SOFT MONEY CONTROVERSY
JUNE 12, 1997
The Federal Elections Commission has begun to review two requests, one from Congress and the other from the President, to impose laws governing so-called "soft money." The Congressional requests asks the FEC to "help lessen the impact of soft money." President Clinton, heeding a promise to have a campaign finance reform proposal by the 4th of July, petitioned the FEC to ban all soft money. A background report will be followed by a discussion with three members of Congress and a Presidential adviser.
MARGARET WARNER: The Federal Election Commission voted unanimously today to seek public comment on whether it should curtail or ban the use of so-called "soft money" in federal elections. "Soft money" refers to contributions made to political parties. While there are limits on how much money individuals can donate to a candidate, there are no limits on how much they can give to a political party, hence the term, "soft money."
A RealAudio version of this segment is available.
March 24, 1997:
Part One of Hedrick Smith's series on campaign financing.
March 25, 1997:
Part Two of Hedrick Smith's series on campaign financing.
March 26, 1997:
Part Three of Hedrick Smith's series on campaign financing.
March 11, 1997:
Senators Dick Durbin (D-IL) and Thad Cochran (R-MS) discuss the Senate fund-raising investigation.
March 6, 1997:
Two former White House lawyers discuss the legality of Vice President's fund-raising.
March 4, 1997:
Presidential historians, journalist/author Haynes Johnson and William Kristol, editor and publisher of The Weekly Standard discuss money and politics.
March 3, 1997:
Vice President Gore said he did nothing illegal or wrong when he solicited funds for the 1996 presidential campaigns.
February 27, 1997:
Jim Lehrer leads a discussion on the accusations against the White House campaign financing team .
February 25, 1997:
Elizabeth Farnsworth discusses the growing DNC fund raising scandal with White House Special Counsel Lanny Davis.
November 28, 1996:
Margaret Warner discusses campaign finance reform with three members of Congress.
November 28, 1996:
The NewsHour's Kwame Holman reports on this year's efforts to reform campaign financing and how "soft money" may have been the biggest story of this election.
November 18, 1996:
House Minority Leader Dick Gephardt (D-MO) discusses campaign finance reform and his party's role in the 105th Congress.
October 25, 1996:
Mark Shields and Paul Gigot discuss the role of money in this election year.
October 21, 1996:
A panel debates campaign finance reform and allegations of illegal foreign contributions and egregious misuse of lots of "soft money".
Browse the Online NewsHour's Congressional coverage.
Both parties raised more than $100 million for the 1996 elections this way. The FEC acted today in response to two petitions. The first, a May 15th request from three Republican and two Democratic members of Congress, asked the commission to "help end or at least significantly lessen the influence of ‘soft money'." The second, a June 7th petition from President Clinton, asked the FEC to "ban ‘soft money' outright." Should soft money be outlawed?
To debate that, we have: Senator John McCain, Republican from Arizona and co-sponsor of the McCain-Feingold campaign finance reform bill currently spending in the Senate; Senator Mitch McConnell, Republican of Kentucky, an outspoken critic of campaign finance reform proposals and chairman of the National Republican Senatorial Committee; Congressman Marty Meehan, Democrat of Massachusetts, one of the five House members who petitioned the FEC, and Rahm Emanuel, senior adviser to the President.
Welcome all of you. Congressman Meehan, how do you take today's FEC decision? Do you consider this a significant step?
REP. MARTY MEEHAN, (D) Massachusetts: I think it's a significant step and a great victory. And it was unanimous, which means we get Republican support from the commissioners too. So I think this sends a clear message. Hopefully, Congress will get the message and enact comprehensive campaign finance reform.
MARGARET WARNER: Rahm Emanuel, do you see this as a significant step, this FEC decision?
RAHM EMANUEL, Senior Advisor to the President: I would agree with the Congressman. It's a significant first step, and I hope that obviously the FEC through the inquiry will take the next step, which is to limit or ban soft money, but it shouldn't be considered a replacement for what we have to do, which is comprehensive legislation that affects all aspects of the campaign finance system.
MARGARET WARNER: Well, Congressman Meehan, were you suggesting that you see this more as a prod to Congress or that you think the FEC, itself, is now on the road to doing it?
REP. MARTY MEEHAN: I think it could be both. First of all, the FEC kind of opened up in 1978 a loophole that, frankly, it's a loophole that ate the law. You know, it's supposed to be illegal to have these kinds of contributions, corporate contributions, massive contributions, hundred, two hundred thousand dollars. So there's a massive loophole that I think we need to close up. And I'm happy that the FEC at least will begin to have hearings and begin the process of making soft money illegal. But the fact that remains, we need comprehensive campaign finance reform. And the Congress has been dragging its feet for far too long.
MARGARET WARNER: Okay. Now, Sen. McConnell, what's your reaction to today's FEC decision?
SEN. MITCH McCONNELL, (R) Kentucky: First, it's important to note that the Supreme Court opined in the Colorado case last summer that soft money is certainly not corrupt and has no corrupting potential. So we're not talking here when we use the term "soft money" about a corrupting thing. We're talking about a type of contribution that is not regulated by the Federal Election Commission. The FEC, itself, didn't create soft money. It was created by Congress when Congress created hard money. And the FEC--
MARGARET WARNER: Hard money being--
SEN. MITCH McCONNELL: Federally regulated money.
MARGARET WARNER: --money that is regulated.
SEN. MITCH McCONNELL: Yes.
MARGARET WARNER: Yes.
SEN. MITCH McCONNELL: Congress created soft money when it created hard money. The FEC held six to nothing in 1986 that it didn't have the power to eliminate soft money because it didn't create it. So I think all the FEC said today is it's willing to take comments, but it knows certainly, as it knew in 1986, that it can't eliminate soft money because it didn't create it.
MARGARET WARNER: Sen. McCain, how do you see today's decision or move?
SEN. JOHN McCAIN, (R) Arizona: I think I see it as something that's probably a natural reaction for them to have public comment. I agree with Mitch that it probably would not come to much. There are vacancies on the commission. We know it's notoriously weak. But perhaps more importantly than that, this is really the job of the Congress and the legislative branch working together.
This kind of an issue really can't be given over to a regulatory body which is--particularly in this case--is very weak, so I think that it's very important that Congress address the issue. And, very frankly, if on the remote chance that they acted, it would them imbalance the advantages the parties have, because it would not do anything about the dramatic advantage that labor has.
MARGARET WARNER: Sen. McCain, staying with you for a minute, though your support--though you sponsored the McCain-Feingold bill, when the White House came out with its request to ban soft money, you said you were opposed to doing that unrelated to anything more. Explain a little more why.
SEN. JOHN McCAIN: Look, I can't expect Republicans to give up their advantage and have the Democrats keep their advantage. What the White House did was put a partisan spin on what I think has to be bipartisan. It has to be balanced. That's why Sen. Feingold and I have repeatedly stated you have to restrain labor; you have to eliminate soft money, and those balance each other out because the soft money favors Republicans, and the labor money and involvement favors Democrats. I mean, it's obvious to any casual observer.
MARGARET WARNER: So are you saying that you think to go down this path alone would just simply derail the larger campaign finance reform?
SEN. JOHN McCAIN: Well, to start with, absolutely, because it's got to be balanced, and I can't blame Republicans if their advantage in this present terribly flawed system was eliminated and the Democrats were left with their advantage. That's why I'm, frankly, confused as to how anybody would think that the Congress wouldn't act in a way, for example, on an appropriations bill, that would de-fund the FEC if they acted in a way that would help one party over another.
MARGARET WARNER: Rahm Emanuel, what about that point, that essentially going ahead down this path makes it very difficult to get the whole--
RAHM EMANUEL: One fact that's very important. We didn't act alone, although we did on our petition. It was a bipartisan petition submitted by members of the Congress. Congressman Meehan can talk about what he and Congress Shays and three other members did in their petition. It was bipartisan. The vote today was bipartisan, five-zero, in the Federal Election Commission to open a point of inquiry, and we've always said that we were going to do everything we could to pass legislation. And we are committed to doing that. This President wants to pass comprehensive, bipartisan campaign finance reform because the McCain-Feingold-Shays-Meehan legislation is a bipartisan solution to a bipartisan problem.
MARGARET WARNER: That's the broader campaign finance reform bill?
RAHM EMANUEL: The broader campaign that deals with TV, that deals with the FEC reporting, that deals with this issue of soft money, but that doesn't mean you limit your actions when you think that the FEC--we do--we have a respective difference here--the FEC does have authority here. In fact, since they created some of this problem in their rulings over the years dating as far back as 1978, we think they do have a role here, and we are also going to push out unnecessary--in the area of the FEC--we're going to push out in a couple of weeks in announcing the new free TV commission to study the issue of the free TV commission with the FCC. So there's not going to be a--a stone unturned in our effort to pass campaign finance reform.
Whether that's due to legislative process or regulatory process, none of these individual actions, though, should be seen as a supplement to the legislation. They are actions in and of themselves but also a way of prodding, hopefully, the legislative branch to do what needs to be done. And there I agree with Sen. McCain. In the end, comprehensive reform has to be done through the legislative branch, and we're engaged fully to get that done.
MARGARET WARNER: Sen. McConnell, I know, of course, that you oppose the comprehensive reform, but address just this question of whether going down this path of just banning soft money, what impact that has overall on the prospects for campaign finance reform.
SEN. MITCH McCONNELL: Well, John McCain got it right. It's important to remember there are two kinds of soft money. There is party soft money and there's non-party soft money. And what John said I totally agree with. The Congress is simply not going to pass a bill that adversely affects party soft money without impacting the unions. For example, the unions raise their money through dues check-off. Individual members don't even have a right to control how their political money is spent.
I can tell you, this Republican Congress is not going to pass a bill in the soft money area that doesn't deal with both unions and parties together, because we're not going to take the parties off the playing field. The one entity in America that will support challengers, the one entity in America that will stand up for their own party members out on the hustings, out across the country; to take their power away and hand it over to the unions and to the press is something this Congress is simply not going to do.
MARGARET WARNER: All right. Sen. McConnell, let me ask you to explain one other thing. Why is--do you think there should be a distinction, or do you think there should, between hard money, that is, campaign contributions made to candidates, which are limited, and campaign contributions made to parties, which you say should be unlimited, why the distinction?
SEN. MITCH McCONNELL: Well, there needs to be a distinction because it's important to remember the parties just don't exist to elect federal candidates. The Democratic National Committee and the Republican National Committee cares who gets elected to the legislature in Oklahoma. They care who gets elected mayor in South Dakota. They work on governors' races. These are truly national parties. To totally eliminate soft money, the definition of soft money being anything that isn't hard money, would require an entire federalization of all of American elections making the FEC the size of the Veterans Administration regulating all candidates in all elections throughout America. And that's a dramatic overreaching that I don't think anybody believes it's a good idea.
REP. MARTY MEEHAN: I do.
MARGARET WARNER: Let me get Congressman Meehan back in this. Respond to that, that there should be a difference between how much you can give to an individual versus the parties which need, I think what Sen. McConnell is saying, they need lots of money, and that the only way to really raise it is through these larger contributions.
REP. MARTY MEEHAN: Parties can raise money. We can up the hard dollar limits in order to deal with the parties, but we shouldn't have the system where soft money is legal. Let me make another observation here. This soft money versus union things, we're talking about apples and oranges. Let's deal with soft money. Republicans have traditionally raised significantly more soft money than Democrats have. In the ‘96 election cycle it was closer than it's been in the past but Republicans raised $10 million more than Democrats did.
So I reject--I agree with Sen. McCain that we ought to do a comprehensive bill. I also agree with Sen. McCain, we need--the Congress should act, but let's make it clear, the Republicans have raised more soft money than Democrats have. I totally reject the notion that if we ban soft money, that's going to hurt Republicans more than Democrats. We had a bipartisan petition here with Republican members of the House of Representatives that support banning soft money.
MARGARET WARNER: Congressman Meehan, I'm not sure I understand you. You say, in fact, Republicans do raise more in soft money than Democrats.
REP. MARTY MEEHAN: That's right.
MARGARET WARNER: So why wouldn't they be unfairly affected if, in fact, you go down this route of just banning soft money?
REP. MARTY MEEHAN: Because it was basically even in the last election is what I'm saying. Look at the Democratic Party within the House. They're saying to Democratic members, we can't ban soft money; we need to have the soft money to compete with the Republicans. They outspend us six and seven to one in hard money. So depending upon who you talk to, the fact remains both parties were affected evenly in the last election cycle. Essentially, the Republicans and Democrats split on that issue. Abolishing soft money is going to be even to both parties. That's why Republicans and Democrats in the House supported this initiative.
MARGARET WARNER: All right. Sen. McCain, you wanted to weigh in now on this question about why there should be a distinction.
SEN. JOHN McCAIN: It's bizarre to--it's just bizarre to say that soft money affects both parties equally. I mean, it's just not the case. Yes, the White House did an extraordinary job in this last election cycle using the power of the presidency to raise a lot of soft money but we know that the soft money favors Republicans, and we also know that the labor money goes to Democrats, and so we want to eliminate both unfair advantages. I mean, I just--the record does not substantiate Mr. Meehan's allegations here.
REP. MARTY MEEHAN: Well, let's--why don't we ban PAC money as well then?
SEN. JOHN McCAIN: I think that there should be limits on contributions, and we have those limits on contributions. I mean, surely no one believes we shouldn't allow people to contribute. The question is, is where the system is out of control, the system is out of control.
MARGARET WARNER: You wanted to--
REP. MARTY MEEHAN: That was my next point. I think in the end you could talk soft money, hard money. The system is broken, there's a mad rush and a mad dash by everybody; we all know it. I raised money in ‘92. This system is broken. It needs to be reformed. McCain-Feingold-Shays-Meehan is the perfect vehicle to do that. It is a bipartisan solution to a bipartisan problem.
MARGARET WARNER: All right. But here we're talking about this other--
REP. MARTY MEEHAN: Other venue. It means that you do--soft money would affect everybody but I do agree with one point. We're going to take this action, and we hope the FEC follows up with step two, which is to actually limit or lessen the influence of soft money, but it is not an act in and of itself. It must be followed up with comprehensive legislation. It should also not be used as an excuse not to do comprehensive legislation.
MARGARET WARNER: All right. And, Sen. McCain, if the FEC were to go ahead and act on its own, what then?
SEN. JOHN McCAIN: This issue, as we all know, would not be resolved for many, many months ahead if the FEC did act.
MARGARET WARNER: FEC.
SEN. JOHN McCAIN: FEC did act, and so we're going to have to act on this issue on the floor of the Senate in one way or another, either affirmatively or negatively, and I think this issue is going to have to be resolved one way or another this fall. It's still going to fall into the hands of the legislative and executive branch.
MARGARET WARNER: Just very briefly, Senator. We're out of time.
SEN. MITCH McCONNELL: Yeah. Margaret, if the FEC tried to do this, injunctive relief would--they would be stopped in the courts. They don't have the authority to abolish soft money.
MARGARET WARNER: All right. Gentlemen, thank you all very much. Have to leave it there.