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Will McCain-Feingold Improve the Campaign Finance System?

Aired March 19, 2001 - 7:30 p.m. ET



SEN. JOHN MCCAIN (R), ARIZONA: Campaign contributions from a single source that run to the hundreds of thousands or millions of dollars are not healthy to a democracy. Is that not self-evident? It is to the people, Madame President.


BILL PRESS, CO-HOST: Tonight: let the debate on campaign finance reform begin. But will the McCain-Feingold bill go anywhere or is there a White House plot to kill it?


SEN. CHUCK HAGEL (R), NEBRASKA: ... any of the Shakespearian drama that we love so much in this town about me being used by the White House or George Bush, of course, is complete nonsense.


ANNOUNCER: Live from Washington, CROSSFIRE. On the left, Bill Press; on the right, Robert Novak. In the CROSSFIRE: Republican Senator Gordon Smith of Oregon, and David Keene, chairman of the American Conservative Union.

PRESS: Good evening. Welcome to CROSSFIRE and the kick-off of two weeks of Senate debate on campaign finance reform. Buoyed by public response in last year's presidential primaries, John McCain and Democratic sidekick Russ Feingold made the case for banning all soft money. That's money to political parties that doesn't fall under federal limits. "It's time to end the tyranny of having to raise all this money," McCain declared.

But he faces two big obstacles. Thanks in part to new opposition from organized labor, some Democrats, who voted for McCain-Feingold in the past, may suddenly be having second thoughts.

And many Republicans are supporting a competing proposal introduced by Nebraska Republican Senator Chuck Hagel and backed by the White House, which would limit soft money, but not ban it.

The result: will it be the McCain-Feingold bill, the Hagel bill, or no bill at all? Where is the Senate heading? Let's find out. Sitting in as guest host on the right tonight, a familiar face to all of: former Congressman Rick Lazio of New York.

Rick, good to have you here.

RICK LAZIO, GUEST CO-HOST: Great to be on, Bill.

PRESS: Now, stay on your side of the table.

LAZIO: All right. I'm not going to hand you anything, not even a pardon.


PRESS: Don't invade my space.

LAZIO: Gordon, great to see you. Senator Smith, you're doing a wonderful job in the Senate. I want to thank you for being here today.

Let me ask you something: You know, a great Republican president, Theodore Roosevelt, was a crusader to end corporate contributions to federal elections. That's been the law of the land for almost 100 years. The unions have been effectively banned -- legally banned, not effectively banned, legally banned from making donations. Yet, over the last few years, hundreds of millions of dollars in soft money donations are pouring into the campaigns.

I want to show you a little graphic right now of how the big fat cats are really dominating the playing field right now. If you look at this, 800 people -- corporations and unions -- are donating almost $300 million, which is 2/3 of all of the soft money that is pouring into the election campaigns.

Isn't there something wrong with that? What about getting the parties to get back to grassroots fund raising? Raising money at $100, $200, $1,000 a clip -- what's wrong with that?

SEN. GORDON SMITH (R), OREGON: Look, the 800 people, they do donate a lot, but there's a whole lot of people who donate a little, and what we don't want to do is choke off those folks from being able to participate in American politics. That's frankly why I support the Hagel bill, which does -- caps off money but does preserve it as a way to preserve our political parties.

They do important things, and I think that there's room for them.

LAZIO: But why validate now this end-run around the law? I mean, the law has said corporations cannot donate, unions can't donate, but over the last couple of years, because of an interpretation of the law -- namely, if you run a commercial and you say, vote for or vote against, you can't run the ad, but if you run the exact same commercial and you don't use that language, you can run the ad. Isn't that crazy?

SMITH: Yeah. This is the problem, Rick, when we try to regulate speech. We're regulating freedom. We're particularly regulating our most important speech, which is our political speech, which affects the future of the country.

But honestly, yeah, you get around the law, and if McCain- Feingold passes, it will be immediately challenged, and in my opinion, they'll probably throw half of it out, and maybe all of it.

But if they throw half of it out and you have the effect of ending political parties to effectively compete, what we will have done is empower unelected people to go into smoke-filled rooms and to run campaigns about candidates. That will hurt our country. That's why if McCain-Feingold is the answer, there must be a nonseverability constitutional clause, so if they find one part unconstitutional, it's all unconstitutional.

PRESS: David Keene, let me pick up on this point, because this soft money is a big giant end-run around the process. They limited the hard money contributions to individual candidates. They thought they fixed the problem, and nobody thought about this escalating problem with the soft dollars.

And let's just look how -- how it's exploded over the last few years, also going to a graphic here from "The Los Angeles Times."

1992, there was -- this is Republican -- by the way, this is a bipartisan problem.

DAVID KEENE, CHAIRMAN, AMERICAN CONSERVATIVE UNION: Well, soft money is about evenly raised by both parties.

PRESS: Right. So both parties -- in 1992, 86 million. '96, 263 million. Last year, 487 million!

I mean, this is getting so obscene! And doesn't it just make it look like everybody in the system -- good and bad, and mostly good -- it makes it look like everybody in the system is for sale.

KEENE: Well, first of all, the American people have always been somewhat cynical about their elected representatives, and I think that's a healthy attitude, from the very beginning of the republic. That doesn't mean that all politicians are for sale. It doesn't mean that when you -- when someone gives a contribution they're doing it for a quid pro quo, and it doesn't mean that when a politician accepts it, he's going to deliver for them.

But the problem is -- and you go back to it as the senator mentioned and as Rick mentioned, there's a bright-line rule. And the reason for that is that the Constitution in this society has gone to extraordinary lengths to protect freedom of speech. The core of the First Amendment is political speech, and we protect all kinds of other speech because we can't really say what is political and what isn't. And these laws go right to the core of the First Amendment of our Constitution.

Now, it may cause problems, it may be difficult, but it's the price we pay to live in a free, democratic and representative government. Now, the soft money -- let's be clear -- the prohibition against corporate and union giving is hard money, and that's where the small dollars come in. You know, the soft money at this point goes to the state parties, and it's for get-out-the-vote and other party-building activities.

PRESS: I just think that -- I have to tell you, with all due respect, I think that is pure baloney, this constitutional argument...

KEENE: You may but that's the way it is.

PRESS: ... that this is the First Amendment. I know about that Supreme Court ruling. I think it was a wrong one. But the Supreme Court has also -- they've upheld limits on campaign contributions. They've upheld a lot of steps along the way.

You can't tell me -- you say it's constitutional for somebody like a Ross Perot to -- to just try to buy a seat and it would be against the First Amendment to have some (UNINTELLIGIBLE) limits?

KEENE: Well, that goes -- that goes to the senator's position on the severability of these things. Back in 1974, when the '74 reforms -- so-called -- were passed, they included limits on a candidate buying a seat. They included a bunch of limits that the court found blatantly unconstitutional. But the court did not find individual contribution limits unconstitutional. They said those were speech one step removed.

The result is that Jon Corzine can run and buy a seat, but his opponent cannot raise money above that limit to take him on.

Now the Congress today could have fixed that, the Senate could have fixed it, and the Democrats defeated an amendment that would have allowed them to fix it.

SMITH: I just came from a vote, and I voted to untie the caps on challengers who are up against a millionaire spending his own money to tie down a seat. But it was defeated by the Democrats. They did not want to amend McCain-Feingold to make it fair for challengers who don't have a big bank account. I was stunned at that...

LAZIO: See, I disagree with that. I think the Republicans were right on that point, to have stood firm. People should have a level playing field.

But let's go back to this, because I think this First Amendment argument is somewhat thin.

Every individual can contribute to a campaign. Every individual can contribute. Why can't a corporation go out there and have a PAC, as they can under law right now, or a union have a PAC and get those contributions? Why do they need to use corporate treasury money or union treasury money to go out there and run additional ads? Why is it now a fact that individuals have the ability to contribute? What's wrong with just forcing parties, corporations, unions to go out and get permission and raise money at $1,000 a clip? KEENE: Do you know why there are corporate PACs today? Because in 1973, 1974, when that campaign reform was considered, the Republicans said we want it to apply evenly, and we want it to apply to the unions as well. The unions said: Well, no, we can't do that. Why don't we let the corporations have PACs as well so that they can do these things?

The fact of the matter is that -- and you're going to face this same problem today, because the core support for this reform is Democrats. And the unions are going to say, we want limits on our opponents, we don't want limits on our friends. And that's going to be a problem.

LAZIO: But David, that runs against some of the ideas that you espouse. Remember the voucher and educational reform referendums have been beaten by effectively soft money that's come out. The fact is, is that you stand firmly, and your organization, against unlawful or wasteful subsidies for corporations that are not justified. Why are they perpetuated? Because in many cases they're giving tons of money to both sides and people on both sides of the aisle.

KEENE: I would love -- Rick, I would love to say my opponents, people that disagree with me can't spend money. I can't do that. And you can't take that kind of a position.

Right now in the Senate, as the senator will say, you've got shifting alliances, because the Democrats were saying, gee, we're not that good at raising hard money, maybe we shouldn't abolish soft money, because that might work to our advantage. Maybe it will.


When you're approaching questions that go to the First Amendment of the Constitution and the very nature of our country, you can't do it that cynically.

PRESS: That assumes, of course, that free peach equals money. That's another debate. But senator, I want to ask you, what's going on in this town today? You know, Rick and I sort of agree on this issue, not on all the points of it.

There's a gold rush in town today. The rush is for ambassadorships and the people that are first in line are the ones that came up with the most gold.

And by the way, this happened under Bill Clinton. It's now happening under George Bush. It doesn't change from administration to administration.

KEENE: It happened under John Adams.

PRESS: But people -- it happened probably under John Adams.

SMITH: It did. It does.

PRESS: The people who were called Pioneers, who raised a $100,000 for Bush in the campaign, they're up front. You're even more up front if you gave an additional $100,000 for the inaugural committee.

You've got admit, this stinks! Get rid of it. Get rid of the soft money.

SMITH: Bill, I -- I won't deny the fact that it stinks. It always has. But honestly, because we've had, at least in recent years, a lot of disclosure, at least people can know who's doing what and make a judgment on it. But it has produced, this imperfect system of ours, the greatest nation in the world.

So it's not all bad, and it is called freedom. And I don't know how you ring it out except with public financing, and that takes away from education.

KEENE: That's even worse.

SMITH: That's even worse. Then you've got the government deciding who gets to speak.

KEENE: And don't think there wouldn't be standards.

PRESS: But wait a minute. But here's one way to get out of it. You've got McCain-Feingold. And every time this bill comes up, there are a thousand different excuses -- we're hearing some of them tonight -- for why we don't go ahead with this.

I mean, think about the public. You know, this last election -- big election -- 50.7 percent only of American people voted. Why? I would argue because a lot of them say that they don't have access to these politicians anymore. If they can't write the big checks, their vote doesn't count, their voice doesn't count. I mean, just to get the people back into the system is worth supporting this bill.

SMITH: Well, I mean, the truth is that countries like Japan, for example, who have public financing and severely limit political speech. They have increased cynicism and decreased voter turnout. And so this is not a panacea to what you're decrying. I share your concern about the apathy in the American electorate. But apparently, heavy regulation of political speech is not the answer if other countries are the guide.

KEENE: If you want to motivate more people, you need to spend more money.


PRESS: All right. We'll leave it right there for a second while we take a break. John McCain says it's now or never for campaign finance reform. Will it be never? We'll be right back with more CROSSFIRE.


LAZIO: Welcome back to CROSSFIRE. I'm Rick Lazio, sitting in on the right.

The battle lines are drawn on campaign finance reform. Will reformers prevail? Joining us to battle it out: David Keene, chairman of the American Conservative Union, and Republican Senator Gordon Smith of Oregon -- Bill.

PRESS: Senators, you know, one of the oldest tricks in the business when you don't like a bill, you know, instead of killing the bill what you do is introduce another bill that kind of looks good, but it's really phony, it's shot with holes, and that gives people a place to run, and they can vote for that and tell their constituents they voted for campaign finance reform when in fact they didn't do anything like it. That's what's happening right now with this bill that you support, this Chuck Hagel bill.

Let's face it: That bill is a phony bill. It's the Trojan Horse that you're just rolling into the Senate to kill McCain-Feingold, isn't it?


PRESS: With George Bush's backing!

SMITH: The reason I'm supporting it, Bill, is because I think there is a need for campaign finance reform, but I have had trouble with some of the constitutionality, in my view, of the McCain- Feingold.

I think Hagel does some good stuff. It requires disclosure. It limits, not bans, soft money so parties can stay in business. And I think it raises hard money limits, which I think is important, because at the end of the day, we need to figure out how to reconnect citizens and candidates directly, because the way we're doing it, we're driving it all into the back, smoke-filled rooms, and giving power to people who are not accountable or even disclosable to the American people.

PRESS: But you see also, you do something like that, and then that takes away all the drive for campaign reform and you never get to the real stuff. I think that's what Senator Feingold was talking about tonight or today. You heard him say this on the floor. If we could just play a little bite here for our viewers and have you respond to it. This is Senator Feingold today.


SEN. RUSS FEINGOLD (D), WISCONSIN: The fact is the Hagel bill is worse than the current system. It simply says soft money is fine: $60,000 for every corporation, $60,000 for every union. And if you don't like that, you can run every single dime straight through the state parties back through the federal elections. It honestly doesn't do a thing to change the system.


PRESS: So it's worse than nothing, isn't it? SMITH: Not in my opinion, and look, if Russ wants to have his bill passed, he's got to include the nonseverability thing, because otherwise we will do our country severe damage. And I think we will restrict free speech, we'll hammer our political parties. They'll not be players anymore. And we will empower people that frankly don't care about the truth. They care about winning elections, and they'll be running campaigns about candidates. And we will be further disenfranchising the citizens and the candidates of this country.

LAZIO: David, let me ask you something. I just went through this Senate race in New York. Over $100 million was spent. News that just came out from "The New York Times" saying that, one account, Hillary Clinton raised and spent over $10 million in soft money, just with one account. And there were many others, I'm sure, many times that.

So while I'm out there in the first couple months of the campaign trying to raise those hard dollars to be competitive, she's out there raising soft money at $100,000, $200,000, $300,000 a clip.

Wouldn't it be the right thing to do to eliminate that, that taint on the system, to build credibility, to have both people raise hard money? Isn't $1,000 or $2,000 enough for people to express...

KEENE: Well, $1,000 isn't enough, and the senator made the point that the Hagel bill does increase the hard dollar component. That $1,000 limit was enacted in 1974. Inflation alone means that it ought to be in the $3,000 to $4,000 range now.

The fact of the matter is that it's very difficult to raise the funds that are needed for a free political system under the limits that you've got, particularly for hard dollars.

When you get to regulating advocacy, and particularly issue advocacy, regardless of who it's by, you run into constitutional questions -- very serious constitutional questions. McCain would go after advocacy groups across the board and say, you can't discuss issues for a certain period before an election. The reality of life in America or in any free system is that people tune into issues during certain periods, and that's one of the crucial ones.

You outlaw that and you're outlawing a significant part of what this country is about.

LAZIO: Isn't it healthier for the conservative movement? Isn't it healthier, senator, for the Republicans Party to reach out, to broaden the tent, to get that grassroots donations...


LAZIO: But see, over the last few years, what's happened is that the parties have focused on the big fat cats. Their campaigns have been financed by these big $100,000 donations. We saw that graphic before: 800 corporations, unions, and individuals financing 2/3 of all the soft money. The average donation was $120,000. Isn't that something both the conservative movement and the party is in the wrong direction?

SMITH: Well, look, if we're going to do the soft money ban, then let's regulate the other speech as well, because then it comes down to a hard money race which does reconnect the citizen and the candidate. And that is better. I admit that.

KEENE: The soft money is in large part again a result of the '74 act...

SMITH: Absolutely.

KEENE: But before that, you could raise hard money, and it had to be reported.

PRESS: We're almost out of time here, but I just want to come at you, because I think you may be a sheep in wolf's clothing here, if I may put it that way, because...

KEENE: Nobody's ever accused me of that.


PRESS: Look, and the senator has mentioned it a couple of times. The reason you're against this is because you're one of these organizations that loves to go out there, get all the soft money you can, and then you run these commercials at the end, and nobody knows who's behind them. You come up with some phony name...


KEENE: Let me tell you something: When we run an ad, we run it under our name, Bill.

PRESS: But that's your agenda, right? You don't give the money to the candidate. You run your own ad.


KEENE: No, we give more money to candidates through our PAC than we run soft money ads. That happens to be a fact. And when we run an ad -- and we did in Rick's case -- we didn't spend very much money compared to Hillary Clinton or any of these other folks.

But the fact of the matter is that there are advocacy groups on all sides, and they have to have a right to speak. They have to have a right to raise their issues. That's part of what this country is about, Bill!

SMITH: We ought to agree that anybody wanting to play should be willing to do it in the light of day and be subject to disclosure. Then you're in the marketplace of ideas, then the voter can decide who's for what and who's paying whom, and then, we have an open democracy.

PRESS: And let's let the record show this is the first day of two weeks of debate. You kicked it off. We didn't resolve all the issues, but we got a good start.

Thank you very much for coming in, David Keene, Senator Smith. Rick Lazio and I will be back, two former candidates. We'll have our answers to the whole problem of campaign finance reform, coming up in our closing comments.


PRESS: Rick, you know, I don't think this should be a partisan issue. I think both Republicans and Democrats should be supporting McCain-Feingold. But the fact is this bill would have passed last year if Republicans hadn't killed it in the Senate. It would pass this year if George Bush were not against it. He is undermining what the people want.

LAZIO: Bill, the two most important players in this are John McCain, who's been the champion of campaign finance reform, a Republican senator, and the other fellow, who is the most important player in all of this, is someone who is no longer in an elected office, and that is Bill Clinton, who abused the system, who raised hundreds of millions of dollars in soft money, who ransacked the law, who abused every sense of notion of decency and fair play when it comes to campaign finance reform.

And that's why the public is seeing the light and knows that we need to get some...


PRESS: Wait a minute! Bill Clinton was ready to sign McCain- Feingold. Mitch McConnell would never let it get there, and now George Bush, if it got there today, would veto it.

LAZIO: Where were the Democrats when they were in control, when they had both houses and when they had Bill Clinton? Where were they on campaign finance reform? They were nowhere.

PRESS: You know what? They should have done it then, and we should do it now.

All right. From the left, I'm Bill Press. Good night for CROSSFIRE. I'll see you later in the "THE SPIN ROOM."

LAZIO: And from the right, I'm Rick Lazio. Join us again tomorrow night for another edition of CROSSFIRE.



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