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Intelligence


INVESTIGATION OF ILLEGAL OR IMPROPER ACTIVITIES
IN CONNECTION WITH 1996 FEDERAL ELECTION CAMPAIGNS

FINAL REPORT of the COMMITTEE ON GOVERNMENTAL AFFAIRS
SENATE Rept. 105-167 - 105th Congress 2d Session - March 10, 1998
                 ADDITIONAL VIEWS OF SENATOR CARL LEVIN
    When the Committee began its investigation into campaign 
finance abuses last year, some of us said that the real 
problems with the 1996 campaign were not, for the most part, 
what was illegal, but what was legal. The Committee 
investigation proved that to be true. While illegal foreign 
contributions and contributions made in the name of another 
found their way into both political parties, the bulk of the 
activity which came under public scrutiny involved candidate 
and party conduct that was legal, including the solicitation 
and receipt of soft money contributions in massive amounts 
clearly violating the intent of legislated contribution limits; 
the intentional misuse of so-called issue advocacy commercials 
to elect or defeat a particular candidate; and the blatant 
offers of access in exchange for contributions.
    Yet back in March of 1997, we had to fight to have these 
activities included in the scope of the Committee's 
investigation. The Republican leadership at that time was 
committed to limiting the scope of the Committee's 
investigation to activities that were already illegal and 
excluding activities that should be illegal. In the end, 
Members on both sides of the aisle fought to defeat that 
limitation and to include ``improper,'' as well as illegal, 
activities within the jurisdiction of the Committee's work.
    The significance of that issue becomes apparent when we 
look at what we learned from this investigation: the driving 
force behind most of the conduct we investigated in the 1996 
federal elections is the currently legal chase for large 
donations of money--soft or unrestricted money--which could be 
used to pay for the activities of the national parties on 
behalf of their candidates, outside the contribution and 
expenditure limits of the federal election laws.
    Restrictions that apply to contributions of hard money--for 
example, prohibitions on contributions in the name of another 
and solicitations of persons on federal property--don't even 
apply to soft money. And the various uses of soft money--issue 
ads designed and used to support or defeat specific candidates; 
contributions of soft money to non-profit organizations; and 
coordination of the expenditure of soft money between 
candidates and their parties--slip under and between the 
current prohibitions in federal election laws.
    The Republican leadership did not want to face the reality 
of the role of soft money in the 1996 elections, because the 
Republican leadership did not want to fuel the fire for 
campaign finance reform. But the reality of our campaign 
finance system could not be avoided, and, in the end the real 
message of the 1996 elections has been the evasion of our 
campaign finance laws through the solicitation and use of large 
amounts of soft money.
Tamraz is a bipartisan problem
    Roger Tamraz, a large contributor to both parties, became 
the bipartisan symbol for what's wrong with the current system. 
Roger Tamraz served as a Republican Eagle in the 1980s during 
Republican Administrations and a Democratic Trustee in the 
1990s during Democratic Administrations. Tamraz's political 
contributions were not guided by his personal support for or 
against the person in office; Tamraz was unabashed in admitting 
his political contributions were made for the purpose of 
getting access to people in power. Tamraz showed us in stark 
terms the all-too-common product of the current campaign 
finance system--using unlimited soft money contributions to buy 
access. And despite the condemnation by the Committee and the 
press of Tamraz's activities, when asked at the hearing to 
reflect on his $300,000 contribution in 1996, Tamraz spoke 
plainly when he said, ``I think next time, I'll give 
$600,000.'' He spoke plainly, because he knows selling access 
is legal and he told us as much. He said, ``[Y]ou set the 
rules, and we are following the rules. . . . this is politics 
as usual. What is new?''
    Ironically and poignantly, while Republican Committee 
members criticized the access Tamraz obtained to the Clinton 
White House in the face of the opposition of the National 
Security Council, we learned that the Republican Party was 
simultaneously soliciting Tamraz to be a special donor to 
Republican campaign efforts.
    Tamraz received the solicitation in early 1997 from the 
National Republican Senatorial Committee to join the 
``exclusive Republican Senatorial Inner Circle.'' The 
invitation was signed by Majority Leader Trent Lott, and stated 
at the end, ``I look forward to meeting you personally and 
formally welcoming you to the Inner Circle in the near 
future.'' The letter said Tamraz was being nominated to fill 
one of the ``28 Inner Circle nominations open in New York.'' On 
February 18th, Tamraz got a follow-up letter from Senator Mitch 
McConnell, Chairman of the Republican Senatorial Inner Circle. 
Senator McConnell, referring to the earlier letter from 
Majority Leader Lott, wrote:
          The Inner Circle Leadership Committee placed your 
        name in nomination to receive this honor at our last 
        meeting based on the fact that your personal 
        accomplishments and your proven commitment to our Party 
        will make you a perfect Inner Circle Member.
    The letter promised Tamraz that once he ``signs on'' to 
become a member of the Inner Circle, he will receive 
invitations ``twice a year to attend high-level Washington 
policy briefings, receptions and special dinners'' with 
Republican Senators ``as well as the top leaders of the 
Republican Party.'' Included, according to the letter, would be 
``the entire Republican Senate leadership of Senate Chairmen 
and Subcommittee Chairmen who are driving the national 
Republican agenda.'' The letter also promised ``an exclusive 
dinner where the Republican Senate leadership will honor you as 
a new Inner Circle member.''
    These offers of special access to leading Republican 
officials in return for contributions to the Republican Party 
were made to the very same man Republican Committee Members 
were saying should not have been allowed in the White House.
Lack of balance
    The failure to acknowledge the Republican side of the 
Tamraz problem was symptomatic of the Committee's entire 
investigation. Throughout the investigation, the Majority was 
unwilling to see or to admit that the problems caused by the 
chase for soft money under our current campaign finance system 
are problems of both parties. The curse of soft money has 
caused good people in both parties to push the limits, not 
because the persons involved have an insatiable ``thirst for 
money,'' but because, to succeed, the current campaign finance 
system leads to an unending chase for money. While few 
candidates or party officials would knowingly risk defeat by 
engaging in illegal campaign conduct, many candidates and party 
officials from both parties are willing to use available, legal 
loopholes to raise the huge sums of money needed to stay 
competitive.
    In the same way that the Majority loudly condemned Tamraz's 
relationship to the Democratic Party, while treating his 
relationship to the Republican Party with silence, the entire 
investigation lacked balance. It lacked a balanced presentation 
of the evidence, a balanced presentation of the issues, a 
balanced presentation of the involvement of both parties.
Republican campaign conduct
    Despite evidence that some campaign practices by the 
Republican National Committee took loopholes in the law even 
further than the Democratic National Committee, the Committee 
chose not to examine such information in public hearings, other 
than with respect to the National Policy Forum. One example is 
the open offer of access for contributions.
    Harold Ickes, White House deputy chief of staff, testified 
that the Democrats learned about offering access in exchange 
for campaign contributions from longstanding Republican 
practice. The most blatant example of this Republican practice 
was a fundraising document prepared and issued by the 
Republican Party in connection with the 1992 Republican 
President's Dinner, an event attended by President Bush. It 
lists so-called ``benefits'' available to persons who 
contribute or raise certain amounts of money for the Republican 
Party by buying or selling tickets to the Dinner. Top 
contributors and fundraisers get a private reception hosted by 
President Bush at the White House. They get a reception hosted 
by the President's Cabinet. They get a luncheon at the Vice 
President's residence hosted by Vice President Quayle. At the 
end of the invitation are these words: ``Note: Attendance at 
all events is limited. Benefits based on receipts.'' In other 
words, it's only when the Republican Party gets the 
contributions in hand, that the benefits become available. 
That's how far this system went before President Clinton became 
President--the direct sale of access to President Bush, Vice 
President Quayle, and top government officials in exchange for 
large campaign contributions.
    This fundraising tactic is not, of course, unique to 1992. 
In 1995, an invitation to join the Republican Congressional 
Forum states that contributors who pay a $25,000 membership fee 
get a host of ``membership benefits,'' including ``monthly 
private dinners with the Chairmen and Republican Members of key 
Congressional Committees.''
    In 1997, in the midst of the Committee's investigation and 
public criticism of fundraising excesses, the Republican Party 
issued a RNC Annual Gala invitation listing the same types of 
``benefits'' for contributors and fundraisers. The invitation 
offers persons who contribute or raise at least $250,000, for 
example, a future breakfast with Senate Majority Leader Trent 
Lott and House Speaker Newt Gingrich, and a future lunch with 
the House or Senate Committee Chairman of the contributor's 
choice.
    Such offers of access, like the DNC's excessive use of the 
White House, are not illegal, but they do create an appearance 
that access to elected officials is for sale. Making such 
offers of access illegal would be constitutionally difficult, 
since elected leaders must have access to their constituents 
and the public, whether or not they have contributed to their 
campaign. It would also defy common sense to bar elected 
officials from speaking to or meeting with their financial 
supporters. But like so much else in public life, there are 
appropriate limits to conduct that should or could be self-
regulated, requiring the use of good judgment and common sense. 
The problem is a bipartisan one, and although the Majority 
shrinks from acknowledging that the Republican Party also sold 
access in exchange for campaign contributions, the public knows 
both parties did it. By ignoring that reality, the Majority 
diminishes the value and credibility of both the Committee 
hearings and the Majority Report.
    Another practice of concern during the 1996 elections was 
the degree to which the RNC coordinated campaign activities 
with outside organizations which held themselves out as 
independent and, in many cases, nonpartisan. As described in 
the Minority Report, but never examined in a Committee hearing, 
the Republican National Committee spent millions of dollars 
financing the election-related activities of some key groups. 
The RNC gave over $4.6 million to Americans for Tax Reform, an 
allegedly independent, nonpartisan tax-exempt organization, 
which then used the money to advance the Republican agenda and 
Republican candidates, in coordination with the RNC. If the DNC 
had given $4.6 million to a labor union or environmental group 
in the month before the 1996 election--an unprecedented 
transfer of funds by a political party--I have no doubt that 
there would have been a searching investigation of the facts, 
if not full scale public hearings, which would have been 
appropriate. But here--where the money was paid by the RNC to a 
pro-Republican tax-exempt organization--not a single hearing 
witness was called. Worse, the Committee never interviewed a 
single person from either the RNC or Americans for Tax Reform 
about the $4.6 million.
    Internal RNC documents show that the RNC also explicitly 
planned to raise millions of dollars from third parties for 
outside pro-Republican groups, analyzed whether contributions 
would be tax deductible and whether they would have to be 
publicly disclosed, then actually collected and delivered 
specific checks from third parties to such organizations as 
Americans for Tax Reform, the American Defense Institute and 
National Right to Life Committee. The Minority Report also 
describes specific instances in which the RNC itself 
coordinated election-related activities with particular 
organizations, as well as instances in which pro-Republican 
entities, such as Triad Management, Coalition for Our 
Children's Future and the Christian Coalition, engaged in 
election-related activities in possible violation of federal 
election laws. Not one of these activities was examined in a 
Committee hearing.
    The Majority ignored these serious evasions of the law and 
focused, instead, on one instance in which Harold Ickes 
identified three possible non-profit organizations to which a 
potential contributor could make a tax deductible contribution. 
The Committee called a witness of questionable credibility to 
lay out the incident, without calling Mr. Ickes at the same 
hearing to provide his side of the story. Instead of looking at 
the extensive activities of the RNC in orchestrating support 
for Republican candidates among non-profit organizations in 
which millions of dollars changed hands, the Majority focused 
its fire on one incident involving proposed contributions that 
never actually took place. The Committee held an entire day of 
hearings on the Ickes' incident; it refused to call even one 
witness to testify about the RNC's systematic efforts to 
finance tax-exempt organizations supporting Republican 
candidates.
    The Committee's kid-glove treatment of RNC and Dole 
campaign officials further demonstrates the imbalance. In the 
nine months of the investigation, only 2 RNC officials were 
deposed and they answered questions only on the National Policy 
Forum. The Committee never deposed or took hearing testimony 
from a single RNC official on RNC policies or practices. The 
finance director of the DNC was deposed and testified publicly 
at length; the finance director of the RNC did neither. The 
general counsel for the DNC was deposed and testified publicly 
at length; the general counsel for the RNC did neither. Top 
officials of the Clinton campaign answered hundreds of 
questions at sworn depositions; not a single official from the 
Dole campaign ever answered a single question from this 
Committee.
    Thus, when the Majority Report states that, ``Based on the 
available evidence, the Committee finds no basis for concluding 
that any illegal coordination between the RNC and Dole campaign 
took place,'' the ``available evidence'' conveniently did not 
include any interviews of RNC or Dole campaign officials about 
these topics. This Committee has, in fact, concluded its 
investigation into the 1996 elections without ever asking the 
RNC or Dole campaign about soft money, coordination, issue ads, 
tax-exempt organizations, contribution laundering or any other 
campaign matter, other than the National Policy Forum.
    Having won the battle to conduct a broad investigation into 
both illegal and improper campaign activity, those of us who 
thought the result would be a bipartisan investigation, in the 
end, lost the war. The Majority focused its investigative power 
almost exclusively on the Democratic Party, providing the 
American people with a one-sided view that failed to 
communicate the whole truth--a campaign finance breakdown taken 
advantage of by both parties.
Democratic campaign conduct
    Even the Committee's examination of Democratic campaign 
conduct was, all too often, one-sided. On several occasions, 
Democratic Committee Members requested specific witnesses to 
provide a more balanced presentation of the facts, but our 
requests were denied. For example, for the hearing on the Hsi 
Lai Temple, we asked that Ladan Manteghi, the key scheduler on 
the staff of the Vice President, be called as a witness. She 
would have testified unequivocally and convincingly that she, 
the Vice President's office and the Vice President himself 
understood the Temple event to be a community outreach event 
and not a fundraiser. Manteghi was not called. Her testimony is 
quoted at length in the Minority Report, but was never 
presented to the American people during the key hearing on this 
event.
    On other occasions, the Majority failed to call key 
witnesses with important information. For example, a key issue 
associated with John Huang involved his use of the Stephens 
office. Vernon Weaver, head of the Stephens' Washington office 
and the person responsible for giving Huang permission to use 
it, was interviewed by the Committee but never called as a 
witness to answer questions about Huang's conduct. According to 
his interview, Weaver would have testified that he had known 
Huang for years from Arkansas, Huang routinely used the 
Stephens' Washington office well before becoming a Commerce 
Department employee, and Huang never did anything that made 
Weaver concerned that he might be engaging in wrongdoing.
    Still another example of imbalance involves videotapes of 
President Bush's fundraising events in the White House. Despite 
claims by some Committee Members that the Clinton 
Administration's use of the White House for fundraising 
purposes was ``unprecedented,'' the Majority refused repeated 
requests by the Minority to join in a request to the Bush 
Library for copies of those tapes. The Majority's failure to 
pursue or to allow the examination of information that might 
demonstrate both parties using the White House in the same 
manner is another glaring instance in which the Committee 
declined to present the whole truth about campaign conduct in 
this country.
The China Plan
    The Majority's investigation into the China Plan is one of 
the most disturbing examples of partisanship overwhelming the 
treatment of an important issue that should have been handled 
in a careful, bipartisan manner and presented in a balanced way 
to the American public. The origin of this plan was the Chinese 
Government's perception, following the 1995 congressional 
resolution advocating that Taiwanese President Lee be permitted 
to visit the United States, as well as President Lee's 
subsequent visit, that Congress and state officials were more 
influential in foreign policy decisions than the Chinese 
Government had previously determined. Consequently, the China 
Plan was designed to increase the Chinese Government's 
influence with the United States Congress and state 
legislatures; it was not designed to affect the 1996 
presidential race.
    The Majority Report mischaracterizes existing evidence 
regarding the focus and intent of the China Plan when it speaks 
of the China Plan in the context of the 1996 presidential 
election. None of the information the Committee obtained 
suggests that the China Plan targeted the presidential 
campaign. While there is direct evidence that the China Plan 
targeted state and congressional races, there is, again, no 
such direct evidence regarding the presidential elections. Yet, 
the Majority takes the China Plan, mixes it with evidence of 
contributions from foreign sources to the Democratic National 
Committee, and then improperly concludes that the two are 
linked, stating that the Committee's investigation suggests 
that ``China's efforts involved the 1996 Presidential race.''
    The Majority Report begins its description of the China 
Plan by citing early 1997 newspaper articles based on unnamed 
sources. The only evidence cited in the Majority's Chapter to 
substantiate the allegation that China's effort involved the 
1996 presidential race is a reference to ``fragmentary 
reporting'' by a ``U.S. agency'' that relates to ``China's 
efforts to influence the U.S. Presidential election.'' The 
Majority Report states that, because the information--which is 
``fragmentary''--is ``part of a criminal investigation,'' it 
``cannot be discussed'' further.
    In the absence of direct evidence supporting the allegation 
that the China Plan targeted the presidential election, the 
Majority Report tries to connect six DNC contributors to the 
People's Republic of China (PRC). To do so, because the six 
individuals have links to Taiwan, Macao or Hong Kong, the 
Majority states that some of their DNC contributions used funds 
from ``bank accounts in the Greater China area.'' The Majority 
Report defines ``Greater China'' as ``territories claimed or 
recently acquired by the PRC, including Hong Kong, Macao, and 
the Republic of China on Taiwan.'' While in the context of 
economic, cultural or other common interests, it may be 
acceptable to use the term ``Greater China'' to refer in one 
phrase to all four areas, in the context of allegations that 
individuals are acting as agents of the Government of the 
People's Republic of China, the use of this phrase is 
inappropriate, unfair and misleading.
    The Majority claims, for example, that contributions to the 
DNC using funds from bank accounts in Taiwan, Macao or Hong 
Kong are evidence of possible ties to the China Plan. Following 
that logic, why not put Haley Barbour on the list of possible 
PRC agents, since he solicited $2 million in collateral from 
Ambrous Young of Hong Kong; and why not add Simon Fireman, a 
national vice chair of the Dole campaign, who funded employee 
contributions using a company he owned in Hong Kong. After all, 
it is undisputed that Ambrous Young accompanied Haley Barbour 
on a trip to China in late 1995, in which they met with Chinese 
officials, including the Chinese Foreign Minister. Simon 
Fireman wired funds from Hong Kong to the United States for the 
express purpose of funding illegal contributions to the Dole 
campaign. By the Majority's standard, such actions are equally 
likely to be part of the China Plan.
    Aside from bank account information and without going into 
the Majority's evidence with respect to each of the six 
individuals, a few items are worth noting. With respect to 
Maria Hsia, the Majority Report states that Hsia ``has been an 
agent of the Chinese government . . . [and] has attempted to 
conceal her relationship.'' Substantiation for that serious 
charge consists of the words, ``The Committee has learned.'' 
The Majority Report makes no mention of Hsia's sworn affidavit 
denying the charge, and explaining that her family's support 
for Taiwan is longstanding and deep, and that her immigration 
work has put her in contact with the PRC government only on 
behalf of her immigration clients. Nor does the Majority Report 
offer any explanation why a person with strong ties to Taiwan 
and who has worked to introduce Taiwanese leaders to U.S. 
officials would act as an agent of the Chinese Government to 
influence U.S. elections.
    The Majority Report links Huang to the PRC by the following 
sentence: ``A single piece of unverified information shared 
with the Committee indicates that Huang himself may possibly 
have had a direct financial relationship with the PRC 
government.'' The thinness of the evidence and the tenuousness 
of the statement itself demonstrate how little may responsibly 
be drawn from the information before the Committee.
    The Majority freely uses speculation and innuendo to make 
numerous serious charges throughout the Chapter, unaccompanied 
by documentation or support. Take for example: ``The source of 
the Temple's money is believed to be Buddhist devotees and may 
derive from overseas.'' ``Many of these activities may or may 
not have been part of a single, coordinated effort. Regardless, 
a coordinated approach may have evolved over time.'' ``Other 
efforts, though undertaken by PRC government entities, have 
been characterized as rogue activities.'' ``It appears that the 
PRC money was in fact used to make or reimburse a contribution 
to Wong in the amount of $5,000.'' ``Huang himself may possibly 
have had a direct financial relationship with the PRC 
government.'' ``It is likely that the PRC used intermediaries, 
particularly with regard to political contributions.''
    Weaving together this web of possibilities, the Majority 
attempts to create a conspiracy by the six individuals it has 
identified and the PRC. The Report's analysis is strewn with 
words like ``suggest,'' ``seemingly,'' ``possible,'' ``possibly 
related,'' ``suspected,'' ``alleged,'' with conjecture layered 
upon conjecture. The unsubstantiated claims in the Majority 
Report do not meet the standards of proof and responsibility 
expected of a U.S. Senate Committee. Nor does it serve the 
Senate or the American people to be so loose with facts and 
conclusions, particularly when it comes to suggesting political 
activity by United States citizens against the interests of the 
United States.
    The Majority Report's analysis is further undermined by 
lapses in its examination of key figures. To establish a link 
between the China Plan and campaign contributions, the Majority 
used public hearings to get at the facts regarding campaign 
contributions and fundraising efforts by John Huang, the 
Riadys, Maria Hsia and Charlie Trie. But with respect to the 
key figure of Ted Sioeng, a person linked to campaign 
contributions made to both Republicans and Democrats, the 
Majority balked--it held no public hearing.
    The Committee had important information, for example, 
establishing that Matt Fong, the Republican Treasurer of the 
State of California, solicited and received contributions 
totalling $100,000 from Ted Sioeng. There is also evidence that 
Fong was involved in a solicitation of a $50,000 contribution 
for the National Policy Forum, an arm of the Republican 
National Committee, along with Joseph Gaylord and Steve Kinney, 
aides to the Speaker of the House Newt Gingrich. Fong arranged 
for Sioeng to meet and have his picture taken with Speaker 
Gingrich in Washington, D.C., and Fong accompanied Sioeng to 
that meeting with the Speaker. The Committee also was in 
possession of a photograph that appeared in a Chinese-American 
newspaper in California of a luncheon attended by Speaker 
Gingrich, Sioeng and other Asian Americans shortly after the 
$50,000 contribution to the National Policy Forum. Yet the 
Committee never called Fong as a witness at a hearing to learn 
more about Sioeng and any possible connection to the China 
Plan. Nor did the Committee call Gaylord or Kinney as hearing 
witnesses. Nor did the Majority ever hint in any public hearing 
that the China Plan had a Republican component. Conspicuously 
missing from the Majority's Chapter on the China Plan, despite 
its relevance, is any mention of Fong, who is now running for 
the Republican nomination to be a U.S. Senator from California.
    What is particularly disturbing about the Majority's 
failure is the fact that we know the China Plan explicitly 
focused on state candidates. As the Majority itself says in its 
Report, one of the ``several activities China undertook to 
influence our political processes during the 1996 election 
cycle'' was that a ``PRC government official devised a seeding 
strategy, under which PRC officials would organize Chinese 
communities in the U.S. to encourage them to promote persons 
from their communities to run in certain state and local 
elections.'' So despite a major contribution to a state 
candidate by the person most closely identified as having a 
financial connection to the PRC, the Committee didn't pursue 
it. The glaring omission from the Majority's China Plan Chapter 
of any mention of Sioeng's contributions to Fong or meetings 
with Speaker Gingrich speaks volumes about the Majority's 
partisan approach to the China Plan.
    The China Plan Chapter in the Majority Report makes a 
partisan stretch, using innuendo and hypothesis, to connect the 
China Plan to campaign misconduct in the presidential election, 
yet ducks discussing evidence connecting the China Plan with 
state and congressional campaigns because that evidence would 
involve Republicans. The Majority Report concocts a place 
called the ``Greater China area,'' lumping together the 
People's Republic of China, Taiwan, Macao and Hong Kong as 
though they had the same interests, to try to link the China 
Plan to DNC contributions. The China Plan did not receive the 
careful, bipartisan, balanced treatment warranted.
Need for reform
    In the end, despite all the efforts of the Republican 
Majority to focus on illegalities, one message from the 1996 
campaign dominates--the need to reform the federal campaign 
finance system. The system is broken and in desperate need of 
repair.
    The first priority should be to eliminate the raising and 
spending of soft money by both parties. As the Supreme Court 
said in Buckley v. Valeo when it upheld contribution limits:
          Under a system of private financing of elections, a 
        candidate lacking immense personal or family wealth 
        must depend on financial contributions from others to 
        provide the resources necessary to conduct a successful 
        cam paign. . . . To the extent that large contributions 
        are given to secure political quid pro quo's from 
        current and potential office holders, the integrity of 
        our system of representative democracy is undermined. . 
        . . Of almost equal concern is . . . the impact of the 
        appearance of corruption stemming from public awareness 
        of the opportunities for abuse inherent in a regime of 
        large individual financial contributions. . . . 
        Congress could legitimately conclude that the avoidance 
        of the appearance of improper influence ``is also 
        critical . . . if confidence in the system of 
        representative government is not to be eroded to a 
        disastrous extent.''
As enacted, the campaign finance laws' contribution limits 
never contemplated individual, corporate or union contributions 
of $100,000, $1 million or more, creating the expectation, 
actual or perceived, that these enormous sums were being repaid 
with something more than a thank-you note or attendance at a 
large banquet.
    In tandem with a ban on soft money, we must also tackle the 
problem of so-called issue ads. The most vicious combination in 
the 1996 election season was the use of huge contributions 
unregulated by federal election laws to pay for candidate 
attack ads mislabelled as issue ads. This combination 
encapsulates for me, more than any other single image, the 
collapse of our campaign finance system and the rock-bottom 
need for reform.
    We identified numerous examples of political advertisements 
which attacked candidates by name, but claimed to be issue 
discussions outside the law's limits on contributions. These 
candidate attacks ads were broadcast by parties, companies, 
unions and interest groups of all kinds on behalf of both 
parties. The Annenberg Public Policy Center estimates that 
parties and outside groups spent at least $135 million 
broadcasting these ads, almost 90 percent of which named 
candidates while sidestepping the contribution limits and 
disclosure requirements that are the bedrock of our campaign 
laws.
    Issue ads have been compared to drive-by shootings in which 
the sponsor of the attack is neither known nor held 
accountable. And they are using unlimited and unregulated money 
to pay for it.
    Congress cannot get off the hook by using its investigative 
powers to point fingers at campaign improprieties, while 
avoiding its share of the blame for failing to close the 
loopholes and reinvigorate federal campaign finance laws. 
Congress alone writes the laws, and we have no one to blame but 
ourselves for the sorry state of the federal election laws. It 
is not enough to know that the system is broken and lament that 
condition; Congress must also fix it. That is our legislative 
responsibility. Without legislative reform, we will be haunted 
by the words of Roger Tamraz that in the next election, he will 
give $600,000 to buy access to a candidate and will do so 
legally.
                                                        Carl Levin.



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