Arlen Specter

Mr. SPECTER

Mr. SPECTER. Mr. President, in seeking recognition, I am putting forward legislation on campaign finance reform which builds upon the experience of the Governmental Affairs Committee hearings, which are now in progress, on illegalities and improprieties of campaign finance reform. I have served on that committee for the past 8 months while we have conducted the investigation and the 6 weeks of hearings which we have had. The legislation which I am about to introduce builds on those hearings. At the outset, I compliment my colleagues, Senator John McCain and Senator Russ Feingold, for the work which they have done with the leadership. I have stated publicly that I applaud their efforts, but I disagree with a key provision of their bill, S. 25, which would give candidates free television advertising time. I have been advised that the McCain-Feingold bill may be modified as to that aspect. I have talked to my colleague, Senator McCain, today and had previously circulated my bill. Senator McCain advises he is interested in bringing the matter to the floor next week. We discussed the possibility of integrating the legislation or my adding amendments to his proposed bill. I have circulated this proposed legislation among a number of my colleagues on both sides of the aisle. I think there is an excellent chance we will have a number of cosponsors to this legislation. But I want to proceed now to make this brief statement on the substance of my legislation and to put the bill in so that our colleagues could consider this bill during the course of the next week before the matter comes to the Senate floor. My bill does six things. First, it eliminates ``soft money.'' We have seen an avalanche of soft money, into the hundreds of millions of dollars, influencing the 1996 election. My bill, second, defines ``express advocacy'' to enforce the intent of the Federal election laws to prevent coordinated campaigns. What we have seen on both sides of the aisle from both Democrats and Republicans are advertisements in the 1996 election, by the Republicans extolling the virtues of Senator Dole and criticizing President Clinton, and vice versa for the Democrats, praising President Clinton and criticizing Senator Dole. But for some reason those advertisements have not been defined to be ``express advocacy.'' The third provision of my bill would make ``independent expenditures'' truly independent by requiring affidavits from those who are involved in the process. My proposal would say that if someone is to make an independent expenditure, that person will have to file with the Federal Election Commission, swearing under oath under the penalties of perjury that the expenditure is truly independent. Then after that affidavit is filed with the FEC, the FEC will notify the candidate and the committee on behalf of whom the independent expenditure was made and require from that candidate and that committee an affidavit subject to the penalties of perjury that there is no coordination. My experience as prosecuting attorney has been that when people are compelled to take affidavits, they pay a lot more attention to what they are doing than some provision of the law which they might not know about, might not understand, or think has been disregarded. My sense is that as a general matter, not in all cases, but in many cases, these so-called independent expenditures are not independent at all. The fourth provision that I am proposing would be to try to deal with the Buckley versus Valeo decision that anyone may spend as much of his or her own money that he or she chooses. My bill incorporates the so-called Maine Standby Public Financing provision where, illustratively, if candidate A spends $10 million of his/her own money, then there would be public financing for the amount by which such expenditure exceeds the relevant spending cap. I am opposed to public financing generally, and opposed S. 2 which was introduced in this body years ago on that subject, because I think there ought not be public financing. But this ``standby'' provision I think would act principally to deter somebody from spending $10 million of their own money. The Government would put up money equal to the amount of the excess. I think that would deter somebody from spending the money knowing that their financial advantage would be matched. And to the extent that the expenditures would have to be made, I think that is worthwhile. It would stop people from buying seats in the U.S. Congress. The fifth provision would eliminate foreign transactions which funnel money into U.S. campaigns. Our Governmental Affairs investigation has shown what happened in the so-called Young brothers' transaction which went through the Republican National Committee and ended up placing foreign money in a political committee. This legislation would preclude that from happening again. The sixth and final provision would impose limitations and require reporting of contributions to the legal defense funds for Federal officeholders and candidates. The Governmental Affairs hearings have again shown, with the actions of Mr. Charlie Trie, hundreds of thousands of dollars came into the Clinton campaign for the legal defense fund. They were not reported. They were not identified. They were kept secret until after the election had occurred. And they are first cousins to campaign contributions. And this legislation would impose limitations and required reporting. Mr. President, this legislation is being introduced a little earlier than I had intended because I believe that we will have a number of cosponsors, Senators who are now considering the bill. But I thought it important to make this brief statement and to put the provisions of the bill into the Congressional Record so that Senators may have an opportunity to consider this proposal between now and next week when there may be an opportunity in one form or another to discuss campaign finance reform. As I say, with the modification that Senator McCain has apparently made taking out the provision requiring free television time, it may be possible to integrate these two bills or piecemeal amendments from my legislation into the McCain-Feingold bill. I had been unwilling to cosponsor that legislation because I think that constitutes a taking in violation of the provision against due process against taking without compensation. Six months of investigation and 5 weeks of hearings by the Senate Governmental Affairs Committee have confirmed my conclusion and the view of most Americans that campaign finance reform is necessary. Politics is awash in money--corrupting some, appearing to corrupt others, and making almost everyone in or out of the system uneasy about the way political campaigns are financed. I believe my colleagues Senator John McCain and Senator Russ Feingold have done an excellent job in providing leadership for campaign finance reform even though I disagree with the key provisions of their bill (S. 25) which would give candidates free television advertising time. In my judgment, taking such property without compensation is confiscatory and unconstitutional. Our Government Affairs hearings have highlighted issues not covered by the McCain-Feingold legislation and those hearings have suggested the need for other legislative reforms. My proposed legislation would: First, end ``soft money''; second, define ``express advocacy'' to enforce the intent of the Federal election laws to prevent coordinated campaigns; third, require affidavits to make ``independent expenditures'' truly independent; fourth, eliminate foreign transactions which funnel money into U.S. campaigns; fifth, deter massive spending of personal wealth by adapting a new ``standby public financing'' framework similar to one recently enacted by Maine; and sixth, impose limitations and require reporting of contributions to legal defense funds for federal office- holders and candidates. soft money The factual need for reform of the soft-money rules has been well documented. Public funding of Presidential campaigns was intended to eliminate collateral contributions. But soft money for so-called issue advocacy has created a gaping loophole that permits spending without limit. An estimated $223 million of soft money was raised by both parties in 1996. According to Congressional Quarterly, that figure represents almost 3 times what was raised as soft money in 1992 and more than 11 times that raised in 1980. While many have focused on the allegedly corrupting influence of political action committees, PAC's pale in comparison to soft money. For example, Congressional Quarterly has also reported that Enron Corp. gave $44,000 less through its political action committee in 1996 than it did in 1994, but the firm quintupled its soft money contributions to $627,400. Soft money flows not only from individuals, but also from corporations and labor unions, which are expressly prohibited from giving directly to candidates. Archer Daniels Midland donated a total of $380,000 to the Democratic and Republican National Committees during the recent election cycle. Phillip Morris, the Nation's leading tobacco company, donated a total of more than $2.7 million to the two parties in 1995 and 1996, with $2.1 million going to the Republican Party. In the first half of 1997, Common Cause reports that the tobacco companies gave $1.9 million to Republican and Democratic committees, at a time when Congress and the President have begun consideration of the tobacco litigation settlement. In 1996, telecommunications companies reportedly donated $14.5 million in soft money; twice as much as they did in 1992. In short, both parties have emerged as the vehicles for evading post-Watergate contribution limits, and neither will disarm unilaterally. Currently, there is a $20,000 cap on the amount that any individual can give to the national committee of a political party in any 1 year. In order to circumvent this limit, some individuals contribute to the non-Federal accounts of political parties which are not subject to any caps. These funds are then often spent on behalf of the party's candidate in a Federal election. To close this loophole the bill: Maintains the $20,000 a year cap which would apply to the total amount individuals can contribute to political parties, whether at the national, State or local level, for use in Federal elections. Prohibits the national committees of political parties from soliciting or receiving any contributions not subject to the provisions and caps of the Federal Election Campaign Act. Provides that State party committee expenditures that may influence the outcome of a Federal election may be made only from funds subject to the limitations and prohibitions imposed by Federal law. Expands the reporting requirements so that all national committees, including all congressional and Senate campaign committees, must report all receipts and disbursements, whether or not in connection with a Federal election. These restrictions on soft money contributions to parties are constitutional and consistent with the reasoning applied by the Supreme Court in Buckley. The logic of Buckley and its progeny permits Congress to cap campaign contributions when necessary to avoid the impropriety and the appearance of impropriety caused by large gifts. In Buckley the Supreme Court struck down certain caps on campaign expenditures that were originally included in the Federal Election Campaign Act [FECA]. At the same time, however, Buckley upheld a number of FECA's caps on campaign contributions, including the $1,000 cap in the amount that individuals can contribute to candidates, the $5,000 cap on the amount that individuals can contribute to political action committees, and the $20,000 cap on the amount that individuals can contribute to national committees of political parties. Buckley also upheld FECA's $25,000 cap on the total amount an individual can contribute to campaigns, PAC's and national committees in any 1 year. This bill extends the scope of these permitted caps to cover contributions to the State and local committees of political parties for use in Federal campaigns. The concept of proposing further caps on contributions to political parties was endorsed by the Supreme Court in its decision in Colorado Republican Federal Campaign Committee versus Federal Election Commission. In that case, the Court ruled that the sections of FECA that limited the amount of independent expenditures that could be made by a political party were unconstitutional. In reaching this conclusion, however, the Court approved limiting individual contributions to political parties: The greatest danger of corruption . . . appears to be from the ability of donors to give sums up to $20,000 to a party which may be used for independent party expenditures for the benefit of a particular candidate. We could understand how Congress, were it to conclude that the potential for evasion of the individual contribution limits was a serious matter, might decide to change the statute's limitations on contributions to political parties. [Emphasis added] The potential for evasion of the contribution limits clearly does exist, and the fact of evasion of these limits clearly does exist. It is indeed time that Congress changes FECA's limitations on contributions to political parties. express and issue advocacy In the 1996 Presidential elections, the line was blurred beyond recognition between party and candidate activities. There is substantial evidence that soft money was spent illegally during the 1996 campaign by both parties. According to a November 18, 1996, article in Time magazine, President Clinton's media strategists collaborated in the creation of a DNC television commercials. The article describes a cadre of Clinton-Gore advisors, including Dick Morris, working side by side with DNC operatives to craft the DNC advertisement which extolled the President's accomplishments and criticized Republican policies. Republicans did the same. Such cooperation constitutes violation of the Federal Election Campaign Act [FECA] which provides: Expenditures made by any person in cooperation, consultation, or concert, with, or at the request or suggestion of, a candidate, his authorized political committees, or their agents, shall be considered to be a contribution to such candidate. 2 U.S.C. 441a(a)(7)(B)(1) Thus, if the alleged cooperation between the Clinton/Gore campaign and the DNC took place, then all of the money spent on those DNC advertisements constituted contributions to the Clinton campaign. Under FECA, such contributions would have to be reported upon receipt and would have to be included when calculating the campaign's compliance with FECA's strict contribution and expenditure limits. The failure to treat the expenditures as contributions would be a violation of FECA, and the knowing and willful failure to treat the expenditures as contributions would be a criminal violation of FECA. There are indications that the Clinton/Gore campaign advisors did realize they were violating the law at the time. The Time article quotes one as saying, ``If the Republicans keep the Senate, they're going to subpoena us.'' The content of the DNC and RNC advertisements appears to have violated Federal election law. When an entity engages in issues advocacy to promote a particular policy, it is exempt from the limitation of FECA and can fund these activities from any source. When an entity engages in express advocacy on behalf of a particular candidate, it is subject to the limitations of FECA and is not permitted to fund such activities with soft money. Where the DNC and RNC advertisements did contain express advocacy, and funded these advertisements with soft money, then these committees violated FECA. The FEC defines ``express advocacy'' as follows: Communications using phrases such as ``vote for President,'' ``reelect your Congressman,'' ``Smith for Congress,'' or language which, when taken as a whole and with limited reference to external events, can have no other reasonable meaning than to urge the election or defeat of a clearly identified federal candidate. 11 CFR 100.22 In my judgment, both the DNC and RNC television advertisement crossed the line from issues advocacy to express advocacy. While the DNC and RNC ads did not use the words ``Vote for Clinton'' or ``Dole for President,'' these advertisements certainly urged the election of one candidate and the defeat of another. For example, the following is the script of a widely broadcast DNC television commercial: American values. Do our duty to our parents. President Clinton protects Medicare. The Dole/Gingrich budget tried to cut Medicare $270 billion. Protect families. President Clinton cut taxes for millions of working families. The Dole/ Gingrich budget tried to raise taxes on eight million of them. Opportunity. President Clinton proposes tax breaks for tuition. The Dole/Gingrich budget tried to slash college scholarships. Only President Clinton's plan meets our challenges, protects our values. Does this advertisement convey any core message other than urging us to vote for President Clinton? The RNC ads similarly crossed the line into express advocacy. The following is the script of a widely broadcast RNC television commercial: (Announcer) Compare the Clinton rhetoric with the Clinton record. (Clinton) ``We need to end welfare as we know it.'' (Announcer) But he vetoed welfare reform not once, but twice. He vetoed work requirements for the able-bodied. He vetoed putting time limits on welfare. And Clinton still supports giving welfare benefits to illegal immigrants. The Clinton rhetoric hasn't matched the Clinton record. (Clinton) ``Fool me once, shame on you. Fool me twice, shame on me.'' (Announcer) Tell President Clinton you won't be fooled again. Similarly, the Democrats, through their shared use of campaign consultants such as Dick Morris for Clinton-Gore 1996 and the Democratic National Committee, crossed the line into illegal contributions on television advertisements. There has been substantial information in the public domain about the President's personal activities in preparing television commercials for the 1996 campaign. The activity of the President has been documented in a book by Dick Morris and in public statements by former Chief of Staff, Leon Panetta. There is no doubt--and the Attorney General conceded this in oversight hearings by the Judiciary Committee on April 30, 1997--that there would be a violation of the Federal election law if, and when the President prepared campaign commercials that were express advocacy commercials contrasted with issue advocacy commercials. This bill will end the charade by providing a clear-cut statutory definition of express advocacy wherever the name or likeness of a candidate appears with language which praises or criticizes that candidate. independent expenditures This bill would put teeth into the law to make independent expenditures truly independent. Current law requires political committees or individuals to file reports quarterly until the end of a campaign and to report expenditures of more than $1,000 within 24 hours during the final 20 days of the campaign. This legislation would require reporting for independent expenditures of $10,000 or more within 24 hours during the last 3 months of a campaign. This bill would require the individual making the independent expenditure or the treasurer of the committee making the independent expenditure to take and file an affidavit with the FEC that the expenditures were not coordinated with the candidate or his-her committee. Then, the Federal Election Commission would notify within 48 hours the candidate, campaign treasurer, and campaign manager of that independent expenditure. Those individuals would then have 48 hours to take and file affidavits with the FEC that the expenditures were not coordinated with the candidate or his/her committees. Taking such affidavits coupled with the penalty for perjury would be significant steps to preclude illegal coordination. clamping down on foreign contributions Anyone who has watched the Governmental Affairs hearings knows the alarming role of illegal foreign contributions in our 1996 campaigns. This legislation would strengthen the existing law to better prevent transactions which effectively fund domestic political campaigns with foreign financing schemes. Under current law, it is illegal for a foreign national to contribute money or anything of value, including loan guarantees, either directly or indirectly through another person, in connection with an election to any political office. Knowing and willful violations can result in criminal penalties against the offending parties. Mr. Haley Barbour's recent testimony before the Governmental Affairs Committee highlights the need to strengthen and more actively enforce the foreign money statute to ensure that foreign nationals do not circumvent this intended prohibition on foreign political contributions. This bill would clarify the law to cover all arrangements from foreign entities through third parties where funds from these transactions ultimately reach a U.S. political party or candidate. In his testimony, Mr. Barbour acknowledged that the National Policy Forum [NPF], which he headed, received a $2.1 million loan guarantee in October 1994, from Young Brothers Development, the U.S. subsidiary of a Hong Kong company which provided the money. The loan guarantee served as collateral for a loan NPF received from a U.S. bank. Shortly thereafter, NPF sent two checks totaling $1.6 million to the Republican National Committee [RNC]. NPF ultimately defaulted on its loan with the U.S. bank and Young Brothers eventually ended up paying approximately $700,000 to cover the default. The weak link in the existing law is that many people, including Attorney General Reno, have argued that the Federal campaign finance law does not apply to soft money. Accordingly, there are those who would argue that the NPF transaction described above would be legal so long as only soft money was involved. We need to make it 100 percent clear that foreign nationals cannot contribute to U.S. political parties or candidates under any circumstances. My bill closes this potential loophole by explicitly stating that the foreign money provisions of the bill apply to all foreign contributions and donations, both soft and hard money.

Mr. SPECTER

Mr. SPECTER. Mr. President, I have sought recognition because I would like to speak briefly on the introduction of legislation on campaign finance reform and to submit my bill today since the bill is going to, apparently, be considered in some form by the Senate next week. I have consulted with the distinguished manager, Senator Gorton, who stated that it would be acceptable to him for me to take 10 minutes, and I consulted with Senator Enzi, who has been waiting to speak on another matter, and I consulted with Senator Dodd, who may not be officially in charge of the bill.

Mr. SPECTER. I am just about to ask unanimous consent to proceed as if in morning business for the purpose of introducing legislation, but I wanted to state my purpose as to why I was seeking that time at this moment.

Mr. SPECTER. I thank my colleague from Connecticut.

Mr. SPECTER. I thank the Chair and thank my colleagues. I yield the floor. Mr. HUTCHINSON addressed the Chair.

Mr. SPECTER. I thank the Chair. (The remarks of Mr. Specter pertaining to the introduction of S. 1191 are located in today's Record under ``Statements on Introduced Bills and Joint Resolutions.'')

Mr. SPECTER

Mr. SPECTER. Mr. President, in seeking recognition, I am putting forward legislation on campaign finance reform which builds upon the experience of the Governmental Affairs Committee hearings, which are now in progress, on illegalities and improprieties of campaign finance reform. I have served on that committee for the past 8 months while we have conducted the investigation and the 6 weeks of hearings which we have had. The legislation which I am about to introduce builds on those hearings. At the outset, I compliment my colleagues, Senator John McCain and Senator Russ Feingold, for the work which they have done with the leadership. I have stated publicly that I applaud their efforts, but I disagree with a key provision of their bill, S. 25, which would give candidates free television advertising time. I have been advised that the McCain-Feingold bill may be modified as to that aspect. I have talked to my colleague, Senator McCain, today and had previously circulated my bill. Senator McCain advises he is interested in bringing the matter to the floor next week. We discussed the possibility of integrating the legislation or my adding amendments to his proposed bill. I have circulated this proposed legislation among a number of my colleagues on both sides of the aisle. I think there is an excellent chance we will have a number of cosponsors to this legislation. But I want to proceed now to make this brief statement on the substance of my legislation and to put the bill in so that our colleagues could consider this bill during the course of the next week before the matter comes to the Senate floor. My bill does six things. First, it eliminates ``soft money.'' We have seen an avalanche of soft money, into the hundreds of millions of dollars, influencing the 1996 election. My bill, second, defines ``express advocacy'' to enforce the intent of the Federal election laws to prevent coordinated campaigns. What we have seen on both sides of the aisle from both Democrats and Republicans are advertisements in the 1996 election, by the Republicans extolling the virtues of Senator Dole and criticizing President Clinton, and vice versa for the Democrats, praising President Clinton and criticizing Senator Dole. But for some reason those advertisements have not been defined to be ``express advocacy.'' The third provision of my bill would make ``independent expenditures'' truly independent by requiring affidavits from those who are involved in the process. My proposal would say that if someone is to make an independent expenditure, that person will have to file with the Federal Election Commission, swearing under oath under the penalties of perjury that the expenditure is truly independent. Then after that affidavit is filed with the FEC, the FEC will notify the candidate and the committee on behalf of whom the independent expenditure was made and require from that candidate and that committee an affidavit subject to the penalties of perjury that there is no coordination. My experience as prosecuting attorney has been that when people are compelled to take affidavits, they pay a lot more attention to what they are doing than some provision of the law which they might not know about, might not understand, or think has been disregarded. My sense is that as a general matter, not in all cases, but in many cases, these so-called independent expenditures are not independent at all. The fourth provision that I am proposing would be to try to deal with the Buckley versus Valeo decision that anyone may spend as much of his or her own money that he or she chooses. My bill incorporates the so-called Maine Standby Public Financing provision where, illustratively, if candidate A spends $10 million of his/her own money, then there would be public financing for the amount by which such expenditure exceeds the relevant spending cap. I am opposed to public financing generally, and opposed S. 2 which was introduced in this body years ago on that subject, because I think there ought not be public financing. But this ``standby'' provision I think would act principally to deter somebody from spending $10 million of their own money. The Government would put up money equal to the amount of the excess. I think that would deter somebody from spending the money knowing that their financial advantage would be matched. And to the extent that the expenditures would have to be made, I think that is worthwhile. It would stop people from buying seats in the U.S. Congress. The fifth provision would eliminate foreign transactions which funnel money into U.S. campaigns. Our Governmental Affairs investigation has shown what happened in the so-called Young brothers' transaction which went through the Republican National Committee and ended up placing foreign money in a political committee. This legislation would preclude that from happening again. The sixth and final provision would impose limitations and require reporting of contributions to the legal defense funds for Federal officeholders and candidates. The Governmental Affairs hearings have again shown, with the actions of Mr. Charlie Trie, hundreds of thousands of dollars came into the Clinton campaign for the legal defense fund. They were not reported. They were not identified. They were kept secret until after the election had occurred. And they are first cousins to campaign contributions. And this legislation would impose limitations and required reporting. Mr. President, this legislation is being introduced a little earlier than I had intended because I believe that we will have a number of cosponsors, Senators who are now considering the bill. But I thought it important to make this brief statement and to put the provisions of the bill into the Congressional Record so that Senators may have an opportunity to consider this proposal between now and next week when there may be an opportunity in one form or another to discuss campaign finance reform. As I say, with the modification that Senator McCain has apparently made taking out the provision requiring free television time, it may be possible to integrate these two bills or piecemeal amendments from my legislation into the McCain-Feingold bill. I had been unwilling to cosponsor that legislation because I think that constitutes a taking in violation of the provision against due process against taking without compensation. Six months of investigation and 5 weeks of hearings by the Senate Governmental Affairs Committee have confirmed my conclusion and the view of most Americans that campaign finance reform is necessary. Politics is awash in money--corrupting some, appearing to corrupt others, and making almost everyone in or out of the system uneasy about the way political campaigns are financed. I believe my colleagues Senator John McCain and Senator Russ Feingold have done an excellent job in providing leadership for campaign finance reform even though I disagree with the key provisions of their bill (S. 25) which would give candidates free television advertising time. In my judgment, taking such property without compensation is confiscatory and unconstitutional. Our Government Affairs hearings have highlighted issues not covered by the McCain-Feingold legislation and those hearings have suggested the need for other legislative reforms. My proposed legislation would: First, end ``soft money''; second, define ``express advocacy'' to enforce the intent of the Federal election laws to prevent coordinated campaigns; third, require affidavits to make ``independent expenditures'' truly independent; fourth, eliminate foreign transactions which funnel money into U.S. campaigns; fifth, deter massive spending of personal wealth by adapting a new ``standby public financing'' framework similar to one recently enacted by Maine; and sixth, impose limitations and require reporting of contributions to legal defense funds for federal office- holders and candidates. soft money The factual need for reform of the soft-money rules has been well documented. Public funding of Presidential campaigns was intended to eliminate collateral contributions. But soft money for so-called issue advocacy has created a gaping loophole that permits spending without limit. An estimated $223 million of soft money was raised by both parties in 1996. According to Congressional Quarterly, that figure represents almost 3 times what was raised as soft money in 1992 and more than 11 times that raised in 1980. While many have focused on the allegedly corrupting influence of political action committees, PAC's pale in comparison to soft money. For example, Congressional Quarterly has also reported that Enron Corp. gave $44,000 less through its political action committee in 1996 than it did in 1994, but the firm quintupled its soft money contributions to $627,400. Soft money flows not only from individuals, but also from corporations and labor unions, which are expressly prohibited from giving directly to candidates. Archer Daniels Midland donated a total of $380,000 to the Democratic and Republican National Committees during the recent election cycle. Phillip Morris, the Nation's leading tobacco company, donated a total of more than $2.7 million to the two parties in 1995 and 1996, with $2.1 million going to the Republican Party. In the first half of 1997, Common Cause reports that the tobacco companies gave $1.9 million to Republican and Democratic committees, at a time when Congress and the President have begun consideration of the tobacco litigation settlement. In 1996, telecommunications companies reportedly donated $14.5 million in soft money; twice as much as they did in 1992. In short, both parties have emerged as the vehicles for evading post-Watergate contribution limits, and neither will disarm unilaterally. Currently, there is a $20,000 cap on the amount that any individual can give to the national committee of a political party in any 1 year. In order to circumvent this limit, some individuals contribute to the non-Federal accounts of political parties which are not subject to any caps. These funds are then often spent on behalf of the party's candidate in a Federal election. To close this loophole the bill: Maintains the $20,000 a year cap which would apply to the total amount individuals can contribute to political parties, whether at the national, State or local level, for use in Federal elections. Prohibits the national committees of political parties from soliciting or receiving any contributions not subject to the provisions and caps of the Federal Election Campaign Act. Provides that State party committee expenditures that may influence the outcome of a Federal election may be made only from funds subject to the limitations and prohibitions imposed by Federal law. Expands the reporting requirements so that all national committees, including all congressional and Senate campaign committees, must report all receipts and disbursements, whether or not in connection with a Federal election. These restrictions on soft money contributions to parties are constitutional and consistent with the reasoning applied by the Supreme Court in Buckley. The logic of Buckley and its progeny permits Congress to cap campaign contributions when necessary to avoid the impropriety and the appearance of impropriety caused by large gifts. In Buckley the Supreme Court struck down certain caps on campaign expenditures that were originally included in the Federal Election Campaign Act [FECA]. At the same time, however, Buckley upheld a number of FECA's caps on campaign contributions, including the $1,000 cap in the amount that individuals can contribute to candidates, the $5,000 cap on the amount that individuals can contribute to political action committees, and the $20,000 cap on the amount that individuals can contribute to national committees of political parties. Buckley also upheld FECA's $25,000 cap on the total amount an individual can contribute to campaigns, PAC's and national committees in any 1 year. This bill extends the scope of these permitted caps to cover contributions to the State and local committees of political parties for use in Federal campaigns. The concept of proposing further caps on contributions to political parties was endorsed by the Supreme Court in its decision in Colorado Republican Federal Campaign Committee versus Federal Election Commission. In that case, the Court ruled that the sections of FECA that limited the amount of independent expenditures that could be made by a political party were unconstitutional. In reaching this conclusion, however, the Court approved limiting individual contributions to political parties: The greatest danger of corruption . . . appears to be from the ability of donors to give sums up to $20,000 to a party which may be used for independent party expenditures for the benefit of a particular candidate. We could understand how Congress, were it to conclude that the potential for evasion of the individual contribution limits was a serious matter, might decide to change the statute's limitations on contributions to political parties. [Emphasis added] The potential for evasion of the contribution limits clearly does exist, and the fact of evasion of these limits clearly does exist. It is indeed time that Congress changes FECA's limitations on contributions to political parties. express and issue advocacy In the 1996 Presidential elections, the line was blurred beyond recognition between party and candidate activities. There is substantial evidence that soft money was spent illegally during the 1996 campaign by both parties. According to a November 18, 1996, article in Time magazine, President Clinton's media strategists collaborated in the creation of a DNC television commercials. The article describes a cadre of Clinton-Gore advisors, including Dick Morris, working side by side with DNC operatives to craft the DNC advertisement which extolled the President's accomplishments and criticized Republican policies. Republicans did the same. Such cooperation constitutes violation of the Federal Election Campaign Act [FECA] which provides: Expenditures made by any person in cooperation, consultation, or concert, with, or at the request or suggestion of, a candidate, his authorized political committees, or their agents, shall be considered to be a contribution to such candidate. 2 U.S.C. 441a(a)(7)(B)(1) Thus, if the alleged cooperation between the Clinton/Gore campaign and the DNC took place, then all of the money spent on those DNC advertisements constituted contributions to the Clinton campaign. Under FECA, such contributions would have to be reported upon receipt and would have to be included when calculating the campaign's compliance with FECA's strict contribution and expenditure limits. The failure to treat the expenditures as contributions would be a violation of FECA, and the knowing and willful failure to treat the expenditures as contributions would be a criminal violation of FECA. There are indications that the Clinton/Gore campaign advisors did realize they were violating the law at the time. The Time article quotes one as saying, ``If the Republicans keep the Senate, they're going to subpoena us.'' The content of the DNC and RNC advertisements appears to have violated Federal election law. When an entity engages in issues advocacy to promote a particular policy, it is exempt from the limitation of FECA and can fund these activities from any source. When an entity engages in express advocacy on behalf of a particular candidate, it is subject to the limitations of FECA and is not permitted to fund such activities with soft money. Where the DNC and RNC advertisements did contain express advocacy, and funded these advertisements with soft money, then these committees violated FECA. The FEC defines ``express advocacy'' as follows: Communications using phrases such as ``vote for President,'' ``reelect your Congressman,'' ``Smith for Congress,'' or language which, when taken as a whole and with limited reference to external events, can have no other reasonable meaning than to urge the election or defeat of a clearly identified federal candidate. 11 CFR 100.22 In my judgment, both the DNC and RNC television advertisement crossed the line from issues advocacy to express advocacy. While the DNC and RNC ads did not use the words ``Vote for Clinton'' or ``Dole for President,'' these advertisements certainly urged the election of one candidate and the defeat of another. For example, the following is the script of a widely broadcast DNC television commercial: American values. Do our duty to our parents. President Clinton protects Medicare. The Dole/Gingrich budget tried to cut Medicare $270 billion. Protect families. President Clinton cut taxes for millions of working families. The Dole/ Gingrich budget tried to raise taxes on eight million of them. Opportunity. President Clinton proposes tax breaks for tuition. The Dole/Gingrich budget tried to slash college scholarships. Only President Clinton's plan meets our challenges, protects our values. Does this advertisement convey any core message other than urging us to vote for President Clinton? The RNC ads similarly crossed the line into express advocacy. The following is the script of a widely broadcast RNC television commercial: (Announcer) Compare the Clinton rhetoric with the Clinton record. (Clinton) ``We need to end welfare as we know it.'' (Announcer) But he vetoed welfare reform not once, but twice. He vetoed work requirements for the able-bodied. He vetoed putting time limits on welfare. And Clinton still supports giving welfare benefits to illegal immigrants. The Clinton rhetoric hasn't matched the Clinton record. (Clinton) ``Fool me once, shame on you. Fool me twice, shame on me.'' (Announcer) Tell President Clinton you won't be fooled again. Similarly, the Democrats, through their shared use of campaign consultants such as Dick Morris for Clinton-Gore 1996 and the Democratic National Committee, crossed the line into illegal contributions on television advertisements. There has been substantial information in the public domain about the President's personal activities in preparing television commercials for the 1996 campaign. The activity of the President has been documented in a book by Dick Morris and in public statements by former Chief of Staff, Leon Panetta. There is no doubt--and the Attorney General conceded this in oversight hearings by the Judiciary Committee on April 30, 1997--that there would be a violation of the Federal election law if, and when the President prepared campaign commercials that were express advocacy commercials contrasted with issue advocacy commercials. This bill will end the charade by providing a clear-cut statutory definition of express advocacy wherever the name or likeness of a candidate appears with language which praises or criticizes that candidate. independent expenditures This bill would put teeth into the law to make independent expenditures truly independent. Current law requires political committees or individuals to file reports quarterly until the end of a campaign and to report expenditures of more than $1,000 within 24 hours during the final 20 days of the campaign. This legislation would require reporting for independent expenditures of $10,000 or more within 24 hours during the last 3 months of a campaign. This bill would require the individual making the independent expenditure or the treasurer of the committee making the independent expenditure to take and file an affidavit with the FEC that the expenditures were not coordinated with the candidate or his-her committee. Then, the Federal Election Commission would notify within 48 hours the candidate, campaign treasurer, and campaign manager of that independent expenditure. Those individuals would then have 48 hours to take and file affidavits with the FEC that the expenditures were not coordinated with the candidate or his/her committees. Taking such affidavits coupled with the penalty for perjury would be significant steps to preclude illegal coordination. clamping down on foreign contributions Anyone who has watched the Governmental Affairs hearings knows the alarming role of illegal foreign contributions in our 1996 campaigns. This legislation would strengthen the existing law to better prevent transactions which effectively fund domestic political campaigns with foreign financing schemes. Under current law, it is illegal for a foreign national to contribute money or anything of value, including loan guarantees, either directly or indirectly through another person, in connection with an election to any political office. Knowing and willful violations can result in criminal penalties against the offending parties. Mr. Haley Barbour's recent testimony before the Governmental Affairs Committee highlights the need to strengthen and more actively enforce the foreign money statute to ensure that foreign nationals do not circumvent this intended prohibition on foreign political contributions. This bill would clarify the law to cover all arrangements from foreign entities through third parties where funds from these transactions ultimately reach a U.S. political party or candidate. In his testimony, Mr. Barbour acknowledged that the National Policy Forum [NPF], which he headed, received a $2.1 million loan guarantee in October 1994, from Young Brothers Development, the U.S. subsidiary of a Hong Kong company which provided the money. The loan guarantee served as collateral for a loan NPF received from a U.S. bank. Shortly thereafter, NPF sent two checks totaling $1.6 million to the Republican National Committee [RNC]. NPF ultimately defaulted on its loan with the U.S. bank and Young Brothers eventually ended up paying approximately $700,000 to cover the default. The weak link in the existing law is that many people, including Attorney General Reno, have argued that the Federal campaign finance law does not apply to soft money. Accordingly, there are those who would argue that the NPF transaction described above would be legal so long as only soft money was involved. We need to make it 100 percent clear that foreign nationals cannot contribute to U.S. political parties or candidates under any circumstances. My bill closes this potential loophole by explicitly stating that the foreign money provisions of the bill apply to all foreign contributions and donations, both soft and hard money.

Mr. SPECTER

Mr. SPECTER. Mr. President, I have sought recognition for the purpose of engaging the distinguished chairman of the Interior Appropriations Subcommittee in a brief colloquy regarding the fish known as the blue pike. Mr. President, the blue pike was officially declared extinct in 1983 under the Endangered Species Act. This highly valued species, prized for food and sport, prospered in Lakes Erie and Ontario prior to its disappearance in these lakes. But recently, I have been made aware of reports from the Erie, PA area that the blue pike can still be found in Canadian lakes. It this is so, we have an exceptional opportunity to bring a species back from the brink of extinction. Mr. President, I would suggest that the Biological Resources Division of the U.S. Geological Survey consider investigating the existence of the blue pike. The Chairman has shown excellent judgment in recommending a bill which includes a $1 million increase for restoration of the Great Lakes fisheries and habitats in this legislation, and I think this is an appropriate area where this important work can be carried out. I am advised that this study and restoration plan could cost $250,000. This is a small price to pay to realize the economic and environmental benefits this study, if successful, would surely produce. Accordingly, I look forward to working with my colleague from Washington to address the blue pike issue.

Mr. SPECTER

Mr. SPECTER. Mr. President, I have sought recognition to address my views on the Bryan amendment regarding timber road construction in our National Forests. I am very concerned about environmental protection and safeguarding our Nation's forests, providing there is an appropriate balance for economic development and job opportunities. On Senate floor votes in 1986 and 1989, I supported reductions in the direct Federal spending no road construction by the Forest Service. If this amendment had been limited to road construction, I would have voted for it. However, I am concerned about the impact of the elimination of all funding for the purchaser road credit program. From what I have seen and heard, during my August visits to the Allegheny National Forest in Elk, Forest, McKean and Warren counties, elimination of the purchaser road credits would constitute a significant hardship. Accordingly, that provision of the amendment causes me to vote against it. I do so on the assurances which I have received that the administration is currently reviewing the timber road construction program and may make substantial revisions which would provide for appropriate environmental safeguards. This vote, for me, is a close call. If there is not adequate environmental protection from changes in the purchaser road credit program in the administrations continuing review, I would be prepared to reconsider my vote on this issue on next year's Interior appropriations bill.

Mr. SPECTER

Mr. SPECTER. Mr. President, I ask unanimous consent that the order for the quorum call be rescinded.

Mr. SPECTER. I ask unanimous consent that I be recognized for 10 minutes to speak as if in morning business.

Mr. SPECTER

Mr. SPECTER. Mr. President, the competency and appearance of integrity, if not the integrity itself, of the Department of Justice was called into sharp question when Attorney General Reno, FBI Director Freeh, and CIA Director Tenet briefed the Senate Intelligence Committee last Wednesday and the Senate Governmental Affairs Committee on Thursday. In last week's briefing, the CIA Director advised that an individual, referred to here as ``X'', who had been identified in many news accounts as a major foreign contributor to political campaigns and campaign committees, has made significant contributions as part of a plan of the Government of China. The CIA Director further advised that the CIA obtained that information about ``X'' from the FBI, and it only put the FBI information on ``X'' together with the news reports on ``X'' after an analysis which was made following a request by Senator Bennett at the July 1997 FBI-CIA briefing of the Governmental Affairs Committee. The FBI Director advised that the information about ``X'' had been in the FBI files since September or October of 1995 on one report and since January 1997 on a second report. The FBI Director advised that the Governmental Affairs Committee was not told about that information at the July 1997 briefing because the FBI did not know it had the information. These disclosures raise a fundamental question of whether the FBI deliberately withheld the information or was not competent enough to know what information it had in its own files. Either alternative is a strong indictment of the FBI. With the new information on ``X,'' the question is: Where do we go from here on dealings with the Department of Justice and the FBI? When the FBI Director said the FBI did not know the FBI had the information on ``X'' in its files, based on my extensive dealings with Director Freeh, I accept and believe that he personally did not know the FBI had the information in its files. Frankly, I am not so sure that others in the FBI did not know of the import of that data. This matter obviously adds fuel to the fire on recent questions about the FBI and Director Freeh's leadership of that agency. There are questions on many matters, including the FBI laboratory, the FBI's handling of the interrogation of Mr. Richard Jewel in the Atlanta pipe bombing case, the FBI allowing White House people to look at confidential personnel background files, and the FBI's handling of the Ruby Ridge incident after Judge Freeh became director, as well as before. But notwithstanding those matters, I believe that Director Freeh is doing his job about as well as it can be done with that giant agency which is ever-expanding and taking on new worldwide assignments. But I do believe that Director Freeh is going to have to find out what went wrong here, take corrective action, including punitive measures, if warranted, and establish procedures to protect against its recurrence. It is really not a very complicated matter. All that is required is an index of names like ``X'' who have connections with the Government of China and then to cross-check those names against people who have appeared in the news media as major contributors to candidates or campaign committees. When I refer to this context, it is obviously not intended to be a comment on any special group. It is hard to understand why that cross- checking of a simple index was not done by the FBI. And it is even harder to understand why the Department of Justice investigators did not find out about it, if in fact they did not. In a context where the Attorney General has consistently refused to petition the court for appointment of an independent counsel, it may well be that either consciously or subconsciously, those under her command may be less inclined to pursue, vigorously, leads which may embarrass the administration. After all, the fundamental purpose of appointing independent counsel was to have someone in charge who was not allied with the administration, not beholden to the administration, and not motivated in any way to favor the administration. It is not unusual, as a matter of common experience, for subordinates to do what they think their superiors want whether or not they correctly speculate on their superior's wishes. Beyond giving a clear signal to all the subordinates, an independent counsel would be in a position to press hard on a continuing basis for people to make all searches and analyses which were not done here. Leadership and intensity establish a tone and purpose. From numerous indicators, that tone and purpose are not present in the current Department of Justice. The Attorney General said at last Thursday's briefing that she was ``not comfortable now'' to discuss cooperation with the Governmental Affairs Committee but would ``want to sit down and talk with the Department of Justice task force.'' There are two problems with her statement. First, she had ample time to discuss the matter with the task force since she had met with the Intelligence Committee the day before and certainly had some advanced knowledge prior to that meeting. Second, she has continually said she would be willing to consider our request, but consistently there has been no followup. The Governmental Affairs Committee was further advised at last Thursday's briefing that if in the future the Department of Justice found information like that on ``X'', they would ``very seriously consider and talk about bringing that information to the committee.'' That is palpably insufficient. An independent counsel should be appointed so that the individual can press to obtain all such information on a continuing basis and so that there is no doubt about the duty of all units in the Department of Justice, including the FBI and other governmental agencies, to follow the direction of the independent counsel. In short, Mr. President, we have a situation here where the FBI has information in its files since September or October 1995--almost 2 years ago--and other information since January 1997. That information is very important in linking an individual who is reputed to be a major campaign contributor, as noted in many news accounts, with a plan of the Government of China. Yet, that information was not made available to the Governmental Affairs Committee, and on the representation of the FBI not even known to the FBI. It came to light only because the FBI provides that information to the CIA. And the CIA had done an independent analysis at the request of Senator Bennett. Absent that request by Senator Bennett, absent the independent analysis of the CIA, today, we would not have that important link as we seek to understand the puzzle, put together the pieces on the so-called dotted lines, and understand what is going on in this matter. If we had independent counsel vigorously pursuing these matters and a clear-cut understanding throughout the entire Department of Justice and all Federal agencies, then we would have a realistic opportunity to get to the bottom of whatever is going on and take the corrective action. This is another link that I suggest is a very, very powerful link in the chain of evidence and circumstances really demanding appointment of independent counsel. I thank the Chair and yield the floor. In the absence of any other Senator seeking recognition, I suggest the absence of a quorum.

Mr. SPECTER

Mr. SPECTER. Mr. President, I thank my distinguished colleague, Senator Harkin, for his cooperation on this bill and the outstanding staff: Bettilou Taylor, Craig Higgins, Jim Sourwine, Jack Chow, Dale Cabaniss, for the majority, and the outstanding work on the minority side by Marsha Simon and Ellen Murray. I thank the leadership of Senator Lott--who is right here--and has been here at all times. I believe the passage of this bill is noteworthy. We had great problems passing a separate appropriations bill on Labor, Health and Human Services, and Education for fiscal year 1996. We were not able to get floor action on a bill until April 1996. It should have been finished on September 30, 1995. We finally broke that logjam with an amendment, which Senator Harkin and I had offered, for an additional $2.6 billion for education and training programs. That legislation was then folded into the omnibus appropriations bill. So we did not have a regular Labor, HHS and Education appropriations bill for fiscal year 1996. Then the fiscal year 1997 bill was not considered separately by the Senate. Instead, funding was included in an Omnibus appropriations bill that was significantly written by the administration and leadership. I said at that time that I thought the process was inappropriate. Our constitutional system is to have Congress deliberate and pass the bills and then submit them to the White House for approval or veto. This year we were able to complete it the regular Labor, HHS and Education appropriations bill. It took a fair amount of time. We started on September 2. Senator Lott brought us back at 11 o'clock the day after Labor Day. We now mark its conclusion. I am delighted. I also thank the distinguished minority leader, the Democratic leader. We have concluded action on an important bill. I thank the Chair and yield the floor.

Mr. SPECTER. Mr. President, I very much agree. I recognize the importance of providing early detection and diagnostic screening services to as many uninsured women as possible, and agree that the Department of Health and Human Services should consider providing the screening and diagnostic program with any unexpended or otherwise available funds under this bill in fiscal year 1998. Also, Congress and the administration should take a close look at the current program and be willing to consider further efforts to provide followup treatment for all women diagnosed with cancer through the screening program.

Mr. SPECTER. I join my colleague from South Dakota in recognizing the importance of drug prevention efforts in rural America. It is my understanding that the Crow Creek Youth Center would be eligible for these funds and I encourage the Secretary of Health and Human Services to give serious consideration to funding such efforts out of the money appropriated under this bill.

Mr. SPECTER. I agree that osteoporosis should be the focus of aggressive detection, prevention and treatment activities. We owe it to our own and future generations to tackle the root cause of so much injury and debilitation in later life, and to reduce the growing financial burden it imposes on individuals and the public alike. I agree that NIAMS and AHCPR should pursue, within the funds provided, strategies to detect, prevent, and treat osteoporosis in both women and men, and I look forward to working with the conferees to include such language in the conference report.

Mr. SPECTER. Yes, I think our colleagues will all agree that the CDC performs valuable public health services. There is widespread support for the CDC and its missions, and I believe it is a worthwhile use of Federal funds.

Mr. SPECTER. I agree with your interpretation of the committee's report. Our intent was to convey the need to redouble our efforts to successfully prevent, detect and treat breast cancer. Sufficient funding to push the boundaries of breast cancer research is essential if we are truly committed to these goals. Increased funding for the National Cancer Institute should indeed be reflected in a larger financial commitment to breast cancer research.

Mr. SPECTER. The concerns of the Senator from Maryland are well founded. I will look closely at fully funding BLS programs as we move to conference with the House.

Mr. SPECTER. I note the Senator's support for music programs for young people with interest and agree that we should encourage education and learning through the use of the arts. I would also encourage the Department of Education to consider this proposal. student/parent mock elections

Mr. SPECTER. I would be pleased to yield to my colleague.

Mr. SPECTER. I am not sure we will ever have enough money in the Labor-HHS bill. It is a constant struggle. I have to say that one thing which alarmed the committee is the high cost of these new AIDS medications. Pharmaceutical research, as you well know, is extremely time intensive and costly, and this is especially true for AIDS drugs. The committee was very concerned about the lack of timely national data available to estimate the demands for AIDS medications funded by the ADAP program, and also, I might add, about the wide variation in State Medicaid policies on individual eligibility, benefits, and drug availability. We have asked the Secretary to develop benchmarks to measure progress in this area and to increase data collection and information sharing, and so we hope to have a better guideline in the future.

Mr. SPECTER. I respond to the Senator from Montana that it is the intention of the committee to urge the Secretary to provide, from the program management account, continuation grants to those rural hospitals which have received first or second year grants. The committee believes that an undue hardship could be brought upon these hospitals if their 3-year grants are not completed as promised. I thank the Senator from Montana.

Mr. SPECTER. I would like to thank Senator Grassley, the distinguished chairman of the Aging Committee for his leadership on this important issue. The Senator can be certain that I understand the importance of maintaining adequate funding for the National Institute on Aging. I will certainly keep this in mind as the appropriations process continues. early head start program

Mr. SPECTER. That is true. It was our intention to include in report language that the National Student-Parent Mock Election be funded at $225,000 this fiscal year. I, too, believe that this is an important and worthy program.