Senate campaign hearings fail to match expectations But the seamier side of fund raising was clear


WASHINGTON -- In exploring the nexus of money and politics in the last election, the Senate investigating committee steered its inquiry from one unlikely site to another -- a Buddhist temple in Los Angeles, a suburban home in Gaithersburg, a dog-racing track in Wisconsin, the White House Map Room.

Now that the hearings have concluded, the question emerges: Where did the committee end up?

The answer is a murky one. The 32 days of hearings pointed to a pattern of abuses, but they failed to stir much public interest or deliver the blockbuster punch of Watergate or Iran-contra.

The committee chairman, Sen. Fred Thompson, has been criticized even by fellow Republicans, who were disappointed that his team did not land harder blows on the Clinton administration or live up to its more dramatic goals.

The committee did not, for instance, provide evidence that the Chinese government tried to influence the presidential election, as Thompson promised; prove that President Clinton, Vice President Al Gore or any senior administration official broke any laws;or spark enough public outrage to compel lawmakers to pass campaign finance reform.

But as a defensive Thompson pointed out Friday, when he pulled the plug on the public hearings, his Governmental Affairs Committee can count a number of accomplishments.

"We should not measure ourselves in terms of scalps on the wall," he said.

The committee, for instance, turned up the heat on the Justice Department's own inquiry of campaign fund-raising abuses and escalated pressure on Attorney General Janet Reno to call for the appointment of an independent counsel.

The possibility of a special counsel now looms for four administration officials: Clinton, Gore, former Energy Secretary Hazel R. O'Leary and Interior Secretary Bruce Babbitt.

In addition, the committee's requests for information resulted in the discovery of potentially illuminating new material, such as White House videotapes that had been unknown to the Justice Department.

And, if nothing else, the committee presented a detailed picture of the seamier side of campaign fund-raising, revealing a campaign so hungry for cash that it turned a blind eye to possibly illegal conduct and zealously exploited loopholes in election laws.

In the end, the hearings created enough buzz about campaign finance reform that Senate Majority Leader Trent Lott grudgingly agreed to schedule a floor debate on the issue in March.

"Thompson's committee has helped keep these matters alive in spite of the absence of bottom-up public demand for reform," said Thomas E. Mann, director of governmental studies at the Brookings Institution.

Mann and others say the hearings failed to stir the public because Americans have become inured to political scandal and lack enough confidence in government to demand that it change.

"These hearings have not made a great dent in public attitudes, nor do I think they told us a lot we didn't already know about campaign finance," said Roger Davidson, a University of Maryland professor of government. "We knew it was a mess."

And while it offered a close view of that mess, the Senate's inquiry has left the administration unscathed. Clinton's popularity remained high throughout the hearings, dipping only slightly last month when the White House videotapes were released.

"It took people being able to see it on tape," said Ed Goeas, a Republican pollster.

But overall, Goeas says, the hearings had only a marginal effect on the political landscape.

Short of the appointment of an independent counsel, even Gore -- who admitted that his appearance at a Buddhist temple fund-raiser was a mistake -- is unlikely to sustain serious damage, political strategists say.

In explaining his problems, Thompson has blamed the end-of-year deadline imposed by the Senate, coupled with a lack of cooperation from many key figures.

For example, John Huang and Yah Lin "Charlie" Trie, Democratic fund-raisers who solicited about $2 million that had to be returned because of its possibly foreign origin, have either fled the country or pleaded the Fifth Amendment.

What's more, with time running out, a number of groups, such as the AFL-CIO, have ignored the committee's subpoenaes.

Here is what the committee did and did not achieve:

* Foreign influence and foreign money:

Most observers believe Thompson erred by opening the hearings with the audacious assertion that Beijing tried to influence the 1996 elections through illegal campaign donations.

The chairman later said the evidence to support that claim was contained in confidential intelligence reports that could not be made public. China has denied any attempt at influence.

The closest Republicans came to linking the Chinese government to the Clinton campaign was through James Riady. Riady, a longtime Clinton friend and a patron of Huang, heads an Indonesian banking conglomerate, the Lippo Group, that is a partner with the Chinese government.

The Riady family is connected to some of the foreign contributions to the Democrats that have been returned. But there is no direct evidence that Riady, with Clinton's knowledge or help, funneled illegal foreign money into the campaign, or that Riady won any policy favors from the administration in return.

But there is much evidence that Democratic fund-raisers such as Huang and Trie laundered foreign money through U.S. citizens to the Democrats. It is illegal to disguise a donation by contributing fTC in someone else's name. Both men deny wrongdoing.

What did the money buy for the fund-raisers and the foreigners who actually made the contributions? Access, if nothing else.

Johnny Chung, another fund-raiser who fled the country, said he figured out that the system was like a subway: "You have to put in coins to open the gates." In one instance, he brought a group of Chinese businessmen to the White House after making a $50,000 donation.

Though there is no direct evidence that the president knew that contributions to his campaign and the Democratic Party came from foreign sources, he may have looked the other way.

The videotapes show fund-raising events filled with foreigners at which Clinton thanks those present, including "those who have come from other countries to be with us," for their support.

Democrats sought to show that Republicans, too, had a brush with foreign money. Haley Barbour, a former Republican national chairman, was questioned about his use of a think tank connected to the Republican Party as a funnel for foreign money. Barbour insisted that the organization was allowed to accept foreign donations. The Justice Department is investigating.

* Illegal fund-raising on federal property:

Thompson has said Clinton used the White House in an "unprecedented" way in pursuit of campaign dollars. Indeed, while past presidents held White House events for big donors and invited some to sleep over, the Clinton White House may have far exceeded any of its predecessors in its systematic hunt for cash from such occasions.

Republicans assert that such events violate the law against political fund-raising on federal property.

Reno has said otherwise, ruling that the president is allowed to "entertain" friends and supporters at the White House. But Reno has not yet deemed the fund-raising phone calls made by Clinton and Gore at the White House to be legal. She has extended her department's review of the calls and has until Dec. 2 to decide whether the phone calls warrant the appointment of an independent counsel.

Though Republicans say the calls violated campaign laws, they see them as one minor part of a broader pattern of abuse and are disappointed that Reno has focused on them. "Everybody in this town knows nobody's going to be prosecuted on these phone calls," Thompson said.

* Violation of spending limits:

This is what many reform-minded observers believe is the main story of the 1996 election -- the way in which both Democrats and Republicans exceeded federal spending limits by using unregulated "soft" money.

Clinton and GOP rival Bob Dole both received federal campaign money in the 1996 presidential campaign in return for their pledge not to raise private money. But both found an outside source of funds: the "soft" money raised by political parties.

This money is not supposed to be used to directly endorse a particular candidate. Election law experts are debating the use of "soft" money for ads that appear to endorse a candidate, even ads that don't say so explicitly. Most agree that such ads violate the spirit, if not the letter, of campaign finance laws but probably do not merit prosecution.

Thompson echoed the thoughts of many who favor reform: "If the interpretation is that this is legal, and that this is proper, then we have no campaign finance system in the country anymore."

* Quid pro quo?

The Republicans could not prove that the administration altered any policy in exchange for contributions. In one case, however, there is circumstantial evidence that money might have played a role in a decision by Interior Department officials.

In 1995, the department rejected an application for a casino in Wisconsin sought by three impoverished Indian tribes. The casino was opposed by wealthy tribes in the area who, after the agency's ruling, donated nearly $300,000 to the Democratic Party.

White House and Democratic Party officials communicated extensively with both a lobbyist for the wealthy tribes and with Interior Department staff.

Interior Secretary Bruce Babbitt insisted last week that political pressure played no part in his department's decision to reject the casino bid.

But Republicans are skeptical. And in the committee's remaining two months, they are likely to pursue this story line, along with other unanswered questions.

Pub Date: 11/02/97

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