit quid pro quo for this 
contribution.
     The Majority Report refers repeatedly to Chung's 
access to ``the White House,'' misleadingly implying that he 
had frequent access to the executive mansion. The Majority 
Report fails to distinguish between the White House itself--the 
executive mansion--and the ``White House Complex,'' a term that 
includes the White House and some nearby buildings, including 
the Old Executive Office Building (``OEOB''). The vast majority 
of Chung's visits were to the OEOB; 30 he frequently 
dropped in on Margaret Williams or her assistant, Evan 
Ryan.31
---------------------------------------------------------------------------
    \30\ For example, Secret Service ``WAVE'' records, which record 
visits by individuals who do not hold White House passes, show that 
Chung visited the White House complex 30 times in 1995 and that most of 
those visits were to Williams's office in the OEOB.
    \31\ Margaret Williams's and Evan Ryan's offices were located in 
Room 100 of the Old Executive Office Building.
---------------------------------------------------------------------------
     The Majority Report incorrectly implies that Chung 
had frequent access to President and Mrs. Clinton. The evidence 
before the Committee shows that Chung only met the Clintons on 
a handful of occasions, usually at Democratic fundraising 
events where he was one of a large number of attendees. The 
references to his visits to ``the First Lady's office'' are 
misleading because he actually visited the office of Margaret 
Williams, the First Lady's Chief of Staff, in the Old Executive 
Office Building.32
---------------------------------------------------------------------------
    \32\ Evan Ryan deposition, 8/7/97, pp. 11-12: The suite of offices 
in the OEOB where Williams and Ryan worked does not contain an office 
for the First Lady.
---------------------------------------------------------------------------
     The Majority alleges that Margaret Williams 
solicited a $50,000 contribution from Chung. The Majority's 
discussion of the $50,000 contribution is based largely on 
unsworn allegations to journalists by Johnny Chung and it 
ignores a great deal of contradictory evidence in the form of 
testimony to the Committee by Margaret Williams and Evan Ryan. 
The Majority also ignores Williams's testimony on the same 
subject to the House Government Reform and Oversight Committee 
(even though evidence presented to that Committee has been used 
elsewhere in the Majority Report). For example, the Majority 
Report ignores Williams's denial that she solicited the $50,000 
contribution from Chung and her testimony that she initially 
rebuffed him when he tried to hand her the check.33 
Ultimately, according to her testimony, she decided to treat 
the check the same way she had treated unsolicited checks that 
had arrived in the mail: She simply forwarded it to the 
DNC.34 By ignoring these and other important parts 
of Williams's testimony, the Majority has created a distorted 
impression of what the Committee learned about Johnny Chung.
---------------------------------------------------------------------------
    \33\ Margaret Williams deposition, 5/29/97, p. 184.
    \34\ Margaret Williams deposition, 5/29/97, pp. 184-86.
---------------------------------------------------------------------------
     The Majority alleges that Williams provided Chung 
with access to the White House as an explicit quid pro quo for 
a $50,000 contribution. Regarding the alleged quid pro quo for 
the $50,000 contribution, the Majority relies again, on unsworn 
statements to journalists by Johnny Chung and ignores 
contradictory evidence, including testimony to this Committee 
by Margaret Williams and Evan Ryan. According to their 
testimony, neither of them suggested to Chung that his requests 
would be expedited if he contributed to the DNC. By ignoring 
this evidence, the Majority has elevated press accounts over 
actual evidence received by the Committee.

Response to Majority Report Chapter 11: ``The Contribution of Yogesh 
        Gandhi''

    In this chapter, the Majority concludes that Yogesh Gandhi 
was able to use a $325,000 contribution to gain access to the 
President for Gandhi's own purposes. It concludes that the 
contribution both originated from foreign funds and was 
laundered through Gandhi. The Majority suggests that DNC 
officials had concerns about the contribution at the time it 
was received and concludes that DNC General Counsel Joseph 
Sandler and the DNC willfully postponed returning the 
contribution until after the election.
    The Minority agrees that this contribution should have been 
handled more carefully, but disagrees with the Majority's 
presentation of the facts.
     Despite evidence to the contrary, the Majority 
asserts that the presentation of the Gandhi award to Clinton 
was arranged well in advance of the DNC event. The evidence 
obtained by the Committee indicates that the presentation of 
the award to Clinton was not arranged in advance, but was 
handled at the event.35 Gandhi told Committee staff 
that he did not mention the award to anyone until the event, 
and that he did not meet John Huang until the 
event.36
---------------------------------------------------------------------------
    \35\ Joseph Sandler deposition, 5/15/97, pp. 105-14. Joseph 
Sandler, 9/10/97 Hrg., p. 100.
    \36\ Staff Interview of Yogesh Gandhi, 3/26/97.
---------------------------------------------------------------------------
     The Majority incorrectly claims that evidence 
indicates that the DNC purposefully delayed return of the 
Gandhi contribution until after the election. Sandler testified 
that the date of the 1996 election was not a factor in the 
decision to return the Gandhi contribution.37 He 
returned the contribution approximately two weeks after press 
allegations first surfaced raising questions about Gandhi's 
solvency.38
---------------------------------------------------------------------------
    \37\ Joseph Sandler deposition, 5/15/97, p. 116.
    \38\ Joseph Sandler deposition, 5/15/97, pp. 116-18.
---------------------------------------------------------------------------
     The Majority unfairly insists that there was 
concern over the Gandhi contribution inside the DNC at the time 
it was received. The Committee developed no evidence suggesting 
anyone at the DNC was initially concerned about the Gandhi 
contribution. DNC Finance Director Richard Sullivan actually 
testified that ``John [Huang] showed me the $325,000 
contribution from Gandhi, from Yogesh Gandhi, and I believe he 
stated he was holding on to it until he could vet it with 
Joe.'' Although Sullivan testified that Huang later told him he 
had spoken to Sandler about the contribution, Sandler testified 
that Huang did not bring the contribution to him for review and 
that he would have remembered if Huang had done 
so.39 Sullivan similarly testified that Huang 
represented that at least one other contribution had been 
reviewed, while Sandler testified Huang never brought it to 
him.40
---------------------------------------------------------------------------
    \39\ Richard Sullivan deposition, 6/5/97, pp. 37-39; Joseph 
Sandler, 9/10/97 Hrg., p. 13.
    \40\ Joseph Sandler, 9/10/97 Hrg., p. 13.
---------------------------------------------------------------------------

Response to Majority Report Chapter 12: ``Ted Sioeng''

    In this chapter, the Majority examines political 
contributions by Ted Sioeng, his family, and related business 
interests in the United States. Sioeng is a wealthy Indonesian-
born businessman with extensive business interests in China. 
The recipients of his contributions included the DNC, the RNC's 
National Policy Forum, and Matt Fong, a Republican currently 
serving as California State Treasurer. Although the Majority 
acknowledges that it cannot establish any connection between 
these Sioeng-related contributions and the Chinese government, 
the Majority's principal conclusion is that approximately half 
of the $400,000 contributed by Sioeng-related interests to the 
DNC consisted of ``foreign money.''
    The Majority's analysis is misleading and incomplete as to 
the central question of whether any of these contributions 
violated federal campaign laws. Existing law does not prohibit 
using ``foreign money'' to fund federal political contributions 
by individuals so long as those contributions are, in fact, 
made by persons legally eligible to contribute (i.e., U.S. 
citizens or legal permanent residents) with their own 
funds.41 Much of the Majority's analysis of the bank 
records underlying the contributions at issue completely 
ignores this critical issue.
---------------------------------------------------------------------------
    \41\ See Minority Report Chapters 1 and 20.
---------------------------------------------------------------------------
     The Majority report ignores Jessica Elnitiarta's 
contribution to the National Policy Forum (``NPF'). The 
Minority Report raises troubling questions about the actual 
source of the funds donated to the NPF, a de facto subsidiary 
of the Republican National Committee. The day before Sioeng's 
daughter, Jessica Elnitiarta, donated $50,000 to the NPF, the 
Panda Industries account which funded the contribution had a 
balance of only $1,300.42 That same day, Ted Sioeng 
wrote a check for $50,000 from his personal account into the 
account of Panda Industries.43 These transfers raise 
the fair inference that Sioeng both directed and was the real 
source of the NPF donation. In examining this same transaction, 
the Majority overlooks the evidence that Sioeng, a nonresident 
alien, probably directed the NPF contribution and, instead, 
merely concludes that, based on the evidence available to the 
Committee, it is impossible to determine whether Sioeng's 
reimbursement of his daughter's contribution came from foreign 
monies. This does not, however, remove the principal concern 
raised by this contribution: that Sioeng may have directed the 
contribution of $50,000 to the NPF.
---------------------------------------------------------------------------
    \42\ Memorandum from Steven E. Hendershot, FBI detailee, to 
Minority Counsel, re: ``Jessica Elnitiarta Record Review,'' 8/22/97.
    \43\ Memorandum from Steven E. Hendershot, FBI detailee, to 
Minority Counsel, re: ``Jessica Elnitiarta Record Review,'' 8/22/97.
---------------------------------------------------------------------------
    The Majority also ignores that Elnitiarta's contribution to 
the NPF was solicited by Steve Kinney, an aide to Speaker 
Gingrich, and was collected by Kinney the day before Sioeng sat 
next to Speaker Gingrich at a Beverly Hills event in 
1996.44 These facts raise the strong inference that 
Sioeng's seating next to the Speaker was a reward for his 
daughter's contribution to NPF, but are ignored by the 
Majority.
---------------------------------------------------------------------------
    \44\ Memorandum from Steven E. Hendershot, FBI agent, to Senate 
Investigating Team re: China Press newspaper article of 7/22/95'', 7/
23/97; Memorandum from Steven E. Hendershot, FBI detailee, to Minority 
Counsel, re: ``Jessica Elnitiarta Record Review,'' 8/22/97; Staff 
interview with Jessica Elnitiarta, 6/19/97; Los Angeles Times, 7/4/97.
---------------------------------------------------------------------------
     The Majority ignores the crucial legal questions 
regarding Sioeng-related contributions because it focuses 
solely on identifying possible ``foreign money'' sources of 
those political contributions. As noted above, a U.S. citizen 
or legal permanent resident, such as Sioeng's daughter and his 
associates, can make contributions funded entirely by ``foreign 
money'' so long as the money belongs to the donor and the donor 
of record is actually the person making the contribution 
decision, not simply acting as a conduit for 
others.45 The issue of whether part of the monies 
contributed to Fong comes from overseas is not nearly as 
significant as the fact that Fong actively solicited a $100,000 
contribution from Sioeng, a person ineligible to donate, 
personally received a check for $30,000 from him, and failed to 
ascertain whether Sioeng was eligible to contribute. Fong then 
unpersuasively testified that he thought that Sioeng was making 
a contribution on behalf of one of his sons--which would still 
be illegal as a contribution in the name of 
another.46 Indeed, the Majority Report contains no 
reference whatsoever to the deposition testimony which Fong 
provided to the Committee.
---------------------------------------------------------------------------
    \45\ See Minority Report Chapters 1 and 20.
    \46\ Minority Report Chapter 7: Ted Sioeng.
---------------------------------------------------------------------------
     Without sufficient evidence, the Majority 
characterizes a $50,000 contribution to the DNC from Kent La, a 
business associate of Sioeng's, as Sioeng-related. The Majority 
suggests that Sioeng may have directed this contribution; it 
bases this on La's characterization of Jessica Elnitiarta (in a 
telephone interview) as his ``supervisor.'' 47 This 
is an extremely slender reed upon which to ascribe La's 
contribution to Ted Sioeng. The Majority failed to mention 
another Committee interview in which La's wife described the 
contribution at issue: ``La advised that after she and her 
husband learned from Jessica [Elnitiarta] that Ted Sioeng had 
made a big donation to the President, La's husband decided to 
do the same. La advised that another reason they gave money to 
President Clinton was because the President supported trade 
increases with China and granted favorite nation status to 
China. La advised that no one forced or coerced them into 
donating the money.'' 48
---------------------------------------------------------------------------
    \47\ The factual support for the Majority's contention that La 
described Elnitiarta as his ``supervisor'' is exceedingly unclear. The 
Majority's characterization of La's statements is not supported by the 
only report of a telephone interview with La that is known to the 
Minority. On May 13, 1997 FBI detailee Steven E. Hendershot contacted 
Kent La and, because La's English was ``not very good,'' conducted an 
interview in Chinese. Memorandum from Steven E. Hendershot to Senate 
Investigative Team re: Contact with Kent La, 5/14/97. During that 
interview, La offered no characterization of his business relationship 
with Elnitiarta. Id. There are no records of any additional FBI 
interviews of La and it is unlikely, given La's lack of English 
fluency, that members of the Majority staff could have conducted such 
an interview.
    \48\ Memorandum from FBI detailee Vo Duong Tran to Senate 
Investigative Team re: Interview of Nancy La, 5/25/97.
---------------------------------------------------------------------------
    The Majority also notes that it sought to depose La, but 
was unable to get the Minority's approval for the issuance of 
the subpoena. The resulting unstated inference--that the 
Minority's failure to approve the proposed subpoena was 
motivated by a desire to obstruct the Committee's 
investigation--is unfair and inaccurate. What the Majority 
Report failed to explain was that a subpoena to La had already 
been issued with the Minority's approval, but that the Majority 
came to discover it had issued an invalid subpoena which 
mistakenly named La's cousin, Vinh B. La.49 When the 
Majority proposed to re-issue corrected subpoenas for both Kent 
La and Vinh B. La, the Minority sought equivalent technical 
corrections of subpoenas that had been issued to RNC officials. 
When the Majority made it clear that it was unwilling to extend 
the Minority the courtesy of reciprocal technical corrections 
on subpoenas already issued, the Minority declined to approve 
the requested subpoenas for Kent La and Vinh B. 
La.50 The Majority had the authority to vote to 
issue the requested subpoenas over the Minority's objections, 
but did not do so.51
---------------------------------------------------------------------------
    \49\ Letter from Laura S. Shores, counsel to Kent La, to Majority 
Counsel, re: Kent La, 11/6/97.
    \50\ The text of Senator Glenn's 11/19/97 letter to Chairman 
Thompson on this matter is as follows:
---------------------------------------------------------------------------
        Pursuant to the Rules of the Governmental Affairs 
      Committee, I am writing to object to the Majority's 
      proposed issuance of two subpoenas--a corrected subpoena 
      for Vinh B. La and a new subpoena for Kent La. I do so 
      reluctantly because I have no interest in impeding the 
      legitimate course of the investigation. I am compelled to 
      object, however, because precisely the same requests by the 
      minority for subpoenas to correct alleged technical defects 
      have been ignored and effectively denied. For example, The 
      Committee issued deposition subpoenas for Curt Anderson and 
      Jill Hanson that asked for depositions on dates that had 
      already passed by the time that service was effected. The 
      Minority has twice unsuccessfully sought to have these 
      technical defects corrected by new subpoenas. On another 
      occasion, we detailed for the Majority how Martin 
      Weinstein, counsel for several RNC officials, misled the 
      Committee about his representation of Tim Barnes and caused 
      the Committee to serve a deposition subpoena on Mr. 
      Weinstein rather than his actual counsel, Mr. Burchfield. 
      Our request that a corrected subpoena be served on Mr. 
      Barnes was ignored.
        The Minority has asked your staff to correct these 
      subpoenas at the same time that your requested subpoenas 
      are issued, but have received no response. Under these 
      circumstances, I am compelled to object to the issuance of 
      the Majority's proposed subpoenas to Vinh B. La and Kent 
      La.

    \51\ Memorandum from Majority Counsel Michael Bopp to Chief 
Minority Counsel Alan Baron re: Notice of Deposition Subpoenas, 11/14/
97.
---------------------------------------------------------------------------
     The Majority's unwillingness to explore Sioeng's 
dealings with Republican candidates contrasts starkly with its 
willingness to use bank records to tie Sioeng to Chinese 
government officials. In one notable instance, the Majority 
appears to have overreached considerably in suggesting that a 
$10,000 check made out to the ``O.C. Chinese Friendship Ass.'' 
in 1995 ``may have been intended for an organization called the 
Overseas Friendship Association'' which the Majority Report 
describes as an instrument of the Chinese Communist Party. From 
the Minority's perspective, a more reasonable interpretation 
(at least one that takes into account the ``C'' following the 
``O'') is that Sioeng donated this $10,000 to a slightly more 
benign organization: the Orange County (``O.C.'') Chinese 
Friendship Association.
Response to Majority Report Chapter 13: ``Huang's Years at Lippo''
    In this chapter, the Majority suggests that the Lippo 
Group's shifting focus from Indonesia to the emerging markets 
of the People's Republic of China over the last five years 
indicates that the Lippo Group has a suspicious relationship 
with the Chinese Government. The Majority also claims that John 
Huang engaged in a pattern of illegal political contributions 
on behalf of the Lippo Group.
    The Majority provides scant evidence for its conclusions, 
however, and ignores much evidence to the contrary.
     Based on scant evidence, the Majority asserts that 
Lippo Group joint venture partner China Resources is a 
corporate agent of espionage for the government of China. The 
only evidence developed by the Committee indicates that the 
Lippo Group has a business relationship with China Resources, a 
major conglomerate owned by the Chinese government that acts as 
a licensed intermediary for outside businesses doing business 
in China.52 The Majority fails to mention, for 
example, that according to a 1992 estimate, China Resources has 
29 wholly owned subsidiaries and ``hundreds'' of joint 
ventures, including ventures with U.S. 
corporations.53 While there have been allegations 
that China Resources engages in intelligence gathering on 
behalf of the Chinese Government, no evidence has been 
developed that suggests that the Lippo Group has ever acted as 
agent of China Resources or provided any intelligence 
information to the Chinese Government.54
---------------------------------------------------------------------------
    \52\ Thomas Hampson, 7/15/97 Hrg. pp. 67-68.
    \53\ Xinhua wire service, 11/10/92. On 2/7/96, the Harris 
Corporation, an NYSE-listed company, issued a press release announcing 
that it had been awarded a $2.7 million contract to supply radio 
terminals to a Northwest Electric Power Group, an electric company in 
the PRC. The press release states that China Resources National 
Corporation, a branch of China Resources Group, represented Northwest 
Electric Power. The press release described China Resources National 
Corporation as ``an import/export company that acts as a licensed 
intermediary for outside companies doing business in China.'' A 6/26/85 
press release of the Universal Satellite Corp., a public company based 
in New York, announced a contract to sell high-resolution television 
projectors to Strong Progress Ltd., a subsidiary of China Resources 
Group of Hong Kong.
    \54\ According to the Los Angeles Times, the Riady family issued a 
statement in February of 1998 explaining the nature of their commercial 
relationship with China Resources and asserting that they have not 
``gathered classified information or [performed] other intelligence 
operations'' in the course of their dealings with international 
partners. Los Angeles Times, 2/23/98. In addition, the classified 
information provided to the Committee supports the conclusion only that 
the Riadys' relationship with the Chinese Government involved normal 
business dealings within China.
---------------------------------------------------------------------------
     The Majority asserts that an audiotape of a DNC 
event attended by the Vice President indicates that Huang may 
have arranged a White House meeting between Vice President Gore 
and the vice chairman of China Resources, Shen Jueren. The 
Majorityalleges that Huang may have arranged three ``meetings'' 
between Shen Jueren and the Vice President--a ``meeting'' in the White 
House on Friday, September 24, 1993; a ``meeting'' at a California law 
firm in the afternoon of Monday, September 27, 1993; and a ``meeting'' 
at a DNC event in California later that same Monday. There is scant 
evidence, however, to support these alleged ``meetings.'' The meeting 
on Friday was a short visit with the Vice President's Chief of Staff, 
not the Vice President; 55 and the meeting on Monday in the 
afternoon was with approximately 25 Asian Americans and Shen Jueren was 
not listed as an attendee.56 Finally, the meeting on Friday 
evening was in fact a DNC ``Reception/Dinner'' attended by 
approximately 50 individuals, including Shen Jueren. The Vice President 
was not seated at the same table as Shen at this event.57 
Despite the documentary evidence, the Majority relies on an alleged 
exchange captured on audiotape at the law firm event to argue that on 
the previous Friday, a White House meeting may have occurred. This 
audiotape is largely inaudible but appears to reflect that at the law 
firm event, an individual stated that ``Kevin said he met you last 
Friday and I also come.'' 58 The tape does not seem to refer 
to Shen, nor, more importantly, was Shen listed as in attendance at 
that afternoon event.59 The Majority's reliance on this tape 
to allege a meeting, despite all evidence to the contrary, is 
unpersuasive.
---------------------------------------------------------------------------
    \55\ White House Communications Agency audio tape, 9/27/93, Letter 
to Jack Quinn, 10/7/93, EOP 49490.
    \56\ List of attendees at 9/27/93 afternoon event, EOP 965-969.
    \57\ Briefing papers and attendees for DNC ``Reception/Dinner,'' 9/
27/93, 6:00 p.m., EOP 962-964.
    \58\ White House Communications Agency audio tape, 9/27/93.
    \59\ List of attendees at 9/27/93 afternoon event, EOP 965-969; In 
addition, even if the reference of ``Kevin'' is to Shen Jueren, the 
individual could very well have been speaking to the Vice President's 
Chief of Staff, Jack Quinn, who accompanied the Vice President to the 
law firm event and who had briefly met Shen Jueren the Friday before 
that event.
---------------------------------------------------------------------------
     The Majority implies that John Huang improperly 
transmitted information to members of the Lippo Group and to 
the Chinese government, despite insufficient evidence. The 
Committee developed no evidence that Huang ever mishandled or 
passed classified or other sensitive information. Moreover, 
evidence gathered by the Committee indicates that Huang's 
contacts with Lippo employees were for administrative or 
personal reasons.60 For example, James Per Lee, the 
current president of Lippo Bank in California testified in his 
deposition that he had investigated the approximately 200 calls 
exchanged between Huang and Los Angeles-based Lippo employees 
and concluded that these calls were routine and brief. Per Lee 
testified that the calls were exchanges primarily between Huang 
and the bank's executive secretary in order to relay messages 
of calls received, and that calls to other employees concerned 
such matters as important bank clients, an appearance by Huang 
in a Chinese New Year's parade, and administrative matters 
dealing with the domestic subsidiaries.61 After Per 
Lee's deposition, the Majority abruptly canceled his scheduled 
appearance before the Committee 62 and fails in its 
Report to recognize the Lee's deposition testimony.
---------------------------------------------------------------------------
    \60\ Among one summary of Huang's ``Lippo contacts'' were calls 
placed from Huang's Glendale home to the home of Lippo bank employee 
Ken Yuen, although Mr. Yuen testified in deposition that his wife was 
friends with Jane Huang. Ken Yuen deposition, 4/30/97, p. 23. No 
attempt was made to determine if Huang was in Glendale or Washington at 
the time such ``contacts'' occurred.
    \61\ James Per Lee deposition, 5/2/97, pp. 93-102.
    \62\ Harold Arthur, 7/15/97 Hrg., pp. 140-141.
---------------------------------------------------------------------------
     The Majority incorrectly asserts that three 1993 
contributions from Lippo subsidiaries in the United States to 
the DNC were reimbursed with foreign funds. There is no 
evidence to support the Majority claim that three contributions 
to the DNC in September 1993 from three Lippo-owned California 
corporations were reimbursed with funds from abroad. Documents 
suggest that the contributions consisted of income generated in 
the U.S. For example, the Committee discovered a reimbursement 
request for a 1992 contribution from Hip Hing Holdings, but did 
not discover similar requests for the 1993 contributions, 
despite reviewing all such reimbursement requests for the 
relevant time period.63 In addition, contrary to the 
Majority's assertions, administrator Juliana Utomo did not 
testify that these contributions were reimbursed from 
Indonesia.64 And finally, unlike the domestic income 
generated for the 1992 contribution, the domestic income 
generated for each of the three companies that contributed in 
1993 was more than sufficient to make the contributions from 
those funds.65 The Majority's assertion that the 
1993 contributions were reimbursed by funds from Indonesia has 
no evidentiary support.
---------------------------------------------------------------------------
    \63\ Lippo Group holding companies requests for reimbursement of 
expenses from August to December 1993, HHH 0236-37.
    \64\ Juliana Utomo, 7/15/97 Hrg., pp. 12-15.
    \65\ Exhibit 105. During the July 15 hearing, Senator Thompson 
referred to an Advisory Opinion issued by the Federal Election 
Commission, the summary of which states that ``in order for a 
contribution to be legal, a domestic subsidiary must make contributions 
out of net profits.'' Advisory Opinion 1992-16. While the Opinion holds 
it is proper for the particular domestic subsidiary seeking the Opinion 
to make contributions from its net profits, it does advise whether 
contributions from the net income of a domestic subsidiary operating at 
a loss are permissible. See legal analysis in Chapter 1, supra.
---------------------------------------------------------------------------
     The Majority asserts that the Lippo Bank of 
California is controlled by the Lippo Group from abroad. In 
public testimony before the Committee, former bank President 
Harold Arthur testified the bank is owned and controlled by 
James Riady and managed by the Bank's Board. Arthur testified, 
``To the extent that any company controlled by a Riady family 
member is included within the portfolio of companies and 
investments under the common name of The Lippo Group, it could 
be argued that it is part of the Lippo Group. However, . . . 
the Bank is neither a subsidiary, nor a division of, nor 
controlled by, any company, group, partnership trust or other 
person or entity within the Lippo Group or otherwise.'' 
66
---------------------------------------------------------------------------
    \66\ Harold Arthur, Opening Statement, 7/15/97 Hrg., p. 10.
---------------------------------------------------------------------------

Response to Majority Report Chapter 14: ``Huang at Commerce''

    In this chapter, the Majority attempts to suggest that John 
Huang, while employed at the Department of Commerce, was a spy 
for the Riadys's Lippo Group, and, by extension, the Chinese 
government. After first implying that Huang was purposefully 
and carefully restricted from policy matters relating to China, 
the Majority then suggests that Huang improperly accessed and 
misused classified materials. The Majority also makes a point 
of noting that the Committee's work was complicated by Huang's 
refusal to cooperate.
    The Majority fails to note, however, that Huang had offered 
to testify before the Committee without any restrictions as to 
allegations that he had engaged in espionage.67 The 
rest of the Majority's conclusions are similarly based on 
ignoring or mischaracterizing evidence before the Committee.
---------------------------------------------------------------------------
    \67\ Opening Statement of Senator Glenn, 7/8/97 Hrg., pp. 30-34.
---------------------------------------------------------------------------
     The Majority's assertion that it could not 
adequately investigate Huang's role at Commerce because Huang 
refused to cooperate with the Committee is partially correct. 
The Majority ignores the fact that the Committee took dozens of 
depositions, received thousands of documents and held public 
hearings on Huang's role while at Commerce.
     The Majority asserts that Huang was excluded from 
policy-making at the Department of Commerce because he ``was 
not capable of doing the work.'' In fact, Huang was not 
explicitly excluded from any policy area or from receiving any 
policy-related information. Huang was hired by his immediate 
supervisor Charles Meissner to fulfill a primarily 
administrative position with the concurrence of Undersecretary 
of International Trade, Jeffrey Garten.68 While 
Huang played a limited policy role at Commerce, this was 
primarily due to the administrative nature of his position and 
inter-department tension. Responsibility for high-profile areas 
was vested primarily at the Undersecretary and Deputy 
Undersecretary level, two levels above Huang.69 No 
directive of any sort was ever issued by any of Huang's 
superiors that Huang was to be restricted from access to any 
policy area, including China, or that he be ``walled off.'' 
70 Huang was also never restricted, implicitly or 
explicitly, from receiving information regarding any particular 
country.
---------------------------------------------------------------------------
    \68\ Jeffrey Garten, 7/16/97 Hrg., pp. 120-21.
    \69\ Jeffrey Garten, 7/16/97 Hrg., p. 122.
    \70\ Jeffrey Garten, 7/16/97 Hrg., p. 122, 137.
---------------------------------------------------------------------------
     The Majority asserts that the Department of 
Commerce security clearance procedures were inadequate and that 
``warning signs'' pertaining to Huang were ignored. In fact, 
procedures used for Huang's clearance were identical to every 
other political appointee and no issues were uncovered in this 
investigation to suggest that Huang should have been denied a 
security clearance. Several issues relating to issuance of the 
clearances follow:
     The Majority asserts that the Clinton 
Administration initiated the policy of granting all Department 
of Commerce Officials an interim clearance. In fact, the policy 
of granting all political employees interim clearances was 
determined by career Department of Commerce Officials and not 
by political appointees or other Administration 
officials.71 Although interim clearances had been 
issued in previous administrations, Steven Garmon, a career 
employee was then the Director of the Department of Commerce 
Security Office, instituted a policy of automatically granting 
interim clearances to all appointees in reaction to criticism 
which had been leveled at the Security Office in previous 
administrations over the delays political appointees had faced 
in obtaining their clearances and their consequent inability to 
attend certain meetings or receive certain 
information.72 The policy was changed by Secretary 
William Daley in February 1997.
---------------------------------------------------------------------------
    \71\ Steven Garmon deposition, 5/23/97, pp. 25-27; Paul Buskirk 
deposition, 6/3/97, pp. 31-35.
    \72\ Steven Garmon deposition, 5/23/97, pp. 33-34.
---------------------------------------------------------------------------
     The Majority asserts that a background check prior 
to issuance of Huang's interim security clearances showed that 
he had been ``arrested or detained,'' and contends the finding 
was not followed up. In fact, Huang was never arrested or 
detained, and the NCIC record was reviewed by the agent 
handling the Huang clearance and by his superior, Security 
Office Deputy Director, Paul Buskirk.73 Buskirk 
determined that the Immigration and Naturalization Service 
entry was within days of Huang's marriage in 1972, and was 
likely a fingerprint check as a part of the initiation of 
Huang's application for citizenship.74 Buskirk's 
determination is supported by INS records produced to the 
Committee that indicate Huang was fingerprinted prior to being 
granted permanent resident status and was never arrested or 
detained.
---------------------------------------------------------------------------
    \73\ Joseph Burns deposition, 5/23/97, pp. 55-56.
    \74\ Paul Buskirk deposition, 6/3/97, pp. 53-54.
---------------------------------------------------------------------------
     The Majority asserts that the lack of an overseas 
background check of Huang has left unresolved questions about 
Huang's contacts with the Chinese government. An overseas 
investigation was not conducted because the Office of Personnel 
Management determined that it was not necessary based on the 
fact that Huang had emigrated from Taiwan in 1969 and had been 
living in the U.S. since that time. Moreover, no derogatory 
information was discovered in the domestic background 
investigation.75
---------------------------------------------------------------------------
    \75\ Letter to Rep. Larry Combest from James King, Director of OPM, 
10/30/96.
---------------------------------------------------------------------------
     The Majority asserts that an OPM investigator made 
a notation on Huang's file that signified he was a ``potential 
security problem,'' and that this notation was ignored by the 
Department of Commerce Security Office. In fact, the ``E'' 
notation on a security file refers to unresolved issues such as 
a medical problem, not to indicate a potential security risk. 
No evidence was found in OPM's background check on Huang that 
related to loyalty, terrorism, dishonesty in the application or 
examination process, felony offenses, liquor law violations, 
employment information, or even disturbing the 
peace.76
---------------------------------------------------------------------------
    \76\ Federal Investigative Programs Manual, Office of Personnel 
Management, 1991. The Majority could not have regarded this as a 
serious issue as the Minority was never notified of the interview of 
the OPM staff person, and no witness was questioned about the ``E'' 
notation.
---------------------------------------------------------------------------
     The Majority implies that Huang may have 
improperly accessed classified information while at the 
Department of Commerce or received classified information 
beyond his 18-month tenure at Commerce. In fact, there is no 
evidence that Huang ever improperly accessed classified 
information or accessed any classified information outside of 
his 18 months of employment at the Department of Commerce. None 
of the intelligence officials questioned by the Committee 
indicated that there was any evidence of mishandling of 
classified information on the part of John Huang.77
---------------------------------------------------------------------------
    \77\ 7/16/97 Hrg., pp. 222-227.
---------------------------------------------------------------------------
     The Majority asserts that Huang had access to 
unprecedented amounts of classified information. In fact, Huang 
repeatedly declined access to additional classified information 
and received less classified material than either his 
predecessor or other individuals at his level. Huang turned 
down the suggestion of Meissner and Security Officer Bob 
Gallagher that he get an SCI clearance, a level above top 
secret.78 Huang also never developed his cable 
profile to receive anything other that cables at the secret 
level addressed directly to him.79 Huang's 
predecessor Rick Johnston received more frequent briefings and 
more extensive information than John Huang.80 
Testimony established that Huang's role, while primarily 
administrative, required him to be able to make informed 
decisions on a variety of policy issues about which he received 
classified information.81
---------------------------------------------------------------------------
    \78\ Robert Gallagher deposition, 5/30/97, p. 13.
    \79\ Staff Interview with Lewis Williams, 6/12/97.
    \80\ Staff interview of Richard Johnston, Jr., 6/12/97.
    \81\ David Rothkopf deposition, 6/2/97, p. 30.
---------------------------------------------------------------------------
     The Majority asserts that Huang's use of the 
Washington D.C. office of Stephens, Inc. is ``cloaked in 
mystery,'' and implies that Huang's visits to Stephens were 
used to pass secret information to outsiders. Although the 
details of Huang's visits to the Stephen's office are not fully 
known to the Committee, the Majority neglected to request the 
appearance at public hearings of those individuals with 
knowledge of these details. For example, the Majority did not 
call as a witness Vernon Weaver, the head of the Washington 
office of Stephens, Inc., although Weaver had explained to the 
Committee in an interview the uses of the Stephens office. 
Weaver explained that Huang had used the office before he began 
employment at Commerce, that other people used the office, and 
that Weaver in turn used an office in the Lippo Bank when he 
was in California.82 Rather than call Weaver as a 
witness, the Majority instead called Paula Greene, a secretary 
at the Stephens office, although she was not able to provide 
similar information.83 The Majority is correct that 
the purpose of Huang's visits is unclear, but it is unfair to 
cast this ambiguity in the most sinister light possible.
---------------------------------------------------------------------------
    \82\ Staff Interview of Vernon Weaver.
    \83\ Paula Greene, 7/17/97 Hrg.
---------------------------------------------------------------------------
     The Majority asserts that Huang arranged a meeting 
between Weaver and California State Treasurer Matt Fong which 
resulted in Stephens receiving business from the State of 
California. The Majority appears to rely exclusively on Huang's 
agenda in making this assertion. Neither Fong nor Weaver were 
ever questioned about this meeting or the business relationship 
between Stephens and the state although Fong was deposed and 
Weaver was interviewed by Committee staff.

    response to majority report chapter 15: ``john huang moves from 
                         commerce to the dnc''

    In this chapter, the Majority goes to great lengths to 
imply that there was something sinister in the hiring of John 
Huang by the Democratic National Committee (``DNC''). The 
Majority repeatedly asserts that Huang was hired based upon the 
President's intervention on his behalf.
    The Majority's conclusions are not supported by accurate 
descriptions of the testimony and omit critical facts. There is 
no evidence that Huang's hiring was suspicious, that it was 
part of an effort to raise foreign money, or that the 
President's involvement in the process was either significant 
or inappropriate.
     The Majority falsely implies that there was 
something inappropriate about the President being involved with 
Huang's move to the DNC to raise money in the Asian American 
community. The Majority's discussion of the President's 
``involvement'' in Huang's hiring is misleading and a 
distortion of the facts. As noted below, the President did not 
play a ``central role'' in Huang's hiring, but even if he had, 
as the leader of his party, it is perfectly appropriate for the 
President to take an interest in DNC personnel matters, 
particularly when the DNC was reaching out to a new community, 
Asian-Americans. Nor does the fact that Huang was hired to 
raise money in the Asian-American community mean that there was 
a plan to funnel foreign money into federal elections. With the 
November 1995 initiation of the Asian Pacific American 
Leadership Council, the DNC was formally reaching out to a new 
community; 84 previously, the DNC had established 
fundraising and outreach programs in other minority communities 
such as in the Hispanic, African-American, and Jewish 
communities, and it also had fundraising and outreach to 
women's groups.85
---------------------------------------------------------------------------
    \84\ Donald L. Fowler deposition, 5/21/97, pp. 190-191; Richard L. 
Sullivan deposition, 6/5/97, pp. 12-13.
    \85\ Richard L. Sullivan deposition, 6/5/97, p. 9.
---------------------------------------------------------------------------
     The Majority's claim that the President ``played a 
central role'' in Huang's hiring is supported by misleading, 
and inaccurately characterized testimony. The Majority cites to 
press accounts and unsworn interviews to describe a 
conversation between DNC Finance Chairman Marvin Rosen and the 
President relating to Huang, despite the fact that the 
Committee deposed Rosen and therefore sworn testimony was 
available. The Majority fails to mention that Rosen stated in 
his deposition that his conversation with the President 
regarding Huang was ``very brief, seconds of time.'' 
86 The Majority's conclusion that ``the President 
himself intervened'' with the DNC to hire Huang is supported 
only by this brief conversation that occurred when the 
President happened to see Rosen in the receiving line at a 
fundraiser. In addition, DNC National Chairman Don Fowler 
testified that he personally made the decision to hire Huang, 
without consulting anyone from the White House and without 
knowledge of the President speaking to Rosen.87
---------------------------------------------------------------------------
    \86\ Marvin S. Rosen deposition, 5/19/97, pp. 139-140.
    \87\ Donald L. Fowler deposition, 5/19/97, p. 171.
---------------------------------------------------------------------------
     The Majority Report falsely implies that Huang 
received no training. Despite a discussion about Huang's hiring 
and conversations about his training (and additional discussion 
of this subject in other chapters), the Majority fails to 
mention the uncontested fact that Huang was trained. The 
Majority extensively investigated this issue, asking numerous 
witnesses about Huang's training and developed a significant 
record that clearly establishes that Huang was trained. Huang 
was placed at a group training session by fellow Finance 
staffer and office mate Sam Newman; 88 a copy of the 
DNC's legal guidelines for fundraising was found in his files; 
89 DNC General Counsel Joseph Sandler testified that 
after reviewing checks with Huang after a fundraising event, 
Sandler determined that Huang was familiar with the laws and 
guidelines by which he was to raise money; 90 and 
Sullivan testified that Sandler communicated this to 
him.91 Despite this uncontested record developed by 
the Majority, there is absolutely no mention of these facts in 
the Majority Report, which instead focuses on discussions 
before Huang was hired regarding the type of training that 
Huang should receive. These omissions leave the reader with the 
false impression that Huang was not trained.
---------------------------------------------------------------------------
    \88\ Samuel Newman deposition, 7/17/97, pp. 142-143.
    \89\ Joseph E. Sandler, 9/10/97 Hrg., p. 13.
    \90\ Joseph E. Sandler deposition, 8/21/97, p. 17. Sandler also 
testified that he communicated this level of comfort to either DNC 
Finance Director Richard Sullivan or DNC Treasurer Scott Pastrick.
    \91\ Richard L. Sullivan deposition, 6/5/97, p. 23.
---------------------------------------------------------------------------

    response to majority report chapter 16: ``john huang's illegal 
                        fundraising at the dnc''

    In this chapter, the Majority discusses Huang's fundraising 
while at the DNC. The Majority states that there were concerns 
regarding Huang's fundraising before he even undertook his 
first event and concludes that Huang's involvement in and/or 
organization of several events should have been a ``warning 
sign'' for the DNC.
    In so doing, however, the Majority draws conclusions that 
are not supported by the evidence.
     The Majority Report falsely claims that there is 
``contradictory testimony on whether Sandler trained Huang.'' 
The testimony is absolutely consistent that Huang was trained 
(see Response to Majority Chapter 15). In this chapter the 
Majority tries to exploit a minor contradiction regarding the 
``type'' of training Huang received--the training given to all 
DNC fundraisers or a special training just for Huang. Even this 
contradiction has been reconciled in testimony before the 
Committee: former DNC Finance Director Richard Sullivan's 
understanding that Huang received private training 
92 most likely resulted from the session in which 
Sandler reviewed checks with Huang after his first 
event.93
---------------------------------------------------------------------------
    \92\ Richard L. Sullivan deposition, 6/5/97, pp. 23-24.
    \93\ Joseph E. Sandler deposition, 8/21/97, p. 15.
---------------------------------------------------------------------------
     The Majority Report illogically asserts that 
contributions solicited by Huang and returned by him in March 
of 1996 were a ``warning sign.'' Far from being evidence that 
Huang was acting improperly, Huang's returns of contributions 
suggest that he knew the rules and was following them by 
initiating the return of funds he believed to be problematic.
     The Majority Report fails to mention the lack of 
any corroboration of Rawein Soberano's statements regarding 
Huang and the DNC. The alleged lunch between Soberano and Huang 
is not noted on Soberano's calendar, and Soberano says there 
was no credit card, reservation, or other documentary evidence 
of his lunch.\94\ Moreover, the Minority discovered that the 
Majority made undisclosed failed attempts to corroborate 
Soberano's story. When the Minority called the Organization of 
Chinese Americans to determine whether Huang was registered for 
its June 1996 conference in San Francisco (at which Soberano 
claimed that he saw Huang), we learned that Huang was not on 
the registration list, and that the Majority had (undisclosed 
to the Minority) called and received the same information. 
Indeed, the sole corroboration the Majority claims to have for 
Soberano's story is an interview with Jerry Parker (from whom 
Soberano rented office space). It should be noted that the 
Majority neither notified nor invited the Minority to this 
interview. The Majority also failed to provide the Minority 
with either a transcript or a memorandum from this interview. 
According to the Majority, Parker ``confirmed'' in this 
interview that Soberano told him he had lunch with Huang. If 
the Majority had, in fact, obtained corroboration of Soberano's 
allegations, it is unclear why the Majority did not provide 
this information to the Minority or mention the information 
during the public hearing on this subject.
---------------------------------------------------------------------------
    \94\ Rawlein Soberano, 9/16/97 Hrg., pp. 211-212; Rawlein Soberano 
deposition, 5/13/97, pp. 29-31, 39.
---------------------------------------------------------------------------

response to majority report chapter 17: ``The Hsi Lai Temple Fundraiser 
                            and Maria Hsia''

    In this chapter, the Majority discusses the DNC-sponsored 
event at the Hsi Lai Buddhist Temple in Hacienda Heights, 
California. The Majority spends nearly half of the chapter 
discussing the activities of Democratic activist Maria Hsia and 
her associates, including DNC fundraiser John Huang. The 
Majority details the contributions made by monastics since 1993 
who were reimbursed by the Temple. Finally, the Majority 
discusses the DNC event held at the Hsi Lai Temple on April 29, 
1996, focusing on what the Majority believes the Vice President 
knew and when he knew it.
    The Majority's analysis is riddled with inaccuracies and 
baseless conclusions. In the most serious of these conclusions, 
the Majority inaccurately claims that this event was a 
fundraiser, that the Vice President knew this in advance of the 
event, and that he proceeded to participate in this event 
despite this information.
     By mischaracterizing testimony and using documents 
in a misleading fashion, the Majority incorrectly asserts that 
the Vice President and his staff were aware as early as January 
1996 that the Hsi Lai event was to be a fundraiser. The 
Majority cites to several memoranda from White House Deputy 
Chief of Staff Harold Ickes to prove that the Vice President 
was personally and specifically informed of amounts of money 
the Temple event was intended to raise. All of these memoranda 
are spreadsheets with dozens of other events and goals listed; 
none specifically discusses or names the Hsi Lai Temple event. 
Contrary to the Majority's assertion, the Vice President's 
Deputy Chief of Staff, David Strauss, testified in his 
deposition that the Vice President did not look at these 
spreadsheets. There were events on those spreadsheets which 
never, in fact, occurred but which stayed on the list.\95\ In 
making these allegations, the Majority ignores the testimony of 
all witnesses with first-hand knowledge about the scheduling 
practices of the Vice President's office and about the events 
that surrounded the scheduling of the Temple event, including 
Strauss,\96\ Kimberly Tilley \97\ and Ladan Manteghi.\98\ In 
fact, the Majority refused to call Manteghi as a public witness 
despite a letter of request from every Minority Member of the 
Committee. For a full discussion of these events, see Minority 
Chapters 4 and 21.
---------------------------------------------------------------------------
    \95\ David Strauss deposition, 8/14/97, p. 236.
    \96\ David Strauss, 9/5/97 Hrg., pp. 31, 39. And see pp. 41-44 
where Strauss testifies:

        Q: Prior to the time that the newspaper articles appeared 
      in the fall of 1996, did you have any reason to believe 
      that anybody on the Vice President's staff had heard that 
      there was any fundraising engaged in by Ms. Hsia, by virtue 
      of a call from Mr. Huang?
        A: I have no knowledge that anyone did know.
        Q: Did you ever know anything about contributions having 
      been collected or monies having been collected prior to the 
      April 29th event at the Hsi Lai Temple? There has been 
      testimony that a certain amount of money was generated in 
      advance of the event.
        A: I had no knowledge of that.
        Q: Do you have any reason to believe that the Vice 
      President knew anything relative to this event, either 
      prior to the event or that after the event any monies had 
      been collected?
        A: I have no reason to believe that he knew anything 
      about this.

    \97\ Kimberly Tilley deposition, 623/97, p. 124.
    \98\ Ladan Manteghi deposition, 8/26/97, pp. 53-57, 67.
---------------------------------------------------------------------------
     The Majority's basis for concluding that the 
Temple event was a fundraiser ignores significant evidence that 
establishes that it was not. The DNC routinely organizes both 
fundraisers and community outreach events since it is important 
to motivate both financial and political supporters during a 
campaign.\99\ At the Temple event, there was no entrance fee; 
tickets were not collected or sold at the door; the speakers 
did not solicit donations; and many of those who attended did 
not contribute to the DNC at all.\100\ In addition, attendees 
at the event confirm that it did not appear to be a fundraiser. 
Charlie Woo, told Committee investigators that there was ``no 
mention of money at the event.'' \101\ Mona Pasquil, DNC 
Western States political director and former director of Asian-
Pacific affairs, testified that she saw no signs of 
fundraising, such as a table at the door, name tags, checks 
being exchanged, or solicitations for money.\102\ DNC Chairman 
Fowler described it as an ``outreach event'' similar to those 
he attended at churches in the 1960s; not everyone who attended 
also contributed, and there were none of the typical trappings 
of a fundraiser.\103\ Fowler also testified, ``[T]here were 
three people who made presentations there--myself, the temple 
master, and the Vice President. None of the three of us made 
any reference to raising money, contributing money, giving 
money before or after.'' \104\
---------------------------------------------------------------------------
    \99\ See Chapter 25 of the Minority Report for further discussion 
of the distinction between fundraisers and community outreach events.
    \100\ Donald L. Fowler, 9/9/97 Hrg., pp. 26-29.
    \101\ Staff interview of Charlie Woo, 5/30/97.
    \102\ Mona Pasquil deposition, 7/30/97, pp. 59-62.
    \103\ Donald L. Fowler, 9/9/97 Hrg., pp. 26-29, 71-72.
    \104\ Donald L. Fowler, 9/9/97 Hrg., pp. 29.
---------------------------------------------------------------------------
    Persons associated with the Temple who helped organize the 
event also indicated that they did not consider the event to be 
a fundraiser.\105\ Man-Ho, assistant to the Temple abbess, 
testified at the hearing that Temple personnel did not focus on 
fundraising during planning before the event.\106\ In her 
deposition, she said that the guests ``were not required to pay 
a buck for [the] luncheon. . . .'' \107\ She also told the 
Committee that she did not see anything at the event that would 
indicate that it was a fundraiser.\108\ The head of the Temple, 
Venerable Master Hsing Yun, provided a statement to the 
Committee with consistent information.\109\
---------------------------------------------------------------------------
    \105\ Man-Ho Shih, 9/4/97 Hrg., p. 83; Man-Ho Shih deposition, 8/6/
97, pp. 136-146.
    \106\ Buddhist nuns, 9497 Hrg., p. 143.
    \107\ Man-Ho Shih deposition, 8/6/97, pp. 134-37.
    \108\ Man-Ho Shihm 9/4/97 Hrg., pp. 137-139.
    \109\ Statement of the Venerable Master Hsing Yun presented during 
his interview with Committee investigators, 6/17/97, p. 3.
---------------------------------------------------------------------------
    Ignoring this evidence, the Majority concludes that the 
event was a fundraiser based on unfounded inferences:
    According to the Majority's Report, Immigration and 
Naturalization Service official Daniel Hesse heard references 
to money raised, but what the Majority writes that he heard--
``they had raised X amount of dollars''--does not amount to a 
solicitation. A solicitation is generally believed to be a 
request for contributions whereas this is merely a statement of 
what the DNC had raised; far from a request for funds. 
Furthermore, this interview was conducted unilaterally by the 
Majority, and, though the Majority cites the interview as 
having occurred in August of 1997, before the Committee's 
hearings on the Temple event, this information was not 
introduced at the Committee's public hearing which might have 
presented a fuller picture of the event.
    The Majority's reliance on Sherry Shaw's assertion that she 
heard a solicitation from a luncheon speaker is also not 
credible; not one of the approximately 100 others in the 
audience claims to have heard this. Moreover, Shaw's assertion 
does not comport with Hesse's statements to the Majority or the 
recollections of Charlie Woo (another attendee) or Boston Globe 
reporter John Aloyisius Farrell. According to the Majority, in 
addition to Shaw's statement to Committee FBI agents on May 14, 
1997, Shaw submitted a sworn statement to the Committee in 
August 1997 which contained this information. Again, this was 
the month before Committee hearings on the Temple event, and 
once again, the Majority did not divulge this material which it 
believed to have been relevant to the investigation.
     The Majority inaccurately states that the 
solicitation of contributions by Hsia assistant Matt Gorman and 
the nuns proves the Temple event was a fundraiser. While Huang 
and Hsia used the event to encourage contributions to the DNC 
the day after the event occurred, there is no evidence that the 
DNC was aware of these activities nor do the activities 
establish that the Temple event was a fundraiser.
     The Majority incorrectly asserts that the Vice 
President's March 15, 1996, meeting with Master Hsing Yun was 
set up for the sole purpose of the Master inviting the Vice 
President to the Hsi Lai Temple for a DNC event. Temple 
administrator Man Ho testified that the Master was not 
particularly interested in going to Washington for a possible 
meeting with the Vice President.\110\ Although the meeting took 
place, it lasted only 10 minutes.\111\ Briefing memos prepared 
for the Vice President for the meeting do not mention a DNC 
event at the Temple in April of 1996; the Master simply invited 
the Vice President to visit the Temple.\112\ Moreover, there is 
no evidence that a DNC event was ever discussed, and the 
Majority's assertion to the contrary is nothing more than 
speculation.
---------------------------------------------------------------------------
    \110\ Man-Ho Shih deposition, 8/6/97, p. 96.
    \111\ Statement of the Venerable Master Hsing Yun presented during 
his interview with Committee investigators, 6/17/97.
    \112\ David Strauss, 9/5/97 Hrg., p. 12.
---------------------------------------------------------------------------
     The Majority incorrectly states that there never 
really was a second event planned at a restaurant in Southern 
California for April 29, 1996. While there is little 
testamentary evidence that such an event was planned, this does 
not prove that Huang and Hsia never contemplated such an event. 
At least two documents produced by Hsia's consulting firm, Hsia 
& Associates, show that such an event was contemplated by Hsia 
at one time.\113\ And Charlie Woo, an attendee at the April 29, 
1996 event, told Committee FBI detailees that Huang originally 
invited him to attend an event at a restaurant in Southern 
California and later called to tell him that the location had 
been changed to the Hsi Lai Temple.\114\
---------------------------------------------------------------------------
    \113\ Exhibit 772: 3/23/96 letter from Maria Hsia to the Vice 
President, SEN 01719; Invitation to DNC Asian Pacific American 
Leadership Council event at Harbour Village Restaurant in Monterey 
Park, California; the name of the restaurant is crossed out and Hsi Lai 
Temple is written in, SEN 00111.
    \114\ Staff interview of Charlie Woo, 5/30/97; see also Richard 
Sullivan deposition, 6/25/97, pp. 21-22.
---------------------------------------------------------------------------
     The Majority concludes that the nuns' alteration 
and destruction of documents constituted ``deliberate 
destruction of evidence'' and was done to protect the Vice 
President and Maria Hsia.  After the Temple events were 
publicized, two nuns involved in Temple bookkeeping and 
administration altered and destroyed some documents.\115\ There 
is, however, absolutely no evidence that their actions were 
undertaken with the knowledge or consent of anyone at the White 
House or the DNC. Nonetheless, the evidence does indicate that 
at least some Temple officials were conscious of possible 
wrongdoing. Yi Chu, the Temple bookkeeper, testified that she 
knew the Temple could not contribute directly, in its own name, 
which is why she had to go through the process of finding 
individuals to write checks.\116\
---------------------------------------------------------------------------
    \115\ Man-Ho Shih, 9/4/97 Hrg., pp. 34-35; Yi Chu, 9/4/97 Hrg., pp. 
60-61.
    \116\Yi Chu deposition, 8/7/97, p. 31.
---------------------------------------------------------------------------
     The Majority falsely implies that beginning in the 
1980s, Maria Hsia had inappropriate access to then-Senator Gore 
based on her fundraising activities. What the Majority does not 
mention is that fundraising and political outreach 
organizations are not only an appropriate and legitimate means 
of stimulating public interest in the democratic process, they 
are also commonplace. The Majority's insinuation that when 
organizations and leaders within the Asian-American community 
participate in these activities, something untoward or sinister 
must be involved is disturbing. In the 1980s, Hsia helped form 
the Pacific Leadership Council and was an active and open 
fundraiser in the Asian-American community. There is nothing 
sinister about the Vice President reaching out to and raising 
money in this community. Hsia was one of hundreds of people who 
raised money for the Democrats throughout this country.
     The Majority repeats its allegations that Maria 
Hsia is an ``agent,'' without stating that the classified 
information that forms the basis for this allegation--certain 
activities she undertook while an immigration consultant in the 
early 1990s--has no connection whatsoever to Hsia's fundraising 
for the Democratic party.\117\
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    \117\ See Minority Chapter 2. See also Affidavit of Maria Hsia, 2/
98.
---------------------------------------------------------------------------
     In this chapter, the Majority also takes the 
opportunity to mischaracterize the Democratic Senatorial 
Campaign Committee's (``DSCC's'') tally program. The Majority 
falsely states that the tally program serves as a means by 
which contributors can ``earmark'' large ``soft money'' 
contributions to particular senate candidates in circumvention 
of the FECA's hard money limits. The Majority also incorrectly 
suggests that the tally program was ``ultimately found to be 
illegal'' and terminated. The Majority is wrong on all scores. 
First, the Majority is incorrect in its characterization of the 
tally program as a program that permits ``earmarking.'' In 
fact, the Federal Election Commission rejected this precise 
claim when it was made by the National Republican Senatorial 
Committee in 1996.\118\ When it dismissed that complaint, the 
FEC's general counsel stated that ``there is no evidence that 
the DSCC accepted earmarked tallied contributions or pass [sic] 
earmarked contributions on to the Democratic Senate candidates 
in the form of coordinated party expenditures.''\119\ In fact, 
an earlier agreement between the DSCC and FEC was premised on 
the fact that the DSCC did not earmark tallied contributions--
although some contributors' participants in the program may 
have been confused. As the FEC stated in its April 14, 1997, 
letter to the DSCC dismissing the NRSC's complaint about the 
tally program ``[u]nderlying the need for the remedial 
requirements in the August 1995, conciliation agreement was the 
belief that participants in the tally program did not 
understand how the tally program differed from earmarking.'' 
The FEC dismissed allegations that the 1996 tally program 
amounted to earmarking or violated the law.
---------------------------------------------------------------------------
    \118\ See Complaint filed 9/27/96 in MUR Nos. 4490 and 4502.
    \119\ MUR Nos. 4490 and 4502 at 12 (General Counsel's Report.)
---------------------------------------------------------------------------

Response to Majority Report Chapter 18: ``The China Connection: Summary 
        of Committee's Findings Relating to Efforts of the People's 
        Republic of China to Influence U.S. Policies and Elections.''

    In this chapter, the Majority explains that the Committee's 
investigation of campaign finance activities included both a 
public examination of foreign interests connected to the U.S. 
political process during the 1996 federal election cycle, and 
an examination of classified information regarding possible 
Chinese Government involvement in the U.S. political process. 
The Majority states that the public and classified information 
together warrant a number of conclusions. The Majority 
identifies six individuals with ``extensive ties'' to the 
Chinese Government who ``produced or facilitated foreign 
campaign contributions'' from ``the Greater China area'' and 
states that ``discussions took place and actions were taken 
that suggest . . . that a variety of PRC entities were acting 
to influence U.S. elections.'' The Majority concludes:

          The Committee has learned in sobering detail of a 
        wide range of covert PRC efforts in the U.S. and 
        overseas designed to influence elections in this 
        country. Many of these activities may or may not have 
        been part of a single, coordinated effort. Regardless, 
        a coordinated approach may have evolved over time. 
        Other efforts, though undertaken by PRC government 
        entities, have been characterized as rogue activities. 
        Such fine distinctions fall beyond the scope of this 
        report.

    Unfortunately, the Majority chapter addressing these 
important issues does not lay out the information received by 
the Committee and then draw clear conclusions based on that 
evidence. For example, the chapter does not identify sources 
for most of its conclusions or state whether the information 
for those conclusions came from the Committee's public 
investigation or from the Committee's review of classified 
information. In fact, the vast majority of the statements made 
in the Majority chapter are derived from public information 
that has been available to the Committee and the public for 
some time.
    Another example of this obfuscation is the Majority's 
identification of six individuals who it states have 
``extensive'' ties to China or the Chinese Government followed 
by its assertion that these ties are demonstrated by political 
contributions or other activities that in fact have stronger 
connections to Indonesia, Taiwan, Cambodia or Hong Kong. Having 
found that there is very little evidence connecting the 
individuals it has targeted to China, the Majority curiously 
refers to these Asian countries and the then-British controlled 
property as the ``Greater China'' area.
    Along the way, the Majority chapter also makes a number of 
inaccurate or exaggerated statements to support its case. The 
Majority chapter contains errors in fact and characterization 
even when they are based on public information. Such false and 
exaggerated statements based on public information raise 
significant questions about the accuracy of the Majority's 
conclusions based on classified (``non-public'') information, 
which is not available for independent public assessment.\120\
---------------------------------------------------------------------------
    \120\ The conclusions based on classified information, as stated in 
the Majority and Minority Reports, were not approved by any Executive 
Branch agency. Letter from George J. Tenet, Director, Central 
Intelligence Agency to Senator John Glenn, 2/18/98; Letter from George 
J. Tenet to Chairman Fred Thompson, 2/18/98; Letter from Robert M. 
Bryant, Deputy Director, FBI to Senator John Glenn, 2/25/98. See also 
Letter from Andrew Fois, Assistant Attorney General, Department of 
Justice to Chairman Fred Thompson, 7/11/97.
---------------------------------------------------------------------------
    Most important is the fact that, after the Committee's 
year-long investigation into the ``China Plan,'' the Majority 
chapter does not provide clear or useful information to the 
public. For ananalysis of the classified information received 
by the Committee during its investigation, see Chapter 2 of this 
Minority Report.
    The Minority responds to some of the statements set forth 
in the Majority chapter:
     Most of the Majority's conclusions are based on 
media allegations and public information that has been 
available to the Committee and the public for months. 
Throughout the Majority's chapter on the China Plan, there are 
bold assertions about connections to Chinese Government 
officials and other fundraising activities without clarifying 
upon what information those assertions are based. As a result, 
the Majority makes no clear statements about what conclusions 
can be derived from public information presented to the 
Committee and what conclusions are drawn from classified (or 
``non-public'') information. This approach implies that the 
Committee received more non-public information than it actually 
did to support the Majority's conclusions.
     The Majority's quotations of newspaper articles do 
not appropriately or accurately describe information made 
available directly to the Committee. Reliance in a Senate 
Committee report on the media's second hand characterizations 
of non-public information is unwarranted, particularly here 
where the Committee had the direct information available for 
its review.121
---------------------------------------------------------------------------
    \121\ For example, the Majority chapter cites a February 13, 1997 
Washington Post article that stated that Executive Branch agencies had 
discovered information that the Chinese Government ``sought to direct 
contributions from foreign sources to the Democratic National Committee 
before the 1996 presidential campaign.'' Several months later, however, 
the Committee received direct testimony from the Executive Branch 
agencies themselves that, based on the information available at the 
time, there was no indication that the China Plan was directed at 
influencing the presidential race or that it had affected that race 
with campaign contributions. Closed Committee Hearing, 7/28/97, pp. 41-
44, 54. The Majority chapter also cites a March 9, 1997 Washington Post 
article in order to describe a 1996 FBI briefing to members of Congress 
regarding the China Plan. Several months after that article appeared, 
however, the Committee received direct information and testimony from 
the Executive Branch agencies about this and similar briefings. Closed 
Committee Hearing, 7/29/97, p. 19-12, 84.
---------------------------------------------------------------------------
     The Majority's chapter on the China Plan fails to 
make any clear conclusions, demonstrated by the fact that the 
chapter contains 25 statements that include phrases such as 
``may or may not,'' ``possibly,'' ``believed to be,'' 
``indicated,'' and ``suggest.''
     The Majority chapter also makes a number of 
contradictory assertions and also ignores, without explanation, 
crucial facts regarding the foreign connections uncovered in 
the Committee's investigation. Some examples are:
           The Majority does not explain how 
        contributions from Indonesia, Taiwan, Cambodia or Hong 
        Kong demonstrate that the Chinese Government ``may or 
        may not'' have funneled money into political campaigns. 
        The contributions and activities listed by the Majority 
        in its chapter derive from a variety of independent 
        Asian countries. The Majority's use of the term 
        ``Greater China'' or the ``Greater China Area'' is an 
        unjustifiable attempt to bend the facts to make all 
        connections to every Asian country look like a 
        connection to China.
           The Majority does not explain why it has 
        focused exclusively on certain individuals' ``ties to 
        China'' without recognizing that the individuals 
        targeted in its chapter have equal, if not stronger, 
        ties to Taiwan and Indonesia. It is clear from the 
        Majority chapter itself that most of the individuals it 
        lists as having ``extensive ties'' to China or the 
        Chinese Government in fact have strong ties to Taiwan, 
        Indonesia or Hong Kong, entities not under the control 
        of the Chinese Government during the 1996 election 
        cycle. For example, John Huang was raised in Taiwan 
        before moving to the United States in 1969 and becoming 
        an American citizen; Maria Hsia was born in Taiwan and 
        is an American who continues to have strong family and 
        institutional ties to that country; and the Riadys are 
        Indonesians with business interests around the world. 
        The Majority chapter provides no explanation or 
        analysis of why it ignored ties to other Asian 
        countries in order to focus exclusively on China or why 
        it assumes all ties to any Asian country demonstrates a 
        tie to China. The Majority also provides no explanation 
        for why it ignored non-public information about other 
        countries and their political activities in the United 
        States. See Minority Chapter 2, Information Not Pursued 
        by the Committee.
           The Majority ignores the contradiction in 
        its assertion that connections to Taiwan demonstrate 
        connections to China. The Majority states in its Report 
        that Taiwan is considered by China to be ``a rogue 
        province'' but nonetheless assumes that certain 
        individuals'' connections to Taiwan may also 
        demonstrate connections to China or to the China Plan.
           The Majority chapter explains that a China 
        Plan was developed after Taiwanese President Lee's 
        visit to the United States in the spring of 1995, but 
        does not explain why a number of the activities it 
        highlights occurred before that time period. The 
        Majority states that after Taiwanese President Lee's 
        visit to the U.S. in 1995, the Chinese Government 
        ``[s]ecretly'' developed a plan that went beyond 
        increasing lobbying efforts to include ``influencing 
        U.S. policies and elections through, among other means, 
        financing election campaigns.'' The Majority then 
        highlights, among other things, a 1989 trip to Taiwan 
        organized by Maria Hsia, 1993 political contributions 
        from Lippo Group subsidiaries, and 1993 ``meetings'' 
        involving Shen Jureun. Whether these activities are 
        connected to the Chinese Government is one question. 
        Another question is why these activities are 
        highlighted when the Committee was informed in closed-
        door proceedings that prior to 1995 and the formulation 
        of the so-called China Plan, the Chinese Government's 
        efforts to promote its interests in the United States 
        were focused almost exclusively on using traditional 
        diplomatic means.122
---------------------------------------------------------------------------
    \122\ Closed Committee Hearing, 7/28/97, p. 5-6.
---------------------------------------------------------------------------
     The Majority chapter also makes assertions based 
on public information that are unsupported by either publicly 
available or classified information. This raises serious 
questions about the accuracy of the Majority's assertions that 
it claims are based on classified information not available to 
the public. A few examples of the Majority's misstatement and 
exaggerations based on public information are:
           The Majority inaccurately claims that in 
        September 1993, contributions to the DNC by three Lippo 
        Group subsidiaries located in California were `` paid 
        with foreign money'' from Jakarta, Indonesia. The 
        Majority then uses this unproven conclusion to tie the 
        supposed foreign contributions to ``meetings'' between 
        the Vice President, and John Huang and Shen Jueren. 
        According to the Majority, Shen is the head of a 
        commercial enterprise ``identified as a PRC 
        intelligence gathering operation.''
          There are several inaccuracies in these Majority 
        assertions.
          First, while it is true that the Committee received 
        evidence that in August of 1992, one subsidiary of the 
        Lippo Group made a $50,000 contribution to the DNC and, 
        according to a reimbursement requests obtained by the 
        Committee, the subsidiary was likely reimbursed for 
        this contribution from Indonesia, no such evidence was 
        received regarding the 1993 contributions. The 
        Committee reviewed the same reimbursement forms for the 
        three subsidiaries that contributed to the DNC in 1993 
        and found no document requesting reimbursement for 
        those checks.123 In addition, the Majority's 
        general citation to the testimony of a LippoBank 
        employee does not establish that the 1993 contribution 
        was reimbursed.124
---------------------------------------------------------------------------
    \123\ Lippo Group holding companies requests for reimbursements of 
expenses from August to December 1993, (HHH 0236-37).
    \124\ See Juliana Utomo, 7/15/97, Hrg. pp. 14, 53. (Utomo did not 
testify that the 1993 contributions were reimbursed and, in fact, she 
did not even take over the relevant responsibility when working for 
these subsidiaries until 1994.)
---------------------------------------------------------------------------
          Second, the Majority apparently makes this new 
        allegation about the 1993 contributions so it can 
        falsely assert that foreign funds were connected to two 
        ``meetings'' attended by Huang and Vice President Gore 
        in that same month of 1993. Even here, the Majority has 
        it wrong. The Majority states that ``the day after 
        Huang wrote'' the checks, he ``escorted Shen Jueren to 
        a White House meeting with Gore's chief of staff, Jack 
        Quinn, and may have met with Gore as well.'' 
        125 Public documents received by the 
        Committee, however, establish that Huang and Shen 
        Jueren did not have a meeting with Vice President Gore 
        on that day.126 Regarding the second alleged 
        ``meeting,'' the Majority is referring to a ``DNC 
        Reception/Dinner'' in Santa Monica attended by the Vice 
        President and approximately 50 other people. The Vice 
        President was not seated at the same table as 
        Shen.127 The Majority assertions that Shen 
        had a meeting in the White House with Vice President 
        Gore is not supported and its description of a DNC 
        reception and dinner as an additional ``meeting'' 
        between Shen and Vice President Gore is a 
        mischaracterization of the facts.
---------------------------------------------------------------------------
    \125\ The Majority chapter, as provided to the media in February 
1988 and as provided to the Minority in ``final'' form on March 2, 
1998, stated that ``Huang escorted Shen Jueren to a White House meeting 
with Gore and his chief of staff, Jack Quinn.'' On March 3, 1998, the 
Majority changed the language to assert that Huang ``may'' have met 
with Vice President Gore on that day. This change was welcome, but as 
described below, the Majority has continued to make this less 
definitive assertion despite the fact that the evidence does not 
suggest that a meeting with Vice President Gore occurred on that date.
    \126\ The first ``meeting'' was in reality a ``stop by'' meeting 
with Jack Quinn, a staff member in the Office of the Vice President. 
Letter from Huang to Quinn, 10/07/93 (EOP 049490). In fact, despite the 
Majority's assertions in its report about the possibility of a 
``meeting'' with Vice President Gore, the Majority never requested the 
schedules for the Vice President or Quinn on that day, or requested any 
other information from the Vice President's office or Quinn about this 
alleged meeting. As a result, the schedules were not received by the 
Committee because they were not requested, nor are they responsive to 
other Committee requests. In order to assess the Majority's new 
allegation in its Report, the Minority requested documents and 
information regarding the activities of that day. In addition to the 
fact that Huang's letter to Quinn makes clear that Huang and Shen did 
not meet with the Vice President on September 24, 1997, documents also 
establish that no ``meeting'' took place. Schedule of Vice President 
Gore for 9/24/93; Schedule of Jack Quinn for 9/24/93. Instead, it 
appears that Huang, Shen and Shen's assistant dropped by for a visit 
with Quinn. Letter from Huang to Quinn, 10/17/93 (EOP 049490).
    \127\ Briefing papers for Vice President Gore, DNC Reception, 3/27/
93( EOP 000959J-64J) (approximately 50 attendees and Shen Jureaun is 
not listed as one of the few people seated at the Vice President's 
table.). Earlier that day, Vice President Gore met with over 20 Asian 
American leaders at a Los Angeles law firm for approximately 40 
minutes. In its chapter on Huang's activities while at the Lippo Bank, 
the Majority asserts that an audio tape proves that Shen was present at 
that event as well. However, the attendance list for that afternoon 
event does not include Shen and the audio tape also does not refer to 
Jueren. Briefing papers for Vice President Gore, Meeting with Asian 
American Leaders, 4:35-5:15, 9/27/93 (EOP 000965-69); Audio tape, 9/27/
93, White House Communications Agency (Produced to the Committee 10/
97). See Minority Response to Majority Chapter 13.
---------------------------------------------------------------------------
          Third, the Majority's description of ``China 
        Resources Holding,'' a company then ``head[ed]'' by 
        Shen Jueren who retired in 1995, as one ``identified as 
        a PRC intelligence-gathering operation'' is apparently 
        designed to imply there was contact between a Chinese 
        Government intelligence official and the Vice 
        President. In addition to falsely stating that the 1993 
        contributions came ``from foreign funds'' that had some 
        connection to ``meetings,'' the Majority's description 
        of China Resources Holding is also an exaggeration. 
        According to public information, China Resources 
        Holding is apparently the current name of the entity 
        once called, and often still referred to as, China 
        Resources.128 The company has been located 
        in Hong Kong for 50 years and engages in trading and 
        investment involving ``retailing, property development, 
        hotels and infrastructure,'' with an estimated asset 
        value of 6.5 to 8 billion dollars, 76 percent of which 
        is in Hong Kong, 17 percent in Mainland China and 7 
        percent overseas.129 The organization is 
        also known to be a Chinese Governmen-owned trading and 
        import/export intermediary that does business within 
        China as well as with foreign companies, including 
        American companies.130 The Minority does not 
        set forth any conclusions about this organization 
        because the Committee did not conduct a meaningful 
        investigation on the topic. However, the Majority's 
        characterization of the organization as a ``PRC 
        intelligence-gathering operation,'' something the 
        Majority also alleged during the Committee's public 
        hearings in July 1997,131 appears to be an 
        exaggeration of the facts in order to support its 
        unwarranted conclusion.
---------------------------------------------------------------------------
    \128\ See www.chinaresources.co in the internet. The site provides 
information about the group and states that China Resources Holding is 
the current name of the entity once called, and often still referred to 
as, China Resources.
    \129\ Financial Times (London), 8/21/93; Time, 5/5/97; Washington 
Post, 7/18/97; www.chinaresources.co.
    \130\ Time, 5/5/97; Reuters Wire, 3/31/96, 6/26/85, 2/7/96; Xinhua 
Wire, 11/10/92; Washington Post, 7/18/97.
    \131\ Thomas Hampson, 7/15/97 Hrg. pp. 67-73; Senator Bennett, 7/
15/97, Hrg. pp. 67-73.
---------------------------------------------------------------------------
           The Majority's statement that ``Ted Sioeng 
        was one of the DNC's largest contributors during the 
        1996 federal election cycle'' is not supported by the 
        evidence. The Majority states that ``Sioeng, his family 
        and his business enterprises contributed $400,000 to 
        the DNC in 1995 and 1996.'' Public records show, 
        however, that the $400,000 apparently attributed to 
        Sioeng by the Majority includes $250,000 given to the 
        DNC by Sioeng's adult daughter, a U.S. permanent 
        resident and businesswoman, or from companies that she 
        legally controls, and $150,000 from two individuals who 
        are not employed by Sioeng and who are also eligible to 
        contribute to the DNC.132 Although Sioeng is 
        associated with these individuals and attended several 
        DNC events with his family, there certainly is not 
        sufficient evidence to state that Sioeng, who is not 
        attributed with giving any money to the DNC, was one of 
        the ``largest contributors'' to the DNC in the last 
        election cycle.133
---------------------------------------------------------------------------
    \132\ Staff interview with Jessica Elnitiarta, Sioeng's daughter, 
6/19/97; Memorandum of Steven Hendershot, FBI Agent detailed to the 
Committee, ``Re: Jessica Elnitiarta Record Review,'' 8/22/97; Letter 
From Thomas McLish, counsel for Elnitiarta, 6/18/97; FEC Records; Other 
contributions came from Subandi Tanuwidjaja and Kent La, both of whom 
are associated with Sioeng and Elnitiarta, but neither of whom are 
employees of Sioeng's. FEC Records; Staff interview with Jessica 
Elnitiarta, 6/19/97; FBI Special Investigator interview with Kent La, 
5/13/97 (La is an independent distributor who does business with 
Sioeng). This interview was conducted in Chinese by an FBI agent 
detailed to the Committee who transcribed the contents of the interview 
in a report to the Committee dated 5/14/97. There is nothing in the 
interview report that states that La works for Sioeng or that La 
contributed to the DNC based on requests from Sioeng.
    \133\ The Majority also states that Sioeng and his family and 
business interests ``spent over $550,000 on political campaigns and 
organizations in 1995 and 1996.'' This figure is derived from the 
$400,000 contributed to the DNC by his daughter, her companies and 
associates; $100,000 contributed to Matt Fong, a Republican California 
official, apparently by Sioeng's companies in Hong King and $50,000 
contributed by his daughter's company to the National Policy Forum, an 
arm of the RNC. See Chapter 7 of this Minority Report.
---------------------------------------------------------------------------
           The Majority's conclusion that the Chinese 
        Government consulate in Los Angeles gave a hotel owned 
        by Sioeng $3,000 ``for the purpose of making or 
        reimbursing'' Sioeng for a political contribution to a 
        California state candidate is not based on a sufficient 
        investigation. The Majority states that ``the Committee 
        has concluded'' that the Chinese Government provided 
        $3,000 to a hotel in California in order to reimburse 
        Sioeng for a $5,000 political contribution to a 
        Republican California state candidate. The Majority 
        apparently reached this conclusion based only on review 
        of two bank transfers.134 The Majority did 
        not request information from the hotel about the reason 
        for this $3,000 payment and it appears that the payment 
        may have been made to the hotel to cover expenses of a 
        Chinese Government television crew that stayed there in 
        1996.135
---------------------------------------------------------------------------
    \134\ See footnotes 13 and 14 of the Majority chapter.
    \135\ Los Angeles Times, 2/23/97 (stating that attorneys for the 
hotel supplied billing records to verify that the hotel charges were to 
cover the expenses of a Chinese government television crew in early 
1996). The Committee did not request such information and therefore the 
Minority is unable to reach a conclusion about the purpose of the 
payment to the hotel.
---------------------------------------------------------------------------
           The Majority's statement that Charlie Trie's 
        contributions solicited for the Presidential Legal 
        Trust Fund were ``ultimately'' reimbursed with money 
        from Taiwan and Cambodia is an exaggeration. Putting 
        aside the propriety of Trie's unsuccessful attempt to 
        provide the private trust fund with nearly $500,000 in 
        contributions,136 the evidence before the 
        Committee supports the conclusion that of the nearly 
        $500,000 of attempted contributions, only $70,000 came 
        from abroad: $40,000 from Taiwan and $30,000 from 
        Cambodia.137
---------------------------------------------------------------------------
    \136\ In Majority Chapter 20, which discusses Charlie Trie's 
attempted contributions to the Presidential Legal Expense Trust, the 
Majority claims that the amount of Tries' attempted contributions was 
not ``nearly $500,000,'' but instead ``$789,000.'' The Majority's 
figure in this chapter is the accurate one.
    \137\ Zhi Hua Dong deposition, 6/17/97, pp. 98-105. Interviews 
reports and other analyses on this topic written by FBI agents on 
detail to the Committee do not suggest that additional funds came from 
abroad.
---------------------------------------------------------------------------
           The Majority chapter's pattern of misstating 
        and mischaracterizing public information received by 
        the Committee is continued in the Majority's treatment 
        of classified information received by the Committee. 
        When the Executive Branch agencies reviewed the 
        portions of the Majority and Minority report regarding 
        the China Plan, they expressly noted that their review 
        was limited to deleting direct factual errors or 
        classified information. The agencies informed the 
        Committee that they did not take any position regarding 
        conclusory statements made by either the Majority or 
        the Minority based on classified 
        information.138 And indeed, the Minority 
        here responds to some of the most egregious allegations 
        made by the Majority against American citizens and 
        other individuals based on ill founded conclusions of 
        classified and other information.
---------------------------------------------------------------------------
    \138\ The conclusions based on classified information, as stated in 
the Majority and Minority Reports, were not approved by any Executive 
Branch agency. Letter from George J. Tenet, Director, Central 
Intelligence Agency to Senator John Glenn, 2/18/98; Letter from George 
J. Tenet to Chairman Fred Thompson, 2/18/98; Letter from Robert M. 
Bryant, Deputy Director, FBI to Senator John Glenn, 2/25/98. See also 
Letter from Andrew Fois, Assistant Attorney General, Department of 
Justice to Chairman Fred Thompson, 7/11/97.
---------------------------------------------------------------------------
           The Majority's two statements about John 
        Huang do not show that he had ``extensive ties'' to the 
        Chinese Government. The Majority states that Huang is 
        one of six individuals identified by the Majority who 
        had ``extensive ties'' to the Chinese Government and 
        then describes two activities to support its assertion: 
        (1) that in 1993 Huang made a political contribution 
        reimbursed by funds from Indonesia and escorted Shen 
        Jueren to ``two meetings'' and that (2) the Committee 
        obtained a ``single piece of unverified information . . 
        . that indicates that Huang himself may possibly have 
        had a direct financial relationship with the PRC 
        government.'' The first activity is based on public 
        information and the factual inaccuracies of the 
        Majority's assertions regarding these contributions and 
        ``meetings'' are discussed above. The second activity 
        highlighted by the Majority is based on non-public 
        information. Indeed, the facts are derived from an 
        unsubstantiated hearsay speculation gathered well after 
        Haung's campaign finance activities were extensively 
        publicized in the press.
           The Majority's statements about Maria Hsia 
        also do not demonstrate ``extensive ties'' to the 
        Chinese Government. The Majority states that Hsia also 
        had ``extensive ties'' to the Chinese Government and 
        then lists several activities to support its assertion: 
        (1) a long standing relationship with the Hsi Lai 
        Temple in California, (2) contributions ``laundered'' 
        through the Temple, (3) a trip to Taiwan organized by 
        Hsia in 1989, (4) fundraising for the Democratic Party 
        generally, (5) attendance at the Santa Monica 
        ``meeting'' attended by Shen Jueren in 1993, (6) 
        activities considered to constitute being an agent for 
        the Chinese Government and (7) information that Hsia 
        worked with Sioeng and Huang to identify donors for the 
        Democratic Party. The first four activities, which are 
        based solely on public information, demonstrate that 
        Hsia has a long-standing relationship with Taiwan as 
        well as with a Temple in California that is both 
        wealthy and ardently pro-Taiwan. The fifth activity, 
        also based on public information, is Hsia's attendance 
        at a 1993 ``meeting'' with Shen Jureun. This meeting, 
        however, was in fact a ``DNC Reception/Dinner'' in 
        California attended by approximately 50 individuals.
           Regarding the sixth activity mentioned by 
        the Majority, it should be noted that the Committee 
        received no information suggesting that Hsia's 
        fundraising activities were connected to the Chinese 
        Government. Indeed, the information characterized by 
        the Majority from the classified information regarded 
        some of Hsia's duties while an immigration consultant 
        in California in the early to mid 1990s. In an 
        affidavit submitted to the Committee, Hsia explains 
        those duties, raising doubt regarding any improper ties 
        to China. The allegations made by the Majority against 
        an American citizen without a thorough analysis of the 
        facts is troubling. The final activity of Hsia 
        described by the Majority, number seven above, is again 
        based on the same non-public information in which Huang 
        is referred, which contained a hearsay speculation 
        gathered well after allegations of fundraising 
        improprieties against these individuals were publicized 
        in the media.
           The Majority's assertions that the Committee 
        uncovered connections between the Riadys and a Chinese 
        intelligence entity does not imply that the Riadys were 
        involved in foreign spy or similar intelligence 
        activities. The Majority's conclusions about the 
        Riady's business interests and their connections to 
        Chinese intelligence sources is based primarily on 
        public information presented to the Committee during 
        its open proceedings.139 The non-public 
        information received by the Committee supports the 
        conclusion that the Riady's business dealings may have 
        involved a relationship with a Chinese intelligence 
        entity, but does not support the implication that the 
        Riadys were involved in foreign spy or other similar 
        intelligence activity. The Minority agrees that the 
        Riadys have ties to China but is unable to assess 
        whether those ties are ``extensive'' or whether they 
        are appropriate ties based primarily on business 
        dealings within China.
---------------------------------------------------------------------------
    \139\ Thomas Hampson, 7/15/97, Hrg. pp. 67-73.
---------------------------------------------------------------------------
           The Majority Report's assertions regarding 
        Charlie Trie are based solely on public information 
        received by the Committee. The Majority does not make 
        any conclusion about Trie based on non-public 
        information and the Minority agrees with this decision. 
        For information about Trie, see Chapter 5 of the 
        Minority Report.

                               conclusion

    In describing the basic elements of the China Plan, the 
Majority provides information that the plan, for the most part, 
contemplated legitimate activities that have been undertaken by 
most other countries for years. However, in order to expand on 
the plan and its significance in the 1996 election cycle, the 
Majority makes a series of speculative assertions and 
conclusions. The Majority strings together a number of 
activities connected to several Asian countries, labels those 
countries the ``Greater China Area,'' and implies or assumes 
that they ``may or may not'' be related to the China Plan or 
the Chinese Government. This is a necessary predicate for the 
Majority to establish because the activities the Majority lists 
in support of its theory have limited connections to China. 
Huang's contribution though a Lippo Group subsidiary in 1993 is 
connected to Indonesia; Trie's attempted contributions to the 
President's Legal Expense Trust was partially reimbursed by 
funds connected to Taiwan and Cambodia; Hsia's association with 
the Hsi Lai Temple is connected to Taiwan; and the Riadys are 
connected to Indonesia and have global business interests.
    The incidents mentioned by the Majority in its China 
Connection chapter that actually show any possible connection 
to China are (1) alleged ``meetings'' with Shen Jueren in 1993; 
(2) Hsia's immigration work on behalf of Chinese nationals, (3) 
the Riady's business dealings with China Resources; (4) an 
event attended by Wang Jun 140 and (4) Sioeng's 
contacts and business interests in China. While these 
connections are important, they are greatly exaggerated by the 
Majority chapter. The Minority does not downplay the 
seriousness of the allegations of foreign connections that were 
exposed by the Committee's public hearings or closed 
proceedings. In fact, as stated in Chapter 2 of the Minority 
Report, the allegations and information raised legitimate 
questions about contributions from a number of countries making 
their way into the 1996 federal elections.
---------------------------------------------------------------------------
    \140\ The Majority repeats its characterization of Wang Jun as a 
``Chinese arms'' dealer, despite the fact that the Committee was 
informed that Wang Jun is primarily associated with the Chinese 
investment company CITIC, which has a board of international advisors 
that includes prominent Americans. Staff interview with Robert 
Suettinger, Director, Asian Affairs, National Security Council, 6/3/97. 
The Minority does not make any conclusions about Wang Jun, but believes 
that this repeated characterization of Wang Jun by the Majority is, at 
best, simplistic.
---------------------------------------------------------------------------
    The Majority's treatment of the important issue of foreign 
influence in the 1996 election cycle and its highly 
questionable and damaging conclusions based on the information 
presented to the Committee were unfortunately driven by a 
conclusion looking for supporting information that was not 
available. Ultimately, the information presented to the 
Committee demonstrated a number of foreign contributions making 
their way into both political parties from businessmen and 
companies in a variety of Asian countries. The information 
submitted to the Committee to date, however, does not 
demonstrate that these troubling instances were connected to a 
grand scheme by the Chinese Government to influence our 
electoral process.

Response to Majority Report Chapter 19: ``Charlie Trie and Ng Lap 
        Seng's Laundered Contributions to the DNC''

    In this chapter, the Majority analyzes Charlie Trie's 
contributions to the DNC and possible involvement in 
contribution conduit schemes, and concludes that Trie used 
foreign funds supplied by Macao businessman Ng Lap Seng to pay 
for both his own contributions and to reimburse others for 
making contributions to the DNC. The Majority also implies that 
the DNC failed to return a conduit contribution by Xiping Wang.
    The Minority generally agrees with the Majority's 
conclusions in this chapter, but notes that several facts have 
been omitted. For example, the Committee did not receive 
evidence that most of the money Trie raised for the DNC 
involved conduit funds. In addition, the Majority fails to 
mention that the DNC returned the Xiping Wang contribution to 
the U.S. Treasury.
     The Majority concludes that Trie used foreign 
funds supplied by Macao businessman Ng Lap Seng to pay for both 
his own contributions and to reimburse others for making 
contributions to the DNC. The Minority agrees with the 
Majority's conclusion, but disagrees that ``most'' of the money 
Trie raised for the DNC involved conduit funds; for example, 
there is no evidence that Trie reimbursed the $325,000 
contribution by Yogesh Gandhi which comprises more than half of 
the funds attributed to Trie by the DNC.
     The Majority suggests that the DNC has not 
returned Xiping Wang's contribution. The Majority references 
Xiping Wang's testimony indicating that she was not reimbursed 
by the DNC for her contribution. However, the Majority fails to 
note that the DNC did in fact return the contribution--it sent 
the money to the United States Treasury after failing in an 
attempt to locate Wang and it informed her attorney of that 
fact.141
---------------------------------------------------------------------------
    \141\ Letter from DNC retained counsel, Judah Best, Debevoise & 
Plimpton, to R. Michael Haynes, Esq., attorney for Xiping Wang, 2/20/
98.
---------------------------------------------------------------------------

Response to Majority Report Chapter 20 : ``Charlie Trie's Contributions 
        to the Presidential Legal Expense Trust''

    In this chapter, the Majority analyzes Charlie Trie's 
fundraising efforts on behalf of the Presidential Legal Expense 
Trust (``PLET'' or ``Trust''). The Majority concludes that the 
donations were ``highly questionable,'' may have been 
``coerced,'' and that the Trust acted improperly in how it 
investigated the donations, returned them, altered the Trust's 
accounting procedures, and delayed revealing the matter to the 
news media. The Majority further suggests that Trie's PLET 
fundraising efforts may have been linked to, among other 
things, his appointment to a Presidential Commission and to his 
obtaining an invitation for Wang Jun to a White House coffee.
    The Majority's analysis of Trie's fundraising efforts for 
PLET is deeply flawed. The Majority chapter apparently double 
counts a number of the checks that Trie presented to the Trust; 
notes the bipartisan, impressive credentials of the trustees, 
but then ascribes partisan motives to their actions and; 
speculates on linkages between the PLET donations and Trie's 
Commission appointment, Wang Jun's coffee invitation.
     The Majority incorrectly states that Trie 
presented PLET with donations totaling $789,000. This figure 
apparently double counts a number of the checks. In Trie's 
first meeting with the Trust, the Trust declined to accept 
checks totaling $70,000, whose deficiencies Trie promised to 
correct. Bank records establish that the Trust actually 
deposited $380,000.142 In Trie's second meeting, the 
Trust declined to accept checks which Trie said totaled 
$179,000. In a third meeting, the Trust declined to accept 
checks which Trie said totaled $150,000. The $380,000 bank 
deposit and the $150,000 figure Trie used in the final meeting 
result in a total of $530,000, almost a third less than the 
inflated figure used in the Majority chapter.
---------------------------------------------------------------------------
    \142\ See Michael Cardozo, 7/30/97 Hrg., p. 7. See also Minority 
Chapter 5 on Trie.
---------------------------------------------------------------------------
     The Majority acknowledges the bipartisan, 
impressive credentials of the Trustees, but then attributes 
partisan motives to the trustees. The Majority suggests that 
the trustees sought White House permission for the Trust's 
actions, while failing to acknowledge testimony by the Trust's 
executive director that the Trust never took direction from the 
White House. The Majority also suggests that the trustees hid 
the Trie-related donations to protect the President until after 
the election, while failing to acknowledge that the trustees' 
accounting decisions were made on a unanimous, bipartisan basis 
for substantive reasons. In short, the Majority unfairly 
impugns the motives of the respected, bipartisan trustees and 
fails to acknowledge that the Trust acted prudently and with 
restraint in declining to accept apparently eligible 
contributions.
     The Majority's analysis of a link between Trie's 
Commission appointment and the PLET donations fails to 
acknowledge the documentary evidence that Trie's appointment 
was finalized before he ever met with the Trust.143 
The facts do not establish any link between the PLET donations 
and Trie's Commission appointment, the Wang Jun invitation, or 
Trie letter. The Majority fails to cite any facts linking the 
PLET donations to the DNC's decision to invite Wang Jun to a 
White House coffee as Trie's guest. There is no evidence before 
the Committee that the DNC personnel involved in the coffee 
invitation. DNC officials David Mercer, Richard Sullivan, and 
Marvin Rosen were aware of the PLET donations. In addition, the 
White House personnel involved in responding to Trie's letter 
to the President have stated that they handled the letter 
routinely, using standard language they had developed to 
respond to a host of letters on the same subject.144 
The Majority chapter also fails to acknowledge testimony by FBI 
detailee Jerry Campane that Trie's letter was apparently 
prompted by one of his employees, had no connection to China, 
and no impact on U.S. policy.145
---------------------------------------------------------------------------
    \143\ See Minority Chapter 5, including analysis of a 12/15/95 
White House personnel office memorandum stating that ``President 
Clinton has approved'' Trie for the Commission appointment, and 2/5/96 
White House legal counsel memorandum reporting successful completion of 
a background check and stating that the Commission appointment of Trie 
and another individual ``may proceed.'' Trie first contacted the Trust 
on 3/20/96.
    \144\ See Minority Chapter 5; staff interview of Robert Suettinger, 
director, Asian affairs, National Security Council, 6/3/97.
    \145\ See Minority Chapter 5; Jerry Campane, 7/29/97 Hrg., pp. 58, 
77-78, 95; staff interview of Robert Suettinger, director, Asian 
affairs, National Security Council, 6/3/97.
---------------------------------------------------------------------------
     The Majority labels the donations made by members 
of the Buddhist Ching Hai sect as ``highly questionable'' and, 
in part, ``coerced,'' even though the majority of PLET 
donations met the Trust's requirements. The Majority fails to 
acknowledge the evidence that most of the donors appeared to be 
U.S. citizens who contributed voluntarily to help the 
President.146 The recent indictment of Trie does not 
reference any questionable conduct in connection with the PLET 
donations.
---------------------------------------------------------------------------
    \146\ See Minority Chapter 5; see also Michael Cardozo, 7/30/97 
Hrg., p. 80.; Sally Schwartz deposition, 5/6/97, p. 144; 5/9/96 
memorandum from Sally Schwartz to Michael Cardozo, Document 0078.
---------------------------------------------------------------------------

Response to Majority Report Chapter 21: ``The Saga of Roger Tamraz''

    In this chapter, the Majority describes Tamraz's attempts 
to gain access to U. S. Government officials and concludes that 
in the spring of 1996, senior U.S. Government officials looked 
for ``any reason'' to support Tamraz's pipeline project based 
on his political contributions to the Democratic Party. The 
Majority's conclusion that Tamraz was successful at gaining 
access to U.S. Government officials is correct. Before Tamraz 
made political contributions to the Democratic Party, he met 
with several Government officials. After he made contributions, 
he attended several DNC events where senior Government 
officials were in attendance.
    The Majority's chapter, while containing several statements 
and conclusions with whichthe Minority agrees, also contains 
omissions of significant evidence, assumptions not based on evidence, 
and conclusions contrary to the evidence.
     The Majority Report erroneously states that the 
DNC ``pressure[d] NSC officials to change their position on the 
merits of Tamraz's Caspian Sea Pipeline.'' The Majority claims 
for the first time in its Report that the DNC did more than 
invite Tamraz to DNC events in the spring of 1996. The Majority 
now claims that the DNC and the White House actually pressured 
``NSC officials'' to change U.S. Government policy regarding 
Tamraz's pipeline project. This assertion is contradicted by 
the facts.
    The Majority provides absolutely no citations for its 
conclusion that seven months after U.S. policy was 
implemented,147 senior Government officials were 
looking for ``any reason'' to support Tamraz's pipeline 
proposal. In fact, the evidence contradicts these assertions. 
Tamraz testified that he mentioned his pipeline in March and 
April 1996 during a brief ``introduction to the President'' and 
``for about 30 seconds'' to White House official Thomas 
(``Mack'') McLarty, both at DNC events.148 He 
testified that he described his pipeline proposal during those 
brief encounters as one that would supposedly bring peace to 
the region and jobs to Americans. In response, McLarty asked 
his Energy Department contact, Kyle Simpson, to provide him 
with information about the pipeline project.149
---------------------------------------------------------------------------
    \147\ U.S. policy was implemented in October of 1995 and Tamraz 
played no role in that policy. Sheila Heslin, 9/17/97 Hrg. pp. 5-6, 19-
20, 28, 52, 72.
    \148\ Mack McLarty deposition, 6/30/97, pp. 5-9; Memorandum for 
Jonathan Marks to Ann Ngo, 10/25/95; E-mail from Ira Sockowitz to 
Jonathan Marks, 10/27/95; Melissa Moss Deposition, 6/11/97, pp. 190-
193.
    \149\ Thomas McLarty deposition, 6/30/97, p. 56; Kyle Simpson 
deposition, 6/25/97, p. 26. Simpson testified that requests for 
information about American companies and their projects are not 
uncommon. He explained that the U.S. Government sees value in U.S. 
companies participating in foreign projects although it is ``not 
terribly particular'' about which U.S. company it is if more than one 
is vying for a project. Kyle Simpson deposition, 6/25/97, p.54.
---------------------------------------------------------------------------
    In addition, despite the assertions that this request was 
based on Tamraz's political contributions, both McLarty and 
Simpson testified unequivocally that they were not aware of 
Tamraz's political contributions at the time of this request 
nor did they mention political contributions to 
anyone.150 Tamraz himself testified that he had 
never mentioned political contributions to anyone in the White 
House ``ever.'' 151 The Majority ignores the fact 
that even Jack Carter, another Energy Department official, 
testified that Simpson's request for information about the 
pipeline was not, in any way, an attempt to tie alleged 
information about political contributions to U.S. Government 
support for, or meeting with, Tamraz.152
---------------------------------------------------------------------------
    \150\ Thomas McLarty deposition, 6/30/97, pp. 30. 56-57; Kyle 
Simpson, 9/18/97 Hrg. pp. 50-51; Kyle Simpson deposition, 6/25/97, pp. 
43, 46-48.
    \151\ Roger Tamraz, 9/18/97 Hrg. p. 73.
    \152\ Jack Carter deposition, 6/23/97, pp. 44-45. The Majority 
relies on Carter's testimony to assert that political contributions 
motivate this request for information. However, the Majority at the 
same time asserts that Carter's recollection of other issues are not 
accurate. The Majority also attempts to bolster its decision to rely on 
Carter's testimony by stating that Carter's ``handwritten notes of his 
encounter with Simpson corroborate that they discussed Tamraz and 
suggest also that Simpson made clear President Clinton's interest in 
the matter.'' The statement is correct only as far as it goes. The 
notes say ``do background on Tamraz'' and ``consider distance'' and 
``memo to Pres.'' The notes do not contain any figures or any mention 
of political contributions whatsoever. Exhibit 1199, p. JC-007 (Notes 
of Jack Carter, 4/3/96).
---------------------------------------------------------------------------
     Apparently recognizing that its conclusion is 
unsupported by the evidence, the Majority makes several 
questionable assertions in its attempt to support its assertion 
that U.S. officials were ``looking for any reason'' to change 
U.S. policy in the spring of 1996. The Majority unsuccessfully 
attempts to cast doubt on the testimony of other witnesses 
whose testimony was consistent. The Majority suggests that 
Simpson's testimony about his exchange with Carter may have 
been influenced by a call from McLarty and is less credible 
because he attended a fundraiser in his home town of Houston. 
Simpson's deposition and hearing testimony, however, 
demonstrate that these suggestions are false.153 The 
Majority's allegations regarding a DNC-generated list of 
Tamraz's contributions also ignores the testimony of four 
witnesses. McLarty, Simpson and Carter all testified that they 
have never seen this list 154 and Tamraz himself 
testified that he never showed the list to anybody. Tamraz also 
testified that ``nobody at the White House has ever talked to 
me about contributions, ever.'' 155 Finally, the 
Majority's speculation that Carter was acting at the behest of 
someone else fails to address the inaccuracies of the 
speculation, the contrary testimony by all other witnesses, and 
the documentary evidence that demonstrate what actually 
occurred. See Minority Chapter 30.
---------------------------------------------------------------------------
    \153\ Kyle Simpson deposition, 6/25/97, p. 83 (Simpson called 
McLarty in March of 1997 in response to an answer Simpson gave to a 
reporter that confused a 1995 meeting between Tamraz and Jack Carter 
and McLarty's later request for information on the pipeline); Kyle 
Simpson, 9/18/97, Hrg. pp. 135-38 (Simpson was given a complimentary 
seat at the fundraiser during his tenure at the Energy Department and 
did not raise money for the DNC while he was at the Department.)
    \154\ Thomas McLarty deposition, 6/30/97, p. 30; Kyle Simpson 
deposition, 6/25/97, p. 50; Jack Carter deposition, 6/23/97, p. 32.
    \155\ Roger Tamraz, 9/18/97, Hrg. p. 73.
---------------------------------------------------------------------------
     The Majority Report's discussion of Tamraz's 
attempt to meet with the Vice President is incorrect. The 
Majority recounts that at ``some point in August or early 
September 1995'' the Vice President ``expressed interest in 
Tamraz's pipeline and `requested that Harut Sassounian set up a 
meeting about the proposal.' . . . and that ``[a]s a result, 
Tamraz was invited to a breakfast with the Vice President 
scheduled for October 5, 1995.'' The Majority also states that 
Tamraz was disinvited from the coffee due to Sheila Heslin's 
efforts, but was ``not unhappy'' because he attended a private 
fundraiser on October 2, 1995 and sat at the head table with a 
number of individuals, including Vice President Gore. There are 
several factual misstatements in this version of events. 
Although relatively minor points, the Majority's treatment of 
this issue is the looseness with which the Majority handles the 
facts.
    The Vice President's staff did receive a request that the 
Vice President meet with Sassounian and his associate, Roger 
Tamraz.156 Contrary to the Majority Report, however, 
the response to this request was not to invite Tamraz ``to a 
breakfast with the Vice President scheduled for October 5, 
1995.'' Rather, the evidence establishes that the Vice 
President's staff responded by sending a memorandum to the Vice 
President on September 13, 1995, suggesting that he not agree 
to such a meeting.157 And in fact, after that 
memorandum was sent, the Vice President's staff notified 
Sassounian and Tamraz that no meeting would be scheduled. No 
meeting was ever scheduled, nor did one occur.158
---------------------------------------------------------------------------
    \156\ Exhibit 1127: Memorandum to the Vice President from Leon 
Fuerth, 9/13/95, EOP 45766-67. The Vice President received this request 
after meeting with Sassounian on August 8, 1995, not in ``early 
September,'' as the Majority asserts. Exhibit 1126; Exhibit 1127; EOP 
045766 and EOP 56535, 5639-40.
    \157\ Exhibit 1127: Memorandum to the Vice President from Leon 
Fuerth, 9/13/95, EOP 45766-67.
    \158\ EOP 25006-006; 250-4; Exhibit 1135.
---------------------------------------------------------------------------
    Tamraz's attendance at a October 2 private fundraising 
dinner was scheduled by the DNC and, upon discovering this, the 
Vice President's staff, not Heslin, caused Tamraz to be 
``disinvited'' from the October 5, 1995 coffee. The DNC 
organized the fundraiser on October 2 and decided whom to 
invite.159 On October 3, 1995, having learned that 
the DNC had invited Tamraz to an event the night before, the 
Vice President's staff faxed to the DNC a copy of Vice 
Presidential National Security Advisor Leon Fuerth's September 
13, 1995 memorandum advising the Vice President not to meet 
with Tamraz, apparently to make clear to the DNC that it should 
not invite Tamraz to future events with the Vice 
President.160 It was this fax that resulted in the 
DNC withdrawing Tamraz's invitation to the October 5, 1995 
coffee.
---------------------------------------------------------------------------
    \159\ Exhibit 1136.
    \160\ Exhibit 1137 and Exhibit 1138.
---------------------------------------------------------------------------
    Ultimately, the assertion that the Vice President or the 
DNC responded to a request for an official meeting by inviting 
Tamraz to the October 5 coffee is inaccurate.
     The Majority Report's description of the two phone 
calls between Bob of the CIA and DNC National Chairman Donald 
Fowler is incomplete. The Majority Report states that Fowler 
called Bob of the CIA twice, once on October 19, 1995 and again 
on December 13, 1996. The Majority states that ``Fowler was 
closely engaged in efforts to contact Bob at the CIA'' and that 
Fowler was not truthful in his testimony before the Committee 
when he denied having any memory of calling the CIA. The 
Majority analysis of these phone calls is incomplete.
    First, the Majority's factual statement is correct as far 
as it goes, but evidence omitted--most notable relevant 
references to Bob of the CIA's deposition--casts serious doubt 
on the Majority's conclusion. Regarding the October phone call, 
the Majority ignores the testimony of Bob, who stated that he 
called Fowler first on October 18, 1995 and left his name, and 
possibly his phone numbers, with a receptionist who answered 
the phone. Fowler returned the call the next day.161 
There is no explanation in the Majority Report why they call 
Bob's name and phone number ``classified'' in the context of 
these calls.
---------------------------------------------------------------------------
    \161\ Bob of the CIA deposition, 7/11/97, p. 3.
---------------------------------------------------------------------------
    Second, the Majority also ignores the fact that Bob 
testified that during both phone calls with Fowler his 
affiliation with the CIA was never mentioned. Bob testified 
that during the October phone call he was working undercover, 
that he never mentioned his CIA affiliation and was ``not sure 
that Fowler [knew] who he [was] talking to.''162 Bob 
testified that during the December phone call he still could 
``not say for certain how [Fowler] knew who he was talking to 
because CIA was never mentioned.''163
---------------------------------------------------------------------------
    \162\ Bob of the CIA deposition, 7/11/97, p. 6.
    \163\ Bob of the CIA deposition, 7/11/97, p. 11.
---------------------------------------------------------------------------
    Finally, although the Majority criticizes Bob for lobbying 
the NSC's Sheila Heslin on issues regarding Tamraz, the 
Majority ignores the evidence that establishes that Bob's 
lobbying began in June 1995, long before Bob had his first 
contact with Fowler in October of 1995. In fact, according to 
Heslin, Bob's lobbying from June through October 1995 focused 
on getting Tamraz's proposal accepted by the U.S. Government 
and, accordingly, stopped after October of 1995, probably 
because Bob was aware that U.S. policy regarding the Caspian 
Sea pipeline had already been determined and Tamraz had already 
been excluded.164 Fowler's contacts began after U.S. 
policy was already established and were focused on gaining 
information on Tamraz to permit him to attend DNC events. The 
Majority's conclusion that ``Fowler was closely engaged in 
efforts to contact Bob at the CIA'' is called into serious 
doubt when all the evidence about their two phone conversations 
is examined.
---------------------------------------------------------------------------
    \164\ Sheila Heslin, 9/17/97, Hrg. p. 20; Staff interview with 
Sheila Heslin, 5/28/97.
---------------------------------------------------------------------------
     The Majority Report incorrectly asserts that 
Tamraz was not able to obtain access to Republicans. The 
Majority agrees that in the 1980s, Tamraz ``gave enough money 
to become a Republican Eagle.'' However, the Majority states 
that ``Tamraz received no response to his overtures from the 
Reagan Administration; he could not even gain access to the 
Reagan White House.'' Although Tamraz testified that he did not 
visit the Reagan White House, the evidence before the Committee 
shows that in 1985, the chairman of the Republican National 
Committee, Frank Fahrenkopf, apparently endorsed Tamraz for a 
position in the Reagan Administration by sending a letter to 
Robert Tuttle, Reagan's White House Personnel Director. The 
letter of endorsement was clearly based on Tamraz's political 
contributions to the Republican Party.165 Tuttle 
responded to the letter by requesting that the RNC forward 
Tamraz's resume to the White House. Tamraz also testified that 
he received two letters from President Reagan thanking him for 
his contributions to the Republican Party 166 and 
that during the 1980s, he had access to high level CIA 
political appointees.167 As late as 1997, Tamraz was 
offered meetings with Republican Senators in exchange for 
contributions to the Republican Party.168
---------------------------------------------------------------------------
    \165\ Roger Tamraz deposition, 5/13/97, p. 36; Roger Tamraz, 9/18/
97 Hrg. p. 18; Senator Levin, 9/18/97 Hrg. pp. 64-44; Exhibit 1064M.
    \166\ Roger Tamraz deposition, 5/13/97, p. 40.
    \167\ Roger Tamraz deposition, 5/13/97, pp. 11-14, 123-24; Roger 
Tamraz, 9/18/97 Hrg. pp. 3-4.
    \168\ Roger Tamraz, Hrg. pp. 67, 169-170; Exhibits 1065 & 1066.
---------------------------------------------------------------------------

Response to Majority Chapter 22: ``DNC Efforts to Raise Money in the 
        Indian Gaming Community''

    In this chapter, the Majority purports to show that 
favorable government action with respect to Indian gaming 
issues was purchased by Native American tribes through campaign 
contributions to the DNC. The Majority fails, however, to offer 
proof in support of any allegedly improper quid pro quos, 
choosing instead to rely on innuendo and speculation.
     Contrary to assertions in the Majority Report, 
contributions to Democrats by the Mashantucket Pequots had 
nothing to do with defeating a proposed 35 percent tax on 
Indian casinos. The Majority takes pains to suggest that the 
recent success of some Indian gaming interests has created a 
``perfect recipe for the solicitation of political 
contributions'' because, inter alia, the government can 
pressure tribes through ``its authority to impose a tax on 
gaming revenues.'' The Majority then details what it views as 
Democratic complicity in tribal efforts to avoid a 35 percent 
tax on casino profits which was proposed as part of the 1995 
budget. In a supposed example of the abuse of Government 
authority, the Majority describes a meeting between DNC 
National Chairman Donald Fowler and representatives of the 
Mashantucket Pequot tribe of Connecticut on November 13, 1995. 
Prior to that meeting, A DNC staffer wrote a briefing memo for 
Fowler urging him to remind the tribal representatives that he 
had ``played an active role in expressing'' tribal opposition 
regarding the tax.
    The Majority Report also notes that the Mashantucket 
Pequots donated at least $475,000 to the DNC and to Democratic 
campaigns between 1993 and 1996. (No attempt is made to show 
that the tribe made a contribution close in time to the 
November 13 meeting.) The Majority offers no additional 
evidence in support of its suggestion that the contributions 
made by the Mashantuckets to the DNC were the result of 
pressure applied through the Clinton Administration's 
``authority to impose a tax on gaming revenues.'' Relevant 
facts which the Majority declined to include in their report 
include the following: (i) the 35 percent casino tax was 
proposed by Congressman Bill Archer, chairman of the House Ways 
and Means Committee;169 (ii) the tax was vigorously 
opposed by prominent Republicans, including Senators Pete 
Domenici and John McCain.170 Moreover, by the time 
of Fowler's November 13 meeting with the Mashantucket 
representatives, Republican senators had already publicly 
promised to oppose the casino tax in the House-Senate 
conference, thereby making it highly improbable that the tribe 
felt it necessary to contribute to Democratic causes in order 
to kill the casino tax. Indeed, the tribe has since confirmed 
that it viewed Fowler's attempt to take credit for the killing 
of the tax as an exaggeration, since the tax died in a 
Republican-controlled Congress.171 None of these 
inconvenient facts are mentioned by the Majority.
---------------------------------------------------------------------------
    \169\ New York Daily News, 6/9/97.
    \170\ Albuquerque Tribune, 11/3/95; The Santa Fe New Mexican, 10/
28/95.
    \171\ The Hartford Courant, 2/11/98.
---------------------------------------------------------------------------
     The Majority incorrectly alleges that 
contributions by the Mashantucket Pequot influenced the 
Interior Department's approval of an expansion of the tribe's 
already-existing casino. The most regrettable part of the 
Majority's chapter suggests, in an echo of the controversy 
surrounding Interior Secretary Bruce Babbitt's supposed 
involvement in the Hudson casino matter, that Mashantucket 
contributions influenced Interior's decision to approve two 
separate expansions of the Mashantucket's existing casino over 
community opposition. The Majority offers no evidence, but 
simply notes that Interior approved the expansions and that the 
Mashantucket Pequots made contributions to the DNC. These 
contributions were not even contemporaneous with those actions, 
but simply occurred within the 1996 election cycle. Indeed, the 
Majority frankly acknowledges that its inferences are not 
substantial: ``It is unknown if the DNC assisted the 
[Mashantucket] Pequots in convincing Interior to rule in their 
favor.''
     The Majority unfairly attacks Interior Deputy 
Secretary John Garamendi and Assistant Secretary for Indian 
Affairs Kevin Gover for their tangential involvement in 
fundraising activities prior to assuming their government 
positions. The Majority takes Garamendi to task for having 
suggested to DNC officials that they solicit Mark Nichols, 
chief financial officer of the Cabazon Tribe of Mission 
Indians, for a political contribution. The Majority argues that 
it was ``unseemly'' for Garamendi to be involved in soliciting 
money from tribal leaders over whom he would eventually 
exercise authority in his government position, but the Majority 
does not even contend that Nichols was told that Garamendi had 
suggested him for a solicitation. As the Majority Report 
acknowledges, Nichols had already committed to raising $100,000 
for Clinton Campaign before being contacted by the DNC. 
Ultimately, he donated a total of $125,000.
    Even more attenuated is the Majority's criticism of Gover. 
Over two years before being sworn in as Assistant Secretary of 
Indian Affairs, Gover, along with several other attorneys 
acting as advocates for tribal leaders who had been invited to 
a meeting at the White House, wrote a memorandum to White House 
political directors pointing out that Indian tribes had 
contributed monies in the past and asking that attention be 
paid to the Administration's political supporters. These facts 
failed to raise significant concern during Gover's confirmation 
hearing in November 1997.172 During his hearing 
testimony, none of which is mentioned in the Majority Report, 
Gover explained that he had long advocated greater political 
involvement by American Indians. ``I believe that tribes need 
to become more involved in national politics. I have preached 
that message.''173 Gover explained that he also 
worked on several grassroots advertising and get-out-the-vote 
drives; the type of activities which he believed helped to 
explain why tribes with only 9 percent of U.S. population cast 
14 percent of the vote in the 1996 presidential 
election.174 Following his testimony, the Chairman 
of the Senate Indian Affairs Committee, Ben Nighthorse 
Campbell, publicly confirmed his continued support for 
Gover.175 Gover's nomination was approved by the 
Committee and quickly approved by the Senate without debate, 
under prodding from another supporter on that Committee, 
Senator Pete Domenici.176 Whatever significance the 
Majority ascribes to Gover's past activities, they posed no 
obstacle to his confirmation by the Republican-controlled 
Senate.
---------------------------------------------------------------------------
    \172\ Albuquerque Journal, 10/31/97.
    \173\ Albuquerque Journal, 10/31/97.
    \174\ Albuquerque Journal, 10/31/97; The Santa Fe New Mexican, 11/
10/97.
    \175\ Albuquerque Journal, 10/31/97.
    \176\ The Santa Fe New Mexican, 11/10/97.
---------------------------------------------------------------------------

Response to Majority Chapter 23: ``Hudson Casino''

    In this chapter, the Majority examines the circumstances 
surrounding the Interior Department's denial of an application 
by three Indian tribes and a gambling company to take land near 
Hudson, Wisconsin, into trust for the purposes of establishing 
a casino. The Majority draws the limited conclusion that 
``[t]here is strong circumstantial evidence'' that Interior's 
decision in the Hudson case ``was caused in large part by 
improper political considerations, including the promise of 
political contributions from opposition tribes.'' This 
conclusion is not fully supported. The Majority Report fails to 
acknowledge key facts about the Hudson casino proposal and 
mischaracterizes many others.
     Contrary to assertions by the Majority, Galaxy 
Gaming, not the applicant tribes, was the moving force behind 
the Hudson casino application. The Hudson casino application 
was made by an entity known as the Four Feathers Partnership, 
which consisted of three Indian tribes and another partnership 
known as the Galaxy Gaming Company, headed by Fred 
Havenick.177 This Florida-based gambling company 
owned a money-losing dog track in Hudson, Wisconsin, and hoped 
to salvage that investment by establishing a casino on the same 
site in partnership with the Indian tribes. Galaxy Gaming is a 
sophisticated, politically savvy entity with considerable 
resources that spent significant amounts on lobbying government 
officials, including its retention of Paul Eckstein, a lobbyist 
with seemingly little of value to offer other than his 
willingness to prevail on his personal friendship with Interior 
Secretary Bruce Babbitt to secure a result for his new clients. 
In 1993, Galaxy Gaming spent more money on lobbying in 
Wisconsin--over $60,000--than any other gambling 
entity.178 Given these facts, the Majority's 
insistence on characterizing the Hudson casino matter as a 
battle between ``impoverished'' Indian tribes and wealthy 
lobbyists hired by the opposing tribes is unfair and 
disingenuous.
---------------------------------------------------------------------------
    \177\ Washington Post, 12/21/97.
    \178\ Chicago Tribune, 8/5/93.
---------------------------------------------------------------------------
     The Majority Report unfairly omits key facts 
justifying Interior's denial of the application, such as the 
distance between the applicants' reservations and the proposed 
casino site. One of the most controversial aspects of the 
Hudson casino application was the proposal to take into trust 
land far removed from the reservations of the applicant tribes. 
Although the Majority Report never mentions it, the fact that 
the reservations of the applicant tribes were between 80 and 
190 miles away from Hudson, Wisconsin, was critical to an 
understanding of Interior's decision. Different, and far 
stricter, criteria apply when an Indian tribe petitions the 
government to take off-reservation land in someone else's 
community into trust for gambling operations. As Secretary 
Babbitt testified in the hearings before the House Committee on 
Government Reform and Oversight, of the nine off-reservation 
applications initially approved by the regional Bureau of 
Indian Affairs office since the Indian Gaming Regulatory Act 
was passed in 1988, only one led to the establishment of a 
casino.179 In that case, unlike the casino proposed 
in Hudson, the local community supported the 
application.180 One of these denials occurred during 
the Bush Administration.181
---------------------------------------------------------------------------
    \179\ Testimony of Secretary Babbitt before the House Government 
Reform and Oversight Committee, 1/29/98, p. 20.
    \180\ Testimony of Secretary Babbitt before the House Government 
Reform and Oversight Committee, 1/29/98, p. 20.
    \181\ Testimony of Secretary Babbitt before the House Government 
Reform and Oversight Committee, 1/29/98, p. 20.
---------------------------------------------------------------------------
     The Majority Report unfairly omits key facts 
justifying Interior's denial of the application, such as the 
depth and intensity of local opposition to the casino. Although 
the Majority makes passing references to the opposition by 
persons on the local, state, and federal levels, it is 
suggested that whatever local opposition existed was actually 
generated by the opposing tribe's lobbying activities. Although 
lobbying certainly occurred on both sides, it is unrealistic to 
suggest that these lobbying efforts were primarily responsible 
for the widespread opposition to the proposed Hudson casino. 
The Committee's investigation found overwhelming evidence of 
legitimate opposition to the casino expressed by both 
Republican and Democratic elected officials on the ground that 
the casino would be detrimental to the community. The 
opposition was widespread, intense, and bipartisan. See 
Minority Chapter 37.
     The Majority Report omits key facts justifying 
Interior's denial of the application, including the fact that 
Interior never ``reversed course'' on the Hudson casino 
application. The Majority seriously mischaracterizes the record 
by suggesting that Interior was initially inclined to approve 
the Hudson casino application, but changed its mind after being 
subjected to ``pressure'' (through some mechanism which the 
Majority is not able to identify). As the career staff at 
Interior have testified, they never recommended approval of the 
Hudson casino proposal. The Majority makes much of the fact 
that the local Bureau of Indian Affairs office approved the 
application, but fails to acknowledge that all such 
applications are reviewed by Interior staff at headquarters--
pursuant to sound policy established by the Bush 
Administration--to ensure consistent application of the 
law.182 The Majority treats the differing 
conclusions reached by the local BIA office and the Interior 
Department in Washington as a matter of grave suspicion, but 
refuses to acknowledge that the Interior Department has often 
rejected local BIA recommendations to approve applications for 
off-reservation gambling.183
---------------------------------------------------------------------------
    \182\ Testimony of Secretary Babbitt before the House Government 
Reform and Oversight Committee, 1/29/98, p. 20.
    \183\ Testimony of Secretary Babbitt before the House Government 
Reform and Oversight Committee, 1/29/98, p. 20.
---------------------------------------------------------------------------
    Turning to the specifics of the Report, the Majority twists 
the record in asserting that George Skibine, an Interior 
Department official, ``favored granting the Hudson 
application.'' This is a mischaracterization of Skibine's 
testimony. Skibine first formulated his recommendation in June 
1995, based on the record, and his recommendation was that the 
application be denied.184 The only issue of debate 
in the weeks leading up to the issuance of the decision was the 
statutory basis on which to rely in denying the application, 
not on whether to approve it.185
---------------------------------------------------------------------------
    \184\ George Tallchief Skibine deposition, 11/17/97, pp. 49, 61-65, 
70.
    \185\ George Tallchief Skibine deposition, 11/17/97, p. 70.
---------------------------------------------------------------------------
    The Majority relies heavily on the two memos prepared by 
Tom Hartmann, a financial analyst, which concluded that, 
notwithstanding the intense local opposition, there was 
insufficient evidence in the record to support a finding that 
the proposed casino would be ``detrimental to the surrounding 
community.'' Skibine and Hartmann both testified, however, that 
Skibine, the deciding official, never agreed with Hartmann's 
view expressed in these memoranda and never adopted that 
analysis.186 Skibine thought the application should 
be denied and he initially recommended denial based on the 
Indian Reorganization Act.187
---------------------------------------------------------------------------
    \186\ George Tallchief Skibine deposition, 11/17/97, pp. 61-62.
    \187\ George Tallchief Skibine deposition, 11/17/97, p. 151.
---------------------------------------------------------------------------
     Contrary to the Majority's claim, ``reopening'' 
the administrative record was not an unusual step. The Majority 
views with dark suspicion the agreement by two Interior 
officials, in response to complaints from representatives of 
the opposing tribes during a meeting in February 1995, to allow 
those tribes to submit supplemental factual information to 
Interior concerning the extent to which the proposed casino 
would hurt their existing casinos. The Majority Report opines, 
without factual support, that this ``reopening'' of the record 
was ``an unusual step.'' In fact, Interior officials have 
testified that there was no ``reopening'' of the record in 
light of the fact that it was never formally ``closed'' prior 
to the issuance of the decision. Unlike, for example, agency 
rule-making, there is no formal deadline for the submission of 
materials relevant to a quasi-adjudicative decision like the 
trust application decision. Skibine has testified that, in 
allowing the opposing tribes to submit additional information, 
he simply allowed persons with relevant information to present 
that information to the Department.188 Indeed, in an 
order unmentioned by the Majority Report, United States 
District Court Judge Barbara Crabb rejected the applicant 
tribes' claims in their lawsuit against Interior that this 
action was inappropriate.189 Instead, Judge Crabb 
held that Interior's decision to accept the additional 
information was especially justified ``when both the town of 
Troy and city of Hudson had passed resolutions opposing the 
project during the period between the area office's submission 
of its report and the February 8 meeting.'' There was nothing 
improper about Interior's decision to consider this additional 
information.190
---------------------------------------------------------------------------
    \188\ George Tallchief Skibine deposition, 11/17/97, p. 21 
(``[T]his is an informal decision-making process. So we don't have any 
regulations. There are no guidelines that apply to Central Office 
action. There are no deadlines.'')
    \189\ Sokaogon Chippewa Community, et al. v. Bruce C. Babbitt, et 
al., 929 F. Supp. 1165, 1183 (W.D. Wisc. 1996).
    \190\ Sokaogon Chippewa Community, et al. v. Bruce C. Babbitt, et 
al., 929 F. Supp. 1165, 1183 (W.D. Wisc. 1996).
---------------------------------------------------------------------------
     The Majority Report mischaracterizes the testimony 
of Paul Eckstein. In its Report, the Majority states that Paul 
Eckstein testified that Secretary Babbitt ``made comments 
suggesting that Interior had come under political pressure to 
deny the application.'' In fact, Eckstein testified Secretary 
Babbitt denied his request for a delay of the issuance of the 
decision on the grounds that ``Harold Ickes had directed him to 
issue the decision that day.'' (Ickes was then Deputy Chief of 
Staff at the White House.) In his deposition and in his 
testimony to the Committee, Eckstein was clear that he 
understood the comment that he ascribed to Babbitt to relate 
only to the timing, not the substance, of Interior's decision. 
Indeed, Eckstein agreed that he had ``no basis'' to believe 
that anyone from the White House had ``directed the substance 
of the decision denying the application.'' 191 The 
Majority Report unfairly draws inferences from Eckstein's 
testimony without ever acknowledging that Eckstein himself did 
not draw those same inferences from the remarks he ascribed to 
Babbitt.
---------------------------------------------------------------------------
    \191\ Paul Eckstein Deposition, 9/30/97, pp. 90-91.
---------------------------------------------------------------------------

Response to Majority chapter 24: ``The Cheyenne Arapaho Tribes: The 
        Quest for the Fort Reno Lands''

    This Majority chapter characterizes the decision by the 
Cheyenne-Arapaho Tribes to contribute to the DNC as a 
``sordid'' chapter in the DNC's 1996 fundraising efforts, and a 
``cynical political exploitation.'' According to the Majority:

          Democratic fund-raisers led the tribes, who were 
        politically naive, to believe that making a large 
        contribution would secure them the long-sought Fort 
        Reno lands. The tribes made contributions to the DNC, 
        received encouragement about their land claim from many 
        quarters, including the President himself, but 
        ultimately received nothing. The tribes then fell into 
        the hands of a series of Democratic operators, who 
        attempted to pick their pockets for legal fees, land 
        development fees, and additional contributions.

The Majority's conclusions are based on a series of misleading 
mischaracterizations, misstatements of facts, and unwarranted 
inferences.
     The Majority makes misstatements of fact and 
creates misleading impressions in its characterization of the 
source of the money used by the tribes to contribute to the 
DNC. While it correctly states that the money was derived from 
the operation of a bingo hall, it incorrectly describes the 
role of the tribes with respect to the hall. The Majority 
states, ``Although the hall was not profitable--it has incurred 
millions in losses since opening--the C/A receive a monthly 
$5,000 payment from the entity that manages the bingo hall on 
their behalf.'' This statement leaves two false impressions: 
(1) that the tribes had contracted out to an outside entity to 
manage the bingo hall for them, and (2) that the tribes were 
losing millions of dollars as a result of the bingo hall 
operations. In fact, the tribes did not hold the gambling 
license for the bingo hall. They merely managed the hall for 
the licensee, Southwest Casino and Hotel Corporation, and 
received a $5,000 monthly payment for this service. Any losses 
which might have resulted from the bingo hall operations would 
have been incurred by Southwest Casino, not by the Tribes. The 
money which the Tribes derived from the bingo hall operation 
was thus money which came to them free and clear and not as the 
result of a money-losing tribal business venture.
    The Majority Report states, ``[W]hile the account from 
which the money is drawn does not appear to be a specially-
earmarked welfare fund, it is frequently used to pay for such 
things as funeral costs, heating bills, and general assistance 
for needy tribal members.'' While that may be the case today, 
that was not the case at the time the tribes made the decision 
to contribute to the DNC. The Majority ignores the fact that 
the chairman and secretary of the tribes' business committee, 
as well as the chairman of its business development 
corporation, all denied that the tribes had a welfare fund at 
the time they made their contribution.192 The 
Majority also ignores the fact that Tribes' attorney had 
informed the Committee staff that the money from the bingo hall 
operations had been placed into certificates of deposit and had 
not been used previously for any other purposes.193
---------------------------------------------------------------------------
    \192\ Staff interview with Charles Surveyor, 8/22/97; Staff 
interview Tyler Todd, 8/21/97. See also, Daily Oklahoman, 3/11/97.
    \193\ Staff interview with Barry Coburn, 9/16/97.
---------------------------------------------------------------------------
     The Majority falsely states that Democratic fund-
raisers took advantage of the Tribes' political naivete, 
leading them to believe that making large contributions would 
secure them the long-sought Fort Reno Lands. Not only is this 
statement incorrect, but the basic premise upon which it 
rests--that the tribes were politically naive--is inaccurate. 
By the time the Cheyenne-Arapaho made their decision to 
contribute to the DNC in 1996, they were politically active 
tribes which had been lobbying at the local, state, and 
national levels for years. Their representatives had made 
numerous trips to Washington to meet with members of Congress 
and officials from the Departments of Interior, Agriculture, 
and Justice. They had hired Patton, Boggs & Blow, an 
influential Washington lobbying firm, to argue their case. They 
had held protest rallies and had spent over $100,000 on 
political advertising targeting politicians they saw as opposed 
to their interests. Their decision to contribute to the DNC was 
a calculated decision to take their political involvement to 
another level, not the result of political naivete.
    The Majority's contention that someone at the DNC promised 
the tribes the return of their lands in exchange for a large 
contribution is unsupported by any facts. The tribes made their 
decision to contribute before they had even spoken to anyone at 
the DNC.194 The Majority cites no direct evidence to 
show that Jason McIntosh, Terry McAuliffe, or anyone associated 
with the DNC or the Clinton/Gore campaign ever promised the 
tribes the return of the Fort Reno lands in exchange for their 
contribution. Furthermore, the Majority ignores the unequivocal 
statement of Tyler Todd, the chairman of the tribes' business 
development corporation, who said, ``We didn't ask for anything 
and we weren't promised anything.'' 195
---------------------------------------------------------------------------
    \194\ The tribes discussed the idea of contributing to the DNC in 
meetings of their business committee on February 12, 1996, and April 
30, 1996. Staff interview with Tyler Todd, 8/21/97 and Staff interview 
with Barry Coburn, 9/16/97. They informed Michael Turpen, whom they had 
hired as a lobbyist, of their decision in May 1996, whereupon Turpen 
put the tribes in touch with Jason McIntosh of the DNC. Staff interview 
of Barry Coburn, 9/21/97.
    \195\ Daily Oklahoman, 3/11/97.
---------------------------------------------------------------------------
    The Majority's approach to this issue is curious. The 
Majority seems to imply that the tribes were somehow taken 
advantage of because they received no direct, tangible policy 
benefit from their contribution. At the outset of the chapter 
on the tribes, the Majority states, ``The tribes made 
contributions to the DNC, received encouragement about their 
land claim from many quarters, including the President himself, 
but ultimately received nothing.'' The chapter then concludes 
by stating, ``They [the tribes] have nothing to show for their 
$107,000 in contributions, except memories of a Presidential 
luncheon and the hollow echoes of ``encouragement'' to 
contribute given them along the way.'' Just what the Majority 
believes the tribes should have ``received'' or should ``have 
to show'' for their contribution is not clear. Had the tribes 
received some direct policy benefit in exchange for their 
contribution, would that not have amounted to an illegal quid 
pro quo? The fact that the tribes received nothing for their 
contribution is therefore not an indication that they were 
taken advantage of, but rather an indication that their 
dealings with the DNC and the Administration were wholly legal 
and appropriate.
     The Majority falsely states that the tribes fell 
into the hands of a series of Democratic operators, who 
attempted to pick their pockets for legal fees, land 
development fees, and additional contributions. The Majority 
castigates Nathan Landow and Peter Knight for their attempts to 
negotiate a contract with the tribes prior to agreeing to 
undertake work on their behalf. It should be noted that it was 
the tribes who approached Landow and Knight for their services, 
not vice-versa. From the beginning of their dealings with the 
tribes, both Landow and Knight's firm were clear as to their 
fees and the need for a written contract. Their actions in this 
regard were nothing more than standard business practices. The 
Majority presents no evidence either that the proposed contract 
terms were onerous or that the amount of the fees was excessive 
in comparison to similar arrangements. Indeed, both Landow and 
Knight's firm were aware that their contracts would require the 
approval of the Bureau of Indian Affairs, and they drafted the 
contracts to conform to the requirements of the Bureau of 
Indian Affairs.
    It appears that the Majority's main reason for casting 
Landow and Knight in a negative light is the fact that they 
were ``Democratic operators.'' While it is true than Landow and 
Knight had ties to the DNC and the Clinton/Gore campaign, their 
dealings with the tribes had nothing to do with those entities. 
Indeed, the Majority presents no evidence that Landow or Knight 
at any time in their dealings with the tribes acted at the 
behest of, on behalf of, or even with the knowledge of the DNC 
or the Clinton campaign. The opprobrium which the Majority has 
cast upon these individuals by comparing them to pickpockets is 
unwarranted and unworthy of this Committee.

Response to Majority chapter 25: The Offer of R. Warren Meddoff

    In this chapter, the Majority discusses Florida businessman 
Warren Meddoff who, shortly before the 1996 election, 
approached President Clinton at a Florida fundraiser concerning 
a possible $5 million donation to the President's campaign. The 
Majority concludes that White House Deputy Chief of Staff 
Harold Ickes's conduct in faxing Meddoff a memorandum listing 
several possible tax-exempt organizations to receive the 
contribution ``was an attempt to circumvent both the federal 
general election contribution prohibition and spending limits 
imposed on campaigns receiving public financing.'' At one 
point, the Majority states that Ickes subsequently told Meddoff 
to ``shred'' this memorandum, but later backs away from this 
assertion and reaches no conclusion as to whether Ickes made 
this statement. Nevertheless, the Majority insinuates that 
Ickes's conduct amounted to an obstruction of justice.
    The Majority's conclusions are based on the testimony of a 
witness who lacks credibility and are also contrary to any 
reading of the law.
     The Majority's allegations of circumvention of 
campaign finance laws and improper coordination concerning 
Harold Ickes are contrary to the Majority's own reading of the 
law. The Minority disagrees with the Majority's contention that 
Ickes attempted to circumvent campaign finance laws. The 
Minority found that Ickes would have been well-advised to 
refrain from providing the information contained in the fax to 
a potential contributor, in order to avoid any appearance of 
improper coordination. Nevertheless, the simple fact that Ickes 
identified nonprofit groups in response to a desire by a 
potential contributor to make a tax-deductible contribution 
does not establish that improper coordination occurred. As the 
Majority has recognized in its Report, current law does not 
prohibit a federal government employee or party official from 
directing contributions to tax-exempt 
organizations.196 And as the Majority has also 
recognized, the Committee did not determine whether nonprofit 
organizations Vote Now '96, the National Coalition of Black 
Voter Participation, and Defeat 209 communicated with Clinton/
Gore campaign officials about the steering of donors to these 
entities or whether these organizations knew that Ickes was 
referring donors to them for the purpose of advancing the 
President's re-election. If such communications had occurred, 
any contributions might be considered illegal. Moreover, the 
Republican National Committee (``RNC'') routinely engaged in 
far more troubling activity than this. As admitted by the 
Majority in its Report (and as discussed more throughly in the 
Minority Report), the RNC ``routinely supported nonprofit 
groups that it considered sympathetic to its cause. This 
support principally took the form of financial contributions 
directly from the RNC or from funds raised by RNC officials.'' 
197 The Majority concludes, however, that there was 
nothing illegal or improper about these activities. To draw 
such a conclusion, while at the same time concluding that 
Ickes's conduct was inappropriate, is disingenuous at best.
---------------------------------------------------------------------------
    \196\ The Majority asserts that Congress ``would do well to examine 
whether it should continue to be legal for campaigns to refer donors to 
nonprofit entities that, for all intents and purposes, will further the 
campaign's election. . . .'' Majority Report Chapter 25.
    \197\ Majority Report Chapter 28; see Minority Report Chapters 10 
and 11-13. These nonprofit groups included Americans for Tax Reform and 
Coalition for Our Children's Future.
---------------------------------------------------------------------------
     The Majority's discussion of Meddoff's allegations 
omits critical evidence. As discussed more fully in Minority 
Report Chapter 17, the Minority found that the evidence before 
the Committee raised grave doubts about Meddoff's credibility 
given the questionable nature of his business dealings and 
associates, his apparent personal agenda in appearing before 
the Committee, and his apparent attempt at bribery in 
connection with a previous proposed contribution. Meddoff's 
testimony that Ickes told him to shred the memorandum, 
considered in this context, lacks credibility.
     The Majority claims that Ickes potentially 
violated the law by his use of White House staff and equipment 
to send the fax to Meddoff when, in fact, the evidence on this 
point is not clear. In a footnote, the Majority states, ``If 
Ickes solicited Meddoff for contributions, it would appear that 
he violated criminal provisions of the Hatch Act, specifically 
5 U.S.C. Sec. 7323(b) which prohibits a federal employee from 
soliciting political contributions from any location at any 
time.'' (Majority Report Chapter 25, n.54) Although this was 
not a ``solicitation'' or a ``political contribution,'' the 
Majority seems to suggest that the fax was nonetheless 
improper. The Minority disagrees with this suggestion, because, 
as the Minority points out in Chapter 24 of its Report, the 
White House Office of Political Affairs is permitted to engage 
in certain types of political activity. That office maintains a 
separate fax machine for its political work.198
---------------------------------------------------------------------------
    \198\ Jennifer O'Connor deposition, 10/6/97, pp. 149-50.
---------------------------------------------------------------------------

Response to majority chapter 26: ``White House, DNC and Clinton-Gore 
        campaign fundraising efforts involving the International 
        Brotherhood of Teamsters''

    In this chapter, the Majority makes serious allegations 
regarding the Teamsters' activities during the 1996 election 
cycle. Specifically, the Majority alleges that the Committee's 
investigative efforts into relevant activities of the Teamsters 
were substantially limited by several factors, including the 
refusal by subpoenaed entities to produce documents, 
individuals' assertions of their Fifth Amendment rights in 
refusing to testify, witnesses' providing ``inaccurate or 
misleading testimony,'' and the Committee's agreement to limit 
the scope of the investigation because of the Southern District 
of New York U.S. Attorney's investigation. The Majority alleges 
that Harold Ickes and other Administration officials, in 
possible violation of federal law, provided assistance to the 
Teamsters on policy matters ``with the intention of enticing'' 
the Teamsters to participate in Democratic campaigns and 
causes. The Majority also alleges that DNC officials 
participated in a contribution swap scheme in which they 
solicited funds for Ron Carey's reelection campaign of Ron 
Carey, who was then president of the Teamsters Union.
    The Majority's analysis is based on misstatements of facts 
and its conclusions are unsupported by the evidence.
     In its Report, the Majority perpetuates its 
admittedly inaccurate assertion that the President was involved 
in or had knowledge of Martin Davis's improper activities. At 
the October 8, 1997 hearing, Chairman Thompson falsely implied 
that the President was involved with the Teamsters swap 
proposal. The Chairman stated:

          The concern is that, according to the Southern 
        District of New York, you have a conspiracy in May and 
        June of 1996 for this contribution swap, the Democratic 
        National Committee and the Teamsters Union. The people 
        involved in that met with the President on June 17. 
        Then four days later, the decision was made to 
        implement at least part of the plan, apparently, by 
        sending $236,000 to state Democratic parties. [Emphasis 
        added.] 199
---------------------------------------------------------------------------
    \199\ Chairman Thompson, 10/8/97 Hrg., pp. 25-26.

    During later testimony, however, it was established that 
the Chairman was incorrect when he suggested that there was a 
private meeting with the President at which the Teamsters swap 
proposal was discussed. The evidence presented at the hearing 
established that the allegedly ``private meeting'' between the 
President and the Teamsters consultants who later pleaded 
guilty to fraudulent conduct was actually a luncheon that was 
attended by numerous people.200 After receiving the 
evidence, the Chairman acknowledged that there was no private 
meeting and that all of the lunch attendees lunch entered the 
White House at approximately the same time.201
---------------------------------------------------------------------------
    \200\ 10/8/97 Hrg., pp. 38-39; Exhibit 2396.
    \201\ Chairman Thompson, 10/8/97 Hrg., pp. 166-67.
---------------------------------------------------------------------------
    Astonishingly, the Majority repeats these same false 
allegations against the President in its Report, stating: 
``Because the Committee has not been unable to speak with 
Davis, it cannot determine whether Davis ever discussed 
Teamster fundraising or Carey's campaign with the President.'' 
The Majority's use of random speculation and discredited 
evidence to make allegations against the President is both 
reckless and unworthy of a Senate Committee.
     The Majority wrongly charges that the Committee's 
investigation of possible connections between the 1996 election 
of officers for the International Brotherhood of Teamsters 
(``IBT'') and the 1996 federal elections was ``substantially 
limited'' because the AFL-CIO did not cooperate with the 
Committee's investigation. The Majority claims the AFL-CIO 
``[r]efused to produce documents reflecting dealings with the 
White House, DNC and Clinton-Gore campaigns'' and ``[r]efused 
to produce relevant materials from the files of Political 
Director Steven Rosenthal, Secretary-Treasurer Richard Trumka, 
President John Sweeney, and other individuals involved in AFL-
CIO campaign-related activities.'' The Majority's claim is 
wrong, and it is misleading. As is plain from its timing--May 
1997--and content, the Committee's document subpoena to the 
AFL-CIO was not related to allegations about the Carey 
campaign--allegations that in fact surfaced long after the 
document subpoena to the AFL-CIO was issued by the Committee. 
The Committee's subpoena issued to the AFL-CIO covered the 
entire range of the AFL-CIO's involvement in electoral and 
legislative politics; it did not target matters related to the 
Teamsters or the Carey campaign. Further, the ``swap schemes'' 
referred to by the Majority were not revealed until long after 
May 23, the date the Committee issued the subpoena to the AFL-
CIO. The circumstances of the AFL-CIO's objections addressed to 
the document subpoena are described in the Minority's response 
to Majority Chapter 23 and are entirely unrelated to 
allegations of wrongdoing in the Teamsters election.
     The Majority Report falsely states the AFL-CIO 
Secretary-Treasurer Richard Trumka ``refused to comply'' with a 
deposition subpoena issued by the Committee. Again, the 
Majority's statements are misleading. As explained in the 
Minority's response to Majority Chapter 27, Trumka did not 
``refus[e] to comply'' with the Committee's deposition 
subpoena. Counsel for the AFL-CIO, after being told by the 
Majority Chief Counsel on Thursday, September 18, 1997, that 
there would be no further depositions, received three faxed 
deposition subpoenas on the evening of Friday, September 19. 
One of the depositions requested was Trumka's and it was 
scheduled for 9:00 on the very next Monday, September 22--a day 
when Majority counsel knew the witnesses in question would be 
out of town at the AFL-CIO Convention. Counsel for the AFL-CIO 
wrote to the Committee explaining why Trumka and other 
witnesses could not appear, but did not refuse to produce the 
witnesses on another date.202
---------------------------------------------------------------------------
    \202\ See Letter from Robert M. Weinberg and Robert F. Muse to 
Michael J. Madigan, Chief Counsel, and Philip Perry, Majority Counsel, 
Sept. 22, 1997.
---------------------------------------------------------------------------
     The Majority incorrectly claims that its 
investigation of the ``contribution swap'' allegation was 
limited. The Majority's investigation was not limited. As the 
Majority itself acknowledges it conducted 15 depositions and 
``dozens of interviews relating to [the] allegations'' involved 
in the contribution swap scheme. The Majority also conducted a 
day of hearings regarding these allegations. Moreover, contrary 
to the Majority's claim, thousands of pages of documents 
related to the Teamsters issues that the Majority was 
investigating were produced by the Teamsters, the DNC, the 
White House, Vote Now '96, and the law firm that represented 
Judith Vazquez. Similarly, contrary to the Majority's 
assertion, no witness asserted his or her Fifth Amendment 
privilege and refused to appear for a deposition or hearing 
relating to the Teamsters issues. Moreover, as detailed in the 
Minority Chapter 18, on the Teamsters allegations and as more 
thoroughly discussed below, the Majority's claim that witnesses 
provided ``inaccurate or misleading'' testimony is not 
supported. Finally, while the U.S. Attorney's office did 
request that the Committee not subpoena several witnesses, most 
of these witnesses have given testimony or statements that are 
available to the Committee (and, indeed, these materials are 
cited in both the Majority and Minority Reports), and this 
``limitation'' did not impede the Majority's investigation.
     The Majority claims without sufficient evidence 
that there is a suggestion that the Administration took steps 
to improperly ``benefit the Teamsters'' in connection with the 
Diamond Walnut strike. While it would not have been illegal or 
inappropriate for the Administration to get involved in the 
Diamond Walnut strike, there is no evidence that 
theAdministration in fact took steps that benefitted the Teamsters with 
respect to this strike. To the contrary, although the Majority Report 
omits mention of this fact, the Diamond Walnut strike is still 
ongoing--no Administration action known to the Minority assisted the 
Teamsters with the resolution of their dispute with Diamond Walnut.
     The Majority presents a slanted version of the 
facts surrounding the ``contribution swap'' scheme. The 
Majority falsely implies that the idea for the so-called 
``contribution swap'' scheme originated with the DNC which was 
concerned because the Teamsters were not ``participating in 
federal electoral politics at the same extraordinary level as 
it had in the 1992 campaign.'' The Report states, after 
discussing this purported decrease in political participation, 
``In May or June 1996, a plan for a `contribution-swap scheme' 
between the DNC and the Teamsters was conceived. It was 
relatively simple: the DNC agreed to find a $100,000 donor for 
Ron Carey's campaign for reelection as Teamsters president; in 
exchange, the Teamsters' PAC director, Bill Hamilton, would 
steer approximately $1 million to state Democratic parties.'' 
As the Majority well knows based on the evidence before the 
Committee, the idea for the scheme was entirely that of Martin 
Davis, Ron Carey's election campaign consultant, and it was 
Davis who contacted Terry McAuliffe. The Majority's implication 
that the DNC broached the subject with the Teamsters as part of 
the DNC's plan to raise money from the Teamsters is not based 
on the evidence.
    Throughout the Majority Report, the Majority also presents 
a slanted version of the so-called scheme by ignoring key 
deposition testimony from credible witnesses regarding the 
scheme. For example, its chapter does not contain a single 
citation to the deposition of Laura Hartigan, whose testimony 
confirmed that of DNC Finance Director Richard Sullivan. She 
stated that it was never her understanding that Davis was 
suggesting some sort of quid pro quo or a nexus between raising 
money for Carey and raising funds for the DNC.203
---------------------------------------------------------------------------
    \203\ Laura Hartigan deposition, 9/16/97, pp. 24, 20.
---------------------------------------------------------------------------
     The Majority fails to prove allegations that 
testimony by Democratic witnesses was false or misleading. As 
discussed more thoroughly in Minority Report Chapter 18, the 
Minority disagrees with the Majority's contention that Richard 
Sullivan provided misleading and inaccurate testimony to the 
Committee. Sullivan was forthcoming to the Committee about the 
relevant circumstances examined by the Committee surrounding 
Judith Vazquez's potential contribution. The Minority also 
disagrees with the claim that White House Deputy Chief of Staff 
Harold Ickes was not truthful to the Committee. Ickes testified 
that he ``discussed Diamond Walnut with Jennifer'' O'Connor, 
his assistant,204 and the Majority failed to ask him 
about the substance of those conversations.205 The 
Majority then claims that Ickes was not forthcoming based on 
O'Connor's description of that conversation--her testimony that 
she and Ickes discussed whether Mickey Kantor contacted Diamond 
Walnut. Moreover, as Ickes testified, the Administration did 
not ``do [anything] regarding the Diamond Walnut strike.'' 
206 The Administration did not intervene in this 
strike, and the strike is still underway, indicating that the 
Teamsters were not benefitted by any Administration action 
relating to this strike.
---------------------------------------------------------------------------
    \204\ Harold Ickes deposition, 9/22/97, p. 133.
    \205\ The issue of Administration policy with regard to Diamond 
Walnut was not fully explored during Ickes's deposition due, in part, 
to objections properly posed by Ickes's attorneys on the proper scope 
of the deposition.
    \206\ Harold Ickes deposition, 9/22/97, p. 141.
---------------------------------------------------------------------------

Response to majority report chapter 27: ``Compliance by Non-Profit 
        Groups with Committee Subpoenas''

    The Majority criticizes a number of tax-exempt groups, 
ranging from the Christian Coalition to the AFL-CIO, for 
refusing to comply with Committee subpoenas. It alleges that 
this pattern of noncompliance began in August 1997, when the 
AFL-CIO announced that it would not comply with a document 
subpoena. The Majority also contends that the subpoenas issued 
by the Committee to these groups could not have been enforced 
because the Minority would have blocked enforcement efforts and 
because the Committee's mandate expired on December 31, 1997. 
Finally, the Majority complains that because of the 
noncompliance of subpoenaed groups, it was ``unable to draw any 
meaningful conclusions about the activities of nonprofit groups 
during the 1996 elections.''
     The Majority wrongly accuses the AFL-CIO of 
``deliberately adopt[ing] an obstructionist strategy designed 
to thwart production'' of documents and witnesses to the 
Committee in the ``cynical hope of escaping scrutiny . . .'' To 
the contrary, the AFL-CIO's responses to the Committee's 
document and deposition subpoenas were based on legal positions 
that were presented to the Committee in a manner well within 
the procedural rules set forth both by this Committee and by 
the full Senate. The AFL-CIO was presented with an 
extraordinarily broad subpoena, requesting 48 separate 
categories of documents that reached deeply into nearly every 
aspect of the AFL-CIO's internal organization and structure 
and, particularly, into its participation in the political 
system. This subpoena differed markedly in its breadth and 
scope from any other subpoena issued by the Committee. The AFL-
CIO repeatedly informed the Committee of its concerns regarding 
the breadth and scope of these demands 207 and, 
after an initial review of some of the millions of documents 
demanded by the subpoena, the AFL-CIO provided the Committee 
with a lengthy, detailed statement of its legal grounds for 
objection. 208
---------------------------------------------------------------------------
    \207\ See Letter from AFL-CIO counsel, Robert Weinberg and Robert 
Muse to Majority and Minority Chief Counsels, June 5, 1997; Letter from 
AFL-CIO counsel to Majority and Minority counsel, July 11, 1997; Letter 
from AFL-CIO counsel to Majority counsel, Aug. 6, 1997; Letter from 
AFL-CIO counsel to Majority and Minority Chief Counsels, 8/20/97.
    \208\ See Memorandum of Points and Authorities in Support of the 
AFL-CIO's Objections to the Subpoena Duces Tecum, 8/27/97.
---------------------------------------------------------------------------
     The Majority falsely asserts that the document 
subpoena directed to the AFL-CIO was issued because of ``press 
accounts link[ing] the leadership of the AFL-CIO with an 
illegal conspiracy to funnel general treasury funds from the 
International Brotherhood of Teamsters (``IBT'') to the 
reelection campaign of IBT President Ron Carey.'' This claim is 
untrue. The document subpoena was issued in May 1997--long 
before the IBT election was overturned; there were at that time 
no ``press accounts'' linking the AFL-CIO or its leadership to 
alleged wrongdoing in the Carey campaign. Further, the subpoena 
did not focus on any connection between the AFL-CIO and the 
IBT, or make any requests for documents related to the Carey 
campaign.
     The Majority falsely claims that the AFL-CIO 
refused repeated offers extended by the Committee to narrow the 
May 23 document subpoena. To the contrary, Majority Counsel 
repeatedly informed the AFL-CIO that the subpoena would not be 
narrowed. For example, in a June 19, 1997 meeting of counsel 
for the AFL-CIO with both Majority and Minority counsel, 
Majority counsel explicitly stated that the Committee would not 
agree to a narrowing of the subpoena. And in fact, an August 23 
letter signed by the Majority Chief Counsel--and incorporated 
by the Chairman in his September 3 Ruling and Order--simply set 
forth the Majority's demands for an ``immediate production,'' 
which was clearly labeled as an ``initial production'' sought 
by the Majority.209
---------------------------------------------------------------------------
    \209\ Letter from Majority Chief Counsel to AFL-CIO counsel, Aug. 
25, 1997, at 4 (stating that ``the Committee agrees not to enforce the 
following specifications at this time.').
---------------------------------------------------------------------------
     The Majority falsely claims that the AFL-CIO 
``refused to produce witnesses pursuant to deposition 
subpoenas, or to allow the Committee to interview persons 
affiliated'' with the AFL-CIO. The record shows that this 
characterization is wrong. Deposition subpoenas were sent to a 
total of five AFL-CIO officials or consultants. The AFL-CIO did 
not refuse to produce any of these witnesses.210
---------------------------------------------------------------------------
    \210\ As documented in a September 22, 1997 letter to Majority 
Chief Counsel from AFL-CIO counsel, subpoenas for three of the AFL-CIO 
witnesses (Richard Trumka, Gerald Shea, and Steve Rosenthal) were sent 
by Majority counsel by facsimile at 5:35 p.m. on Friday, September 19, 
1997, to the offices of AFL-CIO counsel. The subpoenas demanded 
appearances at 9:00 a.m on Monday, September 22, of the AFL-CIO's 
Secretary-Treasurer, Political Director, and Executive Assistant to the 
President. No notice preceded these subpoenas and, indeed, they arrived 
approximately 24 hours after the Majority Chief Counsel had assured the 
AFL-CIO that the Committee would not be taking any depositions of AFL-
CIO witnesses. The Majority had been informed that all three 
individuals were in Pittsburgh for the AFL-CIO's biannual convention, 
which was scheduled to continue through the week of September 22. 
Counsel for the AFL-CIO submitted a letter to the Committee on the 
morning of September 22 explaining why the three witnesses would not be 
appearing on that day. That letter did not state that the witnesses 
would not appear on another date. The Majority made no effort at any 
time to secure the presence of these witnesses on another date. With 
regard to the deposition subpoenas issued to two AFL-CIO consultants, 
the majority's claims of ``defiance'' are similarly false. One of these 
witnesses--Geoffrey Garin--appeared at his deposition and testified 
fully in response to questions by Committee counsel. The other witness, 
Ray Abernathy, was subpoenaed for a deposition to take place on 
September 20, but prior to his appearance, counsel for the AFL-CIO was 
informed by Majority staff that it would not be necessary for Abernathy 
to appear.
---------------------------------------------------------------------------
     The Majority is wrong in its claim that the 
Minority would not have supported contempt actions against all 
groups that did not comply with subpoenas. In fact, the record 
is clear that on a number of occasions, the Minority asked the 
Committee to enforce its subpoenas. The Minority believed that 
a refusal to enforce subpoenas not only impeded the Committee's 
investigation, but set a terrible precedent. As Senator 
Lieberman noted, ``We are the people's representatives. We are 
the people's opportunity to find the facts, to search for the 
truth, and when the parties that we subpoena are asked for 
information, do not cooperate, it is an insult to the Congress, 
and it sets a precedent that is not one that we should 
accept.'' 211When Chairman Thompson asked Senator 
Glenn on October 8 if he would vote to hold liberal-leaning, as 
well as conservative-leaning, groups, in contempt, Senator 
Glenn responded:
---------------------------------------------------------------------------
    \211\ Senator Lieberman, 10/7/97 Hrg. p. 41.

          I would probably vote for contempt for the whole, for 
        everybody that has denied our subpoenas, for everybody 
        who has said they will not appear and has stiffed us. I 
        think the authority of this Committee, the jurisdiction 
        of the Committee, the jurisdiction of the United States 
        Senate to enforce subpoenas is what is at issue here. . 
        . . Let us support all of [the Committee's 
        subpoenas].212
---------------------------------------------------------------------------
    \212\ Senator Glenn, 10/8/97 Hrg. pp. 73-74.

Thus, months before the Committee's mandate expired, the 
Minority expressed its willingness to support contempt actions 
against noncompliant groups.
     The Majority Report fails to acknowledge that 
defiance of the Committee's authority began when the National 
Policy Forum ignored an order by Chairman Thompson and refused 
to produce documents. On April 9, 1997, the Committee issued a 
subpoena calling on NPF to produce responsive documents by 
April 30. NPF provided a limited number of documents on June 6 
and June 30, but stated that these documents were not 
responsive andclaimed that the subpoena was invalid. On July 3, 
Chairman Thompson issued an order that stated, ``The National Policy 
Forum is ORDERED and DIRECTED to produce all documents in its files 
that are responsive to the NPF subpoena . . . by 9 a.m. on Monday, July 
14. . . .'' 213 NPF flatly refused to obey this order. The 
Committee failed to initiate contempt proceedings. A month later, a 
number of other groups, including the Trail Lawyers, the Christian 
Coalition, the AFL-CIO, and the National Right to Life Committee, 
announced that they would challenge the Committee subpoenas.
---------------------------------------------------------------------------
    \213\ Order to National Policy Forum from Chairman Thompson to 
produce all documents responsive to the National Policy Forum subpoena, 
7/3/97.
---------------------------------------------------------------------------
     The Majority Report fails to acknowledge that 
defiance of the Committee's authority continued when 
individuals associated with Triad Management refused to appear 
for depositions or answer questions pursuant to Committee 
subpoena. On September 8, 1997, counsel for employees, officers 
and directors of Triad, Citizens for Reform, and Citizens for 
the Republic informed the Committee that they would not appear 
for deposition pursuant to subpoena. While three individuals 
did later appear, they refused to answer any questions. This 
was the first instance of individuals refusing to comply with 
subpoenas.214
---------------------------------------------------------------------------
    \214\ In September, the Majority subpoenaed three individuals 
associated with the AFL-CIO. The Committee issued these subpoenas after 
it had announced its intention to suspend investigative hearings and 
proceed with hearings on campaign-finance reform. Even though the 
Committee knew that the subpoenaed individuals had previous time 
commitments, it ordered them to appear for depositions only three days 
after the subpoenas were issued. The individuals informed the Committee 
that they would not appear at the scheduled time, but the Committee 
made no attempt to reschedule their depositions.
---------------------------------------------------------------------------
     The Majority's claim that noncompliance by 
nonprofit groups prevented it from drawing ``any meaningful 
conclusions about the activities of nonprofit groups during the 
1996 elections'' is disingenuous. The Majority has used the 
noncompliance of Republican nonprofit groups as an excuse for 
not examining the activities of these organizations. Although 
the recalcitrance of these groups did hamper the Committee's 
investigation, as Part 3 of the Minority Report shows, there is 
ample documentary evidence to conclude that the Republican 
Party improperly used tax-exempt groups, such as Americans for 
Tax Reform, the National Right to Life Committee, the Christian 
Coalition, and Coalition for Our Children's Future, for 
political purposes. And it was the Majority's own failure to 
seek enforcement of the subpoena that created that problem the 
Majority now relies on for an excuse.

Response to majority chapter 28: ``The Role of Nonprofit Groups''

    The Majority and the Minority agree that nonprofit 
organizations played a major role in the 1996 campaign. These 
groups spent tens of millions of dollars distributing ``voter 
guides'' aimed at helping specific candidates win election or 
broadcasting purported ``issue advocacy'' ads that were clearly 
designed to help specific candidates. The law governing issue 
advocacy is extremely liberal: Advertisements that avoid using 
certain language to ``expressly advocate'' the election or 
defeat of specific candidates is generally deemed by the courts 
to fall into the ``issue advocacy'' category. As a result, the 
funds used to pay for the ads are not treated as campaign 
contributions. Thus, donors who want to evade campaign finance 
restrictions have been able to assist candidates by donating 
money to nonprofit groups that run political attack ads under 
the guise of issue advocacy.
    In discussing the role of nonprofit groups, the Majority 
correctly states that there was ``an unprecedented level of 
political activity by nonprofit groups'' during the 1996 
election. The Majority is also correct in stating that several 
nonprofit groups failed to cooperate with the Committee's 
investigation. But the Majority's chapter on this subject is 
seriously flawed on several grounds.
            Overview
     The Majority mischaracterizes the degree to which 
different nonprofit groups cooperated with the investigation. 
Most notably, the Majority focuses on AFL-CIO as being 
extremely recalcitrant while downplaying or ignoring similar 
examples of noncooperation by several conservative groups. It 
also states that the Committee was unable to question several 
former officials of the Republican National Committee (``RNC'), 
without noting the reason: The Minority's efforts to serve at 
least one of the individuals with knowledge of the RNC's 
interaction with outside groups was impeded by the 
Majority.215
---------------------------------------------------------------------------
    \215\ In early August 1997, Curt Anderson, through his attorney, 
indicated he would voluntarily appear for a deposition. Subsequently, 
he changed his mind, and at the request of the Minority, the Majority 
issued a Subpoena with a September 18 return date. Anderson could not 
be located immediately and the subpoena was served on September 19, one 
day after the return date. Anderson's attorney claimed the subpoena was 
invalid, and the Majority refused the Minority's request to issue a 
second subpoena to Anderson.
---------------------------------------------------------------------------
     The Majority asserts that the Committee faced an 
``inability'' to depose key personnel of the RNC, Americans for 
Tax Reform, Triad and others and states that it is unable to 
form conclusions as the result of such non-cooperation. In 
fact, the Committee could easily have found these individuals 
in contempt of the Committee and enforced the subpoenas. The 
Committee could also have held public hearings on these groups.
     The Majority applies a different standard to the 
AFL-CIO, which ran issue ads aimed at benefiting the Democrats, 
than it applies to Republican groups. For example, the Majority 
discusses allegations that the AFL-CIO coordinated with the 
Democratic National Committee and the Clinton re-election 
campaign, and yet it minimizes--or simply ignores--disturbing 
evidence regarding the Republican National Committee's 
coordination with pro- Republican groups. As noted below, the 
RNC not only engaged in extensive coordination with a long list 
of nonprofit organizations, it established nonprofit front 
groups and it provided millions of dollars in financial help 
(directly or through fundraising assistance) to several other 
tax-exempt groups.
            The AFL-CIO
     In asserting that the AFL-CIO engaged in illegal 
coordination with the Clinton campaign, the Majority applies a 
double standard. Relying upon a legal analysis for coordination 
of an independent expenditure containing express advocacy, the 
Majority concludes, contrary to the facts, that the AFL-CIO 
engaged in illegal coordination while Triad Management did not. 
The Majority's claims that a nonprofit group violates the law 
regarding coordination with campaigns only when the group 
spends money ``at the request of the candidate . . . or based 
upon information obtained from the candidate.'' The Majority 
concludes that the AFL-CIO illegally coordinated with he 
Clinton campaign although they fail to offer evidence that any 
candidate, campaign staff, or White House officials provided 
information or direction to the AFL-CIO.
     The Majority improperly assumes that all 
communications between the AFL-CIO and the White House were for 
the purpose of electoral politics. As Garin and Ickes 
testified, meetings between the AFL-CIO and White House 
officials were principally related to then pending legislative 
issues, and the AFL-CIO often shared information with the White 
House to persuade White House officials to support the AFL-CIO 
position with respect to those issues.216
---------------------------------------------------------------------------
    \216\ Geoffrey Garin deposition, 9/5/97, p. 41.
---------------------------------------------------------------------------
     The Majority inaccurately asserts that the AFL-CIO 
and staff of the Clinton campaign improperly coordinated timing 
and strategy of balanced budget advertising in December 1995. 
In fact, the testimony is consistent that both White House 
staff and Clinton campaign officials believed that the only 
advertisements viewed were advertisements already on the air, 
and that they took steps to ensure they would not coordinate 
content, strategy or location of advertising in advance. The 
Majority report falsely states that both Harold Ickes and Dick 
Morris testified that organized labor and the DNC previewed 
each others advertising. In fact, Morris testified organized 
labor showed ads they ``either had run or were planning to run, 
I was never quite clear what it was. And we showed them ads 
that had already run.'' 217Ickes testified ``I think 
that these ads were up and running and that the AFL-CIO just 
wanted to show us what they were running,'' and Doug Sosnick 
testified that he had no specific recollection of the ads but 
recalled discussing with Ickes that White House staff ``would 
not discuss with labor either the content or placement of their 
ads prior to them doing it,'' and that White House staff 
likewise would not discuss what the DNC would air or where it 
would air.218 Thus, there is no evidence that DNC or 
labor advertisements were ever previewed, and there is no 
evidence that there was ever any advance discussion of content 
or placement of such advertising.
---------------------------------------------------------------------------
    \217\ Dick Morris deposition, 8/20/97, p. 216-17.
    \218\ Harold Ickes deposition, 9/22/97, p. 193; Doug Sosnick 
deposition, 9/12/97, pp. 148-49.
---------------------------------------------------------------------------
     The Majority improperly relies on testimony of 
political consultant Dick Morris, that an official of organized 
labor, who he cannot recall, suggested that 1995 balanced 
budget advertising be coordinated. In fact, Morris also 
testified that there was never any agreement to coordinate and 
no coordination took place. Morris testified that the 
suggestion of coordination was immediately rejected and at no 
time during the campaign were the ads coordinated in any 
way.219 Several other individuals including then 
Chief of Staff Leon Panetta and George Stephanopoulos, who were 
also present had no recollection of any suggestion of 
coordination.220 While Ickes had no specific 
recollection of such a suggestion, he testified that there 
``could well have been'' a suggestion of coordination, as there 
were many suggestions made at meetings.221 However, 
Morris, Sosnick, and Ickes testified that no coordination of 
advertising schedules actually occurred.222
---------------------------------------------------------------------------
    \219\ Dick Morris deposition, 8/20/97, p. 217.
    \220\ Leon Panetta deposition, 8/29/97, p. 190; George 
Stephanopoulos deposition, 9/6/97 p. 98.
    \221\ Harold Ickes deposition, 9/22/97, p. 193.
    \222\ Harold Ickes deposition, 9/22/97, p. 193, Dick Morris 
deposition, 8/20/97, p. 217, Doug Sosnick deposition, 9/12/97, p. 46.
---------------------------------------------------------------------------
     The Majority details no evidence that the AFL-CIO 
coordinated any 1996 issue advertising with any congressional 
candidate. AFL-CIO advertising in 1996 contained advertisements 
that focused on the records of specific candidates for the 
House of Representatives. In the spring of 1995, the AFL-CIO 
made a public announcement of its intent to target many 
freshman Members of Congress. While the AFL-CIO informed Ickes 
of this intent, the information hardly amounts to ``the sneak 
preview'' alleged by the Majority. Similarly, the Majority 
recites information about a ``draft'' memorandum from Jennifer 
O'Connor without mentioning the fact that on the face of the 
memorandum it is clear that the memorandum relates to the 
``Coordinated Campaign,'' the permissible annual get-out-the-
vote programs undertaken by groups sympathetic to both 
political parties.
            Triad Management services
     The Majority incorrectly states that Triad 
Management provides services to conservative contributors in 
exchange for a set fee. Evidence received by the Committee 
shows that Triad does not charge regular fees, is largely 
financed by a single backer andgenerates no profits. See 
Minority Report Chapter 12.
     The Majority incorrectly states that Citizens for 
Reform and Citizens for the Republic Education Fund simply paid 
management fees to Triad and aired issue advertising under 
Triad's guidance and omits a full description of their 
relationship with Triad. Citizens for the Reform and Citizens 
for the Republic Education Fund were created and controlled by 
Triad. Both organizations existed largely on paper and lacked 
offices, staff, and telephones. Moreover, these organizations 
undertook no activities apart from those arranged by Triad. See 
Minority Chapter 12.
     The Majority insists that Triad's pattern of 
visiting campaigns, meeting with candidates and campaign staff, 
reviewing advertisements, providing advice to candidates and 
staff, and gathering information on key issues in the race did 
not rise to the level of illegal coordination. The Majority 
simultaneously concludes that the AFL-CIO did engage in illegal 
coordination based on less compelling, and often undocumented 
facts and evidence. The reports of meetings between Triad's 
consultants and Republican candidates and campaigns document an 
unprecedented level of coordination between allegedly 
independent organizations and campaigns. The FEC has repeatedly 
enforced violations for activity similar to and less extensive 
than Triad's.223 The Majority also employs a double 
standard under which it concludes that all AFL-CIO and White 
House communications were sufficient to establish coordination, 
but Triad and candidate communications were not.224
---------------------------------------------------------------------------
    \223\ FEC Matter Under Review 3918 Hyatt Legal Services; FEC Matter 
Under Review Orton for Congress; FEC Matter Under Review, 3608, Bush-
Quayle '92.
    \224\ FEC Matter Under Review 3608, Bush-Quayle, and J. Stanley 
Huckaby as treasurer.
---------------------------------------------------------------------------
     The Majority asserts that Triad did not make an 
illegal corporate contribution to the Brownback for Senate 
campaign when Triad employee Meredith O'Rourke was sent to the 
National Republican Congressional Committee (``NRCC'') to help 
Senator Brownback ``dial for dollars.'' In fact, O'Rourke 
testified that she went to help Brownback at the instruction of 
her superior at Triad, Carolyn Malenick.225 The 
Majority relies on press statements of Triad's attorneys rather 
than O'Rourke's testimony in claiming that O'Rourke appeared at 
the NRCC as a ``volunteer.''
---------------------------------------------------------------------------
    \225\ Meredith O'Rourke deposition, 9/3/97 pp. 94-95.
---------------------------------------------------------------------------
     The Majority asserts that there is insufficient 
evidence to conclude that employees of Triad engaged in an 
illegal scheme to launder contributions through PACs to 
Republican candidates. The Majority further offers instances of 
overlapping contributions from individuals and PACs to 
Democratic candidates as evidence that coincidental 
contributions are not necessarily illegal. The Majority ignores 
compelling evidence developed by the Committee that Triad 
employees personally solicited the names of potential PAC 
contributors from candidates, solicited those individuals for 
PAC contributions, delivered contributions to the PACs, were in 
regular communication with people at each PAC, and delivered 
PAC contributions to recipient candidates. The Committee 
established that Malenick was involved as an intermediary in 
the making of contributions to multiple PACs that all made 
contributions to the same candidate within days.226 
No similar evidence of earmarking was uncovered in relation to 
contributions received by Democratic candidates. See Minority 
Report Chapter 12.
---------------------------------------------------------------------------
    \226\ Minority Report Chapter 12.
---------------------------------------------------------------------------
     The Majority fails to mention evidence that over 
$1 million of Triad's ad campaign was financed by a secret 
organization, the Economic Education Trust, that required Triad 
use its political consultants, and that also appears to have 
funded advertising through other organizations. The Minority 
twice requested a Committee subpoena for the financial records 
of the Economic Education Trust. No subpoena was ever issued, 
virtually ensuring that the identity of the individuals or 
corporations who may have influenced the outcome of elections 
will remain unknown. See Minority Report Chapter 12.
     The Majority asserts that the Minority has 
repeatedly leaked documents pertaining to Triad in violation of 
the Committee protocol. The Majority specifically relies on a 
May 2, 1997 Kansas City Star article detailing suspicious PAC 
contributions to the Brownback for Senate campaign. The article 
makes no reference to information obtained from the Committee, 
is based on information available on the public record, and was 
written months before Triad produced records to the Committee. 
Further, an October 29, 1997, Wall Street Journal article on 
the subject of Triad states: ``Republican investigators said 
the Kochs paid Triad a fee, indicating they are a client of the 
company, which advises donors on where to contribute.'' 
227 The Majority's assertion about leaks is ironic, 
considering that several major newspaper articles specifically 
stated that they were based on documents and transcripts 
(covered by the Senate protocol) obtained from the Republican 
staff of the Committee.228
---------------------------------------------------------------------------
    \227\ Wall Street Journal, October 29, 1997 (emphasis added).
    \228\ See New York Times 9/14/97: ``A copy of the deposition, taken 
on June 26 and 27 in the Hart Senate Office Building, was obtained by 
The Times from a Republican staff member in the Senate;'' Washington 
Post, 11/14/97 citing classified information provided to a few 
Committee Members.
---------------------------------------------------------------------------
            The RNC's relationships with tax-exempt groups
     The Majority insists, contrary to the evidence, 
that the Republican National Committee did not coordinate its 
activities with nonprofit groups that received millions of 
dollars of RNC funds in the weeks prior to the election. In 
fact, the investigation revealed that the RNC was in constant 
communication with nonprofit groups regarding election-related 
activities and that the RNC actually instructed Republican 
candidates on how to coordinate with outside groups. See 
Minority Report Chapters 10, 11, 13, and 14.
     The Majority asserts that the Committee ``found no 
evidence that the RNC directed or controlled'' the expenditure 
of the millions of dollars it provided to nonprofit groups in 
the weeks before the election. In fact, substantial evidence 
shows that Americans for Tax Reform received from the RNC $4.6 
million to spend on a massive phone bank and direct-mail 
operation aimed at helping Republican candidates. As then RNC-
Chairman Haley Barbour has acknowledged, the RNC could not 
permissibly have paid for the ATR activity itself without using 
a combination of hard and soft dollars. Other documents 
involving the American Defense Institute and National Right to 
Life Committee suggest that the RNC withheld the delivery of 
substantial third party contributions pending participation in 
desired activities. The Majority view of this activity 
contrasts sharply with its characterization of Harold Ickes's 
discussions with Warren Meddoff.229
---------------------------------------------------------------------------
    \229\ As discussed in Chapter 25 of the Majority Report and Chapter 
17 of the Minority Report, Florida businessman Warren Meddoff 
approached Harold Ickes, then Deputy Chief of Staff in the Clinton 
White House, and said his business associate was interested in making a 
large contribution to the Democrats. Later, Meddoff asked Ickes to 
provide him with a list of tax-exempt groups to which Meddoff's 
associate could contribute. The Majority condemns this activity despite 
the fact that Ickes merely recommended certain nonprofit groups--in 
response to a specific request--but finds no fault with the RNC which 
provided substantial funding to several groups, heavily coordinated 
with those groups, and founded two such groups.
---------------------------------------------------------------------------
     The Majority Chapter fails to mention nonprofit 
groups that were actually founded by the RNC, one of which ran 
issue ads as a proxy for the RNC. The National Policy Forum was 
established in 1993 by RNC Chairman Barbour as a policy arm of 
the party and was later denied tax-exempt status due to its 
close connections to the Republican Party. In 1995, the RNC 
created the Coalition for Our Children's Future, another 
501(c)(4) entity, for the sole purpose of running ``issue 
ads,'' on behalf of the Republican Party and its candidates. By 
using working through CCF, the RNC lent credibility to the ads, 
since they seemed to emanate from a legitimate grassroots 
organization, and avoided spending scarce hard money. See 
Minority Report Chapters 3 and 13.
     The Majority falsely asserts that Americans for 
Tax Reform ``complied with the Committee's subpoenas.'' ATR in 
no way complied with the Committee subpoena, refusing to accept 
the Committee's authority to compel the production of 
documents, making a unilateral determination to ``voluntarily'' 
produce certain documents and alleging that the Committee 
lacked jurisdiction over it because it claimed not to have 
engaged in election activity in 1996. This despite the fact 
that ATR received $4.6 million from the RNC right before the 
1996 elections. An unknown amount of documents that would have 
been responsive to the subpoena were withheld. See Minority 
Report Chapter 11.
     Despite consistent efforts of the Minority, the 
Committee failed to interview a single person from the RNC or 
ATR regarding the $4.6 million transfer.
            RNC coordination with the Dole Presidential campaign
     The Majority asserts that ``the Committee cannot 
draw any meaningful conclusions about the allegations that the 
RNC coordinated its issue advocacy expenditures with the Dole 
campaign.'' In fact, the Committee has developed evidence that 
the RNC and the Dole for President campaign coordinated its 
issue advertising campaign in an almost identical fashion to 
the Clinton campaign and the DNC. Thus the Majority's inability 
to draw conclusions is puzzling in view of the clear conclusion 
that the Democratic coordination was extensive and illegal. The 
investigation has shown that Dole campaign manager Scott Reed 
controlled the budget of the RNC's issue-advocacy campaign; 
Dole consultants Don Sipple and Tony Fabrizio created and 
produced the RNC's ads; and the Dole fundraiser who left the 
Dole payroll to become RNC deputy finance director, raised the 
money used to fund the Dole-RNC media campaign. See Minority 
Report Chapter 33. Moreover, no provision in current federal 
law forbids national parties to coordinate with their 
presidential candidates.

Response to Majority Chapter 29: ``Allegations Relating to the National 
        Policy Forum''

    In this chapter, the Majority attempts to provide a defense 
for the National Policy Forum by depicting it as an 
independent, nonpartisan, tax-exempt organization which fully 
cooperated with the Committee. The Majority defends the 
Republican National Committee's role in creating and funding 
the organization. The Majority also spends a great deal of time 
discussing former RNC Chairman Haley Barbour's solicitation of 
a loan from Young Brothers Development, Hong Kong. According to 
the Majority, Barbour did not use the loan to help finance 
Republican congressional elections in 1994. In fact, the 
Majority Report concludes that ``the facts cannot be twisted to 
support a charge that Barbour's testimony was anything less 
than truthful.'' In coming to the defense of Barbour, the 
Majority raises questions about the credibility and clarity of 
other witnesses' testimony, including Fred Volcansek, Richard 
Richards, Ambrous Young, and Benton Becker.
    The Majority's chapter on the NPF twists the facts:
     The Majority falsely claims that ``the NPF and NPF 
witnesses fully complied with the Committee's inquiry.'' In 
fact, the NPF challenged the authority of the Committee and 
never produced a single document pursuant to the Committee 
subpoena. For instance, the NPF never produced the letter or 
the memorandum which Michael Baroody, the president of the NPF, 
submitted to RNC and NPF Chairman Haley Barbour when Baroody 
resigned. Nor did NPF witnesses fully comply: Daniel Denning, 
former president of the NPF, refused to answer numerous 
questions that were posed to him during his deposition.
     The Majority chapter contradicts itself on the 
issue of whether ``the RNC had knowledge that the funds for the 
YBD Team 100 contributions were derived from a foreign source 
rather than the U.S. earnings of a domestic corporation.'' 
Although the Majority claims that the RNC had no knowledge 
about the source of these contributions, the Majority itself 
acknowledges in its chapter that Richard Richards testified 
that Alex Courtelis, an RNC official, ``knew at the time that 
the Young Brothers USA contributions to the RNC arose out of 
the Young Brothers Hong Kong money.'' 230
---------------------------------------------------------------------------
    \230\ Exhibit 402: Affidavit of Richard Richards, 7/14/97.
---------------------------------------------------------------------------
     In its discussion of the origin of the NPF loan 
guarantee, the Majority omits any reference to evidence that 
demonstrates that the funds would be used to assist Republican 
candidates in the 1994 congressional elections. The Majority 
has created a novel theory that was not presented by any 
witness at the NPF hearings: ``The NPF recognized that, as a 
result of the impending congressional elections, the RNC and 
congressional campaigns would present stiff competition for 
available fundraising sources through November, 1994.'' In 
fact, several sources--including the Volcansek talking 
points,231 Ambrous Young's September 9, 1994, letter 
hand-delivered to Barbour,232 and Richard Richards's 
September 17, 1996 letter 233--make clear that 
Barbour approached Ambrous Young by stating that the money 
supplied by Young Brothers Development would ultimately be used 
to help Republican candidates in the 1994 election.
---------------------------------------------------------------------------
    \231\ Exhibit 277: Talking Points for Haley Barbour, 7/28/94.
    \232\ Exhibit 289: Letter from Ambrous Young to Haley Barbour 
regarding support of the Republican Party and NPF, 9/9/94, 0040.
    \233\ Exhibit 349: Letter from Richard Richards to Haley Barbour 
regarding the YBD loan to NPF, 9/17/96, RB 014591.
---------------------------------------------------------------------------
     In its attempt to bolster the credibility of 
Barbour, the former RNC chairman, the Majority either ignores 
contradictory testimony or tries to impeach witnesses who 
contradicted him. Even though Barbour is contradicted on 
several points by numerous witnesses and documents, the 
Majority asserts his testimony was credible. As detailed in 
Chapter 3 of the Minority Report, Barbour's testimony was 
contradicted on several important points by Fred Volcansek, 
Steve Young, Ambrous Young, Benton Becker, and Richard 
Richards.234 Moreover, the documents obtained by the 
Committee also either contradict, or do not support, Barbour's 
version of events.
---------------------------------------------------------------------------
    \234\ The Majority goes to great lengths to impeach the credibility 
of former RNC Chairman Richard Richards, particularly as it relates to 
his letter to Barbour on September 17, 1996, concerning the purpose of 
the loan. The Majority Report quotes from an affidavit signed by 
Richards on July 14, 1977, in which he states that ``I now understand 
that these funds could not and were not used to directly benefit 
congressional candidates.'' The circumstances surrounding the signing 
of this affidavit were described by Richards's attorney, Benton Becker, 
in a letter to the Committee on December 16, 1997. According to Becker, 
RNC attorney Martin Weinstein contacted his office to inquire if, among 
other things, Richard ``might submit to [a] `brief interview'. . . .'' 
Becker was later informed by Steve Richards that ``Mr. Weinstein asked 
Richard Richards to execute an affidavit that had been prepared by Mr. 
Weinstein.'' Becker eventually obtained the affidavit and determined 
that there were ``factual errors therein.'' Becker advised Richards to 
execute a new affidavit correcting the errors, which Richards 
subsequently did. In the affidavit prepared by Weinstein and signed by 
Richards on July 14, Richards described the letter he had written to 
Haley Barbour on September 17, 1996: ``Accordingly in the letter, I 
made several serious statements which, upon reflection, were made as 
negotiating tools [emphasis added] and were not accurate.'' In his 
testimony before the Committee on July 24, Haley Barbour testified in 
response to a question from Counsel Alan Baron whether he viewed 
Richards's September 17 letter as credible: ``Now that's what I took 
the letter to be, a negotiating tool [emphasis added], to put pressure 
on me. That's why I didn't respond. It's also why I didn't give it 
credibility.'' Despite the remarkable similarity between Richards's 
affidavit and Barbour's testimony, Richards consistently testified that 
Barbour told him in 1994 that the money was to be used for the 1994 
congressional elections. Richards's testimony in that regard is 
corroborated by Volcansek and by the documents.
---------------------------------------------------------------------------
     The Majority has mischaracterized the commitment 
that Haley Barbour made to Young Brothers Development in order 
to secure the loan guarantee for NPF. The Majority Report 
references Barbour's August 30 letter to Benton Becker and 
notes that ``Ultimately, Barbour responded with a letter 
committing to raise the issue with the RNC Budget Committee and 
seek its approval in the event that the NPF defaulted on an 
outstanding debt to a `domestic corporation.' '' In fact, 
Barbour made a much stronger commitment, ``Moreover, as 
Chairman of the RNC, in the event NPF defaults on any debt, I 
will ask the Republican National Committee to guarantee me such 
authority to pay off any NPF debts. I am confident the RNC 
would grant me such authority. . . .'' 235 Indeed 
Senator Thompson, apparently recognizing this commitment, 
remarked to Barbour, ``[I]t looks to me like you had a 
situation there where this gentleman, whether he is a citizen 
or not, caused his company to put up some money that was lost 
at a time when he was thinking, anyway, that the RNC, had a 
moral obligation to step in there and do what it could. . . . 
So legalities aside, you know, a deal is a deal, and don't you 
think maybe that you and I both ought to urge that thing be 
looked at again?'' 236
---------------------------------------------------------------------------
    \235\ Exhibit 285: Letter from Haley Barbour to Benton Becker 
regarding loan guarantee for the National Policy Forum, 8/30/94, 0037.
    \236\ Chairman Thompson, 7/24/97 Hrg., p. 170.
---------------------------------------------------------------------------
     The Majority claims that ``the NPF did not misuse 
its tax status,'' but it fails to describe the NPF's 
relationship with the RNC. The Majority acknowledges that ``the 
NPF was initially envisioned as a wing or subsidiary of the 
RNC.'' The Majority even quotes Michael Baroody, NPF's first 
president, in support of this view. However, the Majority fails 
to note that Baroody resigned because he believed Barbour had 
allowed the ties between the NPF and the RNC to become so close 
that the NPF's status as an independent, nonpartisan 
organization was a fiction. Baroody wrote, ``I believe that 
what has happened over many months has undermined my efforts, 
distorted our purpose, blurred the separation of the RNC and 
the NPF in such a way as to conceivably jeopardize our 
501(c)(4) application. . . .'' He went as far as to say that 
``in recent months, it has become increasingly difficult to 
maintain the fiction of separation.'' 237 Indeed, as 
the Majority notes, the NPF 501(c)(4) application was rejected 
by the Internal Revenue Service in 1997. The Majority notes 
that the IRS's decision has been appealed but fails to quote 
the IRS's letter explaining that decision. The IRS found 
substantial evidence that the NPF was far from being the 
``nonpartisan'' organization it claimed to be when it applied 
for (c)(4) status. The IRS noted, among other things, Haley 
Barbour's dual roles as chairman of both the RNC and NPF and 
NPF's heavy reliance on the RNC for funding.238
---------------------------------------------------------------------------
    \237\ Exhibit 273: Memorandum from Michael Baroody to Haley Barbour 
regarding Baroody's reasons for resignation from NPF, 6/28/95.
    \238\ Exhibit 353: Letter from the Internal Revenue Service to the 
National Policy Forum denying NPF tax exempt status, 2/21/97.
---------------------------------------------------------------------------

Response to Majority Report Chapter 30: ``White House Document 
        Production''

    In this chapter, the Majority asserts that the delays in 
document production by the White House were the result of a 
deliberate attempt by the White House Counsel's Office to 
obstruct the work of the Committee. Although the Minority 
shares the Majority's disappointment with certain delays, the 
Majority grossly exaggerates this problem. Moreover, the 
Majority Report never details how the alleged instances of 
``non-cooperation'' obstructed the Committee's investigation.
     The Majority's complaints about the scope of the 
White House's assertion of executive privilege are overstated. 
The Majority describes, in the most dramatic terms possible, 
the White House's assertions of executive privilege as overly 
broad, a violation of previous understandings with the 
Committee, and a substantial impediment to the progress of the 
Committee's investigation. First, as the Majority Report 
acknowledges, the Committee adopted a document production 
protocol on April 1, 1997, which specifically contemplated that 
the White House could assert executive privilege as to some 
documents and, in that event, that Committee staff would be 
provided an opportunity to review such documents and to renew 
requests for production. Although the Majority Report implies 
that the Clinton Administration's concern for executive 
privilege compares unfavorably to previous Republican 
administrations (which the Report claims ``voluntarily waived 
executive privileges applicable to documents requested by 
investigative bodies,'') the actual historical record is far 
more mixed. Both the Reagan and the Bush Administrations 
invoked executive privilege to prevent disclosures of materials 
to Congress.239Indeed, the Reagan Administration 
invoked executive privilege on no fewer than three 
occasions.240
---------------------------------------------------------------------------
    \239\ Substantiality of White House Claims of Executive, Attorney-
Client and Work Product Privilege for Documents Relating To The Hudson 
Dog Track Matter, Congressional Research Service, 12/3/97; Washington 
Post, 2/20/98.
    \240\ Washington Post, 2/20/98.
---------------------------------------------------------------------------
     The White House did not withhold WAVE record 
241information from the Committee. Perhaps the most 
egregious distortion of the record is the Majority's insistence 
that White House Counsel (1) deliberately declined to provide 
certain categories of information maintained by the Secret 
Service as part of their WAVE records, (2) deliberately misled 
the Committee about the existence of these categories of 
information, and then (3) reluctantly provided the requested 
information only after being confronted with the facts by the 
Secret Service in a meeting between Committee staff, White 
House Counsel and the Secret Service. Each of these assertions 
is simply wrong. Such false allegations betray the partisan 
intent of this chapter.
---------------------------------------------------------------------------
    \241\ The Secret Service's WAVE records record visits to the White 
House Complex by individuals who do not hold White House passes.
---------------------------------------------------------------------------
    The category of information at issue consists of notations 
made by the Secret Service to reflect whether their check of 
the database records maintained by the National Crime 
Information Center (``NCIC'') indicate past criminal activity 
by a potential White House visitor. The Secret Service referred 
to this as the ``double XX'' information because a double XX 
was placed in the records maintained by the Secret Service next 
to these entries. Under the Privacy Act, 5 U.S.C. Sec. 552a, 
this ``double XX'' information could not be disclosed by the 
Secret Service unless the disclosure came under specific 
exemptions contained in the Privacy Act.242 Because 
of the sensitivity of this information and the legal restraints 
of the Privacy Act, which imposes personal liability on 
individuals who make unauthorized disclosures of protected 
information, the ``double XX'' information was never included 
in the monthly printouts of WAVE records provided to the White 
House.
---------------------------------------------------------------------------
    \242\ Letter from Thomas A. Kelly, FBI Acting General Counsel, to 
Thomas Dougherty, Senior Counsel, United States Secret Service, re: 
propriety of releasing NCIC information to the Senate Governmental 
Affairs Committee, 8/11/97.
---------------------------------------------------------------------------
    The Secret Service also provided accompanying computer 
tapes to the White House containing WAVE record information, 
including the double XX information, but the software which 
enabled the White House to print out additional copies of these 
reports from the computer tape did not allow the White House to 
access the ``double XX'' information. Therefore, when the White 
House received the monthly WAVE records from the Secret Service 
or printed out additional copies of those records from the 
computer tape provided by the Secret Service, White House 
personnel did not see the ``double XX'' information. Indeed, 
the White House Counsel's office was not aware of the existence 
of the ``double XX'' notations maintained by the Secret Service 
prior to receiving inquiries from the Majority Counsel about 
this category of information.243The Majority Report 
is mistaken, therefore, when it suggests that the White House 
deleted or withheld the ``double XX'' information before 
providing the requested WAVE records to the Committee: The 
White House provided the Committee with all of the WAVE record 
information in its possession. White House Counsel Charles F.C. 
Ruff restated this explanation to a Majority Deputy-Chief 
Counsel on July 29, 1997: ``Your assertion that my office 
receives USSS Waves records from the Secret Service in a format 
different from that provided to the Committee is simply 
erroneous.'' 244
---------------------------------------------------------------------------
    \243\ Telephone interview with White House Counsel Karen Popp, 2/
20/98.
    \244\ Letter from White House Counsel Charles F.C. Ruff to Majority 
Counsel Don Bucklin, 7/29/97, p.3.
---------------------------------------------------------------------------
    When Majority Counsel met with the Secret Service in April 
1997 and discovered the existence of the ``double XX'' 
information, the Committee inquired of White House counsel 
Karen Popp, who truthfully responded that she knew nothing 
about the ``double XX'' information and that the WAVE records 
which the White House received from the Secret Service did not 
contain such a category of information. Nevertheless, Popp 
promised to inquire further and she contacted the Secret 
Service's Office of General Counsel. Even this Committee had no 
familiarity with the ``double XX'' category of information and 
had to make its own inquiries of the agents who briefed the 
Committee to establish that this information existed and to 
learn how it was maintained. Popp advised two Majority counsel 
that she had confirmed the existence of the double XX 
information and that both the White House Counsel's office and 
the Secret Service's Office of General Counsel had not 
previously known about this information. The Majority Report is 
in error when it suggests that Popp was not forthcoming when 
dealing with the Committee staff on this issue.
    During a subsequent meeting between Secret Service 
representatives, Majority Counsel and White House Counsel Popp 
on August 8, the Secret Service raised the concern that 
disclosing the ``double XX'' information to the Committee might 
violate the Privacy Act. The attendees placed a call to the 
then-acting General Counsel for the FBI, Thomas A. Kelly, who 
subsequently provided a letter to the Secret Service stating 
that the Secret Service could disclose the requested ``double 
XX'' information to the Committee without violating the Privacy 
Act.245 Therefore, although the Majority claims that 
the White House ``eventually produced complete copies of the 
WAVE records,'' the truth is that the ``double XX'' information 
was provided directly by the Secret Service, in accordance with 
the restrictions of the Privacy Act.246 Indeed, in 
its letter to the Committee accompanying the double XX 
information, the Secret Service explicitly distinguished the 
``double XX and comment field information'' held by the Secret 
Service from the ``WAVES visitor information'' that the Secret 
Service provided to the White House on a monthly 
basis.247
---------------------------------------------------------------------------
    \245\ Letter from Thomas A. Kelly, FBI Acting General Counsel, to 
Thomas Dougherty, Senior Counsel, United States Secret Service, re: 
propriety of releasing NCIC information to the Senate Governmental 
Affairs Committee, 8/11/97.
    \246\ Letter from William H. Pickle, Executive Assistant to the 
Director (Congressional Affairs), United States Secret Service, to 
Chairman Thompson re: providing ``double x and comment field'' 
information in response to Committee's request for information 
concerning White House visitors.
    \247\ Letter from William H. Pickle, Executive Assistant to the 
Director (Congressional Affairs), United States Secret Service, to 
Chairman Thompson re: providing ``double x and comment field'' 
information in response to Committee's request for information 
concerning White House visitors.
---------------------------------------------------------------------------
     The Majority's criticisms of White House Counsel 
Michael Imbroscio are unfair. The White House's belated 
production of videotapes responsive to production requests was 
disappointing but, as the Minority Report explains in detail, 
there is no evidence that anyone at the White House acted to 
obstruct this Committee's investigation. The Majority Report 
suggests that White House Counsel Michael Imbroscio--who 
ultimately discovered the existence of responsive videotapes--
actively misled Committee staff members when he informed them 
that the White House Communications Agency (``WHCA'') did not 
videotape events that were closed to the press and that he 
would produce a paper log of videotaped events for review by 
the Committee. Such accusations ignore Imbroscio's consistent 
deposition and hearing testimony. For example, at a September 9 
meeting with Committee counsel, Imbroscio testified that he had 
asked the WHCA representative he had interviewed to get back to 
him about the existence of a log of videotaped and audiotape 
events, that he would inquire further on the issue of such 
videotapes by reviewing the log and, most importantly, he 
committed to provide the Committee with access to such a log 
when it was located.248 Imbroscio's also testified 
during public hearings that:
---------------------------------------------------------------------------
    \248\ Michael Imbroscio deposition, 10/17/97, pp. 111-112.

          I said very clearly there were videotapes of 
        fundraising events and that--but to my understanding 
        there were not videotapes of coffees, but that I would 
        inquire further. . . . I did not have complete 
        confidence that Mr. Smith knew precisely on a day-to-
        day basis what WHCA did, and so that is why I couched 
        it in the terms I did, which is my understanding they 
        were not filmed, but I wanted to satisfy myself on a 
        first-hand basis whether or not they, in fact, 
        existed.249
---------------------------------------------------------------------------
    \249\ Michael Imbroscio, 10/29/97 Hrg. pp. 163 & 190.

    Although there were miscommunications and misunderstandings 
that delayed the production of responsive videotapes, the 
Majority ignores the consistent testimony of Imbroscio 
regarding his representations to Committee counsel during their 
September 9 meeting.250 Significantly, the Minority 
proposed that the Majority Counsel who was present at the 
September 9 meeting, be deposed concerning his communications 
with Imbroscio, but this request was rejected by the Majority. 
The Majority also ignores the fact that as soon as the coffee 
tapes were discovered, Imbroscio called the Majority Counsel 
immediately.
---------------------------------------------------------------------------
    \250\ The Majority Report also unfairly accuses Imbroscio of 
misrepresenting WHCA's practices of document retention to Committee 
Counsel during the September 9 meeting by reporting that WHCA's phone 
logs were destroyed after 60 days. Majority Report, Chapter 24, n. 87. 
Imbroscio explained in response to a question from Chairman Thompson 
that he was not aware at the time of the September 9 meeting that WHCA 
maintained separate logs for the President or that copies of those logs 
were provided to the diarist. Michael Imbroscio, 10/29/97 Hrg., pp. 
214-215.
---------------------------------------------------------------------------
     The Majority falsely asserts that the Ruff memo's 
definition of ``document'' was the reason that WHCA failed to 
identify responsive videotapes. The evidence is clear that, but 
for the mishandling of page two of the Ruff memo by the career 
military personnel in the White House Communications Agency, 
the White House Counsel's document-search procedures were 
adequate to identify the existence of responsive videotapes. 
Notwithstanding the Ruff memo's simple definition of 
``document,'' WHCA personnel did, in fact, search their 
videotape and audiotape databases for responsive materials. 
Indeed, WHCA Deputy Commander Charles Campbell had directed his 
subordinates to conduct a thorough search of all records 
(regardless of media).251 No responsive materials 
were identified at that time because of the mishandling of the 
second page of Ruff memo with its request for materials related 
to coffees. Both the Campbell and Chief Charles McGrath, the 
person actually responsible for searching the audio and video 
databases, testified to the Committee that they would have 
identified responsive videotapes if they had seen page two of 
the Ruff memo.252 In its determined attempt to shift 
blame from the WHCA to the White House Counsel's Office, the 
Majority Report inexplicably characterizes the above-described 
testimony from the career military personnel at WHCA concerning 
matters within their direct experience and area of 
responsibility as a ``purely speculative assessment of the 
impact of this mysterious and inadvertent transmission error.''
---------------------------------------------------------------------------
    \251\ Exhibit 2428M: E-mail message from Col. Charles Kenneth 
Campbell to WHCA personnel re: HOT SUSPENSE--Document Search, 4/29/97.
    \252\ Col. Charles Kenneth Campbell deposition, 10/21/97, p. 83; 
Chief Charles McGrath deposition, 10/20/97, pp. 89-90.
---------------------------------------------------------------------------
     The Majority ignores the testimony of the WHCA 
individual who actually conducted the search for the 
videotapes. The Majority takes the comments of one WHCA 
official, Steve Smith, out of context when it quotes him as 
saying, ``if somebody wanted the White House Communications 
Agency to look for tapes, audiotapes, videotapes, . . . that's 
what they should ask for you know, video or audiotapes.'' At 
the time of the Ruff memo, however, Smith had not assumed his 
present position with WHCA, was not in the operational chain of 
command for the Audiovisual Unit, and bore no responsibility 
for directing the search of the audiotape and videotape 
databases.253 Furthermore, Smith never testified 
that the Ruff memo, with its simpler definition of document, 
was inadequate to allow WHCA personnel to identify responsive 
videotapes. Most important, however, is the fact that the 
Majority ignores the testimony of the WHCA officials who 
actually had responsible for responding to the Ruff memo. Those 
officials testified that they would have identified responsive 
videotapes if the second page of the Ruff memo, which 
specifically asked for materials relating to ``coffees,'' had 
not been inadvertently omitted from the e-mail transmitted to 
WHCA personnel. See Minority Chapter 42.
---------------------------------------------------------------------------
    \253\ Steven Smith, 10/23/97 Hrg., p. 93.
---------------------------------------------------------------------------
     Contrary to the Majority's assertion, inclusion of 
the Committee's definition of ``document'' would not have been 
likely to put others on notice that WHCA had failed to identify 
all responsive material. The Committee's investigation, 
however, failed to identify any individual with both the 
requisite knowledge of WHCA videotaping activities and close 
involvement with the document production process who might have 
identified responsive videotapes earlier with the benefit of 
the Committee's full definition of ``document.'' For example, 
the Majority broadly claims that White House Deputy Counsel 
Cheryl Mills knew that one of WHCA's function was to videotape 
the President and that she attended meetings of lawyers working 
on the campaign finance investigation. Mills testified during 
her deposition, however, that she was generally unaware which 
events WHCA was videotaping.254 Moreover, she was 
not involved with the coffees during the time they were 
occurring, did not attend any coffees, and did not even know 
there was a coffee ``program.'' 255 Moreover, Mills 
did not play a major role in the White House's responses to the 
Committee's document requests.256 Similarly, other 
members of the White House Counsel's Office, although more 
involved with producing materials to the Committee, did not 
have detailed knowledge of the kinds of events videotaped by 
WHCA.
---------------------------------------------------------------------------
    \254\ Cheryl Mills deposition, 10/18/97, pp. 57-59.
    \255\ Cheryl Mills deposition, 10/18/97, pp. 54-57.
    \256\ Cheryl Mills deposition, 10/18/97, p. 52.
---------------------------------------------------------------------------
     The Majority provides insufficient evidence that 
the White House tried to ``manipulate'' the investigation by 
disclosing materials to the press. The Majority Report is 
especially inchoate in its repetitive criticisms of the White 
House for allegedly attempting to ``manipulate'' the 
Committee's investigation by providing some materials to both 
the Committee and the press at the same time. The Majority, 
however, never explains why it considered the White House 
provision of information to the press and the public as 
inappropriate. Nor does the Majority explain how that process 
``manipulated'' the Committee's investigation.257 In 
addition, the Majority's complaints in this regard conflict 
with claims it makes elsewhere that the Committee efforts ``led 
to the exposure by the White House--either though the 
Committee's hearings or through the White House's production of 
information directly to the press--of much that would otherwise 
have remained undisclosed.'' Finally, the White House's release 
to the press of information that had been requested by the 
Committee was not prohibited by any Senate rule, Committee 
protocol, or informal agreement. In sharp contrast, information 
from numerous confidential deposition transcripts and staff 
interviews regularly appeared in the press throughout the 
course of the Committee's investigation in direct violation of 
Committee protocol.258
---------------------------------------------------------------------------
    \257\ Letter from White House Counsel Lanny Breuer to Majority 
Chief Counsel, 7/11/97. Letter from Majority Chief Counsel to Lanny 
Breuer, 7/18/97.
    \258\ Letter from Thomas C. Hill to Chairman Thompson re: 
unauthorized disclosure of Heather Marbeti's deposition transcript to 
the Washington Post, 9/30/97; Letter from White House Counsel Lanny 
Breuer to Majority Chief Counsel re: complaint that Committee staff has 
provided deposition testimony from multiple witnesses directly to 
reporters, 9/2/97.
---------------------------------------------------------------------------

Response to Majority Report Chapter 31 : ``DNC Document Production''

    In this chapter, the Majority contends that the Democratic 
National Committee acted in bad faith in connection with the 
Committee's document subpoena and chose to ignore the 
subpoena's return date. The Majority states that the DNC was 
``slow walking'' its response to the subpoena, knowing that the 
DNC could use the allegedly more urgent subpoenas issued by 
federal grand juries as an excuse for delaying its response to 
the Committee.
    The Majority fails to note the extent of cooperation 
provided by the DNC in making staff available for depositions 
and testimony without subpoenas, in stark contrast to the lack 
of cooperation exhibited by other groups, including the 
Republican National Committee.
     The Majority's claim that the DNC intentionally 
delayed production of documents is unfounded and untrue. The 
DNC made significant efforts to respond to the Committee's 
subpoena, which, according to DNC Chairman Roy Romer, ``reached 
far beyond the legitimate needs of the Committee's 
investigation.'' 259 In apparent frustration with 
the refusal of the Committee to narrow the scope of the 
subpoena, Romer sent a letter to Chairman Thompson on July 17, 
1997, in which he wrote that the scope and attendant cost of 
document production would rival or exceed the costs associated 
with the largest civil cases in U.S. history, ``cases brought 
against huge corporations with thousands of employees and 
resources vastly exceeding the limited funds of the DNC.'' 
260 By the end of 1997, the DNC had incurred 
logistical, technical, and staff costs of $4.75 million 
responding to various investigations. This figure does not 
include legal fees, which significantly increases the total 
expenditures made by the DNC in response to the Committee and 
other investigative demands.261
---------------------------------------------------------------------------
    \259\ Letter from DNC General Chairman Roy Romer to Chairman 
Thompson, 9/2/97.
    \260\ Letter from DNC General Chairman Roy Romer to Chairman 
Thompson, 7/17/97.
    \261\ Washington Post, 1/19/98.
---------------------------------------------------------------------------
    The DNC attempted to adjust to the shifting deposition 
schedules, document demands, and priorities of the Committee. 
The Committee conducted the equivalent of 38 days of 
depositions, 14 interviews, and five days of public hearings of 
current and former DNC officials who voluntarily provided sworn 
testimony to the Committee, unlike several former and current 
RNC officials, who insisted on Committee subpoenas before they 
would cooperate. Even when subpoenas were issued, RNC officials 
largely ignored them, ultimately providing only two half days 
of deposition testimony.
    The DNC faced approximately 18 separate subpoena and 
document demands from various investigative bodies including 
the Committee. In order to respond, the DNC reviewed over 9 
million documents. Unlike the RNC, which produced only about 
70,000 pages of responsive documents, many of which were 
heavily redacted, the DNC produced about 230 boxes of 
unredacted documents, exceeding 450,000 pages.262 In 
August 1997, to meet the demands placed upon it, the DNC 
doubled the number of employees dedicated to document 
production from 17 to 34.263 The DNC made every 
effort to meet the Committee's requests in a timely manner, but 
was overwhelmed by the frequency, extent, and compressed time 
schedules imposed by the Majority.
---------------------------------------------------------------------------
    \262\ Letter from Chairman Thompson to DNC General Chairman Roy 
Romer, 7/23/97; telephone conversation with Paul Palmer of Debevoise & 
Plimpton, counsel to the DNC, 12/15/97; letter from Chairman Romer and 
Steve Grossman, DNC National Chairman, to Chairman Thompson, 9/2/97; 
telephone conversation with Paul Palmer of Debevoise & Plimpton, 
counsel to the DNC, 1/7/98.
    \263\ Letter from Roy Romer, DNC General Chairman and Steve 
Grossman, DNC National Chairman, to Chairman Thompson, 9/2/97; Joseph 
Birkenstock deposition, 8/28/97, pp. 9-10.
---------------------------------------------------------------------------
     The Majority contends that as part of a ``pattern 
of gamesmanship,'' the DNC's first production of 25 boxes of 
documents was mostly ``of no value.'' The Majority staff 
specifically asked the DNC to first produce documents relating 
to John Huang. Within a week of that request, the DNC produced 
25 boxes of documents, including all of John Huang's files, all 
of his e-mail (five full boxes), the results of an exhaustive 
search of the DNC's computer network for documents relating to 
Huang and certain others, and all of the Ernst & Young work 
product from the accounting firm's review of contributions 
conducted on behalf of the DNC.264
---------------------------------------------------------------------------
    \264\ Letter from DNC General Chairman Roy Romer to Chairman 
Thompson, 6/11/97.
---------------------------------------------------------------------------
     The Majority's contention that the DNC was not 
looking for e-mail responsive to the subpoena until September 
1997 is incorrect. The DNC produced five boxes of Huang's e-
mail--dating back to March 1996--weeks before the Committee 
hearings began.265 Printouts of other e-mail records 
were also produced, consistent with priorities established by 
Majority staff.
---------------------------------------------------------------------------
    \265\ Letter from DNC General Chairman Roy Romer to Chairman 
Thompson, 6/11/97.
---------------------------------------------------------------------------
     The Majority contends that the DNC produced 
documents in a manner calculated to impede and obstruct the 
investigation. The Majority also complained that the DNC 
routinely produced documents relevant to particular witnesses 
the afternoon before their deposition, even though the 
documents had been gathered by the deponents long before. In 
his August deposition, DNC attorney Joseph Birkenstock 
testified about the DNC's efforts to comply with the 
Committee's document subpoena. He stated that he was instructed 
to carry it out as expeditiously as possible, and there was no 
apparent deviation from those instructions. Birkenstock 
testified that while the documents frequently required time-
consuming pre-production review to protect against disclosure 
of personal, confidential, or privileged information, there was 
no DNC practice or policy to delay production of documents for 
any reason, nor did the DNC establish different document 
production priorities from those established by the Committee. 
Birkenstock stated that the political or legal sensitivity of 
particular documents or categories of documents was not a 
factor in determining when they would be produced to the 
Committee.266
---------------------------------------------------------------------------
    \266\ Joseph Birkenstock deposition, 8/28/97, pp. 131-133.
---------------------------------------------------------------------------
    In a June 11, 1997, letter to Chairman Thompson, DNC 
Chairman Romer wrote, ``our lawyers have not `waited' to 
produce any documents to the committee, much less until shortly 
before the depositions. To the contrary, we have been working 
intensively with the limited resources we have to produce 
whatever prioritized documents we can before the depositions. 
To then complain that we could not produce those documents even 
sooner, so that your multi-million dollar, taxpayer-financed 
legal staff could peruse them at a more leisurely pace (while 
our lawyers work night and day to try to accomodate their 
unrealistic and ever-shifting schedule), seems to me to be 
totally unreasonable.'' 267 The Committee itself 
caused a decrease in efficiency in the DNC's document 
production efforts. The DNC's ongoing document production was 
often disrupted as the Committee's priorities changed regarding 
who would be deposed or would testify on any given day. This 
required the DNC change course and identify new documents 
relevant to each newly identified witness or issue and then 
review, sort, copy, and produce thousands of pages of 
documents.
---------------------------------------------------------------------------
    \267\ Letter from DNC General Chairman Roy Romer to Chairman 
Thompson, 6/11/97.
---------------------------------------------------------------------------
    The Majority suggested that the documents sought by the 
Committee had been previously gathered by the DNC but failed to 
note that having hundreds of thousands of pages of documents 
gathered by DNC staff at different times, which were being 
searched and produced in response to numerous different 
requests, was of little help when the Committee failed to 
advise the DNC which witness files it wanted reviewed and 
produced until immediately before the witness's deposition.
     The Majority contends that the late production of 
DNC Finance Director Richard Sullivan's files may raise 
criminal issues. In its Report, the Majority raises the 
possibility that Sullivan's files were intentionally withheld, 
which would constitute criminal obstruction of Congress. In 
fact, the late production of Sullivan's files occurred because 
the documents were not among those that Sullivan identified to 
the DNC as being his files, and the files in question were 
believed to be ``generic'' Finance Department or staff files. 
When they were determined to be Sullivan's documents, Romer 
immediately personally informed Chairman Thompson of their 
existence. Thereafter, the documents were immediately reviewed 
by DNC staff and produced to the Majority on August 4, in 
accordance with Romer's commitment to Chairman 
Thompson.268 The Committee then had the opportunity 
to recall Sullivan, which it did.
---------------------------------------------------------------------------
    \268\ Letter from Roy Romer, DNC general chairman, and Steve 
Grossman, DNC national chairman, to Chairman Thompson, 9/2/97.
---------------------------------------------------------------------------
    Despite the Majority's unusual claims that the DNC may have 
violated 18 U.S.C. 1501, there is is absolutely no evidence of 
the physical assault of a process server nor is there evidence 
of DNC obstruction of compliance with the Committee's subpoena. 
Similarly, there is no evidence that documents were 
intentionally withheld from the Committee.
     The Majority's claim that the DNC should have been 
well-prepared for the Committee's subpoena, because the 
Committee gave a draft of the subpoena to the DNC on March 18, 
1997, is unfounded. In his June 11, 1997, letter to Chairman 
Thompson, DNC Chairman Romer wrote that although the 
Committee's Majority staff provided the DNC's counsel a draft 
of the subpoena, it did so on the express conditions that only 
one DNC employee could see the draft and that he was required 
to return it to the Committee's staff within 24 hours. The 
Committee Majority staff also advised the DNC that the draft 
subpoena was subject to revision, and it was, in fact, changed 
before it was issued. The DNC did not receive the final 
subpoena--which had been changed from the draft version--until 
April 10, 1997. Additionally, the DNC did not receive answers 
from Majority staff on priorities for production until April 
24, 1997.269
---------------------------------------------------------------------------
    \269\ Letter from DNC General Chairman Roy Romer to Chairman 
Thompson, 6/11/97.
---------------------------------------------------------------------------
     The Majority contends that in his August 29 Order 
to the DNC, the Chairman specifically determined that the DNC 
willfully refused to comply with the lawful subpoena the 
Committee issued on April 9, 1997. On September 2, 1997, DNC 
Chairman Romer sent Chairman Thompson a letter responding to 
the Order which he branded as ``nothing more than a partisan 
political maneuver designed to accomplish some end other than 
the legitimate investigative purpose of the Committee.'' 
According to Romer, ``Although the Committee's subpoena was 
issued on April 9, the relevant terms and scope were not 
finalized through negotiations until April 24. Even before the 
process began, however, all the parties--including you 
[Chairman Thompson] and the Committee staff--knew that the 
April 30 return date was at best humanly impossible and at 
worst totally absurd. That is why in April the Committee staff 
agreed to a ``rolling production'' by the DNC. Even with this 
oppressive demand, the DNC managed, contrary to your 
representation, to produce 50,000 pages of documents, including 
all of John Huang's files, by April 30.'' 270
---------------------------------------------------------------------------
    \270\ Letter from Roy Romer, DNC general chairman, and Steve 
Grossman, DNC national chairman, to Chairman Thompson, 9/2/97. The 
subpoena was signed by Chairman Thompson on April 9, 1997 and received 
by the DNC on April 10, 1997.
---------------------------------------------------------------------------
    In the September 2 letter Romer also wrote, ``The DNC never 
instructed its employees in April to complete a review of their 
files by July 31, 1997. Instead, they were told in writing, to 
review their files by May 9, 1997, and as documents were 
submitted, they were reviewed for responsiveness and produced. 
Although certain files were not collected until late July 
pursuant to a final deadline set in that month, they had been 
previously reviewed for more narrow document requests, and the 
additional review process for materials responsive to the 
Committee's subpoena could not have been concluded earlier.'' 
271
---------------------------------------------------------------------------
    \271\ Letter from Roy Romer, DNC General Chairman and Steve 
Grossman, DNC National Chairman, to Chairman Thompson, 9/2/97.
---------------------------------------------------------------------------

Response to Majority Report Chapter 32: ``Soft money and Issue 
        Advocacy: Systemic Problems of the Campaign Finance System''

    In this chapter, the Majority offers its analysis of many 
of the issues covered in the course of the Committee's 
investigation. The Minority generally agrees with the 
Majority's general proposals for reform, such as the banning of 
soft money, the institution of a 60-day bright line test for so 
called ``issue advocacy'' advertisements aimed at influencing 
federal elections, improvements in the structure and processes 
of the Federal Election Commission, and codification of the 
Supreme Court holding in the Beck case. The Majority laudably 
notes that banning soft money without addressing the issue 
advocacy loophole would ``encourage candidates to hide their 
donations through unreported coordinated issue advocacy with 
third parties.''
    Other proposals the Minority believes merit further 
exploration include public financing of campaigns and the 
provision of free air time in an attempt to reduce the 
overwhelming need for money experienced throughout the 
political system. Had the investigation not been conducted on a 
partisan basis, we could have joined together in a bipartisan 
report, recogning those reforms on which we agreed and 
submitting a report in time to have had an impact on the 1988 
debate regarding campaign finance reform legislation.





                                   John Glenn.
                                   Joe Lieberman.
                                   Richard J. Durbin.
                                   Max Cleland.
                                   Carl Levin.
                                   Daniel K. Akaka.
                                   Robert G. Torricelli.





                 ADDITIONAL VIEWS BY SENATOR JOHN GLENN

    The Minority report analyzes in exacting detail the results 
and conduct of the investigation as well as the Majority 
report. As I look at what the committee has wrought following 
the passage of Senate Resolution 39 authorizing the 
investigation, I am struck as much by what the committee didn't 
do as by what it did do.
    Among other things, the committee should have examined in 
more detail the need for better law enforcement through the FEC 
for campaign finance violations. Larger penalties and quicker 
investigations of allegations might concentrate the minds of 
potential violators better than the current system in which the 
FEC is underfunded, understaffed and hamstrung in reaching 
decisions in difficult cases. But this isn't the main lacuna in 
the committee's investigation.
    It is astounding and symptomatic of what is wrong with our 
political system that a high-profile investigation of our 
campaign finance system could be carried out by Congress using 
millions of dollars of taxpayer money and only the Executive 
Branch is put under scrutiny. It is an incontrovertible fact 
that every abusive campaign finance practice described in the 
committee's hearings last summer happens on Capitol Hill with 
regularity, yet this committee shied away from investigating 
its own. It is an omission that deserves serious criticism. The 
American people are not stupid. They know that their lives are 
being affected much more by the extraordinary amount of 
political money from home grown special interests for 
Congressional campaigns than by whatever money may have slipped 
into our political system from abroad and not been caught. They 
have no faith that Congress will make major changes in 
reforming the system, and the events of recent years, including 
this year, show that their skepticism is justified. But we must 
keep trying, and doing it by half steps may not work.
    Since 1976, I have supported complete public financing of 
federal campaigns. This investigation has reinforced my 
conviction that moving to a system of complete federal 
financing is the best way to clean up our campaign system. It 
is, I believe, the only way to stop the chase for campaign 
dollars, and the only way to stop the sale of access to elected 
officials.
    This investigation has shown the appalling lengths to which 
individuals will go to exploit access to elected officials for 
their own end. Whether they are individuals residing in other 
countries seeking to enhance their own stature, or people in 
this country seeking approval of specific projects, 
legislation, or the awarding of contracts, they have the 
potential ability to pressure our elected officials to 
favorably view their special agenda by virtue of the officials' 
need for campaign funds. And if they didn't think their money 
had at least the potential of buying something, they wouldn't 
spend it. It is a fact that the investigation uncovered no hard 
evidence of campaign funds affecting Congressional votes or 
Executive Branch policy, but even the appearance of such quid 
pro quos can be as corrosive to public trust as the reality. 
The best way to ensure that our government and our politicians 
are not exploited in this manner is to provide clean money from 
the federal government for federal election campaigns--money 
that truly represents the interests of all the people, not 
special interests.
    I believe that the elimination of soft money, i.e., 
unlimited contributions from corporations, from unions, and 
from individuals, and the regulation of campaign ads funded by 
special interests must go hand in hand, and are two key 
elements in reforming the system. I am firmly convinced that 
this can be done without running afoul of the First Amendment. 
The reforms of the McCain-Feingold proposal would be salutary 
in correcting some of the worst abuses of the campaign finance 
system. But the passage of this bill should only be considered 
a first step in reforming of the system. For as long as 
election campaigns are driven by private money there will be 
inevitable temptations to bend, if not break, the rules in 
order to gain an electoral advantage. And clever people can 
devise clever loopholes.
    This investigation has revealed attempts to bring money 
from abroad into U.S. elections, numerous instances where 
contributions have been laundered through individuals to hide 
the true sources of the funds, and it has revealed many 
examples of the selling of access by both parties via campaign 
contributions.
    Until we finally move to a system where the government 
funds our federal elections, these problems will continue to 
exist, and will continue to undermine the American public's 
confidence in its elected officials and its government. While 
the Congress has shown no interest up to now in reforming the 
system in this fashion some states have illustrated more 
imaginative thinking along this line.
    The state of Maine has adopted a ``clean money'' state-
financed system for funding elections, and a dozen other states 
are contemplating similar action. It appears that we shall have 
to look to the states for leadership in this area.
    Finally, without necessarily disagreeing with the 
additional views of any of my Democratic colleagues, I wish 
particularly to associate myself with the additional views of 
Senator Akaka.

                                                        John Glenn.





                 ADDITIONAL VIEWS OF SENATOR CARL LEVIN

    When the Committee began its investigation into campaign 
finance abuses last year, some of us said that the real 
problems with the 1996 campaign were not, for the most part, 
what was illegal, but what was legal. The Committee 
investigation proved that to be true. While illegal foreign 
contributions and contributions made in the name of another 
found their way into both political parties, the bulk of the 
activity which came under public scrutiny involved candidate 
and party conduct that was legal, including the solicitation 
and receipt of soft money contributions in massive amounts 
clearly violating the intent of legislated contribution limits; 
the intentional misuse of so-called issue advocacy commercials 
to elect or defeat a particular candidate; and the blatant 
offers of access in exchange for contributions.
    Yet back in March of 1997, we had to fight to have these 
activities included in the scope of the Committee's 
investigation. The Republican leadership at that time was 
committed to limiting the scope of the Committee's 
investigation to activities that were already illegal and 
excluding activities that should be illegal. In the end, 
Members on both sides of the aisle fought to defeat that 
limitation and to include ``improper,'' as well as illegal, 
activities within the jurisdiction of the Committee's work.
    The significance of that issue becomes apparent when we 
look at what we learned from this investigation: the driving 
force behind most of the conduct we investigated in the 1996 
federal elections is the currently legal chase for large 
donations of money--soft or unrestricted money--which could be 
used to pay for the activities of the national parties on 
behalf of their candidates, outside the contribution and 
expenditure limits of the federal election laws.
    Restrictions that apply to contributions of hard money--for 
example, prohibitions on contributions in the name of another 
and solicitations of persons on federal property--don't even 
apply to soft money. And the various uses of soft money--issue 
ads designed and used to support or defeat specific candidates; 
contributions of soft money to non-profit organizations; and 
coordination of the expenditure of soft money between 
candidates and their parties--slip under and between the 
current prohibitions in federal election laws.
    The Republican leadership did not want to face the reality 
of the role of soft money in the 1996 elections, because the 
Republican leadership did not want to fuel the fire for 
campaign finance reform. But the reality of our campaign 
finance system could not be avoided, and, in the end the real 
message of the 1996 elections has been the evasion of our 
campaign finance laws through the solicitation and use of large 
amounts of soft money.
Tamraz is a bipartisan problem
    Roger Tamraz, a large contributor to both parties, became 
the bipartisan symbol for what's wrong with the current system. 
Roger Tamraz served as a Republican Eagle in the 1980s during 
Republican Administrations and a Democratic Trustee in the 
1990s during Democratic Administrations. Tamraz's political 
contributions were not guided by his personal support for or 
against the person in office; Tamraz was unabashed in admitting 
his political contributions were made for the purpose of 
getting access to people in power. Tamraz showed us in stark 
terms the all-too-common product of the current campaign 
finance system--using unlimited soft money contributions to buy 
access. And despite the condemnation by the Committee and the 
press of Tamraz's activities, when asked at the hearing to 
reflect on his $300,000 contribution in 1996, Tamraz spoke 
plainly when he said, ``I think next time, I'll give 
$600,000.'' He spoke plainly, because he knows selling access 
is legal and he told us as much. He said, ``[Y]ou set the 
rules, and we are following the rules. . . . this is politics 
as usual. What is new?''
    Ironically and poignantly, while Republican Committee 
members criticized the access Tamraz obtained to the Clinton 
White House in the face of the opposition of the National 
Security Council, we learned that the Republican Party was 
simultaneously soliciting Tamraz to be a special donor to 
Republican campaign efforts.
    Tamraz received the solicitation in early 1997 from the 
National Republican Senatorial Committee to join the 
``exclusive Republican Senatorial Inner Circle.'' The 
invitation was signed by Majority Leader Trent Lott, and stated 
at the end, ``I look forward to meeting you personally and 
formally welcoming you to the Inner Circle in the near 
future.'' The letter said Tamraz was being nominated to fill 
one of the ``28 Inner Circle nominations open in New York.'' On 
February 18th, Tamraz got a follow-up letter from Senator Mitch 
McConnell, Chairman of the Republican Senatorial Inner Circle. 
Senator McConnell, referring to the earlier letter from 
Majority Leader Lott, wrote:

          The Inner Circle Leadership Committee placed your 
        name in nomination to receive this honor at our last 
        meeting based on the fact that your personal 
        accomplishments and your proven commitment to our Party 
        will make you a perfect Inner Circle Member.

    The letter promised Tamraz that once he ``signs on'' to 
become a member of the Inner Circle, he will receive 
invitations ``twice a year to attend high-level Washington 
policy briefings, receptions and special dinners'' with 
Republican Senators ``as well as the top leaders of the 
Republican Party.'' Included, according to the letter, would be 
``the entire Republican Senate leadership of Senate Chairmen 
and Subcommittee Chairmen who are driving the national 
Republican agenda.'' The letter also promised ``an exclusive 
dinner where the Republican Senate leadership will honor you as 
a new Inner Circle member.''
    These offers of special access to leading Republican 
officials in return for contributions to the Republican Party 
were made to the very same man Republican Committee Members 
were saying should not have been allowed in the White House.
Lack of balance
    The failure to acknowledge the Republican side of the 
Tamraz problem was symptomatic of the Committee's entire 
investigation. Throughout the investigation, the Majority was 
unwilling to see or to admit that the problems caused by the 
chase for soft money under our current campaign finance system 
are problems of both parties. The curse of soft money has 
caused good people in both parties to push the limits, not 
because the persons involved have an insatiable ``thirst for 
money,'' but because, to succeed, the current campaign finance 
system leads to an unending chase for money. While few 
candidates or party officials would knowingly risk defeat by 
engaging in illegal campaign conduct, many candidates and party 
officials from both parties are willing to use available, legal 
loopholes to raise the huge sums of money needed to stay 
competitive.
    In the same way that the Majority loudly condemned Tamraz's 
relationship to the Democratic Party, while treating his 
relationship to the Republican Party with silence, the entire 
investigation lacked balance. It lacked a balanced presentation 
of the evidence, a balanced presentation of the issues, a 
balanced presentation of the involvement of both parties.
Republican campaign conduct
    Despite evidence that some campaign practices by the 
Republican National Committee took loopholes in the law even 
further than the Democratic National Committee, the Committee 
chose not to examine such information in public hearings, other 
than with respect to the National Policy Forum. One example is 
the open offer of access for contributions.
    Harold Ickes, White House deputy chief of staff, testified 
that the Democrats learned about offering access in exchange 
for campaign contributions from longstanding Republican 
practice. The most blatant example of this Republican practice 
was a fundraising document prepared and issued by the 
Republican Party in connection with the 1992 Republican 
President's Dinner, an event attended by President Bush. It 
lists so-called ``benefits'' available to persons who 
contribute or raise certain amounts of money for the Republican 
Party by buying or selling tickets to the Dinner. Top 
contributors and fundraisers get a private reception hosted by 
President Bush at the White House. They get a reception hosted 
by the President's Cabinet. They get a luncheon at the Vice 
President's residence hosted by Vice President Quayle. At the 
end of the invitation are these words: ``Note: Attendance at 
all events is limited. Benefits based on receipts.'' In other 
words, it's only when the Republican Party gets the 
contributions in hand, that the benefits become available. 
That's how far this system went before President Clinton became 
President--the direct sale of access to President Bush, Vice 
President Quayle, and top government officials in exchange for 
large campaign contributions.
    This fundraising tactic is not, of course, unique to 1992. 
In 1995, an invitation to join the Republican Congressional 
Forum states that contributors who pay a $25,000 membership fee 
get a host of ``membership benefits,'' including ``monthly 
private dinners with the Chairmen and Republican Members of key 
Congressional Committees.''
    In 1997, in the midst of the Committee's investigation and 
public criticism of fundraising excesses, the Republican Party 
issued a RNC Annual Gala invitation listing the same types of 
``benefits'' for contributors and fundraisers. The invitation 
offers persons who contribute or raise at least $250,000, for 
example, a future breakfast with Senate Majority Leader Trent 
Lott and House Speaker Newt Gingrich, and a future lunch with 
the House or Senate Committee Chairman of the contributor's 
choice.
    Such offers of access, like the DNC's excessive use of the 
White House, are not illegal, but they do create an appearance 
that access to elected officials is for sale. Making such 
offers of access illegal would be constitutionally difficult, 
since elected leaders must have access to their constituents 
and the public, whether or not they have contributed to their 
campaign. It would also defy common sense to bar elected 
officials from speaking to or meeting with their financial 
supporters. But like so much else in public life, there are 
appropriate limits to conduct that should or could be self-
regulated, requiring the use of good judgment and common sense. 
The problem is a bipartisan one, and although the Majority 
shrinks from acknowledging that the Republican Party also sold 
access in exchange for campaign contributions, the public knows 
both parties did it. By ignoring that reality, the Majority 
diminishes the value and credibility of both the Committee 
hearings and the Majority Report.
    Another practice of concern during the 1996 elections was 
the degree to which the RNC coordinated campaign activities 
with outside organizations which held themselves out as 
independent and, in many cases, nonpartisan. As described in 
the Minority Report, but never examined in a Committee hearing, 
the Republican National Committee spent millions of dollars 
financing the election-related activities of some key groups. 
The RNC gave over $4.6 million to Americans for Tax Reform, an 
allegedly independent, nonpartisan tax-exempt organization, 
which then used the money to advance the Republican agenda and 
Republican candidates, in coordination with the RNC. If the DNC 
had given $4.6 million to a labor union or environmental group 
in the month before the 1996 election--an unprecedented 
transfer of funds by a political party--I have no doubt that 
there would have been a searching investigation of the facts, 
if not full scale public hearings, which would have been 
appropriate. But here--where the money was paid by the RNC to a 
pro-Republican tax-exempt organization--not a single hearing 
witness was called. Worse, the Committee never interviewed a 
single person from either the RNC or Americans for Tax Reform 
about the $4.6 million.
    Internal RNC documents show that the RNC also explicitly 
planned to raise millions of dollars from third parties for 
outside pro-Republican groups, analyzed whether contributions 
would be tax deductible and whether they would have to be 
publicly disclosed, then actually collected and delivered 
specific checks from third parties to such organizations as 
Americans for Tax Reform, the American Defense Institute and 
National Right to Life Committee. The Minority Report also 
describes specific instances in which the RNC itself 
coordinated election-related activities with particular 
organizations, as well as instances in which pro-Republican 
entities, such as Triad Management, Coalition for Our 
Children's Future and the Christian Coalition, engaged in 
election-related activities in possible violation of federal 
election laws. Not one of these activities was examined in a 
Committee hearing.
    The Majority ignored these serious evasions of the law and 
focused, instead, on one instance in which Harold Ickes 
identified three possible non-profit organizations to which a 
potential contributor could make a tax deductible contribution. 
The Committee called a witness of questionable credibility to 
lay out the incident, without calling Mr. Ickes at the same 
hearing to provide his side of the story. Instead of looking at 
the extensive activities of the RNC in orchestrating support 
for Republican candidates among non-profit organizations in 
which millions of dollars changed hands, the Majority focused 
its fire on one incident involving proposed contributions that 
never actually took place. The Committee held an entire day of 
hearings on the Ickes' incident; it refused to call even one 
witness to testify about the RNC's systematic efforts to 
finance tax-exempt organizations supporting Republican 
candidates.
    The Committee's kid-glove treatment of RNC and Dole 
campaign officials further demonstrates the imbalance. In the 
nine months of the investigation, only 2 RNC officials were 
deposed and they answered questions only on the National Policy 
Forum. The Committee never deposed or took hearing testimony 
from a single RNC official on RNC policies or practices. The 
finance director of the DNC was deposed and testified publicly 
at length; the finance director of the RNC did neither. The 
general counsel for the DNC was deposed and testified publicly 
at length; the general counsel for the RNC did neither. Top 
officials of the Clinton campaign answered hundreds of 
questions at sworn depositions; not a single official from the 
Dole campaign ever answered a single question from this 
Committee.
    Thus, when the Majority Report states that, ``Based on the 
available evidence, the Committee finds no basis for concluding 
that any illegal coordination between the RNC and Dole campaign 
took place,'' the ``available evidence'' conveniently did not 
include any interviews of RNC or Dole campaign officials about 
these topics. This Committee has, in fact, concluded its 
investigation into the 1996 elections without ever asking the 
RNC or Dole campaign about soft money, coordination, issue ads, 
tax-exempt organizations, contribution laundering or any other 
campaign matter, other than the National Policy Forum.
    Having won the battle to conduct a broad investigation into 
both illegal and improper campaign activity, those of us who 
thought the result would be a bipartisan investigation, in the 
end, lost the war. The Majority focused its investigative power 
almost exclusively on the Democratic Party, providing the 
American people with a one-sided view that failed to 
communicate the whole truth--a campaign finance breakdown taken 
advantage of by both parties.

Democratic campaign conduct

    Even the Committee's examination of Democratic campaign 
conduct was, all too often, one-sided. On several occasions, 
Democratic Committee Members requested specific witnesses to 
provide a more balanced presentation of the facts, but our 
requests were denied. For example, for the hearing on the Hsi 
Lai Temple, we asked that Ladan Manteghi, the key scheduler on 
the staff of the Vice President, be called as a witness. She 
would have testified unequivocally and convincingly that she, 
the Vice President's office and the Vice President himself 
understood the Temple event to be a community outreach event 
and not a fundraiser. Manteghi was not called. Her testimony is 
quoted at length in the Minority Report, but was never 
presented to the American people during the key hearing on this 
event.
    On other occasions, the Majority failed to call key 
witnesses with important information. For example, a key issue 
associated with John Huang involved his use of the Stephens 
office. Vernon Weaver, head of the Stephens' Washington office 
and the person responsible for giving Huang permission to use 
it, was interviewed by the Committee but never called as a 
witness to answer questions about Huang's conduct. According to 
his interview, Weaver would have testified that he had known 
Huang for years from Arkansas, Huang routinely used the 
Stephens' Washington office well before becoming a Commerce 
Department employee, and Huang never did anything that made 
Weaver concerned that he might be engaging in wrongdoing.
    Still another example of imbalance involves videotapes of 
President Bush's fundraising events in the White House. Despite 
claims by some Committee Members that the Clinton 
Administration's use of the White House for fundraising 
purposes was ``unprecedented,'' the Majority refused repeated 
requests by the Minority to join in a request to the Bush 
Library for copies of those tapes. The Majority's failure to 
pursue or to allow the examination of information that might 
demonstrate both parties using the White House in the same 
manner is another glaring instance in which the Committee 
declined to present the whole truth about campaign conduct in 
this country.

The China Plan

    The Majority's investigation into the China Plan is one of 
the most disturbing examples of partisanship overwhelming the 
treatment of an important issue that should have been handled 
in a careful, bipartisan manner and presented in a balanced way 
to the American public. The origin of this plan was the Chinese 
Government's perception, following the 1995 congressional 
resolution advocating that Taiwanese President Lee be permitted 
to visit the United States, as well as President Lee's 
subsequent visit, that Congress and state officials were more 
influential in foreign policy decisions than the Chinese 
Government had previously determined. Consequently, the China 
Plan was designed to increase the Chinese Government's 
influence with the United States Congress and state 
legislatures; it was not designed to affect the 1996 
presidential race.
    The Majority Report mischaracterizes existing evidence 
regarding the focus and intent of the China Plan when it speaks 
of the China Plan in the context of the 1996 presidential 
election. None of the information the Committee obtained 
suggests that the China Plan targeted the presidential 
campaign. While there is direct evidence that the China Plan 
targeted state and congressional races, there is, again, no 
such direct evidence regarding the presidential elections. Yet, 
the Majority takes the China Plan, mixes it with evidence of 
contributions from foreign sources to the Democratic National 
Committee, and then improperly concludes that the two are 
linked, stating that the Committee's investigation suggests 
that ``China's efforts involved the 1996 Presidential race.''
    The Majority Report begins its description of the China 
Plan by citing early 1997 newspaper articles based on unnamed 
sources. The only evidence cited in the Majority's Chapter to 
substantiate the allegation that China's effort involved the 
1996 presidential race is a reference to ``fragmentary 
reporting'' by a ``U.S. agency'' that relates to ``China's 
efforts to influence the U.S. Presidential election.'' The 
Majority Report states that, because the information--which is 
``fragmentary''--is ``part of a criminal investigation,'' it 
``cannot be discussed'' further.
    In the absence of direct evidence supporting the allegation 
that the China Plan targeted the presidential election, the 
Majority Report tries to connect six DNC contributors to the 
People's Republic of China (PRC). To do so, because the six 
individuals have links to Taiwan, Macao or Hong Kong, the 
Majority states that some of their DNC contributions used funds 
from ``bank accounts in the Greater China area.'' The Majority 
Report defines ``Greater China'' as ``territories claimed or 
recently acquired by the PRC, including Hong Kong, Macao, and 
the Republic of China on Taiwan.'' While in the context of 
economic, cultural or other common interests, it may be 
acceptable to use the term ``Greater China'' to refer in one 
phrase to all four areas, in the context of allegations that 
individuals are acting as agents of the Government of the 
People's Republic of China, the use of this phrase is 
inappropriate, unfair and misleading.
    The Majority claims, for example, that contributions to the 
DNC using funds from bank accounts in Taiwan, Macao or Hong 
Kong are evidence of possible ties to the China Plan. Following 
that logic, why not put Haley Barbour on the list of possible 
PRC agents, since he solicited $2 million in collateral from 
Ambrous Young of Hong Kong; and why not add Simon Fireman, a 
national vice chair of the Dole campaign, who funded employee 
contributions using a company he owned in Hong Kong. After all, 
it is undisputed that Ambrous Young accompanied Haley Barbour 
on a trip to China in late 1995, in which they met with Chinese 
officials, including the Chinese Foreign Minister. Simon 
Fireman wired funds from Hong Kong to the United States for the 
express purpose of funding illegal contributions to the Dole 
campaign. By the Majority's standard, such actions are equally 
likely to be part of the China Plan.
    Aside from bank account information and without going into 
the Majority's evidence with respect to each of the six 
individuals, a few items are worth noting. With respect to 
Maria Hsia, the Majority Report states that Hsia ``has been an 
agent of the Chinese government . . . [and] has attempted to 
conceal her relationship.'' Substantiation for that serious 
charge consists of the words, ``The Committee has learned.'' 
The Majority Report makes no mention of Hsia's sworn affidavit 
denying the charge, and explaining that her family's support 
for Taiwan is longstanding and deep, and that her immigration 
work has put her in contact with the PRC government only on 
behalf of her immigration clients. Nor does the Majority Report 
offer any explanation why a person with strong ties to Taiwan 
and who has worked to introduce Taiwanese leaders to U.S. 
officials would act as an agent of the Chinese Government to 
influence U.S. elections.
    The Majority Report links Huang to the PRC by the following 
sentence: ``A single piece of unverified information shared 
with the Committee indicates that Huang himself may possibly 
have had a direct financial relationship with the PRC 
government.'' The thinness of the evidence and the tenuousness 
of the statement itself demonstrate how little may responsibly 
be drawn from the information before the Committee.
    The Majority freely uses speculation and innuendo to make 
numerous serious charges throughout the Chapter, unaccompanied 
by documentation or support. Take for example: ``The source of 
the Temple's money is believed to be Buddhist devotees and may 
derive from overseas.'' ``Many of these activities may or may 
not have been part of a single, coordinated effort. Regardless, 
a coordinated approach may have evolved over time.'' ``Other 
efforts, though undertaken by PRC government entities, have 
been characterized as rogue activities.'' ``It appears that the 
PRC money was in fact used to make or reimburse a contribution 
to Wong in the amount of $5,000.'' ``Huang himself may possibly 
have had a direct financial relationship with the PRC 
government.'' ``It is likely that the PRC used intermediaries, 
particularly with regard to political contributions.''
    Weaving together this web of possibilities, the Majority 
attempts to create a conspiracy by the six individuals it has 
identified and the PRC. The Report's analysis is strewn with 
words like ``suggest,'' ``seemingly,'' ``possible,'' ``possibly 
related,'' ``suspected,'' ``alleged,'' with conjecture layered 
upon conjecture. The unsubstantiated claims in the Majority 
Report do not meet the standards of proof and responsibility 
expected of a U.S. Senate Committee. Nor does it serve the 
Senate or the American people to be so loose with facts and 
conclusions, particularly when it comes to suggesting political 
activity by United States citizens against the interests of the 
United States.
    The Majority Report's analysis is further undermined by 
lapses in its examination of key figures. To establish a link 
between the China Plan and campaign contributions, the Majority 
used public hearings to get at the facts regarding campaign 
contributions and fundraising efforts by John Huang, the 
Riadys, Maria Hsia and Charlie Trie. But with respect to the 
key figure of Ted Sioeng, a person linked to campaign 
contributions made to both Republicans and Democrats, the 
Majority balked--it held no public hearing.
    The Committee had important information, for example, 
establishing that Matt Fong, the Republican Treasurer of the 
State of California, solicited and received contributions 
totalling $100,000 from Ted Sioeng. There is also evidence that 
Fong was involved in a solicitation of a $50,000 contribution 
for the National Policy Forum, an arm of the Republican 
National Committee, along with Joseph Gaylord and Steve Kinney, 
aides to the Speaker of the House Newt Gingrich. Fong arranged 
for Sioeng to meet and have his picture taken with Speaker 
Gingrich in Washington, D.C., and Fong accompanied Sioeng to 
that meeting with the Speaker. The Committee also was in 
possession of a photograph that appeared in a Chinese-American 
newspaper in California of a luncheon attended by Speaker 
Gingrich, Sioeng and other Asian Americans shortly after the 
$50,000 contribution to the National Policy Forum. Yet the 
Committee never called Fong as a witness at a hearing to learn 
more about Sioeng and any possible connection to the China 
Plan. Nor did the Committee call Gaylord or Kinney as hearing 
witnesses. Nor did the Majority ever hint in any public hearing 
that the China Plan had a Republican component. Conspicuously 
missing from the Majority's Chapter on the China Plan, despite 
its relevance, is any mention of Fong, who is now running for 
the Republican nomination to be a U.S. Senator from California.
    What is particularly disturbing about the Majority's 
failure is the fact that we know the China Plan explicitly 
focused on state candidates. As the Majority itself says in its 
Report, one of the ``several activities China undertook to 
influence our political processes during the 1996 election 
cycle'' was that a ``PRC government official devised a seeding 
strategy, under which PRC officials would organize Chinese 
communities in the U.S. to encourage them to promote persons 
from their communities to run in certain state and local 
elections.'' So despite a major contribution to a state 
candidate by the person most closely identified as having a 
financial connection to the PRC, the Committee didn't pursue 
it. The glaring omission from the Majority's China Plan Chapter 
of any mention of Sioeng's contributions to Fong or meetings 
with Speaker Gingrich speaks volumes about the Majority's 
partisan approach to the China Plan.
    The China Plan Chapter in the Majority Report makes a 
partisan stretch, using innuendo and hypothesis, to connect the 
China Plan to campaign misconduct in the presidential election, 
yet ducks discussing evidence connecting the China Plan with 
state and congressional campaigns because that evidence would 
involve Republicans. The Majority Report concocts a place 
called the ``Greater China area,'' lumping together the 
People's Republic of China, Taiwan, Macao and Hong Kong as 
though they had the same interests, to try to link the China 
Plan to DNC contributions. The China Plan did not receive the 
careful, bipartisan, balanced treatment warranted.

Need for reform

    In the end, despite all the efforts of the Republican 
Majority to focus on illegalities, one message from the 1996 
campaign dominates--the need to reform the federal campaign 
finance system. The system is broken and in desperate need of 
repair.
    The first priority should be to eliminate the raising and 
spending of soft money by both parties. As the Supreme Court 
said in Buckley v. Valeo when it upheld contribution limits:

          Under a system of private financing of elections, a 
        candidate lacking immense personal or family wealth 
        must depend on financial contributions from others to 
        provide the resources necessary to conduct a successful 
        cam paign. . . . To the extent that large contributions 
        are given to secure political quid pro quo's from 
        current and potential office holders, the integrity of 
        our system of representative democracy is undermined. . 
        . . Of almost equal concern is . . . the impact of the 
        appearance of corruption stemming from public awareness 
        of the opportunities for abuse inherent in a regime of 
        large individual financial contributions. . . . 
        Congress could legitimately conclude that the avoidance 
        of the appearance of improper influence ``is also 
        critical . . . if confidence in the system of 
        representative government is not to be eroded to a 
        disastrous extent.''

As enacted, the campaign finance laws' contribution limits 
never contemplated individual, corporate or union contributions 
of $100,000, $1 million or more, creating the expectation, 
actual or perceived, that these enormous sums were being repaid 
with something more than a thank-you note or attendance at a 
large banquet.
    In tandem with a ban on soft money, we must also tackle the 
problem of so-called issue ads. The most vicious combination in 
the 1996 election season was the use of huge contributions 
unregulated by federal election laws to pay for candidate 
attack ads mislabelled as issue ads. This combination 
encapsulates for me, more than any other single image, the 
collapse of our campaign finance system and the rock-bottom 
need for reform.
    We identified numerous examples of political advertisements 
which attacked candidates by name, but claimed to be issue 
discussions outside the law's limits on contributions. These 
candidate attacks ads were broadcast by parties, companies, 
unions and interest groups of all kinds on behalf of both 
parties. The Annenberg Public Policy Center estimates that 
parties and outside groups spent at least $135 million 
broadcasting these ads, almost 90 percent of which named 
candidates while sidestepping the contribution limits and 
disclosure requirements that are the bedrock of our campaign 
laws.
    Issue ads have been compared to drive-by shootings in which 
the sponsor of the attack is neither known nor held 
accountable. And they are using unlimited and unregulated money 
to pay for it.
    Congress cannot get off the hook by using its investigative 
powers to point fingers at campaign improprieties, while 
avoiding its share of the blame for failing to close the 
loopholes and reinvigorate federal campaign finance laws. 
Congress alone writes the laws, and we have no one to blame but 
ourselves for the sorry state of the federal election laws. It 
is not enough to know that the system is broken and lament that 
condition; Congress must also fix it. That is our legislative 
responsibility. Without legislative reform, we will be haunted 
by the words of Roger Tamraz that in the next election, he will 
give $600,000 to buy access to a candidate and will do so 
legally.

                                                        Carl Levin.





              ADDITIONAL VIEWS OF SENATOR JOSEPH LIEBERMAN

    Of the thousands of statements the Senate Governmental 
Affairs Committee heard through the course of its investigation 
of the 1996 Federal elections, one of the most telling was a 
brief comment by former White House Deputy Chief of Staff 
Harold Ickes. Challenged about his handling of a questionable 
transaction during the final week of the 1996 Presidential 
campaign, Mr. Ickes defended his conduct in part by pointing to 
the chaotic atmosphere of the time. ``We were like the mad 
hatters,'' he said.1
---------------------------------------------------------------------------
    Footnotes appear at end of chapter 41.
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    This metaphor for the fundraising madness of the 1996 
election cycle seems right on the money--too many good people 
running around like mad hatters doing all kinds of bad things. 
There was in fact a surreal quality to the whole of the 
scandal, with the bizarre cast of characters that came before 
the Committee, the torturous twists of logic many of the 
witnesses used to rationalize their actions, and the 
overarching sense emerging from the investigation that our 
polity has fallen down a long dark hole into a place that is 
far from the vision and values of those who founded our 
democracy.
    In that strange place, we have learned, the law appeared to 
be written in invisible ink. It was somehow possible, for 
example, for wealthy donors to give hundreds of thousands of 
dollars to finance campaigns even though the law was clearly 
intended to limit their contributions to a tiny fraction of 
those sums. It was possible for unions and corporations to 
donate millions to the parties at the candidates' request, 
despite the decades old prohibition on those entities' 
involvement in Federal campaigns. It was possible for the two 
presidential nominees to spend much of the fall shaking the 
donor trees even though they had pledged under the law not to 
fundraise for their campaigns after receiving $62 million each 
in taxpayer funds. And it was possible for tax-exempt groups to 
run millions of dollars worth of television ads that clearly 
endorsed or attacked particular candidates even though they 
were barred by law from engaging in such partisan activity.
    Where Harold Ickes' analogy breaks down, of course, is that 
the story of how Washington turned into Wonderland on the 
Potomac has no fairy tale ending. Surreal as much of it seems, 
the fundraising scandal of 1996 was a very real tragedy with 
very real consequences for our democracy. The truth is that the 
mad hatters from both parties did more than just beg credulity, 
they betrayed the public trust. In their breathless, boundary-
less rush to raise more money to pay for more television ads, 
they effectively hung a giant ``For Sale'' sign on our 
government and the whole of our political process. In so doing, 
they also hung out to dry some of the most fundamental values 
underpinning our American experiment in self-rule. And they 
gave most Americans, already beset by cynicism, good reason to 
doubt whether they had a true and equal voice in their own 
government. That is the dark hole we find ourselves in today.
    In its work, the Committee was challenged to hold up a 
looking glass to the machinations of the mad hatters during the 
1996 election cycle, to expose the sham that our campaign 
finance laws have become, and to show the American people the 
consequences of conducting elections without any limits or 
standards to protect the public interest and discourage our 
worst impulses. The Committee was challenged to cut through the 
Jabberwockian legalisms that witnesses and their lawyers often 
invoked to justify their side's incredible behavior and get at 
the facts, regardless of what they revealed or who they 
jeopardized.
    I emphasized that last point at the commencement of the 
hearings when I said that our job was not to be prosecutors or 
defense attorneys, but ``searchers for truth.'' 2 
While noting that there would be a strong temptation to give in 
to our partisan instincts in light of the high political stakes 
involved, I argued that we had an obligation to temporarily put 
aside our individual party allegiances for the duration of the 
Committee's work. ``With each witness we question, we must seek 
only the truth, no more and no less,'' I said, ``and we must 
accept that truth and not try to force it improperly into any 
preconceived construct that any of us may bring to the table.'' 
3
    Although I was disappointed with the partisanship that too 
often crept into our proceedings and diminished our 
effectiveness, I nevertheless believe the Committee succeeded 
in compiling a compelling record, one that leaves little 
question that our political system was subverted in 1996 by an 
unquenchable thirst for money and that our democratic process 
suffered grievous harm as a result. It was an unseemly, 
disheartening story in many respects, but one that had to be 
told to dramatize the need for bold campaign finance reform, 
and I am grateful for having had the opportunity to work with 
my colleagues of both parties on the Committee and their staffs 
to gather and tell this story to the American people.
    I have joined in the Minority Views because they are the 
product of an open and constructive effort among the Democratic 
members of the Committee, which far more often than not 
resulted in findings and recommendations that are consistent 
with my conclusions about what happened during the 1996 Federal 
election cycle. The Democratic report offers criticism where 
criticism is most due, detailing and then condemning numerous 
examples of impropriety and wrongdoing associated with members 
and officials of both political parties and both political 
branches of government. At the same time, it appropriately 
notes several instances where such criticism is not warranted 
by the facts. While the Minority Views may sometimes seem 
partisan, they are in the end much less partisan and much more 
objective in their evaluation of the evidence before the 
Committee than the Majority's report, and the Minority's 
recommendations for reform are much more responsive to the 
facts the Committee found.
    I have nevertheless chosen to offer these Additional Views 
to note some points of disagreement with the Majority and 
Minority views, to underscore some points of agreement, and 
ultimately to present my own overview of the significance of 
the Committee's investigation. Working on this investigation 
was an important experience for me, and I came away from it 
with some strong personal conclusions about the implications of 
the Committee's findings, which I want to summarize here. In 
particular, I want to focus on the moral breakdown that 
coincided with and contributed to the political one.
    An important part of what is at issue here, I believe, are 
the distinctions we make between illegal and improper conduct 
in public life and the standards we use to judge them, 
something the Senate struggled with in initially defining the 
scope of our investigation and the Committee itself wrestled 
with through the course of its proceedings.4 To this 
day, some contend that these distinctions are essentially 
irrelevant to the Committee's work, arguing that the bulk of 
the activities we investigated violated laws already on the 
books and therefore the appropriate response should simply be 
tough punishment now and tougher enforcement in the future. The 
facts our Committee found in this investigation strongly 
suggest otherwise, and point to a real need to ask some much 
broader and more fundamental questions about this scandal--
among them, how we in politics have drawn ethical lines, how 
those lines should be drawn in the future, and whether in fact 
simply recalibrating them within the law will be enough to 
rescue us from the dark hole into which we have fallen.
    That is not to gloss over the evidence that some 
individuals appear to have broken the law in the course of the 
1996 Federal elections.5 The Committee heard 
testimony about people using other people's money to fund 
political contributions,6 foreign nationals 
channeling money into American campaign coffers,7 
and Federal workers soliciting campaign contributions 
8--all activities that certainly appear to have 
violated applicable and existing laws. The Committee's 
investigation helped expose those events, and it is now for the 
Justice Department and the Federal Election Commission 
(``FEC'') to investigate them and, if appropriate, to take 
civil enforcement actions or prosecute those involved. That is 
an important part of responding to the excesses of the 1996 
elections, and it must not be devalued by those who wish to 
prevent these abuses from happening again. For it is by holding 
accountable those who violate our laws that we engender the 
respect those laws deserve and create a real incentive for the 
people operating in the campaign finance system to abide by the 
rules in the future.9
    But with that said, the sad truth is that most of the worst 
behavior that occurred in the 1996 elections was legal. 
Consider again the examples I cited above to illustrate the 
surreal nature of the current system--the blatant skirting of 
the limits on individual contributions, the subversion of the 
restrictions on presidential candidates who receive public 
funds, the conversion of supposedly non-partisan, tax-exempt 
groups into political agents, and the infusion of millions of 
union and corporate dollars into the two parties despite the 
law's absolute ban on their involvement in Federal campaigns. 
Each of these acts compromised the integrity of our elections 
and our government in 1996. Each of these acts plainly violates 
the spirit of our laws. Yet each appears to be legal.
    In effect, then, what the law permitted in 1996 was as 
outrageous as any crimes that were committed. This point is 
enormously significant not just in terms of gauging the import 
of this scandal, but in determining the steps our polity should 
take to repair our broken campaign finance system. Criminal 
indictments brought by the Justice Department, FEC enforcement 
actions, and changes in party compliance procedures will go far 
to prevent a recurrence of the illegal activities that occurred 
during the 1996 cycle. Yet we can make no similar statement for 
the wide range of corrosive activities that continue to be 
legal. In fact, just the opposite is true--we know for a 
certainty that these behaviors will not end with the 1996 
elections unless we make them illegal.
    Our investigation also revealed something more profoundly 
unsettling--it is not just the system that has been compromised 
and corrupted, but the values and standards of those operating 
within it. As in many segments of our society today, from the 
professional sports leagues that wink at the outrageous 
behavior of big stars that help them generate big revenue to 
the TV talk show producers who sink to new lows in degradation 
and exploitation every day to gain higher ratings and more 
advertising revenue, the bottom line in politics--raising money 
to win elections--has too often become the dominant line. In 
the process, basic differences between right and wrong have 
been blurred to the point that the operative standard for 
campaigns today is not what is right but what is technically 
legal. This helps to explain how we got to Wonderland in 
Washington.
    Plugging the most egregious loopholes to make the clearly 
improper clearly illegal will make the law more consistent with 
our values and likely deter some future wrongdoing, which are 
more than sufficient reasons to do so. But these changes in the 
end will not be enough. We must reduce the unrelenting pressure 
to raise vast sums of money. It is this pressure that wore down 
the mad hatters' moral immune system and pushed them to duck, 
dodge and ultimately debase the laws we have now. And it is 
this pressure that will continue to drive good people to do bad 
things, almost regardless of what the law calls for, if we do 
not comprehensively recast the system to permanently defuse the 
fundraising arms race and stem the corrosive influence of big 
money. That is the challenge now ahead of us.

Partisanship of the investigation

    Before turning to the substance of the Committee's 
investigation, I want to comment on its process, because the 
manner in which it was conducted significantly affected the 
topics the Committee chose to investigate, colored the 
Committee's findings, and by extension determined in large part 
the subjects I discuss below.
    I firmly believe that the Committee's investigation and 
hearings served the valuable purpose of shedding light on the 
failings of the campaign finance system and those who operate 
within it. The Committee leaves behind an extensive factual 
record that builds a powerful case for campaign finance reform.
    Compelling as that record is, though, it is incomplete. 
That is because the persistent partisanship of the 
investigation kept it from living up to its full potential, 
leaving the American people with only a partial picture of the 
extent of the abuses committed during the last election cycle. 
As the Minority Views extensively detail, the Committee's 
investigation and hearings focused primarily and overwhelmingly 
upon the Democratic Party and its affiliates, despite 
significant evidence that the Republican Party and its 
affiliates also engaged in questionable activities.
    The Committee omitted from public view entire areas of 
inquiry, such as the use of independent and tax-exempt groups 
to improperly conduct surreptitious campaign activity, a topic 
that touched closely on persons and entities associated with 
the Republican Party. And, although the Committee's 
investigation appropriately examined the fundraising practices 
of those associated with the DNC and the Democratic 
Administration, it wrongly declined to review strikingly 
similar activities of the leadership of the RNC and the 
Republican-controlled Congress, who raised significant amounts 
of money in connection with the presidential campaign, often by 
selling access to large contributors.
    Some will say this partisanship was inevitable given the 
difficulties in conducting such an inherently political 
investigation, but I am not convinced of that. In retrospect, 
the Senate should have, as has been done in the past, assigned 
the investigation to a bipartisan Special Committee with a 
joint, nonpartisan staff, or the Governmental Affairs Committee 
should have created a joint bipartisan staff for this 
investigation. Neither of these courses was taken, and so this 
non-traditional investigation proceeded with the Members of the 
majority party retaining their traditional and almost unlimited 
power to control the subjects and targets of the proceedings. 
As a result, the investigation split into two, with Members of 
the Majority too often putting on the case as if they were 
prosecutors, and Members of the Minority too often concluding 
they had to act as defense counsel.
    Because the Republicans are in the Majority and so had 
final say on determining who the Committee subpoenaed and on 
whom the Committee's hearings focused, it was their 
partisanship that ultimately had the greatest impact. Most of 
the Committee's subpoenas targeted people and organizations 
associated with the Democratic Party, and most of the 
Committee's public hearings were spent exploring Democratic 
misdeeds. As a result, most of the examples I discuss below 
involve the Democratic Party, but I emphasize that is because I 
have chosen to address the Committee's record as I have found 
it, not because I believe the Republican Party is devoid of 
similar wrongdoing.
    I cannot leave the topic of partisanship without commenting 
on what is perhaps its most damaging long-term legacy: its 
impact on the ability of future Senate investigations to use 
compulsory subpoenas to obtain the information needed to do 
their job. As detailed in the Minority Views, the Committee 
repeatedly failed to enforce subpoenas it issued to Republican 
Party organizations and affiliates and to a number of outside 
groups espousing ideologies traditionally associated with the 
Democratic and Republican parties.10 Although it is 
questionable whether the Committee ever would have taken action 
against these groups, there is no doubt that the groups were 
significantly emboldened by their knowledge that the 
Committee's investigation had a pre-ordained end date of 
December 31, 1997. These groups calculated--correctly as it 
turned out--that if they could stall long enough, the 
Committee's mandate would wear out long before it found the 
will to take action against recalcitrant recipients of its 
subpoenas. For this reason, I firmly believe it was a mistake 
for the Senate to have imposed a fixed end-date to the 
Committee's investigation.
    What is the lesson the subjects of future Senate 
investigations will take from this experience? They will stall 
and stonewall and assume that Senate investigators will not 
take them to court. I hope that the committee conducting the 
next politically-charged Senate investigation acts quickly to 
prove this assumption unfounded.

The Origin of the problem: The Supreme Court's decision in Buckley v. 
        Valeo 11

    To understand how the excesses of the 1996 election cycle 
came to pass, one must start with the untenable legal framework 
within which our campaign finance system has been operating. 
The basic law took shape through the campaign finance reforms 
that Congress enacted in 1974 in the aftermath of Watergate. 
The goal of this law sounds familiar--to temper the corrosive 
impact of money in our politics. It attempted to do so by 
limiting the contributions people could make to parties and 
campaigns ``with respect to any election for Federal office'' 
12 and by limiting the amount of money campaigns 
could spend.13 By squeezing campaigns on both sides 
of the ledger, the 1974 law aimed at creating a tight lid on 
the overall flow of money into the system and thereby reducing 
the potential of large contributors to have a corrupting 
influence on our elected officials.
    The Supreme Court, however, prevented us from ever really 
testing that theory by quickly striking down the law's spending 
limits as unconstitutional in its landmark 1976 decision in 
Buckley v. Valeo. At the heart of the Court's ruling was the 
finding that money equals speech under the First Amendment. The 
Court reasoned that because most forms of campaign 
communication (television and radio commercials, newspaper ads, 
and the like) cost money, a cap on spending would significantly 
diminish the quantity of a candidate's or a campaign's speech 
and therefore undercut their ability to disseminate their 
message.14 Applying its usual test for reviewing 
restrictions on First Amendment interests, the Court therefore 
required a showing that the law was narrowly tailored to meet a 
substantial or compelling state interest.15 A 
majority of the Justices concluded that although the government 
did have a compelling interest in preventing corruption and the 
appearance of corruption, the spending limits passed by 
Congress did not meet the narrowly-tailored standard, because 
the Court did not see how unlimited spending left candidates or 
parties improperly indebted to their contributors.16
    The Supreme Court took a much different approach to the 
law's limits on contributions. Those restrictions, the Court 
found, impose a much smaller burden on speech than do spending 
limits, because a contribution's speech value lies in its 
symbolic communication of support, something that ``does not 
increase perceptibly with the size of [the] contribution, since 
the expression rests solely on the undifferentiated, symbolic 
act of contributing.'' 17 The Court also concluded 
that unlimited contributions pose a much greater threat to the 
government's interest in avoiding corruption. Allowing a 
candidate or lawmaker to accept huge sums of money from a small 
group of individuals, the Court said, truly did threaten to 
corrupt the government, or at least to create the appearance of 
corruption, by giving the impression that the candidate was 
indebted to wealthy contributors 18--something, it 
is worth noting, the current system does now through its soft 
money loophole. That is why, in the end, the Supreme Court 
upheld the law's contribution limits while striking down its 
spending limits.19
    What the Court in Buckley failed to realize, as our 
experience through the intervening years has shown, is that it 
is impossible to separate the threat posed to the democratic 
process by uncontrolled spending from the threat of unchecked 
giving. The fact is that they are inextricably intertwined, 
just as are the laws of supply and demand. Indeed, as those of 
us who live in the system know, candidates and parties that are 
free to spend as much as they want will do so, especially given 
the spiraling costs of campaigns. So, faced with the dilemma of 
persistent demand for money and strict limits on its supply, 
candidates will feel great pressure to be aggressive and 
evasive in finding new sources of funding, to bend the law by 
exploiting loopholes and weakspots and perhaps even to break it 
on occasion. In that regard, the Court's spending/contributing 
dichotomy has increased the potential for misbehavior, just the 
opposite of the Court's intent.
    The Committee's investigation of the 1996 Federal elections 
shows that ironic and unfortunate result to be so. One 
consequence of the relentless pressure the parties were under 
to raise vast sums of money was that they sometimes became 
careless in the way they went about their business. Both sides 
missed serious warning signs of wrongdoing, granted highly 
questionable favors, and lowered their standards of acceptable 
conduct. But these unintentional slips pale in comparison to 
the calculated efforts of both sides to evade, avoid, and 
subvert the laws regulating who can give what to whom.
    No loophole has been more widely abused or more disastrous 
in its consequences than the soft money loophole, which also is 
part of Buckley's unintended legacy of pushing parties to find 
additional sources of money. The soft money loophole dates to a 
1978 FEC ruling allowing individuals, corporations and unions 
to avoid the law's limits on contributions if they give to 
party committees for non-candidate specific purposes, such as 
voter registration drives and party- building, rather than 
``with respect to any election for Federal office.'' 
20 Standing alone, this loophole was problematic, 
because it provided a way for contributors and parties to 
vitiate the explicit limits the election law imposed on their 
contributions. But it was not until the soft money exception 
was wed to a second distinction articulated in Buckley--one 
between ``issue'' advocacy and ``express'' advocacy--that the 
national parties and their candidates were able to exploit the 
law's weaknesses to decimate its clear intent and debase the 
whole of the system.
    The law the Court reviewed in Buckley limited what 
individuals could spend ``relative to a clearly identified 
candidate.'' 21 The Court found this provision 
troubling, because it raised fears that the government would go 
beyond regulating commercials that express support for an 
individual candidate and would try to put limits on ads 
advocating a point of view on an important issue of the day. In 
particular, the Court worried that this provision would 
unfairly limit the speech of individuals and groups who did 
nothing more than point out a candidate's position on a 
particular issue while making a statement about the importance 
of their cause.22
    The only way to get around this threat, the Court 
concluded, was to read the law narrowly to limit contributions 
only when they supported ``communications that include explicit 
words of advocacy of election or defeat of a candidate.'' 
23 In a footnote to its decision, the Court 
explained that this standard would cover ads that included such 
words as `` `vote for,' `elect,' `support,' `cast your ballot 
for,' `Smith for Congress,' `vote against,' `defeat,' `reject.' 
'' 24
    Although there is nothing in the Court's decision to 
suggest that this footnote defined the exclusive universe of 
candidate-focused speech Congress could regulate--or that that 
narrow interpretation even applied to parties as opposed to 
outside groups--the result of this decision was as predictable 
as the consequence of striking down spending limits. Just as 
the Court's ban on spending limits inevitably spurred both 
parties and many candidates to push the contribution limits to 
their breaking point, it was only a matter of time before 
parties and outside groups would find the issue advocacy/
express advocacy loophole and harness soft money to exploit it. 
And that is exactly what began to happen over the course of the 
last several national elections--and what ultimately went out 
of control in 1996. Both parties wound up using tens of 
millions of dollars in soft money to help pay for ads that were 
clearly designed to aid a particular candidate but were 
nevertheless claimed to be legal because they did not invoke 
Buckley's so-called magic words.
    Thus, the post-Watergate law, as interpreted by the Court 
and the FEC, begat a devastating absurdity. The parties may use 
money supposedly not given in connection with a particular 
election for Federal office--even though parties solicit the 
contributions explicitly to help their candidates--to run 
advertisements that pretend not to advocate a particular 
candidate's election or defeat--even though any reasonable 
person would view those ads as promoting a specific candidate. 
From the beginning, this framework was ridiculous on its face; 
in 1996, it became scandalous in practice.

Activities of the political parties and candidates during the 1996 
        election cycle

    My colleague Senator Pat Moynihan once used the term 
``defining deviancy down'' to characterize the process by which 
abnormal forms of behavior come to be considered normal by the 
greater society. According to this theory, conduct that once 
was considered aberrant by society slowly gains a foothold of 
acceptability, which spreads throughout the culture and 
ultimately establishes itself as the new norm.
    This process aptly describes what has happened to our 
politics over the last two decades, culminating in the 
breakdown of 1996. Otherwise good people, caught up in the 
urgency to raise huge amounts of money to fund their campaigns, 
gradually lowered the bar of acceptable behavior until they no 
longer were able to see what they were doing as those outside 
of the system would--and ultimately did. In this insular world, 
each side wound up pegging its ethical standards not to any 
independent or common norms but to what the competition was 
doing. And because the stakes were so high, it was an 
unquestioned assumption that if the other side was doing it, 
you had to do it as well--the common justification being that 
one side would not ``unilaterally disarm.'' This was how 
candidates, campaign workers and party officials were 
transformed into mad hatters and how their standards sadly 
became as fungible as the various pots of money they amassed.
    The use of the White House as a marketing tool during the 
1996 election cycle provides a troubling case in point. No one 
would dispute that candidates, including the President and 
Members of Congress, can and should meet with their 
supporters--financial or otherwise--both to express gratitude 
and to motivate those friends to continue their support. Nor 
would anyone dispute that previous Presidents, presidential 
candidates of both parties, and Members of Congress have 
marketed access to themselves and their offices to raise 
campaign contributions. But in 1996, as part of the overall 
breakdown of the system, the White House was used more 
systematically and broadly than ever before to raise millions 
of dollars in large soft money contributions, with seemingly 
little consideration given to the troubling signal this would 
send to the broader public or the consequences it could have 
for our government.
    This was particularly true of the White House coffees. The 
evidence the Committee collected regarding the many occasions 
on which attendance at a White House coffee and a large 
donation to the DNC temporally coincided is telling. A review 
of these events conducted by FBI Agent Jerry Campane found that 
40 percent of the 532 people who attended 60 coffees sponsored 
by the DNC contributed to the DNC within one month of their 
coffee attendance, and 90 percent contributed either 
individually or through their businesses at some point during 
the 1996 election cycle.25 Campane also provided the 
Committee with several examples of individuals contributing 
within one week of the coffees.26 These statistics 
well support Campane's conclusion that, although money may not 
have been raised at these coffees, it was certainly raised from 
them.27
    The laws of the marketplace tell us that if you are selling 
something of value, there will be people ready to buy. The laws 
of politics tell us that if you are selling access, some of 
those willing to buy will not have the best motives. We 
therefore should not be surprised by the litany of opportunists 
who took personal advantage of the DNC's willingness to use the 
White House as part of its fundraising strategy. Johnny Chung, 
for instance, was able to get a group of Chinese businessmen 
photographed with the President and First Lady--a picture the 
businessmen later used, without the White House's knowledge, to 
promote their company's beer in China.28 And Pauline 
Kanchanalak successfully insisted on being allowed to bring 
Thai business executives with her to a White House coffee, 
despite DNC Finance Director Richard Sullivan's argument that 
bringing people who could neither lawfully support nor vote for 
the President to a meeting scheduled for the President's 
political and financial supporters would be 
inappropriate.29
    Roger Tamraz's repeated presence at DNC-sponsored events 
provides perhaps the most damning evidence of how the White 
House was exposed to contributors on the make. Tamraz, an 
American citizen, sought the support of the U.S. government for 
his plan to build an oil pipeline in the Caspian Sea region. 
After government officials involved in the issue at the Energy 
Department and the National Security Council (``NSC'') 
determined that Tamraz's plan did not serve U.S. policy and 
learned that Tamraz was falsely claiming U.S. government 
support for his project, the NSC recommended in the Summer of 
1995 against any high level government contact with 
him.30 Despite this advice, Tamraz, who began 
donating large amounts of money to the DNC around this time, 
was able to gain access on a number of occasions to the 
President and Vice-President through DNC events--and even 
obtained help from DNC Chairman Don Fowler in trying to lift 
the bar on his interaction with high level 
officials.31 Once again, the lure of big money led 
party officials into an inexcusable lapse in judgment.
    I agree with the Minority Views that this extensive use of 
the White House during the 1996 campaign was neither illegal 
32 nor without precedent--the Minority Views cite 
ample evidence of previous Administrations engaging in similar 
behavior and of Republican Members of Congress using 
Congressional buildings for similar purposes. Nevertheless, I 
believe that it was highly improper, and more broadly speaking, 
it shows just how far the mad hatters succeeded in defining 
political deviancy down during the 1996 election cycle.
    The extensive use of the White House as part of the DNC's 
fundraising strategy, of course, is far from the only example 
of this problem. Take, for instance, the case of Harold Ickes 
and Warren Meddoff, which was the genesis of the mad hatter 
metaphor. At a fundraising event in Florida shortly before the 
election, Meddoff handed a business card to President Clinton 
which allegedly contained a written message on the back that 
said Meddoff had an associate who wanted to donate $5 million 
to the President's campaign.33 This card found its 
way to Ickes, who subsequently contacted Meddoff by phone. In 
their conversation, Meddoff repeated his offer of a multi-
million dollar contribution, and Ickes pointed out that the 
presidential public financing laws prohibited making such 
contributions to the President's campaign. Meddoff then asked 
Ickes to recommend other ways to help the campaign, suggesting 
that his associate would like to donate at least some of the 
money to tax-exempt groups. Ickes responded by sending Meddoff 
a list of such organizations.34
    I agree with the Minority Views' conclusion that the 
evidence before the Committee does not support a finding that 
Ickes acted illegally in directing Meddoff to tax-exempt 
organizations. I also believe, however, that he did not act 
properly. Meddoff explicitly told Ickes that his goal was to 
give millions to the President's reelection efforts 
(circumventing the public financing law's limits on 
contributions to the presidential campaign) and to obtain a tax 
deduction for these plainly political contributions. Instead of 
willingly participating in this behavior, a governmental 
official in Ickes' high position should have told Meddoff that 
his request for assistance in avoiding the restrictions of the 
presidential public financing law and making political 
contributions that were tax-deductible was improper and refused 
to take part in it.35
    Although, as explained above, the Committee's failure to 
sufficiently investigate Congressional and Republican 
activities leaves me unable to comment authoritatively on the 
scope of wrongdoing committed in that party's name, the 
investigation that was done makes clear that questionable 
activities were not confined to the Democratic Party. As 
discussed further below, for example, Ickes' actions have 
disturbing parallels in the behavior of a number of persons 
associated with the RNC who also improperly directed 
contributions to tax-exempt organizations.
    And, as the Minority Views explain in detail, the one RNC-
related event closely examined by the Committee shows that 
officials of that party were not immune to the devaluing of 
their public behavior. Officials of the RNC started the 
National Policy Forum (``NPF'') in 1993 with a series of loans 
from the RNC to NPF that ultimately amounted to $4 
million.36 By the Spring of 1994, NPF was in serious 
debt, mostly to the RNC, and the RNC, with critical elections 
ahead, wanted its money back.37 RNC and NPF 
officials turned to, among others, Texas businessman Fred 
Volcansek to find a way for NPF to obtain money to repay the 
RNC.38 Volcansek testified that he and others 
involved in seeking funds for NPF explicitly decided to explore 
foreign sources of funding, something that eventually led them 
to Hong Kong businessman Ambrous Young.39
    They approached Young and his representatives about 
securing a bank loan for NPF and repeatedly explained to them 
that the purpose of the loan was, as talking points Volcansek 
prepared for RNC Chairman Haley Barbour put it, to ``allow us 
to free up the money previously advanced to the NPF and make it 
available for the elections.'' 40 Barbour assured 
Young's attorney, Benton Becker, that the RNC would stand 
behind the loan in the case of an NPF default.41 
With this understanding of the loan, Young ultimately agreed to 
post $2.1 million in collateral for NPF--all derived from his 
Hong Kong corporation, albeit sent through that corporation's 
U.S. subsidiary.42 Upon receipt of the loan, NPF 
transferred the bulk of its proceeds to the RNC.43 
When NPF subsequently defaulted on the loan, Barbour and the 
RNC refused to honor their commitment to stand behind it, and 
Ambrous Young's company ultimately lost almost 
$800,000.44
    I cannot reach a conclusion as to whether this convoluted 
transaction, which, as a factual matter, led to the knowing 
infusion of foreign source money into the RNC's treasury at the 
direction of a foreign national, violated the letter of the 
law. It undoubtedly, however, violated the spirit of the law's 
prohibition on foreign nationals giving money to American 
campaigns, and in that sense it was plainly improper.
    These episodes, taken collectively, highlight the 
connection between the illogical legalframework that grew out 
of the Buckley decision and the maddening behavior that resulted from 
the slow defining of political deviancy down. Simply put, these 
scandalous activities never would have happened if it were not for the 
powerful temptation of soft money and the concomitant motivation to 
find more and more of it to fund the parties' ``issue advertising.'' It 
was for donations that dwarfed the average American's income that 
elected officials and party leaders were willing to sell their time to 
the opportunists who came to buy--and in the process to compromise 
their standards and sully some of the nation's most respected 
institutions.
    And, it is worth emphasizing, although the most outrageous 
incidents uncovered by the Committee may have involved Johnny 
Chung, Roger Tamraz and the like, the far more prevalent 
collection of big soft money donations came not from marginal 
hustlers like them, but from mainstream corporate and union 
interests that were indisputably interested in affecting the 
nation's policies and agenda. The amounts of soft money donated 
during the 1996 cycle are staggering: lawyers and lobbyists, 
for example, donated nearly $8 million to the Democratic Party 
and $1.5 million to Republicans; tobacco companies gave nearly 
$6 million to the Republican Party and almost $1 million to the 
Democratic Party; labor unions contributed almost $9 million to 
the Democratic Party and about $150,000 to the Republicans; 
securities and investment firms gave about $10 million to the 
Republican Party and about $9 million to the 
Democrats.45 In total, the parties raised $262 
million in soft money during the 1996 campaigns.46 
And, in another blow to Buckley's intellectual framework, it is 
clear that many, if not most, of those donations came from 
those seeking, not to engage in protected speech by expressing 
their ideological affinity with the parties, but rather simply 
to maintain their access to, and sometimes sway over, 
particular parties or candidates. How else to explain the fact 
that so many big givers were so generous with both parties at 
the same time? 47
    The bottom line is this: were it not for the lure of soft 
money and the relentless pressure to raise it, our nation's 
highest officials would have not been placed into the 
inappropriate situations in which the Committee too often found 
them. The President and the Vice-President, for example, never 
would have felt the need even to consider personally phoning 
supporters for donations, and we likely never would have seen 
the White House and Capitol Hill conscripted into serving the 
fundraising goals of the DNC, the RNC, and the two major 
presidential campaigns.
    Unfortunately, all indications are that the soft money-
driven misdeeds of 1996 are just the beginning, because in 
spite of the Committee's investigation and the widespread media 
disclosures and condemnations, soft money fundraising is not 
just continuing, it is mushrooming. The recent statistics 
indicate we are being drawn into an ever-escalating money 
chase--leaving parties and candidates all the more susceptible 
to the charge that they are improperly indebting themselves to 
wealthy contributors. The $262 million in soft money raised by 
the national parties in the 1996 cycle is 12 times the amount 
they raised in 1984.48 In the first half of 1997 
alone, the two major parties raised $35 million in soft money, 
or more than two and one-half times the almost $13 million they 
raised in the first six months after the last Presidential 
campaign.49 We know the lengths to which the parties 
felt they needed to go to raise money during the 1996 
campaigns. This continued exponential growth rate puts us all 
on notice of what is to come if we do not put a lid on soft-
money contributions.

The presidential campaigns and the abuse of public financing

    In addition to the many incidents of party fundraising 
activities that were improper or illegal, a broader systemic 
problem unique to the presidential campaign system also emerged 
during the Committee's hearings: the virtual destruction of the 
spirit and intent of the presidential public financing laws.
    Pursuant to the Presidential Election Campaign Fund Act 
50 and the Presidential Primary Matching Payment 
Account Act,51 the taxpayers spent approximately 
$236 million during the 1996 elections on the presidential 
campaigns.52 The purpose of all of this taxpayer 
support was to level the presidential electoral playing field, 
to limit spending on the presidential campaigns, to keep 
presidential candidates from becoming full-time fundraisers and 
to limit the flow of private money into the presidential 
campaigns. The Committee's hearings vividly demonstrated that 
in 1996 the taxpayers did not get what they paid for, that the 
spirit of the agreements with them was grossly violated by both 
presidential campaigns, and that it is therefore critical to 
reexamine and reform the public funding laws before the 
presidential campaigns of 2000 begin.
    Legal Background. The Presidential Election Campaign Fund 
Act and the Presidential Primary Matching Payment Account Act 
give public subsidies to candidates for the presidency and 
their parties at three stages of the presidential elections. 
First, the Treasury matches certain contributions raised by 
primary candidates who meet statutory eligibility requirements 
and who agree to limit their primary spending to an amount 
specified in the statute; eligible primary candidates may 
receive up to half of their spending limit in Federal matching 
funds.53 During the 1996 primary elections, 11 
candidates received a total of $58.5 million in matching funds, 
and they had a spending limit of $37 million.54
    Second, political parties may receive a specified amount to 
fund their presidential nominating conventions. In exchange for 
this money, the parties agree not to spend more on their 
conventions than they receive in public funds.55 The 
Treasury paid $24.7 million for the two major party conventions 
in 1996.56
    Third, major party nominees who agree to specified 
conditions are eligible for full public financing during the 
general election. Under 26 U.S.C. Sec. 9003(b), major party 
candidates seeking public financing are required to ``certify 
to the Commission, under penalty of perjury'' that they and 
their campaign committees will neither spend more on their 
campaigns than the amount allotted in public funds, nor accept 
any contributions to fund any expenditures to further their 
election.57 In 1996, $152.7 million went to three 
nominees for the general election, including approximately $62 
million each to President Clinton and Senator Dole (the rest 
went to minor party candidate Ross Perot, who was eligible for 
partial public financing for his general election 
run).58
    Congress enacted this public financing system for a 
specific and well-defined purpose: to level the electoral 
playing field and to remove presidential candidates from the 
potentially corrupting influence of non-stop fundraising. As 
the Senate Rules Committee put it in 1974, these laws aim to 
stop presidential candidates from having ``to devote too much 
time to endless fund raising at the expense of providing 
competitive debate of the issues for the electorate,'' and to 
eliminate the reliance of presidential candidates on wealthy 
contributors.59
    In contrast to its views on the election laws' mandatory 
spending limits, the Supreme Court in Buckley viewed this 
system of voluntary spending limits in exchange for public 
financing as perfectly permissible under the First Amendment. 
As it explained:

          Congress may engage in public financing of election 
        campaigns and may condition acceptance of public funds 
        on an agreement by the candidate to abide by specified 
        expenditure limitations. Just as a candidate may 
        voluntarily limit the size of the contributions he 
        chooses to accept, he may decide to forgo private 
        fundraising and accept public funding.60

    Abuses of the System. Both of 1996's major party candidates 
accepted public financing and pledged in return to limit their 
spending to $37 million during the primary season and, during 
the general election, not to make more than roughly $62 million 
in expenditures ``to further [their] election'' or to seek 
contributions to fund such expenditures.61 As the 
Committee's hearings showed (and as detailed in Chapters 32-33 
of the Minority Views), the candidates effectively ignored 
their pledges. Instead of curtailing their fundraising and 
limiting themselves to spending the amount they agreed to, both 
major party candidates continued raising and spending massive 
quantities of money by using the party machines as appendages 
of their campaigns in what amounted to a back-door effort to 
evade both the fundraising and spending limits they had pledged 
to abide by.
    The presidential candidates engaged in a seemingly never-
ending quest for campaign money throughout the entire election 
period. Indeed, they were involved in exactly the pattern of 
behavior Congress aimed to stop when it enacted public 
financing for the presidential campaigns: the candidates wooed 
wealthy contributors and appeared over and over at events open 
only to those who contributed $5,000, $10,000, $50,000 and 
more.
    The abuses on the spending side were just as bad. Primarily 
by running what they called ``issue'' ads through their 
parties, both major party candidates were able to use the money 
they raised to eviscerate the spending limits they agreed to 
accept. Although couched as ads discussing ``issues,'' the text 
of these advertisements, as well as the role the candidates 
played in producing them, make clear that they aimed to ``to 
further the election'' of the presidential candidates--
precisely what the public financing laws were supposed to 
proscribe.
    Evidence reviewed by the Committee, for example, showed 
that the President and numerous other Administration officials 
were heavily involved in determining the details of the DNC's 
media campaign. The President and some of his senior advisors 
had weekly strategy meetings with the November 5 Group--the 
name used by a group of consultants that included campaign 
consultant Dick Morris, pollsters Penn and Schoen and others--
to discuss campaign strategy. According to Harold Ickes, the 
Wednesday evening group reviewed ``most, if not virtually all'' 
of the DNC's soft money advertising, and members of the group, 
including the President, sometimes commented on the ads and 
suggested changes to the text. In fact, as Harold Ickes 
testified, the ads did not run until the Wednesday night group 
approved them.62
    The Dole for President campaign also played a significant 
role in the RNC's issue ad campaign, particularly during the 
period after the Dole campaign exhausted its permissible 
primary season spending but before it received its $62 million 
in general election funds. As the Minority Views explain in 
Chapter 33, Dole campaign personnel were involved in the 
production of RNC issue ads, and Senator Dole himself 
acknowledged his campaign's role in the party issue ads--and 
the role the party issue ads played in his campaign. 
63
    In short, the Committee's investigation left no doubt that 
the presidential public financing laws were widely evaded in 
1996. And, again, because of the soft money and issue advocacy 
loopholes, this all appears to be legal, even though, under 2 
U.S.C. Sec. 441a(d), the parties are supposed to spend only a 
limited, specified amount in coordination with their candidates 
to advance those candidates' campaigns. As explained above, the 
parties and the campaigns argue that anything that does not use 
Buckley's magic words is not express advocacy, and that 
anything that is not express advocacy is not ``for the purpose 
of influencing any election for Federal office'' and therefore 
falls outside of the limits imposed by the campaign finance 
laws, including those established in Section 441a(d) for 
coordinated expenditures. As a result, despite the fact that 
the campaign message of these party issue ads was as clear to 
anyone who views them as it was to the candidates who helped 
produce them, the parties and candidates argue that it was 
perfectly permissible for the candidates to be involved in the 
development and running of those ads, without limit. 
64
    However troubling the apparent legality of coordinating 
unlimited spending on issue ads is in general, it is beyond 
acceptability in the specific context of the presidential 
campaigns. If the presidential candidates truly can use the 
party apparatuses to raise unlimited soft money and then spend 
it to further their campaigns by running party issue ads whose 
content they controlled, then the taxpayers threw away $236 
million in presidential campaign subsidies in 1996. This is a 
huge and unacceptable loophole in the presidential campaign 
laws, and I hope Congress will adopt legislation to close it.
    By banning soft money and limiting the sources of funding 
available for running advertisements using a candidate's 
likeness or name within 60 days of an election, S. 25, the 
proposed McCain-Feingold campaign finance reform legislation, 
would go a long way toward preventing these abuses. But 
because, as explained above, the Supreme Court has explicitly 
upheld Congress's ability to impose even greater restrictions 
on those candidates who accept public financing, we also should 
consider going beyond S. 25's proposals for publicly-funded 
presidential candidates.
    I therefore have proposed legislation (S. 1666) that would, 
among other things, more explicitly prohibit presidential 
candidates who accept public financing from doing what the law 
long has intended to keep them from doing. My bill would 
effectuate the original goal of keeping the presidential 
candidates from spending too much time fundraising by banning 
them from raising soft money throughout their campaigns and any 
money at all after they are nominated, and it would prevent 
them from using the parties to circumvent spending limits by 
prohibiting their involvement in any party spending--for issue 
ads or anything else--that exceeds the amount Section 441a(d) 
explicitly authorizes presidential candidates and parties to 
spend together. I will urge my colleagues to support this 
proposal, so that the taxpayers can be assured that the 
hundreds of millions of dollars they spend to keep their 
presidential elections clean actually serve the purpose for 
which they are given.

The abuse of tax-exempt organizations

    An equally troubling phenomenon in the 1996 elections--one 
that the Committee regrettably failed to adequately investigate 
or to explore in public hearings--is the improper, and possibly 
illegal, use of tax-exempt organizations to circumvent campaign 
finance laws and to carry out campaign-related activity. 
Investigations conducted by the Minority and additional 
evidence uncovered by journalists strongly suggest that 
activities involving a wide array of tax-exempt organizations, 
sometimes in conjunction with the political parties, violated 
at least the spirit of both the election laws and the tax code. 
The public would have greatly benefited from a full and open 
airing of the stories of these organizations' activities, and I 
regret that did not happen. The Minority Views extensively 
recount the troubling activities uncovered during the 
investigation. I highlight a few here.
    Legal Background. The Federal Election Campaign Act 
(``FECA'') limits both the amounts and the sources of funds 
that may be contributed to candidates and political parties in 
connection with Federal elections, prohibiting, for example, 
such contributions from corporations, labor unions or foreign 
nationals who are not lawful permanent residents of the United 
States. 65 This law also imposes strict reporting 
and disclosure mandates on organizations involved in Federal 
elections, requiring them to provide the public with a detailed 
accounting of the contributions they receive and the 
expenditures they make. 66 The purpose of these laws 
is, among other things, to ensure honest elections by limiting 
the sources of campaign funds and by mandating that the public 
be made fully aware of both the identity of those trying to 
influence its votes and the financial activities of the 
political parties.
    The tax code, for its part, circumscribes the type of 
political activities in which organizations with tax-exempt 
status may engage. Groups with Internal Revenue Code Section 
501(c)(3) status--which confers not only tax-exempt status but 
also the added ability to receive tax-deductible 
contributions--may not intervene in any political campaign on 
behalf of or in opposition to any candidate. 67 The 
tax code permits organizations with Section 501(c)(4) status--
which qualify for tax-exempt status, but may not receive tax-
deductible contributions--to engage in election advocacy as 
long as such efforts do not make up the group's primary 
activity (election law restrictions, however, limit these 
organizations' ability to engage in election advocacy). 
68 In addition, the tax code does not permit 
contributions to political parties or candidates to be tax 
deductible.
    These provisions reflect Congress' judgment that although 
taxpayers should subsidize the activities of groups working in 
the public interest by granting them favored tax status, that 
subsidy should not extend to organizations that focus primarily 
on political campaign work, unless those organizations are 
willing to comply with the regulation of the election laws. 
69 Unfortunately, the scope of the activities some 
of these groups engaged in during the 1996 elections went far 
beyond what Congress intended, and both the tax-exempts 
themselves and the political parties used these organizations 
in ways that the election laws and the tax code were enacted to 
prevent.
    Americans for Tax Reform. The RNC, for example, appears to 
have worked with the 501(c)(4) organization Americans for Tax 
Reform (``ATR'') in a successful effort to circumvent election 
law restrictions on the party's own activities. As recounted 
more extensively in Chapter 11 of the Minority Views, documents 
obtained by the Committee show that the RNC infused ATR with 
over $4.5 million in the weeks leading up to the 1996 election. 
The RNC sent that money to ATR in installments provided just in 
time for ATR to pay its bills for a direct mail and phone bank 
campaign involving four million calls and 19 million pieces of 
mail explicitly disputing the Democrats' position on Medicare 
as it related to the November 5th election. In one case, the 
RNC's money arrived in ATR's bank account just two hours before 
ATR paid one of its bills for the direct mail campaign. 
Although the timing of these transfers alone provides powerful 
evidence of the RNC's involvement in ATR's partisan advocacy 
efforts, when taken together with an RNC document turned over 
to the Committee that refers to ATR's yet-to-be commenced 
direct mail effort, there can be little doubt that the RNC was 
directly involved in devising and implementing ATR's multi-
million dollar campaign.
    This activity is troubling for several reasons. FEC 
regulations require the RNC to fund issue advocacy efforts like 
the one ATR engaged in with a specified percentage of Federal, 
or hard, dollars 70--money that is more difficult to 
raise than the soft money the party sent to ATR. Thus, if the 
RNC in fact did use ATR to carry on these activities on its 
behalf, then the RNC's funding of these efforts entirely with 
soft money effectively thwarted FEC rules limiting the party's 
use of that money.
    Moreover, the RNC's complicity in ATR's activities also is 
completely at odds with the purpose of the election laws' 
disclosure requirements: to let voters know who it is that is 
trying to influence their votes, how much those persons and 
entities have spent and where that money came from. By 
funneling money through an outside group like ATR, the RNC was 
effectively able to hide the fact that it was behind phone 
calls received by four million Americans and letters sent to 19 
million potential voters--all aimed at promoting the party's 
cause. Recipients of material funded by the RNC were left with 
the impression that a disinterested organization, not the party 
itself, was behind the activities. In fact, leaving this false 
impression may have been the very reason for the RNC's 
generosity toward ATR. An article in the February 9, 1997 
edition of The Washington Post quotes then-RNC Chairman Haley 
Barbour as observing that outside groups like ATR ``have more 
credibility'' in pushing a political message than do the 
parties.71
    My concern over the RNC-ATR connection is not limited to 
its election law ramifications;this activity may also have 
brought ATR out of compliance with the tax code. As a 501(c)(4) 
organization, ATR may engage in some limited political campaign 
activities as long as the group's primary purpose is not to intervene 
in political campaigns on behalf of or in opposition to any candidate 
for public office. 72 In this case, the extent of its 
apparent coordination with, and advancement of, the RNC's goals 
suggests that ATR may have crossed the legal line. Indeed, as the 
Minority Views explain, an analysis of ATR's bank records reveals that 
the RNC's donations comprised more than two-thirds of ATR's 1996 
income, and activity carried on with the RNC's money formed the lion's 
share of ATR's pre-election activity. All this means that the taxpayers 
were involuntarily subsidizing undisclosed partisan political activity 
in violation of the clear intent of our tax laws, since ATR, as a 
501(c)(4) organization, is freed from a portion of an otherwise-
existing tax obligation.
    American Defense Institute. ATR was not the only tax-exempt 
group that benefitted from the RNC's fundraising. According to 
press reports and documents turned over to the Committee, the 
RNC also steered large amounts of money to the American Defense 
Institute (``ADI'), a 501(c)(3) organization that runs a voter 
turnout program for military personnel, who tend to vote 
Republican. 73 The October 23, 1997 edition of The 
Washington Post reported that in September 1996, ADI returned 
$600,000 donated to it by the RNC because, according to the 
group's president, ``we didn't want to be controversial and we 
had funding from other sources.'' 74 However, as the 
Post reported, that money was not returned until several days 
after the RNC itself sent checks totaling $530,000 from six 
donors to ADI. 75 Around that time, RNC Chairman 
Haley Barbour also apparently solicited $500,000 from the 
Philip Morris Companies Inc. for ADI. 76 The size of 
these donations and the fact that the RNC itself took the time 
to solicit, collect and send these contributions to ADI 
strongly suggest that the RNC believed that ADI's activities 
would inure to its partisan benefit. The timing of these 
transactions, moreover, arguably gives rise to an inference 
that the RNC and ADI substituted the donors' money for the 
RNC's to avoid publicizing the fact that the RNC was the source 
of ADI's funding--that is to avoid disclosure requirements. 
Moreover, all of those donors could take a tax deduction for 
their RNC-requested contributions to ADI, thus forcing 
taxpayers to subsidize donations to a political campaign in 
violation of the clear intent of our tax law.
    Vote Now 96. On the Democratic side, the Committee heard 
testimony that Vote Now 96, the fundraising arm of the 
501(c)(3) get-out-the-vote organization Citizens Vote, Inc., 
sought and received help from the DNC in raising money for its 
work, presumably because these organizations were working to 
raise turnout among groups who tend to vote Democratic. I have 
already discussed the most prominent example of this activity--
then-White House Deputy Chief of Staff Harold Ickes directing 
Warren Meddoff to Vote Now 96 and other tax exempts in response 
to Meddoff's request for advice as to how his associate could 
contribute to the President's re-election effort and take a tax 
deduction for part of it.
    Information gathered during the Committee's investigation 
suggests that the DNC directed other donors to this group as 
well, apparently as a means of avoiding otherwise applicable 
FECA requirements. For example, the DNC apparently steered to 
Vote Now 96 a $100,000 contribution from Duvaz Pacific 
Corporation, a Philippines company. The DNC directed Duvaz 
Pacific to Vote Now 96 after it learned that the company's 
head, who attended a DNC fundraiser, could not legally donate 
to the DNC itself because of her foreign citizenship. 
77 On another occasion, a $25,000 contribution from 
Shu-Lan Liu and Yun-Liang Ren, rejected by the DNC because of 
the donors' foreign citizenship, subsequently found its way to 
Vote Now 96. 78 The November 22, 1997 edition of The 
Washington Post further reported that the DNC included in a 
White House dinner for its top donors Gilbert Chagoury, who 
reportedly gave $460,000 to Vote Now 96 at the request of a DNC 
official; Mr. Chagoury's foreign citizenship status prevented 
him from contributing directly to the DNC. 79 
According to the deposition testimony of former DNC fundraiser 
Mark Thomann, the DNC may have credited fundraisers the same 
for some donations directed to Vote Now 96 as for contributions 
solicited for the party, 80 and DNC Finance Director 
Richard Sullivan testified that DNC Chairman Don Fowler had 
asked him to raise money for Vote Now 96. 81
    These activities--a political party soliciting money from 
persons ineligible to give to the party and offering party 
favors in return--are wrong. Moreover, insofar as the 
contributors were American taxpayers, they were given 
deductions that amounted to additional, involuntary subsidies 
by the rest of the nation's taxpayers, in violation of at least 
the spirit of our tax laws.
    Citizens for Reform. A number of tax-exempt groups--none of 
which registered with or disclosed their activity to the FEC--
directly and substantially intervened in elections by running 
television advertisements the groups claimed were intended only 
to discuss issues but that, in fact, clearly were aimed at 
influencing specific elections. According to a study by the 
Annenberg Public Policy Center, for example, Citizens for 
Reform, a 501(c)(4) organization, ran $2 million worth of ads 
during October and November of 1996 in Congressional districts 
around the country. 82 In one district, the group 
ran an ad with the following message:

          Who is Bill Yellowtail? He preaches family values, 
        but he took a swing at his wife. And Yellowtail's 
        explanation? He ``only slapped her.'' But her nose was 
        broken. 83

    Any reasonable person would view this ad as trying to 
convince voters to reject Yellowtail's candidacy--not as 
discussing the issue of domestic violence or any other issue. 
Moreover, published reports and testimony and documents 
obtained by the Committee suggest that Citizens for Reform 
became active only shortly before the 1996 campaign, had no 
history of any interest in domestic violence and did not run 
ads anywhere else dealing with domestic violence. Indeed, 
according to the May 5, 1997 edition of the Los Angeles Times, 
when asked whether Citizens for Reform would attack any 
Republicans who may have engaged in domestic violence, the 
group's president responded ``it's not up to us to do the job 
of people who have a liberal ideology.'' 84 Despite 
these facts, and the added fact that the overwhelming 
majority--if not the entirety--of this group's activities 
appear to have focused on helping to elect Republican 
candidates, the group never registered with, or disclosed its 
activities to, the FEC. In addition, it applied for and 
received 501(c)(4) status, which would be lawful only if it 
were primarily engaged in non-campaign related activities.
    All of these activities by tax-exempt, presumably non-
partisan corporations cry out for remedial action by Congress. 
The McCain-Feingold proposal (S. 25) partially addresses these 
problems by prohibiting party organizations from soliciting 
contributions for, or directing them to, tax-exempt entities. I 
have proposed additional legislation (S. 1666) to further 
address these abuses. Premised on the same idea as the 
amendments to the Presidential public financing laws noted 
above, my bill would make more explicit what the law always has 
intended: that organizations that wish to receive the public 
subsidy of tax-exemption must curtail their involvement in 
campaign-related advocacy. In particular, I am proposing to 
prohibit such organizations from coordinating any expenditure 
with parties and candidates and to forbid them to run 
advertisements or send direct mail identifying a candidate 
within 60 days of a general election or 30 days of a primary 
election.
    Like the public financing amendments discussed above, I 
believe these proposals would pass constitutional muster, 
because the Supreme Court already has upheld similar 
restrictions on the activities of tax-exempt organizations. As 
the Court explained in Regan v. Taxation with Representation of 
Washington when upholding against First Amendment challenge a 
provision that prohibits substantial lobbying by 501(c)(3) 
organizations: ``[b]oth tax exemptions and tax-deductibility 
are a form of subsidy that is administered through the tax 
system,'' and by restricting the lobbying activities of 
501(c)(3)'s ``Congress has merely refused to pay for the 
lobbying out of public monies.'' 85

Vice-President Gore and the Hsi Lai Temple event

    I must take issue with the Majority's comments on Vice-
President Gore's attendance at the Hsi Lai Temple's April 29, 
1996 luncheon in Hacienda Heights, California. The Majority 
devotes a chapter to the Temple event and implies that the 
Committee has evidence suggesting that Vice-President Gore was 
associated with, or should at least have been cognizant of, the 
wrongdoing that occurred in connection with the Temple event. I 
agree fully that the evidence before the Committee strongly 
supports the allegation that Temple officials and the event's 
organizers, Maria Hsia and John Huang, engaged in activities 
that violated applicable laws. The Vice-President, however, has 
stated that he had no knowledge of, and was certainly not 
involved in, any improprieties that may have occurred in 
connection with the Temple event. My review of the evidence 
leaves me without any doubt that that is the truth.

The China plan

    Another matter on which I would like to add my comments is 
the so-called China plan. As the Majority and Minority Views 
explain, non-public evidence before the Committee revealed that 
in 1995 officials within the government of the People's 
Republic of China (``PRC'') crafted a plan aimed at improving 
their influence in American Government. This plan included 
activities that amounted to legal lobbying and may also have 
included activities that could have resulted in money going 
into Congressional races in 1996, although there was no direct 
evidence that the plan aimed at putting money into the 1996 
presidential race. 86 This presented one of the 
stranger ironies of this investigation. The Committee had 
evidence of a Chinese Government plan to influence 
Congressional races, but found little evidence of money 
connected to the PRC actually entering Congressional campaigns. 
On the other hand, the Committee had no direct evidence that 
the China plan aimed at putting money into the presidential 
race, but then received considerable evidence of contributions 
to the 1996 presidential campaigns, particularly the Democratic 
campaign, from people or businesses with close links to the 
Chinese Government or businesses controlled by the Chinese 
Government.
    The Committee heard testimony, for example, that the Lippo 
Group, John Huang's former employer and an entity with whose 
employees and officials Huang retained contact during his 
tenure at the DNC, has substantial joint business ventures with 
the Chinese Government.87 A number of these ventures 
are with China Resources, a government-owned company the 
Chinese Government reportedly often uses as a front through 
which to run espionage operations. 88 In late 1992, 
China Resources purchased 15 percent of Lippo's Hong Kong 
Chinese Bank, a share it ultimately increased to 50 percent in 
mid-1993. 89 Since that time, Lippo and China 
Resources have engaged in dozens of joint ventures in China. 
90 In 1993, Huang apparently arranged for the head 
of China Resources, Shen Jueren, to meet with Vice-President 
Gore's Chief of Staff. 91 Moreover, as the Majority 
reports, non-public evidence presented to the Committee 
demonstrates a continuing business-intelligence relationship 
between the Riadys and the PRC intelligence service, although 
that evidence does not reveal any direct connection between the 
PRC intelligence service and the Riadys'' U.S. political 
activity.
    As the Majority Report also states, the Committee received 
non-public evidence suggesting that two individuals, Ted Sioeng 
and Maria Hsia, had direct contact with the government of the 
PRC and may in fact have undertook actions on behalf of that 
government, although the information I saw regarding Hsia did 
not include any direct evidence linking her U.S. political 
activities during the 1996 elections to the Chinese government. 
In 1996, Sioeng, his daughter, or his daughter's business were 
responsible for contributions to the DNC, the National Policy 
Forum and two California state Republican campaigns. Hsia is a 
long-time Democratic fundraiser who worked closely with John 
Huang in raising money for the 1996 Democratic presidential 
campaign.
    The Committee also heard testimony linking Charlie Trie and 
Ng Lap Seng, Trie's business partner and apparent benefactor, 
to Wang Jun.92 Wang is the son of China's former 
Vice Premier and the Chairman of two important Chinese 
Government-owned firms, the China Poly Group and the Chinese 
International Trade and Investment Corporation 
(``CITIC'').93 The exact nature of Trie and Ng's 
relationship with Wang is not clear, but on at least one 
occasion, Trie sought and received permission to bring Wang to 
a White House coffee with the President.94 The 
Committee also heard testimony that Ng reportedly was a member 
of the Chinese People's Political Consultative Conference, 
95 a group of several thousand delegates that serves 
as a channel through which political parties and other 
organized groups can share their views with Chinese government 
officials.96
    We know that the people with these contacts with the PRC--
John Huang, the Riady family, Charlie Trie, Maria Hsia and Ted 
Sioeng--were responsible for raising and contributing 
substantial sums of money to American national political 
parties and campaigns.
    While much of this evidence is circumstantial and therefore 
does not justify a definite conclusion that the China Plan 
aimed at, or in fact resulted in, contributions going from or 
at the direction of the Chinese government into the 1996 
American Federal elections, it leaves me suspicious. The 
evidence before the Committee puts many troubling dots on the 
board, but ultimately does not connect them in a way that 
enables us to see a clear picture of what happened. For me, the 
blurred result is nonetheless very unsettling.
    It is important to note that, aside from the seven Members 
of Congress informed by the FBI that they may have been targets 
of China's improper efforts to gain influence with Congress, 
there was absolutely no evidence presented to the Committee--
public or non-public--to even suggest that any American elected 
official or leader of a national political party had any 
knowledge of the China plan or any contributor's or 
fundraiser's possible connection to it.
    By alleging a China plan so dramatically on the opening day 
of the hearings, and then suggesting that the plan played a 
role in many of the activities to be reviewed by the Committee, 
the Majority created a distraction and established a very 
difficult standard for public conclusions about the Committee's 
work, because the existence of a China plan could be shown 
conclusively only through non-public information, which 
necessarily could not be shared fully with the public. That 
remains the case.
    Nevertheless, this is an important matter. Intelligence and 
law-enforcement agencies should continue to monitor and 
investigate this matter, and if firm evidence arises supporting 
the claim that the Chinese government or any other foreign 
government actually did implement a plan to illegally try to 
influence our nation's policies through illegal campaign 
contributions, those implicated should be prosecuted, and our 
relationship with that government should be affected.
    In the end, it is most important that we not overlook the 
real significance to our Committee's investigation of the China 
plan and of illegal foreign contributions in general. The fact 
that a foreign government, foreign companies, or foreign 
individuals concluded that money has become so important in 
American politics that they could buy their way to access to 
the top of our government to influence our policies towards 
them, thereby diminishing our national strength and 
independence, is a severe indictment of our campaign finance 
system and a compelling argument for reform.

The legacy of the investigation: the law's limitations

    Much of the Committee's investigation was driven by a 
singular question: were laws broken? Most every incident the 
Committee examined was viewed through a legal lens, and this 
focus led to many bitter, largely partisan disputes over what 
the facts were and what the law said about the facts, 
disagreements that live on in the often widely-diverging 
Majority and Minority views.
    In devoting so much time to these fights, we succumbed in 
some respects to the same trap that the mad hatters did, which 
was to equate the law with morality and thus lower the 
standards we use to judge ethical conduct to the legal limit. 
There is in fact a crucial distinction between them, one that 
matters not just to students of ancient philosophy but to us as 
policy-makers and political leaders who are grappling today 
with how we can repair our badly broken political system.
    The truth is that the law, while serving as an expression 
of our values, cannot compel moral behavior. It can stake out 
ethical boundaries, point us in the right direction, and punish 
behavior that is wrong, but its reach is limited. We cannot 
ever fully write into law what every citizen has a right to 
expect from their representatives--that those seeking to write 
the rules for the nation will respect them, rather than search 
high and low for ways to evade their requirements and 
eviscerate their intent; and that those who have sworn to abide 
by the Constitution will honor the trust and responsibilities 
the Constitution places in their hands, rather than cater to 
the special interests depositing soft money in their pockets.
    For our democracy to function, then, we must rely on a 
common core of values above and beyond what the law requires, a 
system of moral checks and balances comparable to the political 
ones built into the Constitution. These values, and the 
traditional American behavioral norms we have internalized in 
concordance with them, have long insulated us from the 
temptations that are endemic to politics and to which we are 
all vulnerable. But over the last several years, as the 
pressure to raise huge amounts of money helped to define 
political deviancy down deeper and deeper, that moral immune 
system was severely weakened, leaving the mad hatters at the 
mercy of their lesser instincts and prone to justify just about 
any means to reach the end of winning.
    The 1996 election cycle provides ample evidence of the 
threat this vulnerability poses to the legitimacy of our 
government. While the record the Committee compiled did not 
show that any U.S. policy--foreign or domestic--was altered by 
any of the hustlers or opportunists who bought access to some 
of our top leaders, we cannot deny that the potential existed 
for this kind of abuse. Nor can we ignore the dangers inherent 
just in the appearance of this kind of influence peddling and 
what it communicated to the American people. Consider some of 
the comments we heard from the unsavory characters who sought 
to purchase their way into our political system. Johnny Chung 
gave this blunt assessment: ``I see the White House is like a 
subway: You have to put in coins to open the gates.'' 
97 Or, as Roger Tamraz said when explaining how his 
contributions helped him get the access to high officials 
through the DNC that he was denied by policy makers: ``if they 
kicked me from the door, I will come through the window.'' 
98 What he really meant was buy his way through the 
window.
    Hearing these comments, the average American would have 
every reason to suspect the worst about their government and 
the leaders running it and to question just whose interests are 
being served. And that may in fact be the most mortal 
consequence of the moral breakdown our politics have suffered--
the damage it does to public confidence and trust in the 
democratic process. Even if we take away the Johnny Chungs and 
Roger Tamrazes and the other shakedown artists, we are still 
left with a system that bends over backwards to indulge big 
soft-money donors and their special interests and thereby 
suggests to the general public that power will be exercised 
first and foremost for those who give top dollar.
    The Washington Post ran an important five-part series two 
years ago that documented the deep feelings of mistrust and 
alienation many Americans feel toward their government and 
their elected leaders. One of the most striking findings was 
that the percentage of Americans who say they trust the Federal 
Government all or most of the time dropped from 76 percent in 
1964 down to 25 percent by the beginning of 1996.99 
Since then, a number of other polls have confirmed the Post's 
conclusions. For instance, a University of Michigan survey 
after the 1996 elections found that just 32 percent of the 
public trust in government to ``do what is right'' most of the 
time.100 And a study done by the Roper Center found 
that when asked whether elected officials have honesty and 
integrity, nearly three-quarters of the public said 
no.101
    The polls we have seen since the campaign finance system 
broke down completely in 1996 indicate that the scandal has 
made things even worse, hardening the profound cynicism that 
already exists. Gallup released the results of a damning survey 
in October 1997 which found that only 37 percent of Americans 
believe the best candidate usually wins elections, while 59 
percent believe elections are generally for sale. That same 
survey found that 77 percent of Americans believe that their 
national leaders are most influenced by pressure from their 
contributors, while only 17 percent believe we are influenced 
by what is in the best interests of the country. And just about 
half of the respondents said they believe the President is 
willing to change government policies in exchange for 
donations.102
    One of the most powerful indicators of the public's lack of 
confidence is its reaction to campaign finance reform itself. 
When asked whether they believed that major changes in the 
campaign finance laws could succeed in reducing the corrupting 
influence of big money in our politics, nearly 60 percent of 
Americans said special interests will always find a way to 
maintain their power in Washington no matter what laws we 
pass.103
    That hopelessness is undoubtedly why we have not heard an 
outcry from the public for major campaign finance reform. 
Without such a demand, that reform probably will not happen, 
for although those in power today often complain about the 
current system, they clearly benefit from it. The first task 
for reformers in both parties, therefore, is to raise the level 
of public trust and confidence to the point where the American 
people believe that campaign finance reform will actually make 
a difference so they will in turn demand it from their elected 
representatives in Washington. In short, the ball is now in 
Congress's court.

Conclusions and Recommendations

    Chairman Thompson wisely observed during the hearings that 
``if the interpretation is that this is legal and this is 
proper, then we have no campaign finance system in this country 
anymore.'' 104 He was referring to the end run 
around the public financing laws that both major 
presidentialcampaigns successfully executed in 1996, but he might as 
well have been talking about the whole gamut of abuses both parties 
committed. The truth is that we have no effective system, just systemic 
failure.
    Unless something is done soon to radically recast our 
entire campaign finance system, we can count on that failure to 
continue well into the next century. Based on the excuses the 
Committee heard in testimony to justify much of the outrageous 
behavior described above, we can probably expect even more 
surreal images than money being raised from a Buddhist temple, 
even more hustlers trying to put their change into the subway 
turnstile at the White House gate, and even more alienation and 
apathy from the people we are elected to serve.
    Fortunately, there are a number of options for achieving 
such reform. One course we should pursue is to ask the Supreme 
Court to reconsider its decision in Buckley. We need to put 
before the Court the demonstrated detrimental impact the 
unlimited spending they permitted and the narrow definition of 
``express advocacy'' they promulgated have had on our campaign 
system. We need to convince the Court that spending limits are 
constitutionally justified because unlimited spending does pose 
a serious threat of corruption and that the need to avoid that 
threat is so compelling that spending limits are warranted.
    In the meantime, though, those of us in Congress seeking 
campaign finance reform have two other options. One is to push 
to amend the Constitution to overturn Buckley--an effort I have 
supported, but that has not yet found sufficient votes in 
Congress.105 The other is to continue to forge ahead 
and enact reforms that will survive constitutional scrutiny 
under Buckley and its progeny. The McCain-Feingold proposal (S. 
25) laudably seeks to do this, by, among other things, 
proposing a ban on soft money and better defining the types of 
candidate-oriented advertisements that are covered by the 
election laws. Although the record created by the Committee's 
hearings recently helped that bill obtain the votes of a 
majority of the Senate, an anti-reform minority filibustered 
the bill, and so kept it from passing.106
    Those of us in favor of comprehensive reform should 
continue fighting to obtain additional support for that bill. 
In the meantime, though, we should consider carving out 
discrete parts of that and other proposals in an attempt to 
enact at least incremental reform this year. I hope, for 
example, that we have the courage to take the logical first 
step of closing the soft-money loophole. Not only would this 
almost certainly meet Constitutional muster under the Buckley 
framework, which upholds limits on campaign contributions, it 
also would have the broad support of the American people. The 
October Gallup poll I cited above showed that the public 
overwhelmingly favors clamping down on soft 
money.107 At a minimum, we should enact non-
controversial reforms, like banning all fundraising in Federal 
buildings, making clear that foreign soft money donations are 
illegal, and specifying that the ban on making contributions in 
the name of another applies to soft money donors. It is hard to 
imagine that anyone would oppose closing these loopholes.
    Another worthy avenue of reform to consider is to better 
define the scope of permissible activities for those accepting 
public subsidies like financing for presidential candidates or 
tax-exemption for outside groups. As explained above, although 
Buckley generally limits Congress' ability to impose mandatory 
restrictions on the spending and the speech of those involved 
in the political and campaign arenas, it and other decisions 
have made clear that Congress may impose such restrictions as a 
condition for receiving government subsidies, like public 
financing in the case of the presidential campaigns and tax-
exemption in the case of tax-exempt 
organizations.108 Congress should use its authority 
to impose such restrictions to help better ensure that 
presidential candidates and tax-exempt organizations conform 
their activities to what they are supposed to be doing to 
receive those subsidies.
    As we pursue this agenda, we would be wise to remember what 
made the mad hatters mad in the first place. They lost their 
heads largely because they lost sight of their values. More to 
the point, they lost sight of our values, the common principles 
that unite us as Americans and that have served as the 
foundation of our democracy since its inception--chief among 
them the ideal of equal access to and participation in our 
government that the Constitution proclaims and respect for the 
rule of law that the Constitution demands.
    The breakdown in our political values is akin to a much 
broader problem in our society that I have raised concerns 
about in recent years--the growing sense that our popular 
culture has disoriented our common moral compass. This is 
particularly so because of the increasingly omnipresent and 
superpowered entertainment industry, where anything seemingly 
goes, no matter how it affects our country, so long as it 
increases revenues. In the intense competition for higher 
television ratings or record sales, many good people working at 
great and honorable companies have lowered themselves into 
mainlining extreme violence, sexual promiscuity, and gross 
vulgarity into our children's minds, and have lowered us all by 
extension. All the while, they defend their behavior by waving 
the First Amendment as if it were some kind of Constitutional 
hall pass, where having the right to speak freely justifies any 
and all behavior exercised under it, no matter whom it hurts. 
This is what the Reverend Billy Graham meant when he said--with 
such moral force--that the people who run the culture often 
``have confused liberty with license.'' 109
    In that sense, the similarities between what has happened 
within our culture and within our polity are striking, and in 
some respects instructive. Both are plagued by enormous 
competitive pressures, the powerful temptation of big money, 
and a reflexive reliance on the right of free speech to defend 
the unseemly and the corrosive. In Hollywood, the thinking 
goes, if I can say it or portray it, and people will pay to see 
it, then I will because I will succeed. In Washington, the 
analog is, if the law does not clearly prohibit me from doing 
it, then I must or I will lose. Either way, the resulting 
behavior often drags down our common standards and weakens our 
moral safety net.
    Our experience with the culture wars tell us that it is 
unrealistic to expect the political mad hatters to voluntarily 
change their behavior and lift up their standards. In the case 
of the degrading daytime television talk shows, for example, it 
took persistent public pressure--a revolt of the revolted--to 
shame the producers and sponsors of at least some of these 
programs and force them to begin to clean up their act. That is 
why it is imperative to fundamentally change the way our 
political process works to do whatever we can to quash the 
temptation to stray from our basic core values in the first 
place--in other words, to silence the siren's call of cash. Our 
best chance to achieve that goal is to push for comprehensive, 
systemic reforms that will not just toughen enforcement of 
existing law and eliminate the most glaring loopholes but 
drastically reduce the insatiable demand for big money that 
begat the mad hatters.
    The Committee's investigation started us down that road by 
showing the American people a deeply disturbing reflection of 
what has become of our politics, how out of control and out of 
touch with our values the campaign fundraising mad hatters have 
become. We have met the enemy, and it is us, which also means 
that we have it within ourselves to change. Now we must find 
the will to do so.
                                   Joseph Lieberman, U.S.S.,
                                           March 10, 1998.

                               Footnotes

    \1\ Harold Ickes, Oct. 8, 1997 Hrg. p. 102.
    \2\ July 8, 1997 Hrg. p. 54.
    \3\ Id at 53, 55.
    \4\ In its initial funding resolution, the Governmental Affairs 
Committee unanimously decided to investigate both illegalities and 
improprieties in the 1996 elections. The Rules and Administration 
Committee, which reviews all such resolutions, then sought to confine 
the Governmental Affairs Committee's mandate to investigating solely 
illegal activities, but the full Senate wisely reversed that decision. 
See March 11, 1997 Cong. Rec. S2114-15 (statement of Sen. Lieberman in 
support of Senate vote to authorize investigation into both illegal and 
improper activities).
    \5\ I want to underscore the use of the term ``appear'' in this 
context. The Committee is neither qualified, nor permitted under the 
Constitution, to reach any definitive conclusions regarding whether the 
behavior of any person or entity violated the law; under the 
Constitution, only courts and juries may definitively determine guilt, 
and it is Congress' job to make laws, not to determine whether someone 
broke them. I must also emphasize that the term ``illegal'' does not 
necessarily mean ``criminal.'' In many of the cases reviewed by the 
Committee, the evidence suggests that an individual's actions did not 
comport with governing legal standards, but does not sufficiently 
illuminate the individual's state of mind to allow for any meaningful 
determination of whether that individual should be considered a 
candidate for criminal sanctions. See, e.g., 2 U.S.C. 
Sec. 437g(d)(1)(A) (criminal sanctions available only upon showing of 
knowing and willful commission of violation).
    \6\ The Committee heard testimony, for example, from Yuefang Chu 
and Xiping Wang that Keshi Zhan, apparently at the request of Charlie 
Trie and/or Ng Lap Seng, asked Chu and Wang to write checks to two 
Democratic congressional campaign committees and to the DNC. At the 
same time, Zhan provided them with funds to cover those checks. July 
29, 1997 Hrg. pp. 131-50. If true, these transactions apparently would 
violate 2 U.S.C. Sec. 441f, which prohibits making contributions in the 
name of another. Moreover, if Ng Lap Seng, a foreign national, provided 
the funds and directed the contributions, this transaction might also 
violate 2 U.S.C. Sec. 441e, which prohibits direct or indirect 
contributions by foreign nationals. See Jerome Campane, July 29, 1997 
Hrg. pp. 17-18 (suggesting funds for Chu and Wang contributions may 
have derived from Ng Lap Seng's Hong Kong company).
    \7\ The Committee received evidence, for example, that a $250,000 
contribution to the DNC in 1996 from Cheong Am America, Inc. was funded 
with money from the company's foreign parent (see Hrg. Exhs. 1038, 
1039, 1040 (DNC memorandum regarding return of donation and copies of 
checks)), as was a 1992 contribution from Hip Hing Holdings, Inc. to 
the DNC (see Hrg. Exhs. 101, 102 (check and request for reimbursement 
from abroad)). A 1992 contribution to the RNC from Michael Kojima also 
appears to have been funded with money transferred to Kojima from 
foreign nationals for the purpose of making the contribution. See 
Minority Views, Chap. 6. Each of these transactions appears to violate 
2 U.S.C. Sec. 441e's prohibition against foreign nationals making 
political contributions directly or through any other person.
    \8\ The Committee heard testimony suggesting that John Huang 
solicited campaign contributions while employed at the Department of 
Commerce, an apparent violation of the Hatch Act, 5 U.S.C. 
Sec. 7323(a)(2). See Minority Views Chap. 4.
    \9\ It is because of the importance I attach to personal 
accountability through the criminal justice system in ensuring respect 
for, and compliance with, the law that I voted against proposals to 
immunize witnesses in every case in which the Justice Department 
informed the Committee that such a grant could compromise an ongoing 
criminal investigation. See, e.g., June 12, 1997 Committee Roll Call 
Vote (closed session) and Committee Meeting pp. 41-42 (open session); 
July 23, 1997 Committee Meeting pp. 2-8, 27-30. Governing law 
authorizes Congress to immunize witnesses even over the Justice 
Department's objection (see 18 U.S.C. Sec. 6005), and I have no doubt 
that there are some cases in which Congress should exercise that 
authority. In my view, however, those cases are extremely rare, and 
they should come about only if Congress determines that the public's 
need for immediate information on a particular issue (due, for example, 
to a national crisis that paralyzes our government) overcomes the very 
strong presumption in favor of preserving the possibility of 
prosecuting a wrongdoer. Because I did not see any case made for 
overcoming that presumption during this investigation, I voted in each 
case to preserve the prosecutors'' ability to conduct their 
investigation. For this reason, I must note my disagreement with any 
suggestion that the Committee erred in declining to grant immunity to 
John Huang. See Minority Views Chap. 4. Mr. Huang's actions were among 
the most disturbing examined by the Committee, and he appears to have 
engaged in a number of activities that skirted a variety of Federal 
laws. The Committee acted wisely in ultimately deciding not to pursue 
immunity for Mr. Huang.
    \10\ See Minority Views Chaps. 39-41.
    \11\ 424 U.S. 1 (1976).
    \12\ 2 U.S.C. Sec. 441a(a).
    \13\ See Buckley, 424 U.S. at 13.
    \14\ Id. at 19.
    \15\ Id. at 25.
    \16\ See, e.g., id. at 55-59.
    \17\ Id. at 20-21.
    \18\ Id. at 26-29.
    \19\ Id. at 58.
    \20\ The contribution limits imposed by 2 U.S.C. Sec. 441a(a) apply 
only to donations made ``with respect to any election for Federal 
office.'' In a series of rulings beginning in 1978, the FEC read that 
term to exclude from the law's contribution limits donations to parties 
that were not made with respect to particular Federal elections, but 
rather for the purpose of funding more generic activities like voter 
registration drives and party building activities. For a good 
discussion of the development and growth of the soft money loophole, 
see A. Corrado, T. Mann, D. Ortiz, T. Potter, F. Sorauf, ``Campaign 
Finance Reform: A Sourcebook'' (Brookings Institution 1997), pp. 167-
77. See also the hearing testimony of Anthony Corrado, Sept. 25, 1997 
Hrg. pp. 3-9.
    \21\ See Buckley, 424 U.S. at 39.
    \22\ Id. at 42-43.
    \23\ d. at 42-43.
    \24\ Id. at 44 n.52.
    \25\ Jerome Campane, Sept. 18, 1997 Hrg. pp. 184-86.
    \26\ Id. at 187-89.
    \27\ Id. at 180.
    \28\ See New York Times, Feb. 22, 1997.
    \29\ Richard Sullivan Dep., June 4, 1997 Vol. 1 pp. 127-28. 
Sullivan testified that when John Huang first approached him about 
Kanchanalak's request to bring foreign nationals to a White House 
coffee, he told Huang it would be inappropriate. Nevertheless, when 
Huang reported that Kanchanalak was ``adamant about this'' and ``has 
been a big contributor, a big supporter,'' the DNC relented and allowed 
her to bring her associates to the June 18, 1996 coffee. Attendees at 
that coffee reported that the Thai executives then took up the bulk of 
the coffee's time talking about issues of importance to them. Id. at 
128-30, 135-36; Clarke Wallace Dep., Aug. 27, 1997 pp. 53-54; Beth 
Dozoretz Dep., Sept. 2, 1997 pp. 110-11.
    \30\ A September 13, 1995 memo to Vice-President Gore from his 
National Security Advisor Leon Fuerth explained the National Security 
Council's objections to such meetings. Calling Tamraz someone ``with a 
shady and untrustworthy reputation'' whose pipeline plan ``is 
commercially questionable at best.'' Fuerth wrote:

      Tamraz's penchant for making false claims is now impacting on the 
U.S. Government. Tamraz recently told Turkish Prime Minister Ciller 
that he has full U.S. Government support for his pipeline plan. This is 
not true, although it is possible he is taking your expression of 
interest to Mr. Sassounian and calling it full USG support. Tamraz's 
line is that he is not looking for support, only that he wants us to 
raise no objections. He then, however, takes comments that we have no 
objection and claims them as reflecting USG endorsement. We therefore 
have to be very careful even in offhand remarks to Mr. Tamraz. He also 
told Ciller that he will be meeting with President Clinton and you this 
week. We are checking to see if Tamraz may be part of a larger group 
meeting with you or the President this week, but as far as we can tell, 
this is an outright fabrication.
      The NSC has advised that senior US Government officials not meet 
with Mr. Tamraz should he or his associates seek appointments. I concur 
with that recommendation.

    September 17, 1997 Hrg. Exh. 1127.
    \31\ Tamraz made approximately $300,000 in contributions to the DNC 
and other Democratic causes between July 1995 and April 1996. Sept. 18, 
1997 Hrg. Exhs. 1167, 1168. Between September 1995 and April 1996, 
Tamraz attended a number of DNC events, including several at the White 
House. Roger Tamraz, Sept. 18, 1997 Hrg. pp. 16, 19, 22, 27. Fowler 
acknowledged calling Nancy Soderburg of the National Security Council 
on Tamraz's behalf. Donald Fowler Dep. May 21, 1997 pp. 229-30. Shelia 
Heslin, the National Security Council staffer directly responsible for 
the Caspian Sea oil issues and most familiar with Tamraz, also reported 
receiving a phone call about Tamraz from Fowler. Shelia Heslin, Sept. 
17, 1997 Hrg. pp. 22-24. Fowler could not recall having the 
conversation with Heslin, but did not dispute that it occurred. Donald 
Fowler Dep. May 21, 1997 p. 239.
    \32\ 18 U.S.C. Sec. 607--the statute that has been commonly invoked 
when reviewing these events--by its terms criminalizes only the actual 
solicitation or receipt of ``any contribution within the meaning of 
section 301(8) of the Federal Election Campaign Act of 1971 in any room 
or building occupied in the discharge of official duties . . . .'' The 
statute thus requires an explicit solicitation or receipt in the 
Federal building, and by referencing the election law's definition of 
contribution, Section 607 further explicitly limits itself to covering 
only the solicitation or receipt of so-called hard, or Federal, money. 
In addition, the statute's ``official duties'' reference limits its 
geographical application to only certain rooms within the White House; 
according to the Justice Department's longstanding interpretation of 
this provision, Section 607 does not apply to either the residence 
portion of the White House or to so-called mixed-use rooms, such as the 
Map room, that are used for both private and official functions. See 3 
Op. O.L.C. 31, 38-44 (1979). The White House coffees do not appear to 
have violated Section 607, because most apparently took place in 
``mixed-use'' rooms (see Jerome Campane, Sept. 18, 1997 Hrg. p. 184 
(most coffees occurred in Map and Roosevelt Rooms)), and there is no 
evidence before the Committee that any solicitation occurred at any 
coffee that took place in an official use room. In fact, the Committee 
heard only one allegation that a solicitation occurred at any of the 
coffees, and attendees of that coffee offered contradictory testimony 
regarding whether even that solicitation occurred. See Karl Jackson, 
Sept. 16, 1997 Hrg. p. 11 (John Huang solicited financial support at 
Map Room coffee); Beth Dozoretz, Sept. 16, 1997 Hrg. pp. 118-20 (no 
solicitation occurred).
    \33\ Warren Meddoff, Sept. 19, 1997 Hrg. pp. 6-8.
    \34\ Harold M. Ickes, October 8, 1997 Hrg. pp. 96-102; Harold M. 
Ickes Dep., June 27, 1997, Vol. 2 pp. 37-58; Warren Meddoff, Sept. 19, 
1997 Hrg. pp. 5-17; Hrg. Exh. 929 (Ickes memo to Meddoff).
    \35\ I want to comment on the Minority Views' suggestion (Chapter 
17) that Meddoff was not a credible witness. In my view, Meddoff's 
credibility is irrelevant to determining the propriety of the 
transaction under scrutiny, because Ickes and Meddoff agree on all of 
the facts upon which my assessment of the issue relies: Meddoff told 
Ickes his associate wanted to donate a significant sum to help the 
President's campaign, Ickes told Meddoff that the presidential public 
financing laws prevented him from doing so directly, and Ickes then, in 
response to Meddoff's further request for ways his associate could give 
to tax-exempt organizations, sent Meddoff a list of tax-exempt 
organizations to which Meddoff's associate could donate. See Harold M. 
Ickes, Oct. 8, 1997 Hrg. pp. 96-102; Harold M. Ickes Dep., June 27, 
1997 Vol. 2 pp. 37-58; Warren Meddoff, Sept. 19, 1997 Hrg. pp. 5-17. 
The only relevant difference in these two witnesses' testimony lay in 
their recollection of what Ickes told Meddoff when he called the 
transaction off. Ickes recalls that he told Meddoff his memo ``was 
inoperative,'' while Meddoff testified that Ickes told him to ``shred'' 
the memo. Harold M. Ickes Dep., June 27, 1997 Vol. 2 pp. 42-43; Harold 
M. Ickes, Oct. 8, 1997 Hrg. p. 128; Warren Meddoff, Sept. 19, 1997 Hrg. 
p. 16. I have no way of knowing which witness had the better 
recollection as to the specific language used in this particular 
conversation, and this dispute has no bearing on my comments on the 
propriety of the transaction.
    \36\ Haley R. Barbour, July 24, 1997 Hrg. pp. 160-61.
    \37\ RNC Chairman Haley Barbour testified that the NPF owed $2 
million to the RNC by 1994. July 24, 1997 Hrg. p. 166. Fred Volcansek 
explained at his deposition that the purpose of the NPF obtaining a 
loan was ``to see the loan [from the RNC to the NPF] repaid to meet the 
fiscal needs of the RNC.'' Volcansek Dep. July 21, 1997 pp. 40-41.
    \38\ Fred Volcansek, July 24, 1997 Hrg. pp. 26-28.
    \39\ Fred Volcansek Dep., July 21, 1997 pp. 49-54, 59.
    \40\ Fred Volcansek, July 24, 1997 Hrg. pp. 34-36 & Exh. 277 
(Volcansek's July 28, 1994 Talking Points for Barbour). See also July 
24, 1997 Hrg. Exh. 278 (August 15, 1994 Volcansek Proposal for Young) 
(``In planning for the ``94 mid-term election cycle in the Congress, it 
has been determined that there are 176 highly contested races. The RNC 
is faced with the need to support substantially over 90 of these races. 
. . . What the NPF needs from you is a three year loan guarantee in the 
amount of $3.5 million . . . if there is any default in loan payments 
by the NPF, [Chairman Barbour] will authorize the guarantee of the RNC 
and ask for the Republican National Committee's ratification. As 
Chairman of the RNC and the NPF, he intends to be certain that neither 
organization defaults on its obligations. . . . Chairman Barbour, 
Senator Dole and Congressman Gingrich, who are committed to the NPF, 
will make themselves available to express their support for your 
participation on this project''); Benton Becker, July 23, 1997 Hrg. pp. 
125-26 (agreeing that ``there was never any doubt that the effect of 
the guaranteeing of the loan to the National Policy Forum would be to 
free up money for the Republican elections in 1994'').
    \41\ See Benton Becker, July 23, 1997 Hrg. pp. 66-67 & Hrg. Exh. 
285 (August 30, 1994 letter from Barbour to Becker on RNC stationery) 
(``Because NPF is separate from the Republican National Committee, the 
RNC is not automatically responsible for its debts. Nevertheless, I am 
committed to making sure NPF raises sufficient funds to cover its 
operations and to pay off any and all its debts. Moreover, as Chairman 
of the RNC, in the event NPF defaults on any debt, I will ask the 
Republican National Committee to authorize me to guarantee and pay off 
any NPF debts. I am confident the RNC would grant me such authority at 
its next meeting, provided there is valid, outstanding debt of NPF to a 
US bank or other lending institution, guaranteed by a US citizen or 
domestic corporation'').
    \42\ Benton L. Becker, July 23, 1997 Hrg. pp. 45-48.
    \43\ Haley R. Barbour, July 24, 1997 Hrg. pp. 236-37 (NPF repaid 
$1.6 million to RNC).
    \44\ Benton L. Becker Dep., June 3, 1997, pp. 81-87. The RNC and 
Ambrous Young reached a partial settlement of their dispute, in which 
the RNC agreed to compensate Young's company (``Young Brothers'') for 
part of the money it lost when NPF defaulted on its loan. After NPF and 
Young Brothers reached the agreement under which NPF would return 
$800,000 to Young Brothers, Young Brothers received a check from Signet 
Bank for $55,460 in interest earned by the certificates of deposit 
Young Brothers had posted as collateral over the life of the loan. NPF 
promptly wrote Young Brothers that, in view of this ``windfall,'' the 
NPF would unilaterally reduce the $800,000 payment it already had 
agreed to by the amount of interest Young Brothers had received on its 
own money. Benton Becker Dep., June 3, 1997 pp. 85-86. See also Benton 
Becker, July 23, 1997 Hrg. pp. 52-53.
    \45\ Common Cause, ``The Soft Money Laundromat'' (available on 
Common Cause Web Site, www.commoncause.org).
    \46\ FEC News Release ``FEC Reports Major Increase in Party 
Activity for 1995-1996'' (March 19, 1997).
    \47\ For example, each of the tobacco companies that gave more than 
$10,000 in soft money to the Democratic Party (Philip Morris, RJR 
Nabisco, U.S. Tobacco and the Tobacco Institute) also donated 
significant amounts to the Republican Party. Revlon Group Inc., M & F 
Holdings gave $562,250 to the Democratic Party and $140,000 to the 
Republican Party. Freddie Mac--Federal Home Loan Mortgage gave $265,000 
to the Democrats and $250,000 to the Republicans, while Bank America 
Corp. gave $355,200 to the Republicans and $190,389 to the Democrats. 
For these and similar examples, see Common Cause, supra.
    \48\ According to the FEC, Democratic national party committees 
raised $123.9 million in soft money in the 1995-1996 election cycle, up 
242 percent from the 1992 cycle, and spent $121.8 million, or 271 
percent more than in 1992. Republican national party committees raised 
$138.2 million in soft dollars in the 1996 cycle, up 178 percent from 
1992, and spent $149.7 million, 224 percent more than in 1992. FEC News 
Release ``FEC Reports Major Increase in Party Activity for 1995-1996'' 
(March 19, 1997). Although parties were not required to report soft 
money contributions and expenditures in the early 1980s, the best 
available estimates put party soft money at $19.1 million during the 
1980 election cycle and $21.6 million in 1984. Corrado, et al., supra 
at p. 173.
    \49\ FEC News Release ``Financial Disclosure Reports of Major 
Political Parties Show Increases in `Soft Money' Contributions'' (Sept. 
22, 1997).
    \50\ 26 U.S.C. Sec. Sec. 9001-9013.
    \51\26 U.S.C. Sec. Sec. 9031-9042.
    \52\ October 31, 1997 Memorandum from FEC Staff Director John 
Surina to the Commission Regarding the Status of the Presidential 
Election Campaign Fund.
    \53\ 26 U.S.C. Sec. Sec. 9033-9035.
    \54\ See Surina Memo, supra.
    \55\ 26 U.S.C. Sec. 9008(d).
    \56\ See Surina Memo, supra.
    \57\ Using the law's language, candidates are prohibited from 
making ``qualified campaign expenses'' in excess of the statutory limit 
and also are prohibited from accepting contributions to make any 
``qualified campaign expenses.'' 26 U.S.C. Sec. 9002(11) defines the 
term ``qualified campaign expense'' as an expense ``incurred by the 
candidate [for President or Vice-President] . . . to further his 
election'' or ``incurred . . . by an authorized committee of the 
candidates . . . to further the election'' of those candidates. In 
addition, presidential candidates must agree not to spend more than 
$50,000 of their own money in connection with their campaigns. 26 
U.S.C. Sec. 9004(d).
    \58\ See Surina Memo, supra. It is important to add that the 
election laws do leave some room for private financing of presidential 
campaigns. Most importantly, presidential campaign committees still may 
seek contributions (subject to hard money limits) to help defray the 
cost of legal and accounting services. See 11 C.F.R. Sec. 9003.2(a)(2). 
In addition, 2 U.S.C. Sec. 441a(d) authorizes political parties to 
spend a specified amount (2 cents times the voting age population) in 
coordination with or on behalf of their presidential candidates. The 
parties are free to raise this money from private sources, subject to 
the Federal Election Campaign Act's hard money limits.
    \59\ S. Rep. No. 93-689, p. 6 (1974). See also Buckley v. Valeo, 
424 U.S. at 96 (``It cannot be gainsaid that public financing as a 
means of eliminating the improper influence of large private 
contributions furthers a significant governmental interest'').
    \60\ 424 U.S. 1, 57 n.65.
    \61\ 26 U.S.C. Sec. 9003(b).
    \62\ Harold Ickes Dep. June 26, 1997 Vol. 1 pp. 50-51, June 27, 
1997 Vol. 2 pp. 35-36.
    \63\ During a June 1996 interview, Ted Koppel asked Dole how, in 
light of his dwindling pre-convention campaign funds, he expected to 
fund additional television advertising. Senator Dole's response:

    [W]e can, through the Republican National Committee, through what 
we call the Victory '96 program, run television ads and other 
advertising. It's called generic. It's not Bob Dole for president. In 
fact, there's an ad running now, hopefully in Orlando, a 60-second spot 
about the Bob Dole story: Who is Bob Dole? What's he all about? Pretty 
much the same question that Ted Koppel asked me. So we'll do that. . . 
. It doesn't say ``Bob Dole for president.'' It has my--it talks about 
the Bob Dole story. It also talks about issues. It never mentions the 
word that I'm--it never says that I'm running for president, though I 
hope that it's fairly obvious, since I'm the only one in the picture! 
(Laughter).

    Oct. 22, 1997 Hrg. Exhs. 2336M (Transcript of ABC News interview of 
Bob Dole (June 6, 1996)), 2405M.
    \64\ I believe that the argument supporting the legality of the 
coordination of issue ads between presidential candidates and their 
parties is weaker than the argument supporting the legality of 
coordination between other candidates and the parties. The argument 
supporting the legality of coordination in general is as follows: the 
Federal Election Campaign Act (``FECA'') limits the extent to which 
individuals and outside groups can ``coordinate'' their campaign 
activities with candidates by defining the term ``contribution'' to 
include ``expenditures made by any person in cooperation, consultation, 
or concert, with, or at the request or suggestion of, a candidate, his 
authorized political committees, or their agents'' (2 U.S.C. 
Sec. 441a(a)(7)(B)(i)). In other words, FECA defines coordinated 
expenditures as contributions from the spending person or entity to the 
candidate, therefore subjecting such expenditures to the law's strict 
contribution limits. However, because FECA limits the term 
``expenditure'' to ``any purchase, payment, distribution, loan, 
advance, deposit, or gift of money or anything of value, made by any 
person for the purpose of influencing any election for Federal office'' 
(2 U.S.C. Sec. 431(9)(A)(i)), and because the term ``for the purpose of 
influencing any election for Federal office'' has been interpreted as 
limited to only express advocacy, many argue that the rule 
circumscribing coordination applies only to coordinated express 
advocacy expenditures. Under this interpretation, parties, outside 
groups and individuals are free to coordinate issue advocacy and other 
similar activities with candidates, and such coordinated expenditures 
do not count toward the spending entity's contribution limits. An 
argument can be made that this very limited definition of coordination 
should not apply to expenditures made in concert with presidential 
candidates. That is because what the presidential financing laws 
prohibit is the making of expenditures beyond the spending limit (or 
the acceptance of contributions to fund such expenditures) that are 
``to further the election'' of the candidate. In contrast to FECA's 
definitions of the terms ``contribution'' and ``expenditure,'' the 
First Amendment does not mandate a narrow reading of those terms in the 
presidential financing law, because the presidential limits are 
voluntarily accepted in return for the public financing available to 
the presidential campaigns. It therefore is arguable that spending on 
issue ads made in coordination with the presidential campaigns violates 
the public financing laws because that spending is ``to further the 
election'' of the president, even though those ads may not contain 
Buckley's magic words.
    \65\ 2 U.S.C. Sec. Sec. 441b(a), 441e.
    \66\ 2 U.S.C. Sec. 434.
    \67\ 26 U.S.C. Sec. 501(c)(3).
    \68\ 26 U.S.C. Sec. 501(c)(4); IRS Revenue Ruling 81-95, 1981-1 
C.B. 332 (1981). Although the tax code permits organizations with 
501(c)(4) status to engage in candidate advocacy, provisions in FECA, 
such as the prohibition against corporations engaging in express 
candidate advocacy, generally restrict their ability to do so.
    \69\ 26 U.S.C. Sec. 527 grants exemption from certain taxes to 
political organizations engaged in attempting to influence Federal, 
State or local elections. Organizations involved in Federal election 
activity that qualify for this status usually have recognized that 
those activities also bring them under the purview of FECA's 
requirements.
    \70\ 11 C.F.R. Sec. 106.5; FEC Advisory Opinion 1995-25 to RNC.
    \71\ The Washington Post , Feb. 9, 1997, p. A1.
    \72\ 26 C.F.R. Sec. 1.501(c)(4)-1; IRS Revenue Ruling 81-95.
    \73\ See Hrg. Exh. 2400; DFP004244; The Washington Post, Oct. 23, 
1997, p. A1.
    \74\ The Washington Post , Oct. 23, 1997, p. A1.
    \75\ Ibid.
    \76\ Ibid ; Hrg. Exh. 2400.
    \77\ Mark Thomann Dep., Sept. 23, 1997 pp. 19-61; Oct. 9, 1997 Hrg. 
Exh. 1409 ($100,000 check from Duvaz Pacific Corp. to Vote Now 96).
    \78\ Joseph Sandler Dep, Aug. 21, 1997 Vol. 3 pp. 26-30 (noting 
DNC's return of checks); Harold Ickes Dep. Sept. 22, 1997 Exh. 38 
(check to Vote Now 96); New York Times , Sept. 20, 1997, p. A1.
    \79\ The Washington Post , Nov. 22, 1997, p. A1.
    \80\ Mark Thomann Dep., Sept. 23, 1997 p. 68.
    \81\ Richard Sullivan Dep., Sept. 5, 1997 p. 75.
    \82\ The Annenberg Center for Public Policy, Sept. 16, 1997, 
``Issue Advocacy During the 1996 Campaign: A Catalogue,'' p. 21.
    \83\ Id. at 4.
    \84\ Los Angeles Times, May 5, 1997, p. A1.
    \85\ 461 U.S. 540, 544, 545 (1983).
    \86\ See Joint Statement of Senator John Glenn and Senator Joseph 
Lieberman, July 15, 1997 (``the information shown to us strongly 
suggests the existence of a plan by the Chinese government--containing 
components that are both legal and illegal--designed to influence U.S. 
congressional elections. . . . [T]here [is not] sufficient information 
to lead us to conclude that the 1996 presidential election was affected 
by, or even part of, that plan.'') (emphasis in original).
    \87\ See Thomas R. Hampson, July 15, 1997 Hrg. pp. 67-71 
(describing Lippo's business ties to Chinese Government).
    \88\ See Newsweek, ``A China Connection,'' Feb. 24, 1997 p. 34; 
Sunday Times, ``Chinese Spies Had Open Door to Oval Office,'' Nov. 10, 
1996.
    \89\ Thomas R. Hampson, July 15, 1997 Hrg. pp. 67-68.
    \90\ Id. at 68-70.
    \91\ Hrg. Exh. 125 (Oct. 7, 1993 letter from Huang to Jack Quinn).
    \92\ Jerome Campane, July 29, 1997 Hrg. pp. 11, 21.
    \93\ The Washington Post, March 16, 1997.
    \94\ Jerome Campane, July 29, 1997 Hrg. pp. 11, 21-22; New York 
Times, Jan. 4, 1997; David Mercer Dep., May 27, 1997, pp. 139-42.
    \95\ Jerome Campane, July 29, 1997 Hrg. p. 21.
    \96\ Congressional Research Service Aug. 25, 1997 Memorandum to 
Sen. Lieberman from Kerry Dumbaugh, Specialist in Asian Affairs.
    \97\ Los Angeles Times, July 27, 1997, p. A1.
    \98\ Roger Tamraz, Sept. 18, 1997 Hrg. p. 66.
    \99\ The Washington Post, ``Reality Check: The Politics of 
Mistrust,'' January 28, 1996, p. A1.
    \100\ The Gallup Poll, ``Americans' Faith in Government Shaken But 
Not Shattered by Watergate,'' June 2, 1997.
    \101\ The Polling Report, Thomas H. Silver, Publisher and Editor, 
April 21, 1997, p. 1
    \102\ The Gallup Poll, ``Americans Not Holding Their Breath on 
Campaign Finance Reform,'' October 11, 1997.
    \103\  Ibid.
    \104\ Oct. 22, 1997 Hrg. p. 16.
    \105\ The Senate most recently voted on a proposed Constitutional 
amendment, S.J. Res. 18, on March 18, 1997. The Resolution failed by a 
vote of 38-61.
    \106\ On February 24, 1998, the Senate refused ``to table'' (vote 
against) McCain-Feingold by a vote of 51 in favor of McCain-Feingold to 
48 against, with one Senator who favored McCain-Feingold not voting. 
Feb. 25, 1998 Cong. Rec. S906. The Senate voted against tabling McCain-
Feingold again on February 25, 1998 by a vote of 50-48, with two 
Senators who favored McCain-Feingold not voting. Feb. 25, 1998 Cong. 
Rec. S1001. Despite this majority in favor of McCain-Feingold, the bill 
did not pass because the Senate's cloture rule requires 60 votes to end 
debate on a measure, and only 51 Senators voted in favor of ending 
debate on February 26, 1998. Feb. 26, 1998 Cong. Rec. S1045.
    \107\ The Gallup Poll, ``Americans Not Holding Their Breath on 
Campaign Finance Reform,'' October 11, 1997.
    \108\ See Buckley, 424 U.S. at 57 n.65; Regan v. Taxation with 
Representation of Washington, 461 U.S. at 544-45.
    \109\ ``The Hope for America,'' speech delivered by the Rev. Billy 
Graham upon acceptance of the Congressional Gold Medal, Washington, 
D.C., May 3, 1996.





              ADDITIONAL VIEWS BY SENATOR DANIEL K. AKAKA

    The Committee's investigation into the 1996 elections was 
triggered primarily by reports in the news media relating to 
Asia. Shortly before the election, news organizations reported 
that donors and fundraisers with ties to the Asia-Pacific 
region were linked to questionable contributions to the 
Democratic Party. After the election, the news media reported 
that U.S. intelligence agencies suspected the Chinese 
government of attempting to influence the elections.
    In light of this, it was understandable--and appropriate--
that the Committee devoted a great deal of time and attention 
to examining certain Asian nationals, Asian Pacific Americans, 
the so-called China Plan, and related matters. While I did not 
object to, and in fact supported, investigating these matters, 
I continue to have serious concerns about the manner in which 
the investigation was conducted. On a number of occasions, in 
my view, the Majority exhibited insensitivity to the effect of 
its actions and words on Americans of Asian ancestry.
    For example, in its discussion of the China Plan, the 
Majority Report confuses Chinese business and social 
connections of certain Asian American donors and fundraisers 
with the possibility of their being ``foreign agents.'' Seeds 
of doubt are cast out as to whether these individuals are loyal 
American citizens. Some of the subjects of the investigation 
may have violated campaign finance laws and some have been 
indicted by a federal grand jury. However, I am aware of no 
conclusive evidence that any of these individuals betrayed the 
United States. Absent stronger evidence, the Committee should 
refrain from making such damaging allegations.
    The Majority also exhibited insensitivity by blurring the 
important distinction between Asian nationals and Asian 
Americans. Let us remember that a congressional investigation 
is a powerful tool, and, like any tool, it must be used with 
skill and with care. If a congressional investigation is not 
conducted in that manner, it becomes a blunt instrument that 
can inflict serious harm to the reputations of innocent 
individuals.
    I am not just concerned that the Committee might have 
disparaged specific Asian Americans. I am also concerned about 
the effect that the allegations and insinuations of disloyalty 
may have on other Asian Americans--and, indeed, American 
citizens of other ethnic groups. The history of our country is 
replete with examples of ethnic groups whose loyalty has been 
questioned merely because of the national origin or religion of 
members of those groups.
    During the 19th century, many U.S. born Protestants viewed 
Irish Catholic immigrants as ``Papists'' who owed a special 
loyalty to Rome that conflicted with their loyalty to the 
United States. Many young people may not realize it, but this 
canard was used as recently as 1960--against then-Senator John 
F. Kennedy. Some of his opponents argued that a Catholic should 
never be elected President, on the grounds that he would be 
obliged to take orders from the Pope!
    During World War II, thousands of Japanese Americans and 
their foreign-born parents were held in federal internment 
camps solely on the basis of nationality and on the speculation 
that they would betray the United States to Japan. Such fears 
proved to be baseless and many Japanese Americans distinguished 
themselves in battle. The all-Nisei 100th/442nd combat team is 
the most decorated unit in U.S. military history.
    I strongly condemn all illegal fundraising activities, and 
I support prosecution of any individual or entity that may be 
guilty of violating federal campaign finance laws. However, I 
do not hold all Asian Americans responsible for the alleged 
actions of a few. With the majority of Americans choosing not 
to vote, let us not discourage Asian Americans from 
participating in the development of public policy because they 
believe the system is against them. Nor should Asian Americans 
be held to a higher standard than other citizens, and their 
political contributions should not be suspect. We cannot be 
guilty of selective harassment of those with Asian surnames 
because such actions only underscore the Asian American 
community's fear that they are being held responsible for the 
alleged crimes of some individuals who happen to be of Asian 
heritage.
    I am also concerned with the Majority's approach to the 
Special Investigation and its overriding focus on foreign 
money, which obscures the fact that foreign donors played a 
minuscule role in Democratic fundraising efforts in the 1996 
election cycle. The Democratic National Committee voluntarily 
returned about 172 contributions out of 2.7 million 
contributions, which represents .01 percent of the 
contributions received. Of the 172 returned contributions, 
fewer than 30 were returned because there was a determination 
that they were illegal or improper.
    All of the confirmed and suspected contributions from 
foreign sources in the 1996 election cycle totalled a few 
million dollars, representing a tiny fraction of the hard money 
and soft money contributions made during that cycle. Soft money 
contributions alone totalled more than a quarter of a billion 
dollars, most of it from wealthy individuals and corporations. 
Well-heeled donors also influenced the electoral process by 
funding political campaign ads through nonprofit groups, 
claiming that these were merely ``issue advocacy'' ads.
    While the Majority on this Committee focused on Charlie 
Trie, Johnny Chung, John Huang, Maria Hsia, Roger Tamraz, and 
others, the Majority has missed the forest for the trees. These 
individuals were not the only ones seeking access to decision-
makers or influence over the actions of the federal government. 
Without a doubt, the conclusions of the Special Investigation 
should not be ignored. Those who have broken laws should be 
prosecuted and punished.
    However, the Majority Report fails to focus on the real 
problem: campaign finance abuse and the need to reform the way 
federal elections are funded. Although it may be overshadowed 
by hyperbole about the so-called China connection, the most 
disturbing evidence gathered by the Committee details the use 
and abuse of our current campaign finance laws. The misuse of 
tax-exempt groups for political advocacy and fundraising; the 
creation and exploitation of tax-exempt shell organizations; 
the role of ``independent'' groups and issue advocacy 
expenditures; the exchange of access for campaign 
contributions; and the role of soft money in undermining the 
entire campaign finance system are some of the practices and 
loopholes utilized by both parties that are the most troubling 
instances of improper or illegal practices chronicled during 
the Special Investigation.
    I am pleased that several Republican members of the 
Committee strongly back real campaign finance reform, including 
Chairman Thompson. However, as long as Senate Republicans 
continue to choke off all efforts to revise our campaign 
finance laws and enact substantive reform, we will fail the 
American voters.
    Finally, I wish to associate myself with the Additional 
Views of Senator Richard J. Durbin. Senator Durbin's statement 
echoes the concerns I have expressed throughout the 
investigation relating to the failure of the Majority to 
enforce subpoenas issued by the Committee. The lack of 
enforcement and refusal to comply with Senate-issued subpoenas 
has set a dangerous precedent. I am hopeful that the serious 
disregard of Committee subpoenas has not harmed the Senate 
power to subpoena individuals to appear at hearings or submit 
requested information.

                            Daniel K. Akaka, United States Senator.





             ADDITIONAL VIEWS OF SENATOR RICHARD J. DURBIN

    I concur in the Minority Report, its Findings and 
Recommendations, and the Responses of the Minority to the 
Majority Report.
    In reflecting on the special investigation into the 1996 
Federal campaign undertaken by this Committee and its place in 
history, I offer these observations.
    From the outset, I approached my responsibilities as a 
member of this Committee with the hope that our investigation 
would be open and bipartisan. I am disappointed that balance 
and fairness were not achieved, and that our investigation 
became an inquiry driven more often by partisan politics than 
objective deliberation.
    As the investigation ensued, I hoped that public exposure 
of just how suspect and tawdry our campaign financing system 
had become would be a catalyst for change. Regrettably, despite 
a compelling body of evidence to justify comprehensive reform, 
the United States Senate, for the second time in six months, 
recently thwarted reasonable efforts to reform the system. The 
few Republican Senators who supported reform, including 
Chairman Thompson and Senators Susan Collins and Arlen Specter 
of this Committee, deserve special recognition for resisting 
their leadership's defense of the status quo.
    Beyond the substantive issue of campaign finance reform, I 
am concerned that this investigation has damaged the procedural 
powers of the Senate in one particular respect. The failure of 
the Committee to confront the refusal of some entities to 
respond to the committee's directives to produce documents, 
appear for depositions, or respond to questions is troubling.
    Part VII of the Minority Report describes in detail the 
increasing difficulties encountered as we attempted, in the 
face of resistance and obstruction, to gather critical facts 
necessary to examine the allegations of illegal and improper 
fundraising practices in the 1996 election campaign.
    What is equally distressing is that not only were subpoenas 
not enforced, the lack of compliance itself became the 
rationale for the Majority's refusal to issue additional 
subpoenas sought by the Minority.1
---------------------------------------------------------------------------
    \1\ Hearing Transcript, October 8, 1997, p. 67, lines 1-3 
``Chairman Thompson: Well, we are not going to issue subpoenas--
continue to issue subpoenas when certain people are thwarting the ones 
that are already out there.''
---------------------------------------------------------------------------
    Well before the issuance of a subpoena to the AFL-CIO 
(which the Majority unfairly blames for stimulating widespread 
refusal of other entities to respond) several Republican-
affiliated groups began to openly resist the Committee's 
subpoenas. Ultimately, well over 30 organizations of both 
political persuasions refused to comply with subpoenas issued 
by the Committee. Not only did the Committee meet opposition 
from subpoenaed entities, the Minority faced repeated 
resistance by the Majority to even discuss our requests that we 
institute action to ensure that all Committee subpoenas be 
obeyed. 2
---------------------------------------------------------------------------
    \2\ Hearing Transcript, October 7, 1997, p. 22, lines 8-24; Hearing 
Transcript, October 7, 1997, p. 31, line 23 to p. 32, line 9; Hearing 
Transcript, October 8, 1997, p. 65, line 12 to p. 75, line 22
---------------------------------------------------------------------------
    No meaningful action to counter these early challenges to 
the Committee's subpoenas occurred. Such efforts may have 
prevented the contagious resistance the Committee faced. 
Failure to act promptly and aggressively may have signaled that 
if one simply resisted the Senate's request, no consequences 
would follow.
    Had the Committee promptly instituted enforcement action to 
compel compliance at the first sign of balking, we may have 
obtained much more of the evidence sought. In addition, had the 
committee sought a declaratory ruling from the court on 
objections raised to the breadth and scope of our requests, we 
may have obtained guidance to settle the discovery disputes, 
which even now, remain unresolved. Furthermore, had any 
judicial enforcement processes the Committee might have 
instituted become protracted, there may have been some 
justification for seeking an extension of time to continue our 
probe. But those possibilities, unfortunately, are things about 
which we can only speculate.
    The Majority Report ascribes blame for not enforcing the 
subpoenas on the cutoff date and what it deems ``lengthy and 
arduous procedures'' for contempt. I cannot accept the argument 
tendered in the Majority's Report that because contempt 
procedures are time-consuming, future investigations must be 
free of arbitrary time deadlines in order to accommodate 
possible noncooperative witnesses.
    While the Majority posits that the cutoff in S. Res. 39 was 
a hindrance, its actions reflected that it had little interest 
in meaningful enforcement. It failed to aggressively confront 
the obstructionists, continuing to cite the deadline as a 
reason for inaction. That argument falters when measured 
against the fact that (1) the full Senate unanimously approved 
a specific end point, (2) the Majority continued to delay its 
approval of Minority requested subpoenas throughout the course 
of the hearings, (3) the Committee never took advantage of the 
statutory civil contempt procedures available to address 
noncompliance with its discovery requests, and thus, there is 
no evidence as to how much time any such enforcement may have 
taken; and (4) the Chairman's decision to suspend public 
hearings fully two months before the December 31 deadline, 
which gave the impression that the Majority had nothing more to 
present and that any claimed need for additional time beyond 
year-end had disappeared.
    Instead of continuing to engage in futile negotiations with 
recalcitrant entities that claimed that the subpoenas were 
overbroad, the Committee should have mounted an assertive 
response, such as seeking a declaratory judgment. Federal law 
provides a remedy that may have satisfied both the Committee's 
objective of obtaining information and entities' collective 
desire to test the validity of our requests.3 
Indeed, if there were legitimate concerns about the scope and 
breadth of matters inquired into or challenges to information 
sought in the subpoenas, the proper forum for evaluating the 
propriety of the requests is the Federal District Court for the 
District of Columbia.
---------------------------------------------------------------------------
    \3\ 2 U.S.C. Sec. Sec. 288b(b) and 288d; 28 U.S.C. Sec. 1365(a); 
CRS Report No. 86-83A. The Senate may ``ask a court to directly order 
compliance [a] subpoena or order or may merely seek a declaration 
concerning the validity of the subpoena or order. By first seeking a 
declaration, [the Senate would give] the party an opportunity to comply 
before actually [being] ordered to do so by a court.'' S. Rept. No. 95-
170, 95th Cong., 1st Sess. 89 (1977). It is within the discretion of 
the Senate whether or not to use such a two-step enforcement process. 
Id. at 90. Regardless of whether the Senate seeks enforcement of, or a 
declaratory judgment concerning a subpoena, the court will first review 
the subpoena's validity. Id. at 41.
---------------------------------------------------------------------------
    Seeking contempt and submitting questions on the propriety 
of our requests for judicial resolution once attempts to secure 
voluntarily compliance had broken down would have been, in my 
estimation, a preferred course of action. To claim that there 
was inadequate time to present and resolve such matters before 
the Committee's work period expired is weak. It appears that 
interest in obtaining the information sought was not paramount.
    Instead, like the recalcitrant groups resisting the 
Committee's requests, the Committee just watched the clock run 
down. Not only did we end in a stalemate with noncooperative 
groups and fail to gain the information we sought, we may have 
discredited the Senate's investigative authority.
    In January 28, 1997 floor remarks, Chairman Thompson quoted 
a passage from the leading Supreme Court case on the power of 
Congress to investigate as a necessary component of its power 
to investigate.4 What the Court went on to explain 
was that:
---------------------------------------------------------------------------
    \4\ McGrain v. Daugherty, 273 U.S. 135 (1927)

          Experience has taught that mere requests for . . . 
        information often are unavailing and also that 
        information which is volunteered is not always accurate 
        or complete; so some means of compulsion are essential 
        to obtain what is needed. All this was true before and 
        when the Constitution was framed and adopted. In that 
        period the power of inquiry--with enforcing power 
        [emphasis supplied] was regarded and employed as a 
        necessary and appropriate attribute of the power to 
        legislate--indeed, it was treated as inhering in it. 
        There is ample warrant for thinking, as we do, that the 
        constitutional provisions which commit the legislative 
        function to the two houses are intended to include this 
        attribute to the end that the function may be 
        effectively exercised.'' 5
---------------------------------------------------------------------------
    \5\ McGrain v. Daugherty, 273 U.S. 135, 175 (1927)

    In the interest of the Senate as an institution, the 
Committee should have been more vigilant in safeguarding the 
integrity of the investigative process and powers of Congress 
and cognizant of the potential for damaging ramifications of 
not invoking sanctions.
    Our failure to take appropriate enforcement action in the 
discovery phase of this investigation may have repercussions 
far more enduring than simply the inability of this Committee 
to obtain the evidence it sought to fully probe questionable 
campaign practices in the 1996 Federal election cycle. The 
damaging precedent we have now established could affect the 
Senate as an institution, as its Committees continue to 
exercise their oversight authority and attempt future 
investigations.
    Any future probes of the magnitude of the one we have just 
concluded must be guided by the lessons of our experience. To 
uphold the integrity of the Senate's power to investigate, 
reasonable requests for information within the clear scope of 
the investigation must be made and deliberate acts of 
obstruction must be promptly addressed.
    Finally, I would associate myself with the Additional Views 
of Senator Daniel K. Akaka.
    At the outset of this investigation, Senator Akaka 
cautioned this Committee not to judge Asian-Americans based on 
any wrongdoing by a few. His eloquent plea was heeded by most 
Members most of the time.
    But the Majority Report may well have crossed the line by 
characterizing some Asian-American donors and fundraisers as 
possibly ``foreign agents.'' Without convincing evidence, the 
loyalty of several Asian-Americans is questioned in that 
report. It is difficult to imagine a more serious and damaging 
charge against any American.
    History will judge whether these charges by the Majority 
are warranted. In the name of fairness, I hope that this 
Committee and the U.S. Senate are prepared to make a public 
apology to those charged with disloyalty should the evidence 
show otherwise.

                                                    Richard Durbin.





            ADDITIONAL VIEWS OF SENATOR ROBERT G. TORRICELLI

    While I fully concur with the Minority Report, I am 
nonetheless writing in order to provide additional emphasis to 
two areas of the Committee's investigation.
I. Television advertising costs: the root cause of the demand for 
        campaign funds
    Over the course of the Committee's investigation, much was 
made of the so-called thirst for campaign contributions that 
permeated the political system during the 1996 federal election 
campaign. The Committee spent countless hours investigating 
instances of questionable contributions and fundraising 
practices which were in one way or another caused by this 
thirst for contributions. I believe, however, that the focus of 
the Committee was misplaced. Instead of examining the effects 
of this thirst for contributions, we should also have examined 
its cause.\1\
---------------------------------------------------------------------------
    \1\ Footnotes appear at end of chapter 44.
---------------------------------------------------------------------------
    If it had done so, the Committee would have learned that 
the upwardly spiraling cost of television advertising is the 
driving force behind rising campaign costs and, consequently, 
the root cause of the fundraising machine that wreaks havoc on 
our political process. Curtis Gans, Director of the Study of 
the American Electorate, defined the importance of this issue 
during his testimony before the Committee. Referring to the 
cost of television advertising, he stated, ``[i]f you want to 
cut the cost, improve the content, and restore the civility of 
the political debate, I think this is where you have to 
start.'' 2
    During the Committee's sole week of testimony directly on 
campaign finance reform, witnesses noted the rising costs of 
television advertising and the detrimental impact it has on our 
system. Mr. Gans, who opposed the standard set of campaign 
finance reforms supported by Democrats, nonetheless 
acknowledged that ``we need to look at what is driving the cost 
of our campaigns up, which is the cost of advertising.'' 
3 Ann McBride, President of Common Cause, similarly 
stated, ``[w]e believe that television is clearly driving up 
the cost of campaigns and clearly, if you look at what happened 
in both the Presidential races, and if you look at Senate races 
and House races around the country, this is increasingly a 
larger and larger percentage of cost, and if there were a way 
to do something about television time, we think that this would 
be a very appropriate remedy.'' 4
    But we need not take the word of the experts; the 
statistics alone paint a telling picture. In 1996, candidates 
and parties spent over $400 million on TV advertising, a 76% 
increase since 1988.5 Television advertising now 
accounts for nearly half of all funds spent in U.S. Senate 
campaigns and a third of all funds spent for the House of 
Representatives.6 In some states where advertising 
time is particularly costly, the percentages are even higher. 
In my 1996 Senate campaign, where the average cost of a prime 
time television advertisement was nearly $50,000, 82 percent of 
all the money raised went to television advertising. And there 
is no reason to believe that these numbers will not continue to 
rise.
    But while the problem is clear, the solution remains 
elusive. Since this investigation began, the Senate has twice 
considered campaign finance reform legislation, and twice the 
Republican majority has thwarted those efforts, despite the 
support of a majority of the Senate. During that time, several 
proposals were offered that would have addressed the problem of 
television costs. First, the original McCain-Feingold campaign 
finance reform legislation included discounted and free 
television time for candidates who accepted expenditure limits. 
After that provision was removed from the McCain-Feingold bill, 
a variety of amendments were proposed, but never voted on, to 
grant television discounts to candidates. I introduced an 
amendment that would have granted candidates substantial 
discounts on air time if the candidate appeared in his own ad. 
The goal of the amendment was to reduce the cost of air time 
for candidates while at the same time acting as a negative 
incentive to running attack ads. Finally, the Federal 
Communications Commission is examining rulemaking to make free 
or discounted air time part of broadcasters public service 
requirement. Despite these efforts, however, to date no reform 
has been enacted.
    Until we address the astronomical cost of television 
advertising, the system will continue to demand more and more 
fundraising. And as this pressure increases, the instances of 
improper and illegal practices will undoubtably rise. By 
failing to fully examine the impact of the cost of air time on 
the campaign finance system and recommend appropriate reform 
legislation, I believe the Committee missed a great opportunity 
to focus the public debate and create a basis for meaningful 
reform.
II. AFL-CIO objections to committee subpoenas
    The majority attempts to make the AFL-CIO the scapegoat for 
a variety of problems it encountered during the investigation. 
Most notably, the majority accuses the AFL-CIO of being 
``obstructionists'' because of the actions it took in objecting 
to the Committee's subpoenas. I believe the accusation of 
``obstruction'' against the AFL-CIO is unjustified and sounds a 
dangerous note for the rights of any citizen called before a 
committee of Congress.
    What the majority characterizes as an ``obstruction'' was 
in fact the submission of legal objections: legitimate First 
Amendment challenges to the power of the Committee to inquire 
into legitimate political activities of a private organization. 
The AFL-CIO submitted lengthy, fully-reasoned memoranda of law 
in support of their positions. Furthermore, several similarly 
situated organizations, aligned with both the Democratic and 
Republican parties, joined the AFL-CIO in making these 
objections.
    By guaranteeing the freedom of speech and association, the 
Constitution gives organizations such as the AFL-CIO the right 
to raise issues of this nature. Indeed, it is exactly this type 
of action by a majority that the First Amendment was created to 
guard against. A review of the memoranda and correspondence 
submitted by the AFL-CIO to the Committee demonstrates that the 
AFL-CIO raised these issues in a manner entirely consistent 
with the rules of this Committee and of the Senate.
    I believe that any effort by the majority to deny a private 
party the right, within the rules, to assert legal objections 
based on the most basic constitutional principles is both 
unwise and unlawful. To the extent the majority's actions or 
its report insinuates such a position, I am obliged to register 
my firm objection. This Committee cannot--and should not 
attempt to--set itself above the law.
III. Guam
    The majority's zealous pursuit of a foreign money 
connection had some very unfortunate consequences. One example 
is the misleading and damaging statements made about political 
contributions of United States citizens from the territory of 
Guam. The Majority and many others often treated the people of 
Guam as if they were non-citizens, for no better reason than 
geographic proximity to Asian countries. No evidence of truth 
to the alleged violations or any impropriety was uncovered. The 
fact is that the people of Guam had every right to participate 
in the political process and should be praised for doing so. By 
casting such a wide, careless net of blame, we have chilled 
political participation among United States citizens in Guam 
and others throughout our nation. I believe the residents of 
Guam deserve our profound apology, and our encouragement to 
remain involved in the political process.

                                              Robert G. Torricelli.

                               Footnotes

    \1\ The Committee held thirty one days of public hearings. Only 
four of these days were devoted to campaign finance reform. The 
testimony of these days was informative, however, it was not as 
comprehensive as needed and the immediate return to other investigative 
topics limited its usefulness as a catalyst for reform.
    \2\ Testimony of Curtis Gans, 10/24/97 Hrg., p. 158.
    \3\ Id. at 157.
    \4\ Testimony of Ann McBride, 10/24/97 Hrg., p. 58.
    \5\ Congressional Research Service, Free and Reduced-rate 
Television time for Political Candidates, 7/7/97, p. 5.
    \6\ Id. at 4.

                                
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