HOW'S THE NEWS ON SOFT MONEY GOING? -- Lazio/Hillary and the hard money problem in 2000

The good news lies in the unprecedented agreement between New York Senate candidates Hillary Rodham (D) and Rep. Rick Lazio (R) to forgo millions of dollars worth of soft-money advertising on their behalf and to urge independent groups not to mount ad campaigns for them.

The bad news arises from evidence that, despite the campaign finance scandals of 1996, the White House guest rooms are still being used by President and Mrs. Clinton to raise money for the Democratic Party, Vice President Al Gore's presidential campaign and the first lady's Senate campaign.

What's the good news-bad news balance? We'd like to be optimists and say that the Clinton-Lazio agreement could be the start of something big. Indeed, the Senate's leading champions of campaign reform, John McCain (R-Ariz.) and Russ Feingold (D-Wis.), have written to all Democratic and GOP candidates running for federal office urging them to try to reach similar agreements with their opponents. "We believe that voters will take note of your leadership and react favorably to your support for better, fairer elections," the duo wrote. In actuality, the banning of soft money might hurt Lazio, who lacks the name recognition which money cannot buy, and that Hillary enjoys

We'd like to believe that too, but so far candidates across the country are not exactly leaping to accept the challenge. A candidate running for the House of Representatives has publicly denounced the banning of soft money as an infringement on his free speech. Those few who are tend to be, like Lazio, in the advantageous position of having more hard money to spend on their races than their opponents (according to preliminary FEC reports Lazio will have out raised Hillary in hard money donations), or more personal money. Most candidates at a hard-money disadvantage aren't likely to give up a possible soft-money rescue by their party.

In fact, there's a danger that the Lazio-Clinton deal could fall apart if independent committees start spending big money on the race and the two parties are not emulating Lazio and Clinton. To the contrary, they are raking in soft money and plan to spew it out. The Democratic National Committee raised $5.5 million from White House guests alone (according to DCCC Chair P. Kennedy). The Republican National Committee is in all probability doing the same, but no so openly excited about it.

Without a change in campaign finance laws, things will get worse. So when candidates like Lazio and Hillary sign an oath to reject soft money it does not help the current situation, it only creates more problems. In our current campaign finance system, the ban of soft money, is an infringement on the free speech rights of independent groups and interests groups. Before we make bold actions, such as signing oaths to ban soft money, we must look at the whole process of campaign finance an re-think it all. And if Democrats can raise money in the Lincoln Bedroom for the time being, why can't Republicans do it in the Rotunda of the Capitol? Or right on the Senate floor? Don't laugh. We're already headed down that road.

Another Hillary Finance Scandal
By Dick Morris
Slate | January 12, 2005

The indictment of Hillary Clinton's 2000 campaign-finance director, David Rosen, may pose a threat to the senator's presidential bid. For now, the federal indictment is focused only on Rosen, but it is not hard to see the process creeping up the campaign food chain to the senator herself.

At issue are the expenses the campaign incurred in an August 2000 fund-raiser for Hollywood glitterati. Rosen was indicted for claiming that the event cost $400,000 when, federal prosecutors allege, he knew the actual cost to be $1.1 million. Under federal campaign-finance rules, the Clinton campaign was obliged to pay for 40 percent of the cost of the fund-raiser. So, if the gala cost $400,000, the campaign had to pay only $160,000, but if the price tag was actually $1.1 million, the campaign would have been on the hook for $440,000.

By understating the cost of the party, Rosen was, in effect, giving Hillary's campaign an extra $280,000.

While there is no indication that the Senate candidate knew of the understating of the cost of the event, is it credible that she would not be aware of a decision that gave her campaign more than a quarter of a million dollars as it entered the final three months before the election?

Remember what was happening in August and September of 2000 in the New York Senate race. Republican Rick Lazio was gaining traction despite his late start (after Rudy withdrew) and had raised massive amounts of hard money through direct mail. Most of Hillary's money was in soft-money contributions.

Exploiting Hillary's long-time stand against soft money, Lazio challenged the first lady to eschew soft money and restrict her campaign to hard-money donations, raised under a limit of $1,000 per contributor.

This challenge threw Hillary's campaign into a panic. It could not hope to compete in hard money. It was at this time that Rosen chose to underestimate the cost of the Hollywood fund-raiser.

The sum involved was enough to pay for almost an entire week of television advertising in New York City and exceeds the total media budget of many smaller campaigns.

To raise this sum, Hillary would have had to get 280 donors to give the maximum $1,000 individual donation permitted under federal law at the time. A decision of this magnitude — how much to say the event cost — would have been a huge issue within the campaign.

This is no clerical error, nor is it likely to be one young man's decision to commit fraud to help the campaign. It is just not credible to believe that Hillary didn't know about and approve of the understatement of the event's cost.

Hillary has always been a detail person who kept a hawk-like focus on the cost of even her husband's campaigns. How much more involved and fixated she must have been on a major financial decision that affected her own election effort.

The federal indictment of the key financial officer in Hillary's campaign — an event The New York Times did not see fit to put on the front page — shows that Sen. Clinton has not escaped from the culture of scandal that dogged her husband's presidency.

The question of who understated the cost of the Hollywood event now joins the pantheon of questions that have haunted the senator's past — Who hid the billing records? Who ordered the travel office firings? Who helped Hillary to make a killing in the commodities market? Did the first lady know her brother was paid to secure a pardon for a major drug trafficker? Did Hillary represent the Madison Bank in a fraudulent real-estate deal? Who ordered the removal of the FBI files?

Hillary's ethical obtuseness is truly Nixonian. Usually campaign-finance filing errors are so mundane that they draw light fines from the Federal Elections Commission. That her campaign committed so important a breach of the finance laws that govern elections that her finance chairman is under a federal indictment is truly extraordinary.

If young David Rosen wants to take the fall for Hillary and join the likes of Web Hubbell and Susan McDougal, who chose to languish in prison rather than tell the truth, that is his decision. But don't ask us to believe something the average 8-year-old knows can't be true: that a gain to the campaign of $280,000 was beneath Hillary's notice.

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