September 11, 1997 in Nation/World

Republicans Say Gore Knew Calls Illegal Memo Said Gifts Were Going To ‘Hard’ Accounts

Marc Lacey And Robert L. Jackson Los Angeles Times
 

In an attempt to show that Vice President Al Gore knowingly violated federal election law, the Senate committee investigating campaign fund-raising abuses released an internal White House memo Wednesday indicating Gore may have been informed that the Democratic Party was dividing contributions between “hard” and “soft” money accounts.

White House aides, however, insisted that, when Gore made telephone calls to donors last year, he was in the dark about the dicey Democratic National Committee tactic, one that may have put Gore as well as some of the party’s biggest contributors in violation of election statutes.

DNC General Counsel Joseph Sandler, the only witness at Wednesday’s hearing, testified that the national committee, without notifying donors beforehand, sometimes put “soft money” contributions into “hard money” accounts.

The distinction between the two election funds is critical because so-called “soft money” contributions to political parties have no donation limits, cannot be used for specific candidates and are not subject to many aspects of federal election law. However, any “hard money” - limited contributions designated for campaigns - Gore solicited in the calls he made between November 1995 and May 1996 could put him in violation of federal prohibitions on fund raising on government property.

In a Feb. 22, 1996, memo to both Gore and President Clinton, Deputy White House Chief of Staff Harold Ickes passed along information from the DNC that appeared to include an explanation of the DNC strategy - although Democrats disputed the memo’s interpretation.

“Federal money is the first $20,000 given by an individual ($40,000 from a married couple),” says the memo, distributed Wednesday at the Senate Governmental Affairs Committee hearing. “Any amount over this $20,000 amount from an individual” goes to soft money accounts.

The Democrats began a review of the money-shifting strategy this week amid reports that it inadvertently had prompted some donors to exceed federal contribution limits.

Ickes’ memo is stamped “The President Has Seen” and includes notations from the president. Gore’s aides said that he may have reviewed it.

“He may have seen the memo but he has no recollection about it and he would not have related that memo to his phone calls,” Lorraine Voles, Gore’s press secretary, said in an interview.

Democrats unveiled another memo, also from Ickes, which said that the advertising campaign for which Gore was raising money would be funded with “soft money.” That, Democrats said, backed up Gore’s claim that he did not believe he was raising “hard money.”

Under the policy now under scrutiny, the Democrats put the first $20,000 of any contribution into “hard” money accounts, often without contributors’ assent. The rest of a contribution would go to “soft money” accounts.

That was done in at least five cases in which Gore solicited funds, meaning that the vice president raised $100,000 in “hard money” from his White House office, officials said.

U.S. Attorney General Janet Reno has begun reviewing whether an independent counsel ought to be named to look into whether Gore violated prohibitions on fund raising on federal property. She made that judgment after learning that Gore had solicited some hard money.

Republican senators argued Wednesday that Gore had clearly violated an 1883 law that prohibits fund raising in government buildings. However, committee Democrats pointed out that the law is murky and that no federal official is ever known to have been prosecuted for making a campaign solicitation from a federal building to someone outside a federal facility.

Numerous big Democratic donors also may have violated federal contribution limits because of the Democratic policy.

The DNC said that, after allocating the money, it typically would send a permission letter to the donors asking them to approve the switch within 60 days. However, the party acknowledges that it did not always notify donors of how it had handled their money. That put donors in jeopardy because election law allows individuals to give no more than $20,000 per year in hard money to political parties, with an overall limit of $25,000 per year for federal elections.

In numerous cases, donors who were not aware that the Democrats were depositing their money in “hard money” accounts unknowingly violated the $25,000 limit in other contributions.

Sandler testified that the Democrats began the policy of shifting the money before receiving donors’ consent during the 1996 presidential campaign. He said that he believes the Republican National Committee engages in the same practice. A GOP spokesman said, however, that contributors were notified before their money was deposited in any account.

Meanwhile, in the House, Rep. Dan Burton, R-Ind., announced Wednesday that he will launch separate hearings beginning next week into campaign fund-raising abuses. After opening statements next Wednesday, the House Government Reform and Oversight Committee will conduct two sessions looking into the activities of embattled fund-raisers John Huang and Yah Lin “Charlie” Trie. Among the witnesses scheduled to testify are Trie’s sister and a family friend.

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Hard and soft money

Under federal law, individuals can contribute up to $25,000 to political candidates and parties each year, and up to $20,000 to a political party organization. This “hard money” can be used for direct campaigning on a candidate’s behalf.

“Soft money” is not subject to federal regulation, and can be raised in unspecified amounts from corporations and labor unions as well as individuals. It cannot be used on behalf of candidates, but in grass-roots organization, administration and other “party-building activies.”

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