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The Keating 535; Charles Keating did us a favor: he showed us how to clean up American campaigns.

Andrew Bates works for the Political Hotline, a daily political wire service.

Charles Keating did us a favor: He showed us bow to clean up American campaigns.

"One of the reasons there is so much support for term limitations is that the American people are increasingly concerned about big-money influence in politics. So we must look beyond the next election to the next generation. And the time has come to put the national interest above the special interest-and to totally eliminate Political Action Committees."

Another Common Cause press release? The annual David Broder campaign reform op-ed? A stump speech by professor Paul Wellstone? No, this call for campaign reform came from President George Bush in his January 29 State of the Union address.

Thanks largely to the exploits of the Keating Five, the idea of campaign finance reform has quietly inched its way in from the fringes, claiming a plank on America's mainstream policy agenda for the first time since Watergate. And that's a damn fine thing. But as President Bush sets out to slay the PAC-men, he's making the same quick-fix mistake that turned Watergate campaign "reforms" into a nursery for folks like Charles Keating.

To understand this, all Bush had to do was take a hard look at the Keating Five scandal, which had nothing to do with PACs but everything to do with campaign finance's more subtle quid pro quo. Recognizing the broader relevance of their clients' actions, defense lawyers cynically turned the Senate Ethics Committee hearings into a sweeping indictment of 535 congressmen. It wasn't that the Keating Five "did nothing wrong" by intervening on behalf of a generous campaign donor; it was that "everybody else does it." Testifying on behalf of embattled colleague Dennis DeConcini, Senator Daniel Inouye admitted, "If [what DeConcini did] is improper, I think all of us at one time or another have done that."

As Jonathan Rowe of the Christian Science Monitor has argued, the Keating hearings presented a spectacle "worse than Watergate," since if Watergate "was about a few bad apples, the Keating Five is about the whole barrel." Still, there's been one healthy seed. By now, virtually every editorial page in the country has urged Congress to "get big money out of campaigns." And even though the only one nailed was the one not up for reelection, the Keating Five scandal has provided the impetus for reform that 20 years of Common Cause diatribes about "special interest money perverting the political process" never could.

Of course, it's easy to rant and rave that money is corrupting our political process-the most entrenched and PAC-financed congressmen do so every year. What's more difficult is to translate such apparent good intentions into meaningful reform. What we need aren't quick fixes like spending ceilings or public financing of campaigns. We need a treatment that goes to the root of today's gutter-pitched and skyscraper-priced congressional campaigns. Abolish the PACS, by all means. And then get to work at real reform.

Foley's follies

The best example of the folly of quick-fix reform comes, not surprisingly, from Congress itself, which last year turned a window of opportunity into the Potemkin Village of campaign reform.

Shamed into action by their Keating Five colleagues and prodded by a bipartisan advisory panel whose recommendations provided a reasonable blueprint for compromise, the Senate took the first wobbly step toward change. After years of filibustering or ignoring Democratic proposals, Senate Republicans realized that it would be political suicide not to back some sort of campaign reform. They emerged with a plan banning PACs and sharply restricting the flow of "soft money" generated by the political activities of unions and trade associations. The GOP proposal forced the Democrats' hand, helping produce a credible bipartisan bill that would have eliminated PAC contributions, prohibited the use of the frank for mass mailings during election years, limited out-of-state individual contributions to $250, and established voluntary, state-by-state spending limits.

It was a bill, amazingly, that addressed many of the inequities of the current system. But it didn't reach the president's desk last year. In fact, no campaign reform bill did, thanks, not to some PAC-engorged midwestern committee chair, but to Speaker of the House (and campaign reform "advocate") Tom Foley.

Unlike former Speaker Jim Wright, Foley has never been accused of any ethical wrongdoing. And unlike Majority Leader Richard Gephardt, the leading House recipient of PAC contributions ($650,000 during 1989-90), Foley does not loudly proclaim his commitment to reform and then quietly soak the PACs. Yet, despite his pristine image, Foley has become the greatest obstacle to campaign finance reform.

In 1989, after Wright's forced resignation, both Foley and House Minority Leader Robert Michel stated their intentions to make campaign reform a reality, Michel emotionally proclaiming that the stain of the Wright case would remain until the House passed a "dramatic reform of our campaign laws and practices." With staunch leadership, it appeared that this might be one of the House's rare bipartisan efforts, especially after Michel made overtures to the Democrats, saying that he was amenable to a spending limit. But House Democrats, with little scrutiny from the press, got away with a time-honored gimmick: proclaim your unswerving devotion to issue A, then pass a fluff bill that is so far from real reform that it can't help but derail conference negotiations. For, unlike the Senate, the House didn't have the ghost of the Keating Five hovering over it to spur an honest attempt at campaign reform.

In 1990, Foley and Michel deputized Reps. Al Swift and Guy Vander Jagt to lead negotiations on the issue. Under the agreement, if negotiations broke down over the most contentious questions (such as how high any spending limit should be set), Foley and Michel would then take charge themselves. Yet when the inevitable breakdown occurred in June, the leaders met only once. Foley made no attempt to construct a bipartisan bill of the sort that Senate Majority Leader George Mitchell skillfully put together, one that wouldn't automatically provoke a presidential veto. He refused Michel's invitation to meet to negotiate campaign spending limits as one element in a comprehensive package. He also didn't take the issue to the House Democratic Caucus or force Democrats to resolve their internal differences. As one congressional aide suggested, Foley's behavior made the real campaign agenda perfectly clear: "Stall 'til after the 1992 elections."

But, Congress being Congress, stalling had to look like working. So at the last minute, the House did pass a hastily written campaign finance bill (with Foley's approval)-a bill so bad that even moderate Republicans denounced it as a copout. (Iowa Rep. James Leach called it "a sham and a shame.") For proof, look at the "reform" the task force crafting the House legislation came up with.

First of all, Swift and his cohorts decided to limit spending in House races-to $550,000 per candidate, twice the current average. But that made some urban Democrats nervous. What if $550,000 proved too little after a tough primary fight? So the task force wrote in an additional $165,000 for those who get less than 67 percent of the primary vote. So much for a spending limit.

Next, they decided to limit a candidate's PAC contributions to 50 percent of that ceiling-$275,000, more than the average candidate now spends per campaign. By 1988 election standards, that provision wouldn't have affected the PAC receipts of three-fourths of the 435 members. Still, Congress didn't want to box itself in. At the last minute, a few more soft money loopholes were scribbled in, including exceptions to permit lobbyists to continue serving on members' fundraising committees and to exempt legal and accounting fees from the spending limit.

The net effect, intended or not, was to take a passable Senate bill, which had garnered the support of moderate Republicans and incorporated the GOP's plan to prohibit PAC contributions to federal candidates, and essentially sabotage it. Given the vast differences between the Senate and House versions and the lack of time before incumbent congressmen went home to campaign (and spend more PAC money), members of the Senate-House conference committee in charge of sending the president a bill never had a chance; recognizing this, they decided not to meet. (Even if the committee had met, little would have been accomplished: Foley, succumbing to pressure from both sides of the aisle, had appointed conferees such as John Dingell, chairman of the Energy and Commerce Committee, and William Ford, then chairman of the Post Office and Civil Service Committee, who had little desire for any serious campaign finance reform.)

The scenario the House incumbents were hoping for-let everyone vote for a campaign finance reform measure, and then let it die a quiet death in conference negotiations--came to pass.

Ad nauseum

During the debate on the House floor last year, Rep. Pat Roberts insisted that new campaign finance laws would be a sure bet from the 102nd Congress. "We will get a reform bill, a true reform bill next time, not this time." While we hold our breath, we have a moment to ponder the question: What is true reform?

Liberal congressmen and self-proclaimed public interest groups like Common Cause continually insist that the key to campaign finance reform lies in spending limits and public financing of campaigns. But as Congress so recently proved, spending limits can be set absurdly high or riddled with loopholes.

Public financing is necessary, the argument goes, because private money is inherently tainted and inevitably forces the type of tit for tat seen in the Keating case. But after the eighties' spate of noxious campaigns, the public would rather pay for toxic waste dumps behind elementary schools. Right now only about 20 percent of taxpayers contribute to the presidential check-off fund; as a recent Federal Election Commission-sponsored focus group study suggests, the other 80 percent feel pretty strongly about leaving that box blank. "It was often difficult to keep the group focused on the subject at hand because of their anger at politicians and a perception of wasteful spending by the government," noted the report. "Their anger associated with those concerns contaminated their consideration of presidential campaign financing."

Imagine how furious the public would be at paying for congressional campaigns-and rightfully furious, considering the quality of most of those campaigns. What is necessary is a plan that doesn't merely say "let's hope the candidates don't spend too much" and offer them our tax dollars not to do so. Instead, we need to attack rising campaign costs at the source. So when the 102nd Congress gets together again to talk campaign finance, here's what they should do:

1) Require free and truthful TV ads. Real campaign reform must start with campaign spending. And one of the prime factors in accelerating campaign costs is the cost of TV ads. Thomas Mann of the Brookings Institution estimates that between 1976 and 1990, the cost of TV advertising in congressional campaigns rose 169 percent. That, of course, sharpened the imperative to raise money from folks like Charles Keating. The best way to stop this desperate money chase is to give candidates air time for free. Mandate that, in exchange for their broadcast licenses, the Federal Communications Commission require television stations to donate a few minutes every evening during the fortnight prior to the general election for ads from House and Senate candidates.

Still, Senate candidates, who now spend 60 percent of their overall budgets on broadcast ads, don't just blow it filming commercials and buying time on the local network. The real money goes to high-paid political consultants like David Garth and Roger Ailes, whose thinking helps shape those trenchant and sophisticated ads. A corollary reform could dramatically cut their receipts. In exchange for free air time, restrict all TV ads to having the candidate speak directly to viewers or be seen debating his opponent. Not only does this dramatically cut production costs, it also improves the substance of commercials. Anyone who's ever read the transcript of a fabulous TV news segment knows how this works. Without the blue skies and swaying cornfields in the background, the words sound a little different than you remembered. During campaigns, of course, that's a good thing-you'll get a far better look at what you're voting for. For instance, instead of an MTV-style edit showing the candidate orating a crowd into a frenzy, all you get is the candidate orating-letting his words stimulate frenzy, if they can.

Talking-head commercials won't just improve the content of innocuous meet-the-candidate spots; they'll also reduce the likelihood of the sleaziest sort of negative ads. Suddenly it's Candidate Kane accusing his opponent of cuddling up inappropriately to zoo creatures not the faceless Independent Committee to Protect Zebras and Elect Candidate Kane. Making the candidate take responsibility for every word that airs won't make ads all sweetness and light-and shouldn't. (What would campaigns be if candidates couldn't criticize each other's decisions and character?) But it will make candidates more concerned that what they say about their opponents is true. Apply the same rules to radio.

Had these provisions been in effect last year, New Hampshire Republican Bill Zeliff probably wouldn't have used 30-second TV spots to label his leading primary opponent, who had done consulting for foreign corporations, a "paid foreign agent." Texas voters probably would've learned more about their gubernatorial choices than that some of them smoked pot in the seventies. And Rep. Denny Smith of Oregon would've bad to scrap that informative ad featuring a backdrop of Adolf Hitler addressing a delirious crowd-the one that accused Democratic challenger Mike Kopetski of siding with Saddam Hussein. "Mike, appeasement is wrong," the announcer intoned. Kopetski's crime? Urging the UN, rather than the U.S., to take the lead in responding to Iraq's invasion of Kuwait. Do such commercials really enhance politicians' stature or improve public discourse?

The chief critics of these proposals would be TV ad departments and the David Garths of this world. However, in 1988, TV stations earned roughly $27 billion in advertising; a few minutes here and there every other year is not going to destroy their revenues. (Clearly, the specifics have to be more precisely worked out for primary elections with larger fields of candidates.) And putting Garth, Ailes, and their cronies out of work is in itself a reason to adopt these changes.

2) Set out-of-state contribution limits. There is nothing wrong with a congressional candidate raising, say, $10 from every constituent in his district. There is something serious) wrong with a candidate having 40 percent or more of his campaign spending financed by out-of-state PACs and individual donors. More than a dozen of the 31 senators running for reelection in 1990 received more than half of their campaign funds from outside their home states. Jesse Helms and Harvey Gantt counted on non-constituents to raise 69 and 67 percent, respectively, of their campaign funds-a major reason why the North Carolina Senate race was the most expensive in the nation, with a total of $24.7 million spent. Any comprehensive campaign finance reform must therefore stipulate that 75 percent of the money a candidate raises must come from within the state. For obvious reasons, candidates should be required to raise virtually all their money from the constituents they intend to serve.

3) Ban all PAC contributions. It's long been obvious that PACs give money for a single purpose: to influence legislation. And PACs realize that the worst way to do that is to support candidates who don't have a prayer of winning. The easiest way, of course, is to fill the coffers of incumbents, especially those who serve on or chair committees that have jurisdiction over a particular PAC's interests. That's why oil, gas, utility, and other energy industry PACs contributed $236,500 to Senator J. Bennett Johnston, chairman of the Senate Energy Committee, during 1989 and the first quarter of 1990. That's why the powerful trial lawyers' lobby bankrolled the campaign of Senator Ernest Hollings, chairman of the Senate Commerce Committee, who has used his position to thwart tort reform. If one needed any more proof of what the PACs were up to, last year they gave nearly $80 million to incumbents and a mere $5 million to their opponents. Former Senator William Proxmire puts it succinctly: "The [PAC] contributions, in effect, are bribes."

Critics say that eliminating PACs would only make candidates more dependent on wealthy contributors. But the $1,000 limits on personal and corporate contributions, holdovers from the post-Watergate reforms, would still be in place. Moreover, the out-of-state spending limits would make a lot of those well-to-do contributors irrelevant.

4) Virtually abolish the franking privilege, except when a congressman is responding directly to a constituent's query. The frank, which allows members to sign their names to mail in lieu of postage, has long allowed congressmen to flood their districts in election years with what is essentially paid political advertising. Paid for by the taxpayers, that is. Up for reelection in 1990, Senator James McClure had his office send out 608,170 pieces of mail at a cost of $90,300 during the first three months of 1989-more than had been spent on his behalf throughout the previous year. From April to September 1990, Senator Dan Coats of Indiana, who had been appointed to fill Vice President Quayle's seat and faced a special election in November, mailed out a whopping 13.1 million pieces of franked mail-$1.8 million worth.

Members, of course, insist that the frank is used for official business, which begs the question: Why do these mailing costs surge during election years ($78 million in 1988, as compared to $44 million in 1987) and nearly double between the first and last required quarterly reporting periods as an election draws near? Forget public financing: At $34 million a year, we've already got it-but only for incumbents.

5) Put some bite into the Federal Election Commission (FEC). Banning PACS, franking, and slick TV campaigns will do a lot to lower costs and lessen sleaze. But what purpose is there in enacting reforms without a tough, independent regulatory agency to enforce them? By itself, the FEC's structure is a guarantee for gridlock, being made up of six members (three from each party) who are appointed specifically for their partisanship. The result, former FEC Assistant General Counsel Daniel Swillinger explains, is that candidates know "the commission is never going to get four votes, so they can do anything they want.... It is undercutting what was anyway a rather weak enforcement system and making it even more toothless."

During the 1988 Senate elections, for instance, the National Republican Senatorial Committee was charged with failing to report nearly $3 million in contributions earmarked for 12 campaigns. The FEC's general counsel found that the committee was in violation of the campaign act; the commission, however, voted along party lines. With a three-to-three tie, no action was taken. The answer here is either to add an odd member or remove the presumption of partisanship in selecting commissioners.

The other major problem with the FEC is a procedural one: The commission is notoriously slow in resolving cases. By the time the FEC figures things out, Mr. Smith is already well into his term. Take one 1982 North Carolina campaign, in which Rep. Charlie Rose charged that his opponent accepted illegal services from a direct mail operation associated with Senator Jesse Helms. Two years later, with the 1984 campaign well under way, the FEC was still investigating those old charges.


To make comprehensive reform work, the FEC will have to be aggressive, making sure that complaints filed during a particular general election period can be resolved before the campaign is over. To that end, Congress should give the FEC the power to conduct field investigations and random audits, to seek injunctions in enforcement cases so that it can act promptly when a violation is about to occur, and to impose stiff fines on transgressors.

These FEC reforms aren't radical: In fact, they're made every year by the commission itself in its annual report to Congress. The real difficulty, as David Magleby and Candice Nelson point out in The Money Chase, is that the FEC is currently just the kind of agency Congress wants to regulate campaign finance laws; it provides disclosure but rarely acts in a way that could influence an election outcome ,,

The same bluff applies in all aspects of congressional campaign reform. And members of the House, many of whom raise twice as much from out-of-state PACs as their challengers raise overall, are sure to balk at these five proposals, as they have done through the years at even the most tepid legislative reform.

That fact shouldn't surprise us: Who expects morality from Congress? What we do expect, however, is self-interest. And that may be what ultimately pushes Congress toward real campaign reform. A few more Keating Five-type episodes may do more than erode the institution's sagging credibility. It may prompt voters to start slapping term limits on their members. And that should do the trick. For the one thing incumbents hate more than campaign reform is not getting the chance to campaign at all.
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Author:Bates, Andrew
Publication:Washington Monthly
Date:Apr 1, 1991
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