Pacs Eager To Help Ease Campaign Debts

Frank Cremeans entered Congress last year with a serious personal problem: He was deeply in hock.

Back home in Gallipolis, Ohio, local businessmen like Dennis Facemyer of Facemyer Lumber and Ed Gloeckner of Gloeckner Chevrolet, had given his campaign a few thousand dollars. Cremeans’ brother, Fred, had put up $2,000. But Frank Cremeans’ biggest supporter by far - the man whose signature was on more than $350,000 in bank IOUs was Frank Cremeans himself.

If he has accomplished more as a fund-raiser than a lawmaker since then, it’s easy to sympathize. Cremeans, owner of a construction supply business from which he’s paid himself less than $19,000 a year, simply can’t afford to ignore his debts.

That’s true, not just for Cremeans, but for virtually all the 125 House and Senate candidates who advanced their own campaigns $100,000 or more in the last election. The rising costs of campaigning, particularly for Republican challengers like Cremeans who bet on themselves, have put more and more politicians into the debtor class.

And that has powerful implications for anyone concerned about who really wields power in Congress.

The candidates - winners and losers - owed themselves a total of nearly $95 million when the session began, almost three times the total personal campaign debt outstanding a decade ago. It’s so much that personal deficit financing is becoming an occupational handicap for many lawmakers, like torn hamstrings for pro football players, that influences their performance in Congress and hobbles them as they prepare to run again.

For one thing, lawmakers in hock depend on special interests and their political action committees for an added reason: “When you owe yourself money, those contributions, in effect, go directly from the PAC account to your personal bank account,” argues Josh Goldstein of the Center for Responsive Politics, a Washington non-profit group promoting reforms.

Goldstein continues: “If you don’t raise the money, you’ll be stuck with the debt. So contributions that pay off personal debts are more powerfully needed, more personally affecting, than money that, say, simply buys more radio ads.”

Is personal debt influencing lawmakers’ performance? It sure looks that way.

When popular clamor for campaign-finance reform falls on deaf congressional ears, for example, part of the reason is that many politicians - particularly House Republican freshmen - have been in no position to listen. Corporate political action committees that reformers want to curb gave Cremeans nearly half the money he used to cut his debts by $249,000 in the last year.

For that matter, the outsized and unpopular zeal behind House votes to reduce environmental, bank and workplace regulation is explained, partly, by demands from a long list of corporate PACs.

Since the 1994 election, the PACs have contributed more than $9 million to House freshmen like Cremeans, roughly twice the take of House freshmen two years ago, according to Common Cause, a Washington-based nonprofit organization that favors public financing of campaigns.

Speaker Newt Gingrich joined cause with the House’s debt-burdened politicians - and startled the public - when he declared in November that national politics is “not overfunded but underfunded.”

Cremeans deserves some sympathy. He spends an hour or two most mornings at the National Republican Campaign Committee dialing for dollars. He attends fund-raisers for other members of Congress, begging them and their contributors for help. “Poor Cremeans,” is the way he’s often described, with sympathy and condescension based on the literal fact.

At first, the money fairly gushed from lobbyists eager to join the Republican revolution. When it got tougher, Cremeans, 53, who’s spent much of his life collecting debt from small contractors in Appalachia, hit his stride.

“Chasing people who don’t have money is a lot harder than chasing people who are loaded,” Barry Bennett, an aide to Cremeans, observed cheerfully. Cremeans’ 1995 take, according to Federal Election Commission reports: $402,038, more than he’s ever earned in a year doing anything else, the fifth best haul in the freshman class.

And why are corporate PACs giving so generously? “Maybe some feel I’m a good investment,” Cremeans ventured in an interview last week. “They feel their political philosophy is like mine, and their business philosophy. I want to reform Congress. I’m an outsider. I’m for low taxes, and I want to pin back some of the agencies that regulate our industries unfairly.”

Because much of the money he’s raised was designated for his reelection campaign, either by contributors or Cremeans, he still beating the bushes hard. At year’s end, he still carried more than $136,000 in 1994 campaign debt.

The incumbent foe Cremeans narrowly beat last time, Democrat Ted Strickland, a prison counselor, is running again, debt-free, with massive support from organized labor. And in their southern Ohio riverbank district that includes eight of the state’s 10 poorest counties, Cremeans’ business friends aren’t that popular.

Despite the stress, it’s been a remarkable year for Cremeans, a former school administrator who’s never held public office before. He was the first member of Congress to endorse publisher Steve Forbes for president, and traveled with Forbes, until he pulled out of the GOP presidential race, as one of the campaign’s co-chairmen.

Merely a bank customer until he was named to the House Banking Committee, Cremeans today is the darling of America’s biggest banks. It was he who marched five of America’s biggest bankers into House Speaker Gingrich’s office last December for a policy session on megabillion-dollar questions such as whether banks, insurance and securities firms ought to be allowed to own one another. Banking Committee Chairman James Leach, R-Iowa, from whom Gingrich had seized control of key banking legislation, tagged along.

Success may not have changed Cremeans as much as debt has.

These days, more of his money comes from executives of Banc One in Columbus, Ohio, America’s 10th-largest bank, and other big banks, and vendors to big banks, and banking associations, than from hometown lumberyards and auto dealers.

AT&T, whom he helped recently against Baby Bell rivals, has contributed more to his campaign than anyone in Gallipolis. So have oil refiners looking to get the Environmental Protection Agency off their backs and shipping companies fighting off tougher regulations on jobs that entail lifting and repetitive motions.

Among the first were to come to Cremeans’ aid were the National Rifle Association and Banc One. Both had helped Strickland in 1994; both came through in early 1995 with what lobbyists call “kiss and make up money.”

Banc One’s $9,000 in checks, which arrived on Valentine’s Day, were Cremeans’ biggest contribution ever. Better yet, Banc One designated all the money to Cremeans’ 1994 campaign debt.

That’s legal, because a PAC can legally contribute $5,000 to both a primary and a general election, even retroactively. Reformers sputter because this lets debtors hit lobbyists up for $20,000 - twice the normal maximum - by asking $10,000 for the election past and $10,000 for the election upcoming.

Banc One Chairman and Chief Executive Officer John McCoy, who hosted a successful fund-raiser for Cremeans last April, indirectly pumped more than $44,000 into Cremeans’ account. His two main legislative concerns, McCoy stated in a letter to stockholders last February, were reducing paperwork under the Community Reinvestment Act, which promotes investment in poor and minority neighborhoods, and permitting banks to sell insurance and securities. Cremeans has voted for both.