Al Gore's Hit Man
Fund, John H.
W hat a difference a decade makes. In May 1989, Tony Coelho, the third-ranking Democrat in the House leadership, announced he was resigning from Congress after his chronic violations of the Ethics...
...The media would have had a field day devouring Bush for ethical insensitivity...
...A decade later, Coelho had more practical reasons for his approach...
...You've been cavorting with the devil...
...Oversights were made in these instances which I genuinely regret," he explained...
...to knowingly draw a check for $100 or more against insufficent funds...
...I don't think the truth is negative campaigning," he said in 1984 in defending a TV ad that attacked the Reagan administration for sleaze...
...But given Coelho's actual June 3 purchase, he was required to pay higher taxes on his short-term capital gains...
...Nonetheless, Coelho is an agile street fighter and Republicans underestimate him at their peril Coelho has admirers as well as detractors on both sides of thy: aisle...
...Both sets of dates met the IRS's 18o-day requirement for favorable long-term capital gains treatment of a $6,8o6 trading profit...
...As chairman of the Democratic Congressional Campaign Committee, Coelho tapped Tom Gaubert of Independent American Savings & Loan (who previously had defaulted on $65 million in loans from an Iowa thrift) to head the one-candidate "East Texas First" political action committee...
...But when Coelho himself ran into ethical trouble he called for a truce in the ethics wars he had so cheerfully waged...
...Shades of Jim Blair and Hillary Clinton's cattle futures...
...H is resignation indeed drew to a halt what would have been an interesting examination of Coelho's relations with S&L kingpins, many of whom collapsed and left taxpayers with the bill for hundreds of billions of dollars...
...It turned out that the check kiters were actually tapping the accounts of their colleagues for interest- and penalty-free loans...
...That May, Coelho admitted purchasing a $ioo,000 Drexel Burnham Lambert junk bond in 1986 with an unreported $5o,000 loan from Columbia S&L head Thomas Spiegel...
...He reported sale dates of October 28 and ro, respectively...
...Coelho fundraising alumni, such as Clinton White House coffee organizer Terry McAuliffe, have become legendary—and infamous—in the business...
...Since Vernon had sent no bills, use of the yacht might be considered an illegal gift but, of course, the belated payments squared Rep...
...But as Wright spoke out in strong support from the well of the House, "his whip Coelho had people all over the floor telling congressmen not to pay attention, the Speaker didn't mean it...
...But you don't need character assassination," he said as he resigned from Congress in 1989...
...We're talking about moral leadership...
...His 1986 House financial disclosures falsely gave the purchase and sale dates as May 1; his federal income tax return falsely claimed an April ro purchase...
...Or at least...cover your tail...
...Democrats won the election with 51 percent of the vote, but Gaubert later was convicted of fraud after his S&L's collapse, which cost taxpayers $900 million...
...Taking Spiegel's $4,000 gift broke House rules barring gifts over $10o from parties with an interest in legislation and the $250 federal limit...
...In May 1989, Tony Coelho, the third-ranking Democrat in the House leadership, announced he was resigning from Congress after his chronic violations of the Ethics in Government Act made the front page of the Washington Post...
...And sure enough, the House repudiated its Speaker by a record margin...
...We're in power...
...Because major institutional investors complained when they could not purchase enough of the oversubscribed BCI Holdings bonds, Coelho's one-bond, "odd lot" purchase reflected a sweetheart deal as well...
...In addition, the Democratic Congressional Campaign Committee, which Rep...
...Brian Lunde, former executive director of the DNC, predicts more such personal attacks from a Gore campaign directed by Coelho...
...As Martin Mayer reported in his book, The Greatest Bank Robbery Ever, Speaker Jim Wright pledged his support for a $15-billion plan to restructure the S&Ls to then-Treasury Secretary James Baker...
...But understand something here...
...In 1997, Luntz even hired Democrat David Gerken, a former Coelho aide, as his chief of operations...
...JOE LOUGHRAN, a Washington writer, also contributed to this article...
...The media reported that Spiegel headed a troubled S&L when he helped with Coelho's bond deal, but missed regulators' failed efforts to have Spiegel disgorge excessive pay...
...But Coelho's appointment was largely greeted with yawns and comments that he would improve the chaotic management structure of the Gore campaign...
...At some point the character assassination has to stop...
...The only way you can win races today is with negative advertising," he told CNN...
...The Justice Department, not surprisingly, dropped an investigation of Coelho in 1993 around the time he began advising the White House...
...Observers of the 2000 campaign can expect to see a rough-and-tumble ride if Tony Coelho remains in the driver's seat of the Al Gore campaign...
...His IRS deception evaded a few hundred dollars in taxes...
...In a New Republic article, Margaret Carlson suggested as much: "something convinced the Federal Home Loan Bank Board to drop its efforts to make Spiegel, the highest-paid executive in the thrift industry, pay back about $8 million he had received in compensation in 1985...
...In his book Honest Graft, Brooks Jackson, now of CNN, told how Coelho perfected the modern political-donor shakedown...
...Later, Coelho was found to be one of the worst abusers of the House Bank...
...GOP pollster Frank Luntz acknowledges calling Coelho a close friend and his "spiritual adviser...
...No one doubts he will eventually fill the same role for Al Gore...
...It is a felony in Washington, D.C...
...Could Coelho, whose overdrafts more than tripled his annual salary in his last year in office, have acted inadvertently...
...Coelho will do far more than rearrange managerial boxes, however, which is why he bears watching...
...After all, this is the man who, when he became de facto head of the Democratic National Committee in 1994 in a fruitless attempt to save the party's House majority, said, "My job is to be the hit man...
...As columnist Paul Gigot has written, Gore's move was the symbolic equivalent of George W. Bush naming Al D'Amato as his top advisor...
...Coelho's personal finances were almost as shaky as those of the S&L operators he had helped...
...Gore has selected the former skipper of the Titanic," sniffs former Clinton pollster Dick Morris...
...In Congress, Coelho came to epitomize a disregard for the law and House rules that arguably cost his party its generations-long control of the House five years after his departure...
...It delivered $99,121 to the Democratic candidate in a key special House election, exceeding federal limits on such contributions by 98 times...
...A year after Coelho left Congress, regulators sued Spiegel for $24 million in excessive pay...
...Coelho's congressional role in the S&L debacle that cost taxpayers hundreds of billions of dollars was even more direct...
...In 1985, he told a lobbying group, "Special interest is not a nasty word...
...20 August 1999 The American Spectator In 1994, a year after Coelho turned down a job as President Clinton's chief of staff, he told Democratic candidates to go negative, a tactic he had long championed...
...JOHN H. FUND is a member of the editorial board of the Wall Street Journal...
...Gerken left voluntarily after a brief stint...
...One might argue that, not unlike his new boss, Al Gore, Coelho's history has followed "no controlling authority" when it has come to his finances, fundraising techniques, and campaign tactics...
...It's true that Coelho is a blind partisan: "I bet you that if President Clinton were on the ballot in the year z000, he'd get re-elected again," he told Fox News last year, only two weeks before Clinton confessed to the nation his "inappropriate" relationship with Monica Lewinsky...
...Was Coelho involved...
...In 1988, after use of the yacht by House Democrats was disclosed, the Coelho campaign committee paid the defunct S&L over $25,000 for seven events on the yacht...
...The future "investment banker" claimed, "I didn't understand how complicated [a junk bond purchase] is...
...Improbably, some Republicans also admire his style...
...We know who you are...
...On June 3, Spiegel sold Coelho the bond for $100,000 plus accrued interest although its market value had grown by more than $4,o0o...
...Coelho with House rules...
...Spiegel placed the order with Drexel on April 10, 1986 and held the bond until Coelho obtained 100-percent financing with $50,000 in properly disclosed loans from two other banks...
...The American Spectator • August 1999 He would make similar noises in 1989, when his junk bond escapcades caught up with him...
...This May, Vice President Al Gore made him general chairman of his presidential campaign...
...The Democratic whip was also a frequent guest on High Spirits, the 112-foot pleasure yacht the Vernon (Texas) Savings & Loan Association kept moored on the Potomac River...
...When the House Bank scandal broke in 1991, it emerged that Coelho bounced 316 checks worth $293,000 in 12 months...
...Now, after a sojourn as a high flier on Wall Street, his rehabilitation is almost complete...
...I think we need good fights...
...Coelho's failure to report the gift also broke EIGA and House disclosure rules...
...Former top Coelho aide Bill Cable told the New Republic, "We basically gave [business] the cometo-Jesus message...
...The reporting lapse broke the 1978 Ethics in Government Act (EIGA) and House Ethics disclosure rules...
...Coelho chaired, paid Vernon $23,300 for five yacht charters and a plane flight on which the soon-to-be-deposed Speaker Jim Wright of Texas was a passenger...
...21...
...He told Scripps Howard that Senator Ted Kennedy's numbers went up when he began to "identify" Republican Mitt Romney as a Mormon...
...Will Marshall, head of the Progressive Policy Institute, a think tank allied with "New Democrats," says that "it's hard to see how adding a legislative tactician" and down-the-line liberal like Coelho will help Gore capture the political center...
...Eyebrows would certainly go up if Coelho brought his fundraising skills to the Gore campaign...
...Some critics dismiss Coelho's competence...
...And I suggest you deal with us...
...In 1987, regulators took over Vernon, which had a record 96 percent of its loans in default...
...In 1987, a last-minute attempt to avert the crisis was mounted...
Vol. 32 • August 1999 • No. 8
