[This transcript is
provided as a service of Journal Graphics. The WGBH Educational Foundation is
not responsible for any errors or mischaracterizations in this transcript.]
FRONTLINE Show #1410
Air Date: January 30, 1996
So You Want to Buy a President?
ANNOUNCER: Last week in Washington, Republicans gathered for the biggest
political party fundraiser in history.
FUNDRAISER: Together, we have raised $16.3 million to elect Republican
candidates. Thank you. Thank you. Thank you!
ANNOUNCER: How much does it cost to get a seat at the political table?
Tonight on FRONTLINE_
PAULA POUNDSTONE: What determines who gets what seat? A whole lot of
ANNOUNCER: _``So You Want to Buy a President?''
JAMIE LOVE, Nader Technology Group: You pay the money if you get the
CLINGER: Sleazy, frankly.
ANNOUNCER: Buy a what?
DAVID BARNUM: Four hundred thousand dollars.
ANNOUNCER: Buy a president.
LARRY KLAYMAN, Director, Judicial Watch: It's a national disgrace.
JAMIE LOVE: You get the access, you're in the game.
ANNOUNCER: Who's buying presidential favors?
T.J. RODGERS, CEO Cypress Semiconductor: Fat cats buying influence.
MARGE SCHOTT: He gives to both sides.
LARRY KLAYMAN: The bottom line here is raising money.
MARGE SCHOTT: Whichever side wins, right?
ANNOUNCER: Tonight correspondent Robert Krulwich examines the big
business of campaign finance. ``So You Want to Buy a President?''
PAULA POUNDSTONE: Sir_ sir, what do you_ what you do for a living?
ROBERT KRULWICH: Some of you might have missed this on television this
fall. It was a primetime broadcast of a gala fundraiser from Ford's Theater,
the place where Lincoln was shot, and in the front row was the President of the
United States and up on the stage was the comedian Paula Poundstone and she was
trying to figure out who gets to sit next to the president.
PAULA POUNDSTONE: What determines who gets which seat? Do you do the
whole seating chart? Do you know the guy behind your head? Very well? Who is
WOMAN: Carl Lindner.
PAULA POUNDSTONE: Carl Lindner? I'm sorry, I'm not familiar_ what_ all
right, what made you give him that seat? That'll tell us who it is.
WOMAN: A whole lot of money.
PAULA POUNDSTONE: A whole lot of money? Carl, I'm sure it was much
deeper than that, sir. It was money and love, little buddy. Don't you worry.
What's Carl's role in the community? What_ Carl, why do you have so much
money? Is that rude to ask? Sir_ sir, what do you_ what do you do for a living?
I know I should know, but since I don't know, would you tell me?
Mr. President, do you know who Carl Lindner is? Would you mind telling me?
Pres. BILL CLINTON: It's a secret.
PAULA POUNDSTONE: It's a secret?
Pres. BILL CLINTON: He's in bananas, sort of like you are.
PAULA POUNDSTONE: He's in bananas? Is that true, sir?
PAULA POUNDSTONE: He what?
WOMAN: He's Chiquita.
PAULA POUNDSTONE: You're the Chiquita banana guy? Gee, sir, without the
fruit on your head, I don't even recognize you. Is that_ is that true? Why does
the president know the banana guy?
ROBERT KRULWICH: Now there is an interesting question. Why does the
president know the banana guy? Well, Carl Lindner is a big supporter of the
Ford's Theater, which is why he was there. But before he was the banana guy,
Carl Lindner was an ice cream guy.
He dropped out of high school at 14 to work in his dad's dairy store in
Cincinnati. Now, 55 years later, he's built the business into a 200-store
chain, United Dairy Farms.
Carl Lindner, you should pardon the expression, is a big banana in Cincinnati.
Besides the convenience stores, he runs an insurance company, a bank, a local
T.V. station and Chiquita Bananas and he is part owner, with friend Marge
Schott, of the Cincinnati Reds.
MARGE SCHOTT: I guess the thing that fascinates me the most about Carl
is that he was a self-made man. He knows how to deal. He's a wheeler-dealer.
You see this white Rolls-Royce going down the road and there he'll be, driving,
with his phone up.
ROBERT KRULWICH: And on the phone he has raised lots of money for
presidents. He collected $106,000 for President Bush's two campaigns and before
that he lined up support for a little-known candidate.
JOSEPH RIPPE, Former President, Provident Bank: Carl called me and he
says, ``Do you want to have breakfast with a guy who's going to run for
president, a little guy from Georgia?'' He says, ``It costs about five grand
apiece.'' And I said, ``All right.'' I remember Carl saying to Jim Carter,
``Jimmy, you and I have something in common these other guys don't have in the
room here.'' He says, ``This room is filled with Catholics and Jews'' and he
says ``You and I are the two_ the only two Baptists.''
ROBERT KRULWICH: Lindner's never wanted to be a candidate.
MARGE SCHOTT: I don't think he's ever been interested in running for
anything. Of course, he doesn't have to run. He's got these other guys running
for him, you know?
ROBERT KRULWICH: These days, he has thousands of people working for him
and every year he invites almost all of them to a Christmas party downtown. It
is a gala affair.
JOSEPH RIPPE: He always brings in a well-known celebrity.
PARTY-GOER: This year it's Andy Williams and he's bringing in his
JOSEPH RIPPE: My guess is, yes, he'd be up to about a million dollars_
three quarters of a million or a million dollars for that party.
ROBERT KRULWICH: A million-dollar party, Andy Williams, big bonuses.
Then, to top it all off, this year Carl played his people a video.
PAULA POUNDSTONE: Carl, why do you have so much money?
Why does the president know the banana guy?
ROBERT KRULWICH: Well, as long as she asked_ since 1988, Carl Lindner
and his company and associates have given $650,000 to the National Democratic
Party, so that could be why the president knows the banana guy.
PAULA POUNDSTONE: It was money and love, little buddy. Don't you
ROBERT KRULWICH: Well, if it was love, this little buddy apparently
loves the Republicans even more, giving that party $1.5 million. So they know
the banana guy, too.
MARGE SCHOTT: I had him on the phone and I said, ``What were you doing
there, right behind Clinton?'' He laughed about it. He said, ``Well, I was
here,'' he said, ``because I support that place.'' I said, ``Okay, Carl.
DAVID OWEN: Almost on a daily basis, some part of his business is
affected by what's going on in Washington. And when Carl Lindner has a problem,
he knows that he can pick up the phone and he can get the attention of a
lawmaker who is going to have direct influence on his particular problem.
ROBERT KRULWICH: David Owen was lieutenant governor of Kansas and was
chief fundraiser and campaign chairman for Bob Dole.
DAVID OWEN: There's a small group of people that know how to play the
game, that contribute the money and raise the money so that they can have
absolute impact on legislation that affects their company or their industry.
ROBERT KRULWICH: Right now, Carl Lindner's Chiquita Banana Company is
having a little problem.
RONALD ROBERTS, Cincinnati Business Committee: Do I think he is talking
to anyone he can talk to in the present administration, in the Congress and in
the Senate? Absolutely. I think in the last couple of years, they've lost over
$400 million to nothing but trade-restraint kinds of policies in Latin America
ROBERT KRULWICH: Well, maybe, but here's what we know. For years,
Chiquita grew lots of bananas and then got contracts and sent them to Europe.
It was a good business. So when the European Union said it would restrict its
contracts, Chiquita suddenly found itself cut off. Chiquita said its sales
suffered, profits dropped and Carl_ well, Carl went to Washington.
Chiquita, which does not grow bananas in the United States, demanded that
America retaliate by protesting in Europe and punishing Costa Rica and Colombia
for going along with the scheme.
The White House was sympathetic. Senator Robert Dole told his colleagues that
he, too, wanted sanctions against Costa Rica and Colombia. In the middle of the
national budget debate, he attached a banana bill to some budget legislation
and told Senators ``bananas are a top priority.''
[interviewing] But were you surprised to see bananas in the middle of
the budget debate, as a rider?
Sen. BILL BRADLEY, (D) NJ: I serve on the finance committee. You're
never surprised by anything.
ROBERT KRULWICH: So bananas was just_
Sen. BILL BRADLEY: But Chiquita_
ROBERT KRULWICH: _another day at the office?
Sen. BILL BRADLEY: But what happened was, Chiquita bananas or whatever
the bananas were_ it_ I mean, it was an inappropriate place. I mean, these
things come up from time to time and this just_ this wasn't even_ this wasn't
even a close call.
ROBERT KRULWICH: The banana amendment stalled, but Carl Lindner took a
different tack. Carl had gotten a meeting in Miami with the president of
Colombia. He forcefully presented his case.
Ambassador CARLOS LLERAS, Colombia: Mr. Lindner tried to show how
powerful he was in the United States by taking out of his pocket quite a number
of photographs of himself with President Bush, President Reagan and, I think,
Republican leader Dole. And besides, he mentioned that he was going to have
breakfast with Speaker Gingrich next morning.
And I think that was too much, you know? I've been very near power myself. My
father was president of Colombia and I'm not easily moved by these kind of
things, either by threats or by the fact that people are friends of influential
people. So I thought it was very bad taste.
ROBERT KRULWICH: Then this fall, on the way home from the funeral of
Yitzhak Rabin, in the back of the president's plane, Senator Dole urged the
Speaker of the House, Newt Gingrich, to take up the banana case and Gingrich
So on the president's plane, in the Congress, at the White House, with the
president of Colombia, everybody was discussing bananas, in part because Carl
Lindner got those conversations going. Who else gets this kind of attention?
Well, back on Capitol Hill, we wondered, if a Senator enters the office and
faces a stack of phone messages, whose calls does he take? We asked former
Missouri Senator John Danforth.
Sen. JOHN DANFORTH, (R) MO, 1976-1994: When your wife calls you on the
phone, you're likely to take the call. When your best friend calls you on the
phone, you're likely to take the call. When people you've known all your life
call, you're likely to take that call. When people you've heard of, or people
that you know or people you think, you know, have_ have some position that_ I
mean, that's_ that's obvious, I think.
INTERVIEWER: And people who contribute big money?
Sen. JOHN DANFORTH: Yeah. Uh-huh.
ROBERT KRULWICH: I'm just wondering, what do I get from giving money to
you? If I give you $10,000 over a number of years, would you know who_ my
Sen. BILL BRADLEY: I may or I may not.
ROBERT KRULWICH: Fifty thousand dollars, including my wife, my three
children and our first cousins?
Sen. BILL BRADLEY: If you_ if you were a major fundraiser, I probably
would. If you raise a sizable amount of money, I probably would. But you know
ROBERT KRULWICH: So if it's Tuesday at 10:00 o'clock in the morning_
Sen. BILL BRADLEY: Yeah.
ROBERT KRULWICH: _and I call you_
Sen. BILL BRADLEY: Yeah.
ROBERT KRULWICH: _because I'm very concerned about something_
Sen. BILL BRADLEY: Yeah, but you know_
ROBERT KRULWICH: _would you take my call?
Sen. BILL BRADLEY: You know what? The best people never make that
ROBERT KRULWICH: I'm not the best people. I'm kind of a mediocre
Sen. BILL BRADLEY: Well, chances are_
ROBERT KRULWICH: But I've called you. [crosstalk] So you know the
question. Do you take the call?
Sen. BILL BRADLEY: I may or I may not. Depends on how I'm feeling that
day. Depends on what the issue was.
ROBERT KRULWICH: If you don't take the call, I could be mad at you. No
more 30 thou.
Sen. BILL BRADLEY: Well, you know, those are the breaks.
ROBERT KRULWICH: This January, Carl Lindner got a break of sorts. The
White House formally declared that Colombia and Costa Rica violated free trade
laws. The U.S. will not impose sanctions and Senator Dole, who's gotten lots of
media attention for his banana work, has backed off a bit. But still, Carl
Lindner now has official government backing for his position and he didn't have
that last year.
[interviewing] Can you think of any society throughout history _ go
back, if you like, to Hammurabi or something like that _ where the rich people
have not been able to use money to buy favors from the king or the powerful
class? Any time, any place.
KEVIN PHILLIPS, Author: Well, I think that's pretty much the case down
through history, as you say. There are minor interruptions. You have periods
where the rich are really in trouble politically. I think we could fairly say
that in 1793 in the Terror in France, they were in trouble. Then you have
periods in which it's kind of a normal balance, which is to say that, yes,
money buys favors, but it doesn't buy so much that it perverts the culture or
the political system. Then you rise to certain points where it does and these
are usually in the periods of excess, periods of great corruption and
ROBERT KRULWICH: Okay, what was the high point in the last 100 years of
KEVIN PHILLIPS: The Gilded Age right at the end of the 19th century, the
roaring '20s, and then the last 15 years.
ROBERT KRULWICH: About a year and a half ago, President Clinton arrived
in California on Air Force One. Joining him were three former U.S. presidents,
cabinet secretaries, Senators and some of the most important political figures
of the last 40 years. The occasion was former President Nixon's funeral.
And there, coming down the stairs, was a man who'd known them all, President
Carter's former special trade representative, Ambassador Robert Strauss.
Ambassador ROBERT STRAUSS: Well, in those days, people dealt primarily
in cash. Most people preferred to give their contributions in cash and most
people preferred to receive them in cash. Then there came a period of time,
really growing out of Watergate, when legislation that had been on the books
and laws that had been on the books started being enforced. And that's when a
change took place.
ROBERT KRULWICH: Now, if you look closely, there was one man on the
plane who never served in any government position. That guy, Dwayne Andreas,
president of a giant food company, ADM, is possibly the champion political
contributor of our era.
Amb. ROBERT STRAUSS: He happens to be a man who believes very genuinely
that people who run for office ought to be supported and he supports them, both
sides, and people who agree with him and disagree with him. If you come by and
you make a good impression on him and you say, ``I want to run for_ I'm running
for this office, Mr. Andreas. I would like to have support,'' he's apt to give
you some support.
ROBERT KRULWICH: Back in 1968, Andreas supported the Democratic
presidential candidate Hubert Humphrey with a $100,000 contribution sent
through his company. Andreas was accused and then acquitted of making an
RICHARD M. NIXON: I have never profited_ never profited from public
ROBERT KRULWICH: Four years later, he delivered $100,000 in cash to the
Nixon White House to be kept in a White House vault while another Andreas
donation, $25,000 in cash, found its way to the Watergate burglars. The image
of wealthy businessmen sneaking cash to politicians angered the public.
Amb. ROBERT STRAUSS: Someone solicited him for a contribution. He gave
him a contribution. It went to the wrong place. You couldn't blame him for
ROBERT KRULWICH: Right now, if I am a donor, what are the rules? What
are my limits?
KEVIN PHILLIPS: Well, you can only give, as an individual donor, $1,000
in the primary and $1,000 in the general election.
ROBERT KRULWICH: Just for me. How about my wife?
KEVIN PHILLIPS: Well, that, too.
ROBERT KRULWICH: How about my kids?
KEVIN PHILLIPS: The children? Absolutely.
ROBERT KRULWICH: So if I have 16 children, I can give $16,000, plus the
$2,000 from me and my wife. Is there any limit on the amount of money I can
give to the Republicans in general or the Democrats in general?
KEVIN PHILLIPS: In terms of campaign and strict party contributions,
yes. But in terms of soft dollars, this is a loophole which exists_
ROBERT KRULWICH: What does that mean, ``soft dollars''?
KEVIN PHILLIPS: Soft dollars are soft legally because they're not really
legal, but they are. They're given for purposes which are really party-building
activities and mostly at the state level and, as a result, people can just pour
money into the party coffers through soft dollars. They can_
ROBERT KRULWICH: You're saying that there's no limit? There's no $1,000
KEVIN PHILLIPS: No. No.
FUNDRAISER: You and I and 14,000 others have raised over $9 million
through this event alone.
ROBERT KRULWICH: This dinner, put on by the Republican Party four years
ago, raised more campaign money than any previous meal in American history, $9
million in one sitting. And up on the dais, right next to Dan Quayle, a quarter
century after Hubert Humphrey, and then Watergate and Nixon, there sits Dwayne
Andreas, still there. And his contribution on this night: $400,000.
Amb. ROBERT STRAUSS: Well, he supports presidents. He supports
presidents. That's what a good businessman does instead of harping and
criticizing them, they support them. They support them.
ROBERT KRULWICH: It's always taken money to run for president, but this
year it's more expensive than ever. The field is so crowded and the primaries
are bunched as never before, so to stand out, T.V. and radio and direct mail
and polling are more important than ever and they cost more. At this point, the
candidates have spent five times more than they'd spent four years ago.
[interviewing] How much money do you think it takes to make a serious
run for a nomination so that you get noticed and have a serious shot at a
national political nomination for the presidency, in gross numbers?
Sen. ARLEN SPECTER, (R) PA: Before the multi-millionaires entered the
race, or billionaires entered the race, I would have said you could do it on
$15 million. But if somebody like Forbes is going to spend $25 million at the
start, and perhaps double that, it's impossible to say what it takes to run.
ROBERT KRULWICH: How much has the fact that you can only get it in
$1,000 or $5,000 nibbles affected the amount of time you had to spend as a
money raiser while you were running?
Sen. ARLEN SPECTER: Fundraising is very, very time-consuming. In the
heart of the effort, I would spend two or three hours a day on the phone
ROBERT KRULWICH: Did you like doing it? Or did you not like doing it?
Sen. ARLEN SPECTER: I've grown accustomed to its face. If you want to be
in politics, if you really want to be in politics, you have to learn to like a
lot of things that you don't like. And fundraising is a necessity and if you
want to be in this particular line, you have to learn to accommodate to like
ROBERT KRULWICH: There are, of course, a number of ways for a candidate
to attract money without the $1,000 or $5,000 limits. David Owen knows that.
DAVID OWEN, Former Dole Fundraiser: Having worked with him for 20 years,
it was_ you start off calling, ``I'm calling for Bob Dole,'' and it was, ``Bob
who?'' to you finally get, ``I'm calling for Bob Dole'' and they can't wait to
get on the phone.
ROBERT KRULWICH: Owen was Bob Dole's chief fundraiser until he was
convicted of filing false tax returns and went to jail. He has since parted
company with Dole. The two don't speak. But over the years, he says, he's seen
politicians accommodate donors who want to write big checks.
DAVID OWEN: There are any number of ways that big fundraisers can
participate and Bob Dole gives them a lot of ways. Well, you start off with his
Senate campaign fund. Campaign America is a political action committee, the
Dole Foundation, which is an organization he set up. You have the Better
America Foundation and you have the presidential campaign funds. That's a_
that's a lot of ways you can help.
ROBERT KRULWICH: With so many options available, it's kind of
interesting to pull together the numbers and see who's given Bob Dole the most
money over the years. According to a new book on the by Charles Lewis, here are
Bob Dole's top five lifetime donors, from the bottom up, beginning with number
This is a conservative PAC. Number four_ oh, is our friend, Dwayne Andreas,
the champ. Number three, Koch_ that's an oil business. Number two is a
financial firm. And number one, at the very top_ oh, look at this, the Gallos.
Now, why would Ernest and Julio, who have a vineyard in California_ why would
they give $381,200 to a Senator who lives next to corn fields in Kansas? What's
the connection here?
Well, as you're about to see, the Gallos treat their politicians kind of like
grapes. They plant their seeds early and then they wait. And they are very
Gallo's headquarters is hidden behind these trees_ unassuming, no corporate
logo, no sign that lets you know this is the biggest winery in the world. The
Gallos like their privacy. And they have secrets.
ELLEN HAWKES: But you had to look exactly like your brother_
ROBERT KRULWICH: He's the brother you never heard of, Joseph, the
youngest of the more famous brothers, Ernest and Julio. He told his family's
story to journalist Ellen Hawkes.
ELLEN HAWKES, Author, Blood and Wine: Two brothers,
Michael and Joseph, Sr., came to America at the turn of the century, setting
out to make their fortune.
ROBERT KRULWICH: Michael Gallo was caught posing as a priest and
arrested for selling land that did not exist. His brother, Joseph, married, had
three children, got into the grape business and bought a vineyard. Prohibition
was not the best time to be in the grape business, but the Gallos did well
enough and the boys, Ernest, Julio and their younger brother Joseph, pitched
in. The Depression, however, took its toll. Sales dropped. Many vineyards
failed. But then something happened that nobody in the family talks about.
ELLEN HAWKES: On June 21st, 1933, the bodies of Ernest, Julio and Joe's
parents were found shot to death on their farm outside Fresno and it was
officially designated as a homicide-suicide_ namely, that the father, Joe,
killed the mother and then shot himself.
ROBERT KRULWICH: Ernest and Julio took over and, after Prohibition, they
began to expand the business. Julio was Mr. Inside. He grew the grapes, he
hired the labor, while Ernest was Mr. Outside, managing the rough-and-tumble of
sales and distribution. Younger brother Joe was hired as an employee.
The business prospered in the low end of the market. The Gallos' most famous
brands were Paisano and the highly fortified, cheap wines like Thunderbird and
Then the company decided to broaden its reach and go national. But the alcohol
business was regulated by states and counties, so Ernest had to deal with
politicians all over the country.
ELLEN HAWKES: His most pointed political education came when he started
to build the sales structure and was pushing Gallo wines nationally. It was at
that point that he started running up against not only the federal regulations,
but from state to state and county to county, the regulations would change. So
Ernest was a very active lobbyist, cultivating politicians who were the most
useful to him.
ROBERT KRULWICH: Ernest planted money all over the political landscape
to help pave the way_ $3,250 to young Alan Cranston, $1,000 for Leon Panetta,
starting his career in Congress, $500 for Jerry Brown, who was then running for
secretary of state.
By the 1970s, the Gallos were doing very well. Here they are with the rest of
the family. There's Ernest and Julio, getting a little peck on the cheek. They
are a large family now. The brothers had eight children plus their families and
24 grandchildren. There's little Micah.
By now, the Gallos were so wealthy, if either Ernest or Julio died, the
business might have to be broken up to pay inheritance taxes, so they tried to
change the law.
A Washington law firm designed some legislation and gave it to Senator Alan
Cranston, who had been helped by the Gallos in a tough reelection campaign.
Cranston brought the bill to the Senate floor on a rare Saturday session and,
with only a handful of Senators present, it passed.
The Gallos got what they wanted, but the newspapers noticed and the critics
charged that the Gallos had bought the amendment. On the floor of the Senate,
Senator Robert Dole referred to the law as the ``Gallo wine amendment.''
But at the end of it all, somebody was left out of the party: Ernest and
Julio's younger brother, Joe. He and his side of the family were the poor
relations. They'd worked for Ernest and Julio, but then in 1986 Joe got to see
his mother's will and discovered that he had not been told by his two older
brothers that he was named as an equal beneficiary. He went to court, but he
could not prove he was entitled to a share of his brothers' business.
ELLEN HAWKES: I interviewed him during the trial. I see him now. Joe has
never been the same.
ROBERT KRULWICH: Ernest and Julio kept control of the family fortune and
the business, the biggest wine company in the world. They were
multi-millionaires. But the more they had, the more they had to protect, so
they kept helping politicians. The young mayor of San Diego, Pete Wilson,
became a U.S. Senator and then a governor. The Gallos have given him $55,000.
Leon Panetta, whom the Gallos had given $33,000, was now a rising star in
Congress_ where, by 1986, the mood was changing.
Democrats were rewriting the tax code and the Gallos saw another chance to
lower their inheritance taxes. That session, everybody came to town. The halls
were full of lobbyists trying to get to their favorite politicians.
DAVID OWEN: They were just inundated with calls about, you know, ``Do
you know understand what you're doing to my_ to my business, my company, my
industry? You know, if you just put in this little amendment here, that would
solve our problem.'' And once it started, it opened the flood gates.
ROBERT KRULWICH: So the Gallos turned to David Owen's boss, the man who,
eight years earlier, had dubbed their bill the ``Gallo wine amendment.''
DAVID OWEN: When it first came up, I'm sure that the Gallos weren't
people that Bob Dole knew, but he figured out it was someone that he needed to
get to know if he were going to play in the national political arena in
California, and so he made it a point to get to know them. And when he got to
know them, that provided the access.
ROBERT KRULWICH: The new Gallo amendment passed and in one week, while
the bill was being written, Senator Dole received four $5,000 contributions
from Ernest and then Ernest's wife and then Julio and then Julio's wife. The
money went to Dole's political action committee.
And in the years since that amendment, Senator Dole and his foundations have
received $1.1 million from the Gallos and their associates. The new amendments
could have saved Ernest roughly $23 million in estate taxes, and the same for
Julio, who died in 1993.
[interviewing] Let's say, just for the sake of argument, that what
we've just seen is the Gallos just sprinkle a little money into the political
arena and they get a bill that is worth, say, $23 million to their
grandchildren. If they were trading money for favors_ and we don't really know
if they did, but if they were, isn't this a terrific deal for them?
HERBERT ALEXANDER, Political Scientist: If one considers it to be an
investment of a million dollars or two million in order to get a $20 million
return, obviously, it's a very good investment. On many minor issues, it is
possible, as a result of political contributions, to get special treatment in
the law. There's no question.
ROBERT KRULWICH: At a really low price.
HERBERT ALEXANDER: There's no_ there's no question about that. But that
doesn't necessarily mean that the entire system is corrupt.
ROBERT KRULWICH: But when you see a bill passed by the United States
Congress that affects very, very few families in the United States, can you
assume that hadn't one of those families put a little money in the right
places, that there would be no such law?
HERBERT ALEXANDER: One can make that assumption, absolutely. They
probably would not have done it had it not been for the contributions.
ROBERT KRULWICH: When a family like the Gallos tries to ask for a favor,
or implies it, how do they do it?
Sen. BILL BRADLEY: They've never approached me, so I don't know what
their style is. I don't know what their strategy is. Most people who want to
affect legislation work through high-priced Washington lobbyists who insulate
them from direct involvement.
ROBERT KRULWICH: So that you would never meet Ernest Gallo. You'd meet
some other guy.
Sen. BILL BRADLEY: Probably. Probably.
ROBERT KRULWICH: And it's said no one knows how to work these halls
better than our friend, Dwayne Andreas, and his lawyers, Aiken, Gump and
JACK BLUM, Attorney and Lobbyist: He's a man who knows politicians
personally, who gives tremendous amounts of money, both hard and soft, and then
stays in the background while lawyers talk to staff people, while trade
association executives mingle with Congressional staff. The message is always
given indirectly. The way he operates is a way in which you can never tie a
particular contribution to a particular vote. It's a very sophisticated, very
subtle way. It's high-class and very expensive.
ROBERT KRULWICH: Talk about high-class_ Dwayne Andreas has another way
to help his friends. He owns four jets and a turbo-prop and whenever he
chooses, he lends them to candidates. Bob Dole has used Andreas's planes 28
times since 1990. In fact, Dole has a whole list of plane-lending friends.
DAVID OWEN: His staff knows that if they want to travel anywhere, all
they have to do is pick up the phone and call someone in corporate America who
has a nice jet airplane and say that they would like to use that plane for a
political trip. And there's nothing illegal about it. All they have to do is
pay a first-class airfare for the use of the plane and they can fly anywhere
they want to.
ROBERT KRULWICH: First-class airfare? That's all?
HERBERT ALEXANDER: That's all. [crosstalk]
ROBERT KRULWICH: Wait, wait, wait, wait, wait, wait! This plane is not
like a real_ I mean, it's available when I want it. It will fly me to Cedar
Rapids or onwards to Council Bluffs at a time when there's no_ or to a town
where no planes fly. So it's not like a_ [crosstalk]
HERBERT ALEXANDER: It's like a charter.
ROBERT KRULWICH: Yeah, it's like_
HERBERT ALEXANDER: It's like a charter. Even though the cost of flying
that plane is much more and_
ROBERT KRULWICH: Much more! Let me give you a number. If you wanted to
take a first-class ticket from Washington to L.A., that would cost $3,000. If
you want to fly in a Gulfstream IV at your own bidding, with the thing ready to
go whenever you go, and then landing whenever you_ and go wherever you please,
it would cost about $40,000 to $50,000. So you're paying $3,000 to get what is,
in effect, a $50,000 service. Doing the math, that strikes me as a $47,000
HERBERT ALEXANDER: There's no question that it's an advantage. It's a
ROBERT KRULWICH: Companies seem to sense this is a very valuable favor.
There are so many planes available now that politicians can get choosy.
DAVID OWEN: It almost gets to the point of, ``I don't want to go in_ I
don't want to go in anything less than a Gulfstream IV.''
ROBERT KRULWICH: Gulfstreams are deluxe jets and Carl Lindner's brother,
Robert, owns one. You remember Carl, the banana man from Cincinnati? Well, the
banana man's firm has an air hangar that has a glass picture window so that you
can look in and see the planes. And in 1995, Senator Dole flew on these planes
12 times. This plane here, for example, is the exact same plane you see here on
a campaign trip to New Hampshire.
But the biggest jet of all is the one we own, Air Force One. Last September,
President Clinton did a quick hop to five cities in a week and raised $5
million for his campaign. It costs more than $36,000 an hour to operate Air
Force One, but all President Clinton paid was first-class air fare for his
staff, $44,000. That is less than an hour and a half of flying time.
[interviewing] Is it true what most people say, that United States
Senators don't know about transferring in Minneapolis because they are always
on these kinds of planes?
Sen. BILL BRADLEY: I think that is a gross exaggeration, one might even
say a kind of base_ well, I mean, I think it's a gross exaggeration.
One of the best moments of my years in public service was on the
Washington-New York shuttle on a Friday night when I was squeezed between Paul
Volker, who was then chairman of the Federal Reserve, and some other Cabinet
official in the administration, and I was in the center seat. And I thought to
myself, ``Hmm. I guess this is democracy.''
ROBERT KRULWICH: It's that season again_ politics in Iowa, where
presidential candidates will do just about anything to draw a crowd. This is
the Charlton Heston NRA Celebrity Shoot-Out and these folks are here to support
Senator Phil Gramm's campaign.
Sen. PHIL GRAMM, (R) Texas, Presidential Candidate: We got people coming
from all over the state. We've had a real grass-roots effort and I'm very proud
CHARLTON HESTON: How's Wendy?
Sen. PHIL GRAMM: Good. She's here somewhere.
CHARLTON HESTON: Oh, is she?
Sen. PHIL GRAMM: Where's Wendy?
CHARLTON HESTON: Out here at the shoot? Oh.
WENDY GRAMM: Hi! Nice to see you!
CHARLTON HESTON: Hello, Wendy. Come on over here.
ROBERT KRULWICH: One way to influence a husband, of course, is to do
something nice for his wife.
CHARLTON HESTON: You look great.
WENDY GRAMM: Well, thanks for taking care of the weather, you know?
CHARLTON HESTON: You're entirely welcome. I'm glad you noticed it.
ROBERT KRULWICH: But as we shall see, this approach can be exquisitely
KATHLEEN HALL JAMIESON, Author, Beyond the Double Bind:
When a woman in a leadership position is married to a political candidate, she
is going to be disadvantaged no matter what she does and she's going to create
conflicts of interest if she tries to pursue her career.
ROBERT KRULWICH: She came to Washington as the wife of a politician, but
she could have come in her own right. She's a Ph.D. in economics, a former
government official. Ronald Reagan called her his favorite economist and he
appointed her to chair the CFTC, the Commodities Futures Trading Commission.
WENDY GRAMM: I speak for all my fellow commissioners when I say that the
commission will continue to use all available means to protect the public
ROBERT KRULWICH: As chair of the CFTC, Wendy regulated futures contracts
for commodities like beef and soybeans and pork bellies and some say she also
regulated her husband.
WENDY GRAMM: On this there will be no compromise. Thank you.
BUDDY ROEMER, Former Louisiana Governor: Wendy Gramm, because she's
different than Hillary, is going to be dismissed by some. They do it at their
own peril. She is very, very important to Phil Gramm, not only to his person,
but to his politics. She just has a different style of affecting that
ROBERT KRULWICH: When Wendy Gramm left the government, she was offered
positions on a number of corporate boards, sometimes by executives who were
strong supporters of her husband. This raised the question: If she joined,
would that become a problem for Phil?
KATHLEEN HALL JAMIESON: Women in positions of leadership are faced with
the question, ``Should I sacrifice my career in order to avoid conflicts of
interest or should I pursue my career and, as a result, accomplish what I could
otherwise accomplish and run the risk that my husband is at a disadvantage
because it looks as if the boards that I'm serving on, for example, are
creating problems for him and his political campaign?''
ROBERT KRULWICH: Take this event. It was a big fundraiser for Phil
Gramm, $4.5 million raised to kick off his campaign. A co-chair of the event
was Kenneth Lay. Now, Mr. Lay is the president of Enron, an oil and gas firm
Wendy Gramm regulated when she was in Washington. Now she's on his board. She
gets $22,000 plus some fees, but early last year Enron gave $18,500 to her
KATHLEEN HALL JAMIESON: And so we have a difficult ethical situation
because the question is, would the woman have been there in any event or is she
there because specifically the corporation is attempting to buy influence with
the candidates_ with the candidate through the candidate's spouse?
ROBERT KRULWICH: Take the case of another board Wendy's on, the IBP_
Iowa Beef Processors. This company controls one third of the U.S. beef market.
It is the world's largest meat-packing company. IBP has had its share of
difficulties with the government_ labor problems, wage problems, immigration
problems, union troubles.
KATHLEEN HALL JAMIESON: IBP is an idea case study. Wendy Gramm belongs
on that kind of board. She has a Ph.D. in economics. She chaired the
Commodities Exchange. There's no question that she's qualified to serve on the
board. She's given remuneration for being on the board. That puts money into
the family coffers. But more importantly for Phil Gramm, IBP is a major
employer in Iowa.
ROBERT KRULWICH: Iowa_ it's important not just because of the famous
Iowa caucus, but because there's an early straw poll here. It's the candidates'
first chance to get big headlines.
The straw poll is a kind of beauty contest. For 25 bucks, anybody _ even if
you don't live in the state _ gets to vote. But some candidates have been known
to buy up blocks of tickets and round up people to give them to.
On this occasion, Phil Gramm got some help. Two and a half weeks before the
vote, Iowa Beef Processors sent this memo to its employees ``encouraging'' them
``to attend and participate'' in the straw poll. The company said the Gramm for
President campaign would provide buses and tickets to all interested employees
and the memo ended, ``Plan to see you there.''
Who at IBP decided to help Phil Gramm? The company's president, Bob Peterson,
would not be interviewed, but we were able to talk to his close friend and
biggest cattle supplier, Bill Haw.
BILL HAW, President, National Farms, Inc.: The history of IBP for all
the time I've known them is that they're a completely non-political
organization, so I was surprised. I asked Bob what had happened. I get a very
clear and concise and, as always, straightforward answer, which is he had been
asked by a director to do a favor in supporting the campaign and he had
responded as he had felt any good chairman and chief executive office would. He
responded by doing the favor for them. So it seemed to me_ my impression from
Bob was that he was simply responding to a request from a valued and respected
INTERVIEWER: Was that director Wendy Gramm or Alec Cortellis?
BILL HAW: Cortellis.
ROBERT KRULWICH: Alec Cortellis was then Phil Gramm's finance chairman
and Wendy's friend. Was Wendy aware or informed of this decision? She wouldn't
KATHLEEN HALL JAMIESON: Wendy Gramm didn't have to ask IBP to act as it
did. Wendy Gramm can reasonably assume, as can Phil Gramm, that IBP will do
that. By virtue, however, of putting Wendy Gramm on the corporate board and
participating as it did in the straw poll, IBP has established that it's a
friend of the Gramms and one can reasonably assume that politicians are
disposed to reward their friends.
ROBERT KRULWICH: Senator Gramm did very well in the beauty contest. To
the surprise of many political observers, he tied the front runner, Bob Dole.
But Gramm wasn't the only candidate who had questions raised about his wife.
Hillary Clinton stayed on boards well into her husband's presidential campaign.
And then there was that matter of the $1,000.
HILLARY RODHAM CLINTON: _asked me what I thought we could afford to
invest. I told him $1,000.
ROBERT KRULWICH: Her $1,000 investment gave her a $100,000 return and
the question was: Was someone trying to do her husband a favor?
HILLARY RODHAM CLINTON: You know, not all my trades made money. Some of
them lost money.
ROBERT KRULWICH: Lamar Alexander's wife, Honey, turned a $10,000
investment in Whittle Communications into a $300,000 windfall. And then there's
Elizabeth Dole, twice a Cabinet secretary and, until the campaign, head of the
American Red Cross. Curiously, while she was there the Gallo brothers sent the
Red Cross their largest cash contribution ever, $100,000.
Voice of DAVID OWEN: In the case of Bob and Elizabeth Dole_ she's such a
public person and such a powerhouse in her own right, when they help her, I
think they believe that they're helping him.
ROBERT KRULWICH: What's new this year in loopholes?
CHARLES LEWIS, Director, Center for Public Integrity: Well, many of
these loopholes have been around for years. The latest_
ROBERT KRULWICH: Chuck Lewis has just written a book about money and
campaigning called, The Buying of the President.
CHARLES LEWIS: _foundations where you_ you can hide money. Millions of
dollars can go into a fund. It can be created, basically, to make you look good
as a candidate and you never have to release the donor information.
ROBERT KRULWICH: How do you come out? Do you come out convinced that
there is_ elections are, in huge part, favors for sale, or in tiny part favors
for sale, or somewhere in the middle?
CHARLES LEWIS: I think that in huge part. I_
ROBERT KRULWICH: In huge part?
Yeah. I was taken aback, actually. I did not realize how expensive things had
gotten. This is the most expensive presidential campaign and the most expensive
political campaign in U.S. history. The numbers are absolutely off the
ROBERT KRULWICH: But just because there's a lot of dollars chasing
candidates, does that mean that there's a lot of selfish people trying to turn
the system to their own purposes? Or couldn't it mean that there's just a lot
of wealthy who want to express broad philosophical issues?
CHARLES LEWIS: I think there are a lot of wealthy people that do want to
express board philosophical issues. I think there are also a lot of very
narrow, specific, vested corporate and labor and other vested interests that
have very narrow agendas that they want pursued. The presidential campaign is
not a horse race or a beauty contest. It's a giant auction.
ROBERT KRULWICH: This is a Clinton fundraiser in California. Some of
these people, of course, are stars, but they're not Clinton's all-stars, the
ones who've given him the most money over the years.
Pres. BILL CLINTON: Thank you, Tom Hanks, for introducing Al Gore. Thank
you for not introducing me.
ROBERT KRULWICH: Chuck Lewis compiled that list, so here is his five top
lifetime donors for Bill Clinton, starting at the bottom.
So we'll start with number five. Well, number five_ we're not going to tell
you that. We'll tell you later in the program. Number four_ Wilkie, Farr and
Gallagher, which is a law firm. Number three_ the Jackson Stephens Group.
They're a big business in Arkansas. Number two_ a New York teachers union. And
number one_ Goldman Sachs, which is a Wall Street firm and former home of
Clinton's Treasury secretary.
All right, now let's do Senator Gramm. Again, same thing_ top five lifetime
donors as of mid-1995_ Chuck Lewis's list. We'll start again at the bottom.
Number five_ First City Bankcorp in Houston. Number four_ Boone Pickens, the
oil man from Texas. Number three_ the Conservative National Committee. That's a
lobbying group. Number two_ the American Medical Association. And Phil Gramm's
number one_ the National Rifle Association.
Now, Phil Gramm is famously proud of his ability to raise money, but it is
hard work because you_ you got to deal with that $1,000-per-person limit. The
limit has been in place for 20 years and it has not been adjusted for
HERBERT ALEXANDER: It has not been indexed and it should have been. The
reason is that if one counts a $1,000 contribution today, considering the value
of the dollar in of January first, 1975, when that law went into effect, a
$1,000 contribution today is worth about $300.
Pres. BILL CLINTON: And every one of you should be happy and proud that
you happen to be alive at this period of profound change. If we do our job, the
best is yet to come. Thank you and God bless you all.
ROBERT KRULWICH: So the campaign limits have had the odd effect of
forcing politicians to spend much more time raising money because you've got to
work three times harder now just to stay even.
CHARLES LEWIS: I don't know if the average American understands this. If
you raise $20 million in one year, that's $55,000 a day. Bill Clinton did not
start until April. In the six months_ first six months he was raising money, he
raised in excess of $100,000 a day.
Now, you don't do that with backyard barbecues. There are certain people that
can give that kind of money and raise that kind of money and pull together
events where that kind of money is generated. And this is not a mom-and-pop
type thing. This is a big-time money machine.
ROBERT KRULWICH: Remember that five-city campaign trip that President
Clinton took on Air Force One? Well, one of his stops was in San Francisco and
the occasion was a fundraiser at the Fairmont Hotel. Money came to town for a
chance to catch a glimpse of the president. And here he is. Just behind him,
there's Vice President Gore and he's giving a little bow to Clarence Clemons.
The president now will stop and have a few words with his supporters.
But now, who_ who's the guy with the bald spot? Ernest Gallo, Bob Dole's
single biggest contributor, the man who gave over $1 million to the
Republicans_ he's here. It seems that in just three days Ernest Gallo raised
$100,000 for this event. And at this point, he is number five on President
Clinton's list of all-time givers.
But why? How does the president know this wine guy? Let's go back a few years.
It turns out in the last election Mr. Gallo had not given to the Clinton
campaign until days before the election, when he gave some money to the
Democratic National Committee.
He'd given heavily to Bush and the Republicans. But the nifty thing about our
system is it's very forgiving. There are lots of ways to give. So Ernest Gallo
gave $40,000 to the Clinton transition. But what could Washington do for
Gallo is the biggest wine producer in the country, nearly a
billion-dollar-a-year business, and their market share is big and stable. So
they need to expand worldwide and that means marketing their wines to other
countries. And guess who helps them pay for commercials like this?
Rep. THOMAS BARRETT, (D) WI: Imagine that you're a chairman or a
president of a major corporation in this country and Uncle Sam walks into your
office and tells you, ``I've got a deal for you. Here's the deal. I subsidize
your foreign advertising budget. In exchange_ well, in exchange, you do
nothing. You just get the money.''
ROBERT KRULWICH: So far, the Gallos have received $30 million under the
market promotion program, a piece of legislation pushed by California
agribusiness and originally sponsored by Senator Pete Wilson and Representative
Leon Panetta _ Remember them? _ both long-time Gallo political favorites. It
was passed in 1985 as Dole Amendment 1167.
But not everybody in the wine business is happy about this bill because it is
structured to reward the biggest producers. Bill MacIver is the owner of a
small winery in California's Sonoma Valley.
WILLIAM MacIVER, Matanzas Greek Winery: I had to look at MPP as a tax
rebate for Gallo, basically. I mean, they get 48 percent of the funds and it's_
and it's really of virtually no use whatsoever to small wineries.
ROBERT KRULWICH: This is how it works. The government gives its money to
the Wine Institute, a trade organization that critics say is dominated by the
biggest producers, led by Gallo.
JOHN DeLUCA, Director, Wine Institute: Nothing comes automatically. You
have to be good at what you do and the funds that you receive are based on your
performance. And I get back to the original equation. You give the funds to the
people who show that they best know how to use it and are successful. And that
is as American as anything else.
WILLIAM MacIVER: Frankly, it infuriates me that_ that there's_ that the
American people is giving Gallo that_ that has revenues of almost a billion
dollars a year, $850 million to a billion dollars a year, that the taxpayer
would fund something like this. It's_ it's a travesty, as far as I'm
ROBERT KRULWICH: Last Labor Day, when President Clinton came to town he
stopped for a few hours in California's Central Valley. He met with workers
and, with his chief of staff, Leon Panetta, he met with ranchers and farmers.
Then he went behind closed doors for a private meeting with Ernest Gallo.
We don't know what they talked about except for official statements which say
they discussed NAFTA and the threat of low-cost Chilean wines. But the next
month, the ad promotion program was reauthorized with President Clinton's
enthusiastic support and, for good measure, with an increase of 30 percent.
But what if you're in business and you don't want the government's help? In
the hills of northern California there's a group of people who want to keep
their distance from Washington.
T.J. RODGERS, CEO, Cypress Semiconductor: We all have a hobby in Silicon
Valley. Mine happens to be wine. And typically, the hobby is pursued with the
same energy as your life.
ROBERT KRULWICH: T.J. Rodgers is one of the new entrepreneurs who've
made their fortunes in Silicon Valley.
T.J. RODGERS: _Saturday and Sunday and then you do something else on
Saturday and Sunday with equal intensity. Yes, I think in this valley, people
are a lot like me.
ROBERT KRULWICH: They are proud of the fact that they haven't needed
government favors or government protection.
T.J. RODGERS: We rarely, if ever, discuss politics because politics,
politicians in Washington, don't matter to us. They are a burden, a drain on
the economy. We create wealth, jobs and money here. They're somebody far away
and hopefully will stay far away.
DAVE BARRAM: Historically, candidates don't raise a lot of money in
ROBERT KRULWICH: David Barram was chief financial officer at Apple
DAVE BARRAM: People don't wake up in the morning thinking, ``Gee, I'd
like to give to a candidate.'' That's just not the way it is.
ROBERT KRULWICH: Bill Clinton walked into this rarefied atmosphere
looking for votes, endorsements and money.
DAVE BARRAM: So to get them to give, they had to really believe in the
ideas of this guy and that he needed the money in order to get his message out.
They could understand that because all of us in those companies were marketing
products and we knew that in this world you have to spend some money to get
your message out.
ROBERT KRULWICH: To get the money, candidate Clinton went to high-tech
deal maker Sandy Robertson.
T.J. RODGERS: Sandy Robertson runs Robertson Stevens. He's an investment
banker, has raised $250 million for the company. So he called me and said,
``You ought to come up and talk to Clinton. He may be president and he's here
to listen to what Silicon Valley thinks ought to get done in Washington.''
Great idea? No.
SANDY ROBERTSON: It's always difficult raising money and there was a
fairly large ticket to come to that.
T.J. RODGERS: Got another letter. Refused again. Got a personal phone
call from an investment banker in San Francisco. Refused again.
SANDY ROBERTSON: It's not easy.
T.J. RODGERS: Called my significant other. ``Have T.J. come up.'' Called
me again. ``Hey, why don't you want to talk to candidate Clinton? He might be
the president. He's here to listen.'' So I finally got convinced. Then the next
day I got the little letter. ``Thank you for coming to talk to candidate
Clinton. Please enclose your check for $1,000.'' So I wrote with my red pen,
you know, ``NFW'' on his invitation and sent it back to him. Just that.
ROBERT KRULWICH: ``No friggin' way.'' But Robertson put together a major
SANDY ROBERTSON: We had about 135 people in the room, all from Silicon
Valley or the biotechnology community, and raised about $400,000 for his
campaign. I think there were $20 billion of sales represented in the room. We
all had a meeting, a private meeting with the president around a great, big
mock-up of a computer chip. It was a very free-form discussion of what the
DAVE BARRAM: There were two or three questions they wanted to get clear
before they would finally agree to support us.
SANDY ROBERTSON: And then everyone who wanted to walked out on stage and
CEO: I am very impressed about the responsiveness of the campaign and,
frankly, it's very, very refreshing and I'm enthusiastic about the prospects.
SANDY ROBERTSON: It was led by John Young of Hewlett-Packard and John
Scully of Apple.
DAVE BARRAM: It was a pretty exciting, interesting day and I think it
made just an enormous difference in the campaign.
ROBERT KRULWICH: When candidate Clinton became president, at first there
seemed to be a happy consensus. Silicon Valley believed it would build the
backbone of the information superhighway, but that's not what the new vice
president had in mind. He wanted the government to build an information
superhighway the way his father had helped build the interstate highway system
in the 1950s.
That's not what the guys in Silicon Valley had in mind.
T.J. RODGERS: The concept that Al Gore could build anything is absurd.
You know, the average high school student in Sunnyvale knows more about
technology than Al Gore does. Secondly, why should the government be competing
against private companies?
ROBERT KRULWICH: During the presidential transition in Little Rock, the
new administration brought business leaders to town. John Scully from Apple
came. He's here looking after Silicon Valley's interests. It becomes a sort of
get-together for the establishment. They both privately and publicly press for
SANDY ROBERTSON: The vice president and the head of AT&T had a
little flurry, probably the only harsh words back and forth during the whole
couple days at the conference, because the president of AT&T said, ``No,
this should be in the private sector.''
AT&T PRESIDENT: I think the government should not build and/or
operate such networks.
Vice Pres. AL GORE: I'd like to briefly clarify one point that you made.
It does seem to me that government ought to play a role in putting in place
that backbone, just as no private investor was willing to build the interstate
highway system. You didn't mean to disagree with that view when you said
government shouldn't play a role, did you?
AT&T PRESIDENT: Yes, I may disagree.
Vice Pres. AL GORE: Bears further discussion. Not now.
Pres. BILL CLINTON: I was hoping we'd have one disagreement before
ROBERT KRULWICH: Scully and Silicon Valley knew they would need to work
on the vice president and they would have help. Clinton appointed one of their
own, Apple executive Dave Barram _ Remember him? _ to deputy secretary of
DAVE BARRAM, Deputy Assistant Secretary of Commerce: What they really
get out of this is the opportunity to pick up the telephone or in some other
way communicate with somebody in the White House or in the administration
somewhere who understands their issues and is willing to make sure they're
considered in a very serious way.
ROBERT KRULWICH: And then in a private dining room of a Silicon Valley
restaurant, the CEOs went to work. While eating salmon and asparagus, they
lobbied their new friends in the administration.
SANDY ROBERTSON: They had a dinner with about 25 of us and the president
and the vice president. The two of them indicated that evening that maybe they
should step back from government funding and maybe just set standards, which
was very much encouraged then by the executives in the room. And I think at
that evening particularly, Gore, who had been talking about it, came back to
the private sector, at least in his thinking, and I'm sure he publicly said it.
But you could see his mind almost change that night.
ROBERT KRULWICH: While Robertson may have thought Gore changed his mind,
publicly the vice president continued to argue for government financing. In
March, Gore stressed the government's role would be big, but then on December
21st, Vice President Albert Gore said this:
Vice Pres. AL GORE: _because unlike the interstates, the information
highways will be built, paid for and funded principally by the private
ROBERT KRULWICH: Gore delivered this speech on December 21st and,
curiously, the Federal Election Commission records that on that day the
Democratic National Committee got a $15,000 contribution from Sprint, the
telephone company, and a $10,000 contribution from U.S. West and a $50,000
contribution from MCI and a $15,000 contribution from Nynex, and the next day
another $20,000 contribution from MCI and $10,000 more from Nynex.
Now, that could just be applause. ``Thank heavens you've seen the light''_ a
legitimate kind of applause. Or it could be a pay-off. What are you
CHARLES LEWIS, Director, Center for Public Integrity: I think it was a
reward, of sorts, by the companies. I'm not saying necessarily that
Clinton/Gore_ I think they didn't have much choice. I think they over-promised,
frankly. But I do think it was a reward. It was a way of saying, ``You did the
right thing. We're very pleased.'' The reason I think this is we have looked at
soft money payments over two or three years and, usually, when you see a big
chunk of money, it didn't come in one check. We found MCI made 23 checks over a
two-year period and the average check was a few thousand dollars. But on this
day it was $50,000. And so there's more to it than just happened to be a
ROBERT KRULWICH: Now, what could be going on? If you suddenly decide to
send $50,000 in the mail on the day of a speech, what could_ what are you
CHARLES LEWIS: I think it's a financial version of a big wet kiss.
ROBERT KRULWICH: Then a new committee is formed. They will advise the
president on the superhighway and their members have been chosen by Ron Brown,
secretary of commerce_ companies like Bell Atlantic, MCI, Sprint_ the people
who want to build the superhighway. There's John Scully. The committee will
deliver a report to the president detailing who should build what for the
But not everyone is thrilled with who got on the committee.
Jamie Love works for Ralph Nader.
JAMIE LOVE, Nader Technology Group: There's an assumption here that all
the smart people about the development of the NII are the captains of all these
big industry groups and I think that's really insulting to people that work in
this field that know all kinds of people that are really brilliant people that
have all kinds of great insights to make that are never really put on these big
advisory boards and ought to be. I mean, these aren't the best and the
brightest people for the NII advisory council. These are the biggest and the
richest. It's not the same thing.
ROBERT KRULWICH: And two thirds of the board are Democratic Party
contributors. Some on the list: AT&T gave over $1.5 million, West
Publishing more than $500,000 and MCA kicked in over $425,000.
JAMIE LOVE: We look at it as a fundraising vehicle for the Democratic
National Committee. That is to say, people who give a lot of money to the
Democratic National Committee more or less can buy a seat on the NII advisory
DAVE BARRAM: You know, I was involved with_ in the discussions. I mean,
we talked about who was going to be on it and it was not driven by who gave
ROBERT KRULWICH: Indeed, Jamie Love of the Nader organization and other
critics were invited to a private get-together.
JAMIE LOVE: It was clear right off the bat that the CEOs from all the
companies were on really intimate terms with the staff of the White House on
everything. I mean, it was, like, ``Good to see you. How's it going?'' And
there was a lot of talking in the corners about this and that and all kinds of
deals going on. The rest of us felt like we were in there, like, looking for
autographs or something. You know, maybe you're going to bring out the camera
and take a few pictures and see what the inside of the White House actually
looks like. And you know, the difference of access and intimacy is really
ROBERT KRULWICH: It does seem that there's a kind of barter culture in
Washington. If the government does something nice for a business, then the
executives of the business say, ``Well, we'd better give them a tip,'' as if
the whole thing were about money. And sometimes it gets, well, rather frank.
Here is a memorandum distributed to big donors by the Democratic Party. When
the president saw this memo, he said, ``Stop it.'' It was circulated, however,
by the Democratic National Committee and it says, ``If you give us a minimum of
$100,000, here is what you get''_ and it's arranged just like a menu.
You get two ``events'' with the president in Washington, D.C., two events with
the vice president _ I guess that could be anywhere, though _ one dinner with
high administration officials, ``honored guest status'' _ that means, I guess,
you get to go to a White House dinner. And then this is an odd one_ ``annual
economic trade missions.'' What could that mean? Well, we found out.
SANDY ROBERTSON: This one here was taken in the Cabinet Room with the
vice president and the president with 25 CEOs on our way to China with Ron
Brown a year ago August.
ROBERT KRULWICH: Remember high-tech deal maker Sandy Robertson?
SANDY ROBERTSON: But people are pretty informally dressed because we're
about to hop on an airplane for a 23-hour flight to Beijing.
ROBERT KRULWICH: The old Air Force one_ they call her ``Queenie.'' She
flew Reagan to Reykjavik, Bush to the Gulf, and she'll fly Ron Brown and top
executives all over the world.
RON BROWN: When the secretary of commerce gets off an airplane, the
airplane has emblazoned on it the words ``the United States of America,'' and I
walk down to the tarmac accompanied by 25 or 30 chief executive officers of
American companies large and small, that reverberates throughout that country.
And yes, it makes a difference and, yes, it has an impact and, yes, it helps
create economic growth.
ROBERT KRULWICH: They call it ``the Brown express'' and 191 American
executives have been on 14 trips.
LARRY KLAYMAN, Director, Judicial Watch: Trade missions have been highly
publicized. He's gone overseas and, in fact, promoted U.S. business, not
generally, but for those individuals who have given those large contributions.
This is a distortion because when you help one company, when you help one
competitor in the marketplace, by definition you're hurting another company
that's competing against that company and that's not a proper use of government
ROBERT KRULWICH: Larry Klayman is a Washington lawyer who's been looking
into these trips using the Freedom of Information Act. He was able to get boxes
of records and memos from Brown's trips, 30,000 pages in all.
LARRY KLAYMAN, Director, Judicial Watch: You find communications from
lobbyists in Washington, D.C., into Secretary Brown's office, into the White
House, saying ``My client, so-and-so, has donated this amount of money to the
Democratic National Committee. My client, so-and-so, is a personal friend of
President Clinton and plays a role on this particular fund-raising
But there was one document in particular that was very interesting. It was
written by an individual at Entergy Company, which is from Arkansas. And in
that memorandum, they quote a key aide of Secretary Brown. And this individual,
Jude Kearney, is quoted as saying, ``I am a political appointee and I am here
to choose those who are politically connected.'' This to me was the foremost
smoking gun in all of these documents, which laid out a basic plan to choose
corporate executives based on political connections.
RON BROWN: All_ all anyone has to do is look at the evidence, look who
goes on the trips, check their party registration, see whether many more of
them_ I would suspect that about 80 percent of the CEOs that go with me are
Republicans, so that certainly is not a criteria for their selection.
ROBERT KRULWICH: Commerce official Jude Kearney would not return our
calls, but officials from Entergy stand by their memo. But their chairman,
Edwin Lupberger, told us that ``political contributions played no part in our
decision to participate.''
In all, 25 executives boarded Brown's plane for China. This is the secretary's
cabin. Look, he's got a desk. And this_ this, I guess, must be the T.V.
Now let's stroll down the aisle. Here is Edwin Lupberger's seat, from Entergy.
Entergy has contributed $216,250 to the Democrats. This is Bernard Schwartz's
seat from Loral. They've given $259,775. Seat 29_ this is a window. Ray Smith
of Bell Atlantic_ $236,625 to the Democrats. Next up, Robert Denham of Solomon
Brothers, whose firms have given $109,722 and, according to the seating chart,
Lodrick Cook of Arco sat here and Arco has given $646,792.
1st REPORTER: The rewards of commercial diplomacy.
2nd REPORTER: Brown is the first U.S. Cabinet official to visit Beijing
3rd REPORTER: Ron Brown's visit to China will bring America billions of
ROBERT KRULWICH: Everybody seemed to be having an excellent time and
Secretary Brown insists these trips are very good for U.S. business. He claims
to have helped close deals worth $5 billion on this one jaunt. Well, maybe yes,
maybe no, but some reports complain about favoritism in the selection
RON BROWN: The Wall Street Journal and others have looked into
this. If you read the articles, they have found no evidence of anything like
that. As a matter of fact, the worst thing that the article said that_ was that
a third of those who went had been contributors to the Democratic Party or
Democratic candidates. What it didn't tell you, that that entire third also
contributed to the Republican Party and Republican candidates, as most major
company chief executive officers do.
ROBERT KRULWICH: Well, Secretary Brown is right and wrong. In fact, we
counted more than two thirds of the CEOs on this trip as major Democratic
contributors. He is right, though, that all of them gave to Republicans, as
LARRY KLAYMAN: One of the things that's true of these companies, and I'm
sure that Secretary Brown would say this in his defense, is that these
companies give to both political parties.
The issue is, is that they also give to the Democratic Party when they need a
favor and the Democratic Party just happens to be in power at this time. But if
the tables are turned and if the Republicans are elected, you'll find that they
become big givers to the Republicans, as well.
And one can ask the question, does our system need to be reformed? And the
answer, obviously, is yes.
ROBERT KRULWICH: In the end, having seen everything we've seen, how does
one go about fixing this?
KEVIN PHILLIPS, Author: Well, the difficulty is that there's no obvious,
easy fix. What I think has to happen, if everything goes well for this country,
is that developments come, really, on three dimensions. The first is that we
change the lobbying and campaign finance laws and try to tighten them down,
ROBERT KRULWICH: Again.
KEVIN PHILLIPS: But it won't be_
ROBERT KRULWICH: After all those previous tightenings.
KEVIN PHILLIPS: But it won't be easy to do, as long as you're dealing
with the Republican and Democratic Parties, because basically, what they want
to do is create loopholes and sieves and such. So I think if the party system
is starting to weaken and we're getting the rise of independents who'll make
this an issue, it increases the pressure on the party system to respond and not
just create another flimflam.
Now, the last ingredient is I think we have to start moving power out of
Washington. The more decisions that are made by ordinary Americans, the more
you take away from Washington. The people cannot be called up by the Washington
Sen. BILL BRADLEY: Real reform of democracy must begin by completely
breaking the connection between money and politics.
ROBERT KRULWICH: Bill Bradley has announced that he's leaving the
Senate, but he is still campaigning. Here he is at Harvard. His cause? Campaign
Sen. BILL BRADLEY: We have to start understanding what has happened to
the past efforts to free politics from the grip of money.
ROBERT KRULWICH: And his idea? He wants to make it impossible for people
to give money directly to politicians. He wants a large pool of money that they
all divvy up. But there are a lot of details.
Sen. BILL BRADLEY: You see, one of the problems with fundamental
campaign finance reform, or with campaign finance reform as we have known it,
is that it becomes so complicated that those who oppose it have no political
liability because those who support it can't explain it convincingly enough to
develop the issue. And I think that campaign finance reform, money and
politics, is a little bit like ants in your kitchen. Either you got to block
all the holes so none of them can get in, or some of them are going to get in.
So you simply have to have_ take the money out of politics and have
fundamental, bold campaign finance reform.
ROBERT KRULWICH: Bradley's notion would make this guy's campaign
STEVE FORBES, (R), Presidential Candidate: I'm here to day to announce
that I'm running for president of the United States.
ROBERT KRULWICH: Steve Forbes has so far spent approximately $15
million, mostly on ads. The Supreme Court has ruled that he has a 1st Amendment
right to spend as much of his money as he pleases. But some of his opponents
would like to take that right away.
Sen. ARLEN SPECTER, (R) PA: It seemed to me that it made no sense to say
that there was a Constitutional right to spend as much of your money as you
wanted to, to get yourself elected, but everybody else was limited to $1,000.
And now, when I last looked, someone was trying to buy_ buy the White House and
apparently it's for sale.
ROBERT KRULWICH: Could you buy the presidency, do you think? Is that
Sen. ARLEN SPECTER: No, it's not possible for me to buy the presidency_
ROBERT KRULWICH: No, I'm not saying you personally.
Sen. ARLEN SPECTER: _but it may be possible for Steve Forbes to buy the
presidency. He's making a valiant effort. And the latest polls show him moving
up very considerably.
STEVE FORBES: [Forbes TV Ad] I'm Steve Forbes. The politicians
are getting nervous. The polls are getting closer. We're moving up, leading a
national crusade to change America. The politicians will try to stop us, but
they can't. We want to balance_
Sen. ARLEN SPECTER: And when I was running for president a few months
ago in New Hampshire and was on a talk show, an interview show, it was
interrupted for a commercial and there, right in the middle of my important
public discourse, appeared Steve Forbes's commercial.
I had just been talking about the flat tax, which I've done a ton of work on,
but he came on with so many 30-second sound-bite commercials that the people of
New Hampshire knew about Forbes's flat tax, didn't know a thing about Arlen
Specter's flat tax. It didn't come from the cerebrum. It came from the
ROBERT KRULWICH: Sour grapes, maybe, but every high-profile politician
now agrees that some things have got to change: Change the limits, change the
rules, change the primaries, change the ads, change enforcement, but you got to
[interviewing] But what about the Frank Capra solution? You get rid of
all those bad people and you put in decent, honest, intelligent, courageous
KEVIN PHILLIPS: Mr. Clinton goes to Washington, ran against Washington
in the election, arrives there and it's like iron filings hitting an
electromagnet. When Jimmy Stewart's fellow went to Washington in the 1930s, it
was a different city. You could park your convertible under the White House
portico and put up the top. You could walk into your Senator's office. K Street
didn't exist except as a bunch of brownstones.
This is a totally different Washington 60 years later. That's a dream. We saw
it become a dream with Clinton, who ran against all this, came in there and was
just swallowed up and became a part of it.
Rep. NEWT GINGRICH, (R), Georgia, House Speaker: Please applaud. I think
this is_ to have the president here is a good thing.
And I think you were suggesting _ I've never heard this proposed before _ that
maybe if we had sort of a blue-ribbon commission of people that really had
respect and integrity that would look at the whole lobbying, political
Pres. BILL CLINTON: Look at the_ is that what you were_ I thought you
were talking about health care reform.
Rep. NEWT GINGRICH: No. No.
Pres. BILL CLINTON: You want to do it on lobby reform? In a heartbeat! I
Rep. NEWT GINGRICH: Well, Mr. President_
Pres. BILL CLINTON: Because_ because otherwise we cannot pass lobby
reform or campaign finance reform or anything else. I would love to have a
bipartisan commission on it. That's our only chance to get anything passed. I
Rep. NEWT GINGRICH: Let me [unintelligible] let's shake hands
Pres. BILL CLINTON: I accept.
Rep. NEWT GINGRICH: _in front of everybody on_
Pres. BILL CLINTON: I accept.
Rep. NEWT GINGRICH: How's that? Is that a pretty good deal?
Pres. BILL CLINTON: I accept.
Rep. NEWT GINGRICH: I'll tell you, if every question is this productive_
now, can I just take one minute, Mr. President, and talk about the Medicare
thing, because I do think_
ROBERT KRULWICH: They shook hands last June and when they came back to
Washington, they talked about a blue-ribbon commission for a while_ and then
If it's not so surprising that the politicians aren't in a rush to reform
themselves, it is odd when you hear the oldest dog in the neighborhood start to
Amb. ROBERT STRAUSS: I think there is a lack of confidence. I think
there is a suspicion by people that their interests are being advantaged_
disadvantaged by financial contributions from rich people and special interests
with narrow_ or narrow special interests. And I don't think that is going to
stop until we reform the campaign finance process in this country. That's not
my opinion, that's a historical fact. And you don't need a 45-minute or a
90-minute show. That is a fact.
JIMMY STEWART: [``Mr. Smith Goes to Washington''] Get up with
that lady that's up on top of this Capitol dome, that lady that stands for
liberty. There's no place up there for graft or greed or lies or compromise
with human liberties!
ANNOUNCER: Next time on FRONTLINE_ a shocking murder.
REPORTER: We've had a shooting at an abortion clinic in the 1000-block
ANNOUNCER: The victim_
SHANNON LOWNEY: Hi. I'm Shannon Lowney.
ANNOUNCER: _the accused gunman_
JOHN SALVI: I am not insane. I am not incompetent.
JOHN SALVI'S MOTHER: He said, ``Mom, I was the thief on the cross with
Cardinal BERNARD LAW: An absolute deformity of Christianity.
ANNOUNCER: In the fevered climate of a holy war, two lives tragically
collide. ``Murder on Abortion Row'' next time on FRONTLINE.
SO YOU WANT TO
BUY A PRESIDENT?
Joe Rosenbloom III
Richard H.P. Sia
and Frank Capria
Ben McCoy Joan Churchill
Rob Rainey Steve Cocklin
Mark Falstad Bob Eyres
Dave Dellaria Norman Lloyd
Michael Anderson Tony Pagano
Skip Brand Bob Peterson
Daniel Canton Ken Willinger
Steve Lederer Rick Juliano
Don Hooper David Langsam
Heidi Hesse Dennis McCarthy
David Baumgartner Carol Rogers
Ann Cocklin Susumu Tokunow
Allen Feuerbach Richard Tropiano
Edward Jones Dennis Towns
Anne del Castillo
Amy McCabe Heibel
Sue Ellen McCann
Joe Rosenbloom III
Center for Responsive Politics
ABC News Video Source
AP Wide World Photos
BBC Worldwide Americas, Inc.
Cable News Network, Inc.
CBS News Archives
Conus News Bureau
KGO-TV, San Francisco
KRON-TV, San Francisco
KWWL-TV, Waterloo, IA
Nightly Business Report
WCIA-TV, Champaign, IL
Scott Williams, Smokey Hills Public Television
Mike's Gym, Boston
Pat McDonald & Video Transfer
POST PRODUCTION SUPERVISOR
POST PRODUCTION PRODUCER
The Caption Center
Lee Ann Donner
DIRECTOR OF ADMINISTRATION
CENTER FOR INVESTIGATIVE REPORTING
A FRONTLINE coproduction with
The Center for Investigative Reporting, Inc.
in consultation with
The Center for Public Integrity
WGBH EDUCATIONAL FOUNDATION
ALL RIGHTS RESERVED
FRONTLINE / WGBH Educational Foundation / www.wgbh.org
web site copyright 1995-2014
WGBH educational foundation