Posted on July 21, 1997 in Washington Watch

At the end of the first two full weeks, the U.S. Senate hearings into 1996 campaign finance irregularities have thus far failed to generate significant public interest.

In the months leading up to the opening of the hearings, Republicans were hopeful that the sessions would create major problems for the Democrats and the White House. And Democrats became increasingly concerned as new stories appeared almost daily suggesting improprieties and illegalities in their 1996 fundraising efforts.

In part, it has been due to this extensive advance coverage that these hearings have been largely ignored. In the case of the famed Watergate hearings of 1974, each new day’s hearing generated revelations that shocked an unaware public. The nation became fixated on the unfolding drama that began with a Republican engineered break-in of the Democrat’s headquarters and ended with a motion to impeach then President Nixon.

By now, the story of the Democrat’s 1996 fundraising is well-known. In a nutshell the story is as follows: in an effort to amass a substantial war chest to re-elect the President, the White House and the Democratic National Committee (DNC) developed a plan to raise large amounts of money for the 1996 campaign. To do so, potential campaign contributors were offered inducements to give, or after they gave a contribution, were rewarded. In some cases the reward was an opportunity to meet the President or Vice-President in a social setting or spend time at the White House. In addition, the DNC hired new fundraisers and pressed them to reach out to previously untapped potential donor groups. One of the fundraisers in question was John Huang, an Asian American, who raised millions of dollars for the Democratic Party, much of which now appears to have been illegally derived from foreign sources. While these are also suggestions that Huang may have maintained some foreign ties while employed by the Administration and some have even raised concerns about espionage, these issues have not been connected either to the White House or the DNC and are the subjects of an on-going investigation.

What has continued to dash Republican hopes for the hearings has been more recent revelations that have found Republicans guilty of many of the same illegalities and irregularities in 1996 and even in 1992. Even more disturbing to the Republicans has been that while Democrats have already returned about three million in contributions they have determined to be illegal or improper, the Republican Party is thus far refusing to do the same with the roughly $3 million they received that also appear to have been illegally given.

A third factor complicating Republican efforts to have the hearings generate news is that they have been upstaged by other stories: the expansion of NATO and the President’s triumphant visit to the new NATO countries; the continuing battle over the new federal budget, and the recent failed coup attempt to oust Republican Speaker Newt Gingrich by some disgruntled Congressional Republicans.

In any case, as the hearings enter their third week, the Republican leadership will be under mounting pressure to produce some major developments to justify the significant expense of convening the sessions.

From the outset, the Democrats’ arguments against the hearings have been three- fold. Firstly, they argued the issues that the hearings sought to explore were already known and were already under investigation by law enforcement agencies. Secondly, Democrats argued that since Justice Department investigations were underway, Republicans could not justify spending $6 million to hold hearings that appear to be retelling what is already known. Finally, the Democrats maintained that since the problem of campaign finance irregularities was bi-partisan, the hearings should be truly bi-partisan, focusing on both Democrat and Republican abuses and leading to real campaign finance reform that would alleviate the problem in the future.

What is most interesting is that while the attention of the Senate has been focussed on these hearings with Republicans attacking and Democrats defending (although on Wednesday of next week Democrats will be given a rare opportunity to interrogate witnesses regarding a 1992 loan to a Republican Party organization by a Hong Kong company), the issue of campaign finance reform has been pushed aside.

There was hope earlier in the year that revelations of big money in politics and abuses in fundraising in the 1996 campaign would both outrage the voting public and move the Congress to reform the political system. A bi-partisan bill was proposed that would reduce the amount of money that could be raised in campaigns, reduce the amount that needed to be spent in campaigns, and create a more level field between incumbents and challengers. The President endorsed the bill and urged Congress to pass it by June 30.

That date passed and instead of legislation to reform politics, the public got the hearings that are currently underway.

One main reason why the Congress has not been eager to move forward on reform is that each of these elected officials is a product of the system the public wants to see changed. In some ways the system is so polluted by money it appears impossible to change. Many newspapers, for example, the day before the hearings began profiled each of the Senators who were members of the Senate Committee. In each case the Senators in question had raised millions of dollars for their last election. In many cases they had received contributions using some tactics used by the White House: calling donors from their offices, offering large donors private meetings, and other benefits. And in some cases, they had also received support from some of the very same illegal sources that were to be investigated in the hearings.

In the 1996 election almost $2 billion was raised and spent by candidates and both parties. While the Democratic Party raised over $220 million, the Republican Party raised over $400 million.

In such an environment where such enormous sums of money has become necessary to run campaigns, it is logical to expect abuses. And where money is so needed and is able, therefore to buy influence, it is not surprising that the Chinese government and some foreign businesses and businessmen would seek to use money to buy influence in the system.

The new story is not the abuses, those are known—it is whether or not the Senate can transcend partisan attacks and “politics-as-usual” and take effective measures to reform a system badly in need of change.

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