S12442 CONGRESSIONAL RECORD — SENATE November 10, 1997 effort rather than simply negotiating agree- the largest single transfer from a polit- Let’s look at what was happening ments that are not enforced and that no one ical party to a tax-exempt organization around the time the money transfer remembers. in the history of American politics— took place. For months prior to elec- Mr. BENNETT addressed the Chair. $4.6 million, which the Republican Na- tion day, Haley Barbour and the RNC Mr. LEVIN. Will the Senator from tional Committee gave to Americans had been complaining about a tele- Utah yield for a unanimous-consent re- for Tax Reform in October 1996, the vision ad campaign funded by orga- quest? I ask unanimous consent that final month before the 1996 elections. nized labor and others criticizing the immediately following the remarks of As this chart shows, over two-thirds Republican Party on the issue of Medi- the Senator from Utah, that I be recog- of the money which ATR received in care. The RNC and Haley Barbour were nized for up to 15 minutes in morning 1996, this tax-exempt organization, telling anyone who would listen that business. over two-thirds of that money came the ads were distorting the facts and The PRESIDING OFFICER. Without from the Republican National Commit- that Republicans were not out to cut objection, it is so ordered. tee. The size of this transfer is unprece- Medicare. And yet, the RNC waited Mr. BENNETT. Mr. President, may I dented. There is no record of an Amer- until October, the final month before inquire as to the parliamentary cir- ican political party giving even $1 mil- the election, to start spending funds to cumstance? Are we in morning busi- lion to a tax-exempt organization, respond to those ads. Here is Haley ness? much less four times that amount. Barbour, at an October 25, 1996, press If the Democratic National Commit- The PRESIDING OFFICER (Mr. conference, explaining the RNC’s deci- tee had given $4.6 million to a labor BURNS). The Senator is correct. The sion to delay spending: Senate is in morning business with union or environmental group in the [W]e made the decision not to borrow Senators permitted to speak for up to month before the 1996 elections, I have no doubt that there would have been a money last year or early this year in order 10 minutes. to try to compete with the unions and the Mr. BENNETT. May I ask unanimous searching investigation of the facts, if not full scale public hearings—and it other liberal special-interest groups’ spend- consent that I be allowed to continue ing. You see, our campaigns do come into the would have been totally appropriate. for up to 20 minutes, if that becomes real election season late September and Oc- But here—where the money was paid necessary? tober without having spent all the money by the RNC to a tax-exempt group The PRESIDING OFFICER. Without that—to match what the unions were doing. whose efforts were aimed at attacking objection, it is so ordered. And you will see us—you are seeing now, and Democrats—not a single hearing wit- have been throughout the month of October, The Senator from Utah is recognized. ness was called. Worse, the Govern- you are seeing Republicans using the re- Mr. BENNETT. I thank the Chair. mental Affairs Committee failed to sources that we’ve raised in voluntary con- (The remarks of Mr. BENNETT per- interview a single person from either tributions to finish very strong, to make taining to the introduction of S. 1518 the Republican National Committee or sure our message is in front of voters when are located in today’s RECORD under they are making their voting decisions. Americans for Tax Reform about this ‘‘Statements on Introduced Bills and transfer. Given its mandate, the Com- What steps was the RNC taking to Joint Resolutions.’’) mittee’s failure to investigate the $4.6 ensure that its message was in front of Mr. JOHNSON. Mr. President, I ask million was a highly partisan act voters when they are making their vot- unanimous consent to speak in morn- which denied the Senate and the Amer- ing decisions in October? One step was ing business immediately following the ican public important information. to funnel $4.6 million in soft money to remarks of the Senator from Michigan. But even without depositions or ATR which used the money on a mas- The PRESIDING OFFICER (Mr. interviews or testimony, there is sive direct mail and phone bank oper- THOMAS) Without objection, it is so or- enough evidence through publicly ation, targeting 150 congressional dis- dered. available documents and the limited tricts with 19 million pieces of mail Mr. LEVIN addressed the Chair. document production by the RNC, and 4 million phone calls. The PRESIDING OFFICER. The Sen- ATR, and some banks to piece together ator from Michigan is recognized for 20 The subject of the ATR mailings and the outline of a coordinated campaign phone calls was just what Haley minutes. effort involving ATR that appears to Mr. LEVIN. I thank the chair. Barbour referred to in his statement to circumvent hard and soft money re- the press—Medicare. The title of one f strictions, to duck disclosure, and to ATR mailing says it all: ‘‘Straight PRIVILEGE OF THE FLOOR misuse ATR’s tax-exempt status—all of Facts About You, Medicare and the No- which calls out for an appropriate in- vember 5 Election.’’ This mailing urged Mr. LEVIN. Mr. President, I ask vestigation by the Department of Jus- unanimous consent that Gail Perkins senior citizens to ignore political scare tice and the Treasury Department. tactics and stated ‘‘[t]here’s barely a be granted privileges of the floor for Let’s begin with what was said at the difference between the Republican the balance of morning business. time about the $4.6 million transfer. In Medicare Plan and President Clinton’s The PRESIDING OFFICER. Without public statements, both RNC Chairman Medicare Proposal.’’ objection, it is so ordered. Haley Barbour and ATR President Gro- f ver Norquist denied that the money Did the RNC know what ATR was going to do with the $4.6 million? Haley MISSING HEARINGS FROM THE transfer was part of any coordinated ef- fort between the two organizations. Barbour and Grover Norquist told the SENATE CAMPAIGN FINANCE IN- American public no, but let’s look at a VESTIGATION. Mr. Barbour told the Washington Post on October 29, 1996, that ‘‘he had no un- document produced by the RNC enti- Mr. LEVIN. Mr. President, on the derstanding with Norquist about how tled, ‘‘Memorandum for the Field last day in October, Senator THOMPSON the money would be spent,’’ while Mr. Dogs.’’ I ask unanimous consent that announced that the Senate Govern- Norquist told the press that he had this document and others I will men- mental Affairs Committee was sus- made ‘‘no specific commitment’’ to the tion in my statement be included in pending its campaign finance hearings RNC on how ATR would use the money. the record after my remarks. in part because the committee did not In short, the two principals would have The PRESIDING OFFICER. Without have the caliber of witnesses and infor- the American public believe that in the objection, it is so ordered. mation to justify continuing the hear- final weeks before election day 1996, (See Exhibit 1) ings. the RNC gave away $4.6 million to a Mr. LEVIN. This ‘‘Memorandum for Mr. President, the Democrats on the supposedly nonpartisan, independent Governmental Affairs Committee were organization with no understanding or the Field Dogs’’ is a document which, promised 3 days of hearings during Sep- expectation as to how that money again, came from the files of the Re- tember or October on a number of would be used. publican National Committee and unexamined issues involving important Not only does common sense tell us states the following in its entirety: events during the 1996 elections. Had that this is unlikely, but the facts and Re: Outside Mail and Phone effort, that commitment been kept, one of the documents behind this transaction in- Attached is a rotten copy of the 1st of 3 days would have been spent looking at dicate that it simply was not so. mail piece[s] that will be sent to 150 selected November 10, 1997 CONGRESSIONAL RECORD — SENATE S12443 congressional districts it will be directed at A closer look shows that the $4.6 mil- made contributions to a number of organiza- [sic], ‘‘a map of which has been included for lion was, in fact, not one donation, but tions that are like-minded, share our views, your viewing pleasure.’’ four payments spread throughout the promote our ideas. We discussed this effort during Wednes- month of October. And if we compare Then he went on to say the following: day’s conference call. As you know, when we do advertising, This is an effort undertaken by Americans the timing of each payment to the bill- when we do advocacy, no matter what we do, for Tax Reform. They are attempting to ing dates for the direct mail-phone we typically have to pay for it, either totally warn seniors about Democrat Mediscare tac- bank operation, we find that each do- with FEC dollars or a mixture of FEC and tics. . .’’ nation came at a very convenient mo- non-FEC dollars. While our fundraising This memo to the field personnel pro- ment for ATR. among small donors has been nothing short vides clear evidence that the RNC had According to the invoice, ATR owed of spectacular, we often find ourselves in the advance information about ATR’s John Grotta an initial payment of position where we cannot match up non-FEC mailing effort. It shows that the RNC $195,177.50 on October 7, 1996. On Octo- funds with enough FEC funds. had a copy of ATR’s first direct mail ber 4, 1996, three days before that ini- Those are the key words, ‘‘We find piece even before it was sent out. In tial payment was due, the RNC gave $2 ourselves in the position where we can- the words of the memo, attached is a million to ATR. The RNC didn’t write not match up non-FEC funds with copy of the first of three mail piece[s] a check to ATR—it wired the funds di- enough FEC funds.’’ To put it in words that will be sent. rectly into ATR’s bank account. Five which are more familiar to the Amer- It shows that the RNC knew it was days later, on October 9, ATR paid its ican public, ‘‘We cannot match up soft the first of three mailings, and that it bill to John Grotta. money with enough hard money.’’ was being sent, not to specified cities Two weeks after that, ATR faced an- Haley Barbour went on to say at that or counties or zip codes, but to speci- other $1,313,677.40 in bills owed to John press conference: fied Federal Congressional districts— Grotta. These bills were due on October So, when we came to that point, we de- 150 congressional districts to be exact— 18 and October 22. And what should cided we would contribute to several groups that it will be directed at. And to en- happen on October 17, but that the RNC who are like-minded and whose activities we sure that RNC field personnel knew provided a second, well-timed donation think, while they’re not specifically politi- precisely which districts had been tar- to ATR—this time in the amount of $1 cal, we think are good for the environment geted, the memo includes a map * * * million. Again, this money was wired for us. for your viewing pleasure. directly into ATR’s account. Within In an article in the Washington Post The fact that the mailing targeted days of receiving it, ATR paid John on February 9, 1997, again referring to congressional districts, rather than Grotta $1,418,544.38. the RNC contribution to ATR, Mr. cities or zip codes, shows clearly an ATR had another John Grotta bill Barbour was quoted as saying that election-related intent. The fact that due on October 24, 1996—this one in the groups like ATR ‘‘ ‘have more credibil- this information was communicated to amount of $1,104,000. On October 23, ity’ in pushing a political message than RNC field personnel doing election-re- 1996, however, the total in ATR’s bank the parties themselves.’’ So here we lated work at the time is more evi- account was $216,344.93. But once again, have Mr. Barbour saying that the RNC dence. The memo also states that RNC ATR got the money it needed. On Octo- gave ATR $4.6 million in soft money, field personnel had discussed the effort ber 25, 1996, the RNC made a third well- because it didn’t have enough match- undertaken by Americans for Tax Re- timed donation to ATR—$1 million ing hard dollars to allow the RNC to do form in a previous Wednesday’s con- wired into ATR’s account. Within the advertising itself, and further say- ference call. Any fair reading of this hours of receiving this donation, ATR ing that having groups like ATR do the memo throws cold water on the claim paid John Grotta $1,104,000. political advertising provides more that there was no understanding be- One week later, at the end of the credibility than having the RNC do it tween the RNC and ATR about what month, ATR faced another John Grotta itself. And yet Mr. Barbour claims that ATR was doing. bill due in the amount of $607,776.72. On he had no understanding with ATR as But, one may ask, what evidence is the day before that bill was due, the to how the RNC’s contributions to ATR there that the RNC knew when it gave total in ATR’s bank account was only would be used? ATR the $4.6 million how ATR in- $70,085.65. But on the next day, the very Then there are Mr. Norquist’s state- tended to spend it? Again, let’s look at day that the $607,000 bill was due, the ments. When asked to comment on the the facts and the documents. RNC wired ATR a fourth and final, $4.6 million, Mr. Norquist told the First, let’s look at an October 29, 1996 well-timed donation—in the amount of Washington Post on December 10, 1996, invoice sent to ATR by the John $600,000. Within 2 hours of receiving the ‘‘We just ramped up on stuff we were Grotta Co. This is the company that RNC donation, ATR paid off its bill to going to do anyway. They, the RNC, actually managed the direct mail and John Grotta. the conservative movement, knew the phone bank effort for ATR in October Are we supposed to believe that the projects we were working on.’’ 1996. It is a company, I might add, that timing and amounts of RNC payments The facts and documents indicate has also run direct mail campaigns on to ATR, when compared to the billing that the RNC was using ATR as a sur- behalf of the RNC and is owned by an dates and amounts owed by ATR to rogate to do what the RNC itself had individual—John Grotta—who is a John Grotta, were mere coincidence? neither the hard dollars or the credibil- former western political director for Are we supposed to believe that the ity to do on its own. Such actions raise the RNC. The invoice shows that ATR RNC’s $600,000 payment just in time to questions about whether the RNC was owed John Grotta various amounts at pay a $600,000 bill was sheer luck—a deliberately circumventing hard various times throughout October 1996. $600,000 coincidence? And that there money requirements as well as disclo- The grand total owed to the company, was no coordination or understanding sure requirements. They also raise not including postage for the mailings, as to how the RNC money would be questions about whether the RNC was was $3,325,498.60. used by ATR? deliberately misusing a supposedly Based on an analysis of ATR’s bank That’s what Haley Barbour and Gro- nonpartisan, independent tax exempt records, which are in Committee files, ver Norquist told the American public. organization to promote the RNC’s on October 1, 1996, ATR had a total in But let’s look past those statements to campaign agenda. its two bank accounts of $294,078.50—a some other things Mr. Barbour and Mr. Americans for Tax Reform is a tenth of the cost of the direct mail- Norquist have said. In a news con- 501(c)(4) organization that is exempt phone bank effort. ference at RNC headquarters on Octo- from taxation. A (c)(4) organization is Lo and behold, though, in October ber 29, 1996, Mr. Barbour was asked supposed to be engaged in social wel- 1996 the RNC began pumping money di- about the RNC’s $4.6 million donation fare that promotes the common good rectly into one of ATR’s bank ac- to ATR. Here’s what he said: and general welfare of the people of the counts. The $4.6 million total would We made a contribution to Americans for community. Social welfare organiza- prove more than enough to pay for the Tax Reform, which is a conservative, low-tax tions may not engage in campaign-re- direct mail-phone bank effort. What a organization. You’ll see in our FEC report lated activity as their primary activ- coincidence. Or was it? now and at the end of the year that we’ve ity. The relevant Tax Code regulation S12444 CONGRESSIONAL RECORD — SENATE November 10, 1997 1.501(c)(4)-1 describes the prohibited ac- directly, or going an extra step of being ATR ‘‘didn’t do televised issue ads,’’ tivity as ‘‘direct or indirect participa- passed by ATR to the ATR Foundation the evidence is overwhelming that ATR tion or intervention in political cam- which then paid bills. What makes this did. One ad, of which we have a paigns on behalf of or in opposition to pattern all the more intriguing is that videotaped copy, attacked then-Rep- any candidate for public office.’’ An ATR bank records for the year-and-a- resentative ROBERT TORRICELLI, the analysis of ATR’s bank records for 1996 half preceding October 1996 do not in- Democratic candidate for Senate in indicates, however, that the $4.6 mil- clude a single month in which ATR New Jersey for allegedly missing votes. lion that the RNC provided was more transferred money to its foundation. A company called Title Wave sent ATR than two-thirds of ATR’s income. The Yet in October 1996, ATR gave its foun- an invoice for $8,524 to produce the ad, fact that RNC funds outmatched ATR’s dation over $2 million. which was called ‘‘Torricelli/‘Miss- other funding by a 2–1 margin raises Why did ATR take this extra step ing’.’’ Invoices from Mentzer Media the issue of whether the RNC funding and involve its foundation? We’d like Services, Inc., charged ATR $325,230 for made electioneering ATR’s dominant to ask Mr. Norquist, but so far have a media buy in New York/New Jersey pursuit in violation of its tax exempt been denied any opportunity to do so. media markets and another $56,656.25 status. How do we know, then, that the foun- for media buys in Philadelphia/New The tax abuse issue doesn’t end dation used RNC funds to help pay for Jersey media markets to keep the ad there. Up to this point, for simplicity’s the direct mail-phone bank effort? We on the air during the month of October sake, I’ve been referring only to Ameri- found two types of evidence. First, right up to November 4, the day before cans for Tax Reform, the 501(c)(4) orga- comparing the October 29 John Grotta the election. nization. But ATR has an affiliate, run invoice to ATR bank records shows RNC funds delivered to ATR were by Grover Norquist out of the same of- that, for every recorded bill payment used to pay for the ad. On October 4, fice, called the Americans for Tax Re- but two there is a corresponding wire 1996, the same day it received $2 mil- form Foundation. This foundation is a transfer from ATR’s bank account to lion from the RNC, ATR wrote a $4,000 501(c)(3) organization which is prohib- John Grotta. The two exceptions are check to Title Wave as partial pay- ited by Federal tax law from engaging two bill payments that were both ment on the ad’s production costs. Two in any campaign activity. shown as made on October 25, 1996—one weeks later, ATR wrote a $4,900 check But it turns out that the foundation in the amount of $468,000 and one in the to a company called Soundwave. The was very much engaged in the direct amount of $1,104,000. Both payments memo at the bottom of the check stat- mail-phone bank operation and served are shown on the invoice as having ed that it was payment on an invoice as a second conduit for RNC funds been made by ATR, but there is no cor- for the ‘‘Torricelli ad.’’ And beginning spent on that operation. Of the $4.6 responding wire transfer from ATR’s on October 8 through the end of the million provided by the RNC, ATR ac- bank account. However, both payments month, ATR’s bank records show a se- tually transferred about $2.3 million to were made after ATR had transferred ries of wire transfers to Mentzer Media the foundation which, in turn, paid al- over $2 million to the ATR Foundation. Services totaling $374,830 for the media most half the direct mail-phone bank Common sense tells us that the founda- buys. At the beginning of October, bills. In effect then, the RNC funneled tion must have paid the bills on ATR’s ATR’s bank account balances had soft money through two tax exempt or- behalf. Of course, having been denied stood at just over $290,000. After receiv- ganizations—one a 501(c)(4) and one a access to ATR Foundation bank ing the influx of RNC dollars, ATR 501(c)(3)—to pay for an advocacy effort records, we don’t have the bank records spent over $383,000 on an attack ad it could not do on its own due to a lack documenting foundation payments to against the Democratic senatorial can- of matching hard dollars. ATR paid ap- Grotta. However, we do have one of the didate in New Jersey. proximately $1.8 million for the oper- mailings that this money paid for. And Documentary evidence suggests ation, while the ATR Foundation paid right there, in black and white, under- ATR’s involvement with other tele- approximately $1.5 million. neath the heading ‘‘Straight Talk vision ads during the 1996 election sea- How do we know? Believe me, Mr. About You, Medicare & the November 5 son. Two were allegedly sponsored by President, it wasn’t easy to find out. Election’’ are the words, ‘‘Paid for by an ATR affiliate called Women For Tax The committee subpoena for ATR bank AMERICANS FOR TAX REFORM Reform, which was formed in August records was intended to cover the ATR FOUNDATION.’’ 1996, housed in ATR’s offices, headed by Foundation, and the bank was willing The documents and public state- ATR’s Executive Director Audrey to produce the foundation’s records, ments of Mr. Barbour and Mr. Norquist Mullen, and which has had no apparent but felt it could not do so under the indicate that RNC soft money went existence apart from the two ads. Both wording of the subpoena without ATR’s through ATR and ATR’s 501(c)(3) foun- ads attacked President Clinton by consent. When the minority asked ATR dation and paid for a direct mail-phone name with one scheduled for airing on to allow the bank to produce ATR bank operation that, if the RNC had television in Chicago in August during Foundation records, ATR refused. And done it directly, would have required the Democratic Convention. when Senator GLENN asked the com- either all hard money or a hard money- In addition, the RNC produced out of mittee chairman to issue a new sub- soft money split. Was the RNC launder- its files the script of a television ad poena to the bank explicitly requesting ing money through the ATR affiliates which was apparently designed to be ATR Foundation records, the request to avoid having to use any hard money sponsored by ATR and used to attack was ignored. So we were forced to piece to pay for the mailings and telephone Democratic candidates running for together the foundation’s role from the calls? Was the RNC funnelling pay- open seats. The document states at the documents we already had. ments through the ATR affiliates to top, ‘‘RNC-TV/Open Seat TV:30/‘Con- To make a long story short, we fol- capitalize on ATR’s greater credibility? trol’.’’ The ad requires inserting a lowed the money. On October 4, 1996, Was the RNC knowingly misusing photo of a Democratic candidate, the RNC wired $2 million to ATR. On ATR’s tax exempt status by causing stamping ‘‘Wrong!!’’ over it, and then October 17, the RNC wired another $1 electioneering to become the primary inserting the ‘‘Democrat Tax Record’’ million to ATR. The next day—October activity of the (c)(4) organization and under the photo. The last line of the ad 18—ATR transferred $508,000 to the by passing funds through a (c)(3) foun- is: ‘‘For more information call Ameri- ATR Foundation. Four days after dation that is prohibited from engaging cans for Tax Reform.’’ At the bottom that—on October 22—ATR transferred in campaign activity? The evidence is of the document, in small type, it another $851,000 to the ATR Founda- powerful and should have been explored states: ‘‘As of 10/15/96 4:50 PM/ Approved tion. On October 25, the RNC wired yet at a committee hearing. by legal counsel.’’ This document not another $1 million to ATR. That very There’s more. The RNC’s $4.6 million only suggests coordination between the day ATR transferred $1 million to the paid for more than the John Grotta di- RNC and ATR on TV ads, but also a ATR Foundation. The result is a pat- rect mail-phone bank operation which sufficient investment of resources to tern of RNC money coming into ATR cost about $3.3 million plus postage. involve a written script and legal con- and then being used by ATR either to Although Mr. Norquist told the Wash- sultation. Since officials from the RNC pay the direct mail-phone bank bills ington Post on December 10, 1996, that and ATR refused to be interviewed and November 10, 1997 CONGRESSIONAL RECORD — SENATE S12445 when subpoenaed refused to appear, we up the good work.’’ It appears that the ally collected checks, contolled checks, don’t know whether any ad was actu- RNC may have directed its contribu- and delivered checks to tax exempts ally broadcast. Whether or not one tors to help the RNC by making their which were allied with it. The RNC was, this RNC-produced document indi- checks payable to these tax exempt or- may have directed millions of dollars cates coordination. ganizations but then to keep control of to these organizations for ‘‘joint state There’s more. Documents indicate the situation, have the contributors mail projects,’’ television ads and other that RNC coordination efforts may send the checks to the RNC. The RNC campaign activities. have extended to organizations other then forwarded the checks to the orga- Another unanswered question is how than ATR, and that the RNC may have nizations, probably in support of the the RNC and ATR handled the $4.6 mil- taken steps to pay for coordinated ac- ‘‘joint state mail project.’’ lion on their own tax returns. Section tivities using not only its own funds, Two other documents raise similar 527 of the Tax Code suggests that one but also funds from third parties which coordination questions. The first was or the other organization had to treat the RNC solicited and directed. Here produced by the RNC and has the same this sum as taxable income. Did that are some of the key documents. ‘‘confidential’’ heading as the October happen? We don’t know, and the com- The first is a memorandum dated Oc- 17th memo from Jo-Anne Coe to top mittee has yet to ask. tober 17, 1996, marked ‘‘confidential,’’ RNC officials, although no author is On April 9, 6 months ago, Mr. from Jo-Anne Coe, RNC finance direc- named. This document discusses con- Norquist told the press that he would tor, to Haley Barbour, RNC chairman, tributions to ATR, the National Right ‘‘cheerfully testify before the commit- Sanford McCallister, RNC general to Life Committee, American Defense tee.’’ But he then refused to be either counsel, and Curt Anderson, RNC polit- Institute, United Seniors Association, deposed or interviewed. Even when he ical director. The memo discusses Coe’s the City of San Diego, and ‘‘CCRI’’ was finally subpoenaed for a deposi- efforts to forward certain sums of which is the California ballot initiative tion, he refused to appear. ATR also re- money to various tax exempt organiza- on affirmative action. Each organiza- fused to produce documents in response tions, including a $100,000 check from tion is analyzed in terms of whether to a committee document subpoena, Carl Lindner to ATR, another $100,000 contributions to it would have to be re- claiming, ‘‘ATR has never engaged in check from Mr. Lindner to the Na- ported to the public and whether a con- electioneering of any sort. It has never tional Right to Life Committee, and tribution would be tax deductible. The advocated the election or defeat of any $950,000 from several sources to the final document is a list of the same or- candidate for any office at any time; it American Defense Institute. The memo ganizations other than the ballot ini- has never run political advertising on poses questions about how certain tiative. By each organization’s name is any subject.’’ checks should be handled and requests a large dollar figure. The figure for Yet it is beyond dispute that Grover quick action ‘‘so I can put this project ATR is $6 million. Norquist was a key figure in the 1996 to bed.’’ What do these figures mean? Does elections. He was profiled in Elizabeth The project itself is not described in the $6 million for ATR mean that, in Drew’s 1996 election analysis, Whatever the memo; however, a second document addition to giving ATR $4.6 million di- It Takes, for convening regular may shed light on that question. It is rectly, the RNC funneled another $1.4 Wednesday meetings in ATR offices at- an October 21, 1996 memorandum from million to ATR in third-party con- tended by conservative activists, RNC Jo-Anne Coe to Haley Barbour. This tributions such as the $100,000 check officials and GOP candidates. Drew de- memo states: from Carl Lindner? How were those scribes him as ‘‘one of the most influ- As soon as we meet and hopefully come to funds used? Did the RNC exercise some ential figures in Washington’’ at the some resolution on the joint state mail control over those funds? We’d like to time. In Norquist’s 1995 book, ‘‘Rock project, I will forward these checks to the ask. Unfortunately, despite the re- the House’’, celebrating the Republican three organizations. In the meantime, I am peated requests and efforts by the mi- takeover of the House of Representa- respectfully withholding delivery of the nority to seek RNC and ATR testimony tives, prominent Republicans provided checks until we have the opportunity to dis- voluntarily and then by subpoena and glowing quotations, with Haley cuss this matter. to have the few subpoenas that were is- Barbour calling him ‘‘a true insider,’’ Could the ‘‘joint state mail project’’ sued enforced, the committee never and Rush Limbaugh calling him ‘‘per- be the project referred to in the Octo- interviewed or deposed anyone con- haps the most influential and impor- ber 17th memo from Coe to Barbour? nected with these documents. tant person you’ve never heard of in Could it refer to ATR’s $3.3 million di- Improper coordination between a na- the GOP today.’’ rect mail-phone bank effort? Could it tional political party and tax exempt Mr. Norquist meets the test that refer to mail efforts by other organiza- organizations was a hot topic in this Chairman THOMPSON laid down for a tions as well, since the memo cites committee when the political party in- high caliber witness. And ATR’s role in three organizations as being involved volved was the Democratic Party. the 1996 elections—how it spent the $4.6 in the project? Is the fact that the RNC Some committee members charged million in RNC funds, how much Finance Director was ‘‘respectfully that President Clinton’s participation money was directed to it by the RNC withholding’’ checks to these three or- in DNC issue ads was improper or ille- from third parties and how those funds ganizations evidence that the RNC was gal, even though these ads were paid were spent, and the window that ATR’s exercising control over their perform- for by the required soft money-hard actions opens onto RNC’s coordination ance in the mail project in exchange money split. I repeat that, because this with tax exempt groups—were unex- for funding? A committee hearing is a very important point of distinc- plored topics in the Senate campaign could have tried to get answers to tion: the DNC issue ads were paid for finance investigation. these questions. The majority denied by the required soft money-hard money And the ATR hearing is not the only us that opportunity. split. But in the Americans for Tax Re- hearing missing from the Senate cam- In the meantime, we must puzzle form case, the facts suggest that the paign finance investigation. over two letters bearing the same date, Republican Party sent millions to ATR A second hearing we would have re- October 21, 1996, as the Coe memo to for issue advocacy in order to avoid requested would have looked at the Re- Barbour on the joint state mail using any hard money at all for those publican National Committee and Dole project. Both letters are from Jo-Anne efforts. To recall Mr. Barbour’s words, for President campaign. Out of the Coe. The first letter is addressed to they didn’t have enough hard dollars to more than 75 witnesses who testified Grover Norquist, president of ATR, and match up. before the committee over the 3 the second to David O’Steen, the execu- The committee also held an entire months of hearings, not one witness tive director of the National Right to day of hearings to take testimony from was called from the Republican Na- Life Committee. Each encloses a Warren Meddoff about his asking for, tional Committee, other than with re- $100,000 check from Carl Lindner to the and Harold Ickes’ providing, sugges- spect to the National Policy Forum, or organization, as described in the Octo- tions for contributions to tax exempt from the Dole for President campaign. ber 17 memo. Ms. Coe states in both organizations. But the RNC did much What most people don’t know is that letters: ‘‘Glad to be of some help. Keep more than make suggestions. It actu- the committee never even interviewed S12446 CONGRESSIONAL RECORD — SENATE November 10, 1997 a single person from the Dole cam- campaign on these critical issues is In addition, the following checks for ADI paign, and request after request from simply unjustifiable. The majority’s are en route to me: the minority for deposition subpoenas commitment to allow Democrats 3 Name Amount Jack Taylor ...... $100,000 were refused. And although the com- days of hearings in September or Octo- Max Fisher ...... 100,000 mittee permitted two limited inter- ber was not kept. As a result, impor- Don Rumsfeld ...... 50,000 views of RNC officials, Haley Barbour tant information such as the ATR Pat Rutherford ...... 30,000 and Scott Reed, no questions were al- story was kept from the American pub- The $100,000 check from Lincy Foundation lowed to be asked duringthose sessions lic. (Kirk Kerkorian) for ADI is still MIA. With on any topic other than the National That is not just some process ques- the $100,000 from Lincy, this will bring the Policy Forum and no other person from tion about subpoenas and depositions. total for ADI to $510,000—plus the $500,000 That is a question about whether or Haley obtained from Philip Morris. So the the RNC was ever interviewed or de- question is whether I ask Kerkorian to stop posed. not relevant testimony within the payment on the lost check and send a re- That means that the Senate Govern- scope of the jurisdiction of the com- placement check for the full amount of mental Affairs Committee is conclud- mittee should have been obtained and $100,000, or ask him to send only $40,000 so ing its investigation into the 1996 elec- should have been made public and that the grand total to ADI is only $950,000. tions without ever asking a single made subject to examination and cross- Please advise ASAP so I can put this project question of the RNC or Dole campaign examination. to bed. on such topics as evasion of Federal The Senate investigation was half an [Memorandum for Haley Barbour of Oct. 21, campaign limits, improper coordina- investigation. The other half remains 1996] tion, misuse of issue advertising, mis- for the Treasury Department and Jus- From: Jo-Anne Coe use of tax exempts, money laundering tice Department to investigate. As soon as we meet and hopefully come to EXHIBIT 1 some resolution on the joint state mail by a top campaign official, or inad- project, I will forward these checks to the JOHN GROTTA CO. equate document production—all the three organizations. In the meantime, I am topics that the committee pursued vig- [Memorandum] respectfully withholding delivery of the orously with the Clinton campaign. To: Audrey Mullen checks until we have the opportunity to dis- This see-no-evil, hear-no-evil, speak- From Cindy Finnegan cuss this matter. no-evil approach to GOP conduct in the Re: Invoices/Payment Status October 21, 1996. 1996 elections has not only seriously Date: October 29, 1996 Mr. Grover Norquist, skewed the investigation, but it has President, Americans for Tax Reform, Washing- Amount owed Amount paid Balance due ton, DC. also left an regrettable stain on the bi- MAIL—JGCo. DEAR GROVER: I am pleased to enclose a partisan traditions of the Govern- 10/18/96 10/21/96 ...... check in the amount of $100,000 payable to mental Affairs Committee. ATR One ...... $490,808.11 $490,808.11 $0.00 Americans for Tax Reform from Mr. Carl H. 10/22/96 10/23/96 ...... A third hearing would have looked at ATRT Two ...... $459,736.27 $459,736.27 $0.00 Lindner. Triad Management—a totally new phe- 10/22/96 10/25/96 ...... It will be appreciated if you will send a nomenon in American electioneering ATR Three ...... $363,133.02 $468,000.00 $104,866.98 thank-you acknowledgment to Carl at the and one which appears to have violated PHONES—JGCo. address shown on this check. 10/7/96 10/9/96 ...... Glad to be of some help. Keep up the good a number of principles of Federal cam- Inbound ...... $41,500.00 $41,500.00 $0.00 10/24/96 10/25/96 ...... work. paign law, from contribution limits to ATR #1 ...... $1,104,000.00 $1,104,000.00 $0.00 Sincerely yours, FEC registration to full disclosure. 10/28/96 10/31/96 ...... MRS. JO-ANNE L. COE. Triad is a private corporation that was ATR #2 ...... $712,643.70 $0.00 $712,643.70 Enclosure. Database—PBL set up by experienced GOP political OCTOBER 21, 1996. 10/7/96 10/9/96 ...... operatives to conduct multimillion dol- Database Acquisition ...... $153,677.50 $153,677.50 $0.00 Dr. DAVID O’STEEN, Executive Director, National Right to Life Com- lar activities directly affecting the 1996 Total balance ...... $607,776.72 elections. Among other activities, mittee, Washington, DC. *Please Note: Does NOT Include Postage. DEAR DAVID: I am pleased to enclose a Triad created two tax exempt organiza- check in the amount of $100,000 for the Na- tions, collected millions of dollars in Video Audio tional Right to Life Committee from Mr. secret contributions to them, and then Carl Lindner of Cincinnati, Ohio. used the tax exempts to air millions of Picture of Labor Washington Labor It will be appreciated if you will sent a dollars worth of television ads affect- Goons From Chap- Bosses and Liberal thank-you acknowledgment to Carl at the ing Federal campaigns. Triad also con- ter II With Head- Special Interests address indicated on his check. ducted hundreds of ‘‘political audits’’ line. Want To Buy Con- Glad to be of some help. Keep up the good work. of GOP campaigns, paying experienced trol of Congress. Washington Special They Think Joe Blow Sincerely yours, campaign professionals to advise the Interest Support— Will Vote Their MRS. JO-ANNE L. COE. campaigns on how to improve their op- With Picture. Way. Enclosure. erations. Triad also may have arranged Calendar Flips Back They Want To Re- 1. Funding for CCRI may be corporate or for individuals who contributed the To 1993. turn To Higher non-corporate, and there are no limits; how- maximum allowable amount to GOP Taxes For More ever, contributions to CCRI itself or state candidates to evade Federal contribu- Wasteful Spending. party accounts are reportable as contribu- Chyron: Largest Tax In Fact, They Were tions by the initial donor. CA law requires tion limits by laundering additional donors who give in excess of $10,000 to any contributions from these individuals Increase In History Behind the Largest Over Chamber Shot. Tax Increase in CA political cause to file reports themselves. through political action committees. History Good practice is to try to avoid inflicting a Triad undertook all of these activi- Picture of (Joe Blow) Joe Blow Says He’s new legal reporting requirement on donors. ties without ever registering with the Says He’s Different. Different. A $3 million contribution or expenditure, Federal Election Commission, or dis- Stamp Wrong ...... Wrong!! therefore, requires either lots of <$10,000 closing any contributions or expendi- Place Info Under Pic- (Democrat Tax non-FEC donors, use of FEC funds or large tures. Yet this wholesale abuse of Fed- ture of Democrat. Record.10) donors already or willing to be subject to the Graphic Build ...... for More Information CA reporting requirement. eral campaign law has not been deemed 2. ADI is a 501(c)(3), and contributions to it by the majority to be worthy of a sin- Call Americans for Tax Reform. are not political contributions by law. Con- gle hearing witness or depositions. tributions to ADI, therefore, are not report- Mr. President, the Governmental Af- [Confidential, Memorandum of Oct. 17, 1996] able and tax deductible. fairs Committee’s failure to inves- To: Haley Barbour, Sanford McCallister, 3. Americans for Tax Relief (ATR) is a tigate the $4.6 million payment by the Curt Anderson 501(c)(4). Contributions to its fair elections Republican Party to Americans for Tax From: Jo-Anne Coe campaign are non-reportable, but they are Reform, its failure to hold one day of Subj: American Defense Institute not tax deductible. Copy of letter to Red McDaniel attached 4. United Seniors Association has both a hearings or hear from one witness with for your information. 501(c)(3) and (c)(4). Its fair elections cam- respect to Triad Management, and its Today I have also sent $100,000 to National paign will be paid for by its 501(c)(4). Con- failure to hold one day of hearings or Right to Life and $100,000 to Americans for tributions to it are non-reportable, but they call one witness from the RNC or Dole Tax Reform—both from Carl Lindner. are not tax deductible. November 10, 1997 CONGRESSIONAL RECORD — SENATE S12447 5. The National Right to Life Committee aggressive than other children their needed assistance to families with the has both a 5601(c)(3) and (c)(4). Its get out the age, and we should, therefore, recog- costs of whichever kind of quality care vote information drive will be paid for by its nize that raising the quality of care they choose. 501(c)(4). Contributions will not be report- has long-term benefits not only for able, but are not tax deductible. Second, the bill contains a number of 6. The City of San Diego has a city account these kids but for our society as a provisions to encourage child care pro- that accepts contributions to help support a whole. Clearly, strong families and viders to offer higher quality care by variety of civic activities, including the con- strong parenting comes first, but we boosting training levels. Child care vention host committee in raising their need to complement that with a great- providers would be eligible for more shortfall. Contributions to the city account er emphasis on quality, affordable generous tax deductions for education may or may not be reported but are tax de- child care. and training that helps them receive ductible. We understand and we recognize that professional credentials. Additionally, American Defense Institute child care can be extremely expensive, States would receive grant funding to 1055 North Fairfax Street— $700,000 costing thousands of dollars per year operate training programs and to offer Suite 200, Alexandria, VA (501c3) for each child, and over $8,000 a year in scholarships to providers who receive 22314, 703/519–700, 703/519– (tax-deduct- some parts of our country. Many par- 8627 (fax), Contact: Red ible) training. McDaniel. ents struggle with paying these bills, One aspect of the child care quality United Seniors Association which are frequently larger than their problem is the extremely high turnover 12500 Fair Lakes Circle— $2.4 mil. rent, mortgage, or car payment. In the among child care workers, which is not Suite 125, Fairfax, VA 22033, (501c4) case of middle- and lower-income fami- surprising when one realizes that most 703/803–6747, 703/803–6853 (not deduct- lies—especially single-parent fami- child care center workers make barely (fax), Contact: Sandra ible) lies—child care costs can easily more than the minimum wage. The (Sandy) Butler, President consume more than one-quarter of a CIDCARE Act approaches this problem (Anita Benjamin, her office family’s annual income. manager). in creative ways. I have been holding a series of meet- National Right to Life First, the bill would create a problem Committee ings with child care providers in my for student loan forgiveness of child 419—7th Street, N.W.—Suite $2 mil State of South Dakota. We face some care workers who earn degrees in early 500, Washington, D.C. 20004, (501c4) special challenges in our State. Among childhood education, or who receive 202/626–8820, 202/737–9189 (not deduct- these challenges is the fact that we professional care credentials. Addition- (fax), Contact: Dr. David ible) have the highest percentage of working O’Steen, Exec. Dir. (Direct ally, grant money would be made avail- mothers in America. For more than 70 able to the States under this bill, line: 626–8814 or 626–8826). percent of the children in South Da- Americans for Tax Reform which could be used for programs to 1320—18th Street—Suite 200, $6 mil kota, both parents work; or in the case provide salary increases for providers, Washington, DC 20036, 202/ (501c4) of a single-parent family, the sole par- who receive professional credentials. 785–0266, Contact: Grover (not deduct- ent works. We should do all we can to encourage Another item discussed at these Norquist, President. ible) more private sector businesses to offer ...... $4 mil meetings was the negative impact of City of San Diego child care benefits. The CIDCARE Act (501c3) cuts in the child and adult care food would provide tax credits to employers (tax-deduct- program that were part of the Welfare to reduce the costs of starting up a ible) Reform Act of 1996. Many child care child care center, for the professional providers have relied on this assistance The PRESIDING OFFICER. Senator development expenses of child care to provide affordable care, and many JOHNSON is recognized under a previous staff, and for cost also related to get- families now face increasing costs and order. ting a child care facility accredited. f reduced access to child care. One of the consequences of the change in the nu- All in all, the CIDCARE Act contains CHILD CARE trition program was to actually create a number of innovative nonbureau- Mr. JOHNSON. I was extremely a disincentive for child care providers cratic provisions, and I believe it would pleased that recently President Clinton to remain licensed and certified. be a great step forward in increasing and Mrs. Clinton hosted a White House Mr. President, I believe that the evi- child care quality and in making it Conference on Child Care. The con- dence is abundantly clear that we need more affordable. ference was not only informative, but to do more to provide more affordable The second piece of legislation that I also very effective, I believe, in draw- and higher quality child care. This can have cosponsored is the Early Child- ing nationwide attention to the wide- be accomplished, I believe, without the hood Development Act, S. 1309. I be- spread difficulties that most parents creation of some new bureaucracy. In- came an original cosponsor of this leg- have in finding child care that is both stead, working in partnership with the islation when it was introduced just 2 affordable and of high quality. States, local governments, and non- weeks ago. I congratulate Senator It is estimated that each and every profit organizations, the Federal Gov- JOHN KERRY and Senator BOND for day 3 million children under the age of ernment, working in Federal-State- their work on this bill. 6 will spend time being cared for by local and a public-private partnership One of the more critical needs in my someone other than their parents, in- can achieve a great deal. State of South Dakota is for after- cluding one-half of all babies younger In an effort to seek constructive so- school programs. More than half the than 12 months of age. We all know lutions, I have recently cosponsored school-age children in my State have that these early years are critical two bills, the CIDCARE Act and the no parent at home in the hours after years for child development and that Early Childhood Development Act. school lets out. From nationwide sta- we need to be concerned about the These bills would work together in a tistics, we know that juvenile crime is quality of care that these children are complementary fashion. at its highest between the hours of 3 receiving. Unfortunately, for too many I would like to congratulate Senators p.m. and 6 p.m., the hours between children, the quality is simply not high JEFFORDS and DODD for their efforts in when kids get out of school and before enough. authoring the CIDCARE Act, S. 1037. I parents, all too often, get home from One national study, which was pub- am pleased to join them as a cosponsor. work. lished in 1994, rated the majority of The bill contains several provisions The Early Childhood Development child care centers as mediocre or poor. that would be a very positive step for- Act contains provisions to expand Fed- One out of eight child care centers ward for all forms of child care. eral financial assistance to innovative were found to actually jeopardize chil- First, the bill would refocus the ex- programs that target at-risk children dren’s safety and development. Not isting child and dependent care tax by providing constructive activities surprisingly, Mr. President, children in credit by making it refundable for low- and care after school lets out. The bill substandard care have delayed lan- income families and by increasing the does not create some new Federal bu- guage and reading skills, they are more credit for families with incomes under reaucracy. Instead, it offers grant $55,000. These steps will provide much- money to States who will, in turn,