Reforms pass House

After challenges from the House leadership, and mixed messages from the White House, campaign reformers finally win.

By Jake Tapper
Published February 14, 2002 9:00AM (EST)

As befits the history of the recent campaign finance reform battle, the House debate on the bill Wednesday was a schizophrenic affair. In the morning, the GOP House leadership was furious at the White House for sounding ambivalent, if not vaguely supportive, of the Shays-Meehan bill, the leading campaign finance reform bill, offered by Reps. Christopher Shays, R-Conn., and Marty Meehan, D-Mass. By the afternoon, at the behest of the angry House GOP, the White House rained on the Shays-Meehan parade. Even though the Shays-Meehan team had resoundingly won three big votes, waves of panic swept through its ranks.

But finally, in the wee hours of Thursday morning, after fending off a number of amendments that GOP opponents offered in an attempt to kill the bill, Shays-Meehan emerged victorious, passing 240-189. The bill's supporters hope it will now be able to go straight to the Senate for a vote -- avoiding the often perilous conference committee -- and, should it pass, go directly to President Bush's desk.

As Wednesday drew to a close, such an outcome seemed increasingly unlikely. Momentum seemed to shift to Republican opponents, while supporters of the bill ran all over the Hill, placing phone calls and buttonholing wavering members of their coalition. The plans of even staunch supporters of the bill, like Reps. Zack Wamp, R-Tenn., and Fred Upton, R-Mich., were up in the air. Republican opponents of the bill finally found a line of attack that seemed to be working -- with the help of the White House, which had previously been keeping above the fray -- by suggesting that the latest version of Shays-Meehan had been amended to let Democrats have some last-minute fun with soft money.

Soft money, which Shays-Meehan would ban, is the unregulated, unlimited campaign cash for purported party-building activities; wealthy interests use it as a loophole to skirt the intent if not the letter of post-Watergate campaign law. With the bill closer than ever to becoming law, interesting alliances and defections emerged. Though the Enron scandal has breathed new life into the bill's chances, forcing it out onto the floor for a vote against the wishes of the GOP House leadership, there have always been Democrats who have argued that the bill is tantamount to political suicide, since Republicans have always proved superior at raising regulated, limited hard dollars.

Some of these Democratic defections first emerged during last winter's debate on the Senate version of the bill offered by Sens. John McCain, R-Ariz., and Russ Feingold, D-Wis. Some emerged when the bill hit the House in the summer and members of the Congressional Black Caucus began defecting from the reform team, despite having voted for the bill in the past.

Whether enjoying corporate largesse at swank convention parties, exploiting various campaign loopholes in the Gore for President campaign or killing off previous campaign finance reform bills, the Democratic Party has shown itself to be increasingly addicted to unlimited corporate and union cash.

So suspicions that Democrats were looking for ways to weasel around a soft-money ban, while getting credit for supporting Shays-Meehan, have a long history. The question for Shays-Meehan opponents then became: What deals did the Shays-Meehan team make with Democratic wafflers to ensure their support? And, furthermore, how do we counter them?

Wednesday morning, the bill's opponents didn't look like they'd be getting any help from the White House. Bush spokesman Ari Fleischer continued to suggest that it wouldn't be a complete and utter capitulation if the president were to sign Shays-Meehan. Both the Shays-Meehan bill and its House leadership favored alternatives to "make progress and improve the system," Fleischer said. "In analyzing the bills right now, they would both -- in the president's opinion -- improve the system and that is at the end of the day what he is looking for."

"If campaign finance reform is enacted into law, I believe that you can thank President George W. Bush, because he changed the dynamic of how this phony debate has finally ended in Washington, D.C.," Fleischer said, with a straight face.

The announcement was not well received in the offices of House Speaker Dennis Hastert, R-Ill., or his deputies. "We were furious," said a senior House GOP leadership aide. "We've been fairly irritated with the White House. They have not lifted a finger to help us when we see this as critical to our political future." Earlier in the week, Hastert referred to the bill's passage as "Armageddon" for the GOP.

Not that Bush was completely off the program. At a photo-op with Pakistani President Pervez Musharraf, Bush voiced support for an amendment that would put the bill's soft money ban into effect as soon as it passed. "It ought to be in effect immediately," Bush said just before noon. "But we'll see what comes my way." (Or, as the talking points issued from the office of House Majority Whip Tom DeLay, R-Texas, read earlier: "If the reforms in the bill are needed they should become law immediately.")

Shays-Meehan supporters consider this demand for immediacy to be an attempt to kill the bill. In an adjustment to the bill introduced Tuesday night, Shays and Meehan changed the date when the bill would become effective from 30 days after passage to Nov. 6, 2002, in order to secure the support of wavering Democrats who want to recapture the House this November and feel they need soft money to do so. So Republican opponents found the Democrat-induced delay hypocritical, which of course it is. But the noises from the White House sounded more supportive of Shays-Meehan than anything else.

At around 12:30 p.m., Hastert's chief of staff, Scott Palmer, had a few choice words for White House congressional liaison David Hobbes, according to the senior House GOP leadership aide. Hobbes was informed that Fleischer's comments were not appreciated, and that there was some serious resentment brewing against the president and his team when it came to this issue.

On the floor, retiring House Majority Leader Dick Armey, R-Texas, offered a campaign finance reform bill that was the first of three that would have immediately banned soft money for any purpose and would have required corporations and unions -- including nonprofit groups -- to use hard money for internal voter registration and get-out-the-vote activities. At the very least, the Armey substitute would have ensured that the bill be sent to a House-Senate conference committee, where controversial bills often go to die, and where Majority Whip Tom DeLay, R-Texas, once vowed he'd kill it if need be. Shays and Meehan were laboring mightily to have their bill be as close as possible to the Senate-approved McCain-Feingold bill so as to prevent any other opportunities for its slaughter.

Regardless of the Armey substitute's inherently smart if deceptive strategy, it never even grabbed the support of the 20 to 30 swing Republicans, and failed 179-249. The other rival campaign finance bill that was favored by the GOP House leadership, and offered by Reps. Robert Ney, R-Ohio, and Al Wynn, D-Md., was supposed to be trotted out. But instead, Ney introduced a purer version of Shays-Meehan from 1998, one that safely passed the House at the time -- but only because members knew it would die in the Senate.

Ney's point was to show how the current version of Shays-Meehan -- amended by the Senate and tinkered with to secure passage -- was a mere shadow of its former perfection.

As the Ney-Wynn bill (the old Shays-Meehan) was debated and voted on, Republican opponents began to attack another provision in the bill (the new Shays-Meehan). Not only would the soft money ban not take effect until Nov. 6, but debts would be able to be repaid with soft money until Jan. 31, 2003. Current law states that soft money debts can only be repaid with soft money, and hard money with hard money. But the provision in the Shays-Meehan bill, introduced last night at 10 p.m., doesn't spell out that soft money can't be used to pay off hard money debts.

GOP opponents of the bill began speculating that the Democratic National Committee would use the $40 million in soft money it has raised to build a new headquarters, and then leverage a loan for hard cash. The DNC would then spend its bazillion dollars in loans on campaign activities and repay the loans between November and January with soft money. DeLay's office began aggressively pushing this argument.

"That's illegal under the present law," Meehan told reporters. "That's illegal under our bill. You couldn't borrow hard money and pay it off with soft money." Since the Shays-Meehan legislation doesn't expressly argue that the existing law would be changed, bill supporters argued, it won't. It's a false alarm, they said.

The Ney-Wynn bill got clobbered 53-377 at 2:43 p.m.

Three minutes later, just as the question about the DNC's alleged plans took root, the White House offered some fertilizer.

"I have an important announcement I'd like to make on campaign finance reform," Fleischer announced. "The president was just informed about a very troubling development on campaign finance reform." Calling the loan repayment window "a multimillion-dollar soft-money loophole" stuck into the Shays-Meehan bill "in the middle of the night last night," Fleischer said that Bush viewed it as an "unfair, unwise and unwarranted change that makes something that is currently illegal and tries to turn it into something that is legal."

Speaking to reporters outside the House chamber, Rep. Tom Davis, R-Va., chairman of the National Republican Congressional Committee, made mention of Fleischer's comments. Word spread throughout the House that the White House was on the program, finally.

Fleischer's comments were "very helpful. And long overdue," the senior House GOP leadership aide said.

Were the charges fair? That's almost beside the point. Larry Noble, executive director and general counsel of the Center for Responsive Politics -- and former general counsel of the Federal Election Commission -- disputed Bush's statement. "It is clear under federal election law that only hard money can be used to pay off a loan that was used for hard money expenditures," he wrote to Shays, arguing that he saw nothing in the disputed section of the bill "that would supersede current federal law ... soft money funds on hand after the election could only be used to pay off debts or obligations used for soft money expenditures."

Opponents of the bill then got their own expert to refute the Shays expert, FEC Commissioner Bradley Smith. The notoriously anti-campaign finance reform expert on campaign finance came out and said that the GOP opponents were right. Last March, Smith called McCain-Feingold "the most serious threat to free speech since the Alien and Sedition Acts" of 1798.

Shortly after 4 p.m., Shays-Meehan passed its first major hurdle. By a vote of 240-191, Shays-Meehan officially became the base bill for debate. But ominous words came from the bill's chief enemy.

"This vote means nothing, guys," DeLay told reporters. "There are amendments to come."

Suspicions were raised about who added the language that would allow debts to be paid off with soft money. Eyes turned to Rep. Martin Frost, D-Texas, the former chairman of the Democratic Congressional Campaign Committee, who was known to be wavering on the soft money ban ever since Democrats achieved near parity with Republicans in raising soft money. A Frost aide had to come forward and refute the charges. "I don't know where it came from, but Martin Frost had nothing to do with it," the aide insisted.

So who was it? Democratic election attorney Bob Bauer? DNC chairman Terry McAuliffe, fending off his own little mini-Enron scandal after it was reported that he made $18 million from a $100,000 investment in Global Crossing, a company that on Jan. 28 became the fourth largest bankruptcy in history? Representatives from Common Cause pleaded ignorance, though some fingered them for the sloppy addition.

Outside the Capitol, Rep. Greg Ganske, R-Iowa, a Shays-Meehan supporter, railed against Sen. Tom Harkin, D-Iowa, whom Ganske is challenging this November. On April 4, 2001, Harkin voted to ban soft money, Ganske said, and then "on the same day filed official papers with the Secretary of the Senate" forming his own joint soft money campaign committee with the Democratic Senatorial Campaign Committee. Harkin's committee raised more than $600,000 in soft money last year, according to Federal Election Commission reports Ganske provided, including $160,000 from agribusiness giant Archer Daniels Midland. Ganske has refused to form a soft money committee, he said. "Tom Harkin is hypocritical."

(Harkin campaign manager Jeff Link called Ganske's charge "laughable." The congressman "is with righteous indignation attacking" Harkin "while at the same time the [National Republican Senatorial Committee] is running radio ads in Iowa with soft money" slamming Harkin for not supporting the president's stimulus package.)

The last-minute show of support from the White House, such as it was, nonetheless had its desired effect. Members of the Shays-Meehan team were freaking out. One amendment offered by opponents would start the ban on soft money on Valentine's Day -- a sure way to lose the votes of Democrats who want to use the money they've raised for the new DNC building, as well as for their own reelections.

Republican opponents were calling their bluff and using the building issue against them. Core Republican members of the Shays-Meehan team -- namely Wamp and Upton -- sounded like they might vote for those amendments. Though the amendments were being offered by obvious campaign finance reform opponents, that didn't much seem to matter.

Rep. Charles W. "Chip" Pickering, R-Miss., a favorite of the National Rifle Association, offered an amendment that would exempt from the bill's advertising restrictions "any communication/advertisement that consists of information or commentary about a person holding or seeking federal office on any matter pertaining to the Second Amendment." It was a close call and gave the Shays-Meehan team a fright, but in the end it failed 209-219. Similar amendments pertaining to exemptions for civil rights ads, farmers and veterans also failed.

And in the end, an amendment that would have caused the bill to become effective immediately, from Rep. Thomas Reynolds, R-NY, went down in flames, 190-238.

After midnight, Shays-Meehan opponents seemed resigned to their loss and began trying to fix the bill. Winning amendments from Ney and another from Rep. Jack Kingston, R-N.Y., attempted to spell out that the DNC couldn't engage in any hijinks with their new building funds or pay off hard money debts with soft money.

Finally, at 2:42 a.m. the Shays-Meehan bill passed 240-189, a misleadingly uncompetitive vote tally belying the cynicism of those who did everything they could to kill reform, but then hopped on the bandwagon when its victory was assured. For Shays, Meehan and Minority Leader Dick Gephardt, D-Mo., it had been a long night -- and it was surely the same for DeLay and the opponents as well.

But the president, surely, was no doubt probably curled up early with his pilly, as usual, safe and secure in the knowledge that no matter what happened he'll come out smelling like a rose.

Jake Tapper

Jake Tapper is the senior White House correspondent for ABC News.

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