ONGOING A SILVER SOFT MONEY APPELLATE TER. THE D.N.C. SEIZED ON
           THE OPPORTUNITY TO USE THE F.E.C. SOFT-HARD ALLOCATION
           REGULATIONS TO RUN TV ADS USING THE 40% SOFT MONEY, THE FIRST
           ONES BEGAN RUNNING IN OCTOBER OF 1995 SHORTLY AFTER THIS
           OPINION WAS RENG DEADER. HOWEVER, IT IS IMPORTANT TO NOTE THE
           RULES STILL PROHIBITED SOFT MONEY, ELECTIONEERING MESSAGES AND

           COORDINATION BETWEEN THE CANDIDATE AND COMMITTEE. IN SUMMARY
           THE NATIONAL PARTY COULD SPEND SOFT MONEY FOR A PORTION OF ITS
           STATE-BASED PARTY BUILDING AND DIRECTLY SPEND SOFT MONEY FOR A
           PORTION OF ITS ISSUE ADVOCACY. OR IT COULD TRANSFER SOFT MONDAY
           TOY STATE PARTIES. AGAIN, THIS IS THE SYSTEM WE HAVE TODAY.
           DOES THIS SOUND LIKE A SIMPLE, FREE ENTERPRISE SYSTEM THAT WE
           ARE TRYING TO SOMEHOW IMPROPERLY MESS WITH?

           THIS IS THE HOPELESSLY COMPLEX, AS WE WILL SEE IN A MINUTE,
           RIDICULOUS SYSTEM, THAT WE HAVE ALLOWED TO BE CREATED UNDER OUR
           VERY NOSES. HOWEVER AGAIN, UNDER THE F.E.C. RULINGS AND COURT
           DECISIONS, IT SHOULD BE NOTED THAT NONE OF THIS SOFT MONEY WAS
           SUPPOSED TO GO FOR ACTIVITIES THAT WERE TO BE COORDINATED WITH
           INDIVIDUAL CANDIDATES. NEVERTHELESS, BY NOW THE SYSTEM HAD BEEN
           HAPHAZARDLY AND WITHOUT PREMEDITATION TRANSFERRED FROM ONE
           WHICH LIMITED BIG MONEY FOR FEDERAL CANDIDATES INTO AN
           ATTRACTIVE OPPORTUNITY FOR ANYONE WILLING TO PUSH THE SOFT

           MONEY DEFAME TO ITS NEXT LEVEL AND PAST WHAT THE LAW APPLAUD.
           THE CLINTON-GORE CAMPAIGN WAS WILLING. BRIEFLY STATED THROORX
           CAMPAIGN CIRCUMVENTED THE D.N.C.'S COORDINATED EXPENDITURE
           LIMIT, AND USED APPROXIMATELY $344 MILLION?
           NATIONAL COMMITTEE SOFT MONEY TO THEIR CANDIDATE'S ADVANTAGE
           THROUGH ELECTIONEERING MESSAGES THAT THEY CLAIM TO BE ISSUE
           ADVERTISEMENTS. ALL THE TIME WHILE CERTIFYING, UNDER OUR
           PRESIDENTIAL SYSTEM, YOU REMEMBER, ALL THE WHILE CERTIFYING
           THAT THEY WOULD NOT SPEND ANYMORE THAN THE PUBLIC FUNDING

           SYSTEM WAS GIVING THEM. THEY WERE RECEIVING THE TAXPAYER
           FUNDING ALL AT THE SAME TIME THEY WERE RAISING THE $44 MILLION
           OUTSIDE THE SYSTEM. THE PRESIDENT AND THE VICE PRESIDENT
           PERSONALLY RACED A LOT OF THIS ON I, PUTTING THEM RIGHT BACK
           INTO THE CAMPAIGN FUNDING CHASE THAT CONGRESS SPECIFICALLY
           INTENDED THE CAMPAIGN LAWS TO PUT THEM ABOVE. THE PRESIDENT
           PERSONALLY REVIEWED AND EDITED TV COMMERCIAL SCRIPTS THAT THE
           SOFT MONEY WENT FOR. HELPED MAKE DECISIONS AS TO WHERE ADS
           WOULD BE RUN. AGAIN, SOFT MONEY IS NOT PERMIT TODAY SUPPORT

           INDIVIDUAL CANDIDATE AND NOT SUPPOSED TO BE COORDINATED OR
           DIRECTED BY THOSE CANDIDATES. NEVERTHELESS, THE ATTORNEY
           GENERAL, THROUGH HER OPINION ON THIS MATTER ACTION PERMITS THIS
           ABUSE AND WE CAN FASTEN OUR SEAT BETS FOR THE NEXT ELECTIONS
           UNLESS WE MAKE SOME CHANGES. NOW THE SEK LARGE AREA THAT WAS
           EXPLOITED IN THE 1996 ELECTION CYCLE HAD TO DO WITH THE
           TRANSFER OF LARGE AMOUNTS OF SOFT MONEY FROM THE NATIONAL PARTY
           TO THE STATE PARTIES, WHICH IN TURN WOULD BE DIRECTEDLY THE

           NATIONAL PARTIES AS TO HOW TO USE THE FUNDS FOR NATIONAL PARTY
           PURPOSES. IN OTHER WORDS, JUST USING THE -- THE NATIONAL PARTY
           IS JUST USING THE STATE PARTY AS A PASS THROUGH. UNDER THE
           F.E.C. RULES, THE AMOUNT OF PERMISSIBLE SOFT MONEY EXPENDITURES
           BY SAIT PARTIES DEPEND ON THE ROW SHOW OF -- RATIO OF FEDERAL
           TO NONFEDERAL CANDIDATES ON THE BALLOT F THERE WERE ARE TWO
           FEDERAL RACES AND EIGHT NONFEDERAL LOCAL RACES, THE STATE PARTY

           CAN PAY FOR 80% OF THEIR GENERIC ACTIVITIES WITH SOFT DOLLARS.
           AGAIN, THIS IS THESIMPLE DEREGULATED SYSTEM THAT WE HAVE TODAY.
           GIVEN THAT HARD DOLLARS RAISED IN THE $1,000 INCREMENTS ARE
           MORE DIFFICULT TO RAISE, THIS GIVES AN INENSIF TO HAVE THE
           STATE PARTY PAY TO TORE AS MANY ACTIVITIES AS POSSIBLE USING
           SOFT MONEY. IN OTHER WORDS, NOW THEY HAVE A SYSTEM ALL
           CONTORTED SO THAT STATES CAN USE MORE SOFT MONEY THAN FEDERAL
           CAN, SO YOU GAME THE FEDERAL SYSTEM AS MUCH AS CAN YOU THROUGH
           THE PARTY COMMITTEE, THE PRESIDENT RAISES THE SOFT MONEY, RUNS

           IT THROUGH THE D.N.C. AND SPENDS THE SOFT MONEY ADDITIONALLY TO
           WHAT HE IS ALLOWED TO SPEND THROUGH PUBLIC FINANCING THEN YOU
           GO TO STATES AND BECAUSE STATES CAN USE MORE SOFT MONEY THAN
           CAN YOU, YOU RUN THE REST OF IT THROUGH THE STATES AND HAVE THE
           STATES RUN THE SAME ADS THAT YOU ARE RUNNING AT THE FEDERAL
           LEVEL FOR THE SAME PURPOSE OF REELECTING THE PRESIDENT. NOW
           THAT'S THE SYSTEM THAT WE HAVE GOT TODAY. SO TO TAKE ADVANTAGE.
           SYSTEM, NATIONAL PARTY COMMITTEES BEGIN TRANSFERRING SOFT MONEY
           TO STATE PARTY COMMITTEES TO UTILIZE THEIR HIGHER SOFT MONEY

           ALLOWANCE. THEN THE CRUCIAL 1995 PRE-ELECTION YEAR, ACCORDING
           TO THE F.E.C. REPORT, THE D.N.C. TRANSFERRED ALMOST $11.4
           MILLION OF SOFT MONEY TO STATE PARTIES. FOLLOWED BY ANOTHER
           $6.5 MILLION IN THE FIRST QUARTER OF 1996. THE R.N.C. SHIFTED A
           LITTLE OVER $2.4 MILLION IT TO STATES IN THAT SAME PERIOD OF
           TIME. ULTIMATELY THE D.N.C. QUIETLY TRANSFERRED AT LEAST $32
           MILLION AND PLANS AS MUCH AS $64 MILLION BY SOME ESTIMATES, TO
           STATE DEMOCRATIC PARTIES IN THE 1919 -- 1996 ELECTION CYCLE.

           AND OF THIS MONEY WAS USED FOR TELEVISION COMMERCIALS. THIS
           TRANSFER ALLOWED OF COURSE THE STATE PARTY COMMITTEES TO USE
           NATIONAL PARTY SOFT MONEY IN AREAS TO HELP FEDERAL ELECTION
           GOALS, MORE THAN IF THE NATIONAL PARTY HAD MADE THE
           EXPENDITURES DIRECTLY. THE D.N.C. ON ITS OWN WOULD HAVE HAD TO
           PURCHASE THE SAME AIR TIME UNDER THE GUIDE LINES REQUIRING A
           HIGHER PEARS DAMAGE OF HARD DOLLARS. OUR HEARINGS DEMONSTRATED
           THAT ON SOME OCCASIONS THE VERY SAME AD WOULD BE RUN BOTH BY
           THE NATIONAL PARTY AND SAIT PARTY, ALL CREATED BY THE D.N.C.

           CLINTON-GORE MEDIA CONSULTANTS, SQUIRE APP AND KNOCK. REPORTS
           OF EXPENDITURES OF STATE PARTIES FROM JUDGE, INDICATED STATE
           ENTITIES OPERATED LITTLE MORE THAN PASS-THROUGHS FOR THE D.N.C.
           TO PAY FOR PRODUCTION AND BROADCASTING OF ADS BY THE SQUIRE
           FIRM. SQUIRE FIRM OF COURSE WAS UP HERE, IN THE WHITE HOUSE,
           CONSULTING WITH THE PRESIDENT, WAS THE PAID MEDIA CONSULTANT
           FOR THE D.N.C., FOR THE CLINTON-GORE CAMPAIGN, AND AT THE SAME

           TIME WAS RUNNING THESE ADS AND CREATING ADS FOR THE STATE
           PARTIES, AND IN MANY CASES THEY WERE THE SAME ADS. THE
           CLINTON-GORE CAMPAIGN FOUND THE WAY TO USE ALL BIG CORPORATE
           AND INDIVIDUAL AND UNION MONEY THEN COULD RAISE FOR THE BENEFIT
           OF THEIR OWN CAMPAIGN. THEY COULD ACTUALLY RAISE THE SOFT MONEY
           FOR THE D.N.C. WHICH IN TURN WOULD SPEND IT AS DIRECTEDLY THE
           CLINTON-GORE CAMPAIGN, IN ORDER TO BENEFIT THE NATIONAL
           CAMPAIGN. SO IT WAS ALL AN OBVIOUS RUSE TO ANYBODY WHO TOOK A

           LOOK AT IT. BUT IT COULD WORK IN A WORLD WHERE THE F.E.C. MIGHT
           TAKE FOUR OR FIVE YEARS TO IMPOSE A MODEST FINE AND WITH AN
           ATTORNEY GENERAL WILLING TO ADOPA TORTURED CLINTON-GORE LEGAL
           DEFENSE THEORY IN ORDER TO JUSTIFY SUCH ACTIONS. OF COURSE
           LABOR UNIONS AND THE O. 50 A 15 C-4 TAX EXCEPT GROUPS HAVE KENT
           APRIL PACE OF THESE DEVELOPMENTS. THEN RUN ADS TARGETING
           SPECIFIC CANDIDATES WHILE COORDINATING THEIR ACTIVITIES WITH

           THE CANDIDATE THEY PORT AS WELL AS WITH EACH OTHER. AS WITH THE
           NATIONAL PARTIES, THEY CLAIM THAT THE ADS THEY RUN ARE ISSUE
           ADS. CAN'T BE REGULATED. SOMETIMES THEY ARE, AND SOMETIMES
           MAYBE THEY ARE NOT. YOU HAVE TO DECIDE THAT ON AN INDIVIDUAL
           FACT-BY-FACT BASIS. HOWEVER, THEY TAKE THE POSITION THAT IN
           MOST CASES THAT THEY ARE NOT -- THEY ARE NOT COORDINATED.
           FACTUAL ISSUES. BUT IF THEY ARE COORDINATED WITH THE CANDIDATE,

           IT'S CONSIDERED TO BE A CONTRIBUTION TO THE CANDIDATE ACCORDING
           TO BUCKLEY. BUCKLEY HAS BEEN QUOTED OF COURSE AS LIMITING THE
           EXPENDITURES THAT CONGRESS -- THE REGULATION THAT CONGRESS CAN
           PLACE ON EXPENDITURES. BUT IN THE BUCKLEY DECISION IT SAYS IF
           YOU SET UP A KIND OF A SHAM DEAL WHERE YOU ARE SUPPOSED TO BE
           MAKING THESE INDEPENDENT EXPENDITURES BUT REALLY DOING IT AT
           THE DIRECTION OF THE CANDIDATE, THAT'S NOT INDEPENDENT. IT IS

           CONSIDERED A CONTRIBUTION TO THE CANDIDATE. AND THE F.E.C., AS
           IN MANY CASES, SUPPORTED THAT PROPOSITION. THERE IS NOTHING IN
           THE COURT CASE THAT IS WOULD INDICATE THAT THAT'S PROPER. IN
           FACT, QUITE THE CONTRARY. IN FACT THE F.E.C. TAKES THE POSITION
           THAT EVEN ISSUE ADS WHICH ARE COORDINATED ARE ILLEGAL. NATIONAL
           PARTIES AND INDEPENDENT GROUPS SEEM TO BE TAKING THE POSITION
           THAT WE DIDN'T COORDINATE, BUT IF WE DID, IT MAY BE LEGAL
           ANYWAY. BUT THE D.N.C. AND CLINTON-GORE CAMPAIGN STAND ALONE IN

           THAT ISSUE BECAUSE THEIR SOFT MONEY EXPENDITURES WERE
           COORDINATED AND DIRECTED BY THE PRESIDENT, SO OPENLY AND
           CLEARLY, AND BLATANTLY, THAT THEY HAD NO CHOICE BUT TO JUST
           ADOPT THE IDEA IN THE FACE OF COURT DECISIONS AND IN THE FACE
           OF F.E.C. RULINGS, THAT IT WAS STILL LEGAL AND PROPER AND THE
           ATTORNEY GENERAL HAS GONE ALONG WITH THEM ON IT. AS I SAID,
           BUBBLY ADDRESSED THE PROBLEMS OF WOULD BE CONTRIBUTORS AVOIDING
           LIMITS BY PAYING DIRECTLY FOR THE ADS THEMSELVES WHEN THEY WERE

           COORDINATING CONTROL BY THE CANDIDATE. BUCKLEY STATED AND THIS
           IS A QUOTATION FROM THE MUCH-COASTED BUCKLEY, "SUCH COORDINATED
           AND CONTROLLED EXPENDITURES ARE TREATED AS CONTRIBUTIONS RATHER
           THAN EXPENDITURES UNDER THE ACT. THE ACT CONTRIBUTION CEILINGS
           PREVENT ATTEMPTS TO CIRCUMVENT THROUGH COORDINATIONS DISGUISED
           TO HIDE THEM. THAT'S THE BUCKLEY DECISION. OF COURSE IN THE
           PRESENT ENVIRONMENT, IT PREVENTS NO SUCH THING. BUCKLEY SAYS,

           LEGALLY IT PREVENTS IT. PRACTICALLY WE SEE THAT IT DOES NOT. IT
           CERTAINLY MAKES NO DIFFERENCE THE PERSON THAT RUNS THE TV ADS
           RUNS THEM THROUGH A PARTY INSTEAD OF BUYING THEM DIRECTLY. THE
           POTENTIAL FOR CORRUPTION THAT PEOPLE HAVE BEEN CONCERNED WITH
           FOR MANY, MANY YEARS, IN THIS COUNTRY AND OTHERS, IS THERE
           EITHER WAY. NEVERTHELESS THE ATTORNEY GENERAL SEEMS TO HAVE
           ADOPTED THE CLINTON-GORE CAMPAIGN ARGUMENT. THE ATTORNEY
           GENERAL'S MOTION WAIL HAVE MANY RAMIFICATIONS, MR. PRESIDENT.

           HER POSITION IS WASTED ON THE IDEA THAT SOFT MONEY
           CONTRIBUTIONS ARE NOT CONTRIBUTIONS. THERE IS A DEFINITION, AS
           YOU KNOW, OF CONTRIBUTIONS IN THE ACT, IN THE LAW, AND SHE SAYS
           SINCE SOFT MONEY CONTRIBUTIONS DON'T FALL WITHIN THAT TESTIFY
           NATION OF CONTRIBUTIONS, THEN THEY ARE NOT REGULATED. SO THAT
           YOU CAN HAVE UNLIMITED MONEY OVER HERE, SOFT MONEY, WE WON'T
           CALM THEM CONTRIBUTIONS, SO THEY ARE NOT REGULATED. WELL, IF
           THAT BLANKET POSITION IS TRUE, THEN FOREIGN SOFT MONEY
           CONTRIBUTIONS ARE NOT ILLEGAL EITHER. BECAUSE THEY CAME UNDER

           THE SAME DEFINITION. IF CONTRIBUTIONS OF ANY KIND, SOFT MONEY
           CONTRIBUTIONS OF ANY KIND ARE NOT REALLY CONTRIBUTIONS AS
           DEFINED BY THE ACT, THEN THAT'S GOING TO APPLY DOMESTIC OR
           FOREIGN. UNDER HER INTERPRETATION, YOU COULD HAVE UNLIMITED
           AMOUNTS OF FOREIGN MONEY BROUGHT IN AND PUT BY A POLITICAL
           CAMPAIGN INTO A SOFT MONEY ACCOUNT AND USED FOR SO-CALLED
           ISSUED ADS, AND IT WOULD BE PERFECTLY LEGAL. THESE ARE THE

           THINGS THAT WE ARE GOING TO SEE IN THE NEXT ELECTION CYCLE. IF
           CONGRESS DOES NOT WANT TO BE BOUND BY THIS ABSURD
           INTERPRETATION THEN WE ARE GOING TO HAVE TO ACT. IN SUMMARY WE
           SEEP THE 1996 ELECTIONS PRODUCED SOME CLEAR VIOLATIONS OF THE
           CRIMINAL LAW. CONGRESS' JOB IN THIS AREA IS TO EXERCISE
           OVERHEIR OVERSIGHT OF THE JUSTICE DEPARTMENT. WE SEE THE WAY
           SOFT MONEY ISSUE ADVOCACY AND COORDINATION ARE BEING USED, AND
           ALLOWED TO BE USED, AS A PRACTICAL MATTER WE ARE LEFT WITH NO

           CAMPAIGN FINANCE SYSTEM AT ALL. AND THIS WEEK WE MUST DECIDE IF
           THAT'S REALLY WHAT WE WANT. BECAUSE OF ALL OF THESE LOOPHOLES
           HAVE BEEN OPENED UP, CONTRARY TO OUR ORIGINAL INTENT, WE FOUND
           OURSELVES WITH A SITUATION WHERE WE WEREN'T THE ONES THAT
           OPENED UP THE BARN DOOR, BUT ALL THE HORSES ARE RAPIDLY
           LEAVING. DO WE WANT TO FIX IT OR DO WE WANT TO TAKE ADVANTAGE
           OF IT?
           BECAUSE IT ESSENTIALLY HELPS ALL INCUMBENTS. AND WE GO THROUGH
           THIS EXERCISE EVERY SO OFTEN AND GET A PRETTY GOOD VOTE BUT NOT

           QUITE ENOUGH. NOW WE HAVE GOT OUR CAKE AND EAT IT, TOO. IF WE
           HAD COME TO THIS FLOOR AND PASSED A PIECE OF LEGISLATION THAT
           ALLOWED THE CURRENT SYSTEM, THEY WOULD HAVE LAUGHED US OUT OF
           TOWN AND NOBODY HERE WOULD HAVE BEEN THE COURAGE TO DO IT. SO
           THE QUESTION IS WHETHER OR NOT WE FIND OURSELVES WITH IT, WE
           ARE GOING TO TAKE ADVANTAGE OF IT, BECAUSE IT BENEFITS ENCUM
           WENT BENTS. SOME WOULD WELCOME THIS TERM OF EVENTS. SOME
           BELIEVE THERE IS NOT ENOUGH MONEY IN OUR POLITICAL SYSTEM,

           ANTHAT LARGE CORPORATIONS AND UNIONS AND OTHERS SHOULD BE
           ALLOWED TO MAKE UNLIMITED CONTRIBUTIONS TO CANDIDATES. I
           BELIEVE THAT THOSE THAT HOLD THAT POSITION HAVE WON THE DAY, SO
           FAR. BECAUSE I THINK THAT'S EXACTLY WHERE WE ARE NOW. I THINK
           IT IS TRAGIC. I BELIEVE THAT BOTH OF US IN BOAT PARTIES WHO
           SUPPORT SUCH A SYSTEM, BECAUSE WE THINK IT MIGHT BE BENEFICIAL
           TO US AS INCUMBENTS, IN SOME WAY, ARE BEING VERY SHORT-SIGHTED,

           BECAUSE I BELIEVE THAT NO SYSTEM THAT REQUIRES US OR ALLOWS US
           AS ELECT DS OFFICIALS INCLUDING THE PRESIDENT OF THE UNITED
           STATES TO SPEND SO MUCH TIME RAISING SO MUCH MONEY FROM SO MANY
           PEOPLE WHO HAVE INTERESTS BEFO US TH WE ARE PASSING LEGISLATION
           ON, NO SUCH
{END: 1998/02/23 TIME: 16-45 , Mon.  105TH SENATE, SECOND SESSION}