Amicus Curiae Brief — McConnell v. Federal Election Commission

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Nos. 02-1674 et al.

[Supreme Coun US.

IN THE M.

Supreme Court of the United Hrajes; 293

AWG S200

OFFICE OF ThE CLIER

MITCH MCCONNELL, UNITED STATES SENATOR, ET AL., —

Appellants/Cross-Appellees,

FEDERAL ELECTION COMMISSION, ET AL.,

Appellees/Cross-Appellants.

On Appeals and Cross-Appeals

from the United States District Court

for the District of Columbia

BRIEF OF THE HONORABLE FRED THOMPSON

AS AMICUS CURIAE IN SUPPORT OF

DEFENDANTS-APPELLEES

DAVID C. FREDERICK

Counsel of Record

ScoTT K. ATTA

WAY

KELLOGG, HUBER, HANSEN,

TODD & EVANS, P.L.L.C.

1615 M Street,

Suite 400

N.W.

Washington, D.C. 20036

(202) 326-7900

Counsel for Amicus Curiae

August 5, 200

QUESTION PRESENTED

Amicus will address the following question:

Whether the evidence of overwhelming abuses in the

raising and spending of soft money in the 1996 presi-

dential election, which were uncovered by a Senate

Governmental Affairs investigation in 1997 and 1998

and debated in the context of passage of the Bipartisan

Campaign Reform Act of 2002 (“BCRA”), Pub. L. No.

107-155, 116 Stat. 81, shows that Congress had ample

justification to enact BCRA Titles I and II to prevent

corruption, the appearance of corruption, and wide-

spread circumvention of the existing federal campaign

finance laws.

TABLE OF CONTENTS

Page

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INTEREST OF AMICUS CURIAE ...0........0..:cccsceeceeeeeeees 1

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ARGUMENT:

I. PERVASIVE SOFT-MONEY FUNDRAISING

LED TO A WIDESPREAD PUBLIC PER-

CEPTION THAT THE CAMPAIGN FINANCE

PEE WOUND GPE © vcsccccccccsccccsesscocscecccscsscosses 6

A. Both Parties Traded Access To Candidates

And Senior Government Officials For Large

Soft-Money Contributions...........................000000. 6

B. Soft-Money Fundraising Distracts Elected

Officials From Their Public Duties.................. 17

II. CONGRESS HAD A COMPELLING INTEREST

IN REGULATING USE OF SOFT MONEY TO

A. The National Parties Used Massive

Amounts Of Soft Money To Fund Sham

CS SLT 20

B. The National Parties Coordinated Sham

“Issue Ads” With Their Presidential Candi-

i cceemsonees 23

C. Both

Parties Shifted Soft Money From

National To State Party Coffers To Fund

ry Bete a BA cccincccecststtacinnnineieummnsin

D. Non-Party Groups Used Massive Amounts

Of Soft Money To Fund Sham “Issue Ads’”......

Ill. THE BCRA ADDRESSES THE SOFT-MONEY

AND ISSUE ADVERTISEMENT ABUSES

DOCUMENTED IN THE REPORT.......................

CONCLUSION

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TABLE OF AUTHORITIES

CASES seal

Buckley v. Valeo, 424 U.S. 1 (1976) ............0...222. 2, 3, 17, 30

STATUTES AND RULES

Bipartisan Campaign Reform Act of 2002, Pub. L. No.

i ENON RBI IIe CIRM Ie or 1

oi eciinleinidinbinesiict Dlametins 28

I eS ee aE TT ECT 28

Tit. II:

§ 307(a), 2 U.S.C. § 441a(a)(1)...............ccccceeeeeeeeeee 19

Federal Election Campaign Act of 1971,

sidechains 2

2 U.S.C. § 44 1a(a)(1) (2000) ............eeecseseeseeeeeeeneneeees 2,7

B WE. § SERGE CID assis scsccsesescsccccncsecsesssecscecs 7

ee ee ITI aisiticnssiishtiinieniechtshetieitniiinintisaiaieatinian 2

RIED ON Dee DEINE A ORC EN 1

LEGISLATIVE MATERIALS

147 Cong. Rec.:

p. S2463 (daily ed. Mar. 19, 2001) .................cccccceeeeeeee 29

p. $3138 (daily ed. Mar. 29, 2001) ...............ccseeeeceeeeees 29

p. $3251 (daily ed. Apr. 2, 2001) ...........:cs:ceesssesssnees 29, 30

148 Cong. Rec.:

p. $2104 (daily ed. Mar. 20, 2002) ...........:-ssseessssessseee 29

pp. S2133-34 (daily ed. Mar. 20, 2002) ................::000+- 29

p. $2137 (daily ed. Mar. 20, 2002) ..cccsssssssssessceseneee 29

pp. S2138-41 (daily ed. Mar. 20, 2002) ........ccsssssssssseee- 29

Investigation of Illegal or Improper Activities in Con-

nection with 1996 Federal Election Campaigns,

S. Rep. No. 105-167 (1998).............ccccccccccsscssssssees passim

ADMINISTRATIVE MATERIALS

ee a Gi, FP cesciacesenicerenaniscnemnsnnnsmmnnntonntinis 2

Final Report of Independent Counsel In Re: Bruce

Edward Babbitt (Aug. 22, 2000) ................cccsccceeeeeeeeees 17

OTHER MATERIALS

The Gallup Organization, Americans Not Holding

Their Breath on Campaign Finance Reform _—

Michael Isikoff & Mark Hosenball, Soft Money, Easy

Access, Newsweek, Oct. 21, 1996 ..................ccccceeeeeeees 3-4

ee OT

Vii

Robert P. Meier, Comment, The Darker Side of Non-

profits: When Charities and Social Welfare Groups

Become Political Slush Funds, 147 U. Pa. L. Rev.

EEE CEES ree et eT a 28

Alison Mitchell, Building a Bulging War Chest: How

Clinton Financed His Run, N.Y. Times, Dec. 27,

Michael Weisskopf & Charles R. Babcock, Donors Pay

and Stay at White House; Lincoln Bedroom a Spe-

cial Treat, Wash. Post, Dec. 15, 1996 .............ccccccccceeeeee 3

INTEREST OF AMICUS CURIAE'

| Senator Fred Thompson, a Republican from Tennessee,

served in the United States Senate from 1994 to 2003.~

From 1997 to 2001, he chaired the Senate Governmental

Affairs Committee, which investigated numerous abuses

of the campaign finance laws during the 1996 presidential

campaign. That special investigation culminated in a six-

volume report spanning nearly 10,000 pages (including

numerous exhibits) that became a substantial basis for

Congress’s enactment of the campaign finance reforms

now before this Court. See Investigation of Illegal or Im-

proper Activities in Connection with 1996 Federal Election

Campaigns, S. Rep. No. 105-167 (1998) (“Report”). ‘

Senator Thompson also co-sponsored the Senate bill

Congress enacted as the Bipartisan Campaign Reform Act

of 2002 (“BCRA”), Pub. L. No. 107-155, 116 Stat. 81, just

as he had co-sponsored the original campaign finance re-

form legislation introduced by Senators John McCain and

Russell Feingold in 1995. Accordingly, Senator Thompson

has a strong interest in the BCRA reforms being upheld

as constitutional. This amicus brief seeks to show that

the Report’s findings on campaign finance abuses in the

1996 election provided Congress with an overwhelming

factual basis for concluding that the BCRA reforms are

necessary to plug the “[u]nanticipated loopholes discov-

ered in the federal campaign finance laws since they were

developed in the 1970s.” Report at 4499. Those loopholes

allowed for “campaign finance law manipulation and cor-

ruption” that needed to be redressed to restore confidence

and integrity in our electoral system. Id.”

1 Pursuant to Supreme Court Rule 37.6, counsel for amicus repre-

sents that it authored this brief and that no entity other than amicus

made a monetary contribution to its preparation or submission. All

parties have consented to the filing of this amicus brief.

? Rather than advance constitutional and other legal arguments

similar to those that the government and others will make, which

amicus adopts, this brief seeks to show that Congress had more than

STATEMENT

1. The Federal Election Campaign Act of 1971

(“FECA”), 2 U.S.C. § 431 et seq., was enacted to reduce the

“actuality and appearance of corruption” created by the

“opportunities for abuse inherent in a regime o! large in-

dividual financial contributions.” Buckley v. Valeo, 424

U.S. 1, 26-27 (1976) (per curiam). FECA set limits on how

much an individual may contribute to a candidate’s cam-

paign or a national political party committee for the pur-

pose of influencing a federal election.’ It also continued

longstanding prohibitions on the use of a corporation’s or

labor union’s treasury funds to influence federal elections.

See 2 U.S.C. § 441b (2000). The purpose behind those re-

strictions was to ensure that contributors could not exer-

cise or be perceived as exercising undue sway over a can-

didate by making massive contributions.

As contrasted with that “hard money,” as funds subject

to those limits came to be called, political parties also

raised “soft money,” supposedly for general party-building

purposes or state elections (but, as explained below, in

actuality to influence federal elections). Soft money was

not subject to the same regulatory limits and prohibitions

as hard money, and consequently was limited in its use to

influence a federal election. See JSSA 30sa-32sa (per cu-

riam) (discussing FEC allocations permitting party activi-

ties that influence federal elections to be funded with a

mix of hard and soft money) (citing, inter alia, FEC Adv.

Op. 1978-10). Over time, however, clever politicians and

their tacticians devised ways to use unlimited soft money

in the party’s coffers to influence federal campaigns.

ample factual support for enacting the BCRA, as evidence gleaned in

the Report demonstrates.

3 Prior to enactment of the BCRA, those limits were: $20,000 per

calendar year for an individual contribution to a national political

party committee; $5,000 per calendar year to any other political com-

mittee; and $1,000 per election for a candidate seeking federal office.

See 2 U.S.C. § 441a(a)(1) (2000).

2. The 1996 presidential election campaign brought

into stark relief the breakdown of the system established

under FECA and upheld as constitutional by this Court in

Buckley. The soft-money fundraising and spending in

that election rendered all but meaningless the source and

contribution limits that Congress had established in the

1970s in FECA. In 1996, the national parties’ total soft-

money spending reached $272 million, or 30% of total

spending, up from $80 million, or 16% of total spending,

in 1992. See JSSA 34sa-35sa (per curiam).*

Once soft money was placed in party coffers, the parties

then used it for purposes that exploited loopholes in how

such funds could be spent. In 1996, the parties aired

thousands of thinly disguised “issue advertisements” on

television and radio that in reality were intended to, and

did, influence federal elections. The theory of the legality

of this practice was that the ads stopped just shy of using

so-called “magic words” of express advocacy, such as “Vote

for Clinton” or “Reject Dole,” which would have required

the ads to be funded with regulated hard money. See

JSSA 778sa (Kollar-Kotelly). Non-party interest groups

such as unions and nonprofits also got into the act by

running similar sham issue ads, which often were orches-

trated by or coordinated with a political party.

As the 1996 campaign proceeded, public attention fo-

cused on White House coffees and overnights, large con-

tributions to parties by persons interested in affecting na-

tional policy, and an unprecedented television blitz of ad-

vertisements that touted the leading candidates for presi-

dent.° In early 1997, in response to this rapid increase in

‘ These staggering figures have only gotten larger with time. JSSA

38sa (per curiam) (noting that national party soft-money spending rose

to $498 million, or 42% of total spending in the 2000 elections).

® See, e.g., Alison Mitchell, Building a Bulging War Chest: How

Clinton Financed His Run, N.Y. Times, Dec. 27, 1996; Michael

Weisskopf & Charles R. Babcock, Donors Pay and Stay at White House;

Lincoln Bedroom a Special Treat, Wash. Post, Dec. 15, 1996; Michael

soft-money fundraising and spending, the Senate Com-

mittee on Governmental Affairs commenced a special in-

vestigation to determine whether those activities were

legal under FECA or, if technically legal, were abusive

evasions of the campaign finance laws. Relevant here, the

investigation focused on:

The independence of the presidential campaigns

from the political activities pursued for their benefit

by outside individuals or groups;

Unregulated (“soft”) money and its effect on the

American political system;

Promises and/or the granting of special access in

return for political contributions or favors;

The effect of independent expenditures (whether by

corporations, labor unions, or otherwise) upon our

current campaign finance system, and the question as

to whether such expenditures are truly independent;

[and]

Contributions to and expenditures by entities for

the benefit or in the interest of public officials.

Report at 11-12.° The committee issued 427 subpoenas,

reviewed more than 1.5 million responsive documents,

took 200 depositions, conducted more than 200 witness

interviews, and held 32 days of hearings where it took

testimony from 72 witnesses. Jd. at 15.

The committee’s Report, released in March 1998, was

approved by a vote of eight to seven, split along party

lines. See id. at 23; id at 1-4555. The minority committee

members published their own findings and recommenda-

Isikoff & Mark Hosenball, Soft Money, Easy Access, Newsweek, Oct.

21, 1996.

6 The committee also investigated other issues such as illegal for-

eign contributions and conflicts of interest of federal officials. Report

at 11. Although those issues are not directly relevant to the matters

before this Court, they do illustrate the carelessness of the political

parties in their relentless pursuit of soft money.

tions, which will be cited herein as the “Minority Report.”

See Minority Report at 4557-9575. Due to a politically

charged atmosphere, the majority Republican committee

members focused more on abuses by Democrats, while the

minority focused more on abuses by Republicans.’ Both

majority and minority fully agreed, however, that “[t]he

Committee investigation has built an undeniable case for

campaign finance reform” by showing that “[t]he soft

money loophole . . . led to a meltdown of the campaign fi-

nance system that was designed to keep corporate, union

and large individual contributions from influencing the

electoral process.” Id. at 4562, 7515; see also Report at

4459 (“[T]he federal campaign finance system virtually

collapsed.”); Additional Views of Senator Collins at 4535

(“[T]he hearings provided overwhelming evidence that the

twin loopholes of soft money and bogus issue advertising

have virtually destroyed our campaign finance laws, leav-

ing us with little more than a pile of legal rubble.”).®

SUMMARY OF ARGUMENT

Congress had a compelling interest in enacting the

BCRA reforms. The rapidly increasing practices of rais-

ing and spending soft money (with a significant focus on

sham “issue ads” that unquestionably influence federal

elections) fully justify the BCRA reforms. “[S]oft money

spending by political party committees eviscerates the

ability of the FECA to limit the funds contributed by indi-

viduals, corporations, or unions for the defeat or benefit of

specific candidates.” Report at 4468. The evisceration of

the original limits set by FECA through soft-money con-

tributions has “caused a loss of public confidence in the

integrity of our campaign finance system. By inviting

7 The majority and minority members also differed at times on

whether certain of the abuses were actual violations of pre-BCRA law.

° Although as Chair amicus did not vote in favor of the Minority Re-

port, the combined findings of both reports provide a devastating look

at the fundraising practices of both parties. For that reason, this brief

cites and discusses the findings of both the majority and the minority.

corruption of the electoral process,” the raising of such

massive sums of soft money from large donors

“threaten(s] our democracy.” Minority Report at 4565.

Many of the proponents of the BCRA cited the findings

of the Report and advanced its legislative proposals. Un-

derstanding the basis for the committee’s Report, there-

fore, serves as a critical factual predicate to Congress's

enactment of the BCRA.

ARGUMENT

I. PERVASIVE SOFT-MONEY FUNDRAISING LED

TO A WIDESPREAD PUBLIC PERCEPTION

THAT THE CAMPAIGN FINANCE SYSTEM WAS

CORRUPT

After Republicans won control of both houses of Con-

gress in the 1994 mid-term elections, President Clinton’s

1996 re-election campaign developed a virtually unslak-

able “thirst for money” in the drive to keep the White

House. Report at 23. Unable to raise sufficient amounts

of hard money under FECA’s contribution limits, the

Democrats turned to soft-money contributions given, not

to the Clinton/Gore campaign, but rather to the Demo-

cratic National Committee (“DNC”) and state Democratic

parties. As the Report details, the Republicans naturally

followed suit. Those soft-money contributions, in turn,

funded issue ads and other activities designed by both

parties to influence the 1996 presidential election.

A. Both Parties Traded Access To Candidates

And Senior Government Officials For Large

Soft-Money Contributions

The pursuit of large contributions of soft money led to a

“willingness to sell access to senior government officials.

Report at 65. Candidates urged potential donors to con-

tribute soft money to federal and state party committees

(or to interest groups working to elect the candidate). In

exchange, donors expected and often received unprece-

dented access to federal officeholders. Soft-money contri-

butions — unlimited in amount — were thus far more

successful at gaining access for contributors to politicians

than hard-money contributions, which FECA limited to

$1,000 per person. See 2 U.S.C. § 441a(a)(1), (6) (2000).

As the following examples gleaned from the Report es-

tablish, public officials used their offices to raise massive

contributions from donors, who in turn sought and re-

ceived access to those officials to advance their own inter-

ests. Such a process gave rise, at a minimum, to a power-

ful perception of corruption.

1. White House Coffees, Overnights, and Other Fund-

raising Events by Democrats. The Report concluded that

President Clinton used the White House on hundreds of

occasions to reward contributors and to provide access for

donors who gave massive amounts of money to the DNC.

See Report at 41 (“Perhaps nothing illustrates this mer-

chandising of the Presidency better than the DNC’s White

House ‘coffees’ — fundraising events at which major donors

were provided access to the President in exchange for

their campaign contributions.”). In January 1995,

Terrance McAuliffe, then-DNC Finance Chairman and

soon-to-become National Finance Chairman for Clinton/

Gore '96, drafted a memorandum suggesting White House

coffees, overnights, golf games, and morning jogs as ways

to give major donors “‘quality time’” “‘to discuss issues

and exchange ideas with the President.’” Jd. at 194. The

President responded, “‘yes, pursue [these events] and

promptly — and get other names at 100,000 [dollars] or

more; 50,000 [dollars] or more.’” Jd. at 195.

Between January 11, 1995 and August 23, 1996,

the White House hosted 103 coffees. Most lasted at

least an hour, and the President attended the vast

majority of them. Approximately 60 of these were

DNC-sponsored coffees, 92 percent of the guests at

which were major Democratic Party contributors.

These guests made contributions during the 1996

election cycle of $26.4 million, an average contribu-

tion of over $54,000 per person, with one-third of

their total donations, some $7.7 million, given

within a month of the donor’s attendance at a

White House coffee.

Id. at 41; see also id. at 196 (“in keeping with the DNC’s

plan to cultivate ‘top top’ contributors, at least 12 indi-

viduals contributed at least $100,000 on or around the

dates of the coffees they attended”) (footnote omitted).*

Many donors also stayed overnight at the White House,

“often in the historic Lincoln Bedroom.” Minority Report

at 7956. These overnight guests, “178 individuals — from

114 different families — contributed a total of more than

$5 million to the DNC . . . during the 1996 election cycle[,]

_.. am average contribution per family of over $44,000.”

Report at 199 (footnote omitted). As the evidence dis-

cussed further below demonstrates, many donors hoped to

get the administration’s assistance to further their pri-

vate business interests, and some apparently succeeded.

The President and Vice President also placed many

phone calls soliciting soft-money donations for the DNC.

See id. at 501-12. Such telemarketing by our highest

elected officials at best “amounted to unsavory and un-

seemly activity that lessens the dignity of these offices.”

Id. at 521. It also “would defy reality not to recognize that

the recipients of such calls, many of whom had business

interests, would find it difficult to turn down requests for

funds from persons who exercise such vast power.” Id.

2. Republican Soft-Money Fundraising Efforts. The

Minority Report catalogued Republican use of access to

the White House and senior government officials for fund-

raising for the Republican National Committee (“RNC”).

“Tablebuyers” purchasing 10 seats at the 1992 President's

Dinner were “entitled to attend a ‘Private Reception

9 Coffees were a highly efficient way to raise money. The DNC’s

overhead costs were “negligible,” while direct mail overhead ran at

42%. Report at 196 & n.29.

hosted by President and Mrs. Bush at The White House’

or a ‘Reception hosted by The President’s Cabinet.’” Jd. at

5418 (noting that tablebuyers could also attend a “‘Lunch-

eon hosted by Vice President and Mrs. Quayle” and a

“‘Senate-House Leadership Breakfast hosted by Senator

Bob Dole and Congressman Bob Michel’”). Tablebuyers

could also “‘request a Member of the House of Represen-

tatives to complete the table of ten,” and the purchase of

a second table gained the “‘option to request one Senator

or one Senior Administration Official.’” Jd. at 5418-19;

see also id. at 5419 (explaining that fundraisers would re-

ceive similar benefits, and warning: “‘Note: Attendance

at all events is limited. Benefits based on receipts.’”).

Promotional materials for the RNC’s two principal do-

nor programs, Team 100 and the Republican Eagles,

promised that members “would receive special access to

high-ranking Republican elected officials, including gov-

ernors, senators, and representatives.” Id. at 7968. Team

100 membership requires an initial contribution of

$100,000, and $25,000 for each of the next three years;

Republican Eagle membership requires contributions of

$15,000 annually. Jd. One fundraising letter to a pro-

spective Team 100 member represented that, after Ed

Lupberger, CEO of Entergy, joined Team 100, Haley Bar-

bour, then-Chairman of the RNC, “‘escort[ed] him on four

appointments that turned out to be very significant in the

legislation affecting public utility holding companies. In

fact, it made Ed a hero in his industry.’” Jd. at 7971. And

a memorandum from an ™NC aide to the Team 100 chair-

man reported that the RNC sought to get a “‘hot’”

prospect “‘an appointment with [Representative] Dick

Armey, so we can get his other $50,000.’” Jd. at 8036.'°

‘© “{A] 1995 Eagles brochure contains photographs of Eagles mem-

bers meeting-with former President George Bush, former Vice Presi-

dent Dan Quayle, Governor Pete Wilson, Senators Connie Mack and

Kay Bailey Hutchison, and Mayor Rudolph Giuliani.” Minority Report

at 7969. The brochure states: “‘Each Year Eagles receive invitations

From May to August 1996, presidential candidate

Robert Dole attended “at least 25 RNC soft-money fund-

raisers.” Id. at 8301. A 1997 fundraising letter by then-

Senate Majority Leader Trent Lott, sent on behalf of the

National Republican Senatorial Committee, promised con-

tributors “‘plenty of opportunities to share [their] personal

ideas and vision with some of our top Republican leaders,

senators, and panel members. Failure to contribute

meant that ‘you could lose a umiyue chance to be included

in current legislative policy debates — debates that will af-

fect your family and your business for many years to

come.” Id. at 7974 (alteration in original); see also id. at

7968-78 (more examples of special access for large RNC

donors).""

3. The Roger Tamraz Contributions. “One of the most

egregious examples of access being provided in exchange

for political contributions concerns businessman Roger

Tamraz,” id. at 4574, one of “a number of alarmingly un-

savory characters” who gained access to President Clin-

ton, Report at 41. Tamraz, an international businessman,

was wanted by French police and faced an Interpol arrest

warrant for embezzlement in Lebanon. Id. at 43.

to four national meetings. At least two of these meetings take place in

Washington, D.C.; and feature strategy and issue committee sessions

with prominent elected Party leaders from the U.S. Senate and House

on such topics as the budget and tax reform, international trade and

regulatory reform, health care and foreign policy. Other participants

have included Republican Presidents (at the White House), Governors

and former Administration officials.’” Id.

11 4 1993 letter urging contributors to join the Republican Senate

Council stated that a “‘standard’” membership ($5,000 — “‘enti-

to mon meetings while the Senate is in session - ++ gen-

pone ah seo pene oi i on current pending ing legisla ation with the

ranking Republican on the pertinent committee addressing the mem-

bership. The Policy Board level [$15,000 yearly] is entitled to all the

standard membership benefits in addition to quarterly dining with this

smaller group and the Republican Senators. The meetings serve as a

virtual one-on-one as the Senators may outnumber the Policy Board

members.” Minority Report at 8033.

Tamraz sought U.S. government backing for an oil pipe-

line project in the Caucasus and was willing to invest sig-

nificant sums of money to get it. When officials at the Na-

tional Security Council (“NSC”) determined that his

schemes were untenable and harmful to U.S. foreign pol-

icy interests, Tamraz began making huge contributions,

donating a total of $300,000 to the DNC and several state

democratic parties, and promising more. See id. at 2910-

14. The allocation of those donations came at then-DNC

National Chairman Don “Fowler’s direction.” Id. at 2913;

see also id. at 2914 (“Buoyed by their success in winning

such large sums from Tamraz, DNC Finance Director

Richard Sullivan recounted, ‘all of us were continually

asking him for money through the course of the year —

perhaps ‘every six weeks’ during 1996.”). When asked at

the committee hearings whether access to the President

for promotion of his pipeline was a reason for the dona-

tions, Tamraz candidly replied: “‘Senator, I’m going even

further. It’s the only reason — to get access.” Id. at 2913

n.46; see also id. at 2915 (“‘[I]f they kicked me from the

door, I will come through the window.’”).

Despite warnings by DNC staff regarding Tamraz’s

background and NSC staff concerns that he should be de-

nied access to senior government officials, see id. at 2911-

13, “Tamraz was able to attend events with President

Clinton on no fewer than six occasions from September

1995 through June 1996,” id. at 2920.’ After one conver-

sation, the President asked Thomas McLarty, Counselor

to the President, to look into the pipeline. Through

McLarty’s influence, Energy Department officials tried to

'2 These events were “(1) a reception for the DNC’s Business Lead-

ership Forum on September 11, 1995; (2) a DNC dinner on September

15, 1995; (3) a DNC Chairman’s holiday reception on December 13,

1995; (4) a DNC Trustee’s dinner on March 27, 1996; (5) a Presidential

coffee on April 1, 1996; and (6) a buffet dinner and private screening of

the film Independence Day on June 22, 1996.” Report at 2920.

use Tamraz’s sizeable donations to change the NSC’s op-

position to dealing with Tamraz. See id. at 2921-29.

Although Tamraz was ultimately unsuccessful in per-

suading the government to support his pipeline, he did

succeed in subverting the policy of the U.S. Government,

as established by the interagency Caspian energy working

group, “to deny him access to high-level U.S. officials. De-

spite the working group’s firm position against such ac-

cess, Tamraz found access to the President of the United

States to be available for a price through Donald Fowler

and the DNC.” Id. at 2930. More ominously, Tamraz

used his vast contributions to “enlist{] senior [U.S.] offi-

cials in his attempt to change the working group's policy

on Caspian energy issues.” Id. Though ultimately

thwarted in receiving full government support for his oil

pipeline project, Tamraz was unrepentant. As he told the

committee, “‘I think next time, I'll give [$]600,000. Id.

Although the most publicized incidents involving Tam-

raz porn ah soft money given to the DNC, | he also

“openly bought access from both political parties. are

ity Report at 8095. “In February 1997, Tamraz receive

letters from Republican Senators Trent Lott and Mitch

McConnell inviting him to become a member of the Sena-

torial Inner Circle.... Senator McConnell[’s} ... letter

stated that for a contribution to the Republican Party,

Tamraz could discuss high-level policy issues at exclusive

dinners with the Senate leadership.” Id. at 8113 (noting,

however, that Tamraz’s subsequent contribution was re-

turned). “When asked why he had contributed this time,

Tamraz responded, ‘you set the rules, and we are follow-

ing the rules.... [T]his is politics as usual. What is

new”” Id. (alterations in original).

unsuccessful offer of $100 million to Boris Yeltsin's re-election cam-

paign in exchange for endorsement of his pipeline. Report at 2930-31.

— ee, ome om —~

As the Tamraz saga additionally demonstrates, donors

often give to both parties in order to ensure access. “In

1996, for example, corporations such as RJR Nabisco,

AT&T, and Walt Disney were among the top contributors

to both parties. In the words of Common Cause President

Ann McBride, ‘[S]oft money is not about ideology. ... It is

about making sure “whoever wins, my special interest has

a place at the table”.... It is about gaining access and

influence.” Jd. at 7517 (alterations in original). The

cynicism of the Tamraz affair was perhaps best illustrated

by the fact that he did not cven bother to vote. Tamraz

“believed himself to possess ‘more than a vote’ by virtue of

his campaign contributions.” Report at 2909."

4. Michael Kojima’s Fundraising and Contributions.

Because he contributed $500,000 to the 1992 President’s

Dinner, Michael Kojima and his wife were placed “at the

head table with President and Mrs. Bush.” Minority Re-

port at 7372. In addition, the Republican Presidential

Roundtable (a Republican fundraising organization) wrote

letters on Kojima’s behalf to obtain meetings for him with

U.S. embassy and foreign officials, to facilitate Kojima’s

pursuit of private business interests. See id. at 5416-17.

In sum, “fiJn a two-year period, due to his contributor

status, Kojima met President Bush on five occasions, in-

cluding at an Oval Office reception; met with Vice Presi-

dent Quayle twice; met Cabinet members at an intimate

lunch; and met multiple times with U.S. ambassadors and

senior embassy personnel.” Jd. at 5428.

5. Charlie Trie. Charlie Trie was a former Little Rock

restaurateur who contributed and raised substantial sums

of money to benefit the DNC to gain access to the Clinton

' “In theory, every voter is equal; the reality is that some voters, to

borrow George Orwell’s phrase, are ‘more equal than others.’ No one

can deny that individuals who contribute substantial sums of money to

candidates are likely to have more access to elected officials. And most

of us think greater access brings greater influence.” Minority Report

at 4563.

White House and senior Administration officials for him-

self and his associates. See Report at 2524, 2527 (“Trie

... managed to contribute a total of $220,000 to the DNC

between 1994 and 1996,” and he “made a commitment to

the DNC to raise $350,000” in 1996 alone). Trie visited

the White House “at least twenty-two times” from 1993 to

1996, and his Macau-based business associate, Ng Lap

Seng (who actually funded Trie’s contributions), visited

the White House 10 times between 1994 and 1996. Id. at

2531-32. “Trie[s] contributions and fundraising made him

a DNC Managing Trustee and member of the DNC’s Na-

tional Finance Board of Directors, and afforded him VIP

treatment at DNC events.” Id. at 2532 (footnotes omitted).

In addition, the committee concluded that “Trie’s contri-

butions and fundraising purchased his otherwise unwar-

ranted appointment in 1996 to the Commission on U.S.-

Pacific Trade and Investment Policy.” Id. at 2519. De-

spite a disqualifying financial interest in the affairs of the

commission (due to Trie’s Asian business interests), and

despite the fact that all slots on the commission were

filled, Trie received the appointment. “In order to accom-

modate the White House’s interest in the inclusion of Trie

_.., the President issued [an] Executive Order . . . expand-

ing the membership of the Commission.” Id. at 2534. The

paperwork on Trie’s disqualifying financial interest “sim-

ply ‘fell through the cracks.” Id. at 2535."

15 ‘Trie also arranged admission to a White House coffee for a Chi-

nese arms dealer and advisor to the Chinese government. See Report

at 2714 (“The President subsequently admitted his meeting with Wang

Jun was highly improper.”). The Committee found generally that the

White House’s vetting process “was essentially nonexistent.” Id. at

753. Due to the soft money quest, “too many unsavory individuals

were allowed entrance to the White House and access to President

Clinton.” Id. For example, major DNC donor Ted Sioeng, “a foreign

national with suspiciously close ties to the Chinese government, sat at

the head table with the President or Vice President at several fund-

raisers.” Id. at 41; see also id. at 963-80.

6. Johnny Chung. Major DNC soft-mone

Johnny Chung likewise enjoyed repeated pan bag

White House. His “DNC contributions helped Chung ob-

tain access to the White House at least 49 times between

February 1994 and February 1996 — access that he used

... to further his interests with foreign business clients

wiet So close was the nexus between Chung’s donations

and his visits, in fact, that White House officials actually

collected money from him in the First Lady’s office in ex-

change for allowing him to bring a delegation of his clients

to White House events.” Jd. at 783 (footnote omitted). In

Chung’s own colorful and candid view, he was granted ac-

cess because the “‘White House is like a subway: You

have to put in coins to open the gates.” Id.

7. Native American Fundraising and Access. Native

American groups found that the same principle — fund-

raising money for political access — operated to them as

well. “It is clear that access to the DNC resulted in in-

creased access to administration officials for tribes. And

the way to get access to the DNC was to make political

contributions. ... The tribes with greater resources had

many more doors opened to them.” Jd. at 3080.

For instance, the Mashantucket Pequ

of the world’s largest casinos, iy oh guar

attention from the DNC” by virtue of their “generosity to

the Democratic party.” Jd. at 3075. Ina briefing memo-

randum for a meeting between then-DNC head Don

Fowler and the Pequot chairman, “Fowler was encouraged

by DNC staff to ask the Pequots to contribute ‘at least’

$250,000 to the DNC. The memo notes that an issue of

special significance for the Pequots was a provision in the

1995 budget bill that proposed a 35% tax on Indian gam-

ing revenues. Inasmuch as the Foxwoods Resort casino

[owned by the Pequot tribe] has yearly revenues of ap-

proximately $1 billion, such a tax would have had a huge

impact on the tribe. The provision was removed, and, ac-

cording to the memo, Fowler ‘played an active role in ex-

pressing’ tribal opposition regarding the tax to the Ad-

ministration and Congress. The memo exhorts Fowler to

‘take credit’ for that and other pro-tribal achievements.”

Id. (footnotes omitted); see also id. at 3076-80 (“finance

officials at the DNC and Clinton Gore were [regularly]

targeting various Indian tribes for contributions”).

In another instance of donor access that “confirms the

public’s worst suspicions about how things seem to work in

Washington,” three impoverished bands of Wisconsin In-

dian tribes applied to open a casino in Hudson, Wisconsin.

Id. at 3167; see id. at 3167-94. The Bureau of Indian Af-

fairs’ area office initially approved their application in No-

vember 1994 over the objections of the wealthy, neighbor-

ing tribes whose nearby gambling casinos would face com-

petition from the applicants. “At the same time the area

office decision was sent to Washington for final approval,

on a separate track began a full-tilt lobbying effort against

the decision, which involved the DNC and the White

House.” Jd. at 3167.

The Report found “strong circumstantial evidence that

the Interior Department’s decision to deny the Hudson ap-

plication was caused in large part by improper political

considerations, including the promise of political contribu-

tions from opposition tribes. At a minimum, it is clear

that the opposition tribes and their lobbyists activated the

DNC and, to some extent, the White House, to take action

on their behalf. Financial support — both past and future

— was crucial to this effort.” Jd. at 3168. “According to

FEC records, in the four months following the Depart-

ment’s denial of the Hudson application, the opposition

tribes contributed $53,000 to the DNC and the (Demo-

cratic Senatorial Campaign Committee (“DSCC”)]; they

donated an additional $230,000 to the DNC and the DSCC

during 1996, and gave more than $50,000 in additional

money to the Minnesota Democratic Party.” Id. at 45.6

16 The Minority Report contended that the denial “was based upon

legitimate concerns,” Minority Report at 8390, although it agreed that

such incidents do create a strong appearance of impropriety, see id. at

— ee ee

The taint of wrongdoing in that episode was so strong

that an independent counsel was appointed to investigate.

See Final Report of Independent Counsel In Re: Bruce Ed-

ward Babbitt (Aug. 22, 2000). Although the independent

counsel found insufficient evidence to bring a criminal

bribery prosecution, its scathing conclusion about soft-

money fundraising bears remembering, as it pertains di-

rectly to the types of concerns the Buckley Court invoked

to uphold the constitutionality of FECA: “From a criminal

Justice perspective, as long as large sums of money outside

of the regulatory authority of the campaign finance laws —

i.e., ‘soft money — may be given to political parties, the

possibility of attempted corruption of official actions will

loom large, public confidence in the integrity of govern-

mental decision-making will be undermined and federal

prosecutors will too often be required to give extraordinary

scrutiny to what should be ordinary administrati

actions.” Id. at 422. - re

B. Soft-Money Fundraising Distracts Ele

cted

Officials From Their Public Duties

The Report documented examples of how soft-mon

fundraising has diverted the attention of key elected offi.

cials from their public responsibilities. In a 10-month pe-

riod before the 1996 election, for example, President Clin-

ton attended more than 230 fundraising events, raising

$119,000,000. See Report at 43. |

According to Presidential campaign advisor Dick

Morris, President Clinton “would say ‘I haven't slept

in three days; every ti turn around the

y want me

to be ata tnd rag I cannot think, I cannot do

anything. Every te of my time is spent at these

8368 (“One of the most discouraging aspects of the prese i

finance system is that even public policy decisions ban marta — a

utmost good-faith can take on an appearance of impropriety in the con-

text of a system where so many of the individuals or entities likely to

be affected by government actions are able to make the kind of large

campaign contributions presently permitted by our system.”).

fundraisers.” This frenzied pursuit of campaign con-

tributions raises obvious and disturbing questions.

Can any President who spends this much time raising

money focus adequately upon affairs of state? Is it

even possible for such a President to distinguish be-

tween fundraising and policymaking?

Id. (alteration in original); see also id. at 42 (“As Vice

President Gore himself noted, ‘we can raise the [necessary]

money ... ONLY IF — the President and I actually do the

events, the calls, the coffees, etc.’”) (alterations in origi-

nal).

Former Vice President Walter Mondale testified that

“‘fi]t is the most degrading and humiliating thing that can

happen to a public officer to have to spend a substantial

chunk of his or her time pleading for money in this kind of

way.... That is one of the most powerful arguments for

repeal of the soft money loophole.” Minority Report at

7520 (alteration in original). “In some ways, the most

troubling result of the White House’s and DNC’s ceaseless

quest for campaign funding is the great amount of time

the President and the Vice President themselves actually

spent raising money.” Report at 42. “The bottom line is

this: were it not for the lure of soft money and the relent-

less pressure to raise it, our nation’s highest officials

would have not been placed into the inappropriate situa-

tions in which the Committee too often found them. The

President and the Vice-President, for example, never

would have felt the need even to consider personally phon-

ing supporters for donations, and we likely never would

have seen the White House and Capitol Hill conscripted

into serving the fundraising goals of the DNC, the RNC,

and the two major presidential campaigns.” Additional

Views of Senator Lieberman at 9538.

Such frenzied pursuit of soft money fatally undermines

public confidence in our political system, as examples from

both parties illustrate. As one White House coffee atten-

dee commented, “‘the White House coffee was an improper

“shakedown” for money ... in the presence of the Presi-

dent. Report at 214. Another donor found the Vice

President’s telephone “sales pitch .. . ‘revolting,’” and still

another felt the call he received had “‘elements of a shake-

down.” Jd. at 501-02. In March 1995, the National Policy

Forum (a think-tank established by the RNC, see Report

at 16) held a conference on telecommunications at which

then-Senate Majority Leader Robert Dole and other Re-

publicans spoke. See Minority Report at 4664. One news-

paper reported: “‘[E]ven though the [requested] $25,000

payment is not mandatory to attend, company represen-

tatives professed surprise at the size of the contribution

request. “It’s pretty astounding,” said one invitee. “If this

doesn’t have ‘payment for acces[s]’ (to top GOP law-

makers) written all over it, I don’t know what does.”’” Id.

(first alteration in original).!”

Il. CONGRESS HAD A COMPELLING INTEREST

IN REGULATING USE OF SOFT MONEY TO

FUND SHAM “ISSUE ADS”

The way soft money is spent is just as problematic as

the way it is raised. During the 1996 election campaign

both the DNC and the RNC (along with corporations, un-

ions, and other interest groups) found a gaping loophole

through which they ran so-called “issue advertisements”

designed to influence federal elections."* Under FECA,

soft money cannot be used expressly to advocate the

'7 Although candidates arguabl

ber y would have to spend more time

raising hard dollars if unlimited soft money could no longer influence

federal elections, lower limits are less likely to place a candidate in the

position of asking for massive contributions from individuals and

therefore giving the appearance of being beholden to them. The

ib ycedabsaydieneen tcoleren

" t .

2 U.S.C. § 441a(aX1). ——

See JSSA 39sa (per curiam) (“It does not a

. ppear that prior to

1996, the practice of using issue advertising to influence federal -

tions was a widespread practice.”). -

election or defeat of a clearly identifiable federal candi-

date, but rather may be used only for more generic party-

building activities. See supra at p.2.

igni t development of party-building, however,

mi jh ads,” television advertisements that do

not expressly advocate the election or defeat of a specific

candidate. Report at 4465. Parties learned over time that

a cleverly worded ad can technically meet this standard by

portraying candidates in a positive or negative light “in

the context of issues.” Id. at 4478.

By the 1996 presidential campaign, “[t]he vast majority

of issue ads identified specific candidates and functioned

as campaign ads.... [Those ads] were effectively indis-

tinguishable from candidate ads.” Minority Report at

7515. Both the national parties and corporate, union, and

other interest groups ran numerous such issue ads funded

substantially’® or completely with unregulated soft money.

These sham ads, highly problematic in their own right be-

cause they were used to influence federal elections and not

restricted to generic party-building uses, were made worse

by the fact that they were often coordinated with — indeed,

controlled by — the 1996 presidential campaign from which

they purportedly were independent.

A. The National Parties Used Massive Amounts

Of Soft Money To Fund Sham “Issue Ads

In the 1996 election, the DNC spent approximately $44

million in soft money on issue ads, and the RNC spent ap-

proximately $24 million. See Report at 4482; Minority Re-

port at 8294. At the committee hearings, Harold Ickes,

President Clinton’s Deputy White House Chief of Staff,

responded to a question asking whether the average per-

son would understand the DNC and RNC issue ads as

suggesting a vote for Clinton or Dole: “‘I would certainly

19 Under FECA, federal law permitted issue ads run by a national

party in an election year to be paid for with 35% soft money, and the

rest with hard money. See JSSA 33sa-34sa (per curiam).

hope so. If not, we ought to fire the ad agencies.’” Minor-

ity Report at 8286.

The President knew he was using DNC soft money to

fund issue ads in the service of his re-election campaign.

He told a group of major contributors to the DNC:

“[W]e even gave up one or two of our fundraisers at

the end of the year to try to get more money to the

Democratic Party rather than my campaigns. My

original strategy had been to raise all the money for

my campaign this year, so I could spend all my [time]

next year being president, running for president, and

raising money for the Senate and House Committee

and for the Democratic Party.

And then we realized that we could run these ads

through the Democratic Party, which meant that we

could raise money in twenty and fifty and hundred

thousand dollar lots, and we didn’t have to do it all in

thousand dollars. And run down — you know what I

can spend which is limited by law. So that’s what

we've done. But I have to tell you I’m very grateful to

you. The contributions you have made in this have

made a huge difference.”

Report at 62 (emphasis added; alteration in original).

The Dole campaign adopted a similar strategy. “[T]here

can be little doubt that the RNC’s issue ads were intended

to influence the outcome of a federal election .... One of

those issue ads, entitled ‘The Story,’ was nothing more

than a biography of Bob Dole.” Id. at 4014.2” Indeed, an

original):

“Audio of Bob Dole: We have a moral obligation to give our chil-

dren an America with the opportunity and values of the nation we

grew up in.

Voice Over: Bob Dole grew up in Russell, Kansas. From his par-

ents he learned the value of hard work, honesty and responsibility.

internal RNC memorandum concluded that “‘[mjaking

this spot pass the issue advocacy test may take some do-

ing.” Id. at 4015; see also id. at 4014-15 (discussing an-

other RNC issue ad that “focused on personality traits [of

Bill Clinton] rather than public issues”); Minority Report

at 8301 (quoting Dole campaign manager as saying, “‘[w]e

went out in April and May and raised $25 million for the

party, of which about $17, $18, or $19 million was put into

party building ads, which were Bob Dole in nature’”).

While being interviewed by Ted Koppel of ABC, Dole

candidly admitted that, although his campaign did not

have enough money to pay for advertising, the RNC would

be running “generic” ads on his behalf (Report at 4153-54):

“Q You said generic spending, and then it says ‘Bob

Dole for president’, is that considered generic spend-

ing?

SEN. DOLE: It doesn’t say ‘Bob Dole for president.’

It has my — it talks about the Bob Dole story. It also

talks about issues. It never mentions the word that

I'm — it never says that I’m running for president,

though I hope that it’s fairly obvious, since I’m the

only one in the picture! (Laughter).”

So when his country called . . . he answered. He was seriously

wounded in combat. Paralyzed, he underwent nine operations.

Audio of Bob Dole: I went around looking for a miracle that

would make me whole again.

Voice Over: The doctors said he’d never walk again. But after 39

months, he proved them wrong.

Audio cf Elizabeth Dole: He persevered, he never gave up. He

fought his way back from total paralysis.

Voice Over: Like many Americans, his life experience and values

serve as a strong moral compass. The principle of work to replace

welfare. The principle of accountability to strengthen our criminal

justice system. The principle of discipline to end wasteful Washing-

ton spending.

Voice of Bob Dole: It all comes down to values. What you believe

in. What you sacrifice for. And what you stand for.”

B. The National Parties Coordinated Sham

“Issue Ads” With Their Presidential Candi-

date’s Campaign

In the 1996 campaign, the White House “operated the

[DNC] party apparatus as a slush-fund for the President’s

re-election campaign.” Report at 23. The Clinton cam-

paign and the DNC engaged in “unprecedented” coordina-

tion “over the content, placement, and production of adver-

tisements.... By the end of the campaign, any distinc-

tions remaining between the White House, the DNC, and

The soft money the President and Vice President had

been so instrumental in raising for the DNC was used to

fund DNC issue ads over which “the President himself ex-

ercised total control.” Id. at 34. According to Dick Morris,

President Clinton’s campaign advisor, “the President ‘was

as involved [in the DNC and Clinton/Gore ’96 media cam-

paign] as any of his media consultants were,’ ‘[e]very line

of every ad came under his informed, critical, and often

meddlesome gaze,’ such that ‘[t]he ads [for both the DNC

and Clinton/Gore ’96] became . . . the work of the Presi-

dent himeelf.’”” Jd. at 122 (alterations in original); see also

id. at 123-25 (detailing close involvement of Vice President

Gore and other White House officials). The coordination

even “extended to the exact day the media team chose to

run a DNC advertisement versus a Clinton/Gore ’96 ad-

vertisement,” id. at 118, and both the DNC and Clin-

ton/Gore ’96 “employed all the same consultants, pollsters,

-and media producers,” id. at 34. One meeting agenda can-

didly stated: “‘[u]Jse DNC to pay for it, we [the joint White

House, DNC and Clinton/Gore media team] control

production.’” Id. at 118-19 (alterations in original).

Although such close coordination was arguably illegal

under FECA, the Attorney General declined to appoint an

independent counsel. She opined that “‘FECA does not

prohibit the coordination of fundraising or expenditures

between a party and its candidate for office.” Id. at 4528.

The Attorney General’s opinion and the perception created

by these fundraising scandals thus made clear that Con-

gress had to close this enormous loophole. See Minority

Report at 8290 (“By permitting such coordinated efforts to

raise soft money and spend it on political activities that

advance the interests of presidential campaigns, the fed-

eral election laws create a tremendous loophole to both

contribution limits and spending limits.”).

The committee’s investigation also showed that, to a

lesser degree, the Dole campaign and RNC coordinated

ads; indeed, their media campaigns came under common

control. The Minority Report concluded that Senator

Dole’s “campaign manager, chief fundraiser, media con-

sultant, and pollster controlled the RNC’s media cam-

paign.” Id. at 8297; see also id. at 8302 (“[FJormer Dole

staffers who were on the RNC payroll ran every aspect of

the bankrupt Dole for President campaign, from planning

campaign events for Dole to raising money for a multi-

million-dollar ad campaign designed to boost the senator's

candidacy.”). Moreover, the RNC’s issue ads were typi-

cally run (like the DNC ads) only in “battleground” states

“where Clinton and Dole were close in the polls.” Jd. at

8299 (“[T]he criterion used by the RNC and the Dole cam-

paign for deciding where to run issue ads was whether the

ads would help Senator Dole win electoral votes.”).

C. Both Parties Shifted Soft Money From

National To State Party Coffers To Fund

More Sham “Issue Ads”

Pre-BCRA law permitted issue ads run by a national

party in an election year to be paid for with 35% soft

money. See JSSA 33sa-34sa (per curiam). Because FEC

regulations permitted state and local parties to fund issue

ads with more than 35% soft money, see id. at 34sa-36sa &

nn.14-15, national party committees often transferred soft

money to them. “Substantial amounts of such transfers

are made to state and local political parties for ‘generic

voter activities’ that in fact ultimately benefit federal

candidates because the funds for all practical purposes

remain under the control of the national committees. The

use of such soft money thus allows more corporate, union

treasury, and large contributions from wealthy individuals

into the system.” Report at 4466.

The size of such transfers is truly massive. In 1996, the

Democratic committees transferred as much as $64 million

in soft money to state parties, nearly nine times more than

in 1992. See id. at 4467; Minority Report at 7520. The

Republican committees transferred $50 million in soft

money to state parties, or almost 10 times more than in

1992. See Minority Report at 7520. The transfers did not

generally entail any loss of control over how the trans-

ferred soft money was spent. As one RNC memorandum

explains (id. at 8300):

“Some have voiced concern that buying through the

state parties could result in a loss of control on our

part. There is absolutely no reason to be concerned

about this. As was demonstrated in our efforts re-

cently in the [California] and [Oregon] special elec-

tions, our field staff is fully able to insure that state

parties make good on any arrangement we make with

them. This is simply a book keeping hassle, but not

in anyway [sic] a reason not to proceed.”

State parties thus “acted as mere conduits, exercising

no independent judgment over the ads.” Id.; see also Re-

port at 4468 (“the state entities operated as little more

than a pass-through for the DNC to pay for the production

and broadcasting of ads by the [same] firm” that produced

DNC and Clinton/Gore ’96 ads).”!_ Indeed, the communica-

21 This mechanism was also used in elections at other levels. The

DNC, for example, accepted a $230,000 soft-money contribution and

shortly thereafter transferred $215,000 to the Kentucky Democratic

Party, “which in turn paid for an advertising blitz that closely paral-

leled the themes that [the donor’s] favored candidate used in cam-

paigning for the U.S. Senate.” Report at 4467; see also id. at 4467-68

& n.32 (detailing incident where “the DNC saved $122,810 in hard

tions director for the Florida Democratic Party commented

with regard to ads run under the state party's name:

“‘Those aren’t ours; those are the DNC’s.’”” Jd.

D. Non-Party Groups Used Massive Amounts Of

Soft Money To Fund Sham “Issue Ads”

The loophole identified and exploited by the national

parties was likewise used by a wide array of advocacy

groups to influence the 1996 election. Such groups spent

an estimated $55-70 million on political advocacy cam-

paigns, or “roughly one-seventh of the 400 million dollars

expended on political advertising during the 1996 elections

by parties, candidates and others.” Report at 3993. A

substantial (though indeterminate) portion of those funds

was spent on issue ads meant to influence federal elec-

tions, yet, like the ads run by the national parties, avoided

using magic words of express advocacy (and thus arguably

avoided being deemed in-kind contributions subject to

hard-money limits). Jd.

In addition, those expenditures i, coordinated

varying de s with the 1996 presidenti campaigns

a the ve pein For example, “White House aides

and the AFL-CIO carefully reviewed each other’s adver-

tisements and coordinated their timing and placement.

Id. at 49; see also id. at 3997 (“Evidence . . . indicates [that

AFL-CIO] programs were conceived, designed and imple-

mented to defeat Republican Members of Congress during

the 1996 federal elections.”); id. at 3997-4006.”

ichi duit to pay for

dollars by using the Michigan Democratic Party as a con

; rs advertisements” produced by the DNC’s own media consultant).

22 «[1jn August 1995 [Deputy White House Chief of Staff Harold]

Ickes hr and chaired a White House meeting in the Roosevelt

Room between representatives of the DNC and Clinton/Gore 96 media

team and approximately seven representatives of various labor un-

ions.... [BJoth the union representatives and the DNC and Clinton/

Gore 96 media team displayed advertisements each had run or were

considering running. [Clinton presidential campaign advisor Dick]

The minority found that a conservative group, The Coa-

lition: Americans Working for Real Change, “was formed

to counter-balance issue ads run by the AFL-CIO. To do

so, it reportedly spent at least $4.5 million, supported 23

Republican incumbents, and criticized the voting records

of four Democrats in tight races. The Coalition’s ads also

contained nearly identical language to that used in ads

broadcast by the National Republican Congressional Coa-

lition (“NRCC”), a division of the RNC. In addition, the

Coalition’s ads were run at the same time as the NRCC’s

ads and in districts where the Republican incumbent’s

seat was vulnerable.” Minority Report at 8944 (footnotes

omitted).

The minority further found that “[t]he issue advocacy

loophole was also exploited by Triad Management Ser-

vices, ... [which] channeled millions of dollars from its

backers to two tax-exempt groups it had established for

the sole purpose of running attack ads against Democratic

candidates under the guise of ‘issue advocacy.’ By operat-

ing this way, Triad and its financial backers avoided the

disclosure and campaign contribution limits of the federal

election laws.” Id. at 4569. For example, under the guid-

ance of Triad, another nonprofit named Citizens for Re-

form with no previous record and “no ... offices, staff, or

even telephones,” id. at 6301, spent $2 million to run tele-

vision ads on congressional races from Kansas to Texas.

Morris testified that ... ‘It was a full briefing of us by them on their

media plans.” Report at 128 (footnote omitted).

*° The following ad, for example, aired during the final weeks of the

Montana congressional race between Bill Yellowtail and Rick Hill:

“Who is Bill Yellowtail? He preaches family values but took a

swing at his wife. And Yellowtail’s response? He only slapped

her. But ‘her nose was not broken.’ He talks law and order...

but is himself a convicted felon. And though he talks about pro-

tecting children, Yellowtail failed to make his own child support

payments — then voted against child support enforcement. Call

Bill Yellowtail. Tell him to support family values.”

- Y

III. THE BCRA ADDRESSES THE SOFT-MONE

AND ISSUE ADVERTISEMENT ABUSES

DOCUMENTED IN THE REPORT

e major problems documented in the Report are ad-

Pvc in oh fully support the BCRA. The Report de-

tailed potential reforms, including banning soft money at

the national and state party levels and restricting sham

issue advocacy by nonparty groups. See Report at 4468-

70, 4480-81, 4485-86, 4491-94; id. at 4492 (“A ban on the

raising of soft money by national party committees effec-

tively deals with the use of union and corporate general

treasury funds in the federal political process only if it

requires funding of candidate-specific ads with hard

money, such as that contributed to a political action com-

mittee.). The Minority Report likewise recommended that

Congress both “[eJliminate [sloft [mjoney ... contribu-

tions to political parties from individuals, corporations and

unions” and enact “reforms addressing candidate adver-

tisements masquerading as issue ads.” Minority Report at

9394.

The BCRA addresses both problems. Title I regulates

the uses by political parties of soft money, whereas Title II

attempts to prohibit labor union and corporate treasury

funds “from being used to run issue advertisements that

have an ostensible federal electioneering purpose.” JSSA

47sa. See BCRA §§ 101-103 (Title I), 201-214 (Title I).

cae ' ' b-

The legislative history shows that Congress relied su

stantially on the Report in passing the BCRA.** Senator

Minority Report at 6305 (alteration in original); see also Report at

4007. Although the group was credited with helping Hill beat Yellow-

tail, it never disclosed how much it spent or the sources of its funds.

See Robert P. Meier, Comment, The Darker Side of Nonprofits: When

Charities and Social Welfare Groups Become Political Slush Funds,

147 U. Pa. L. Rev. 971, 990 n.117 (1999).

as islati six years of study and

The BCRA “legislative process took over y i

reflection by Congress.” JSSA 482sa (Kollar-Kotelly); see id. at 482sa

n.1 (citing numerous campaign finance reform bills introduced over

the last six years). Although the Senate and House bills ultimately

Feingold recounted that, “in the wake of the Thompson

investigation, we reluctantly concluded that we needed to

first focus our efforts on closing the biggest loopholes in

the system: the soft money and the phony issue ads.” 148

Cong. Rec. S2104 (Mar. 20, 2002).

Senator Lieberman likewise described his “new sense of

commitment in 1997, when the Governmental Affairs

Committee conducted its year-long investigation into

campaign finance abuses in the 1996 Federal elections.

With the passage of time, the shock of that investigation’s

revelations have started to fade. But it is critical that

we remember them because they represent precisely what

is most wrong with the system we plan to change and

enacted as the BCRA were not accompanied by explanatory committee

reports, members of Congress frequently invoked the Thompson Com-

mittee Report in floor debates as support for the legislation> See, e.g.,

147 Cong. Rec. $3251 (Apr. 2, 2001) (Sen. Thompson) (“The Final Re-

port of the Senate Governmental Affairs Committee’s year-long Special

Investigation documents numerous examples of actual and apparent

corruption resulting from the solicitation and contribution of soft

money.... The McCain-Feingold bill will restore a campaign finance

system that has been completely thwarted by loopholes created in the

late 1970s.”); id. at S3138 (Mar. 29, 2001) (Sen. Levin) (“The 1997 Sen-

ate investigation collected ample evidence of campaign abuses, the

most significant of which revolved around the soft money loophole.

Soft money contributions of hundreds of thousands, even millions, of

dollars, were shown to have undermined the contribution limits in Fed-

eral law and created the appearance of corruption in the public’s eye.

The Republican and Democratic national political parties that solicit

and spend this money use explicit offers of access to the most powerful,

elected officials.”); id. at S2463 (Mar. 19, 2001) (Sen. Levin) (explaining

how hearings of the committee exposed how politicians had “trashed

the limits on contributions that exist in the law” and stating desire

that, “[hjopefully, McCain-Feingold is going to restore those limits”);

148 Cong. Rec. S2133-34 (Mar. 20, 2002) (Sen. Collins) (“The problem

with soft money was painfully evident during the 1997 hearings ....

We heard from individual after individual who testified about giving

hundreds of thousands of dollars in order to buy access.”); id. at $2138-

41 (Sen. McCain) (“The Senate Governmental Affairs Committee inves-

tigation found flagrant abuses by both Presidential campaigns in the

1996 elections.”).

precisely what helped to begin in full force the effort that

is about to reach a successful conclusion.” Jd. at $2137.

In the wake of the campaign finance meltdown in the

1996 elections, a Gallup poll showed that 59% of Ameri-

cans believed elections were “generally for sale to the can-

didate who can raise the most money,” half thought the

President “was willing to change government policy in ex-

change for donations,” and 77% considered national lead-

ers to be “mostly influenced by the pressure they receive

on issues from major campaign contributors.” The Gallup

Organization, Americans Not Holding Their Breath on

Campaign Finance Reform (Oct. 11, 1997). A paltry 19%

believed elected officials were influenced by what is in the

best interests of the country. Jd. As the court below recog-

nized, more recent polls show these perceptions linger un-

abated. See JSSA 628sa (Kollar-Kotelly), 1292sa (Leon).

The investigation by the Senate Governmental Affairs

Committee in 1997 and 1998 established a documentary

and testimonial record that proved crucial in convincing

legislators of the need to close the loopholes in FECA that

had so badly distorted our electoral system and “to restore

the campaign finance system to what was intended prior

to the appearance and exploitation of the soft money loop-

hole.” 147 Cong. Rec. $3251 (Apr. 2, 2001) (Sen. Thomp-

son). That record exposed the worst of our system: meet-

ings and sleepovers in the White House for specially cho-

sen contributors of high-dollar soft money, the alteration

in policy to meet the demands of donors, and the use of

soft money for advocacy purposes at an unprecedented

scale. In seeking to return the system to what it had been

under FECA before those loopholes were discovered, Con-

gress had a more than ample evidentiary record and a

constitutionally proper mandate under Buckley to enact

the BCRA.

CONCLUSION

Amicus respectfully urges this Court to uphold the con-

stitutionality of BCRA Titles I and II.

August 5, 2003

Respectfully submitted,