Money for Nothing

...Finally, Morris got a call from the White House team...

...The legacy of the 1996 campaign fundraising scandal is that a candidate can ignore whatever laws he wants in order to get elected, ride out the criticism that arises when his transgressions are reported, and make a clean getaway when the various regulatory and law enforcement agencies investigate...

...BYRON YORK is an investigative writer with TAS...

...even Simon conceded that it was all "clean...

...Congress investigated, and did nothing...

...And Center for Public Integrity head Charles Lewis said Bush's tactics reflected his "fundamental arrogance towards the current system...

...I don't know that there has ever been a candidate who has refused matching funds for the general election," Bush spokeswoman Mindy Tucker told TAS...

...So Morris urged the president to turn down the matching funds...

...If any candidates are interested, it's also the limit for American Samoa and Guam...

...And if that were the case, George W. Bush would have easily raised more than $loo million—all clean, all legal...

...Bush...opting to forego federal matching funds, and thus also any spending limits," wrote the Washington Post, "money will talk louder than ever...

...W OPTS OUT Fast forward four years...

...Having Clinton reject the campaign finance system would look terrible, they argued...

...Had Congress seen fit to include a cost-ofliving increase for individual contributions, the maximum allowed today would be about $3,300...

...Once two candidates are formally nominated, the law provides for them to be given an enormous amount of money for their general election campaigns...

...Maybe they're calling the McCain household...

...Asked to react to Bush's refusal of matching funds, a spokesman for the vice president did not hesitate to assume the moral high ground: "We think the campaign finance rules were put in place for a reason so that the American public can have a fair election," spokesman Roger Salazar told TAS...

...Finally, it established the Federal Election Commission to enforce the rules...

...It's the limit in the crucial state of New Hampshire, and also the limit for Alaska, New Mexico, Delaware, Hawaii, Idaho, Maine, Montana, Nebraska, North Dakota, Rhode Island, South Dakota, Vermont, Wyoming, and Washington, D.C...

...They said it didn't much matter to them," Morris says...

...And editorial writers weren't the only ones to attack...

...But that idea didn't fly, either...

...Well, yes...

...Woodward's report set off a variety of probes into Clinton's spending...

...Bush has, in fact, signaled his support for strengthening the campaign finance laws...

...Other candidates would also find it easier to raise large sums of their own, leading them to decline matching funds as Bush did...

...But that is apparently not what Congress wanted, so the candidates, exhausted by chasing $1,000 contributions, take the federal money...

...Why was everyone so angry...

...All of this must be at least mildly entertaining to Al Gore...

...Which makes George W. Bush's decision good news for his competitors, both Republican and Democrat: They can split up the $15 million he doesn't take...

...With Mr...

...And sure enough, the Gore campaign is reportedly planning to bend the rules again should the vice president find himself strapped for cash...

...How did Congress come up with the figure of 16 cents per person of voting age...

...What we saw in '96 will just be routinized in 2000," says Trevor Potter, the former FEC chairman...

...The law lets candidates spend the cash wherever they want to...

...A candidate would have to find 66,120 people willing and able to write $1,000 checks—something no one has ever been able to do...

...the fund is now so low that the FEC will have to stagger some of its payments to candidates...

...So this year it has decreed that no spending limit will be lower than $661,200...

...So they're planning to have the Democratic National Committee raise an unprecedented amount of soft money— $2,00 million is the figure going around—to pay for ads praising Gore, even though he will not be the party's nominee at that time...

...I've never known anybody who knew how they came up with that...

...If nothing else, Bush's decision means he won't be caught in the Dole trap...

...In a written statement, Bush said he made the decision to ensure that he has the "strategic flexibility" to conduct a successful campaign—meaning that he wants the freedom to spend money as he needs without the handicap of federal spending limits...

...Just look at the Clinton/Gore/Morris plan to finance the 1995 ad campaign with soft money from the Democratic National Committee...

...In early June the Gallup organization conducted a poll The American Spectator • September 1999 in which respondents were read a list of issues—the economy, education, crime, taxes, Social Security, Kosovo, and others—and asked whether a candidate's position on each issue would be a high priority in their decision to vote for that candidate...

...The debate lasted for weeks...

...Education topped the list, followed by the cost of health care...

...all they have to do is agree not to take any private contributions...

...I don't have the foggiest idea," says Trevor Potter, a former chairman of the FEC...

...On July 15, Texas governor George W. Bush announced he had raised so much money—a record $37,289,781—that he would not accept federal matching funds to finance his primary campaign...

...Thus the irony behind the criticism of Bush's decision to step away from the system is that he hasn't really stepped away from the system...

...You could get up and say, `I'm not going to eat up $10 million of public money when I don't have an opponent...

...And the same Al Gore whose 1996 re-election campaign paid little or no attention to the laws concerning foreign money, conduit contributions, and soft money expenditures...

...When the law was passed, Congress allowed candidates to spend $ip million during the primary season...

...Another irony is that Bush, having already faced liberal criticism for undermining a system that he in fact supports, is now catching hell from Republican rivals who don't support the system...

...This enabled him to exceed the legal spending limits and effectively rendered the DNC an adjunct to his own re-election effort...

...The American Spectator • September 1999 It was a perfectly legal choice, but sure enough, the editorial boards were horrified...

...And who knows...

...So Bush's money wasn't illegal, it wasn't soft, it wasn't outrageously bundled...

...Bowles told me, 'I think he's going to come down against you on this money,'" Morris says...

...Congress directed the FEC to set precise restrictions on how much each candidate can spend in each state during the primary season...

...In 1974, Congress set the figure at $20 million...

...When you ask people what is the most important problem facing the country, you're going to get maybe one person out of a thousand saying campaign finance reform," says Republican pollster Kellyanne Fitzpatrick...

...the limit is the same now as it was when Jimmy Carter and Gerald Ford were running...

...It appears the watchdogs were simply enraged that anyone would walk away from their revered "post-Watergate" campaign finance system —a baffling position given that they all readily concede the system doesn't work...

...And there are no plans to do so...

...What would the voters think if Clinton announced he wouldn't accept the matching funds...

...They almost killed Bob Dole's campaign in 1996 when Dole was forced to spend all his allowed funds to defeat his rivals during the primaries —and then was forbidden to spend any more in the months before he received a new infusion of federal money for the general election...

...Here was the problem: Morris wanted to begin a series of TV commercials that would run continuously until election day, but the ads would cost so much — tens of millions of dollars —that the Clinton campaign could not pay for them and also abide by the strict spending limits that are imposed on candidates who accept federal matching funds...

...For months he had been struggling to recover his equilibrium after the Republican takeover of Congress, and with the help of secret strategist Dick Morris, Clinton was designing an aggressive plan to bring himself back from the politically dead...

...N 25...

...Simon's predecessor, Fred Wertheimer, accused the Texas governor of "trying to drown opponents with money, which is one of the things that campaign finance law was designed to prevent...

...in the same press statement in which he announced he would not accept matching funds, he repeated his support for a ban on soft money contributions from corporations and unions unless the stockholders or members have a voice in the process...

...And don't look to the experts, either...

...Now that's compassion...

...And it wasn't because Bush's haul included any of the so-called soft money that troubled the watchdogs back in 1996 —no $1oo,000 checks from Philip Morris or the gun lobby...

...The next campaign is always looking at what is permissible," says Senator Fred Thompson, who investigated the 96 finance scandal over the fierce objections of the White House, the Justice Department, and congressional Democrats...

...Steve Forbes, who plans to spend more than $30 million of his own money to finance his campaign, has accused Bush of selling out to "special interests...

...And both sides took in obscene amounts of soft money...

...We don't have the legislative history on why they chose 16 cents," says spokeswoman Kelly Huff...

...Bush is the first major candidate (apart from self-financers like Steve Forbes and Ross Perot) to take the big step—and take the heat...

...Given those precedents, why should z000 be any different...

...Perhaps that one person who thinks campaign finance is an urgent issue actually supports junking the system rather than reforming it...

...Maybe Bush's money, which 21 appeared to be the product of lots of individual donors, was really the work of special interests flexing their muscles...

...He said, `You need to get a Plan B.'" As it turned out, Plan B was a scheme to fund the ads with millions of dollars from the Democratic National Committee — money that the law did not allow the Clinton campaign to use on its own behalf...

...It's an easy promise to make from the candidates' point of view, given the fact that it would be extremely difficult to raise anything near $66,120,000 in the short months between the convention and the general election...

...In addition, the law allows the parties to each spend another $13,252,167 in so-called "coordinated expenditures," meaning the candidate controls the money and can spend it in essentially the same way as his own campaign cash...

...However it was arrived at, the formula works out to the following limits for major states in the upcoming primary season: Iowa $ 1,131,974 New Hampshire $ 661,200 New York $ 7,232,470 California $12,565,445 Florida $ 6,017,449 Michigan $ 3,843,423 Illinois S 4,658,528 22 September 1999 • The American Spectator By the way, the FEC wants candidates to be able to make a credible effort in each state, no matter how small its population...

...In fact, Bush's total came from individuals who gave in amounts no greater than the legally allowable $1,000 per person...

...A larger state, such as California, would have a limit of 16¢ x 23,755,000 (VAP) plus COLA, or $12,565,445...

...A major incentive to accept the federal money is the fact that, Bush's achievement notwithstanding, the law makes it hard for the candidates to raise money themselves...

...What was the problem...

...Today, candidates are allowed to spend $33,060,000 in the primary season (the rules also let them spend an extra 20 percent on legal and accounting expenses, raising the real limit to $39,672,000...

...Al Gore ignored the spending limits, they'll say, while George W. Bush scoffed at them...

...The formula for setting state limits is thcz x VAP + COLA...

...So don't look for George W. Bush to turn down federal money when it comes time to collect the $66,120,000 check...

...He was circumventing the rigorous post-Watergate reforms that were designed to limit and control the raiing and spending of money for presidential campaigns...

...He agreed that it would work with public opinion...

...His direct, 24 September 1999 • The American Spectator hands-on involvement was risky, certainly in violation of the spirit of the law and possibly illegal...

...The Federal Election Commission investigated, and its auditors concluded that both Clinton and, to a lesser extent, Bob Dole ignored the campaign spending limits...

...It also limited how much the candidates could spend —and required them to publicly disclose the names of their contributors...

...Any way you divvy it up, it took a lot of those checks to add up to $37,289,781...

...Why not 15 cents...

...The president, afraid he would be accused of sabotaging the campaign finance laws, decided to break them instead...

...All these numbers are included in a recent FEC publication outlining what the limits would be if the election were held today...

...The percentage of taxpayers authorizing the payment, nearly 3o percent in 198o, is now down to 12 percent...

...We have every intention of abiding by those rules...

...after all, the law was one of the key reforms put into place after the Watergate scandal...

...Maybe not...

...And I've never really known anybody who could in a definitive way explain the reason for the state-by-state limits...

...And Lamar Alexander has produced a television commercial that announces, "An auction is under way on the White House lawn....The nomination is going to the bidder with the most cash...

...Although Bush collected $184,500 from people associated with the Texas law firm of Vinson & Elkins, $120,450 from the accounting firm Andersen Worldwide, and $99,450 from the law firm Jenkens & Gilchrest, among others, if one adds the contributions of the top ten bundlers to the campaign, the figure comes to $940,723 — less than one thirty-ninth of Bush's fundraising total...

...To determine those limits, lawmakers came up with the following formula, according to a recent FEC publication: State spending limits are keyed to the voting age population [VAP] of each state, with a minimum of at least $200,000, plus a COLA for those states with a low VAP...

...a relatively small portion of it came from political action committees in checks of $5,000 or less...

...A less populated state, such as New Hampshire, would have a limit of S200,000 plus COLA, or $661,200...

...When they do, they find the spending limits they have agreed to observe are far more than just limits...

...The Clinton model is you take your government money and then you turn around and raise as much money as you can for the Democratic National Committee to run ads featuring you...

...Nobody in politics wants to be accused of violating the law, even though they may sneer at the law...

...An analysis by the Center for Responsive Politics showed that while there was indeed bundling in the Bush campaign—as there was in the Gore and Bradley campaigns—it made up a tiny portion of his total...

...lawmakers included a cost of living adjustment to be used in future years, which meant that the ceiling would rise each year with inflation...

...The Justice Department investigated, and did nothing...

...They told him he would be savaged by the editorial boards," Morris recalls, "that they would say he was sabotaging the Watergate reforms...

...And as proof of his fidelity, Gore will accept matching funds...

...20 September 1999 • The American Spectator As was his custom with virtually every issue facing the campaign, Morris took a poll to gauge public opinion...

...Other surveys have yielded similar results...

...Or 17 cents...

...Bush's campaign announced that he had received contributions from more than 75,000 people—yet another record—who gave an average of just under $500 each...

...The scheme was first revealed by reporter Bob Woodward in his book The Choice: Clinton personally had been controlling tens of millions of dollars worth of DNC advertising...

...Everyone in politics knows that the presidential system is dysfunctional, but rhetorically everyone has to pay homage to it," says veteran campaign finance lawyer Jan Baran...

...Morris even suggested that Clinton announce the money would instead be spent 7 on some popular federal program, like Head Start...

...Gore campaign officials, preparing to spend heavily to defeat Bill Bradley, believe they will hit their spending limit sometime next spring, leaving them —like Dole in 1996—unable to spend any more money before the convention...

...The FEC will re-calculate them all at the beginning of next year, taking into account a bit more inflation, so the final limits will be slightly higher than those listed here...

...But that was in 1974 dollars...

...At the bottom: campaign finance reform...

...The state-by-state limits apply only to the pre-convention period...

...It still has certain political consequences...

...In recent years fewer and fewer Americans have been checking the box on their income tax returns authorizing S3 to go to the federal campaign finance fund...

...Don't ask the FEC...

...Then the commission overruled its own auditors—and did nothing...

...At the center of all the controversy is the Federal Election Campaign Act, originally passed in 1971 but amended and greatly strengthened after Watergate in 1974...

...That means the public is slowly starving the campaign finance system...

...There'd be no point in doing that...

...The truth is, the public simply doesn't think reform is all that important...

...While supporters of measures like the bill sponsored by senators John McCain and Russ Feingold hope that a repeat of the '96 blowout might provide the decisive push for reform, it might in fact be the last nail in its coffin...

...Even beyond the issue of government micro-management of campaigns why did members of Congress take it upon themselves to say a candidate can spend precisely $3,843,423 in Michigan?—the spending limits can wreak terrible havoc on political strategy...

...A front-page New York Times story said Bush's action meant that "a bulwark of the post-Watergate campaign finance system has been weakened," while the editorial page called for reform to free the system from "the chains of money corruption," presumably represented by the Bush campaign...

...So perhaps this is all just a preliminary to the 2001 campaign finance investigation...

...Of course, isn't this the same Al Gore who four years ago famously attended a fundraiser at a Buddhist temple and also proclaimed that "no controlling legal authority" prevented him from making fundraising calls from his vice-presidential office...

...Congress set a SI,000 limit on individual contributions, but unlike the spending limits, did not allow it to rise with the cost of living...

...I think he initially wanted to do it," Morris remembers...

...It wasn't because any of Bush's money was illegal...

...One can imagine the editorials now...

...And his decision shines new light on just how preposterous the system really is...

...Certainly in one important way the public seems to be moving in that direction...

...And they liked the idea of not taking taxpayer money for the campaign...

...They raised questions about "bundling," the practice by which businesses, unions, and other groups encourage employees and their families to make individual contributions to a candidate...

...Still, the reformers worried...

...Common Cause President Donald Simon said Bush "is turning his back on the principal post-Watergate reform law that's intended to take the White House off the auction block...

...But who cares...

...Doesn't that show the need for far-reaching campaign finance reform...

...using the FEC's cost of living formula, that figure has now grown to $66,120,000...

...But the rest of the Clinton re-election team —including Chief of Staff Leon Panetta and deputies Erskine Bowles and Harold Ickes—all disagreed...

...Fred Wertheimer couldn't have said it any better...

...I think looking back, what we basically saw from the '96 campaign, primarily the Clinton/Gore campaign, both in what they did and the Justice Depai tment's interpretation of what they did, was that there are no effective limitations on campaign fundraising...

...I said, 'Since you have no primary opposition, it would be ridiculous to spend taxpayer money against an opponent who doesn't exist,'" Morris recalls...

...The president was intrigued...

...In it, Congress set limits on how much individuals, political action committees, and parties could contribute to political candidates...

...If they agree to stay under the limit, candidates are eligible to receive federal matching funds of up to $250 for each contribution they receive...

...This year, that could mean as much as $15 million to the most successful candidates...