Ha! I found it and it was the New Republic, July 15, 1996 issue. The title was “Loathing in Las Vegas” and it was written by John Judis. Bastard.
Ok, thanks for the correction. Like I say, my recall is that the “reveal” that the KKK membership card was a hoax was buried late in the article (which meant that unless a reader made it through the piece, (s)he might still walk away with the perception that Phil Gramm had been a member of the Klan).