THE MONEY TRAIL
MARCH 6, 1997
After a background report on the campaign fund-raising money trail by Kwame Holman, Elizabeth Farnsworth explores the legal issues with two attorneys.
JIM LEHRER: Still to come on the NewsHour tonight the campaign fund-raising money trail and warming trends in Antarctica. Money and politics is first. We begin with an update by Kwame Holman.
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 24, 1996:
Ross Perot blasts what he sees as President Clinton's corruption.
October 21, 1996:
Margaret Warner examines campaign money and its sources.
October 21, 1996:
A panel debates campaign finance reform and allegations of illegal foreign contributions and egregious misuse of lots of "soft money".
October 18, 1996:
Margaret Warner reports on the recent emergence of campaign finance issues on the campaign trail.
Oct. 18, 1996:
Ellen Miller, director of the Center for Responsive Politics, participates in an Online Forum on campaign finance reform.
Oct. 11, 1996:
Shields & Gigot debate the latest accusations of campaign finance abuses.
Oct. 6, 1996:
Bob Dole and Bill Clinton discuss campaign finance reform during the first presidential debate.
Sept. 29, 1996:
The leaders of Congress discuss reforming the system during the Debate Night: The Future Congress.
Aug. 16, 1996:
Margaret Warner looks at the corporate lobbying and sponsorship at the national conventions.
June 28, 1996:
Shields and Gigot look at the failed attempt to pass the McCain-Feingold reform.
June 28, 1996:
Ellen Miller participates in an Online Forum on the campaign finance reform efforts.
June 24, 1996:
Senator Feingold defends the McCain- Feingold campaign finance reform bill against an opponent
April 15, 1996:
NewsHour coverage of "soft" money contributions.
April 10, 1996:
NewsHour coverage of complaints against organized labor for millions of dollars in campaign spending.
June 24, 1996:
Senators John McCain of Arizona and Russ Feingold of Wisconsin tried, but failed, to pass campaign reform legislation.
Browse the Online NewsHour's Congressional coverage.
KWAME HOLMAN: Margaret Williams, chief of staff to First Lady Hillary Clinton, first became a public figure during the congressional investigation of the Whitewater affair. She was questioned repeatedly about her role in the removal of documents from the office of White House Deputy Counsel Vincent Foster on the night he committed suicide. Now, Williams is playing a role in the current controversy surrounding questionable campaign fund-raising activity. White House officials have confirmed that Williams accepted a $50,000 donation from California businessman Johnny Chung during Chung's visit to the White House in March of 1995.
Federal law prohibits soliciting or accepting campaign contributions on government property. Williams apparently passed the check on to the Democratic National Committee, and a few days later Chung and several business associates were invited guests at one of President Clinton's weekly radio addresses. This latest revelation comes one day after it was learned Vice President Al Gore used a Clinton-Gore campaign calling card to make phone calls from the White House to solicit contributions to the DNC. That's not what the Vice President said during his hastily-called news conference late Monday afternoon.
VICE PRESIDENT GORE: All calls that I made were charged to the Democratic National Committee. I was advised there was nothing wrong with that. My counsel tells me there is no controlling legal authority that says that is any violation of any law.
KWAME HOLMAN: Despite this week's revelations concerning the Vice President and the First Lady's chief of staff, Attorney General Janet Reno again today would not say whether she will call for an independent counsel to investigate possible illegal fund-raising activities involving the Democratic National Committee and the White House.
JANET RENO, Attorney General: Anybody conducting this type of investigation has got to be guided by what is the evidence, what is the law, and how do we proceed based on the evidence and the law.
REPORTER: But you have the White House admitting that the First Lady's chief of staff accepted a campaign contribution on the premises of the White House. Does that change your mind at all?
JANET RENO: As you know, I've made it a practice not to comment on pending investigations, and I'm not going to do that now. But I think it's very important that as you make these allegations and as you portray them in television or on your headlines that you try to clarify just what the issues are. Let me read you the Section 607 of Title 18 of the United States Code. It states: "It shall be unlawful for any person to solicit or to receive any contribution within the meaning of Section 301, Subsection 8 of the Federal Election Campaign of 1971 in any room or building occupied in the discharge of official duties by a federal employee." Now, the significant phrase there is "any contribution within the meaning of Section 301, Subsection 8 of the Federal Election Campaign Act." If we receive information, we've got to review it based on that statute and what that meaning is. And we're in the process of doing that in a very careful, thoughtful way. When the statute--when the independent counsel statute is triggered, I will take appropriate action.
KWAME HOLMAN: The pace of Attorney General Reno's review has become a point of debate in the Senate, with most Democrats supporting the careful consideration she says she's giving to the matter.
SEN. TOM DASCHLE, Minority Leader: We've always said we're not adverse to the attorney general considering the--the necessity of a special prosecutor. But that is her call. It ought not be politicized. It ought not be influenced by pressure from the Senate.
KWAME HOLMAN: Today that pressure came from the Senate Judiciary Committee which was called into session suddenly this morning by its chairman, Orrin Hatch. The Utah Republican wanted to send a letter to Reno on behalf of the committee formally requesting she call for an independent counsel.
SEN. ORRIN HATCH, Chairman, Judiciary Committee: FBI Director Freeh yesterday testified that the Bureau is as part of its larger investigation, that is the FBI, is looking into whether the Vice President improperly solicited contributions on White House grounds. If the FBI and/or Justice Department believes there are reasonable grounds to be "looking into" these matters and whether laws have been violated, then it seems to me that we still have to move forward.
KWAME HOLMAN: But Vermont's Patrick Leahy, the ranking Democrat on the committee, used Senate rules to delay any committee action for at least a week.
SEN. PATRICK LEAHY, (D) Vermont: I got this 26 seconds before the committee being started this morning. I thought I'd like a little bit more time to consider an issue that may call upon a special prosecutor to go after the President or the Vice President.
KWAME HOLMAN: Senate Democrats, including Leahy, insist on broadening any investigation of campaign fund-raising to include members of Congress, as well as the President. But an obviously frustrated Hatch drew a sharp distinction between the two.
SEN. ORRIN HATCH: I'll be honest with you. I get a little tired of the partisan crap around here. I mean, it just gets on my nerves, to be honest with you. And I think to jump on some technical violations, yeah, they're violations, but technical violations in light of what we're talking about here that are really big, potentially big crimes, there are crimes that if the President were involved in them are impeachable crimes. I'm more concerned in the big picture here and what really are serious potential matters that could involve criminal conduct, to the detriment of our country.
JIM LEHRER: More now on this story and to Elizabeth Farnsworth.
ELIZABETH FARNSWORTH: To explore the legal issues involved in the story we're joined by two attorneys. Stanley Brand was general counsel to the U.S. House of Representatives under Speaker Tip O'Neill. C. Boyden Gray was White House counsel to President Bush. Both are now with law firms in Washington. Mr. Gray, Section 607 of Title 18, which we just heard Janet Reno read, is pretty specific in its language outlawing the accepting of political contributions on federal property which is--has official use. Do you think--in your understanding of the law--was it illegal for Vice President Gore to solicit campaign contributions in the White House?
C. BOYDEN GRAY, Former Bush White House Counsel: Well, there's a technicality here, although technicalities in the criminal law can be exonerations about whether it was hard or soft money. And the reference that the attorney general read I think defines contributions under the Federal Election law which may encompass only hard dollars, not false money, which is what they apparently were spending most of their time raising, and if it's $50,000, that would exceed any hard money limit. So Maggie Williams, it was probably accepting soft money.
ELIZABETH FARNSWORTH: Let's say with Vice President Gore just for a minute. So spell that out a little.
C. BOYDEN GRAY: Well, he would not be in violation if the money he was soliciting in his phone calls and in his coffees was all soft money. That probably made--I don't know--
ELIZABETH FARNSWORTH: And soft money is money that he would be soliciting for the Democratic National Committee.
C. BOYDEN GRAY: Committee, right.
ELIZABETH FARNSWORTH: Which is money that could be used for all sorts of things, not necessarily for the presidential campaign, itself?
C. BOYDEN GRAY: Right. That's correct.
ELIZABETH FARNSWORTH: But it would be illegal if--
C. BOYDEN GRAY: If it were hard money.
ELIZABETH FARNSWORTH: Which was directly for the campaign.
C. BOYDEN GRAY: Well, directly for the campaign. Well, once--once you've got the nomination, your campaign is federally financed. So there wouldn't be any need for money at that stage. This was a year earlier in 1995, and he was raising money for the DNC's ad campaign which was not strictly a campaign for his re-election. It was a campaign to promote President Clinton just generally and to fend off the Speaker of the House, Newt Gingrich.
ELIZABETH FARNSWORTH: Mr. Brand, do you have anything to add to that?
STANLEY BRAND, Former House General Counsel: I'd agree essentially with what Boyden said. I would caution, though, and recall the history of this statute. This is a statute that goes back to 1883. It's basically an anti-shakedown statute. The statute passed for the protection of, in theory, government employees against being shaken down for contributions by their superiors, clearly not was involved here. And while the literal language of the statute raises some issues, you always bring an informed judgment and discretion to that process. Occasional inadvertent or calls that aren't part of some orchestrated phone bank or large campaign have generally not been deemed prosecutable by the Department of Justice because they don't rise to the level of creating the evil the statute sought to prevent. So while there may be some question about the facial invocation of the statute, prosecutors usually look for more than that.
C. BOYDEN GRAY: But I should add here that the statute was broadened to cover so-called shakedown of people who had business with the U.S. government. And, of course, back in the 1880's it wasn't much. Contractors and what not today, of course, given the large regulatory state, there's a great deal, and when you have people in the White House, this life or death control over regulatory--includes EPA, FCC, FTC, SEC--a shakedown of someone who needs an approval from a regulatory agency then could become something very much in the target zone of the statute. And I should add that the White House had--looked like a phone bank operation dialing for dollars going. They had DNC phones in there. They were fund-raising. They were ignoring quite explicitly the advice that has been given by every White House, including by Judge Mikva, then White House counsel, not to do any fund-raising of any kind on White House property.
ELIZABETH FARNSWORTH: Mr. Brand, let me get one thing clear. Vice President Gore said several times, "My counsel advises me there's no controlling legal authority or case that says there was any violation." Would you explain that.
STANLEY BRAND: Well, he's talking about the case law.
ELIZABETH FARNSWORTH: Because there have been so few cases there's basically no case law.
STANLEY BRAND: Right.
C. BOYDEN GRAY: No. Vice President has ever been convicted, so there is no controlling--
STANLEY BRAND: And there is not even that much with respect to others. This statute, again, has been rarely invoked by the department, at least to the degree of bringing the case and getting a judicial construction. So he was emphasizing that in artful terms.
ELIZABETH FARNSWORTH: And just briefly, yesterday it was--he clarified that he was using a Clinton-Gore campaign credit card, rather than a DNC credit card. What is the significance of that?
STANLEY BRAND: I guess he used the wrong credit card. You know, it's like the difference between American Express and Master Charge. He's got to account--they have to account for that in the proper committee and campaign. There will have to be some--
C. BOYDEN GRAY: But the fiction--
ELIZABETH FARNSWORTH: But for legal purposes.
C. BOYDEN GRAY: For legal purposes the fiction was that this independent expenditures by the DNC. Well, the credit card is a little tip of the iceberg of revealing that, in fact, the White House is running the DNC. And this wasn't independent, an independent expenditure.
STANLEY BRAND: One point, though. To bring some parity between the President and his colleagues and the congress of both parties, those kinds of things have gone on. People don't seem to be reviled by a senator making scores of cars, or a member of Congress, so--
ELIZABETH FARNSWORTH: You mean, from their office, from federal property.
STANLEY BRAND: And they have done that on occasion. And no one's raised a hue and cry under the statute. So, again, I think you have to be careful about throwing these standards around because there needs to be some consistency, in my view, between how we treat the elected officers in one branch and how we treat them in another.
ELIZABETH FARNSWORTH: Now, Mr. Gray, let's move on to the First Lady's chief of staff, Margaret Williams, who the White House has said did accept a $50,000 donation from a Los Angeles businessman, Johnny Chung, and then passed it on to the Democratic National Committee. What about the legality of that?
C. BOYDEN GRAY: Well, I don't want to really pass on the ultimate legality that for some jury ultimately, I suppose, if there's an indictment here, which I wouldn't want to prejudge that. But our rules were consistent with rules going back 20 years and rules consistent with what I believe Judge Mikva issued in 1995, when you get a donation, you don't redirect it; you hand it right back, or you send it right back to the donor with no instructions of what to do. It's very clear, very simple, and why she held on to it in a face-to-face meeting is a mystery to me.
ELIZABETH FARNSWORTH: What about that?
STANLEY BRAND: Again, a technical violation perhaps, but you have to again put it in context. There are. There is a specific exemption for members of Congress receiving contributions in their offices when they're inadvertently or mistakenly mailed there.
ELIZABETH FARNSWORTH: The staff of members of Congress, right?
STANLEY BRAND: Well--as long as you--as long as you--as Boyden indicates--don't do anything with that check. You don't deposit it, or hold it, or do anything with it, other than send it off to the campaign committee. So there is this background of practice that has grown up that has not grown up at the White House but it has in Congress.
ELIZABETH FARNSWORTH: But you're saying that in your White House people were asked not even to take a check and to pass it on.
C. BOYDEN GRAY: That's correct, did not take it. And if you got in the mail, put it in an envelope and sent it right back to the donor.
ELIZABETH FARNSWORTH: Now, you heard--we heard in Kwame's report that there's growing pressure for an independent counsel. Do you think one is warranted? Let me just read. The standard, as I understand it, for triggering this--the independent counsel--specific credible evidence that a federal law may have been broken by a person covered under the independent counsel statute, is that right?
C. BOYDEN GRAY: Well, I'll tell you, to step back, I think the biggest potential damage that may come out of this is whether there were quid pro quos for the money that came in; were they selling them for intelligence, were they giving tip-offs, was this guy Huang who had a security clearance without a background check, was he passing information along? When the White House was in this fund-raising effort, were they giving favors, regulatory favors, or other favors in return? That, to me, is where the really serious harm could be, and I don't know enough about that at this point to make a judgment. And I have a--I suppose, maybe it's because of my own background in the White House--I don't like the independent counsel statute very much, but we have it. So it ought to be enforced.
ELIZABETH FARNSWORTH: So you think that it would be one way to get at the information that you want to find out?
C. BOYDEN GRAY: Yes, that would be one way to find out.
ELIZABETH FARNSWORTH: And how else would you get--
C. BOYDEN GRAY: Well, you'd have a hearing. You'd have a congressional hearing, but that's bottled up in a procedural and political fight. And that's not my job to sort that out. That's somebody else's.
ELIZABETH FARNSWORTH: Mr. Brand, what do you think of the independent counsel?
STANLEY BRAND: Yeah. I think the independent counsel statute is past its prime, especially with respect to these matters. These are matters that the Justice Department has from time immemoriam had the expertise on. There are 45 FBI agents assigned to this task force. They're full capable of understanding the statute to bring in essentially a private lawyer. To begin the wheels turning again for the first time and lose all that expertise to me makes no sense. We're likely to get fewer answers that will take much longer than if we let the Justice Department do its job.
C. BOYDEN GRAY: And the Congress.
STANLEY BRAND: And the Congress do its job.
ELIZABETH FARNSWORTH: So you think the Justice Department and Congress could also do this, or do you think an independent counsel really is necessary now?
C. BOYDEN GRAY: Well, under the statute, since we have it, I think there is a real conflict of interest in having the administration investigate itself, given the extent to which the White House was engaged in a comprehensive, systematic fund-raising in violation of certainly the way the law has been interpreted by White House counsels, myself and my predecessors, and my successors. So I think that it's a political choice. I'm glad I don't have to make it. But I do believe that we need to get to the bottom of this. And, to me, the answer is the quickest way to flesh out all the facts, who was getting called, what kind of pressure was put on them, what kind of shakedown were they feeling, I think to get that out as soon as possible by whatever rule is the way we ought to go.
ELIZABETH FARNSWORTH: Mr. Brand, you heard Sen. Hatch say these are "some potentially big crimes, crimes that if the President were involved with them are impeachable crimes." That's pretty serious language. How do you look at the seriousness or not of what we're talking about here?
STANLEY BRAND: I myself don't see 607 violations.
ELIZABETH FARNSWORTH: The Section 607 which we've been talking about.
STANLEY BRAND: A rise to that level. But everybody's entitled to their opinion. I think, again, we're in a mode of hyping these to a degree that's really based on the overall picture, not each individual violation. I think these things have to be looked at separately, lest we get overly-hyperbolic about it.
ELIZABETH FARNSWORTH: Mr. Gray.
C. BOYDEN GRAY: Well, there's one--there are a couple of points that I think are important to remember here. The first is that, unlike the Congress, the presidential elections are publicly financed. And there shouldn't, therefore, be any real need to raise money, especially since the two candidates can command the airwaves very, very easily. They can get on your program anytime they want to in the heat of a presidential campaign. This started a year before. This was in early 1995 that all this got started, and I think that's the source of the problem here. And so it does have to be examined very, very carefully. And it's unusual. It's unprecedented, and it's unchartered water. And I think we need to find out what they were doing to raise that kind of money off election year, off cycle, when people don't normally like to start giving right after they finished giving, if you will, just for the elections just past.
ELIZABETH FARNSWORTH: Okay. Well, gentlemen, thanks for being with us.
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