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Capital Gang

Rep. John Kasich Discusses Campaign Finance, the Buying of an Election and the Breakup of Microsoft

Aired June 10, 2000 - 7:00 p.m. ET



I'm Mark Shields with Al Hunt, Robert Novak and Margaret Carlson.

Our guest is Republican Congressman John Kasich of Ohio, chairman of the powerful House Budget Committee.

Great to have you back, John.


SHIELDS: Thank you.

The Democratic National Committee launched a $25 million ad campaign featuring Al Gore and paid for by soft money.


ANNOUNCER: Al Gore is taking them on, fighting for a Medicare prescription drug benefits for seniors like Bob Artesse (ph).

AL GORE, VICE PRESIDENT OF THE UNITED STATES: People can't afford these ridiculously high prices for prescription medicines.


SHIELDS: Did that break a March 15th pledge by the vice president?


GORE: What I did yesterday was to call on the Democratic National Committee -- and they'll comply with this -- to not spend any of the so-called soft money on these issue ads unless and until the Republican Party does.

GOV. GEORGE W. BUSH (R-TX), PRESIDENTIAL CANDIDATE: It doesn't surprise me, a man who says one thing and does another. It's consistent with how he's run his campaign.

(END VIDEO CLIP) SHIELDS: Democrats asserted that anti-Gore soft money commercials came first. Meanwhile, Republican congressional investigators released a 1997 memo from FBI Director Louis Freeh, proposing an independent counsel to investigate Vice President Gore's fund raising.

The memo said, quote, "In the face of compelling evidence that the vice president was a very active, sophisticated fund raiser who knew exactly what he was doing, his own exculpatory statements must not be given undo weight," end quote.

Al Hunt, does this ad campaign help or does it embarrass Vice President Gore?

AL HUNT, "WALL STREET JOURNAL": Mark, of course Gore reneged on what was probably a foolish pledge. But it's a secondary issue. It's like arguing about faulty logs in the Titanic when the whole damned corrupt ship is sinking. Because the 1996 campaign finance illegalities -- principally Clinton-Gore but also the Republicans -- were never investigated, the message is anything goes. So 2000 is going to produce more money than ever, more soft money, more special interest influence, and, I predict, more corruption than you saw in 1996.

The politicians hope the voters won't care about this scam, but I tell you, the Senate this week, in a big surprise over the opposition of Senate Leader Trent Lott and Mitch McConnell went along with John McCain in voting to crack down on these undisclosed, huge contributions, so-called "527s." And what really was fashioning in that vote, Spence Abraham voted with John McCain on that. Conrad Burns voted with...

SHIELDS: Two Republican senators.

HUNT: Two Republicans, never voted with him before. You know why? They're up this year, Mark.

SHIELDS: Mike DeWine, Kay Bailey Hutchison, same thing.

HUNT: Mike DeWine, absolutely.

SHIELDS: How about it, Bob Novak? Al Hunt make sense. Admit it today.

ROBERT NOVAK, "CHICAGO SUN-TIMES": I agree with almost everything he said. What I don't agree with was it doesn't really matter that Al Gore broke his word. He's got a cumulative problem of changing, of you can't trust him. I mean, the little tape that we showed here is about four different versions of making that promise that he wouldn't go first.

Of course, they're all going to use soft money in the long run. The Bush campaign is going to be out Monday with a Social Security position paid for by soft money, and Social Security, I think, incidentally, is an issue that is, for now at least, playing the Republicans' way. But all these people are into soft money, and we had Toricelli -- Senator Toricelli and Senator McConnell, the Democratic and Republican campaign chairman, on "CROSSFIRE" the other night, and they said, we have to use all this soft money because you won't put the news on CNN.

HUNT: Come on.

NOVAK: That's what they said. That's exactly what they said.

SHIELDS: What did you say to them?

NOVAK: Well, I just listened. I'm just a humble journalist. But...

MARGARET CARLSON, "TIME": You didn't defend CNN?

NOVAK: But the matter of fact is almost worse than soft money is those guys acting as news editors for America's news media. That's what really scares me.

SHIELDS: John Kasich, your own take on this?

KASICH: Well, I mean, come on. With Gore and his denials and his escape clauses, it's a little silly. And I think Bob's right. I think Al Gore's biggest problem is that in the country people really aren't warming to him. And I don't know whether he can solve that problem. I think that that's why George Bush is doing well. People don't trust him. And for them even to talk about campaign finance reform is silly.

But I do want to make a point. I think that Al has it just about 180 degrees wrong when says that it was a great victory in the Senate for campaign finance people. What happened in the Senate and what will happen in the House is we're going to advocate full disclosure. We're not going to try to build another complicated mouse trap to figure out how to shut some segment of America up. We're going to say, if you want to participate in the political system, give what you want, tell us who you are, tell us what you do, and let the voters decide whether they like the people who are contributing.

So I think what happened in the Senate, Al, was interesting. That is a message that Republicans and Democrats say full disclosure, and that's where I think this whole campaign finance reform really ought to go. It's simple, and I think can solve a big part of this problem.

SHIELDS: Simple campaign disclosure, Margaret. Tom DeLay, of course, one of the great advocates of disclosure -- and one of the great advocates of total secrecy. Built up his own committee, John -- can't have it both ways -- Margaret.

KASICH: No you can't.

SHIELDS: You can't have it both ways.

KASICH: You can't have it both ways. SHIELDS: No -- OK, Margaret.

CARLSON: You know, disclosure doesn't really solve the problem. What are voters going to do about, you know, finding out that the NRA gives millions of dollars to a candidate? That the one side of a real estate lobby gives money and then the other side, too. It's the money, not finding out who does it. You can already find out who gives the money, except for these 527.

Now, I agree with you that the public hasn't really warmed to Al Gore, to say the least. But it's not because of this pledge -- which wasn't a pledge, it was a challenge to Bush not to use...

NOVAK: Oh, come on. It was a poll.

CARLSON: ... not to use soft money. And by the way, you know, is it just a coincidence that these independent -- so-called "independent expenditure ads" go up, the missile defense, the Coalition to Protect America Now! -- exclamation point -- put ads up the very day that Bush made his missile defense speech on the missile defense system, that former Governor Pete Wilson puts out the hypocrisy anti-Gore ads. Do you think he did that without Bush thinking it was a good idea?

No, the public -- these -- this are all -- and the public -- here's the problem with your -- the public can't do anything about it. They don't really make these distinctions, independent expenditures, 527, soft, hard, wet, dry -- they just don't.

NOVAK: OK, Margaret, Margaret...

CARLSON: You've got to get the money out.

NOVAK: Just two points: It was a pledge. He wouldn't use it if the RNC didn't. The RNC hasn't used it. And if these independent expenditures, if they're coordinating with the Republicans -- and there's no proof they are -- that's a crime.

KASICH: Look, I want to make the point that...

CARLSON: And I want to make a citizen's arrest.

KASICH: You know, Margaret, what you're saying is basically -- and I'm retiring from politics at the end of this year -- is that it's bad when people outside of Washington put ads on television. I'm not for shutting up Americans. I'm for allowing Americans to say what they want, as long as they tell us who's behind the money and let the voters judge whether they like what's being said.


CARLSON: But what does the Committee to Protect Americans tell you about who's behind the money?

HUNT: I admire...

CARLSON: It's made up.

HUNT: I admire John Kasich for his absolute denunciation of what Tom DeLay's doing. You're absolutely right about that, his undisclosed 527.

But let me say this, Mark. What this is -- and I've been very critical of Clinton-Gore and will remain critical of them -- this is a narcotic to these politicians. They desperately need it. It is really like a drug. And then they come up with all kinds of phony excuses -- this doesn't create a more enlightened citezenry. And I'll tell you something. George W. Bush doesn't have any issue here. Let's see who financed the Wyly brothers. What kind of coordination in that and New York. Let's see what the Senate finance...

NOVAK: Has anybody proved coordination on that?

HUNT: No, but nobody proves some of the Clinton-Gore stuff, either. That's why we need investigations of 1996.

SHIELDS: Bob, let me just say, I agree with you about Al Gore. I agree with you that he made a pledge and he's broken that pledge, OK?

HUNT: He did.

SHIELDS: But, Bob, it defies your powers of reason, which are considerable. You go to bed at night, there's no snow on the ground, you wake up and there's snow on the ground, you're going to say it snowed. The Wyly ad arrives and John McCain in the New York primary spends $2.5 million against him. And to say that wasn't coordinated...

NOVAK: I want -- Mark...

SHIELDS: It was bought by George Pataki...

NOVAK: I want to see the proof of the coordination by somebody who got all these investigators that are paid for, the White House -- give me some proof.

SHIELDS: Well, Bob, do we know...

KASICH: I'm going to pass that the House is going to pass full disclosure in another month, and if you want to create a political action committee, you're going to have to list everybody. And I know one final thing: Al Hunt, I have determined today, is not a contribute to Tom DeLay's PAC.

SHIELDS: Yes, he is. He hopes to be.

HUNT: Bob -- Bob, do we know if Clinton-Gore violated -- do we have proof they violated the law in...

NOVAK: Yes, we do.

CARLSON: Wait one second -- wait. NOVAK: Yes, we do.

HUNT: We have proof? What is it?

CARLSON: We know who the Wyly brothers are.

KASICH: What did the Wyly brothers have to say?

CARLSON: We know who the Wyly brothers are. It doesn't help us get anywhere in campaign finance reform. Disclosure doesn't get us anywhere.

KASICH: (OFF-MIKE) Wyly brothers.

SHIELDS: Last word -- Margaret Carlson.

John Kasich and THE GANG will be right back with the purchase of a U.S. Senate seat.


SHIELDS: Welcome back.

In New Jersey, multimillionaire investment banker Jon Corzine trumps former governor Jim Florio for the Democratic Senate nomination. The former Goldman Sachs chairman spent $35 million of his own money in his first try for public office.


REP. BOB FRANKS (R-NJ), SENATE CANDIDATE: His spending during the course of this campaign demonstrates that Mr. Corzine is truly extravagant with his own money. If he has such little regard for his own money, what regard will he have for yours?

JON CORZINE (R), NEW JERSEY SENATE CANDIDATE: Elections are about ideas, and messengers, and when people go into the voting booth, they look to who they think can be the advocate, the best advocate, for their interests, and I think that conclusion is not about money.


SHIELDS: Margaret Carlson, is Jon Corzine buying a U.S. Senate seat?

CARLSON: Recent experience tells us that you probably can't buy the seat, but you can rent your candidacy. You can get good name ID. Michael Huffington and Al Checchi spent proportionately almost as much.

SHIELDS: Senate in California, Republican candidate...


CARLSON: Senate in California and governor, and didn't win. John Corzine had a couple things other than money going for him, although he had $35 million. He had a weak opponent. Governor Jim Florio came with a Samsonite warehouse full of baggage. The heaviest of which was the surprise tax increase he never showed the slightest regret about, and then he goes up against a kind of nondescript, generic Republican, who is not going to have very much money. I hear that the Mitch McConnell senatorial campaign committee is not going to spend scarce resources over here when Corzine is likely to outspend him.

SHIELDS: So he's going to buy a Senate seat.

NOVAK: He's buying a Senate seat. Now I've got to say this, if my fellow alumnus from the University of Illinois, Jon Corzine, if he wants to spend $35 million to be a senator -- they would have to pay me $35 million to make me a senator. If they want to, that's OK. And if the people of New Jersey are stupid enough that some guy who's giving a left-wing screen, because they see him on television more than anybody, they elect him to the Senate. That's the system, that's the way it works. I'm not going to cry about it.

SHIELDS: Should you cry about it, John?

KASICH: Well, Bob Franks isn't going to cry about it, and he's going to work hard. And you know, Corzine has been described as more liberal than Ted Kennedy and Al Hunt by "The Washington Post." No, just kidding, Al. But the fact is that I think it's really going to be interesting to see how the media handles it, because if they let this become just a discussion about the money, Corzine will win, but if the media says, lets hear their ideas, I think Bob Franks will have a real fighting chance. He's a great friend of mine, and don't underestimate him.

NOVAK: You know him personally.

KASICH: He's great, yes. I just campaigned for him the day before the election.



HUNT: Is Jon Corzine that liberal? Well, I'm just pleased to know that Bob Novak is not going to spend $35 million from his fortune. Everything I hear about Jon Corzine, I've never met him, he's a splendid guy. The notion of trying to paint the former chairman of Goldman Sachs as a left-wing socialist is really, really hilarious, Mark. But I think he'll probably be pretty good senator.

But you know, if you give me a choice between voting for someone who has been bought or someone who buys an election, I'll go for the latter, but what a terrible choice for America, and the notion that people sometimes, what we need is more money in campaigns, you hear that occasionally, I think we saw in the Corzine experience that what that does is not produce a more enlightened, or edifying campaign, but what it does is produce, silly, stupid expenditures, like for private investigators. NOVAK: I the can think of a worst option, the third option. That's that the taxpayer pay for the candidate. That I think is the worst of all options.

KASICH: I think the media is focused on the fact that Corzine spent that much, and they don't like it, and I think that's going to give Bob Franks a chance.

SHIELDS: Once again, I have an opportunity to agree with Robert Novak, and that is that Ronald Reagan, who twice won the presidency on public financing, not taking any private money, stands as a beacon, and should for you, too, Bob, should be an inspiration. That's the last word.

Next on CAPITAL GANG, Microsoft divided by two.


SHIELDS: Welcome back.

Federal district Judge Thomas Penfield Jackson ordered Microsoft Corporation split in two, ending the two-year antitrust trial.


JOEL KLEIN, ASST. ATTORNEY GENERAL: Today decision marks an important step in redressing the serious effects of Microsoft's illegal actions, and requiring the company to obey the law.



BILL GATES, CHAIRMAN, MICROSOFT: This is clearly the most massive attempt at government regulation of the technology industry ever, and it was conceived by the government and imposed by this ruling without a single day of testimony or scrutiny.


SHIELDS: A new Gallup polls shows Americans oppose splitting Microsoft by a 5-3 margin and approve of Microsoft 3-1.

I don't know what that means, But, Bob, is there any political fallout from all of this.

NOVAK: I think there could be. I think it was a big mistake by the Clinton administration. They let the lawyers of the Justice Department go crazy. There was never one cabinet meeting on this. When AT&T broke up they had one cabinet meeting after another. The American people like Microsoft. This is something for the competitors, not the consumers.

And I will say this, that I think Al Gore was very wise not to comment on this decision. Why in the world has George Bush been silent on it? That is a mystery to me. CARLSON: He believes in the law, that's why.

SHIELDS: It is just interesting, though, one was a Republican administration and a Democratic administration. The Democratic administration said, Justice do the job, right, is that true?

CARLSON: Yes, and George Bush is wise not to comment, because he wants to follow the law, and actually the country is fortunate that there are people like Joel Klein and Judge Thomas Penfield Jackson willing to take on this icon of the IPO world, these, you know, rich guys who don't think that there's any place in America for regulation, and they should just be able to take away your privacy, decide what you're going to have. We don't even know what computer we don't have as a result of Microsoft using its muscle illegally.


HUNT: Bob, we're arguing about the legal and the economic interconnections between the Explorer browser the Windows 2000 operating system. When you and I came to work, our cell phones...

NOVAK: I'm talking about politics baby.


HUNT: I want to tell you something, I have read "The New York Times," I have read the "Wall Street Journal," I have read some marvelous outtakes in "The New Yorker" magazine, and, Mark, at the risk of exposing our gig, I don't understand a lot of this stuff, I've got to confess to you, but I think both the politics and the economics are vastly overrated here.

As Bob said, George W. Bush hasn't commented on it, so how is he going to take advantage of it. And as far as the economics are concerned, this judge is a Reagan appointee, a very conservative judge. There is a reason that David Boies so badly outpointed the high-powered Microsoft lawyers in court, and I want to tell you, like AT&T in 1984, I'll make a prediction, if the breakup occurs, that the shareholders of Microsoft will be far wealthier 10 years from now than they are today.

SHIELDS: Certainly the breakup of AT&T, John, led to incredible explosion in innovation.

KASICH: Yes, but, Mark, AT&T was a created monopoly. Microsoft is not. Secondly, this is about politics. This is really about the future. You know, it's the computer that's allowed us to be able to begin to really decode the human cell structure, which leads to isolating down syndrome and all kind of things. The technology that is being developed by companies like Microsoft is changing the very face of America. We have a new set of economic circumstances.

And let me just suggest that companies in this new environment get very big, and then the small companies are hungry. They then develop a leapfrog technology that creates a whole new standard. So for the government to break up companies like this, and I mean liberals and conservatives who are free thinkers agree, this could destroy the ability of a company to innovate and for technology to benefit all Americans. It's a terrible decision.

NOVAK: John, I understood about half of which you said, but I don't know which have it was.

KASICH: You spend too much time in Washington.

NOVAK: Judge Jackson, let me say something about him, he may be a Republican and a Reagan appointment, but he is a classic case of a thorough judge going crazy, giving newspaper interviews, having television going into his chambers while he writes a decision. Disgraceful. He ought to be kicked off the bench.

CARLSON: Imagine Judge Jackson being upset that Bill Gates hired and army of lobbyists to come to Washington and to cut the Justice Department's budget while there was a case before the court.

SHIELDS: Crucial point, Margaret Carlson.

CARLSON: Thank you, Mark.

SHIELDS: John Kasich, thanks for being with us.

The GANG will be back with outrage of the week.

ANNOUNCER: Our viewer "Outrage of the Week" is from Ed Tarantelli. He writes:

"Al Gore's proposals to make so-called mental health care available to all Americans from birth is an outrage. The medial or psychiatric condition should not become our established religion for the sake of drug company profits and political careers."


SHIELDS: Now for the "Outrage of the Week."

Last week, I asked Bob Novak what happened to all those brave Republicans named Lott and DeLay who had demanded hearings on Elian Gonzalez? Here's what he had to say.


NOVAK: They choked. They read the polls, and people who read the polls should not be in public life. But most of them do read the polls.


SHIELDS: This week, our old friend Senator Orrin Hatch proved how right Bob was by calling not for hearings on Elian Gonzalez but for subpoenas on documents. Come on GOP, give it a rest.

Bob Novak. NOVAK: Thank goodness for Larry Klayman and Judicial Watch. This conservative think tank doing journalist work has obtained documents under the Freedom of Information Act showing the Clinton administration working hand in glove with the Cuban communist regime to send back Elian Gonzalez. What about the Cuban trade embargo? What about the lack of diplomatic relations? Now belatedly, Mark, the Senate Judicial Committee wisely has subpoenaed documents relating to this outrage.

SHIELDS: They showed courage.

Margaret Carlson.

CARLSON: At the same moment AT&T was swearing it was lowering long-distance rates in order to get the FCC to reduce the fees it pays to local phone companies, it was actually raising them. They tried to confuse regulators as much as they tried to confuse consumers with their mishmash of plans -- One Rate, five cents a minute, Reach Out America. Actually, Ma Bell was brazenly increasing its Sunday right 163 percent, just the time grandma's calling the grandkids. They should change their slogan to reach out and smack someone.


HUNT: Mark, having lots of gray hair, I'm sometimes mistaken for Phil Donahue, basketball coach Bobbie Cremins, and unfortunately, Newt Gingrich, but the most flattering was when someone thought I was Jeff MacNelly, the great "Chicago Tribune" editorial cartoonist. MacNelly, a conservative, and Herb Lock, a liberal, are the very best of this creative breed that brings more insight to American politics than any of the rest of us. Jeff MacNelly passed away this week at 52. He'll be sorely missed.

SHIELDS: He certainly will.

This is Mark Shields saying good night for the CAPITAL GANG.

Next on CNN, "SPORTS TONIGHT" reports on basketball and playoff finals.



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