TOPICS > Politics

Background: Furor Over Financing

October 18, 1996 at 12:00 AM EDT

MARGARET WARNER: A new issue has arisen in the presidential campaign. It’s about money, and Bob Dole hopes to use it against President Clinton. Republican hopeful Bob Dole has been hammering Bill Clinton over contributions to the Democratic National Committee from Indonesian interests. Sen. Dole raised the issue again today in Albuquerque.

SEN. BOB DOLE: Our actions are not for sale to some foreign influence or some foreign interest. This is the United States of America. We conduct the election in the United States of America. You can make contributions. You can make contributions, but we don’t want these illegal contributions coming into America distorting the process, corrupting the process.

MARGARET WARNER: Dole and the Republicans are questioning millions of dollars in so-called “soft money” solicited by the DNC from companies and individuals with Indonesian ties. Republicans also accused the Clinton administration of distorting its trade and export policies to help the Indonesian donors. Specifically, the Republicans are questioning $475,000 donated to the DNC in recent years by the Indonesian-based Riady family and one of its major companies, the Lippo Group.

The Lippo Group also has business interests in Arkansas–$425,000 donated to the DNC by a young Indonesian couple, the Wiriadinatas, with family ties to the Riadys. The couple lived in a modest home in Northern Virginia. Even after they returned to Indonesia, their checks kept coming to the DNC. White House and Clinton officials insist the contributions were perfectly legal because the money came from the company’s U.S. subsidiaries and from individuals who are legal residents here, even though they weren’t American citizens. But the Republicans insist that the U.S. donors simply fronts for illegal foreign contributions.

SPOKESMAN: I’m reading a wire account here of a speech you made. You accuse the President of soliciting illicit campaign funds from foreigners.

MARGARET WARNER: House Speaker Newt Gingrich took up the charge on CBS’s Face the Nation on Sunday.

REP. NEWT GINGRICH, Speaker of the House: This makes Watergate look tiny. I mean, this is a potential abuse of the American system on behalf of an Indonesian billionaire in a way that we have never seen in American history. It’s almost unthinkable.

MARGARET WARNER: White House spokesman Mike McCurry defended the administration today.

MIKE McCURRY, White House Spokesman: Foreign governments are not allowed to participate in the U.S. political process, and they do not affect–they do not and have not affected the conduct of foreign policy in this administration.

MARGARET WARNER: Democratic Party officials also charge that Dole and the Republican Party have accepted plenty of money themselves from companies and individuals with foreign ties. The dispute has focused renewed attention on the entire phenomenon of so-called “soft money,” donations to political parties and House and Senate campaign committees that aren’t limited under federal law. The law does limit contributions to specific candidates. Individuals cannot give more than $1,000 to a candidate.

Corporate and union Political Action Committees are limited to $5,000 per candidate, and companies cannot contribute to candidates at all, but there are no limits on what individuals or companies can give to political parties. The parties have taken advantage of this to raise millions and millions of dollars in this so-called “soft money,” often at fund-raisers featuring the top candidates as star attractions. Last night, for example, President Clinton appeared at a fund-raiser sponsored by the DNC and the Democratic Senatorial Campaign Committee at Universal Studios in Hollywood.

Bob Dole has appeared at similar events for the RNC. The parties are supposed to use the money they raise for general party-building activities uncoordinated with any candidate’s campaign, but critics say the parties often spend it in collusion with and to the benefit of specific candidates. Last week, the public interest group, Common Cause, charged both parties with illegal diverting soft money to the Clinton and Dole campaigns. At a press conference, Common Cause officials called for the appointment of an independent counsel.

ANN McBRIDE, President, Common Cause: (October 9) Common Cause is calling on the attorney general to take the necessary steps to investigate what we believe are massive knowing and willful violations of the campaign finance laws by the Clinton and Dole presidential campaigns. Common Cause believes that the violations that occurred in the 1996 presidential elections are the most massive violations since the Watergate scandal. These violations involve tens of millions of dollars of campaign contributions and campaign expenditures, and since what is at issue here is knowing and willful violations, they involve criminal penalties and criminal provisions of the campaign finance laws.

MARGARET WARNER: Common Cause says the parties used their soft money to air millions of dollars in television ads that were designed in coordination with the presidential campaigns. The cost was far in excess of spending limits the candidates had agreed to abide by when they accepted federal funds for their general election campaigns.