The Nightly Business Report; The Money Chase Excerpts

<v Cassie>Tonight, we begin a special six part series on money and politics. <v Cassie>We'll look at where campaign contributions come from, how they are spent and the impact <v Cassie>money has on our politics and politicians. <v Cassie>John Palmer reports on the money chase. <v Cassie>John. <v John Palmer>Cassie, there are two parallel campaigns going on in America today. <v John Palmer>One is the race for votes. The other is less visible, but perhaps more important, and <v John Palmer>that is the race for money. You can't chase votes, of course, with an empty wallet. <v John Palmer>The single largest source of campaign dollars is business, but business in America <v John Palmer>is not a monolith. Different businesses support different candidates and parties at <v John Palmer>different times. In future segments, we'll look at how tens of millions <v John Palmer>of dollars in private so-called soft money, that is, contributions that legally <v John Palmer>circumvent laws intended to keep big donations out of presidential politics, <v John Palmer>seep into the race for the White House, a campaign that is supposed to be, by law, <v John Palmer>publicly financed. We'll see how some contributions are targeted to congressional <v John Palmer>committees rather than congressional candidates and why incumbents, even

<v John Palmer>when unopposed, are heavily funded. <v John Palmer>And then we'll look at Ross Perot's, do-it-yourself kind of campaign financing. <v John Palmer>Tonight, kind of an overview, a sort of financial prospectus for American <v John Palmer>politics. Let's start with the race for Congress. <v John Palmer>The average House incumbent raises almost half a million dollars every year, <v John Palmer>and a typical U.S. senator complains he has to raise $12000 <v John Palmer>dollars a week every week for six years just to stay in office. <v John Palmer>And the cost has been going up. <v John Palmer>Take the last presidential race in 1988. Including the primaries and <v John Palmer>the conventions, it cost George Bush and Michael Dukakis a total of $500 <v John Palmer>million. That's 4 times what it cost John Kennedy and Richard Nixon in <v John Palmer>1960, even after the figures are adjusted for inflation. <v John Anderson>1980, which was the year that I ran for president, a total <v John Anderson>of 1.2 billion dollars were spent for elections of all levels <v John Anderson>of government. By 1988, just 8 years

<v John Anderson>later, that figure is reported to have been 2.7 <v John Anderson>billion, and I'm sure that in 1992, it will be over <v John Anderson>3 billion dollars that will be spent for American elections, and that, <v John Anderson>I think, is what drives the American political process today. <v John Anderson>It is money. <v Thomas Ferguson>Look, people appeal to business for money for the same reason that Willie Sutton <v Thomas Ferguson>went to banks for it. I mean, that's where the money is. <v Thomas Ferguson>All right, and uh that's the way we now do politics in this sort of incredibly capital <v Thomas Ferguson>intensive fashion. <v Commercial narrator>To pay for his increased spending in Arkansas, Bill Clinton-- <v John Palmer>Where does all this money go? Television, advertising, fundraising events, <v John Palmer>and administrative overhead, among other things. <v George Bush (on commercial)>Read my lips. <v John Palmer>Critics charge that the money is also used to build up huge war chests to scare <v John Palmer>off potential opponents. But who is paying the bill? <v Ellen Miller>By far and away, the largest contributors is the business community, both PACs and

<v Ellen Miller>individuals. Just no question about it. <v Ellen Miller>When we look on the congressional side, we thought that PACs were out-giving labor- <v Ellen Miller>business PACs were out-giving labor by a factor of 3.5 to 1. <v Ellen Miller>But when we added the individual contributions in, we found that labor was outspent <v Ellen Miller>almost 5 to 1. <v John Palmer>And in soft money contributions so far this year, business-giving has again <v John Palmer>dwarfed labor contributions by a 16 to 1 margin. <v John Palmer>Despite what most people might think, business has been <v John Palmer>very generous with congressional Democrats for years, and in fact, since 1985, <v John Palmer>Democrats have received more business PAC money than Republicans. <v John Palmer>They have also caught up in the soft money sweepstakes. <v John Palmer>To do that, the Democratic Party adopted much more aggressive strategies in the early <v John Palmer>and mid 1980s. Two of the architects of the turnaround were former Congressman <v John Palmer>Tony Coelho, who wasn't afraid to do a little arm twisting, and National <v John Palmer>Party Chairman Charles Manatt.

<v Charles Manatt>As party chairman, it was my role to say, hey, here's uh what the law is and <v Charles Manatt>what the law isn't. If we're going to have a competitive landscape with the Republicans <v Charles Manatt>in direct mail and communications and the party headquarters, we've got to have the <v Charles Manatt>chance to raise those funds that are available to us as the Republicans have <v Charles Manatt>been doing all along. <v Tony Coelho>We went aggressively after the Chamber of Commerce and a little bit after A.M.A. <v Tony Coelho>and the realtors to make an example out of those three groups, <v Tony Coelho>but particularly the Chamber of Commerce. <v Tony Coelho>And we did not participate in any of their TV programs. <v Tony Coelho>We did not go to any of their conferences. <v John Palmer>That kind of hardball tactics worked at the congressional level. <v John Palmer>The presidential story is different. <v John Palmer>It seems to have taken a sweet talking southern governor to get some business elements <v John Palmer>into the Democratic column on the presidential side this year. <v Cassie>John, does this mean there's been a wholesale move by business to the Democrats? <v John Palmer>Cassie, no, not really at all. The polls still show, indeed, that the uh Republican

<v John Palmer>businessmen support President Bush here. <v John Palmer>But we have detected in our tracking a trend, and indeed talking with CEOs, a trend <v John Palmer>by some toward Clinton, the majority still with Bush. <v John Palmer>And I think there's several reasons for this. One is that uh they're a little bit <v John Palmer>disillusioned with Bush, and there's a feeling that maybe Clinton is a little more <v John Palmer>pro-business than usual Democratic candidates, and generally the changes in the global <v John Palmer>economy. And these changes have forced a lot of businessmen to look a little bit <v John Palmer>differently at the traditional laissez faire attitude of the Republican Party <v John Palmer>toward business. <v John Palmer>Now, tomorrow night, the key members of America's business elite will talk about <v John Palmer>just those issues we've been talking about and what they have to say as- well I think <v John Palmer>you'll be a bit surprised. Cassie. All right. <v Cassie>Great, thanks, John. We'll look forward to part 2 tomorrow night. <v Cassie>Bill Clinton has been telling everyone that he's a different kind of Democrat. <v Cassie>No more tax and spend, now it's invest and grow. <v Cassie>In the second segment of our Money Chase series, John Palmer looks at the Clinton message <v Cassie>and how it's playing with businesses. John.

<v John Palmer>Cassie. While Bill Clinton has been courting big business in much the same <v John Palmer>way that uh the Democrats usually are courting big labor, it <v John Palmer>may be more than coincidental that the Republicans are admittedly having trouble raising <v John Palmer>money this year. To hear the Arkansas governor tell it, he's a new kind of Democrat <v John Palmer>with a new message for corporate America. <v John Palmer>[applause] In Chicago last month, Clinton announced that 400 business leaders, including <v John Palmer>many Republicans, had thrown their support to him. <v Bill Clinton>I am profoundly moved by the response that these people have given to our campaign, <v Bill Clinton>just as I was a few days ago in Silicon Valley when the high tech executives <v Bill Clinton>there, most of whom were Republicans, endorsed this candidacy. <v John Palmer>To find out how that message is playing at the very pinnacle of corporate America, <v John Palmer>we traveled to Hot Springs, Virginia, where 100 members of the business elite <v John Palmer>gathered earlier this month for the biannual meeting of the Business Council. <v John Palmer>It's still very much of a George Bush crowd, but even the president's backers

<v John Palmer>acknowledged an erosion of support over a variety of issues, especially <v John Palmer>trade. One corporate leader was pointedly neutral. <v Harold Poling>I'm going to look forward eagerly to the debates and the discussion of these issues, <v Harold Poling>and I'm trying to find out uh specifically where the uh Clinton <v Harold Poling>party stands on these uh matters. <v Walter Williams>I think in this case, um it is a <v Walter Williams>disillusionment with what's happened in the past four years at- with <v Walter Williams>respect to our economy, that is, in a sense, pushing some businessmen <v Walter Williams>to Clinton to try something new, if that's possible, or to give somebody else a chance. <v John Palmer>One executive said there is a great deal of silent support for Bill Clinton. <v John Palmer>Another CEO was not afraid to speak to the issue. <v John Palmer>Have any of the other business leaders come to you and said, <v John Palmer>John, what are you doing here? What- what did you do this for? <v John Young>Well, I've gotten a lot of uh good-natured ribbing, but I think

<v John Young>genuinely there's an awful lot of concern about the fact that we <v John Young>are kind of drifting and not making the progress and not seeing the leadership they'd <v John Young>like to see. And I think there's also a lot of understanding on why <v John Young>people are- are as concerned as they are. <v John Palmer>Several business executives attributed Clinton's appeal to a change in the Democratic <v John Palmer>Party, but more significantly, to a fundamental change in the way American <v John Palmer>business has to compete globally. <v Howard Allen>It's contrary to my basic instincts as a Republican and the <v Howard Allen>way my father reared me. <v Howard Allen>But there are certain things that government should have oversight <v Howard Allen>on, and not just sit back and <v Howard Allen>say that competition will solve everything. <v Howard Allen>It hurts me to say that and my father would turn it over in his grave if he heard me say <v Howard Allen>it [laughs]. <v Norman Augustine>I think the Democrats are moving more toward business and business is moving more toward <v Norman Augustine>the Democratic line of thinking.

<v Norman Augustine>I say that in the sense that uh the Democratic Party, I think is figuring <v Norman Augustine>out that you can't be against uh employers and for jobs. <v Norman Augustine>It's kind of a non-sequitur. <v John Palmer>In the 1991-92 election season, Republicans are still outpacing <v John Palmer>the Democrats by more than 2 to 1 in soft money. <v John Palmer>Those are the unlimited dollars that are ostensibly raised for state and local <v John Palmer>party-building activities. <v John Palmer>But in August, for the first time in the 20 month reporting period, the <v John Palmer>Democrats raised more soft money than the Republicans. <v John Palmer>And in overall contributions, the Democrats have taken in 44.3 <v John Palmer>million dollars since July compared to the Republicans who raised 26 <v John Palmer>million. With all the Democratic attention focused on business, where <v John Palmer>does that leave the party's traditional base: labor unions, liberals <v John Palmer>and minorities. <v Tony Coelho>If Mr. Clinton wins, then by the end of his term- 4 years, <v Tony Coelho>you're going to see a lot of the liberals in the Democratic Party upset with him.

<v John Palmer>Does that mean that the Democratic Party has abandoned its base because it needs <v John Palmer>to appeal to moneyed interests to expand its power, maintain its hold on <v John Palmer>Congress and capture the White House? <v Thomas Ferguson>Look, y- you have to get this straight, political parties in the United States now are <v Thomas Ferguson>names on bank accounts. Okay? They're not devices for organizing anybody at <v Thomas Ferguson>the mass level. In fact, you know, a huge number, half the population doesn't vote, and <v Thomas Ferguson>the other half is quite jaded. <v Thomas Ferguson>I mean, they're watching the debates in many cases because there's nothing else on TV. <v Thomas Ferguson>So, yeah, they're- of course the Democrats change their policies to get money. <v Cassie>The Democrats are pouring all of their money- or excuse me, the business is pouring all <v Cassie>of its money to the Democratic Party? <v John Palmer>Well, there has been an increase, Cassie. <v John Palmer>We've certainly tracked that in our numbers, but we really won't know how much until all <v John Palmer>the numbers are in and that'll be sometime after November 3rd. <v Cassie>What's next on the money chase? <v John Palmer>Well, on our next report, we're going to look at one industry, an important industry, <v John Palmer>health care, and how it is investing in the election.

<v John Palmer>And it's an example of how various interest groups try to protect themselves in the <v John Palmer>Congress. <v Cassie>Thank you very much. We're looking forward to it. <v Cassie>Tonight's segment of the Money Chase looks at the powerful interest mobilized around <v Cassie>health care reform. Health care is a 730 billion dollar industry. <v Cassie>John Palmer is here with a look at how health care companies try to protect their <v Cassie>interests by investing in politics. <v Cassie>John. <v John Palmer>Cassie, about half the money spent on successful congressional campaigns <v John Palmer>comes from political action committees or from PACs. <v John Palmer>There are about 5000 PACs in this country, typically organized around <v John Palmer>business and labor union interests and PAC spending is very pragmatic. <v John Palmer>If you want a preview of upcoming congressional fireworks, just follow the PACs. <v John Palmer>Watch which congressmen are getting the most lavish attention and there's no better <v John Palmer>example of that than the Democratic-dominated house, and one of this year's hot <v John Palmer>button issues, health care. <v John Palmer>There are about 35 million Americans without health insurance.

<v John Palmer>Health care costs are rising at twice the rate of the gross national product. <v John Palmer>And spiraling employee insurance premiums are eroding corporate profits and <v John Palmer>competitiveness. <v Harold Poling>Our health care costs, they're our largest supplier. <v Harold Poling>Last year, a 1,183,000,000 dollars, 529 dollars a <v Harold Poling>car. We cannot be competitive with that type of cost. <v John Palmer>But while our nation's health care delivery system may be in critical condition, <v John Palmer>1992 campaign spending by hospitals, doctors and drug and insurance <v John Palmer>companies has been more than robust. So far this year, health care industry <v John Palmer>contributions to congressional campaigns have reached 22.4 <v John Palmer>million dollars, compared to 18.6 million just two years ago. <v John Palmer>Most of that money is from PACs. <v Richard Kirsch>Contributions from the PACs that represent the insurance companies, the medical <v Richard Kirsch>establishment, increased 20 percent. <v Richard Kirsch>That's twice as fast as PAC contributions increase generally. <v John Palmer>PAC contributions are limited to $5000 per candidate <v John Palmer>per election, and defenders of the PAC system will tell you that's too

<v John Palmer>paltry a sum to influence votes. <v Ellen Miller>PACs in individuals give in PACs. <v Ellen Miller>It's not an isolated contribution. <v Ellen Miller>Generally, their interest is very much the same, and that's what turns the ear <v Ellen Miller>of the uh- of the member towards their interest. <v Edmund Pratt>If you have a committee chairman or keep people on a committee that are- that are very <v Edmund Pratt>valuable to have uh good relations with, why, it's not surprising that uh- <v Edmund Pratt>that you would tend to support some of these people. <v Edmund Pratt>I don't- I don't apologize for that. <v John Palmer>Citizen Action, a Washington watchdog group, added up the latest figures from the <v John Palmer>Federal Election Commission, including Health PAC and individual donations from <v John Palmer>doctors, dentists, hospital administrators and other health care professionals. <v John Palmer>Here are the top five House recipients: Richard Gephardt, majority <v John Palmer>leader and member of the powerful Ways and Means Committee, Henry Waxman, chairman <v John Palmer>of Energy and Commerce's Health Subcommittee, Dan Rostenkowski, Ways <v John Palmer>and Means chairman, and Pete Stark, chairman of the Ways and Means Subcommittee on

<v John Palmer>Health, and John Dingell, chairman of the Energy and Commerce Committee. <v John Palmer>Driven by health industry concern over reform proposals, Rostenkowski's <v John Palmer>donations are up almost 1200 percent from two years ago. <v John Palmer>Gephardt's are up 284 percent. <v John Palmer>Health industries have also been generous with Republicans on Ways and Means. <v John Palmer>Former major league pitcher Jim Bunning's contributions are up 309 percent <v John Palmer>and ex Love Boat star Fred Grandy's jumped 305 percent. <v John Palmer>No congressman would concede that campaign money in any way compromises <v John Palmer>his or her position on the issues. <v John Palmer>The five Democrats, in fact, have sponsored various health care reform plans. <v John Palmer>Critics say the industry is, at the very least, trying to contain the damage. <v John Palmer>What do the companies say? <v Edmund Pratt>If you want to be heard, you have to have access, you- you- and it's a little hard to go <v Edmund Pratt>steaming down on an important issue to somebody you've never seen before and never heard

<v Edmund Pratt>of you and try to be heard. <v Edmund Pratt>So all you expect to get from contributions is- is a sense of relationship <v Edmund Pratt>so that a person is in- in the political scene, is willing to listen to your views. <v John Palmer>What do they mean when they say access? <v Ellen Miller>Well, access is a sugar-coated way of saying buying influence. <v Ellen Miller>Um, whether saying buying influence is another sugar-coating uh to saying buying <v Ellen Miller>votes um you know is not altogether clear. <v Cassie>John, we've seen how special interests try to influence Congress. <v Cassie>But now that the general election is financed by taxpayer dollars, is there any way for <v Cassie>special interests to gain access to the Oval Office? <v John Palmer>Well, Cassie, certainly no president would ever admit to it, no presidential candidate <v John Palmer>and certainly no contributor. But most people feel that by using <v John Palmer>uh soft money, unlimited soft money contributions, they can get more than just a little <v John Palmer>bit of leverage at 1600 Pennsylvania Avenue. <v John Palmer>And tomorrow, we're going to be taking a look at this legal loophole called soft money <v John Palmer>and how it has become big enough to actually drive, I guess, a- a presidential campaign

<v John Palmer>through it. <v Cassie>Tonight, our Money Chase special report takes a hard look at soft money. <v Cassie>John Palmer is here with a look at how big dollars find their way into the presidential <v Cassie>race through a legal loophole in campaign finance laws. <v Cassie>John. <v John Palmer>Cassie, campaign financing abuses that were unearthed during the Watergate Scandal, <v John Palmer>have brought about some sweeping reforms. <v John Palmer>They brought about reforms in 1974. <v John Palmer>Contributions to candidates at the federal level are now strictly limited by law, but <v John Palmer>you can make unlimited donations to political parties. <v John Palmer>That money is supposed to be used to help state and local efforts, but very often it ends <v John Palmer>up one way or another helping candidates for Congress or president. <v John Palmer>That is soft money. <v Ellen Miller>It's money essentially not regulated by the federal campaign finance law. <v Ellen Miller>It was money designed to assist uh candidates <v Ellen Miller>in activities at the grassroots level, but was very quickly taken over by the national <v Ellen Miller>parties as a way to garner 100,000 dollar plus contributions

<v Ellen Miller>to support candidates. <v Frank Reiche>You can say, well, what's the vice in that? Well the vice there is that they thereby <v Frank Reiche>gain access to the members of Congress, indeed, <v Frank Reiche>possibly to the White House, uh by making substantial contributions. <v Frank Reiche>Or if they don't gain access, at least the perception is that they do, and in <v Frank Reiche>campaign finance, perception is sufficient to taint the process. <v John Palmer>So far this election cycle, the Democrats and Republicans have raised <v John Palmer>a total of 62 million dollars in soft money just through August. <v John Palmer>The list of donors includes some of the nation's largest companies, most powerful <v John Palmer>unions and wealthiest individuals. <v John Palmer>Soft money is soft because national and local distinctions get blurry <v John Palmer>around election time. Get out the vote drives help the whole ticket. <v John Palmer>So do the kind of ads that encourage support for a party rather than a specific <v John Palmer>candidate. It's all legal under the Federal Election Act, but it is

<v John Palmer>not legal to use soft money raised for state and local campaigns on <v John Palmer>federal races. <v John Palmer>That's allegedly what happened two years ago in a Kentucky race for the U.S. <v John Palmer>Senate. The matter is still pending before the FEC. <v John Palmer>On October 11th, 1990, according to official documents. <v John Palmer>The Democratic National Committee in Washington received more than 200,000 dollars <v John Palmer>in soft money from Mary Bingham, matriarch of a powerful Louisville <v John Palmer>family. She was an ardent backer of Kentucky Democrat Harvey Sloane's <v John Palmer>uphill battle to unseat Republican U.S. <v John Palmer>Senator Mitch McConnell. <v John Palmer>On October 12th, the DNC began transferring a total of <v John Palmer>215,000 dollars to the cash-starved Kentucky Democratic Party. <v John Palmer>The party spent that money on a statewide TV campaign produced by <v John Palmer>Sloane's Washington media adviser. <v Commercial narrator>That's the difference between wealthy Washington Republicans and Kentucky's Democrats. <v Commercial narrator>Our hard working families know that Democrats always fight for good paying jobs, Social

<v Commercial narrator>Security, health care and quality education. <v John Palmer>The GOP claims the ad clearly focuses on federal matters and was <v John Palmer>aimed at McConnell, who ended up winning by 4 percentage points. <v John Palmer>The Republicans filed a complaint accusing the Democrats of using nonfederal <v John Palmer>funds in a U.S. Senate race. <v John Palmer>The Democratic Party and a lawyer for Mrs. Bingham declined comment since the matter <v John Palmer>is still under investigation. <v John Palmer>The largest amount of soft money is generally raised during presidential races. <v John Palmer>The $5000-a-plate-and-up dinners with Bill Clinton and this fundraiser <v John Palmer>for the Bush campaign are all expressions of solid support with soft <v John Palmer>money. Critics call it an invitation to Watergate style abuses. <v Benjamin Ginsberg>Well, I disagree with that. I think that when a contribution is given to- to the <v Benjamin Ginsberg>Republican National Committee, there is no quid pro quo. <v John Palmer>But the critics point to this year's biggest single, soft money contributor- Archer <v John Palmer>Daniels Midland, the Illinois based billion dollar agricultural conglomerate.

<v John Palmer>This election season, ADM has given more than one million dollars to the Republican <v John Palmer>Party's soft money account. <v John Palmer>It also is kicked in almost 140,000 dollars to the Democrats. <v John Palmer>ADM is the nation's largest producer of corn-based ethanol fuel, <v John Palmer>an alternative to gasoline. <v John Palmer>Its effects on air quality are a matter of debate. <v John Palmer>Earlier this month, President Bush reversed Environmental Protection Agency policy <v John Palmer>and announced plans to include ethanol as an alternate fuel. <v John Palmer>The president's reversal would benefit not only ADM, but also corn farmers <v John Palmer>in the Midwest, where Mr. Bush lags in the polls. <v John Palmer>The decision has angered environmentalists and state and local air quality regulators. <v S. William Becker>There are a number of reasons that have been suggested, ranging from the fact that he's <v S. William Becker>kowtowing to some of the Midwestern states to get the ethanol vote, to the fact <v S. William Becker>that ADM um on record has contributed a significant amount of money

<v S. William Becker>to the Republican National Committee. <v Cassie>John, what does ADM say about all this? <v John Palmer>Well, Cassie, the company has declined all comment. <v John Palmer>But we must say that uh ADM, what they're doing in these contributions, is perfectly <v John Palmer>legal. In fact, the oil companies who say what the president did was illegal, well, they, <v John Palmer>of course, have given soft money too to both the Republicans and to the Democrats. <v John Palmer>And tomorrow night, we're going to look at a couple of people who have no trouble raising <v John Palmer>money, soft or otherwise: Ross Perot, who's trying to shake up the system, <v John Palmer>and a congressman who plays the system like a virtuoso. <v Cassie>All right. We'll look forward to it. See you then. <v Cassie>Anti-incumbent fever may be running high this election year, but John Palmer continues <v Cassie>our Money Chase special report tonight with a look at an incumbent who is coasting home <v Cassie>on a mountain of campaign cash. <v Cassie>John. <v John Palmer>Well Cassie, back in 1962, when Jimmy Quillen was first elected to the <v John Palmer>U.S. House of Representatives, John F. <v John Palmer>Kennedy was in the Oval Office, and astronaut John Glenn was the national <v John Palmer>hero, and a 21-year-old named Bob Dylan was singing a song called Blowin

<v John Palmer>in the Wind. Kennedy, of course, is gone, Dylan is now one of rock's senior citizens, and <v John Palmer>Senator Glenn is fighting for his political life in Ohio, not so with <v John Palmer>Representative Quillin, a sure bet to win his 16th straight term <v John Palmer>in the House. <v John Palmer>James Henry Quillen or Jimmy, as he's known both in Washington and back home <v John Palmer>in east Tennessee, is a low-key candidate. <v John Palmer>No splashy television ads or expensive direct mail campaigns, <v John Palmer>no high-priced consultants or pollsters, mostly just lots of hugs <v John Palmer>and handshakes. Jimmy Quillen is a Republican and the last time Tennessee's <v John Palmer>1st District sent a Democrat to the House was back in 1876. <v John Palmer>But Quillin has another reason to be confident. <v John Palmer>He began the year with more than one million dollars in campaign funds, <v John Palmer>unspent donations amassed over the years during one easy race <v John Palmer>after another. This year, he faces two unknowns who say they have <v John Palmer>a total of 700 dollars to spend on the campaign.

<v John Palmer>Other challengers may have been frightened away by Quinlan's campaign kitty. <v James Quillen>I consider any opposition very formidable. <v James Quillen>I think when you sit down and take things for granted, sometimes the rug is pulled <v James Quillen>out from under you. <v John Palmer>At 76, Quillin spends most every weekend back home during election <v John Palmer>time, pressing the flesh, renewing ties and going through the traditional <v John Palmer>campaign rituals. But his friends and supporters extend far beyond <v John Palmer>his native Appalachia. <v John Palmer>Most of the money given to his reelection committee comes from corporate America, <v John Palmer>from political action committees associated with some of the nation's business giants. <v John Palmer>The 15-term congressman says it's a kind of philosophical link. <v James Quillen>No industry is inseperable to the first district of Tennessee, at <v James Quillen>least I'd like to think so. <v James Quillen>And when you look at it that way, there's a reason for them doing <v James Quillen>it. And I don't ask any questions.

<v James Quillen>The committee asked no questions. <v James Quillen>And I always welcome it. <v John Palmer>And the PACs have been more than willing to give it. <v John Palmer>That's because Quillen is the longest serving Republican on the powerful House Rules <v John Palmer>Committee. No bill makes it to the House floor without getting through the Rules <v John Palmer>Committee first. Quillen isn't just sitting on that big war chest. <v John Palmer>In 1990, according to federal election records, he spent a quarter of a million <v John Palmer>dollars to win all of the 47,796 <v John Palmer>votes cast, but only 4 percent of the money spent went for <v John Palmer>actual campaigning. <v John Palmer>Where did the rest go? <v John Palmer>Quillen reported spending two thirds, or more than 172,000 <v John Palmer>dollars, on overhead, including more than 80,000 dollars for a full-time <v John Palmer>campaign employee, 42,000 in taxes, and more than <v John Palmer>7,600 dollars to keep the campaign's automobile running smoothly. <v John Palmer>He also listed 8,500 dollars in gifts to constituents, including

<v John Palmer>Super Bowl tickets, wristwatches, flowers, clock radios and congressional <v John Palmer>souvenirs. And he spent $750 on jackets, the same <v John Palmer>kind he's wearing here, which he gave out to campaign workers. <v John Palmer>Why do politicians like Jimmy Quillen collect and spend such large amounts <v John Palmer>of money? <v Sara Fritz>The money is there. The money is available. <v Sara Fritz>Uh special interests have become well-organized. <v Sara Fritz>They're offering money to members of Congress and other candidates. <v Sara Fritz>And uh so members who don't even need the money will raise <v Sara Fritz>a million dollars just to have it uh in their campaign funds <v Sara Fritz>just in case. Also, they use this money to build themselves <v Sara Fritz>their own political empire. <v John Palmer>There is at least one other way to finance a run for office. <v Ross Perot>I'm spending my money on this campaign. <v Ross Perot>The two parties are spending your money, taxpayer money. <v Ross Perot>I- I put my wallet on the table for you and your children.

<v Ross Perot>Over 60 million dollars at least will go into this campaign to leave the American <v Ross Perot>dream to you and your children to get this country straightened out, because if anybody <v Ross Perot>owes it to you, I do. <v John Palmer>Having a few billion dollars in your pocket lets you participate in politics and <v John Palmer>sit out the money chase. <v John Palmer>The only problem is that it narrows the field of possible candidates. <v Cassie>John, what about efforts to reform the campaign finance system, then, is representative <v Cassie>Quillen an exception? <v John Palmer>No, Cassie, he's not really an exception. He's actually the rule. <v John Palmer>In 1990, there were 371 people running for a seat <v John Palmer>in the House of Representatives, either unopposed or they had competition or <v John Palmer>challengers who had very limited financial resources. <v John Palmer>And on the question of reform, well everybody wants reform. <v John Palmer>We've talked to the politicians, to businessmen and so forth. <v John Palmer>Everyone wants reform. It's just a question of what type of reform. <v John Palmer>And we're going to be talking on Monday night with some people trying to rein in <v John Palmer>the money chase. <v Cassie>John, thank you. We'll see you next Monday.

<v John Palmer>Thank you. <v Cassie>On tonight's final segment of the money chase, John Palmer looks at how we might improve <v Cassie>the way we finance our elections. <v Cassie>John is in Washington and he begins with the latest campaign contribution totals. <v Cassie>John. <v John Palmer>Cassie, the latest numbers were compiled by the nonpartisan Center for <v John Palmer>Responsive Politics and are based on data from the Federal Election Commission <v John Palmer>from January the 1st, 1991 to June 30th, 1992. <v John Palmer>Final numbers will be released sometime next spring. <v John Palmer>But here is what we have so far. <v John Palmer>The totals confirm that business represented by individual, corporate <v John Palmer>and political action committee donations is far and away the single <v John Palmer>largest source of political money in the country. <v John Palmer>Labor, which gives almost exclusively through PACs, was outspent by business <v John Palmer>by more than 5 to 1. <v John Palmer>The GOP got 20 million dollars more from business than the Democrats, <v John Palmer>but the Democrats got 93 percent of labor's 29 million dollar contribution

<v John Palmer>to capture the overall lead in the money chase. <v John Palmer>Within the business category, lawyers and lobbyists who habitually haunt the corridors <v John Palmer>of power gave the most money. <v John Palmer>Second on the list was the securities and investment industry, with most <v John Palmer>of its investment in loosely-restricted soft money. <v John Palmer>The list of the most generous contributors was rounded out by industries <v John Palmer>with a very keen interest in the legislative agenda of the next administration <v John Palmer>and Congress. <v Thomas Ferguson>Numbers like this inevitably call to mind the Golden Rule: he or she that has the gold <v Thomas Ferguson>rules. And what that really means is that a American election- in American <v Thomas Ferguson>election processes, the candidates chase not blocs of voters, but <v Thomas Ferguson>blocs of investors. And the perfect limit case to make the point is Ross Perot. <v Thomas Ferguson>He is the only presidential candidate talking about serious reform of the process, and <v Thomas Ferguson>he's the only presidential candidate who doesn't need anybody else's money to mount the <v Thomas Ferguson>campaign.

<v John Palmer>As Tom Ferguson just noted, the race for dollars is just as important <v John Palmer>as the race for votes, perhaps in some cases even more important. <v John Palmer>I've been joined by two people very familiar with the race for dollars and the complex <v John Palmer>world of campaign financing: Ellen Miller, executive director of the Center for <v John Palmer>Responsive Politics and Steven Stockmeyer, executive vice president <v John Palmer>of the National Association of Business PACs. <v John Palmer>Welcome. Ellen, we knew business was a big player here, but according to your latest <v John Palmer>numbers, business was even a bigger player than we thought. <v Ellen Miller>Well, as we've been able to open the window on who funds campaigns beyond just <v Ellen Miller>the congressional side of things, we see an even larger picture for business. <v Ellen Miller>Uh PACs are not really major players at the uh- at the presidential level. <v Ellen Miller>They're not major players when you give to the parties, and they're certainly not players <v Ellen Miller>in the soft money arena. So now that we can identify individual contributors, we see <v Ellen Miller>that individuals, and particularly bundled corporate contributions through individuals, <v Ellen Miller>really uh opens our window on what we know about who's funding American campaigns.

<v John Palmer>Let's talk a bit now about campaign reform. <v John Palmer>During this series, we have seen what appeared to be some abuses. <v John Palmer>What about PACs, Stephen? Do you see any reform needed there in political action <v John Palmer>committees in the way they're used in politics? <v Steven Stockmeyer>Well, I think it's- it's important first to understand what they are and that uh <v Steven Stockmeyer>political action committees are groups of ordinary Americans that band together to try to <v Steven Stockmeyer>magnify their political voices. <v Steven Stockmeyer>They're fully disclosed. They're very strictly limited as to what they can spend on <v Steven Stockmeyer>campaigns. We think PACs are a model for reform. <v Steven Stockmeyer>If we took all that kinds of contributions outside of PACs it- um <v Steven Stockmeyer>Ellen was talking about and put them in the PAC model, we'd have a system much better <v Steven Stockmeyer>under control. <v Ellen Miller>What about that, Ellen? Is that- are PACs a model for reform? <v Ellen Miller>Well, I'd hardly hate to think so. What- what's good about PACs is that we are able to <v Ellen Miller>trace where their money comes from and the precise interest that they have when it comes <v Ellen Miller>to lobbying Capitol Hill or the executive branch. <v Ellen Miller>But in fact, PACs are only one small part of the problem. <v Ellen Miller>I mean, our recent release saw that PAC-giving is to Congress only- there it's

<v Ellen Miller>only about half the money that goes to Congress. <v Ellen Miller>And we really have to widen our understanding of what- uh of what we have <v Ellen Miller>in terms of money in politics. I mean, we have a system of privately-funded elections, uh <v Ellen Miller>elections which are supposed to be fair and equal, public elections funded by a whole <v Ellen Miller>host of private interests. <v John Palmer>What about this question, uh the ultimate question, I guess, about campaign reform and <v John Palmer>political spending reform, and that is that all elections run by county courthouse all <v John Palmer>the way to the White House should be only public money should be used and not private <v John Palmer>money. What about that, Steven? <v Steven Stockmeyer>Well, first of all, I don't think the taxpayers would stand for that. <v Steven Stockmeyer>And we do have that system sort of in the presidential race, in the general election, and <v Steven Stockmeyer>we can see from Ellen's figures that it just doesn't work when you have all public money, <v Steven Stockmeyer>because America is a society of interests. <v Steven Stockmeyer>Interests have a right and a responsibility, and always will try to participate in <v Steven Stockmeyer>campaigns no matter what rules and regulations you have. <v Steven Stockmeyer>That's why we always say let's- let's put it all on the table. <v Steven Stockmeyer>Let's reasonably limit it and make sure the voters know where the support's coming from.

<v Steven Stockmeyer>I don't think the taxpayers would stand, though, for uh campaigns to be funded by the <v Steven Stockmeyer>public. <v John Palmer>And quickly Ellen, do you would- you think this is a good idea? <v Ellen Miller>Money should not be the determinant of access or influence or success in the political <v Ellen Miller>system. <v John Palmer>Thank you both for being with us. <v John Palmer>And um that completes our series that we have been calling the Money Chase about campaign <v John Palmer>financing. Let's go back to New York and Cassie. <v Cassie>John, what surprised you the most in working on this series? <v John Palmer>Well, Cassie, several things. One is the amount of money that is spent in these <v John Palmer>campaigns, 2.7 billion we reported in our first report uh back in 1988, <v John Palmer>uh the fact that business plays such a major role, and the fact <v John Palmer>that sometimes it's the politicians that go to the political action committee soliciting <v John Palmer>funds rather than the other way around. <v Cassie>And of course, so many people have been surprised to learn about soft money. <v John Palmer>Yes, soft money is- is really the key here, certainly reform. <v John Palmer>Uh most of the ideas about reform are aimed there. <v John Palmer>That, of course, is where money is given for party building to state and local <v John Palmer>committees. But actually, the money seeps through and helps uh federal candidates,

<v John Palmer>certainly in the presidential race, and that's an area where most people point to as in <v John Palmer>great need of reform. <v Cassie>All right. Well, we thank you very much. Terrific series, and you've certainly struck a <v Cassie>nerve. We've had more than 5000 calls for additional information. <v Cassie>We're going to give you a number now that provides specific information about candidates <v Cassie>for president, governor and Congress, including where they get their money. <v Cassie>You can also get biographical information about the candidates and find out where they <v Cassie>stand on specific issues. <v Cassie>It's a service of Project Vote Smart, an independent, nonpartisan group. <v Cassie>The number is 1-800-786-6885, and the <v Cassie>call is free.